Supreme Court Clarifies Appeal Deposit Rules Under Consumer Protection Act: ECGC Limited vs. Mokul Shriram EPC JV (2022)

LEGAL ISSUE: Applicability of deposit requirements for appeals under the Consumer Protection Act, 1986 vs. the Consumer Protection Act, 2019.

CASE TYPE: Consumer Law

Case Name: ECGC Limited vs. Mokul Shriram EPC JV

Judgment Date: 15 February 2022

Introduction

Date of the Judgment: 15 February 2022

Citation: Not Available in the source

Judges: Justice Hemant Gupta and Justice V. Ramasubramanian. The judgment was authored by Justice Hemant Gupta.

When a new law replaces an old one, what rules apply to ongoing cases? The Supreme Court of India recently addressed this question in a case concerning the amount required to be deposited when appealing a decision under the Consumer Protection Act. The core issue was whether the deposit requirement for appeals should be governed by the old Consumer Protection Act of 1986 or the new Act of 2019. This decision clarifies which rules apply when laws change, ensuring fairness in the legal process.

Case Background

Mokul Shriram EPC JV (the complainant) was awarded a contract by the Government of Basra, Iraq, for construction of a rainwater drainage, heavy sewerage, and municipal road system. To protect themselves, the complainant obtained two insurance policies from ECGC Limited (the appellant), paying a premium of ₹10,38,03,912. Later, payments for the work done were suspended, and the contract was withdrawn due to internal conflict in Basra. The appellant rejected the insurance claim. Aggrieved, the complainant filed a complaint before the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC ruled in favor of the complainant on 27 January 2021, directing the appellant to pay ₹265.01 Crores with interest.

Timeline

Course of Proceedings

The complainant filed a complaint under Section 21(a)(i) of the Consumer Protection Act, 1986, before the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC ruled in favor of the complainant on 27 January 2021, directing the appellant to pay ₹265.01 Crores with interest. The appellant then filed an appeal before the Supreme Court. The core issue before the Supreme Court was whether the appeal should be governed by the deposit requirements of the 1986 Act or the 2019 Act.

Legal Framework

The case hinges on the interpretation of the Consumer Protection Act, 1986 and the Consumer Protection Act, 2019, specifically concerning the deposit required to file an appeal before the Supreme Court.

✓ Section 23 of the Consumer Protection Act, 1986, as amended, stated:

“Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited in the prescribed manner fifty per cent of that amount or rupees fifty thousand, whichever is less.”

✓ Section 67 of the Consumer Protection Act, 2019 states:

“Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent of that amount in the manner as may be prescribed.”

✓ Section 6 of the General Clauses Act, 1897, outlines the effect of repealing a law:

“6. Effect of Repeal. – Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not—
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or any thing duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.”

✓ Section 107 of the Consumer Protection Act, 2019, addresses the repeal and savings:

“107. (1) The Consumer Protection Act, 1986 is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.
(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.”

The key point of contention is whether the right to appeal under the 1986 Act, with its lower deposit requirement, was a vested right that was protected by Section 6 of the General Clauses Act, 1897, and Section 107 of the 2019 Act.

Arguments

Appellant’s Arguments:

• The appeal was filed under Section 23 of the Consumer Protection Act, 1986, not the 2019 Act, which came into force on 20 July 2020.
• The deposit requirement of 50% under the 2019 Act is more onerous than the 1986 Act, which required 50% or ₹50,000, whichever is less.
• The law applicable at the time of initiation of the legal proceedings (lis) should apply. Therefore, the 1986 Act should govern the appeal.
• Section 107 of the 2019 Act and Section 6 of the General Clauses Act, 1897, prevent retrospective application of the 2019 Act.
• The right to file an appeal under the 1986 Act accrued in favor of the appellant, and no different intention is discernible from the repealing Act.
• The appellant deposited ₹50,000 as per the 1986 Act.

Respondent’s Arguments:

• The amendment is procedural and thus retrospective.
• Procedure includes the manner and form of filing of appeal, pre-deposit and limitation.
• The right of appeal is a statutory right which can be taken away by express provision of law and the conditions on which an appeal would lie is also within the legislative competence.
• Consumer protection legislation is a beneficial legislation, therefore, the interpretation which benefits the consumer should be preferred.

Innovativeness of the argument: The appellant’s argument was innovative in emphasizing the concept of a “vested right” to appeal under the old law, and that the new law should not retrospectively impose more onerous conditions on that right.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the present appeal would be governed under the Consumer Protection Act, 2019 or under the erstwhile 1986 Act.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors. [AIR 1931 Cal. 100] – Calcutta High Court: The Court relied on this case, which was approved by the Supreme Court in Hoosein Kasam Dada, to support the principle that a right of appeal is a substantive right and not merely a matter of procedure.
• Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors. [AIR 1953 SC 221] – Supreme Court of India: This case established that a right of appeal is a substantive right that vests when proceedings are initiated and cannot be taken away by an amendment unless it is expressly retrospective. The court also held that the old law continues to exist for the purpose of supporting the pre-existing right of appeal.
• Garikapati Veeraya v. N. Subbiah Choudhry & Ors. [AIR 1957 SC 540] – Supreme Court of India (Constitution Bench): This case approved the judgment in Hoosein Kasam Dada, reiterating that the right of appeal is a vested right that is governed by the law prevailing at the date of the institution of the suit.
• State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr. [AIR 1960 SC 980] – Supreme Court of India: This case held that an impairment of the right of appeal by imposing a more onerous condition is not a matter of procedure and is not retrospective unless it says so expressly or by necessary intendment.
• Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., Nagpur [AIR 1967 SC 344] – Supreme Court of India: This case reiterated the principle in Hoosein Kasam Dada, stating that when a lis commences, all rights get crystallized, and no clog upon a likely appeal can be put unless the law was made retrospective.
• M/s. Hardeodas Jagannath v. The State of Assam & Ors. [AIR 1970 SC 724] – Supreme Court of India: This case held that the amended provisions would be applicable if the assessment was completed after the amending act came into force.
• K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors. [(2017) 9 SCC 355] – Supreme Court of India: This case held that the relevant date for paying the court fee would be when the proceedings were initiated in the lowest court.
• Anant Mills Co. Ltd. v. State of Gujarat & Ors. [(1975) 2 SCC 175] – Supreme Court of India: This case held that if the authority entertaining appeal has a jurisdiction to dispense with the compliance of requirement to deposit the amount of property tax, it is not onerous.
• Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad & Ors. [(1999) 4 SCC 468] – Supreme Court of India: This case followed the judgment in Anant Mills.
• Ramesh Singh & Anr. v. Cinta Devi & Ors. [(1996) 3 SCC 142] – Supreme Court of India: This case held that an appeal under the Motor Vehicles Act, 1988, will not be applicable to the claim applications filed under Motor Vehicles Act, 1939.
• M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors. [(1992) 1 SCC 428] – Supreme Court of India: This case held that the right of appeal conferred under the Motor Vehicles Act, 1939, could not be said to be taken away after repeal of such Act by the Motor Vehicles Act, 1988.
• Thirumalai Chemicals Limited v. Union of India & Ors. [(2011) 6 SCC 739] – Supreme Court of India: This case held that Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA.
• Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors. [2021 SCC OnLine SC 1044] – Supreme Court of India: This case is not applicable as while framing the statute, Section 43(5) contemplating pre-deposit was part of the initially enacted provision.
• Tecnimont Pvt. Ltd. v. State of Punjab & Ors. [2019 SCC OnLine SC 1228] – Supreme Court of India: This case is also not applicable as it is in respect of right of appeal on pre-deposit which was enacted originally in the Punjab Value Added Tax Act.
• Sri Satya Nand Jha v. Union of India & Ors. [2016 SCC OnLine Jhar 2323] – Jharkhand High Court: This case dealt with the legality and validity of the pre-deposit and not the retrospectivity of the said provision.
• M/s. Indian Oil Corporation v. Orissa Sales Tax Tribunal, CTC & Ors. [2009 SCC OnLine Ori 353] – Orissa High Court: This case considered the reverse proposition wherein condition of pre-deposit of 50% of the deposited amount of tax was deleted.
• Manohar Infrastructure and Constructions Private Limited v. Sanjeev Kumar Sharma & Ors. [Civil Appeal No. 7098 of 2021 with Ors. decided on 7.12.2021] – Supreme Court of India: This case did not decide on the retrospectivity of Section 51 of the 2019 Act.
• Neena Aneja & Anr. v. Jai Prakash Associates Ltd. [2021 SCC OnLine SC 225] – Supreme Court of India: This case held that the right to forum is not an accrued right.
• New India Assurance Co. Ltd. v. Smt. Shanti Misra [(1975) 2 SCC 840] – Supreme Court of India: This case held that change of forum would apply retrospectively.
• Videocon International Limited v. Securities and Exchange Board of India [(2015) 4 SCC 33] – Supreme Court of India: This case held that change of forum and period of limitation are procedural laws.
• Maria Cristina De Souza Sodder & Ors. v. Amria Zurana Pereira Pinto & Ors. [(1979) 1 SCC 92] – Supreme Court of India: This case held that change of forum and period of limitation are procedural laws.
• Harihar Polyfibres v. Regional Director, ESI Corporation [(1984) 4 SCC 324] – Supreme Court of India: This case examined the scope of expression wages in the Employees’ State Insurance Act, 1948.
• Spring Meadows Hospital & Anr. v. Harjol Ahluwalia & Anr. [(1998) 4 SCC 39] – Supreme Court of India: This case held that the definition clause of Section 2(1)(d)(ii) of the 1986 Act is wide enough to include not only the person who hires the services but also the beneficiary of such services.
• Kishore Lal v. Chairman, Employees’ State Insurance Corpn. [(2007) 4 SCC 579] – Supreme Court of India: This case held that the definition of ‘consumer’ in the 1986 Act is wide enough and encompasses within its fold not only the goods but also the services, bought or hired for consideration.
• K.H. Nazar v. Mathew K. Jacob & Ors. [(2020) 14 SCC 126] – Supreme Court of India: This case was about whether a rocky land used for quarrying purposes can be treated as a “commercial site”.
• M/s. Dream Castle & Anr. v. Union of India & Ors. [W.P. No. 13431 of 2015 etc. decided on 18.4.2016] – Madras High Court: This case held that when the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right.

Judgment

The Supreme Court held that the more onerous condition of payment of 50% of the amount awarded as a pre-deposit for filing an appeal will not be applicable to the complaints filed prior to the commencement of the 2019 Act. The Court reasoned that the right to appeal under the 1986 Act was a vested right that was protected by Section 6 of the General Clauses Act, 1897, and Section 107 of the 2019 Act.

How each authority was viewed by the Court?

• Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors. [AIR 1931 Cal. 100]: The Court relied on this case, which was approved by the Supreme Court in Hoosein Kasam Dada [AIR 1953 SC 221], to support the principle that a right of appeal is a substantive right and not merely a matter of procedure.
• Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors. [AIR 1953 SC 221]: The Court heavily relied on this case, which established that a right of appeal is asubstantive right that vests when proceedings are initiated and cannot be taken away by an amendment unless it is expressly retrospective. The court also held that the old law continues to exist for the purpose of supporting the pre-existing right of appeal.
• Garikapati Veeraya v. N. Subbiah Choudhry & Ors. [AIR 1957 SC 540]: The Court approved the judgment in Hoosein Kasam Dada, reiterating that the right of appeal is a vested right that is governed by the law prevailing at the date of the institution of the suit.
• State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr. [AIR 1960 SC 980]: The Court relied on this case for the principle that an impairment of the right of appeal by imposing a more onerous condition is not a matter of procedure and is not retrospective unless it says so expressly or by necessary intendment.
• Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., Nagpur [AIR 1967 SC 344]: The Court reiterated the principle in Hoosein Kasam Dada, stating that when a lis commences, all rights get crystallized, and no clog upon a likely appeal can be put unless the law was made retrospective.
• M/s. Hardeodas Jagannath v. The State of Assam & Ors. [AIR 1970 SC 724]: The Court distinguished this case, as the assessment was completed after the amending act came into force, thus not relevant to the facts of the present case.
• K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors. [(2017) 9 SCC 355]: The Court relied on this case for the principle that the relevant date for paying the court fee would be when the proceedings were initiated in the lowest court.
• Anant Mills Co. Ltd. v. State of Gujarat & Ors. [(1975) 2 SCC 175]: The Court relied on this case for the principle that if the authority entertaining appeal has a jurisdiction to dispense with the compliance of requirement to deposit the amount of property tax, it is not onerous.
• Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad & Ors. [(1999) 4 SCC 468]: The Court followed the judgment in Anant Mills, further supporting the principle of the nature of the deposit requirement for appeals.
• Ramesh Singh & Anr. v. Cinta Devi & Ors. [(1996) 3 SCC 142]: The Court relied on this case for the principle that an appeal under the Motor Vehicles Act, 1988, will not be applicable to the claim applications filed under Motor Vehicles Act, 1939.
• M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors. [(1992) 1 SCC 428]: The Court relied on this case for the principle that the right of appeal conferred under the Motor Vehicles Act, 1939, could not be said to be taken away after repeal of such Act by the Motor Vehicles Act, 1988.
• Thirumalai Chemicals Limited v. Union of India & Ors. [(2011) 6 SCC 739]: The Court relied on this case for the principle that Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA.
• Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors. [2021 SCC OnLine SC 1044]: The Court found this case not applicable as the pre-deposit was part of the initially enacted provision, unlike the situation in the present case.
• Tecnimont Pvt. Ltd. v. State of Punjab & Ors. [2019 SCC OnLine SC 1228]: The Court found this case not applicable as it was in respect of right of appeal on pre-deposit which was enacted originally in the Punjab Value Added Tax Act.
• Sri Satya Nand Jha v. Union of India & Ors. [2016 SCC OnLine Jhar 2323]: The Court distinguished this case as it dealt with the legality and validity of the pre-deposit and not the retrospectivity of the said provision.
• M/s. Indian Oil Corporation v. Orissa Sales Tax Tribunal, CTC & Ors. [2009 SCC OnLine Ori 353]: The Court distinguished this case as it considered the reverse proposition wherein condition of pre-deposit of 50% of the deposited amount of tax was deleted.
• Manohar Infrastructure and Constructions Private Limited v. Sanjeev Kumar Sharma & Ors. [Civil Appeal No. 7098 of 2021 with Ors. decided on 7.12.2021]: The Court distinguished this case, as it did not decide on the retrospectivity of Section 51 of the 2019 Act.
• Neena Aneja & Anr. v. Jai Prakash Associates Ltd. [2021 SCC OnLine SC 225]: The Court relied on this case for the principle that the right to forum is not an accrued right.
• New India Assurance Co. Ltd. v. Smt. Shanti Misra [(1975) 2 SCC 840]: The Court distinguished this case, as the issue was about the change of forum, which is considered procedural.
• Videocon International Limited v. Securities and Exchange Board of India [(2015) 4 SCC 33]: The Court relied on this case for the principle that change of forum and period of limitation are procedural laws.
• Maria Cristina De Souza Sodder & Ors. v. Amria Zurana Pereira Pinto & Ors. [(1979) 1 SCC 92]: The Court relied on this case for the principle that change of forum and period of limitation are procedural laws.
• Harihar Polyfibres v. Regional Director, ESI Corporation [(1984) 4 SCC 324]: The Court distinguished this case, as the dispute was not of any ambiguity, unlike the present case.
• Spring Meadows Hospital & Anr. v. Harjol Ahluwalia & Anr. [(1998) 4 SCC 39]: The Court distinguished this case, as it was about the definition of consumer, not relevant to the present case.
• Kishore Lal v. Chairman, Employees’ State Insurance Corpn. [(2007) 4 SCC 579]: The Court distinguished this case, as it was about the definition of consumer, not relevant to the present case.
• K.H. Nazar v. Mathew K. Jacob & Ors. [(2020) 14 SCC 126]: The Court distinguished this case, as it was about whether a rocky land used for quarrying purposes can be treated as a “commercial site”, not relevant to the present case.
• M/s. Dream Castle & Anr. v. Union of India & Ors. [W.P. No. 13431 of 2015 etc. decided on 18.4.2016]: The Court relied on this case for the principle that when the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right.

Ratio Decidendi

The ratio decidendi of the judgment is that the right to appeal under the Consumer Protection Act, 1986, with its lower deposit requirement, is a vested right that is protected by Section 6 of the General Clauses Act, 1897, and Section 107 of the Consumer Protection Act, 2019. Therefore, the more onerous condition of payment of 50% of the amount awarded as a pre-deposit for filing an appeal under the 2019 Act will not be applicable to the complaints filed prior to the commencement of the 2019 Act.

Obiter Dicta

There was no significant obiter dicta in this judgment. The court focused primarily on the issue of the applicability of the deposit requirements and the vested right to appeal.

Dissenting Opinion

There was no dissenting opinion in this case. The judgment was unanimous.

Final Order

The Supreme Court allowed the appeal, setting aside the order of the NCDRC that required the appellant to deposit 50% of the awarded amount. The appellant was held to be entitled to the benefit of the deposit requirement under the 1986 Act.

Flowchart of the Case

Conclusion

The Supreme Court’s decision in ECGC Limited vs. Mokul Shriram EPC JV (2022) is significant for clarifying the applicability of deposit rules for appeals under the Consumer Protection Act when a new law replaces an old one. The Court emphasized that the right to appeal with its associated conditions is a vested right that is governed by the law prevailing at the time of the initiation of the proceedings. This judgment ensures that changes in law do not unfairly affect the rights of parties who have already initiated legal proceedings under the old law, upholding the principles of fairness and legal certainty. It also highlights the importance of Section 6 of the General Clauses Act, 1897, in preserving rights that have accrued under a repealed law.