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Supreme Court of India
Manohar Infrastructure And … vs Sanjeev Kumar Sharma on 7 December, 2021Author: M.R. Shah
Bench: M.R. Shah, Sanjiv Khanna
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7098 OF 2021
Manohar Infrastructure and
Constructions Private Limited …Appellant(s)
Versus
Sanjeev Kumar Sharma and Ors. …Respondent(s)
With
CIVIL APPEAL NO. 7099 OF 2021
TDI Infrastructure Ltd. …Appellant(s)
Versus
Jyoti Bhardwaj …Respondent(s)
With
CIVIL APPEAL NO. 7100 OF 2021
M/s. TDI Infrastructure Ltd. …Appellant(s)
Versus
Surender Sharma …Respondent(s)
With
CIVIL APPEAL NO. 7101 OF 2021
M/s. TDI Infrastructure Ltd. …Appellant(s)
Versus
Signature Not Verified
Digitally signed by R
Ved Prakash …Respondent(s)
Natarajan
Date: 2021.12.07
17:13:07 IST
Reason:
With
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CIVIL APPEAL NO. 7104 OF 2021
M/s. TDI infrastructure ltd. …Appellant(s)
Versus
Kusum Gaur and Anr. …Respondent(s)
With
CIVIL APPEAL NO. 7102 OF 2021
M/s. TDI Infrastructure ltd. …Appellant(s)
Versus
Ved Prakash …Respondent(s)
And
CIVIL APPEAL NO. 7103 OF 2021
M/s. TDI Infrastructure Ltd. …Appellant(s)
Versus
Kabita Bhattacharya and Anr. …Respondent(s)
JUDGMENT
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned order passed
by the National Consumer Disputes Redressal Commission, New Delhi
(hereinafter referred to as “National Commission”) dated 27.09.2021 in
I.A. No. 3621 of 2021 in First Appeal No. 330 of 2021 by which, the
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National Commission, while staying the order passed by the State
Commission has directed the appellant to deposit the entire decretal
amount with the State Commission, the original appellant – builder –
M/s. Manohar Infrastructure and Constructions Private Limited, has
preferred the Civil Appeal No. 7098 of 2021.
2. Feeling aggrieved and dissatisfied with the impugned order passed
by the National Commission dated 31.08.2021 passed in I.A. No. 5880
of 2021; I.A. No.5881 of 2021; I.A. No.5882 of 2021; I.A. No. 5883 of
2021 and I.A. No. 5884 of 2021 in respect of First Appeal Nos. 856 of
2020, 857 of 2020, 858 of 2020, 859 of 2020 and 860 of 2020 by which
the National Commission has dismissed the said I.A.s and refused to
modify or review or recall its earlier order dated 04.02.2021 by which,
while admitting the respective appeals, the National Commission granted
stay of the orders passed by the State Commission, subject to deposit of
entire decretal amount with up-to-date interest, if any, the original
appellant/applicant – builder – M/s. TDI Infrastructure Ltd. has preferred
the present Civil Appeal Nos. 7099 to 7104 of 2021.
3. At the outset, it is required to be noted that feeling aggrieved and
dissatisfied with the order passed by the State Commission directing the
appellant(s) to refund the amount paid by the respective home buyers
with interest, the appellant(s) have preferred the first appeals before the
National Commission under Section 51 of the Consumer Protection Act,
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2019 (hereinafter referred to as the “Act, 2019”). That in the said
appeal(s), the respective appellant(s)/applicant(s) filed the said
application(s) to stay the respective order(s) passed by the State
Commission.
4. At this stage, it is required to be noted that as the said respective
appellant(s) have deposited 50 per cent of the decretal amount by
preferring the appeal(s), which the appellant(s) are required to deposit
as a pre-deposit at the time of preferring the appeal(s) as required under
Section 19 of the Act, 2019. But the National Commission has stayed
the order passed by the State Commission on condition that the
appellant(s) shall deposit the entire decretal amount with interest, if any,
with the State Commission. Feeling aggrieved and dissatisfied with the
order(s) passed by the National Commission passed on the stay
application(s) directing the appellant(s) to deposit the entire decretal
amount with interest, if any, while staying the respective order(s) passed
by the State Commission, the original appellant(s) have preferred the
present appeals.
5. Shri Sidharth Dave, learned Senior Advocate has appeared on
behalf of the appellant in Civil Appeal No. 7098 of 2021 and Ms. Kanika
Agnihotri, learned Advocate has appeared on behalf of the appellant –
M/s. TDI Infrastructure Ltd. in Civil Appeal Nos. 7099 to 7104 of 2021.
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6. Shri Sidharth Dave, learned Senior Advocate on behalf of the
respective appellant has vehemently submitted that the National
Commission cannot pass an order to deposit the entire decretal amount
and/or any amount higher than 50 per cent of the amount in terms of the
order of the State Commission while entertaining the appeal in view of
the second proviso to Section 51 of the Act, 2019. It is submitted that
according to the statutory intent, the requirement of deposit at best can
be 50 per cent of the decretal amount and not higher than that. Learned
counsel appearing on behalf of the respective appellant(s) have heavily
relied upon the number of orders passed by this Court against several
orders passed by the National Commission granting stay of the order of
the State Commission subject to deposit of the entire decretal amount
with the State commission and this Court has disposed of the respective
special leave petition(s) with the direction that the appellant(s) shall
deposit 50 per cent of the decretal amount in view of the second proviso
to Section 51 of the Act, 2019.
6.1 It is further submitted that assuming that the National Commission
can pass the order to deposit the entire amount and/or any amount
higher than 50 per cent of the amount while staying the order passed by
the State Commission, in that case also such order(s) on stay
application(s) is/are not to be passed mechanically. It is submitted that
power to grant stay are akin to power to grant stay of the decree passed
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by the Civil Court under the provisions of the Civil Procedure Code,1908,
namely Order XLI Rule 5.
6.2 It is submitted that a speaking order is required to be passed by
the National Commission, if on facts, the National Commission proposes
to pass an order to deposit the entire decretal amount and/or any
amount higher than 50 per cent. It is submitted that directing the
appellant(s) to deposit the entire decretal amount/entire amount would
be unreasonable and taking away the right of the appellant/aggrieved
party to challenge the order passed by the State Commission in an
appeal under Section 51 of the Act, 2019.
6.3 It is submitted that considering second proviso to Section 51 of the
Act, 2019, it can be said that the legislative intent is that before the
appeal of the aggrieved party is considered by the National Commission
on merits, he has to deposit 50 per cent of the decretal amount and it is
sufficient that 50 per cent amount of the decretal amount is deposited
and not higher than that.
7. Learned counsel appearing on behalf of the original complaint(s)-
respondent(s) in the appeals preferred by the TDI Infrastructure Ltd. has
vehemently submitted that as such the appellant – TDI Infrastructure Ltd.
has not challenged the original order dated 04.02.2021 directing the
appellant(s) to deposit the entire amount ordered by the State
commission as a condition for grant of stay. It is submitted that
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thereafter by order dated 23.03.2021 the National Commission
dismissed the respective appeal(s) for waiver of the condition of deposit
of the entire decretal amount by earlier order dated 04.02.2021 and the
same is also not challenged. It is submitted that what is challenged is
the subsequent order dated 31.08.2021 passed in respective I.A. Nos.
5880 of 2021 to 5884 of 2021 in respective First Appeal Nos. 856 of
2020 to 860 of 2020, which were filed for modification of the earlier order
dated 04.02.2021. It is therefore submitted that in the absence of any
challenge to the earlier main National Commission’s orders dated
04.02.2021 and 23.03.2021, the present appeal(s)/special leave
petition(s) challenging only the order dated 31.08.2021 refusing to
modify the earlier order dated 04.02.2021 is not maintainable and the
same is not required to be entertained.
7.1 On merits, while opposing the present appeals, it is vehemently
submitted that as such the order passed by the State Commission is
akin to a money decree and therefore while staying the money decree
the National Commission is absolutely justified in directing the appellant
– judgment debtor to deposit the entire decretal amount while staying the
order passed by the State Commission. It is submitted that even
otherwise in the present case the order passed by the State Commission
is to refund the amount to the respective home buyers, which they
actually deposited and paid to the builder. It is therefore submitted that it
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is their money that the State Commission has directed to refund. It is
therefore submitted that as such the National Commission has rightly
directed to deposit the entire decretal amount.
7.2 It is further submitted by the learned counsel appearing on behalf
of the original complainant(s) that the issue, whether the National
Commission can pass an order to deposit the entire amount and/or any
amount higher than 50 per cent of the amount as such is no longer res
integra in view of the decision of this Court in the case of Shreenath
Corporation and Ors. Vs. Consumer Education and Research
Society and Ors., (2014) 8 SCC 657.
7.3 It is submitted that while considering the pari materia provision
under the Consumer Protection Act, 1986 (hereinafter referred to as the
“Act, 1986) second proviso to Section 19, it is observed and held that the
pre-deposit condition has no nexus with grant of interim order of stay. It
is held that while considering the stay of the order passed by the State
Commission, the National Commission can direct the appellant(s) to
deposit the entire amount. It is submitted that deposit of 50 per cent of
the amount awarded by the State Commission would be a pre-condition
to entertain the appeal filed by the aggrieved party -appellant and that is
the minimum mandatory requirement before the appeal and application
for stay is considered on merits.
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7.4 It is submitted that so far as the earlier orders passed by this Court
directing the appellant(s) to deposit only 50 per cent of the amount is
concerned, it is submitted that in none of the orders any law is laid down
by this Court. It is submitted that on the contrary, the issue involved in
the present appeal(s) is directly and squarely covered by the decision of
this Court in the case of Shreenath Corporation and Ors. (supra) by
which this Hon’ble Court has considered the issue in detail on merits and
has considered the object and purpose of deposit of the amount as a
pre-deposit. It is submitted that in the case of Shreenath Corporation
and Ors., this Court also considered the Order XLI Rule 5 and Order
XXXIX Rule 1 of the CPC alongwith the object and purpose of the
deposit of the amount as a pre-deposit before the appeal is entertained
under Section 19 of the Act, 1986.
7.5 Making above submissions, it is prayed to dismiss the present
appeals.
8. We have heard learned counsel for the respective parties at
length.
9. The short question which is posed for consideration of this Court
is:
“Whether in an appeal under Section 51 of the Consumer
Protection Act, 2019 and while considering the stay application to stay
the order passed by the State Commission, the National Commission
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can pass an order to deposit the entire amount and/or any amount
higher than 50 per cent of the amount in terms of the order of the State
Commission while entertaining the appeal under Section 51 of the Act,
2019?”
10. While considering the aforesaid issue/question, Section 51 of the
Consumer Protection Act, 2019 is required to be referred to, which reads
as under:-
“51. Appeal to National Commission.—(1) Any person
aggrieved by an order made by the State Commission in
exercise of its powers conferred by sub-clause (i) or (ii) of
clause (a) of sub-section (1) of Section 47 may prefer an
appeal against such order to the National Commission
within a period of thirty days from the date of the order in
such form and manner as may be prescribed:
Provided that the National Commission shall not
entertain the appeal after the expiry of the said period of
thirty days unless 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
State Commission, shall be entertained by the National
Commission unless the appellant has deposited fifty per
cent of that amount in the manner as may be prescribed.
(2) Save as otherwise expressly provided under this Act
or by any other law for the time being in force, an appeal
shall lie to the National Commission from any order
passed in appeal by any State Commission, if the
National Commission is satisfied that the case involves a
substantial question of law.
(3) In an appeal involving a question of law, the
memorandum of appeal shall precisely state the
substantial question of law involved in the appeal.
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(4) Where the National Commission is satisfied that a
substantial question of law is involved in any case, it shall
formulate that question and hear the appeal on that
question:
Provided that nothing in this sub-section shall be
deemed to take away or abridge the power of the National
Commission to hear, for reasons to be recorded in writing,
the appeal on any other substantial question of law, if it is
satisfied that the case involves such question of law.
(5) An appeal may lie to the National Commission under
this section from an order passed ex parte by the State
Commission.”
11. On a fair reading of Section 51 of the Act, 2019, more particularly,
second proviso to Section 51, it appears that the appellant(s) in an
appeal against the order passed by the State Commission may prefer an
appeal, however, before the appeal is entertained by the National
Commission, the appellant(s) has to deposit 50 per cent of the amount.
So, it is the pre-condition to deposit 50 per cent of the amount as
ordered by the State Commission before his appeal is entertained by the
National Commission. Therefore, it is a condition precedent to deposit
50% of the amount before his appeal is entertained by the National
Commission. However, that does not take away the jurisdiction of the
National Commission to order to deposit the entire amount and or any
amount higher than 50 per cent of the amount while considering the stay
application to stay the order passed by the State Commission. Rules for
entertainment of an appeal on deposit of 50 per cent of the amount
ordered by the State Commission, which is a statutory pre-deposit and
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the grant of interim order on the stay application subject to deposit of
further amount are distinct and different. Pre-deposit condition as per
second proviso to Section 51 has no nexus with the grant of interim
order of stay by the National Commission subject to deposit of the
amount awarded by the State Commission.
12. An identical question came to be considered by this Court in the
case of Shreenath Corporation and Ors. (supra). In the aforesaid
case, this Court was considering the pari materia provision under the
Act, 1986 and second proviso to Section 19, which provided pre-deposit
of amount specified therein, i.e., 50 per cent of the amount awarded by
the State Commission or Rs.35,000/- whichever is less. In the aforesaid
case, this Court had occasion to consider the object and purpose of pre-
deposit condition while entertaining the appeal under Section 19 by the
National Commission, against the order passed by the State
Commission. In paragraphs 8 to 10, it is observed and held as under:-
“8. This Court in State of Haryana v. Maruti Udyog
Ltd. [(2000) 7 SCC 348], while dealing with the case of
waiver of “pre-deposit” in an appeal under first proviso to
Section 39(5) of the Haryana General Sales Tax Act held:
(SCC p. 353, para 7)
“7. … There cannot be any dispute that right
of appeal is the creature of the statute and
has to be exercised within the limits and
according to the procedure provided by law. It
is filed for invoking the powers of a superior
court to redress the error of the court below, if
any. No right of appeal can be conferred
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except by express words. An appeal, for its
maintainability, must have a clear authority of
law. Sub-section (5) of Section 39 of the Act
vests a discretion in the appellate authority to
entertain the appeal if it is filed within sixty
days and the amount of tax assessed along
with penalty and interest, if any, recoverable
from the persons has been paid. The
aforesaid restriction is subject to the proviso
conferring discretion upon the appellate
authority to dispense with the deposit of the
amount only on proof of the fact that the
appellant was unable to pay the amount.
Before deciding the appeal, the appellate
authority affords an opportunity to the party
concerned to either pay the amount or make
out a case for the stay in terms of proviso to
sub-section (5) of Section 39 of the Act. Once
the conditions specified under sub-section (5)
of Section 39 are complied with, the appeal is
born for being disposed of on merits after
hearing both the sides.”
9. The second proviso to Section 19 of the Act mandates
pre-deposit for consideration of an appeal before the
National Commission. It requires 50% of the amount in
terms of an order of the State Commission or Rs 35,000,
whichever is less for entertainment of an appeal by the
National Commission. Unless the appellant has deposited
the pre-deposit amount, the appeal cannot be entertained
by the National Commission. A pre-deposit condition to
deposit 50% of the amount in terms of the order of the
State Commission or Rs 35,000 being condition
precedent for entertaining appeal, it has no nexus with the
order of stay, as such an order may or may not be passed
by the National Commission. The condition of pre-deposit
is there to avoid frivolous appeals.
10. It is not the case of any of the appellants that the
Consumer Forum, including the State and National
Commissions, has no power to pass interim order of stay.
If the National Commission after hearing the appeal of the
parties in its discretion wants to stay the amount awarded,
it is open to the National Commission to pass an
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appropriate interim order including conditional order of
stay. Entertainment of an appeal and stay of proceeding
pursuant to order impugned in the appeal stand on
different footings, at two different stages. One (pre-
deposit) has no nexus with merit of the appeal and the
other (grant of stay) depends on prima facie case,
balance of convenience and irreparable loss of party
seeking such stay.”
13. We are in complete agreement with the view taken by this Court in
the case of Shreenath Corporation and Ors. (supra). Therefore, it is
held that National Commission can pass an order to deposit the entire
amount and/or any amount higher than 50 per cent of the amount in
terms of the order of the State Commission while staying the order
passed by the State commission.
However, at the same time, while considering the stay application
against the order passed by the State Commission and while passing
the order to deposit the entire amount and/or any amount higher than 50
per cent of the amount, the National Commission has to assign some
reasons and pass a speaking order why the conditional stay is being
granted on condition of deposit of the entire amount and/or any amount
higher than 50 per cent of the amount. Such an order on the stay
application is not to be passed mechanically. Even in the case of
Shreenath Corporation and Ors. (supra), it is observed that if the
National Commission after hearing the appeal of the parties in its
discretion wants to stay the amount awarded by the State Commission,
it is open to the National Commission to pass an appropriate interim
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order including a conditional order of stay. The order passed by the
State Commission directing the appellant to refund the amount and/or
pay any amount higher than 50 per cent can be said to be akin to a
money decree. Even as per Order XLI Rule 5, the general rule is that
normally there shall not be any unconditional stay of a money decree,
however, at the same time, the Appellate Court may pass an appropriate
conditional order while staying the impugned decree depending upon the
facts of the case and by giving cogent reasons. Therefore, while
considering the stay application requesting to stay the order passed by
the State Commission and as observed and held hereinabove, the
National Commission can pass an order to deposit the entire amount
and/or any amount higher than 50 per cent of the amount while staying
the order passed by the State commission, however, the National
Commission has to pass a speaking order giving some reasons why in
the facts of the particular case the conditional stay of the order passed
by the State Commission is to be passed subject to deposit of the entire
amount and/or any amount higher than 50 per cent of the amount
awarded by the State Commission and that too after giving an
opportunity to the appellant as well as to the respondent. The order on
the stay application is not to be passed mechanically. It must reflect an
application of mind by the National Commission why the order passed by
the State Commission is to be stayed on condition of deposit of the
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entire amount and/or any amount higher than 50 per cent of the amount
awarded by the State Commission. However, at the same time, there is
no discretion at all to stay the order passed by the State Commission
subject to deposit of any amount less than 50 per cent of the amount
which is required to be deposited as a pre-deposit before the appeal is
entertained as per second proviso to Section 51 of the Act, 2019.
14. Now in so far as the various orders passed by this Court relied
upon by the learned counsel for the respective appellant(s) by which, the
special leave petition(s) have been disposed of directing the appellant(s)
to deposit only 50 per cent of the amount as ordered by the State
Commission are concerned, at the outset, it is noted that in none of the
cases any law has been laid down by this Court. It appears that while
issuing a notice(s), the appellant(s) was/were directed to deposit 50 per
cent of the amount as ordered by the State Commission and thereafter
without discussing any law and/or considering anything on merits and
the scheme of the Act, 2019, more particularly, Section 51 of the Act,
2019, the special leave petition(s) has/have been disposed of. On the
contrary, there is a direct binding decision of this Court in the case of
Shreenath Corporation and Ors. (supra) laying down the law after
discussing the scheme, object and purpose of pre-deposit and the power
of the National Commission to grant conditional stay of deposit of the
entire amount and/or any amount higher than 50 per cent of the amount.
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15. The sum and substance of the above discussion and our
conclusions would be that:-
(i) pre-deposit of 50 per cent of amount as ordered by the State
Commission under second proviso to Section 51 of the
Consumer Protection Act, 2019 is mandatory for
entertainment of an appeal by the National Commission;
(ii) the object of the said pre-deposit condition is to avoid
frivolous appeals;
(iii) the said pre-deposit condition has no nexus with the grant of
stay by the National Commission;
(iv) while considering the stay application in staying the order
passed by the State Commission, the National Commission
can grant a conditional stay directing the appellant(s) to
deposit the entire amount and/or any amount higher than 50
per cent of the amount in terms of the order of the State
Commission;
(v) however, at the same time, the National Commission has to
assign some cogent reasons and/or pass a speaking order
when the conditional stay of the order passed by the State
Commission is passed subject to deposit of the entire
amount and/or any amount higher than 50 per cent of the
amount either as an ex parte order or after hearing both
sides and considering the facts and circumstances of the
case.
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(vi) Thus, the National Commission can grant a conditional stay
of the order passed by the State Commission on deposit of
the entire amount and/or any amount higher than 50 per cent
of the amount as ordered by the State Commission in the
aforesaid manner.
16. Considering the impugned order(s) passed by the National
Commission, it appears that the said order(s) on the I.A.(s)/stay
application(s) directing the appellant(s) to deposit the entire decretal
amount while staying the respective order(s) passed by the State
Commission have been passed mechanically and without assigning any
reason(s) and/or no speaking order is passed. Therefore, the matters
are remanded to the National Commission to decide the said
application(s) afresh and pass an appropriate order on the said
application(s) in light of the observations made hereinabove. Till then,
the respondent(s) herein shall not take any coercive steps against the
appellant(s) herein
17. In view of the above discussion and for the reasons stated above,
all the appeals succeed in part. The respective I.A.(s) in respective
appeal(s) are ordered to be restored to the file of the National
Commission and the National Commission to pass fresh orders on the
respective I.A.(s)/stay application(s) and pass speaking order/reasoned
order considering the observations made hereinabove. It will be open
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for the original complainant(s) to submit that as it is a money decree and
the order passed by the State Commission is to refund the amount
deposited by them as a home buyer, therefore, the appellant(s) be
directed to deposit the entire amount and/or any amount higher than 50
per cent of the amount and the same may be considered by the National
Commission after giving opportunity to the appellant(s). At the same
time, it will also be open for the appellant(s) to pray for an unconditional
stay without deposit of the entire amount and/or any amount higher than
50 per cent of the amount. The said contentions may be considered by
the National Commission while exercising the discretion and considering
the respective stay application(s). The aforesaid exercise has to be
completed within a period of eight weeks from today. Either of the
parties to place a copy of the present judgment and order before the
National Commission forthwith.
All these appeals are partly allowed to the aforesaid extent only
with the law laid down on the powers of the National Commission to
grant conditional stay of the order passed by the State Commission on
condition of deposit of the entire amount and/or any amount higher than
50 per cent of the amount as observed hereinabove.
………………………………….J. [M.R. SHAH]
NEW DELHI; ………………………………….J.
DECEMBER 07, 2021. [B.V. NAGARATHNA]
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