Back
High Court Of Delhi
BY FORD LEASING LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
CRIMINAL APPEAL 431 of 1994
Decided On : 12/13/1994
CONSUMER PROTECTION ACT, 1986 - SECTION 27 - PROCEDURE FOR ENFORCEMENT OF ORDERS - POWER OF CONSUMER FORA TO PUNISH FOR NON-COMPLIANCE - SCOPE AND APPLICABILITY - SECTION 4(2) OF THE CODE OF CRIMINAL PROCEDURE, 1973 - NOT APPLICABLE.
Fact of the Case:
The petitioner company challenged the impugned order of the State Commission dismissing its application in proceedings initiated against it under Section 27 of the Consumer Protection Act, 1986 (the Act). The company also sought to quash the complaint made against it and the warrants issued for the arrest of its Chairman. Additionally, the petitioner prayed for a declaration that Section 27 of the Act is ultra vires and that proceedings under Section 27 are governed by the procedure prescribed in the Code of Criminal Procedure (CrPC).
Finding of the Court:
The court held that the impugned order of the State Commission was subject to statutory appeal to the National Commission under the Act. The court also held that Section 27 of the Act empowers each of the specified Fora to punish a person who fails or omits to comply with any order made by it under the Act. The court further held that the power conferred upon the Fora for enforcing compliance of its own orders cannot be subjected to investigation, inquiry, and trial, and that a case under Section 27 of the Act cannot be dealt with according to the provisions made for offenses under the CrPC. The court also held that the Fora created under the Act can adopt any procedure to deal with cases under Section 27, provided the procedure is fair and just.
Issues: 1. Whether the State Commission had the jurisdiction to issue notice to the Chairman/Director or any officer of the company in proceedings against the company under Section 27 of the Act. 2. Whether the proceedings under Section 27 of the Act could be undertaken only in accordance with the provisions made in the CrPC for the trial of a warrant case. 3. Whether Section 27 of the Act is ultra vires the Constitution of India.
Ratio Decidendi: 1. The court held that persons who are officially responsible for the conduct of the affairs of the company are liable to be punished for disobeying the orders of Competent Courts directed against the company. 2. The court held that in the absence of any specific provision made in the Act itself, the Commission has to devise a procedure of its own which should be in conformity with the principles of natural justice. 3. The court held that Section 27 of the Act is not ultra vires the Constitution of India.
Final Decision: The court dismissed the writ petition with costs and assessed the fee of Counsel for respondent No. 3 at Rs. 10,000.
( 1 ) BY this petition under Article 226 of the Constitutionof India the petitioner-company is challenging the impugned order dated 20/24. 5. 1994 (Annexure-D) made by the State Commission (Consumer Disputesredressal Commission) Delhi dismissing the petitioner s application filed in theproceedings initiated against the petitioner/company under Section 27 of theconsumer Protection Act, 1986 (hereinafter REFERRED TO to as "the Act)".
( 2 ). It is also prayed that the complaint of respondent No. 3 made against thepetitioner/company as well as the warrants issued by the State Commission forthe arrest of the Chairman of the petitioner company by the impugned order bequashed.
( 3 ). Further, it is prayed that a declaration be issued that Section 27of the Actis ultra virse and, that in the alternative the proceedings under Section 27 of the Actare governed by the procedure prescribed in the Code of Criminal Procedure byvirtue of the provision made in Section 4 of Sub-section 2 of the said Code.
( 4 ). The Writ Petition is opposed on behalf of respondent No. 3 on all counts, inaddition to the plea that the petitioner has got an alternative remedy by way of anappeal or revision against the impugned order of the State Commission undersection 19 read with Section 21 of the Act.
( 5 ). The facts and circumstances in which the impugned order has been made, may be briefly stated:
( 6 ). On a petition made by respondent No. 3 the State Commission passedagainst the petitioner company a payment order dated 15/04/1993 directingthe company to pay to respondent No. 3 an amount of Rs. 93,681. 00 with intereston an amount of Rs. 83,681. 00. The company preferred TO an appeal against the saidpayment order to the National Commission. Together with the appeal the companyalso prayed forstay,of operation of the impugned order of the Commission. Thenational Commission granted stay sought by the company subject to thecondition that the company, desposited before the State Commission a sum of Rs. 75,000. 00 within one month to be paid to respondent No. 3 herein without insisting upon any surety and in default of compliance of this condition, it wasclarified that the stay, order shall stand automatically cancelled. This order waspassed by the National Commission on 16/09/1993. The appealpreferred TO by the company against the payment order dated 15/04/1993passed by the State Commission is still pending before the Nationalcommission. In the meanwhile, on 15/07/1993 respondent No. 3 filed anapplication for action against the company undersection 27of the Act. On l9. 8. 93the State Commission ordered notice to be issued to Sh. B. K. Sahni, Chairman ofthe company for 16/09/1993. That day one Mr. D. L. Sehgal appearedon behalf of the company and stated before the State Commission that thenational Commission had stayed the operation of the payment order on certainconditions. He requested for time to file the order of the National Commission andto comply with that order. Accordingly the case was adjourned to 18/07/1993. That day an Advocate appeared for the company, and made a statement thatmr. B. K. Sahni, Managing Director of the company, had gone to Bombay. Butbeing specifically asked by the Commission the learned Counsel stated that he was not in a position to produce Mr. Sahni before the Commission on the nextdate of hearing. Consequently the State Commission issued bailable warrantsagainst Mr. Sahni returnable on 11. 11. 1993. A report was received that Mr. Sahnihad not been served as he was away to Bombay. Fresh bailable warrants were issued, for 7/01/1994 but report regarding service was not received backand bailable warrants were again issued for 24/02/1994 and then for 1 1/03/1994. Sh. D. L. Sehgal, Assistant Vice-President of the company enteredappearance and filed the application for cancellation of the bailable warrantsissued for appearance of the Chairman/managing Director of. the company. This is the application which was dism
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
