NCDRC Within Its Authority To Direct The Deposit Of Complete Or More Than Half Of The Amount Decided By SCDRC While Granting Stay: Manohar Infrastructure And Constructions Pvt Ltd Vs Sanjeev Kumar Sharma

DATE OF JUDGEMENT:
7th December, 2021

JUDGES:
Justices M.R. Shah and B.V. Nagarathna

PARTIES:
Manohar Infrastructure and Constructions Pvt. Ltd (Appellant)
Sanjeev Kumar Sharma (Respondent)

SUBJECT

The Supreme Court held that while the NCDRC may, after stating the reasons for doing so, order the deposit of the entire or more than half of the amount ordered by the SCDRC under Section 51 of the Consumer Protection Act, 2019. However, no discretion can be exercised by the NCDRC to order the payment of less than half the amount while entertaining an appeal under Section 51.

OVERVIEW

1. As per Section 51 of the Consumer Protection Act, 2019, where an appeal is made before the National Consumer Disputes Redressal Commission against the order of the State Consumer Disputes Redressal Commission, the appellants are mandated to deposit 50% of the amount order by the State Commission before the appeal can be entertained by the National Commission.
2. A group of builders had filed an appeal before the Supreme Court aggrieved by the order of the National Consumer Disputes Redressal Commission which, while issuing the stay order, directed the builders to deposit the entire amount determined by the SCDRC.
3. The State Commission had directed the builders to pay back the amount, with interest, that the paid by the home buyers.

IMPORTANT PROVISIONS

Consumer Protection Act, 2019

• Section 51:(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.

(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.

ISSUES

• Whether the NCDRC can stay the order of the SCDRC while directing the deposit of full or more than 50% of the amount ordered by the SCDRC?

ANALYSIS

1. The Supreme Court held that the NCDRC is well within its authority, while considering a stay application under Section 51 of the Consumer Protection Act, 2019, to order the deposit of the entire or more than 50% of the amount ordered by the State Commission.
2. However, such an order cannot be passed mechanically and the NSDRC must state the reasons for the conditional stay. The decision has to be taken after considering the facts and circumstances of the case.
3. The Court also pointed that there is no nexus between the condition of pre deposits and the stay order awarded by the National Commission.
4. The Court also pointed out that the NSDRC cannot exercise its discretion and order the payment of less than 50 percent of the amount while entertaining an appeal under Section 51.

CONCLUSION

The Court has rightly observed that a deposit of more than 50% may be directed by the National Commission. It must be noted that the purpose of Section 51 is to prevent frivolous appeals and where the Commission feels that a higher deposit than 50% is needed, it may order so while stating the reasons. Such a decision has to be taken depending on the facts and circumstances unique to a particular case. Thus, the minimum limit of 50% has been set by the Legislature and it is up to the discretion of the Commission to order the deposit of a sum higher than 50%.

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