Holding

The amendment deleting the unconstitutional proviso and conferring the power of a Judicial Magistrate of First Class on the consumer tribunals makes the earlier controversy academic, rendering the challenge moot.

Summary

The State of Karnataka and the Union of India appealed against a Karnataka High Court judgment that had struck down the proviso to Section 27 of the Consumer Protection Act, 1986 on the ground that it allowed tribunals to impose imprisonment or fine without prescribing a trial procedure, violating Articles 20 and 21 of the Constitution. The High Court had held the proviso unconstitutional but said the main provision remained valid. While the appeals were pending, Parliament amended the Act by deleting the offending proviso and inserting a provision (Section 23 of the 2002 Amendment) granting the District Forum, State Commission and National Commission the powers of a Judicial Magistrate of the First Class for trial of offences under the Act. The Supreme Court observed that, in view of this amendment effective from 15 March 2003, the controversy regarding the proviso became academic and therefore disposed of the appeals without any order as to costs.

Issues considered

Whether the proviso to Section 27 of the Consumer Protection Act, 1986, which permitted lower penalties without prescribing a procedure, violated Articles 20 and 21 of the Constitution.
Whether the main provision of Section 27, apart from the proviso, is constitutionally valid.
Whether the amendment deleting the proviso and conferring judicial‑magistrate powers on the consumer tribunals renders the earlier constitutional challenge moot.

Legislation cited

Subjects

Consumer ProtectionConstitutional LawFundamental RightsArticle 20Article 21Penalty ProvisionJudicial MagistrateStatutory AmendmentAcademic Controversy

Judgment

' ..( )i
STATEOFKARNATAKA A
v.
PARAMJIT SINGH AND ORS.

MARCH 2, 2006

[ARIJIT PASAYAT AND TARUN CHATTERJEE, JJ.) B

"'"' Consumer Protection Act, 1986:

s. 27, proviso-Proviso struck down by High Court-Judgment of High
Court challenged-Meanwhile s.27 amended and proviso omitted-Further, c
District Forum, State Commission and National Commission conferred with
the power of Judicial Magistrate First Class as under Code of Criminal
Procedure, 1973, for trial of offences under the Act-Held, in view of the
amendments which have been made effective from 15.3.2003, the controversy
has become academic.
D
In the present appeals, judgment of the Karnataka High Court dated
" 18.12.1998 was challenged by the State of Karnataka and the Union of
India, whereby the High Court had held that since the proviso to s.27 of

- the Consumer Protection Act, 1986, as it stood then, authorized the
Forums and the Commissions to impose a punishment without providing
any procedure, the same was liable to be struck down being
E
unconstitutional.

Meanwhile s.27 of the Act has been amended deleting the proviso;
and the amendments have been made effective from 15.3.2003.
F
-'") Disposing of the appeals, the Court

HELD: By the Consumer Protection (Amendment). Act, 2002 as
contained in Section 23 of the Amending Act, the proviso which was struck
down as un-constitutional by the High Court has been omitted. Sub-section
(2) has been introduced which provides that the District Forum or the State G
~
Commission or the National Commission, as the case may be, shall have the
-r power ofa Judicial Magistrate of First Class for the trial of offences under
the Act and on such conferment of powers, the District Forum or the State
Commission or the National Commission, as the case may be, on whom the
873 H
SUPREME COURT REPORTS [2006] 2 S.C.R.
874

A powers are so conferred, shall be deemed to be a Judicial Magistrate of the .
First Class for the purpose of the Code of Criminal Procedure, 1973. The
amendments have been made effective with effect from 15.3.2003. The
controversy has, therefore, become academic. [876-E-G)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3482 of2000.
B
From the Final Judgment and Order dated 18.12.1998 of the Kamataka
High Court in W.P. No. 10363 of 1994.

Harish Chandra, Sanjay R. Hegde, A. Rohen Singh, Anil K. Mishra,
Mrs. Kiran Bhardwaj, V.K. Verma and B.V. Balaram Das for the Appellant.
c
E.M.S. Anam for the Respondents.

The Judgment of the Court was delivered by

ARIJIT PASA YAT, J. Challenge in these appeals is to the judgment
D rendered by a Division Bench of the Kamataka High Court in a writ petition
which was filed challenging validity of Section 27 of the Consumer Protection
Act, 1986 (hereinafter referred to as 'the Act'). One of the two appeals is by
the State of Karnataka and the other· by the Union of India. The basis of the
challenge was that the District and the State Commission and National
E Commission and the Forum created under the Act have been clothed with
blanket powers to pass orders including an order of civil imprisonment for
the breach that may be committed by the party against whom the order is
passed under the Act. As Section 27 does not prescribe any procedure for
trial and, therefore, it was prayed that it should be declared as unconstitutional,
being violative of Article 21 of the Constitution of India, I950 (in short 'the
F Constitution'). The High Court held that an offence has been created without
prescribing any procedure for the Forums or the Commissions created under
the Act to impose the punishment provided in Section 27. Therefore, it was '-
of the view that the proviso to Section 27, as it stood then, authorised the
Forums and the Commissions to impose a punishment without providing any
procedure, resulting in deprivation of rights conferred upon the persons under
G Articles 20 and 21 of the Constitution and, therefore, the same was liable to
be struck down, being unconstitutional. It was, however, held that the striking
of the proviso to Section 27 did not render the whole provision un-
constitutional. Finally, it was observed that the proviso to Section-27 was
violative of the fundamental rights, as enshrined under Articles 20 and 21 of
H the Constitution and, thus, was liable to be quashed. It was further held that
\

J

STATEOFKARNATAKA v. PARAMJIT SINGH [PASAYAT, J.] 875

but for the proviso, there was no un-constitutionality in the main provision. A
. It was observed that the offence created and penalties provided under Section
27 can be tried and imposed only in accordance with the observations made
in the judgment relating to the trial of offences under the Indian Penal Code,
1860 (in short 'the !PC') and other laws, as contained in Section 4 of the
Code of Criminal Procedure, 1973 (in short 'the Code'). It was held that by B
filing a complaint before the criminal court in accordance with the procedure
prescribed, the offence created and the penalty provided under Section 27 can
be tried and imposed.

· The State of Karnataka and the .Union of India have questioned the
correctness of the view expressed .by the High Court. Learned counsel for the C
Union of India and the State of Kamataka contended that after having been
held that the main part of Section 27 was not un-constitutional, the proviso
which only permitted imposition of lesser fine or sentence of imprisonment,
cannot by any stretch of imagination, be held to be un-constitutional. It was
submitted that the ·District Forum, the State Commission and the National
Commission were conferred with a power to sentence any person who has D
failed or omitted to comply with the order passed by the District Forum or
two Commissions. Therefore, the proviso, in no way, dilutes the power for
such imposition or levy. Learned counsel for respondent No. 1 on the other
hand submitted that the questions have really become academic after the
amendment to Section 27. _E

Section 27, prior to its amendment in 2003 read as follows:

"Penalties: Where a trader or a person against whom a complaint is
made or the complainant fails to omits to comply with any order
made by the District Forum, the State Commission or the National F
Commission, as the case may be, such trader or person or complainant
shall be punishable with imprisonment for a term shall not be less
than one month but which may extend to three years, or with fine
which shall not be less than two thousand rupees but which may
extend to ten thousand rupees or with both:
G
Provided that the District Forum, the State Commission or the
National Commission, as the case may be if it is satisfied that the
circumstances of any case so require, impose a sentence of
imprisonment or fine, or both, for a term lesser than the minimum
term and the amount lesser than the minimum amount, specified in
this section''. H
876 SUPREME COURT REPORTS [2006] 2 S.C.R.

A After amendment, Section 27 reads as follows:

I. Penalties: (I) Where a trader or a person against whom a complaint
is made (or the complainant) fails or omits to comply with any order
made by the District Forum, the State Commission or the National
Commission, as the case may be, such trader of person (or
B complainant) shall be punishable with imprisonment for a term which
shall not be less than one month but which may extend to three years,
or with fine which shall not be less than two thousand rupees but
which may extend to ten thousand rupees, or with both:

(2) Notwithstanding anything contained in the Code of Criminal
c Procedure, 1973 (2 of 1974), the District Forum or the State
Commission or the National Commission, as the case may be, shall
have the power of a Judicial Magistrate of the first class for the trial
of offences under this Act, and on such conferment of powers, the
District Forum or the State Commission or the National Commission,
D as the case may be, on whom the powers are so conferred, shall be
deemed to be a Judicial Magistrate of the first class for the purpose
of the Code of Criminal Procedure, 1973 (2 of 1974).

(3) All offences under this Act may be tried summarily by the District
Forum or the State Commission or the National Commission, as the
E case may be."

It is to be noted that by the Consumer Protection (Amendment Act),
2002 (62 of 2002), as contained in Section 23 of the Amending Act, the
proviso which was struck down as un-constitutional by the High Court has
been omitted. Sub-Section (2) has been introduced which provides that the
F District Forum or the State Commission or the National Commission, as the
case may be, shall have the power of a Judicial Magistrate of First Class for
the trial of offences under the Act and on such conferment of powers, the
.
-
District Forum or the State Commission or the National Commission, as the
case may be, on whom the pow(:rs are so conferred, shall be deemed to be
G a Judicial Magistrate of the First Class of the Code. The amendments have
been made effective with effect from 15.03.2003. The controversy has,
therefore, become academic. The appeals are, accordingly, disposed of but
without any order as to costs.

R.P. Appeals disposed of.