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Supreme Court Rules NCDRC Third Member Can Decide Appeal When Questions Inseparable from Evidence
In a nuanced ruling on the procedural limits of a third or "referee" member under the , the has held that where a referring bench fails to precisely state the and instead frames broad questions that are on record, the third member may decide the appeal itself without committing an illegality warranting interference under .
A bench of Justice Dipankar Datta and Justice Sheel Nagu set aside an order that had quashed a third member's decision on jurisdictional grounds. The Court remanded the matter to the High Court for a fresh hearing on the merits of the Article 227 application.
A Commission Split and a Flawed Reference
The dispute arose from a consumer complaint filed by the appellants— Askari Hussain and others —before the , in . The SCDRC awarded a compensation of ₹95 lakh with 15% interest per annum.
On appeal, a two-member NCDRC bench disagreed. The presiding member allowed the appeal and dismissed the complaint, while the companion member modified the award to ₹93 lakh with 12% interest. Under , the bench should have stated the specific points on which its members differed. Instead, it formulated five broad questions that delved into the factual merits of the case—whether the complainant had proved improper treatment, whether medical records were withheld, and whether oral affidavits could be relied upon without cross-examination.
The Third Member's "Common Sense" Approach
The third member, to whom the reference was made, answered all five questions in concurrence with the companion member and then proceeded to decide the appeal itself. The order reduced the compensation to ₹93 lakh, retained interest at 12%, and added ₹10,000 in litigation costs. It also crafted a payment mechanism for the second complainant, a patient requiring medical certification before receiving her share.
Aggrieved, the first respondent— Dinesh Kumar —challenged this order before the under Article 227. A Single Judge quashed the order, relying on the Supreme Court's decision in , which held that a referee bench must only answer the questions referred and return the matter to the original bench. The High Court directed that a fresh third member be appointed to confine himself to answering the questions.
Supreme Court's Legal Analysis: Technical Objections and Exceptional Circumstances
The Supreme Court identified the core issue: whether the third member exceeded his jurisdiction by deciding the appeal. On a plain reading of Section 58(3), the Court observed that the statutory mandate indeed requires the third member to opine only on the
. However, the referring bench had failed to comply with that mandate—it did not state the specific points but framed questions that
"required a consideration of the facts alleged and rebutted on merits."
Drawing from the concurring opinion of Justice Madan B. Lokur in , the Court noted that while a larger bench should normally confine itself to the questions referred, it may adopt a "" to answer any subsidiary question that logically and unavoidably arises. Here, because the questions were "," the third member necessarily had to survey the entire gamut of material and rival contentions.
The judgment underscored:
"The objection as to scope of the reference, in our view, is technical. While the statutory mandate under the CP Act requires the third member to confine himself to the point(s) of difference, the present case stands on a different footing. The referring order did not delineate the point(s) of difference; instead, it formulated questions which went to the root of the complaint and are on record."
The Court further held that the third member's approach "does reflect a , which this Court in Salil Sabhlok acknowledged is available in exceptional cases. We, therefore, ought not to disapprove the approach of the third member, at this distance of time."
Remand to the High Court
Despite setting aside the High Court's order on the procedural point, the Supreme Court did not validate the merits of the third member's findings. It noted that the Single Judge had confined his interference to the procedural objection and had not examined the correctness of the answers given. The Court therefore ordered a remand of the Article 227 application to the for a fresh decision on its own merits.
All issues of fact and law were left open for the parties to raise. The Court directed that the application be decided expeditiously, given the elapsed time, and ordered that the NCDRC shall not proceed further until the High Court renders its final decision.
Key Observations
"In our opinion, on a plain reading of sub-section (3), it would seem that the third member did act in by deciding the appeal. However, there is one significant aspect in the present case which cannot go unnoticed."
"The referring order did not delineate the point(s) of difference; instead, it formulated questions which went to the root of the complaint and are on record. The third member, necessarily, had to survey the entire gamut of material and the rival contentions raised before the referring Bench."
"On facts and in the circumstances, we hold that by not returning the reference with the answers to the question referred and, instead, by deciding the appeal itself, the third member did not commit such an illegality that the situation warranted an interference in exercise of jurisdiction under ."
The judgment reinforces that while the procedural discipline of references must be respected, courts will not mechanically strike down decisions where the referring bench itself created the ambiguity—especially when the questions were so intertwined with the merits that answering them effectively required a final decision.
