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Maruti Udyog Limited, New Delhi v. Shri V.K Jain .
Summary of Opinion (V. Balakrishna Eradi, J.)
Factual and Procedural Background
A complaint petition was filed before the District Forum, Delhi by the respondent (the complainant) seeking compensation from the revision petitioner, M/s Maruti Udyog Ltd., for alleged negligence and delay in effecting delivery of a vehicle. When the complaint was heard by the District Forum the President of the Forum was absent; the case was heard and disposed of on January 16, 1990 by a Bench consisting only of the two other Members. The District Forum's order directed the revision petitioner to pay: (a) 18% interest on Rs. 91,976.20 for a specified period; (b) Rs. 6,316.56 as refund of excess price; and (c) Rs. 7,000 by way of compensation for loss of livelihood and suffering.
The District Forum's order recorded that the judgment was delivered under the "Consumer Protection Act, 1916, Rule 3(8) and Rule 4(10) promulgated vide notification ..." — a reference used in answer to objections about the competence of the two-member Bench. The revision petitioner appealed to the State Commission, Delhi, which upheld the District Forum's order: the State Commission interpreted Rules 3(8) and 4(10) of the Delhi Consumer Protection Rules, 1987 as permitting a two-member Bench to function and relied on Rule 5 (referred to in the opinion) as preventing challenge for casual absence. The State Commission dismissed the appeal. The present petition is a revision challenging the legality of disposing of the complaint by a Bench of only two members of the District Forum.
Legal Issues Presented
- Whether an order disposing of a complaint petition passed by only two out of three Members constituting a District Forum can be regarded as valid in law.
- Whether Rules made under Section 14(3) of the Consumer Protection Act, 1986 (specifically Rule 3(8), Rule 4(10), and Rule 4(5) of the Delhi Rules, 1987) are consistent with, or ultra vires of, the mandatory provision contained in Section 14(2) of the Act.
Arguments of the Parties
Revision Petitioner / Appellant
- The appellant raised only the question of the legality of disposal of the petition by a Bench consisting of only two Members of the District Forum (i.e., whether such disposal was valid under the Act).
State Commission / Respondent (as characterised in the opinion)
- The State Commission construed Rule 3(8) and Rule 4(10) of the Delhi Consumer Protection Rules, 1987 as authorizing a Bench consisting of only two Members of the District Forum to validly function and pass orders.
- The State Commission held that orders passed by a two-member Bench are not liable to be challenged on account of the casual absence of a Member, relying additionally on Rule 4(5) (referred to in the opinion as Rule 5 of those Rules) to validate proceedings despite absence.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court conducted a step-by-step statutory analysis focused on the interplay between statutory provisions and the Delhi Rules relied upon by the State Commission and the District Forum:
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Composition and mandatory signing requirement:
- The court cited Section 10(1) of the Consumer Protection Act, 1986 to explain that each District Forum consists of a President (a person qualified to be a District Judge) and two Members — i.e., three persons in total.
- The court extracted Section 14(2) of the Act, which mandates that "Every order made by the District Forum under Sub-section (1) shall be signed by all the members constituting it and, if there is any difference of opinion, the order of the majority of the members constituting it shall be the order of the District Forum."
- From the plain language, the court concluded the word "all" refers to all three members who together constitute the District Forum; therefore an order must be signed by all three members.
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Majority provision and its assumption:
- The court noted that the majority rule in the second part of Section 14(2) presupposes disposal by the three-member Forum; a majority view presumes at least three members so that a "majority" can be ascertained.
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Scope of rule-making power under Section 14(3):
- The court emphasized that Rules made under Section 14(3) are expressly "subject to the foregoing provisions" (i.e., subsections (1) and (2)), so no Rule may be framed inconsistent with those mandatory subsections.
- If a Rule conflicts with Sub-section (2), it is void to the extent of the inconsistency; Rules cannot enlarge or contradict the parent enactment.
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Analysis of Rule 3(8) (Delhi Rules):
- The court held Rule 3(8) (which empowers the senior-most member to discharge functions of the President during absence/illness) is concerned with administrative functions only and not with the discharge of quasi-judicial duties; therefore it is of "little relevance" to the question whether a two-member Bench can finally dispose of a complaint.
- Accordingly Rule 3(8) does not legitimize judicial disposal by a Bench of less than all three Members.
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Analysis of Rule 4(10) (Delhi Rules):
- Rule 4(10) provides that "Orders of the District Forum shall be signed and dated by the Members of the District Forum constituting the Bench and shall be communicated to parties free of charge."
- The court observed that Rule 4(10) can be read as permitting a Bench that does not include all three members to hear and dispose of a complaint and to have the order signed only by the members constituting that smaller Bench.
- Such an interpretation places Rule 4(10) in direct conflict with Section 14(2)'s mandatory requirement that every order be signed by all members constituting the District Forum (i.e., all three members).
- Because Rule 4(10) is inconsistent with Sub-section (2) of Section 14, it was held to be ultra vires and void to the extent of such repugnancy — i.e., the Delhi Administration exceeded its rule-making power under Section 14(3) by framing Rule 4(10) in a way that conflicts with the statute.
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Analysis of Rule 4(5) (Delhi Rules):
- Rule 4(5) states that "No act or proceedings of the District Forum shall be invalid by reason only of the existence of any vacancy among its members or any defect in its constitution."
- The court distinguished absence from vacancy: a casual absence (e.g., due to illness) is not a "vacancy" (which contemplates the post being unoccupied, to be filled by appointment because of expiry of term, death, resignation, removal, etc.).
- Consequently, Rule 4(5) could not be invoked to validate proceedings where a member was merely absent; reliance by the State Commission on this Rule to uphold the two-member disposition was found to be misconceived.
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Conclusion of legal analysis:
- On the combined statutory and rule analysis, the court concluded that under Section 14(2) as it stands, every order of a District Forum must be signed by all three Members; therefore a Bench consisting of only two Members (or a single Member) cannot validly hear and dispose of a complaint petition.
- The State Commission's contrary view was rejected as legally incorrect.
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Observations on practical difficulties and legislative remedy:
- The court acknowledged the practical inconvenience and delay that may result from insisting on the presence of all members at every sitting, noting many District Forums operate part-time and members may be unable to attend at short notice.
- However, the court emphasized it must apply the statute as written and stated that an appropriate amendment to Sub-section (2) of Section 14 would be necessary to address these practical problems without undermining the Act's objectives.
Holding and Implications
Holding:
THE ORDERS PASSED BY THE STATE COMMISSION AND THE DISTRICT FORUM IN THIS CASE ARE ILLEGAL AND WITHOUT JURISDICTION AND ARE HEREBY SET ASIDE.
Direct consequences and directions:
- The District Forum, Delhi is directed to restore Complaint Petition No. 1606 of 1989 to its file and to dispose of it afresh in accordance with law and in the light of the observations contained in this order.
- There will be no order as to costs.
Broader implications noted by the court:
- The court observed that while the statutory requirement of signatures by all three Members must be enforced, this requirement may impede speedy disposal in practice. To reconcile the object of speedy and cheap redressal of consumer grievances with practical realities, the court suggested that an amendment to Sub-section (2) of Section 14 should be carried out urgently by the legislature or competent authority.
- The decision applies the existing statute and rules as interpreted: it does not purport to create a new rule of substantive consumer law beyond the interpretation and application of the cited statutory provisions and Delhi Rules.
V. Balakrishna Eradi, J.:— The sole question arising for determination in this Revision Petition is whether an order disposing of a complaint petition passed only two out of three Members constituting a District Forum can be regarded as valid in law.
2. A complaint petition was filed by the respondent herein before the District Forum, Delhi seeking to recover compensation from the Revision petitioner—M/s Maruti Udyog Ltd., for alleged negligence and delay on the latter's part in effecting delivery of a vehicle to the complainant. On the date when the complaint petition was taken up for hearing by the District Forum, the President of the District Forum was not present and the case was heard and disposed of by a Bench consisting of only the two other Members of the Forum The said Bench disposed of the complaint petition by order dated January 16, 1990 whereby the revision petitioner (opposite Party in the complaint) was directed to pay to the complainant (a) 18% interest on a sum of Rs. 91,976.20 (being the amount deposited by the complainant towards the price of the vehicle) for the period from 8th August, 1989 to 23rd October. 1989; (b) a sum of Rs. 6,316.56 by way of refund of the excess price collected from the complainant for the vehicle and (c) Rs. 7,000/- by way of compensation for the loss of livelihood and the sufferings which the complainant had to undergo.
3. In the last paragraph of the order it was specifically stated that “this judgment is delivered under Consumer Protection Act, 1916, Rule 3(8) and Rule 4(10) promulgated vide notification No. 50(131)/06-F&S/CA dated 29th September. 1987.” Obviously, this was so stated by way of answer to the objections raised by the Opposite Party against the competence of the Bench consisting of only two Members of the District Forum to hear and dispose of the complaint petition.
4. The revision petitioner took up the matter in appeal before the State Commission, Delhi. In the arguments before the State Commission the appellant is stated to have urged only the aforesaid question relating to the legality of the disposal of the petition by the Bench consisting of only two Members of the District Forum. The State Commission took the view that in view of the provisions contained in Rule 3(8) and 4(10) of the Delhi Consumer Protection Rules, 1987 (hereinafter called the ‘Delhi Rules’), it was competent for a Bench consisting of only two of the Members of the Forum to validly function as the District Forum. It was further held by the State Commission that orders passed by such a Bench of the Forum are not liable to be challenged on the ground of the casual absence of any Member of the Forum in view of the provision contained in Rule 5 of the aforesaid Rules. On the basis of this reasoning, the State Commission held that the impugned order passed by two Members of the District Forum did not suffer from any legal infirmity. The appeal was accordingly dismissed by the State Commission.
5. The legality and correctness of the aforesaid view taken by the State Commission is under challenge in this revision petition.
Section 14(2) of the Consumer Protection Act, 1986 (hereinafter called the ‘Act’) reads:—
“Every order made by the District Forum under Sub-section (1) shall be signed by all the members constituting it and, if there is any difference of opinion, the order of the majority of the members constituting it shall be the order of the District Forum”
Section 10(1) of the Act which deals with the composition of the District Forum states:
“10(1) Each District Forum shall consist of—
(a) a person who is, or has been, or is qaulified to be a District Judge to be nominated by the State Government, to be its President;
(b) a person of eminence in the field of education, trade or commerce;
(c) a lady social worker.
6. Each District Forum thus consists of its President and two Members. Section 14(2) of the Act mandatorily lays down that every order passed by the District Forum under Sub-section (1) shall be signed by all the Members constituting it. The word “it” occurring in the said sub-section clearly refers to a District Forum established in accordance with Section 10(1) of the Act. Under the said Section the President and the two other members together constitute the District Forum. Under the mandatory terms of Sub-section (2) of Section 14 it is clearly stipulated that every order passed by the District Forum should be signed by “all the members constituting it”, that is by all the three persons mentioned in Section 10(1) of the Act.
7. The second part of Section 14(2) lays down that if there is difference of opinion the order of the majority of the members constituting it shall be the order of the District Forum. This provision is manifestly based on the assumption that the disposal of any complaint petition shall be only by all the three members because otherwise in the event of difference of opinion between only two persons there cannot be a “majority view”.
Rules 3(8) and 4(10) of the Delhi Rules which have been referred to and relied on by the State Commission as well as by the District Forum have been framed in exercise of the Rule making power conferred by Subsection (3) of Section 14 of the Act. The said sub section reads:—
“Subject to the foregoing provisions, the procedure relating to the conduct of the meeting of the District Forum, its sittings and other matters shall be inch as may be prescribed by the State Government.”
8. From the very opening words of this sub-section, it is clear that the power to make Rules has been conferred only subject to the provisions contained in Sub section (1) and (2) of the said Section. Hence no Rule can be made in exercise of the said power except in a manner perfectly consistent with the provisions contained in Sub-section (2) send if the said limitation is transgressed, the Rule will have to be treated as void to the extent of its inconsistency with the provisions contained in Sub-section (2).
At this stage it will be useful to extract Rule 3(8) and Rule 4(10) of the Delhi Rules which have been relied on by the State Commission.
Rule 3(8):—“When the President of the District Forum is unable to discharge the functions owing to absence, illness or any other cause, the senior most lira order of appointment) Member of the District Forum shall discharge the functions of the President until the day on which the President resumes the charge of his functions.”
Rule 4(10):—“Orders of the District Forum shall be signed and dated by the Members of the District Forum constituting the Bench and Shall be communicated to parties free of charge.”
9. In our opinion Rule 3(8) is of little relevance in the present context. As we understand the said Rule it only empowers the senior most Member of the District Forum to discharge the administrative functions of the President during the period when the President of the District Forum is unable to discharge those functions owing to absence illness or any other cause. The President of the District Forum has several administrative functions to discharge in relation to matters concerning the office establishment of the District Forum. The provision contained in Rule 3(8) is only intended to avoid a vacuum in regard to the performance of such administrative functions of the President during a period of temporary absence of the President and it is not a provision dealing with the discharge of the quasi judicial functions by the President of the District Forum. In regard to performance of judicial work, the President of the District Forum stands in the same position as the other two Members and he has no separate or distinctive role or function to discharge. It is only in regard to the administrative work of the District Forum that the President has his own separate role and function and the reference in Rule 3(8) is only to such administrative functions of the President. This sub-rule is therefore of no assistance or relevance in deciding the question raised before us concerning the competence of a Bench consisting of only two of the Members of the District Forum to pass final orders disposing of a complaint petition filed before it.
10. The position in relation to Rule 4(10) is however, quite different. Under the terms of said Rule, orders of the District Forum are required to be signed only by the members of the Forum constituting the Bench which heard the case. Though the Rule does not expressly state that the ‘Eench’ of the Forum need not consist of all the members constituting the District Forum it is capable of being interpreted and understood as implying that a complaint may be heard and dispose it of by a Bench of the District Forum which does not comprise all the three members (President and two Members) and that the order passed by such a Bench need be signed only by the Members of the District Forum “constituting the Bench”. If Rule 4(10) is to be interpreted in this manner its provisions are directly in conflict with the mandatory provision contained in Subsection (2) of Section 14 of the Act. Thus this sub-rule has been framed in clear violation of the limitation imposed on the Rule making power by the opening words of Sub-section (3) of Section 14. Rule 4(10) framed by the Delhi Administration has therefore to be regarded as ultra vires and void on the ground that the Delhi Administration has manifestly acted beyond the scope of the Rule making power conferred on it by Section 14(3) of the Act Even apart from the restriction imposed by the opening words of Section 14(3), it is a well recognised legal principle that a Rule can be framed under a statute only in a manner consistent with the provision contained in the parent enactment and it there is any inconsistency between the terms of a Rule framed under an Act and any of the provisions of the Act, the Rule will have to be treated as null and void to the extent of such repugnancy. Hence the provisions contained in Rule 4(10) in so far as it implies that an order can be signed and passed by a Bench which does not consist of all the three Members of the District Forum has to be treated as null and void to the extent of such repugnancy. Hence the provisions contained in Rule 4(10) in so far as it implies that an order can be signed and passed by a Bench which does not, consist of all the three Members of the District Forum has to be treated as null and void since it is directly in conflict with the mandatory stipulation contained in Section 14(2) of the Act.
Rule 4(5) of the Delhi Rules is the only other provision relied on by the State Commission in support of its conclusion upholding the legality of the order passed by the District Forum. Rule 4(5) reads:—
“No act or proceedings of the District Forum shall be invalid by reason only of the existence of any vacancy among its members or any defect in its constitution”.
11. A casual absence on account of illness or any other cause does not create a “vacancy” among the Members of the District Forum. A vacancy can be said to exist only when the post of the Member is unoccupied and remains to be filled by appointment of a substitute Such vacancy can arise on account of the expiry of the term of office of a member, death or resignation of a Member or the removal of a Member from office in exercise of the powers conferred on the administrator by Rule 6(5) of the Delhi Rules. We are not concerned in this case with the other contingency referred to in the said Rule namely a defect in the constitution of the District Forum. The reliance placed by the State Commission on Rule 4(5) of the Delhi Rules is, therefore, wholly misconceived.
12. The position that emerges from the foregoing discussion is that under the mandatory provision contained in Section 14(2) of the Act at it now stands, every order passed by a District Forum has to be signed by all the three Members (President and two members) all of whom together constitute the District Foram and it is not competent for a Bench consisting of only two Members or even a single Membes of a District Forum to validly hear and dispose of any complaint filed before the District Forum. The contrary view taken by the State Commission cannot be accepted as legally correct or sound.
13. We are fully conscious of the serious inconvenience and delay that would result from the insistence on the presence of all the members at every sitting of the District Forum but when the point is directly raised it has to be answered only in accordance with what has been laid down by the statute. The language of Section 14(2) of the Act being clear and unambiguous, it is our duty to give effect to it. We should however point out that it being of the essence of the purpose and intent of the Act to ensure speedy disposal of consumer grievances the said purpose will be frustrated to a considerable extent if Section 14(2) is to be retained in its present form. Many of the District Forums in the country are functioning on part-time basis and it may frequently happen that one of the members of the Forum suddenly finds himself/herself unable to be present for a sitting. A postponement of all the cases posted before the Forum for that day would manifestly involve great amount of inconvenience and expenditure to the parties in addition to causing delay in disposals. To avoid this situation, it is necessary that an appropriate amendment should be urgently carried out in Sub-section (2) of Section 14 so that the objective of assuring cheap and speedy redressal of Consumer grievances should not be hampered.
14. The orders passed by the State Commission and the District Forum in the present case are illegal and without jurisdiction and they will accordingly stand set aside. The District Forum, Delhi is directed to restore to its file Complaint Petition No. 1606 of 1989 and dispose it of afresh in accordance with law in the light of the observations contained in this order. There will be no direction regarding: costs.
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