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Abee Associates v. Paradise Heights Chs Ltd.

National Consumer Disputes Redressal Commission

Mar 10, 2015

Judgment

Subsequent
References

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Structured Summary of the Opinion

Factual and Procedural Background

The petitioner (also referred to as the opposite party) challenged an order of the Maharashtra State Consumer Commission (State Commission) in CC No. 11/283, aggrieved by the Commission's rejection of his preliminary objection to the maintainability of a complaint.

Relevant events (as described in the opinion):

Respondent No.1 originally filed CC No. 11/2005 before the State Commission. That complaint was dismissed for non-prosecution by order dated 01.03.2011.
On 15.04.2011 the respondent complainant filed an application for restoration of the complaint; that application was unconditionally withdrawn and dismissed by order dated 24.02.2012.
Thereafter the complainant filed a subsequent complaint in the State Commission based on the same cause of action as the earlier dismissed complaint.
The petitioner, upon service, filed a preliminary objection contending that the second complaint was not maintainable because a prior complaint on the same cause of action had already been dismissed on 01.03.2011.
The State Commission rejected the preliminary objection after hearing, relying principally on the Supreme Court decision in New India Assurance Co. Ltd. v. R. Srinivasan (AIR 2000 SC 941), and other authorities, and proceeded to list the matter for admission hearing.
The petitioner filed this revision petition challenging the State Commission's rejection of the preliminary objection; the State Commission's order and the competing submissions of counsel are recorded in the opinion.

Legal Issues Presented

Whether, following the dismissal of a consumer complaint for default (i.e., non-prosecution), a fresh consumer complaint on the same cause of action is maintainable?

Arguments of the Parties

Petitioner's Arguments (Shri Sukumar Pattjoshi)

The State Commission erred in relying on the decision in New India Assurance Co. Ltd. v. R. Srinivasan because a three-member Bench of the Supreme Court in Rajeev Hitendra Pathak & Ors. v. Achyut Kashinath Karekar & Anr. (2011 (9) SCC 541) had overruled that aspect of New India.
As per Rajeev Hitendra Pathak, the District Forum and the State Commission do not have the power to review or recall their own orders; entertaining a subsequent complaint on the same cause of action would amount to indirectly permitting a review of the earlier order dismissing the first complaint in default.
The petitioner therefore urged that the revision petition be allowed and the impugned order of the State Commission set aside.

Respondent's Arguments (Mr. H.V. Kumarswamy)

The respondent supported the impugned order of the State Commission and sought dismissal of the revision petition.
The respondent's counsel relied on New India Assurance Co. Ltd. v. R. Srinivasan (AIR 2000 SC 941) to argue that dismissal in default does not bar the filing of a second complaint on the same cause of action, particularly since the earlier complaint was not adjudicated on merits.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
New India Assurance Co. Ltd. v. R. Srinivasan, 2000 AIR (SC) 941	Held that the rules governing consumer fora do not contain a prohibition like Order 9, Rule 9(1) CPC; a complaint dismissed in default does not per se bar filing a second complaint on the same cause of action; it is permissible to file a second complaint explaining why the earlier complaint could not be pursued.	The State Commission's reliance on New India was upheld: the court applied this principle to conclude that a second complaint is maintainable where the first was dismissed for default and the second was filed within limitation. The court held the preliminary objection to be untenable on this basis.
Rajeev Hitendra Pathak & Ors. v. Achyut Kashinath Karekar & Anr., 2011 (9) SCC 541	Addressed whether a District Forum/State Commission has power to recall/review its own orders; in that context the three-member Bench overruled the aspect of New India that dealt with recall/review power.	The court acknowledged that Rajeev Hitendra Pathak overruled New India only on the point of power to recall/review. However, it found that Rajeev did not consider or decide the separate issue whether a second complaint after dismissal in default is maintainable. Thus Rajeev did not displace New India's rule on maintainability of a second complaint for the purposes of this case.
Motors Ltd. v. Anant Haridas Chodhar (National Commission) — reported in III (2013) CPJ 520	Cited by the State Commission (as reported in the opinion) in support of the proposition that the first complaint had not been decided on merits and that the present complaint was filed within limitation; the State Commission regarded the cause of action as continuous.	The court noted that the State Commission relied on this authority among others to support its view about continuity of cause of action and the absence of a statutory bar to a second complaint; the court accepted the State Commission's reliance as consistent with New India and its conclusion.
HDFC Standard Life Insurance, Solapur Branch v. Mr. Dilip Shridhar Sapatnekar, Appeal No. A/09/90 (State Commission, 31.01.2013)	Cited by the State Commission in support of the proposition that the earlier complaint was not decided on merits and that there is no bar to a second complaint under the Consumer Protection Act.	The court treated this State Commission decision as one of the authorities relied upon by the State Commission below to justify rejecting the preliminary objection; the appellate court found no fault in the State Commission having done so.

Court's Reasoning and Analysis

The court proceeded by identifying the precise legal question: whether dismissal of a consumer complaint for default prevents a fresh consumer complaint on the same cause of action. The analysis followed these steps, drawn from the opinion:

Factual determination: The first complaint was dismissed at the stage of admission on 01.03.2011 and was not decided on merits. The subsequent complaint was filed within the period of limitation. The cause of action was treated as continuing.
Statutory and rule framework: The court noted Section 18 of the Consumer Protection Act, 1986 and the procedural rules under the Act (sections 12–14 and the Rules framed thereunder). It observed that the consumer fora rules (e.g., Rule 4(8), Rule 8(8), Rule 15(6) etc., as discussed in New India) do not contain a provision equivalent to Order 9 Rule 9(1) CPC which bars a second suit after dismissal in default.
Application of New India (para 16): The court relied upon the principle in New India that the absence of a specific statutory prohibition means the rule of Order 9, Rule 9(1) CPC cannot be extended to proceedings before the consumer fora; consequently, a complainant may file a second complaint after an earlier dismissal for default, provided an explanation is given and the matter is within limitation.
Assessment of Rajeev Hitendra Pathak: The court examined the petitioner's reliance on Rajeev Hitendra Pathak. It concluded that Rajeev overruled New India only on the narrow point of whether the forums possess power to recall/review their own orders. Rajeev did not address the distinct question whether a second complaint after dismissal in default is maintainable. Therefore Rajeev did not negate the New India principle relied upon by the State Commission for the maintainability issue.
Distinction drawn between restoration and filing a second complaint: The court explained that restoration (if restoration were permitted) would relate back to the original filing date for limitation purposes, whereas filing a fresh complaint uses the fresh filing date for limitation. This distinction underlined that allowing a second complaint is not equivalent to permitting a review of the earlier dismissal.
Res judicata and limitation: Because the first complaint was dismissed for default without adjudication on merits, res judicata does not apply. The court reaffirmed that a second complaint is maintainable so long as it is within the period of limitation (Section 24A referenced) and not barred by res judicata.
Conclusion on preliminary objection: On the above reasoning, the court found the State Commission rightly rejected the preliminary objection and applied New India to dismiss that objection as untenable.

Holding and Implications

REVISION PETITION DISMISSED.

Implications and direct effects:

The impugned order of the State Commission rejecting the petitioner's preliminary objection was upheld; the revision petition was dismissed.
The court held that a second consumer complaint filed after an earlier complaint was dismissed for default is maintainable provided two conditions are met: (a) the second complaint is filed within the period of limitation; and (b) the second complaint is not barred by the principle of res judicata (which did not apply here because the first complaint was dismissed for default without adjudication on merits).
The court found that the Supreme Court decision in Rajeev Hitendra Pathak did not address the maintainability question and therefore did not displace New India on this particular point; the result was that no alteration of the State Commission's reliance on New India was required in this case.
The opinion does not purport to lay down any broader, novel precedent beyond applying existing authorities to the facts; its practical effect is limited to upholding the State Commission's determination that the second complaint before it was maintainable under the stated conditions.

Disposition recorded in the opinion: AJIT BHARIHOKE, Presiding Member; REKHA GUPTA, Member.

Show all summary ...

The petitioner / opposite party being aggrieved of rejection of his preliminary objection regarding maintainability of the complaint has preferred this revision against the order of State Commission Maharashtra, Mumbai in CC No. 11/283.

2. Briefly stated, the facts relevant for the disposal of the revision petition are that respondent no.1 earlier filed CC No. 11/2005 against the petitioner before the State Commission Maharasthra. The said complaint was dismissed for non prosecution vide order dated 01.03.2011. The respondent complainant filed application dated 15.04.2011 for restoration of complaint. The said application was, however, unconditionally withdrawn by the counsel for the respondent complainant and it was dismissed vide order dated 24.02.2012. Thereafter, the complainant filed subject claim in the State Commission on same cause of action. The petitioner on being served with the notice filed an application taking preliminary objection to the maintainability of the complaint on the ground that the complainant had earlier filed the complaint on the same cause of action which came to be dismissed on 01.03.2011. Thus, second complaint on the same cause of action is not maintainable.

3. State Commission after hearing the parties relying upon the judgment of Apex Court in the matter of rejected theNew India Assurance Company Vs. R.Srinivasan AIR 2000 SC 941 preliminary objection. The relevant observations of the State Commission are reproduced as under:

It is admitted fact that earlier complaint filed by the complainant was dismissed for want of non-prosecution. Thereafter, the complainant had filed an application for restoration of complaint. Later on, he had withdrawn the same. During the course of arguments, learned counsel for the opponents have placed reliance on ruling laid down by the Honble Apex Court in case of Rajeev Hitendra Pathak & . Passed in Civil Appeal No.4307/2007Ors. Vs. Achyut Kashinath Karekar & Ors on 19.08.2011, judgment passed by the Honble National Commission in the case of -reported in III (2013) CPJ 520SAS Motors Ltd. Vs. Anant Haridas Chodhar (NC) and the judgment passed by this Commission in the case of HDFC Standard passed in Firstlife Insurance, Solapur Branch Vs. Mr. Dilip Shridhar Sapatnekar Appeal No.A/09/90 on 31.01.2013. It is to be noted here that the first complaint filed by the complainant was not decided on merit. The present complaint is filed within limitation. Cause of action is continuous cause. There is no bar to entertain the second complaint under provisions of the Consumer Protection Act, 1986. The complainant has not asked for review of order or to set aside order. Learned counsel Mr. Kumarswami placed his reliance on the ruling laid down by the Honble Apex Court in the case of New India Assurance Co. ltd. Vs. R. Srinivasan-reported in 2000 AIR (SC) 941. In this ruling, the Honble Apex Court has observed in para no. 16 as under: This Rule is in identical terms with Sub-rule (8) of Rule 4 and Sub-rule (8) of Rule

8. Under this Sub-rule, the appeal filed before the State Commission against the order of the District Forum, can be dismissed in default or the State Commission may in its discretion dispose it of on merits. Similar power has been given to the National Commission under Rule 15(6) of the Rules made by the Central Government under Section 30(1) of the Act. These Rules do not provide that if a complaint is dismissed in default by the District Forum under Rule 4(8) or by the State Commission under Rule 8(8) of the Rules, a second complaint would not lie. Thus, there is no provision parallel to the provision contained in Order 9. Rule 9(1) Civil Procedure Code which contains a prohibition that if a suit is dismissed in default of the plaintiff under Order 9, Rule 8, a second suit on the same cause of action would not lie. That being so, the rule of prohibition contained in Order 9, Rule 9(1) Civil Procedure Code cannot be extended to the proceedings before the District Forum or the State Commission. The fact that the case was not decided on merits and was dismissed in default of non-appearance of the complainant cannot be overlooked and, therefore, it would be permissible to file a second complaint explaining why the earlier com-plaint could not be pursued and was dismissed in default.

This ruling is squarely applicable to the case in hand. In view of this ruling, objection is not tenable. Hence the preliminary objection raised by the opponents is rejected. Now the case is adjourned for hearing on the point of admission to 18.11.2013.

4. Shri Sukumar Pattjoshi, learned counsel for the petitioner has contended that the impugned order of the State Commission is not sustainable for the reason that the State Commission has failed to appreciate that Honble Supreme Court in the matter of Rajeev Hitendra Pathak & had held that view taken by theOrs. Vs. Achyut Kashinath Karkar & Anr. 2011 (9) SCC 541 State Commission in the matter of New India Assurance Company Ltd. Vs. R. Srinivasan is untenable. It is further contended that as per law laid down by the Supreme Court in the matter of Rajeev Hitendra Pathak & Ors. ( supra), District Forum and State Commission do not have power to review their own decisions. It is contended that the State Commission has committed an error because entertaining the subsequent complaint on the same cause of action would indirectly amount to allowing the respondent complainant to seek review of the earlier order of dismissal of complaint in default. Learned counsel has thus urged us to allow the revision petition and set aside the impugned order.

5. Mr. H.V.Kumarswamy, Advocate for respondent no.1 has argued in support of the impugned order and prays for dismissal of the revision petition.

6. We have considered the rival contentions. The question which needs determination in this revision petition is whether in the event of dismissal of consumer complaint, a fresh consumer complaint on the same cause of action is maintainable?

7. Undisputedly, the first complaint filed by the complainant was dismissed at the stage of admission vide order dated 01.03.2011. The instant complaint before the State Commission on the same cause of action has been filed within the period of limitation. It may be noted that cause of action for filing the complaint is a continuous cause of action. As per Section 18 of the Consumer Protection Act, 1986 ( hereinafter referred to as the Act), the State Commission for disposal of complaint is supposed to follow the procedure of complaint as provided in section 12 to 14 of the Act and the rules framed thereunder. There is no bar to entertain the second complaint on the same cause of action after the dismissal of first complaint for default under the provisions of the Act and Maharashtra Consumer Protection Regulations 2000 framed thereunder. Therefore, we are of the view that second complaint is maintainable provided it is within limitation in terms of Section 24 (A) of the Act, provided the second complaint is not barred by principal of resjudicata. Admittedly, the instant complaint is within limitation and the principal of resjudicata is not applicable because the complaint was dismissed for default at the stage of admission without going into the merits of the case. Thus, in our view, the State Commission has rightly dismissed the petition on maintainability relying upon the judgment of the Supreme Court in the case of New India Assurance Company Vs. R. Srinivasan, wherein it was observed in para 16 as under:

Learned counsel Mr. Kumarswami placed his reliance on the ruling laid down by the Honble Apex Court in the case of New India Assurance Co. ltd. Vs. R. Srinivasan-reported in 2000 AIR (SC) 941. In this ruling, the Honble Apex Court has observed in para no. 16 as under: This Rule is in identical terms with Sub-rule (8) of Rule 4 and Sub-rule (8) of Rule

8. Under this Sub-rule, the appeal filed before the State Commission against the order of the District Forum, can be dismissed in default or the State Commission may in its discretion dispose it of on merits. Similar power has been given to the National Commission under Rule 15(6) of the Rules made by the Central Government under Section 30(1) of the Act. These Rules do not provide that if a complaint is dismissed in default by the District Forum under Rule 4(8) or by the State Commission under Rule 8(8) of the Rules, a second complaint would not lie. Thus, there is no provision parallel to the provision contained in Order 9. Rule 9(1) Civil Procedure Code which contains a prohibition that if a suit is dismissed in default of the plaintiff under Order 9, Rule 8, a second suit on the same cause of action would not lie. That being so, the rule of prohibition contained in Order 9, Rule 9(1) Civil Procedure Code cannot be extended to the proceedings before the District Forum or the State Commission. The fact that the case was not decided on merits and was dismissed in default of non-appearance of the complainant cannot be overlooked and, therefore, it would be permissible to file a second complaint explaining why the earlier com-plaint could not be pursued and was dismissed in default.

8. Learned counsel for the petitioner has vehemently argued that the State Commission has erred in relying upon the above noted judgment ignoring the fact that three members Bench of the Supreme Court in the matter of Rajeev Hitendra Pathak & Ors.(supra) have overruled said judgment.

9. We have carefully gone through the judgment relied upon by the petitioner. In our view, the judgment in the matter of Rajeev Hitendra Pathak & Ors. (supra) is of no avail to the petitioner for the reason that in the said matter, the issue before the Supreme Court was whether or not the District Forum / State Commission has powers to recall / review its own order. In that regard, the Supreme Court over turned the judgment in the matter of New India Assurance Company Vs. R. Srinivasan (supra). In the Rajeev Hitendras case, the Supreme Court has not considered the issue whether or not after dismissal in default of complaint, second complaint on the same cause of action is maintainable? Thus, the impugned order cannot be faulted for relying upon the judgment in the matter of New India Assurance Company Ltd.. Vs. R.Srinivasan.

10. Learned Sh. Pattjoshi has also contended that State Commission has failed to appreciate that by allowing the complainant to maintain fresh complaint on the same cause of action, it has by implication reviewed its earlier order dismissing the first complaint in default. We do not find merit in this contention. Restoration of complaint and filing of second complaint are two different concepts. In the case of restoration of a complaint, date of filing of complaint for computing limitation shall relate back to date on which the complaint was filed and it would not be date of restoration of complaint. However, in the case of second complaint, for the purpose of limitation, the date of filing of earlier complaint is not relevant. Thus, in our view, when there is no bar provided in the Act or the rules framed thereunder for filing the second complaint after dismissal of complaint in default, there is no reason to deny the complainant to file the fresh complaint provided it is within limitation and is not barred by the principal of resjudicata.

11. In view of the discussion above, we do not find merit in the revision petition. It is accordingly dismissed. ......................J AJIT BHARIHOKE PRESIDING MEMBER ...................... REKHA GUPTA MEMBER