LEGAL MATTERS

National Commission

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.