Bookmark
PDF
Share
CaseIQ

Sukhvinder Singh Hayer v. M/s Manohar Infrastructure and Constructions Pvt. Ltd.

State Consumer Disputes Redressal Commission

Mar 23, 2017

Judgment

Subsequent
References

CaseIQ

Smart Summary (Beta)

Structured Summary of the Provided Opinion

Factual and Procedural Background

The opinion addresses the question whether interest claimed by a complainant should be added to other relief claimed for the purpose of determining the pecuniary jurisdiction of State Commissions/Consumer Fora. The matter arose in the context of prior decisions by benches of the National Commission, notably a Three Judges Bench decision in Ambrish Kumar Shukla (referred to as "Shukla (supra)") and an earlier Three Judges Bench decision in Shahbad Cooperative Sugar Mills Ltd. (II 2003 CPJ 81 (NC)). The court reviews the pleadings in a complaint which sought Rs. 18,33,000/- plus interest @ 18% from the date of claim till realization and notes that interest claimed pertained to period up to the date of filing, pendente lite and future.

The Commission considered whether interest should be included when determining pecuniary jurisdiction and examined precedent including a Three Judges Bench reasoning in New India Assurance Co. Ltd. vs. Hilli Multipurpose Cold Storage Pvt. Ltd. and the principle from the Five Judges Bench decision in Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. The Commission concluded that interest, being a discretionary relief, should not be added to the principal relief for determining pecuniary jurisdiction, and on that basis found that the pecuniary value in the present complaints fell below Rs. 1 crore and above Rs. 20 lacs, thus conferring jurisdiction on this Commission. The Commission rejected the opposite parties' objection to its pecuniary jurisdiction and partly accepted all three complaints, awarding refunds, interest at 13% p.a., compensation and costs, subject to payment timelines and penal interest provisions.

Legal Issues Presented

Whether interest claimed by a complainant (including interest up to the date of filing, pendente lite and future interest) is to be added to other relief claimed for the purpose of determining the pecuniary jurisdiction of the State Commission / Consumer Fora.
Whether a subsequent Bench of co-equal strength may give a contrary finding to a view already expressed by a former Bench of the same strength (i.e., the binding effect of prior co-equal or larger-bench decisions).

Arguments of the Parties

Complainant's Arguments / Prayer

The complaint prayed for payment of Rs. 18,33,000/- plus interest @ 18% from the date of claim till realization and also sought suitable damages (as reproduced in the opinion).
The interest claimed pertained to periods up to filing, pendente lite and future interest.

Opposite Parties' Arguments / Objection

The opposite parties raised an objection that this Commission lacked pecuniary jurisdiction to entertain the complaints (i.e., an objection to pecuniary jurisdiction was pressed).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shahbad Cooperative Sugar Mills Ltd. (II 2003 CPJ 81 (NC))	Held that interest component claimed by a complainant is not to be added when determining pecuniary jurisdiction of Consumer Fora.	The court treated Shahbad as establishing that interest should be excluded for pecuniary jurisdiction calculations and followed that view in the present case when determining jurisdiction.
Ambrish Kumar Shukla (referred to as "Shukla (supra)")	The opinion notes that Shukla was rendered by a Three Judges Bench without noting an earlier view on the subject (i.e., it reached a contrary finding to an earlier bench).	The court observed that Shukla's ratio was not discussed in the New India Assurance matter and treated Shukla as a subsequent co-equal bench decision that cannot override an earlier co-equal bench on the same issue.
New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. (Civil Appeal No.10941-10942 of 2013, decided 04.12.2015)	Affirmed the principle that a former Bench of co-equal strength that has given a finding on a legal issue is binding on a subsequent Bench of co-equal strength; a subsequent co-equal Bench cannot give a contrary opinion and, at most, may refer the matter for a larger Bench.	The court followed the view expressed in New India Assurance to prefer the earlier Three Judges Bench decision (Shahbad) over a later co-equal bench decision (Shukla) and applied the binding principle to resolve the present conflict.
Central Board of Dawoodi Bohra Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673	Explained that law laid down by a Bench of larger strength is binding on subsequent Benches of lesser or co-equal strength and summarized the rules and limited exceptions about when a later bench may differ or refer the matter to a larger Bench.	The court relied on the legal position summarized in Dawoodi Bohra to support the rule that prior larger or co-equal benches' views bind subsequent benches and to justify following the Shahbad view rather than the contrary Shukla view.

Court's Reasoning and Analysis

The court proceeded through a sequence of analytical steps that are recorded in the opinion:

Examination of the relief clause / prayer: The court noted that the interest claimed related to interest up to the date of filing, pendente lite and future interest and that the prayer sought Rs. 18,33,000/- plus interest @ 18% and damages.
Nature of interest as discretionary relief: The court emphasized that the rate and period for which interest is to be allowed is within the discretion of the Consumer Fora and that the exercise of that discretion is to be made at the stage of final disposal of the complaint (i.e., when the final order is passed).
Error in adding interest for jurisdictional calculation: The court held that the State Commission acted erroneously in adding interest at 18% per annum till the date of filing of the complaint to the amount of Rs. 18,33,000/- for the purpose of determining pecuniary jurisdiction before reaching the stage of final determination; interest, being discretionary, cannot be added to determine pecuniary jurisdiction.
Precedential hierarchy and choice between conflicting benches: The court analyzed conflicting National Commission bench decisions and relied on the legal principle (derived from New India Assurance and the Five Judges Bench in Dawoodi Bohra) that a former bench of co-equal strength prevails over a later bench of co-equal strength. The court therefore preferred the Shahbad Cooperative Sugar Mills Ltd. view (which excluded interest) over the contrary Shukla view.
Application to present case: Excluding the interest component from the relief, the court found that the amount claimed fell below Rs. 1 crore and above Rs. 20 lacs, thereby vesting pecuniary jurisdiction in this Commission. The court rejected the opposite parties' objection that the Commission lacked pecuniary jurisdiction.
Disposition on merits and reliefs: Having established jurisdiction and found the opposite parties' objection devoid of merit, the court proceeded to partly accept the complaints and grant specific monetary reliefs—refunds with interest at 13% p.a., compensation amounts as prayed or as specified, and litigation costs—subject to payment timelines and penal interest if payments are not made within 45 days.
Administrative directions: The court ordered certified copies of the order to be supplied, noted that files be consigned to record room after completion, and recorded the pronouncement date and signatures of the bench members.

Holding and Implications

Holding: The court held that interest claimed by complainants (including interest up to filing, pendente lite and future interest) should not be added to the principal relief for the purpose of determining the pecuniary jurisdiction of the Consumer Fora; accordingly, this Commission possessed pecuniary jurisdiction in the present matters and the complaints were partly accepted.

Direct consequences for the parties (as ordered in the opinion):

Consumer complaint No. 775 of 2016 (Sukhvinder Singh Hayer Vs. M/s Manohar Infrastructure and Constructions Pvt. Ltd.): Opposite party directed to refund Rs. 66,87,500/- with interest @ 13% p.a. from respective dates of deposits; pay Rs. 50,000/- compensation; pay litigation costs of Rs. 33,000/-. Payment to be made within 45 days of certified copy; if not, the refunded amount at sr. no. (i) shall carry penal interest @ 15% p.a. (instead of 13%) from respective dates of deposits; interest @ 13% p.a. shall apply to compensation and costs from date of filing till realization.
Consumer complaint No. 859 of 2016 (Jugraj Singh and ors. Vs. M/s Manohar Infrastructure and Constructions Private Limited): Opposite party directed to refund Rs. 22,50,000/- with interest @ 13% p.a. from respective dates of deposits; pay Rs. 1,25,000/- compensation; pay litigation costs of Rs. 33,000/-. Same 45-day payment period and penal interest provisions as above.
Consumer complaint No. 860 of 2016 (Daljit Singh Mahal and another Vs. M/s Manohar Infrastructure and Constructions Pvt. Ltd.): Opposite party directed to refund Rs. 40,42,500/- with interest @ 13% p.a., with interest calculated from 18.07.2014 for the first payment and thereafter on subsequent payment dates; pay Rs. 2,00,000/- compensation; pay litigation costs of Rs. 33,000/-. Same 45-day payment period and penal interest provisions as above.
If complainants have availed loans from banks or financial institutions for payments towards the units, those institutions will have first charge on the amounts payable to the extent due.

Broader implications:

The opinion applies and reiterates the legal proposition that interest, as a discretionary relief, is not to be added to the value of goods or services (or compensation claimed) for determining pecuniary jurisdiction of Consumer Fora, following Shahbad Cooperative Sugar Mills Ltd.
The opinion follows the hierarchical precedential rule that an earlier decision by a Bench of co-equal or larger strength prevails over a later conflicting decision by a bench of co-equal strength, as explained in Central Board of Dawoodi Bohra and New India Assurance.
The decision’s practical effect is to reject objections to pecuniary jurisdiction in these matters and to grant the specific monetary remedies listed above; the opinion does not assert that it establishes a new legal principle beyond applying and following the cited precedents.

This summary is prepared exclusively from the text of the provided opinion. No information has been added that was not present in that text.

Show all summary ...

Shukla (supra) was rendered by Three Judges Bench of the National Commission, without noting its earlier view of the subject. This issue, whether, when determining pecuniary jurisdiction of the State Commission/ Consumer Foras, interest is to be added with other relief claimed or not, came up for consideration, before the Three Judges Bench of the National Commission in Shahbad Cooperative Sugar Mills Ltd. . In the said case,Vs. National Insurance Co. Ltd. And Ors., II 2003 CPJ 81 (NC) noting similar arguments, it was observed as under:-

3. Complaint (at pp 17-36) was filed with the following prayer : -15-

It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.

4. Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period upto the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission. It was specifically stated that interest claimed by appellant/complainant pertained to the period upto the date of filing complaint, pendente lite and future, need not be added in the relief claimed, to determine pecuniary jurisdiction of the State Commission/Consumer Foras. It was rightly said that the rate and period for which the interest has to be allowed, is within the discretion of the particular Consumer Fora, and the stage for exercise of such discretion would be the time, when final order is passed. We are of the considered opinion that the view taken is perfectly justified. There may be cases, where the complainant may not be entitled to claim any interest upon the amount paid, like the one, where he is rescinding his contract and further at what rate interest is to be granted will be determined by the competent Consumer Fora, by looking into the facts of each case. All cases cannot be put into a straitjacket formula, to add interest claimed, to determine pecuniary jurisdiction of the Consumer Foras. The interest, which is a discretionary relief, cannot be added to the value of the goods or services, as the case may be, for the purpose of determining the pecuniary jurisdiction of the Consumer Foras. As per provisions of the Consumer Protection Act, 1986 (Act) value of the goods purchased or services plus (+) compensation claimed needs to be added only, for determining pecuniary jurisdiction of the Consumer Foras. As per ratio of the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., Civil Appeal , we would like to follow the viewNo.10941-10942 of 2013, decided on 04.12.2015 expressed by Three Judges Bench (former Bench) of the National Commission in (supra), in preference to the ratio ofShahbad Cooperative Sugar Mills Ltd. case judgment passed by a Bench of co-equal strength (subsequent Bench) of the National Commission in the case of Ambrish Kumar Shukla case (supra). In (supra), it was specifically observed by theNew India Assurance Co. Ltd. case Supreme Court that when a former Bench of co-equal strength has given a finding -16- qua one legal issue, it is not open to the subsequent Bench of co-equal strength to opine qua that very legal issue and give a contrary finding. At the maximum, the subsequent Bench of co-equal strength can refer the matter to the President/Chief Justice of India to constitute a bigger Bench, to look into the matter and reconsider the legal proposition. It was further specifically held that, in case, there are two contrary views by the former and later co-equal strength Benches, the former will prevail. It was so said by looking into the ratio of judgment rendered by the Five Judges Bench of the Supreme Court of India, in Central Board of Dawoodi Bohra wherein,Community & Anr. Vs. State of Maharashtra & Anr. (2005) 2 SCC 673, when dealing with similar proposition, it was observed as under:-

12. Having carefully considered the submissions made by the learned senior counsel for the parties and having examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms :- (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength. (2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. (3) The above rules are subject to two exceptions : (i) The abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and
(ii) In spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view -17- is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh and Hansoli Devi.

In Ambrish Kumar Shukla case (supra), ratio of judgment- Shahbad Cooperative (supra) was not even discussed and considered. In view of aboveSugar Mills Ltd. proposition of law laid down by the Five Judges Bench in Central Board of and also Three Judges Bench of the SupremeDawoodi Bohra Community & Anr.`s Court, in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. (supra), it is not open to the Bench of co-equal strength to give contraryLtd. case findings, to the view already expressed by a Former Bench of same strength. In (supra), decided on 02.04.2003, it wasShahbad Cooperative Sugar Mills Ltd. case specifically observed by Three Judges Bench of the National Commission that when determining pecuniary jurisdiction of the Consumer Foras, interest component claimed by the complainant/party, is not to be added. We are of the considered view that in view of proposition of law, as explained above, the view taken in Shahbad (supra), to determine pecuniary jurisdictionCooperative Sugar Mills Ltd. case without taking interest claimed, will prevail. As such, in the present case, we are not looking into the interest claimed by the complainant, when determining pecuniary jurisdiction of this Commission. If the interest part is excluded, the amount claimed in the relief clause fell below Rs.1 crore and above Rs.20 lacs. Hence, this Commission has pecuniary jurisdiction to entertain and decide the present complaint. In view of above, the objection raised by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected. Thus, the objection taken by the opposite party, that this Commission lacks pecuniary Jurisdiction, being devoid of merit, must fail and the same stands rejected. No other point, was urged, by Counsel for the parties, in all the three complaints. For the reasons recorded above, all the complaints are partly accepted, with costs in the following manner:- In consumer complaint bearing no.775 of 2016 titled as Sukhvinder Singh Hayer Vs. M/s Manohar Infrastructure and Construction s Pvt. Limited., the opposite party is directed as under:- To refund the amount Rs.66,87,500/- to the complainant, alongwith interest @13% p.a., from the respective dates of deposits onwards. -18- To pay compensation, in the sum of Rs.50,000/- (as prayed), for causing mental agony and physical harassment, to the complainant, as also escalation in prices. To pay cost of litigation, to the tune of Rs.33,000/- to the complainant. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 45 days from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a., instead of @13%, from the respective dates of deposits onwards, and interest @13% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization. In consumer complaint bearing no.859 of 2016 titled as Jugraj Singh and ors. Vs. M/s Manohar Infrastructure and Constructions Private Limited., the opposite party is directed as under:- To refund the amount Rs.22,50,000/- to the complainants no.1 and 2, alongwith interest @13% p.a., from the respective dates of deposits onwards. To pay compensation, in the sum of Rs.1,25,000/-, for causing mental agony and physical harassment, to the complainants no.1 and 2, as also escalation in prices. To pay cost of litigation, to the tune of Rs.33,000/- to the complainants no.1 and 2. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 45 days from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a., instead of @13%, from the respective dates of deposits onwards, and interest @13% p.a., on the amounts mentioned at sr.nos.(ii) and (iii), from the date of filing of this complaint, till realization. In complaint bearing no.860 of 2016, titled as Daljit Singh Mahal and another Vs. M/s Manohar Infrastructure and Constructions Pvt. Ltd., the opposite party is directed as under:- -19-

iii. To refund the amount Rs.40,42,500/- to the complainants, alongwith interest @13% p.a. The amounts paid shall be refunded, while calculating interest ordered, from 18.07.2014, when first payment was actually made by the complainants to the opposite party, and thereafter, on subsequent dates of payments made, onwards. To pay compensation, in the sum of Rs.2 lacs, for causing mental agony and physical harassment, to the complainants, as also escalation in prices. To pay cost of litigation, to the tune of Rs.33,000/- to the complainants. The payment of awarded amounts mentioned at sr.nos.(i) to (iii), shall be made, within a period of 45 days from the date of receipt of a certified copy of this order, failing which, the amount mentioned at sr.no.(i) shall carry penal interest @15% p.a., instead of @13%, in the manner ordered above, and interest @13% p.a., on the amounts mentioned at sr.nos.(ii) and

(iii), from the date of filing of this complaint, till realization. However, it is made clear that, if the complainant(s) in any of the above complaints, have availed loan facility from any banking or financial institution, for making payment towards the said units, it will have the first charge of the amount payable, to the extent, the same is due to be paid by them (complainants). Certified copy of this order be placed in the connected files, referred to above. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to Record Room, after completion Pronounced. 23.03.2017 Sd/- [JUSTICE JASBIR SINGH (RETD.)] PRESIDENT Sd/- (DEV RAJ) MEMBER -20- Sd/- (PADMA PANDEY) MEMBER -21-