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MANU/AP/0050/2013
IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD
W.P. No. 2521 of 2013
Decided On: 07.02.2013
Appellants: Maytas Properties Ltd.
Vs.
Respondent: Andhra Pradesh State Consumer Disputes Redressal
Commission, Mr. Mamidi Naveen and Mrs. Mamidi Anantha Lakshmi Saritha
[Alongwith W.P. Nos. 2526, 2527, 2552, 2555 and 2559 of 2013]
Hon'ble
Judges/Coram:
G. Rohini and C. Praveen Kumar, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Sri. D. Prakash Reddy Senior Counsel in Writ Petition
Nos. 2521, 2555, 2559, 2526, 2527, 2552 of 2013 for Sri. Avinash Desai in Writ Petition
Nos. 2521, 2555, 2559 of 2013 and Sri. S. Niranjan Reddy in Writ Petition Nos. 2526,
2527, 2552 of 2013
For Respondents/Defendant: None for Respondent Nos. 2 & 3 in Writ Petition Nos. 2521,
2526, 2527 of 2013, Sri. Prabhakar Sripada Respondent Nos. 2 & 3 in Writ Petition Nos.
2552, 2555 of 2013 for Respondent No. 3 in Writ Petition No. 2559 of 2013
Subject: Consumer
Catch Words
Mentioned IN
Acts/Rules/Orders:
Code of Civil Procedure, 1908 (CPC) - Order XLI Rule 5; Code of Civil Procedure, 1908
(CPC) - Order XXI Rule 27; Code of Civil Procedure, 1908 (CPC) - Order XXXIX Rule
2A; Constitution Of India - Article 226; Consumer Protection Act, 1986 - Section
17, Consumer Protection Act, 1986 - Section 17 (a) (i), Consumer Protection Act, 1986 Section 19, Consumer Protection Act, 1986 - Section 24, Consumer Protection Act, 1986
- Section 25, Consumer Protection Act, 1986 - Section 25 (3), Consumer Protection Act,
1986 - Section 27, Consumer Protection Act, 1986 - Section 27A
Cases
Referred:
Cicily Kallarackal vs. Vehicle Factory MANU/SC/0672/2012 ; C.V. Ratnam vs. Union of
India and Ors. MANU/AP/0622/2001 ; Atma Ram Properties (P) Ltd. vs. Federal Motors
Pvt. Ltd. MANU/SC/1047/2004 ; Laxmi Engineering Works vs. P.S.G. Industrial
Institute MANU/SC/0271/1995 ; State of Karnataka vs. Vishwabarathi House Building
Coop. Society and Ors. MANU/SC/0033/2003
Citing
Reference:

Mentioned

5
Case
Note:
Consumer - Maintainability of proceedings - Consumer Protection Act, 1986 (the
Act) - Whether penal proceedings under Section 27 of the Act for failure to
comply with order of State Commission could be maintained while appeal
against order of State Commission was pending before National Commission Held, it was no doubt true that object of the Act was to provide speedy and
simple redressal to consumer disputes and procedure to be followed for
settlement of consumer disputes was summary in nature - However, having
regard to fact that Section 27 was penal provision under which non-compliance
of order of District Forum or State/National Commission would be punishable by
way of imprisonment or fine, Court was of opinion that Section 27 could not be
equated with other provisions of the Act providing for settlement of consumer
disputes by District Forum and State/National Commission - Petition allowed.
Industry: Real Estate
ORDER
G. Rohini, J.
1. The short question that requires consideration in these writ petitions is as to whether
the penal proceedings under Section 27 of the Consumer Protection Act, 1986 for failure
to comply with an order of the State Commission can be maintained while the appeal
against the order of State Commission is pending before the National Commission? The
petitioner in all the writ petitions is a company incorporated under the provisions of the
Companies Act, 1956. It is stated that the said company is engaged in the business of
property development and it had undertaken the development of a township called "The
Hill County". The respondents in the writ petitions who claim to have purchased
residential apartments in the above said township filed Complaints before the State
Consumer Disputes Redressal Commission (for short, 'State Commission') alleging that
the petitioner had failed to complete the said project and seeking a direction for refund of
the amount advanced by them together with interest. The said Complaints (C.C. No. 40
of 2011 & etc.) were allowed by the State Commission on different dates. Aggrieved by
the same, the petitioner herein preferred appeals before the National Consumer Disputes
Redressal Commission, New Delhi (for short, 'National Commission') which are pending.
2. While so, the respondents herein filed applications under Section 27 of the Consumer
Protection Act, 1986 (for short, 'the Act') before the State Commission with a prayer to
punish the writ petitioner for its failure to comply with the orders of the State
Commission in spite of the fact that the time granted had expired long back. In the said
applications (E.A. No. 18 of 2012 & etc.) the State Commission had initially directed
notice to the writ petitioner and subsequently bailable warrants were issued for ensuring
the personal appearance of the writ petitioner. Challenging the said orders, the writ
petitioner preferred Revision Petitions before the National Commission. By order dated
19.10.2012 the National Commission allowed the Revision Petitions, however it was
observed that an order can be passed by the State Commission requiring the petitioner
to be present in person if the presence of the petitioner was required. Thereafter the writ
petitioner filed applications (E.A. No. 2485 of 2012 & etc.) before the State Commission
raising an objection as to the very maintainability of the proceedings under Section 27 of
the Act and thus praying to reject all the applications filed under Section 27 as not
maintainable.
3. That apart, the petitioner filed W.P. No. 34850 of 2012 & etc., seeking a Writ of
Prohibition restraining the State Commission from continuing the proceedings under
Section 27 of the Act contending that the State Commission had no jurisdiction to
entertain the applications under Section 27 of the Act as the appeals against the orders

of the State Commission in C.C. No. 40 of 2011 are pending before the National
Commission.
4. The said writ petitions were disposed of by this Court by a common order dated
14.11.2012 with a direction to the State Commission to dispose of E.A.I.A. No. 2485 of
2012 & etc., in which the petitioner prayed for rejecting the applications filed under
Section 27 of the Act as not maintainable, within three weeks. It was also directed that
the personal appearance of the writ petitioner before the State Commission should not be
insisted upon till such orders were passed.
5. In pursuance thereof, the State Commission after hearing both the parties dismissed
E.A.I.A. No. 2485 of 2012 & etc by common order dated 21.01.2013. Hence these writ
petitions seeking Certiorari to call for the records relating to the said common order
dated 21.01.2013 passed by the State Commission, and to quash the same being
arbitrary, illegal and without jurisdiction.
6. We have heard Sri. D. Prakash Reddy, the learned Senior counsel representing Sri.
Avinash Desai and Sri. S. Niranjan Reddy, the learned counsel for the writ petitioners and
perused the material available on record. We have also heard Sri. Prabhakar Sripada, the
learned counsel for the respondents who appeared at the stage of admission and
contested the writ petitions by making elaborate submissions on all the issues involved.
7. The learned counsel for the respondents at the outset raised an objection as to the
maintainability of the writ petitions on the ground that an alternative remedy of appeal is
available under Section 27A of the Act. In the light of the said alternative statutory
remedy, the learned counsel contended that the petitioners cannot invoke the jurisdiction
of this Court under Article 226 of the Constitution of India. In support of his submission,
the learned counsel relied upon the decision in Cicily Kallarackal v. Vehicle
Factory MANU/SC/0672/2012 : (2012) 8 SCC 524.
8. However, the learned Senior Counsel appearing for the writ petitioner, while submitting
that the remedy of appeal under Section 27A of the Act is available only against an order
passed under Section 27 and such order has not yet been passed in the present case,
contended that the remedy of appeal under Section 27A of the Act cannot be availed by
the petitioner at this stage.
9. We find force in the submission of the learned Senior Counsel appearing for the writ
petitioner. What is challenged in the present batch of writ petitions is only an order
passed by the State Commission dismissing the interlocutory applications filed by the writ
petitioner to reject the petitions filed under Section 27 of the Act on the ground that no
such petitions can be maintained while the appeals preferred by the petitioner under
Section 19 of the Act are pending before the National Commission. Since no final order as
such is admittedly passed on the petitions filed by the respondents under Section 27 of
the Act, the question of appeal under Section 27A does not arise at all. Hence, the
preliminary objection raised on behalf of the respondents as to the maintainability of the
writ petitions on the ground of availability of alternative statutory remedy of appeal
cannot be accepted.
10. Coming to the merits of the case, the appeals preferred by the writ petitioner under
Section 19 of the Act against the orders passed by the State Commission in C.C. No. 40
of 2011 and etc., in exercise of its power conferred by Section 17 (a) (i) are admittedly
pending before the National Commission. Though the writ petitioner sought interim stay
of all further proceedings pursuant to the order of the State Commission in C.C. No. 40 of
2011 & etc., no orders have been passed so far and the said stay petitions are also
pending before the National Commission. In the meanwhile, the respondents herein filed
applications under Section 27 of the Act with a prayer to punish the writ petitioner for
non-compliance with the order of the State Commission. The objection raised by the writ
petitioner as to the maintainability of the said petitions was not accepted by the State

Commission and thus the impugned order came to be passed directing appearance of the
writ petitioner/JDR for the purpose of the trial in the petitions under Section 27 of the
Act.
11. As we could see, the writ petitioner filed E.A.I.A. No. 2485 of 2012 & etc., to reject
the petitions filed by the respondents under Section 27 of the Act on the ground that the
orders passed by the State Commission in C.C. No. 40 of 2011 & etc., in exercise of its
power conferred by Section 17 (a) (i) have not become final as provided under
Section 24 of the Act since the appeals preferred against the said orders are pending
before the National Commission.
12. The State Commission rejected the said contention and dismissed E.A.I.A. No. 2485
of 2012 & etc., holding that mere preferring of an appeal would not operate as stay of an
order appealed against and therefore pendency of the appeals before the National
Commission was no bar to proceed with the execution proceedings under Section 27 of
the Act. A perusal of the order under challenge shows that the State Commission
formulated two points for consideration namely (i) Whether the power under
Section 27 has to be exercised as a last resort only after invoking and exhausting the
remedy provided under Section 25 (3) of the Act and (ii) Whether the contention that the
order of the State Commission has not attained finality as laid down under Section 24 of
the Act is sustainable. So far as Point No. 1 is concerned, it was held by the State
Commission that as there was no provision in the Act which contemplates that the
remedy provided under Section 25 (3) should be exhausted in the first instance, the
petitions under Section 27 are maintainable. The said conclusion being in accordance with
the settled principle of law that the remedies under Section 25 and Section 27 are
independent, the State Commission cannot be held to have committed any error while
deciding Point No. 1. In fact, the said conclusion has not been questioned before us by
the writ petitioner.
13. However, so far as the conclusion on the Point No. 2 is concerned, it is contended by
Sri. D. Prakash Reddy, the learned Senior Counsel appearing for the writ petitioners that
the State Commission committed a grave error in holding that the petitions under
Section 27 were maintainable even before the order of the Commission attained finality
in terms of Section 24 of the Act. Relying upon a decision of the Full Bench of this Court
in C.V. Ratnam v. Union of India & Ors.MANU/AP/0622/2001 : 2001 (6) ALD 35 : 2001
(5) ALT 610 the learned Senior Counsel submitted that the State Commission is
competent to entertain the proceedings under Section 27 of the Act only when the order
made under Section 17 (a) (i) becomes final as provided under Section 24 of the Act. The
learned Senior Counsel further contended that the reliance placed upon by the State
Commission
on
Atma
Ram
Properties
P.
Ltd.
v.
Federal
Motors
P.
Ltd.MANU/SC/1047/2004 : (2005) 1 SCC 705 which was rendered in the context of
Order 41 Rule 5 of C.P.C. was misplaced.
14. On the other hand, the learned counsel for the respondents while placing reliance
upon Laxmi Engineering Works v. P.S. Industrial InstituteMANU/SC/0271/1995 : AIR
1995 SC 1428 and State of Karnataka v. Vishwabarathi House Building Co-op.
Society MANU/SC/0033/2003 : AIR 2003 SC 1043, contended that the expression
"finality of orders" in Section 24 of the Act cannot be interpreted as attaining finality after
exhausting all the remedies provided under the Act. The learned counsel submitted that
such interpretation would defeat the very object of the Act to provide speedy and simple
redressal to consumer disputes.
15. For proper appreciation of the above contentions, it is necessary to refer to
Section 24, Section 25 and Section 27 of the Act which read as under:

24. Finality of orders: Every order of a District Forum, State Commission


or the National Commission shall, if no appeal has been preferred against

such order under the provisions of this Act, be final.


25. Enforcement of orders of the District Forum, the State Commission or
the National Commission:- (1) Where an interim order made under this
Act, is not complied with the District Forum or the State Commission or
the National Commission, as the case may be, may order the property of
the person, not complying with such order to be attached.
(2) No attachment made under sub-section (1) shall remain in forced for
more than three months at the end of which, if the non-compliance
continues, the property attached may be sold and out of the proceeds
thereof, the District Forum or the State Commission or the National
Commission may award such damages as it thinks fit to be complainant
and shall pay the balance, if any, to the party entitled thereto.
(3) Where any amount is due from any person under an order made by a
District Forum, State Commission or the National Commission, as the
case may be, the person entitled to the amount may make an application
to the District Forum, the State Commission or the National Commission,
as the case may be, and such District Forum or the State Commission or
the National Commission may issue a certificate for the said amount to
the Collector of the district (by whatever name called) and the Collector
shall proceed to recover the amount in the same manner as arrears of
land revenue.
27. Penalties: (1) Where a trader or a person against whom a complaint
is made ('or the complainant') fails or omits to comply with any order
made by the District Forum, the State Commission or the National
Commission, as the case may be, such trader or person (or complainant)
shall be punishable with imprisonment for a term which shall not be less
than one month but which may extend to three years, or with fine which
shall not be less than two thousand rupees but which may extend to ten
thousand rupees or with both:
(2) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), the District Forum or the State Commission
or the National Commission, as the case may be, shall have the power of
a Judicial Magistrate of the first class for the trial of offences under this
Act, and on such conferment of powers, the District Forum or the State
Commission or the National Commission, as the case may be, on whom
the powers are so conferred, shall be deemed to be a Judicial Magistrate
of the first class for the purpose of the Code of Criminal Procedure, 1973.
(3) All offences under this Act may be tried summarily by the District
Forum or the State Commission or the National Commission, as the case
may be.
16. Having carefully gone through the provisions of the Act and the decisions cited by the
learned counsel in support of their respective submissions, we find it difficult to sustain

the conclusion of the State Commission that the proceedings under Section 27 can be
maintained even before the order of the State Commission attained finality in terms of
Section 24 of the Act.
17. It is to be noticed that the scope of Section 25 & Section 27 of the Act in the context
of Section 24 was considered by the Full Bench in C.V. Ratnam's case (2 supra) in detail
and it was held that the provision of Section 25 or Section 27 can be taken recourse to
only when the order of the Forum or the Commission becomes final. While explaining the
nature of power conferred under Section 25 of the Act, the Full Bench further held that
Section 27 can be taken recourse to only by way of last resort and that it had been
enacted for the purpose of dealing only with such defaulters who, despite several
opportunities failed and/or negligent to comply with the directions.
18. No other decision is brought to our notice in which a contra view was expressed
either by this Court or the Supreme Court.
19. In Laxmi Engineering Works' case (4 supra) cited by the learned counsel for the
respondents, the Supreme Court while dealing with the nature and powers of the
authorities created by the Act held that the orders of the District Forum, State
Commission and National Commission are final as declared in Section 24 and cannot
questioned in a civil Court. The question whether the penal proceedings under
Section 27 of the Act can be maintained while the appeal under Section 19 is pending
before the National Commission was neither argued nor decided in the said case. Even in
Vishwabarathi House Building Co-op. Society's case (5 supra) the question with regard to
the finality of the orders with reference to Section 24 of the Act was not considered nor
any ratio as such was laid down on the said issue.
20. On a plain reading of Section 27 of the Act, it is clear that it is penal in nature and is
intended to empower the District Forum or the State/National Commission to punish not
only the opposite party but also the complainant if it comes to the conclusion that the
action on the part of the defaulter is dishonest and intentional. As explained in
Vishwabarathi House Building Co-op. Society's case (5 supra) and also in C.V. Ratnam's
case (2 supra), Section 27 is akin to Order XXXIX Rule 2Aof C.P.C. or the provisions of
the Contempt of Courts Act or Section 51 read with Order XXI Rule 27 of C.P.C. It is no
doubt true that the object of the Act is to provide speedy and simple redressal to
consumer disputes and the procedure to be followed for settlement of consumer disputes
is summary in nature. However, having regard to the fact that Section 27 is a penal
provision under which non-compliance of the order of the District Forum or the
State/National Commission would be punishable by way of imprisonment or fine, we are
of the opinion that Section 27 cannot be equated with the other provisions of the Act
providing for settlement of consumer disputes by the District Forum and State/National
Commission. Therefore, the penal proceedings under Section 27 cannot be allowed to be
taken recourse to even before the order of the District Forum or State/National
Commission attains finality merely on the ground that the Act provides for speedy and
simple redressal to consumer disputes. In fact, the language of Section 24 of the Act is
plain and unambiguous and makes it clear that the order of a District Forum or
State/National Commission shall be final only if no appeal has been preferred against
such order. The law is well settled that the language employed in a statute is the
determinative factor of legislative intent. Therefore, as held by the Full Bench in C.V.
Ratnam's case (2 supra) Section 27 can be taken recourse to only by way of last resort
after the order attains finality as provided under Section 24 of the Act.
21. The reliance placed by the State Commission upon Atma Ram Properties P. Ltd.'S
case (3 supra) while passing the impugned order in our considered opinion is misplaced.
The decision in Atma Ram Properties P. Ltd.'S case (3 supra) was rendered in the light of
Order 41 Rule 5 of C.P.C. which provides that an appeal shall not operate as a stay of
proceedings under a decree or order appealed from except where execution of decree is

stayed. Admittedly no such provision is available in the Act. On the other hand, it is
expressly provided under Section 24 of the Act that the order of the District Forum or the
State Commission shall be final if no appeal has been preferred against such order under
the provisions of the Act. In the light of Section 24, it can be safely concluded that the
penal proceedings under Section 27 of the Act cannot be entertained while an appeal is
pending before the State/National Commission.
22. For the reasons stated above, we are of the opinion that the petitions filed by the
respondents under Section 27 of the Act cannot be entertained at this stage. Accordingly,
we hold that the State Commission has no jurisdiction to entertain and proceed with E.A.
No. 18 of 2012 & etc., filed by the respondents under Section27 of the Act. Therefore the
impugned order passed by the State Commission being without jurisdiction is liable to be
set aside on that ground alone.
23. Accordingly, the impugned order is hereby set aside and E.A.I.A. No. 2485 of 2012 &
etc., shall stand allowed.
24. In the result, all the Writ Petitions are allowed. No costs. Consequently the
miscellaneous petitions, if any, pending in all the writ petitions shall stand closed.
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