Madhu Sweta and Saurabh Bindal, Rajani Singhania & Partners, India
Subsequent to an amendment in 2002, the Act, conferred powers solely on the National Consumer Dispute Redressal Commission1 to review the orders made by it. The Lower forums particularly the District Consumer Dispute Redressal Forum2 and the State Consumer Dispute Redressal Commission3 did not have the power to review their orders. This being the position, consumers found themselves faced with legal hurdles where, for example, to have an ex-parte interim order reversed, the consumer was obliged to approach the National Commission. The leitmotif of this article is to throw light on the barrier created by the amendment brought about in 2002 in the Act.
Essence of Power of Review
By way of explanation, the power of review of a Court is an essential feature of Rule of Law. It is an established procedure that allows Courts to review orders or judgments passed by subordinate Courts or the same Courts, if there exists a prima facie error of law and/ or a miscarriage of justice. It is trite that if an error is not self-evident and its detection requires long debate and process of reasoning, it cannot be treated as an error apparent on the face of the record. In Narshi Thakershi v. Pradyumansinghji4, the Honourable Supreme Court laid down the proposition that power of review is not an inherent power; it must be conferred either specifically or by necessary implication. The Narshi judgment was referred to by the Supreme Court in the case of Grindlays Bank Ltd. v. Central Government Industrial Tribunal and Ors5. In this case theSupreme Court held that the expression “review” is used in two distinct senses. First, procedural review, which is either inherent or implied in a Court or a Tribunal to set aside a palpably erroneous order passed under a misapprehension by it. Second, review on merits, when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the Court in the Narshi judgment held that no review lies on merits unless a statute specifically provides for it. Obviously and in the view of the author, when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power is inherent in every court or tribunal.
Amendment of Consumer Protection Act, 1986
Prior to the amendment of the Act in 2002, the power of review was not vested in any forum. The sole remedy against the orders of the District Forums and the State Commissions was to file an appeal or revision before the State Commission or the National Commission, respectively. In the case of orders passed by the National Commission, parties were obliged to approach the Courts to setting aside and review those orders. However, the 2002 amendment to the Act brought about with it changes in the functioning and powers of the National Commission. By insertion of Section 22(2)6 and Section 22 A7, the Act statutorily bestowed on the National Commission, the power to review its orders, to set aside ex-parte orders and to review ex-parte orders passed by consumers forums at any and all levels. Thus, through the operation of the amendment, with the exception of the National Commission, the lower consumer forums were explicitly prohibited to exercise this power.
In Jyotsana Arvind Kumar Shah and Ors. v. Bombay Hospital Trust8, the Honourable Supreme Court held that the State Commission did not have the power to review or recall its ex-parte orders. The Court held that “if the law does not permit the Respondent to move an application for setting aside the ex-parte order, which appears to be the position, the order of the State Commission setting aside the ex-parte order cannot be sustained. As stated earlier, there is no dispute that there is no provision in the Act enabling the State Commission to set aside an ex-parte order”.
Expressing a differing view, in New India Assurance Company Ltd. v. R.Srinivasan9, the Honourable Supreme Court without referring to Jyotsana’s Case, held that the State Commission could indeed review or recall its ex-parte orders. It held that "We only intend to invoke the spirit of the principle behind the above dictum in support of our view that every court or judicial body or authority, which has a duty to decide lies between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi-judicial body. In the absence of the complainant, therefore, the court will be well within its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non- appearance of the complainant”.
Subsequently, in Rajeev Hitendra Pathak and Ors. v. Achyut Kashinath Karekar and Anr.10, decided after the 2002 amendment , the full bench of the Honourable Supreme Court decisively laid to rest the divergent views emanating from preceding two differing judgments by finding in favour of the law as expressed in the Jyotsana judgment. The Court after analyzing the provisions of the Act held that consumer tribunals, being creatures of statute, derived their power from the express provisions of statute. It stated that it was the clear and explicit intent of the legislature to only bestow the National Commission the power to set aside or review its ex-parte orders. In conclusion, it confirmed that the District Forum and State Commission do not have the power to set aside ex-parte orders.
Power of Review in the Consumer Protection Act, 1986: A Barrier
The 2002 amendment failed to cure the inadequacies in the Act. The amendment - effectively barring the powers of the forums below the National Commission – instead acted as a barrier rather than a bridge to access justice. The legitimate review of continuous orders was not being pursued by consumers as a result of these complex procedures and the associated financial implications in embarking on such procedures.
It is apposite to note that the prolixity involved in an approach to a higher forum, even in cases seeking to set aside ex-parte interim orders, is absent of the notion of justice which the Act had a mandate to fulfil. By way of illustration, an ex-parte interim order is distinguishable from an ex-parte final order, inasmuch as the latter is passed in absence of the defending party and denotes finality in proceedings., whereas, an ex-parte interim order is not final and dispositive of the merits This differentiation is essential to understand that the amendment brought about in 2002 in the Act restricts review of even ex-parte interim orders by the District Forum and the State Commission, which is in essence a procedural order. This is contrary to the dictum laid down by the Honourable Supreme Court in Grindlays Bank, to the effect that such procedural orders can be very well reviewed by the forum passing the order. However, in practice and reality, the District Forums and the State Commission are following the law laid down by the Supreme Court in the case of Rajeev Hitendra Pathak.
Power of review has two facets, namely procedural review and substantive review. The Act as amended in 2002 stipulates that the power of review is vested with the National Commission. As such, the District Forum and the State Commission have adopted this literal interpretation, without recognizing that procedural review is inherent and can be undertaken by the forum passing the order. The disability of the lower forums to review or set aside ex-parte orders is at odds with the objective of the Act. This application of the law has escalated the risk of depriving the consumer of its rights. . Bearing in mind the purpose of consumer law to cater for simple access to justice, in addition to the stated objectives of the Act, this deficiency needs to be re-examined in the interest of the consumer at large. It is the power of review on merits that should be explicitly and specifically regulated by provisions of the Act or by necessary implication and not those which relate merely to procedure.
1 (Referred as “National Commission”).
2 (Referred as “District Forum”).
3 (Referred as “State Commission”).
4 AIR 1970 SC 1273.
5 1980 Supp SCC 420.
6 Section 22(2) of the Consumer Protection Act, 1986 states that “without prejudice to the provisions contained in sub-section (1), the National Commission shall have the power to review any order made by it, when there is an error apparent on the face of the record”.
7 Section 22(A) of the Consumer Protection Act, 1986 states that “Where an order is passed by the National Commission ex parte against the opposite party or a complainant, as the case may be, the aggrieved party may apply to the Commission to set aside the said order in the interest of justice.”
8 (1999) 4 SCC 325.
9 (2000) 3 SCC 242.
10 (2011) 9 SCC 541.
*Saurabh Bindal, Rajani, Singhania & Partners, [email protected]
*Madhu Sweta, Rajani, Singhania & Partners, [email protected]