Holding

State Consumer Commissions do not possess the power to restore complaints dismissed for default; such power is limited to the National Commission under Section 22A of the Consumer Protection Act, 1986.

Summary

The appeal concerned whether a State Consumer Disputes Redressal Commission can restore a complaint dismissed for default. The appellant argued that the Supreme Court’s decision in Jyotsana v. Bombay Hospital Trust denied such power to State Commissions, while the National Commission relied on New India Assurance Co. Ltd. v. R. Srinivasan, which seemed to allow restoration. The Court noted that the 2003 amendment introducing Section 22A of the Consumer Protection Act, 1986, expressly confers restoration power only on the National Commission, not on State Commissions. It observed that the New India Assurance judgment did not consider the earlier Jyotsana ruling, leading to a conflict between coordinate benches. Consequently, the Court held that State Commissions lack the authority to restore defaulted complaints and, because of the divergent views, referred the matter to a larger bench for definitive resolution.

Issues considered

Does a State Consumer Disputes Redressal Commission have the power to restore a complaint dismissed for default under the Consumer Protection Act, 1986?
Does the amendment introducing Section 22A confer restoration power on State Commissions as well as the National Commission?
Are the Supreme Court decisions in Jyotsana Arvindkumar Shah v. Bombay Hospital Trust and New India Assurance Co. Ltd. v. R. Srinivasan consistent on the issue of restoration?

Legislation cited

Consumer Protection Act, 1986s. 22A

Subjects

Consumer Protection ActSection 22ARestoration of complaintState Consumer CommissionNational Consumer CommissionDefault judgmentSupreme Court precedentCoordinate benches

Judgment

. '!- -

RAJEEV HITENDRA PATHAN AND ORS. A
v.
ACHYUT KASHINATH KAREKAR AND ANR.

SEPTEMBER 17, 2007

(DR. ARIJIT PASA YAT AND LOKESHW AR SINGH PANTA, JJ.] B

Consumer Protectio,, Act, 1986: s. 22(A)-Power of State Commission
to restore complaint which was dismissed for default-Divergent view of
coordinate benches-Matter referred to larger bench to consider the issue. C
The question which has arisen for consideration in the present appeal
is whether the National Commission was right in holding that the State
Commission has the power to restore-the complaint which was dismissed for
default.

In appeal to this Court, appellant contended that the view contrary to
D
r what has been stated in *New India Assurance's case has been taken in
**Jyotsana's case. Further, Consumer Protection Act, 1986 was amended in
2003 and by the newly introduced Section 22A, National Commission was
given power of restoration but no such power was conferred on the State
Commission. E
Referring the matter to the larger bench, the Court

HELD: In the latter case i.e. *New India Assurance's case, reference
was not made to the earlier decision in **Jyotsana's case. Further the effect
of the amendment to the Act in 2003 whereby s. 22(A) was introduced has the F
effect of conferment of power of restoration on National Commission, but not
to the State Commission. In view of the divergence of views expressed by
coordinate Benches, the matter is referred to larger bench to consider the
question whether the State Commission has the power to recall the ex-parte
order. (Para 7) (1060-C)
G
*New India Assurance Co. Ltd. v. R. Srinivasan, (2000) 3 SCC 242;
, **Jyotsana Arvindkumar Shah and Ors. v. Bombay Hospital Trust, (1999) 4
.,,;. -
sec 325, referred to.

1057 H
1058 SUPREME COURT REPORTS [2007] 9 S.C.R

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4307 of2007.

From the Judgment and Order dated 16.11.2005 oftheNational Consumer
Disputes Redressal Commission, New Delhi in Revision Petitio No. 551 of
2005.

B Siddharth Bhatnagar and V.D. Khanna for the Appellants.

Ravindra Keshavrao Adsure for the Respondents.
J.
The Judgment of the Court was delivered by

·C DR. ARIJIT PASA YAT, J. 1. Leave granted.

2 .. Challenge in this appeal is to the order passed by the National
Consumer Disputes Redressal Commission, New Delhi (in short 'National
Commission') holding that the State Commission has the power to restore the
complaint which was dismissed for default. For coming to the aforesaid
D conclusion the National Commission relied upon the decision of this Court
in New India Assurance Co. Ltd. v. R. Srinivasan, {2000] 3 SCC 242.
~·

3. Learned counsel for the appellant submitted that the view contrary
to what has been stated in New India Assurance's case (supra) has been
taken in Jyotsana Arvindkumar Shah and Ors. v. Bomb<fY Hospital Trust,
E [ 1999] 4 SCC 325. Further, Consumer Protection Act, 1986 (in short the 'Act')
was amended in 2003 and by the newly introduced Section 22A, National
Commission was given power of restoration but no such power has been
conferred on the State Commission.

4. Learned Counsel for the respondents on the other hand submitted
F that the National Commission has referred the case to the factual position ;,

. and, therefore, held that restoration was permissible.

5. In Jyotsana's case (supra) it was observed at para 7 as follows:

"We heard learned Counsel on both sides for quite some time. When
G we asked the learned Counsel appearing for the respondent to point
out the provision in the Act which enables the State Commission to
set aside the reasoned order passed, though ex parte, he could not
lay his hands on any of the provisions in the Act. As a matter of fact,
before the State Commission the appellants brought to its notice the
H two orders, one passed by the Bihar State Commission in Chief
RAJEEV HITENDRA PATHAN v. ACHYUT KASHINATH KAREKAR [PASAYAI, J.Jl059

.>,- Manager, UCO Bank v. Ram Govind Agarwal, (1996) I CPR 351 and A
the other passed by the National Commission in Director, Forest
Research Institute v. Sunshine Enterprises, (1997) I CPR 42 holding
that the redressal agencies have no power to recall or review their ex
parte order. The State Commission had distinguished the above said
orders on the ground that in those two cases the opponents had not
only not appeared but also failed to put in their written statements. B
In other words, in the case on hand, according to the State Commission,
~he opponent (respondent) having filed the written statements, the
failure to consider the same by the State Commission before passing
the order would be a valid ground for setting aside the ex parte order.
The State Commission, however, fell into an error in not bearing in c
mind that the Act under which it is functioning has not provided it
with any jurisdiction to set aside the ex parte reasoned order. It is
also seen from the order of the State Commission that it was influenced
by the concluding portion of the judgment of the Bombay High Court
to the effect that the respondent (writ petitioner) could approach the
appellate authority or make an appropriate application before the State D
Commission for setting aside the ex parte order, if permissible under
the law. Here again, the State Commission failed to appreciate that the
observation of the High Court would help the respondent, if permissible
under the law. If the law does not permit the respondent to move the
application for setting aside the ex parte order, which appears to be E
the position, the order of the State Commission setting aside the ex
parte order cannot be sustained. As stated earlier, there is no dispute
that there is no provision in the Act enabling the State Commission
to set aside an ex parte order."

6. Subsequently, in New India Assurance's case (supra) this Court F
appears to have taken a different view as it is evident from what has been
stated in paragraph 18, the same reads as follows:

"We only intend to invoke the spirit of _the principle behind the
above dictum in support of our view that every court or judicial body
or authority, which has a duty to decide a lis between two parties, G
inherently possesses the power to dismiss a case in default. Where
a case is called up for hearing and the party is not present, the court
)_ or the judicial or quasi judicial body is under no obligation to keep
the matter pending before it or to pursue the matter on behalf of the
complainant who had instituted the proceedings. That is not the
H
1060 SUPREME COURT REPORTS [2007] 9 S.C.R.

A function of the court or, for that matter of a judicial or quasi judicial -~'

body. In the absence of the complainant, therefore, the court will be
well within its jurisdiction to dismiss the complaint, for non-prosecution.
So also, it would have the inherent power and jurisdiction to restore
the complaint on good cause being shown for the non-appearance of
the complainant."
B
7. In the latter case i.e. New India Assurance's case (supra) reference
was not made to the earlier decision in Jyotsana's case (supra). Further the
effect of the amendment to the Act in 2003 whereby Section 22(A) was
introduced has the effect of conferment of power of restoration on National
C Commission, but not to the State Commission. In view of the divergence of
views expressed by coordinate Benches, we refer the matter to a larger Bench
to consider the question whether the State Commission has the power to
recall the ex parte order. Records be placed before the Hon'ble Chief Justice
of India for appropriate orders.

D D.G. Referred to larger Bench .

•