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Smart Summary

Factual and Procedural Background

The petitioner in both cases was a respondent in consumer dispute cases before the A.P State Consumer Dispute Redressal Commission, Hyderabad (the Consumer Forum). An ex parte order was passed against her, holding her guilty of deficiency of service and ordering payment of compensation, without notice to her. She filed a petition before the State Forum seeking to set aside the ex parte order and recall the arrest warrant issued against her. The State Forum passed orders holding that an application to set aside the ex parte order did not lie before it and that the only remedy was to appeal to the National Commission. The petitioner challenged these orders before the High Court.

Legal Issues Presented

  1. Whether the State Consumer Dispute Redressal Commission has jurisdiction to set aside an ex parte order passed without notice to a party.
  2. Whether the High Court can entertain revision or supervisory jurisdiction under Article 226 or Article 227 of the Constitution of India against orders of the Consumer Forum refusing to set aside ex parte orders.
  3. The scope and exercise of inherent powers of a Tribunal or Court to recall or set aside its own orders passed without jurisdiction or notice.

Arguments of the Parties

Petitioner’s Arguments

  • Relied on a decision in Dealwell Engineering Works v. V.V Choudary to argue that the High Court has jurisdiction under Article 226 to entertain revision applications against District Forum decisions under the Consumer Protection Act.
  • Asserted that although the Consumer Protection Act does not expressly provide for setting aside ex parte orders, such orders passed without notice are nullities and the Forum has implied power to correct such orders.
  • Invoked the principle from Grindlays Bank v. Central Government Industrial Tribunal that Tribunals have the duty and power to set aside ex parte awards passed without notice and to rehear the matter.
  • Relied on the inherent power of Courts to recall orders causing prejudice, citing State of Orissa v. Janamohan Das and A.R Antulay v. R.S Nayak, to support the exercise of jurisdiction to set aside the ex parte order and remand the matter for fresh adjudication.

Respondent’s Arguments

  • Argued that a mere wrong decision does not justify exercise of jurisdiction under Article 227 of the Constitution.
  • Relied on Mohd. Yunus v. Mohd. Mutaqim to contend that the High Court’s supervisory jurisdiction is limited to ensuring that the Forum functions within its authority.
  • Contended that the petitioner was set ex parte due to refusal of notice and that substituted service was effected by publication in a newspaper.
  • Maintained that the grievance is not merely a wrong decision but an issue of refusal by the Forum to exercise jurisdiction vested in it.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Dealwell Engineering Works v. V.V Choudary, (1994) 1 ALT 729 High Court jurisdiction under Article 226 to entertain revision applications against District Forum decisions under the Consumer Protection Act. The Court acknowledged supervisory jurisdiction exists but held that revisional jurisdiction should be exercised only in extraordinary cases and not as a matter of routine where an appeal remedy exists.
Grindlays Bank v. Central Government Industrial Tribunal, (1980) Supp SCC 420; AIR 1981 SC 606 Tribunal’s implied and ancillary power to set aside ex parte awards passed without notice and to rehear the matter. The Court applied this principle analogously to the Consumer Forum, holding that ex parte orders passed without notice are nullities and can be set aside by the Forum.
State of Orissa v. Janamohan Das, AIR 1993 Orissa 180 Inherent power of Courts to recall their orders if injury is caused to a suitor by a wrong done by the Court. The Court relied on this to affirm that inherent power exists to recall or set aside orders in exceptional cases, justifying remand for fresh adjudication.
A.R Antulay v. R.S Nayak, (1988) 2 SCC 602; AIR 1988 SC 1531 Distinction between power of recall and review; inherent power to recall orders causing injustice. Supported the Court’s view on inherent jurisdiction to recall orders and correct mistakes causing prejudice.
Mohd. Yunus v. Mohd. Mutaqim, (1983) 4 SCC 566; AIR 1984 SC 38 Limits of High Court’s jurisdiction under Article 227 to ensure inferior courts act within their authority. The Court noted that mere erroneous decisions do not warrant interference but refusal to exercise jurisdiction does.

Court's Reasoning and Analysis

The Court recognized the supervisory jurisdiction of the High Court under Article 226 and the revisional jurisdiction under Article 227 but emphasized that such jurisdiction should be exercised sparingly, especially where an appeal remedy exists. It rejected a blanket proposition that the High Court must entertain revisions against all Forum decisions under the Consumer Protection Act.

However, the Court held that where an ex parte order is passed without notice, it is a nullity and the Forum has an implied power to set aside such orders to do justice between parties. This power is ancillary to the Forum’s functions and necessary to correct jurisdictional errors.

The Court drew an analogy to the Industrial Disputes Act jurisprudence, where Tribunals have both power and duty to set aside ex parte awards passed without notice and to rehear the case.

Further, the Court referred to the inherent power of Courts to recall orders causing prejudice to parties, distinguishing this from review power, and held that such power should be exercised in exceptional cases.

On the facts, the Court found that the Consumer Forum wrongly refused to entertain the petitioner’s application to set aside the ex parte order, thereby refusing to exercise jurisdiction vested in it. The Court directed the Forum to entertain the application and decide on merits, remanding the matter for fresh adjudication.

The Court also addressed the respondent’s contention that notice was refused by the petitioner, holding that the factual dispute on notice and service must be decided by the Forum and does not negate the Court’s power to direct the Forum to exercise jurisdiction properly.

Holding and Implications

DISPOSED OF

The Court set aside the impugned orders refusing to entertain the application to set aside the ex parte order and remanded the matter to the Consumer Forum for fresh adjudication on the petitioner’s grievance. The decision underscores that Consumer Forums possess implied power to set aside ex parte orders passed without notice and that the High Court’s supervisory jurisdiction extends to ensuring such jurisdiction is exercised. No new precedent was established beyond affirming existing principles of inherent and ancillary powers of Tribunals and Courts to correct jurisdictional errors and prevent injustice.

    Meesa Varalakshmi v. A.P State Consumer Disputes Redressal Commission, Hyd. And Anr.

    Lingaraja Rath, J.:— Heard the learned Counsel for the parties. These two cases raise the same question and hence are disposed of by this common order.

    2. The petitioner in both the cases was one of the respondents in C.D Nos. 51 and 84 of 1993 before the A.P State Consumer Dispute Redressal Commission, Hyderabad (hereinafter referred to as ‘the Consumer Forum’). Ex parte order against her having been passed holding her to have guilty of deficiency of service and for payment of compensation, she filed a petition before the State Forum to set aside the ex parte order and to recall the arrest warrant issued against her as the order had been passed without notice to her.

    3. Orders were passed by the State Forum in I.A Nos. 1745 and 1746 of 1994 in C.D No. 51 of 1993 and I.A Nos. 1747 and 1748 of 1994 in C.D No. 84 of 1993, which are impugned before us, that an application for setting aside the ex parte order did not lie before the State Forum and that the only remedy available to the petitioner is to appeal to the National Commission.

    4. The learned Counsel for the petitioner places reliance on a decision in Dealwell Engineering Works, Secunderabad v. V.V Choudary, Ananthapur (1) 1994 (1) ALT 729 a judgment of a learned single Judge, to persuade us that the High Court has jurisdiction under Article 226 of the Constitution of India to entertain revision applications against the decision of the District Forum under the Consumer Protection Act. While there cannot be any dispute about the existence of the supervisory jurisdiction of this Court on the Forum under the Consumer Protection Act under the provisions of Article 226 of the Constitution of India and hence there would be powers to entertain revisions against decisions of the Forums under the Act, yet it is well known that where provisions of appeal are provided against any order, the revisional jurisdictions can be exercised, if at all, only in extraordinary occasions. The theory of alternative remedy is as much applicable to Article 227 of the Constitution as to the entertainment of applications under Article 226. We hence cannot agree to a blanket proposition as advanced that wherever a decision is rendered by the State or the District Forum under the Consumer Protection Act, this Court would be obliged to entertain application under Article 227 of the Constitution and not desire the parties to approach the appellate forum. The cited case also does not lay down any proposition as is advanced before us and except where the Consumer Protection Act was not applicable and consequently the Forums have acted without jurisdiction in entertaining the applications, the Court could exercise its jurisdiction under Article 227 as a corrective measure. It is true that the Consumer Protection Act or the Rules do not specifically provide for power in the Forums to set aside ex parte orders. But, where an order has been passed without notice to the parties, it is nothing but a nullity in law and an action taken without jurisdiction. The Tribunal would have the implied and ancillary power to set its own record straight by purging itself of orders passed by it which is non est in law. To that extent its power to set aside an ex parte order has to be assumed. The position was explained by the Supreme Court in Grindlays Bank v. Central Government Industrial Tribunal (2) 1980 Supp SCC 420 : AIR 1981 SC 606 while dealing with a similar question under the Industrial Disputes Act. So far as the Industrial Tribunals are concerned, the Court held, that in such circumstances the Tribunal has not only the power but also the duty to set aside the ex parte order and to direct the matter to be heard afresh. It was observed:

    “It is true that there is no express provision in the Act or the rules framed thereunder giving the Tribunal jurisdiction to do so. But it is well known rule of statutory construction that a Tribunal or Body should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. In a case of this nature, we are of the view that the Tribunal should be considered as invested with such incidental or ancillary powers unless there is any indication in the statute to the contrary.

    We are inclined to the view that where a party is prevented from appearing at the hearing due to a sufficient cause, and is faced with an ex parte award, it is as if the party is visited with an award without a notice of the proceedings. It is needless to stress that where the Tribunal proceeds to make an award without notice to a party, the award is nothing but a nullity. In such circumstances, the Tribunal has not only the power but also the duty to set aside the ex parte award and to direct the matter to be heard afresh.”

    5. Either the Court or the Tribunal would have the power to correct its own order when the outcome which is sought to be reversed was the product of a mistake committed by the Court. Such power is inherent in the Court or the Tribunal because of the larger principle that no one should suffer prejudice by the acts of a Court. The power of recall was considered in detail in State of Orissa v. Janamohan Das (3) AIR 1993 Orissa 180 where placing reliance on a decision in A.R Antulay v. R.S Nayak (4) (1988) 2 SCC 602 : AIR 1988 SC 1531 the Court distinguished between the power of recall and that of review and found that every Court has the inherent power to recall its order if by any wrong done by it an injury is caused to a suitor. But the power is to be exercised, if not in rarest of rare cases, only in exceptional cases. For such reasons we entertain the application and reverse the order impugned in the case and remand the matter to the first respondent for fresh adjudication as to whether the grievance raised by the petitioner is justified, calling for setting aside the ex parte order against her.

    6. The learned Counsel for the respondent submits before us that a mere wrong decision without anything more does not attract exercise of jurisdiction under Article 227 of the Constitution and the jurisdiction of the High Court under the Article is limited “to seeing that an inferior Court or Tribunal functions within the limits of its authority”. In support of the same, reliance is placed on a decision in Mohd. Yunus v. Mohd. Mutaqim (5) (1983) 4 SCC 566 : AIR 1984 SC 38. Counsel submits on facts, placing reliance on the averments made in the counter affidavit, that the petitioner had been set ex parte as the registered notice sent to her had been refused by her and that thereafter in the execution proceedings she was again set ex parte because of having refused the notice and thereafter substituted service was taken up on her through paper publication in “ANDHRA JYOTHI” on 6-11-1994. The learned Counsel for the petitioner submits of it being the affidavit for the petitioner that she had never refused notice and was not aware of the publication. The principle decided in Mohd. Yunus v. Mohd. Mutaqim (5 supra) in no way an authority to negate the exercise of the extraordinary jurisdiction of this Court in the present case as being contrary to law. The grievance made by the petitioner is not of a mere wrong decision by the Forum but is one where it has refused to exercise jurisdiction which is vested in it. It being the function of this Court to see that Tribunals function in accordance with law, it becomes its duty when the Tribunal improperly refuses to exercise its jurisdiction and direct the jurisdiction to be properly exercised. The fact whether notice was actually refused by the petitioner or she had any bona fide cause for non-appearance is a matter to be decided by the first respondent on facts. Once such matter is decided, this Court may not exercise jurisdiction if the decision is merely an erroneous one. But at this stage where the Consumer Forum has refused to entertain the application for consideration taking the view that it has no power to do so, this Court would direct the Tribunal to entertain the application and pass orders in accordance with law.

    7. The C.R.Ps are accordingly disposed of.

    8. No costs.

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    Comments

    Meesa Varalakshmi v. A.P State Consumer Disputes Redressal Commission, Hyd. And Anr.
    (Sep 23, 1996)