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Manohar Infrastructure and Constructions Pvt. Ltd. v. Sanjeev Kumar Sharma

Consumer Protection Act, 2019 Section 51 – Appeal to National Commission 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.

The object of the said pre-deposit condition is to avoid frivolous appeals. The said pre-deposit condition has no nexus with the grant of stay by the National Commission. 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. 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. 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.

Consumer Protection Act, 2019 Section 51 – Appeal to National Commission – 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 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 ? Held, 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. 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 order including a conditional order of stay.

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 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. [Para 11]

Facts of the Case

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.

Case Law Reference

  1. Shreenath Corporation v. Consumer Education and Research Society, (2014) 8 SCC 657