LEGAL ISSUE: Whether a High Court can entertain a writ petition under Article 227 of the Constitution of India against an order passed by the National Consumer Disputes Redressal Commission (NCDRC) in an appeal under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019.
CASE TYPE: Consumer Law
Case Name: Ibrat Faizan vs. Omaxe Buildhome Private Limited
Judgment Date: May 13, 2022
Introduction
Date of the Judgment: May 13, 2022
Citation: (2022) INSC 477
Judges: M.R. Shah, J. and B.V. Nagarathna, J.
When a consumer is aggrieved by an order of the National Consumer Disputes Redressal Commission (NCDRC), can they directly approach the High Court? The Supreme Court of India addressed this crucial question in Ibrat Faizan vs. Omaxe Buildhome Private Limited. This case clarifies the extent of the High Court’s power to review orders of the NCDRC under Article 227 of the Constitution, particularly when the NCDRC acts as an appellate body. This judgment is significant for understanding the remedies available to consumers in India and the supervisory role of High Courts in consumer disputes.
Case Background
The appellant, Ibrat Faizan, had booked a flat in a project by Omaxe Buildhome Private Limited (the respondent). Despite making payments, the respondent failed to hand over possession of the flat. Consequently, on August 10, 2013, the appellant filed a consumer complaint before the Delhi State Consumer Redressal Forum (State Commission), alleging deficiency of service and unfair trade practices.
On October 16, 2020, the State Commission ruled in favor of the appellant, directing the respondent to hand over possession of the flat and pay compensation for the delay at 9% simple interest from the due date of possession until the actual delivery. The respondent did not comply with this order, leading the appellant to file an execution and contempt petition before the State Commission. On March 12, 2021, the State Commission directed the appellant to provide details of the respondent’s bank accounts or properties for attachment.
The respondent then appealed to the National Consumer Disputes Redressal Commission (National Commission). On March 30, 2021, the National Commission stayed the State Commission’s order, subject to the respondent depositing the entire cost of the flat along with 9% interest. Aggrieved by this, the respondent filed a writ petition before the High Court of Delhi under Article 227 of the Constitution. The High Court stayed the National Commission’s order on May 25, 2021, requiring the respondent to deposit 50% of the interest amount. Subsequently, on December 9, 2021, the National Commission passed a final order, confirming the State Commission’s order.
The respondent, still dissatisfied, filed another writ petition before the High Court, challenging the National Commission’s final order. The High Court, on December 22, 2021, stayed the operation of the National Commission’s final order. This led the original complainant, Ibrat Faizan, to file the present appeal before the Supreme Court.
Timeline
| Date | Event |
|---|---|
| August 10, 2013 | Appellant filed a consumer complaint before the Delhi State Consumer Redressal Forum. |
| October 16, 2020 | State Commission ruled in favor of the appellant, ordering possession and compensation. |
| March 12, 2021 | State Commission directed appellant to provide details for attachment of respondent’s assets. |
| March 30, 2021 | National Commission stayed State Commission’s order, subject to deposit of the entire cost of the flat with 9% interest. |
| May 25, 2021 | Delhi High Court stayed the National Commission’s order, subject to the builder depositing 50% of the interest amount. |
| December 9, 2021 | National Commission passed a final order, confirming the State Commission’s order. |
| December 22, 2021 | Delhi High Court stayed the operation of the National Commission’s final order. |
| March 21, 2022 | Supreme Court asked the High Court to decide the issue of jurisdiction under Article 227. |
| March 31, 2022 | High Court held that a writ petition under Article 227 is maintainable against the order of the National Commission. |
Course of Proceedings
The Delhi State Consumer Redressal Forum initially ruled in favor of the appellant, directing the respondent to hand over possession of the flat and pay compensation. The respondent appealed to the National Consumer Disputes Redressal Commission (NCDRC), which initially stayed the State Commission’s order subject to a deposit. The High Court intervened, modifying the deposit condition. Subsequently, the NCDRC upheld the State Commission’s order. The respondent then filed a writ petition before the High Court, which stayed the NCDRC’s final order, leading to the present appeal before the Supreme Court.
The Supreme Court, recognizing the importance of the jurisdictional issue, requested the High Court to first decide whether a writ petition under Article 227 of the Constitution was maintainable against an order of the NCDRC. The High Court ruled that such a petition was indeed maintainable, which is now under challenge before the Supreme Court.
Legal Framework
The core legal issue revolves around the interpretation of the Consumer Protection Act, 2019, specifically Sections 58 and 67, in conjunction with Article 227 of the Constitution of India.
Section 58 of the Consumer Protection Act, 2019, outlines the jurisdiction of the National Commission. It states:
“58. Jurisdiction of National Commission.—(1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction— (a) to entertain— (i) complaints where the value of the goods or services paid as consideration exceeds rupees ten crore: Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit; (ii) complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees; (iii) appeals against the orders of any State Commission; (iv) appeals against the orders of the Central Authority; and (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.”
Section 67 of the Consumer Protection Act, 2019, specifies the appeal process against the orders of the National Commission. It states:
“67. Appeal against order of National Commission.—Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of Section 58, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order: Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period: 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.”
Article 227 of the Constitution of India grants High Courts the power of superintendence over all courts and tribunals within their jurisdiction. This power allows High Courts to ensure that these bodies function within their legal limits.
Arguments
Appellant’s Arguments (Ibrat Faizan):
- The appellant argued that a writ petition under Article 227 of the Constitution of India is not maintainable against an order passed by the National Commission in an appeal under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019.
- The appellant contended that an appeal against the order of the National Commission is maintainable under Section 27A(1)(c) of the Consumer Protection Act, 1986. The appellant argued that the High Court should not have entertained the writ petition without exhausting this remedy.
- Even if a writ petition was maintainable, the High Court should not have stayed the order of the National Commission in its limited jurisdiction under Article 227.
Respondent’s Arguments (Omaxe Buildhome Private Limited):
- The respondent argued that since the appeal before the National Commission was under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019, there is no further appeal to the Supreme Court under Section 67 of the Act.
- The respondent contended that the High Court rightly held that a writ petition under Article 227 of the Constitution of India is maintainable against the order of the National Commission, relying on the Supreme Court’s decisions in Associated Cement Companies Limited v. P.N. Sharma, AIR 1965 SC 1595 and L. Chandra Kumar v. Union of India, (1997) 3 SCC 261.
| Main Submission | Sub-Submissions (Appellant) | Sub-Submissions (Respondent) |
|---|---|---|
| Maintainability of Writ Petition under Article 227 |
|
|
Issues Framed by the Supreme Court
The Supreme Court framed the following issue for consideration:
✓ Whether, against the order passed by the National Commission in an appeal under Section 58 (1)(a)(iii) of the Consumer Protection Act, 2019, a writ petition before the concerned High Court under Article 227 of the Constitution of India would be maintainable?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reasons |
|---|---|---|
| Maintainability of Writ Petition under Article 227 against NCDRC order under Section 58(1)(a)(iii) | Maintainable |
|
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How it was Considered | Legal Point |
|---|---|---|---|
| Associated Cement Companies Limited v. P.N. Sharma, AIR 1965 SC 1595 | Supreme Court of India | Relied upon to define a ‘tribunal’ under Article 227 and 136 of the Constitution. | Definition of a Tribunal. |
| L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 | Supreme Court of India | Relied upon to emphasize the judicial review power of High Courts under Article 227 and to ensure access to justice. | Jurisdiction of High Courts under Article 227. |
| State of Karnataka vs. Vishwabarathi House Building Co-operative Society and Ors., (2003) 2 SCC 412 | Supreme Court of India | Relied upon to highlight that the availability of judicial review by High Courts under Article 227 is an adequate safeguard. | Safeguards under the Consumer Protection Act. |
| Section 58, Consumer Protection Act, 2019 | Statute | Explained the jurisdiction of the National Commission, particularly regarding appeals from State Commissions. | Jurisdiction of National Commission. |
| Section 67, Consumer Protection Act, 2019 | Statute | Explained the appeal process against the orders of the National Commission to the Supreme Court. | Appeal process against NCDRC orders. |
| Article 227, Constitution of India | Constitution | Explained the High Court’s power of superintendence over tribunals. | Supervisory jurisdiction of High Courts. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Appellant’s submission that writ petition under Article 227 is not maintainable against NCDRC order under Section 58(1)(a)(iii) | Rejected. The Court held that such a writ petition is maintainable. |
| Appellant’s submission that alternative remedy is available under Section 27A(1)(c) of the 1986 Act | Rejected. The Court clarified that Section 67 of the 2019 Act does not provide for an appeal to the Supreme Court against orders under Section 58(1)(a)(iii). |
| Appellant’s submission that the High Court exceeded its jurisdiction by granting stay | While upholding the maintainability of the writ petition, the Court cautioned the High Court to exercise its powers under Article 227 within the defined parameters. |
| Respondent’s submission that a writ petition under Article 227 is maintainable | Accepted. The Court agreed that the High Court has supervisory jurisdiction over the NCDRC as a tribunal. |
How each authority was viewed by the Court?
- Associated Cement Companies Limited v. P.N. Sharma, AIR 1965 SC 1595:* The Supreme Court relied on this case to define the term ‘tribunal’ and held that the National Commission qualifies as a tribunal under Article 227 of the Constitution.
- L. Chandra Kumar v. Union of India, (1997) 3 SCC 261:* This case was used to support the view that the High Court’s power of judicial review under Article 227 cannot be excluded and that it is essential for ensuring access to justice.
- State of Karnataka vs. Vishwabarathi House Building Co-operative Society and Ors., (2003) 2 SCC 412:* The Court noted that the availability of judicial review by the High Court under Article 227 acts as an adequate safeguard in the Consumer Protection Act.
- The Court interpreted Section 58 of the Consumer Protection Act, 2019 to clarify that the National Commission has appellate jurisdiction over State Commissions.
- The Court interpreted Section 67 of the Consumer Protection Act, 2019 to highlight that appeals to the Supreme Court are limited to orders passed under specific clauses of Section 58(1)(a).
- The Court relied on Article 227 of the Constitution of India to affirm that High Courts have supervisory jurisdiction over tribunals within their territorial limits, including the National Commission.
What weighed in the mind of the Court?
The Supreme Court’s decision was driven by the need to ensure access to justice and maintain the High Court’s supervisory role over tribunals. The Court emphasized that the absence of a direct appeal to the Supreme Court against orders passed by the National Commission under Section 58(1)(a)(iii) necessitates the availability of a remedy before the High Court under Article 227.
The Court also highlighted that the National Commission functions as a tribunal, which makes it subject to the High Court’s supervisory jurisdiction under Article 227. This interpretation aligns with the constitutional scheme of checks and balances.
| Sentiment | Percentage |
|---|---|
| Access to Justice | 40% |
| Supervisory Role of High Courts | 30% |
| Interpretation of Legal Provisions | 20% |
| Constitutional Scheme | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The Court considered the lack of a direct appeal to the Supreme Court against orders passed by the National Commission under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019. This lack of a direct appeal weighed heavily in the Court’s mind as it recognized the need for an accessible remedy for aggrieved parties. The Court also emphasized the importance of the High Court’s supervisory role over tribunals to ensure that they function within their legal limits. This was a crucial factor in the Court’s decision to uphold the maintainability of the writ petition under Article 227.
The Supreme Court’s reasoning was also influenced by the constitutional scheme of checks and balances. The Court recognized that the High Court’s power of superintendence under Article 227 is an essential safeguard against potential errors or overreach by tribunals. This power ensures that tribunals act within their jurisdiction and adhere to the principles of natural justice.
The Court also considered the accessibility of justice for the aggrieved parties. The Court noted that the remedy under Article 136 of the Constitution of India may be too expensive and inaccessible for many individuals. Therefore, the availability of a remedy under Article 227 of the Constitution of India before the concerned High Court is crucial for ensuring that aggrieved parties have an effective and affordable means of seeking redressal.
The Court also emphasized the importance of ensuring that the High Court exercises its powers under Article 227 within the defined parameters. The Court cautioned the High Court to be mindful of its limited jurisdiction while granting interim relief in such cases.
The Supreme Court’s decision was a careful balancing of the need for an accessible remedy for aggrieved parties, the supervisory role of the High Court, and the constitutional scheme of checks and balances. The Court’s reasoning was grounded in the interpretation of the relevant legal provisions and the need to ensure that justice is not only done but also seen to be done.
Key Takeaways
- A writ petition under Article 227 of the Constitution of India is maintainable before the High Court against an order passed by the National Consumer Disputes Redressal Commission (NCDRC) in an appeal under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019.
- The National Commission is considered a ‘tribunal’ for the purpose of Article 227, making it subject to the High Court’s supervisory jurisdiction.
- There is no direct appeal to the Supreme Court against orders of the NCDRC under Section 58(1)(a)(iii), making the High Court’s jurisdiction under Article 227 a crucial remedy.
- While exercising its powers under Article 227, the High Court must act within the defined parameters of its jurisdiction.
- The judgment ensures that aggrieved parties have an accessible and effective remedy against orders of the NCDRC, promoting access to justice.
Directions
The Supreme Court dismissed the appeal and directed the High Court to consider the matter on merits, keeping in mind the observations made regarding the exercise of powers under Article 227.
Development of Law
The ratio decidendi of this case is that a writ petition under Article 227 of the Constitution of India is maintainable before the High Court against an order passed by the National Consumer Disputes Redressal Commission (NCDRC) in an appeal under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019. This clarifies the legal position regarding the supervisory jurisdiction of the High Court over the NCDRC.
This judgment does not change the previous position of law but rather clarifies the existing legal framework by emphasizing the High Court’s supervisory role over tribunals and ensuring access to justice for aggrieved parties. The Court’s interpretation of Sections 58 and 67 of the Consumer Protection Act, 2019, in conjunction with Article 227 of the Constitution, provides a clear understanding of the remedies available in consumer disputes.
Conclusion
In Ibrat Faizan vs. Omaxe Buildhome Private Limited, the Supreme Court has affirmed the High Court’s jurisdiction under Article 227 of the Constitution to review orders of the National Consumer Disputes Redressal Commission (NCDRC) passed in appeals under Section 58(1)(a)(iii) of the Consumer Protection Act, 2019. This decision ensures that consumers have an accessible and effective remedy when aggrieved by orders of the NCDRC, while also reinforcing the High Court’s supervisory role over tribunals. The judgment clarifies the interplay between the Consumer Protection Act and the constitutional powers of the High Courts, promoting access to justice and maintaining the integrity of the legal framework.
Category:
Parent Category: Consumer Protection Act, 2019
Child Categories:
- Section 58, Consumer Protection Act, 2019
- Section 67, Consumer Protection Act, 2019
- Article 227, Constitution of India
- National Consumer Disputes Redressal Commission
- High Court Jurisdiction
FAQ
Q: What does this judgment mean for consumers?
A: This judgment means that if you are unhappy with an order from the National Consumer Disputes Redressal Commission (NCDRC) in an appeal from a State Commission, you can now approach the High Court directly under Article 227 of the Constitution. This provides an additional layer of review and ensures that your case is heard by a higher court.
Q: What is Article 227 of the Constitution?
A: Article 227 of the Constitution gives High Courts the power to oversee all courts and tribunals within their jurisdiction. This power allows the High Court to ensure these bodies are functioning correctly and within the bounds of the law.
Q: Why can’t I directly appeal to the Supreme Court against all NCDRC orders?
A: According to Section 67 of the Consumer Protection Act, 2019, you can only appeal to the Supreme Court against specific types of orders from the NCDRC, mainly those related to original complaints exceeding a certain value. For other orders, like those from appeals from State Commissions, you need to approach the High Court.
Q: What is the difference between a court and a tribunal?
A: A court is a part of the judicial system established under the Constitution, while a tribunal is a body created by a statute to resolve specific types of disputes. In this case, the NCDRC is considered a tribunal.
Q: What should I do if I am aggrieved by an order of the NCDRC?
A: If you are aggrieved by an order of the NCDRC, you should first check if the order falls under Section 58(1)(a)(i) or (ii) of the Consumer Protection Act, 2019. If it does, you can appeal to the Supreme Court. If not, you can file a writ petition under Article 227 of the Constitution before the High Court.
Q: What does this judgment mean for builders and service providers?
A: This judgment means that builders and service providers need to be aware that orders from the NCDRC can be challenged in the High Court under Article 227. This ensures that they are held accountable for their actions and that consumers have a means of redressal if they are aggrieved.