LE­GAL MAT­TERS

Na­tional Com­mis­sion

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The Power that Backs In­dian Con­sumers

In 1998, the In­dian ju­di­cial sys­tem had a chal­lenge be­fore it. It had the task of es­tab­lish­ing the point that all de­ci­sions made by con­sumer fo­rums were le­gally bind­ing and each cit­i­zen was bound to obey their or­ders just like they had to ac­cept ver­dicts of other courts. The ju­di­ciary stood by the con­sumers, pro­tected their rights, and passed a land­mark judge­ment that em­pow­ered the con­sumers even more. Dr Prem Lata, Con­sumer Awak­en­ing Mem­ber, CDRF-Delhi

An in­flu­en­tial busi­ness­man filed a pe­ti­tion be­fore the high court of Kar­nataka chal­leng­ing a con­sumer fo­rum ver­dict that he should be ar­rested and sent to jail. The busi­ness­man’s at­tor­ney ap­pealed that con­sumer courts were non-ju­di­cial and had no au­thor­ity to pass such a ver­dict. The ap­peal was thor­oughly dis­cussed and the apex court in its judge­ment (Vishv­ab­harti Co-op­er­a­tive Hous­ing So­ci­eties ver­sus State of Kar­nataka, 2002) up­held Con­sumer Pro­tec­tion Act as valid leg­is­la­ture. The court re­jected the ar­gu­ment of the pe­ti­tioner and stated that par­lia­ment could pass any such leg­is­la­ture by which a tri­bunal, a fo­rum, or a quasi-ju­di­cial au­thor­ity might be con­sti­tuted. The judge­ment strength­ened con­sumer fo­rums and sharp­ened their teeth.

Another Chal­lenge – No Un­due Favours

In another case, a sim­i­lar ques­tion was raised by one Surinder Mo­han Arora. He chal­lenged the au­thor­ity of the Na­tional Com­mis­sion and the reg­u­la­tion framed un­der Sec­tion 30A of the Act.

A com­plaint was filed be­fore the district fo­rum by Arora, al­leg­ing that HDFC Bank had in­dulged in un­fair trade prac­tice by ask­ing him to pay penalty

for pre-pay­ment of loan. The con­sumer fo­rum passed their ver­dict in his favour, but the bank’s bat­tery of lawyers ap­proached the State Com­mis­sion to ap­peal against the order. Their ap­peal was dis­missed and the con­sumer fo­rum’s order was af­firmed.

The bank moved the Na­tional Com­mis­sion with re­vi­sion pe­ti­tion. The Na­tional Com­mis­sion heard the ar­gu­ments and re­versed the order of the con­sumer fo­rum, stat­ing that the par­ties had signed an agree­ment wherein the clause on penalty for pre-pay­ment of loan had been agreed upon by the com­plainant. Arora filed a re­view ap­pli­ca­tion be­fore the Na­tional Com­mis­sion. The com­mis­sion re­viewed its own order and dis­missed the re­view pe­ti­tion.

An ag­grieved Arora chal­lenged the au­thor­ity of Na­tional Com­mis­sion be­fore Delhi high court un­der Ar­ti­cle 226 of the Con­sti­tu­tion .The con­tention of the ap­pli­cant was that Na­tional Com­mis­sion had not given him the op­por­tu­nity to be heard while dis­pos­ing of his re­view pe­ti­tion. He stated that his pe­ti­tion was dis­posed of by the same set of judges who had passed the order ear­lier, and this was against the prin­ci­ple of nat­u­ral jus­tice. Hence, he chal­lenged Reg­u­la­tion 15 of Con­sumer Pro­tec­tion Reg­u­la­tions, 2005, that had em­pow­ered the Na­tional Com­mis­sion to dis­pose of re­view ap­pli­ca­tions in this man­ner.

The high court looked at the pow­ers of the Na­tional Com­mis­sion and sim­ply dis­missed the writ pe­ti­tion on the ground of mis­con­ceived facts. It cited that no ap­pli­ca­tion was ever filed be­fore he com­mis­sion for an oral ar­gu­ment, in the ab­sence of which the Na­tional Com­mis­sion had fol­lowed the cor­rect pro­ce­dure – which was not ul­tra vires of the pro­vi­sions.

The Supreme Court con­firmed the order of the high court and held Reg­u­la­tion 15 (2) valid.

The Case of a Proxy Coun­cil

The same case had an off­shoot. Lawyer Ma­jithia, who was ar­gu­ing the case (Surinder Mo­han Arora ver­sus HDFC Bank) be­fore the Supreme Court,

chal­lenged one no­tice is­sued by the Na­tional Com­mis­sion with a cause list.

Na­tional Com­mis­sion in their cause list specif­i­cally is­sued a no­tice stat­ing ‘no proxy coun­sel shall be al­lowed to make sub­mis­sion.’ Ma­jithia ar­gued that the said no­tice or di­rec­tion was bad in law and was with­out ju­ris­dic­tion. He ar­gued that such no­tice pre­vented a qual­i­fied lawyer en­rolled with the state bar coun­cil from pre­sent­ing their case be­fore the Na­tional Com­mis­sion. He fur­ther stated that un­der Sec­tion 30 of the Ad­vo­cates Act, 1961, an ad­vo­cate af­ter hav­ing been en­rolled un­der the Act had the right to ap­pear be­fore the courts or any other au­thor­ity, and there­fore the no­tice was cur­tail­ment of the rights of an ad­vo­cate. Fur­ther, it was al­leged that this no­tice was also in vi­o­la­tion of Ar­ti­cle 19 (1) (g) of the Con­sti­tu­tion, it be­ing the fun­da­men­tal right to prac­tice.

Lis­ten­ing to these ar­gu­ments, the Supreme Court stated that there was no ter­mi­nol­ogy in the Ad­vo­cates Act which de­fined ‘ proxy coun­sel’. It re­ferred to a re­cent judge­ment made in the mat­ter of San­jay Ku­mar ver­sus State of Bi­har (28 Jan­uary 2014) wherein a three-judge bench or­dered:

‘In the in­stant case, the coun­sel ap­pear­ing in the court for the pe­ti­tioner des­ig­nated him­self merely as a proxy coun­sel. The ad­vo­cate-on-record (AOR) had no courtesy to send at least a slip men­tion­ing the name of the coun­sel who was to ap­pear in the court. Thus we had no ad­van­tage even to know the name of the coun­sel who was ap­pear­ing in the court.

‘In such a chaotic sit­u­a­tion, any arzi farzi, half­baked lawyer un­der the la­bel of proxy coun­sel, a phrase not trace­able un­der the Ad­vo­cates Act, 1961, or un­der the Supreme Court Rules, 1966, can­not be al­lowed to abuse and mis­use the process of the court un­der a false im­pres­sion that he has a right to waste pub­lic time with­out any au­thor­ity to ap­pear in the court, ei­ther from the lit­i­gant or from the AOR (ad­vo­cate on record) as in the in­stant case.’

In the line of the above ob­ser­va­tion, the Supreme Court up­held the no­tice by Na­tional Com­mis­sion to ‘keep away proxy coun­sels from ap­pear­ing in any court.’

This order pro­nounced by the apex court can prove to be a boon for con­sumer fo­rums and needs to be pub­li­cized and pop­u­lar­ized. It is not out of place to men­tion that the pro­ceed­ings at con­sumer fo­rums are ham­pered badly by such proxy coun­sels who are di­rected by the ad­vo­cates to ap­pear be­fore the fo­rum only for the pur­pose of ob­tain­ing/seek­ing ad­journ­ments. Such proxy coun­sels are nei­ther aware of the facts of the case nor do they have any file with them. This prac­tice is one of the ma­jor fac­tors that de­lay court pro­ceed­ings, de­feat­ing the pur­pose of the law.

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