DOES THE STATE COMMISSION HAVE THE POWER TO SET ASIDE EX-PARTE ORDERS WHILE EXERCISING REVISIONAL JURISDICTION?
T.G Niranjana, Associate, Dispute Prevention & Resolution
It has been settled by a catena of judgments that the District Consumer Dispute Redressal Commissions do not have the power to set aside the ex-parte orders passed by them. The current trend to ‘overcome this difficulty’ is to file a Revision Petition before the State Consumer Dispute Redressal Commissions seeking to set aside the ex-parte orders passed by the District Commission. However, are such Revision Petitions maintainable in law?
Power to set ex-parte: According to section 38(3)(b)(ii) of the Consumer Protection Act, 2019,(hereinafter referred to as ‘the Act’), the District Commissions are empowered to proceed with a case ex-parte if the opposite party omits or fails to take any action to represent his case within the time given by the Commission. The words ‘omits or fails to take any action to represent his case’ have been interpreted to mean the failure to file the Written Version within 30 days from date of receipt of notice or within 15 days. It is in this context, that the author seeks to analyze the aforementioned trend.
Power to set aside ex-parte orders: Generally, under the Code of Civil Procedure, 1908 an application to set aside ex-parte orders is filed before the Court which passed such order. However, the Consumer Protection Act differs consciously. Section 51(5) of the Act grants power to the National Commission to set aside the ex-parte orders passed by the State Commission, and section 61 of the Act grants power to the National Commission to set aside its own ex-parte orders.. Interestingly, there is no specific provision in the Consumer Protection Act that expressly grants power to District Commissions to set aside ex-parte orders passed by them.
There has been a lot of debate on whether District Commission has the power to set aside its own ex-parte orders, especially after the interpretation given by the Madras High Court in B. Nagaraj vs Green Earth Biotechnologies (1). This judgment held that when there is no express provision in the Act or the Rules giving the Forum, the jurisdiction to do a particular function, the Forum should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions for the purpose of rendering justice to the parties.
The conflicts in position of law have been well solved by the Supreme Court in 2020 through its landmark judgment, New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited (2). The Apex Court held that the District Forum has no power to condone a delay beyond a discretionary period of 15 days, in addition to the 30 days as envisaged in Section 13 of the Consumer Protection Act 1986.
With Section 38 of the new Act of 2019 replicating Section 13 of the old Act, the law should remain the same. However, the question that seems unanswered is whether the State Commission has the power to set aside an ex-parte order passed by the District Commission, thereby condoning the delay in filing the Written Version.
In the author’s opinion, this has been well answered in the New India Assurance Company judgment (2). The judgment asserts that the limitation period for filing the Written Version cannot be extended beyond the statutory period of forty-five days. There are two main reasons given for the said ruling. The first is that a consequence for non-filing of Written Version has been provided under the statute i.e., proceeding ex-parte, thereby making the limitation mandatory and not directory. The second is a comparison between the position of the Complainant and that of the Opposite Parties under the Act. While the Act grants the power to condone the delay in filing a complaint for sufficient cause, it chooses not to provide a similar power when it comes to condoning the delay in filing the Written Version. In addition, there is a necessity to choose an interpretation which is in line with the objective of the Act i.e., speedy disposal, for the Act is a beneficial legislation.
The take-away from the New India Assurance judgment (2) is not that the District Commission does not have power to condone the delay, rather it is that the delay in filing Written Version is not condonable by any court. Once the intention of the legislature has been made clear by the Supreme Court, it is hard to understand how the State Commission assumes power to contradict it while exercising Revisional jurisdiction.
The scope of Revision under the Act is noteworthy. Even though the word ‘revision’ is not used under the Act, section 47(1)(b) empowers the State Commission to call for records and pass orders in dispute before the District Commission if it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.
When a District Commission refuses to condone the delay in filing Written Version, it executes the intent of law. Therefore, there is no exceeding exercise of jurisdiction or material irregularity. In such a case, the interference of the State Commission is not warranted.
Another question that comes to mind is if not Revision, whether the State Commission has power to condone the delay while exercising the Appellate jurisdiction. This doubt arises especially because Section 41 provides that any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law. The uncertainty is more so because of the Hon’ble Supreme Court’s judgment in Shiur Sakhar Karkhana Pvt. vs State Bank Of India (3) wherein it was held that the words ‘the orders’ would mean and include any order including the order setting ex-parte. But the question before the Court then was whether the National Commission has jurisdiction to set aside an ex-parte order passed by the State Commission. This question has been clearly answered in the affirmative under the new Act under section 51. It is important to note that the reason for being set ex-parte in that case was non-appearance before the Forum and not mere non filing of the Written Version. Therefore, such an interpretation cannot be taken to state that what cannot be done directly through a review or revision can be done indirectly through an appeal.
Having crystallized the New India Assurance judgment’s interpretation of law as the right interpretation of law, the question that arises in the minds of many and perhaps even the State Commission is what justice could be offered to an Opposite Party who could not file the Version due to genuine reasons. The Supreme Court answers that as well in paragraph 25 of the judgment by emphasizing that law prevails over equity and if the law provides so to achieve the object of the statute, the same has to be given effect to.
The intention of the legislature to provide justice to one party, while resulting in the hardship of another is not new to beneficial legislations. A very striking resemblance can be seen in the CPC as amended by the Commercial Courts Act that restricts the power of the commercial courts to condone the delay in filing the Written Statement beyond 120 days.
In light of the above, it is safe to conclude that the Revision Petition against an ex-parte order of District Commission is not maintainable before the State Commission in light of the language and objective of the Act and the view of the Hon’ble Supreme Court. Having said that, the hardship faced by the Opposite Parties due to the aforesaid interpretation in consumer cases cannot be overlooked. In most of the cases, the complaints are against big corporates that have various branches across the country who have personal knowledge and direct communication with the consumers. By the time the legal department in the Head office receives the notice and documents relevant for preparation of Version from the branch offices, they are well past the statutory limitation.
In the author’s opinion, if the Courts are to hold the Opposite Parties strictly to the timeline under the Act, the District Commissions must ensure that along with the notice, the copy of complaint and all the annexures filed in support of complaint are also served as stipulated under Regulation 13 of the Consumer Protection (Consumer Commission Procedure), Regulations, 2020. In most occasions, only the complaint copy is served and considerable time is spent on collating the relevant documents from various branches of the Company. Such service of notice should be deemed as incomplete service of notice and the time to file the Written Version should be considered to begin from the date of receipt of Annexures so as to enable the Party to prepare their reply. Further, considering the aforesaid practical challenges faced by the Opposite Parties, the legislature should consider extending the time granted for the Opposite Parties by at least another 60 days so that there is reasonable time offered to them and they are treated fairly, if not equally as the other party.
- B. Nagaraj vs Green Earth Biotechnologies, 2016 SCC OnLine Mad 23271 : (2016) 5 LW 517 : (2016) 8 Mad LJ 580
- New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited, (2020) 5 SCC 757: 2020 SCC OnLine SC 287
- Shiur Sakhar Karkhana Pvt. vs State Bank Of India (2020) 19 SCC 592