2002 (2) TMI 1218 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the State Consumer Redressal Commission to entertain a complaint under the Consumer Protection Act, 1986, in relation to chit transactions governed by the Chit Funds Act, 1982.
2. Whether the petitioner is estopped from challenging the jurisdiction of the State Commission after acquiescing in the proceedings.

Detailed Analysis:

Issue 1: Jurisdiction of the State Consumer Redressal Commission

The petitioner contended that the Chit Funds Act, 1982, being a special enactment, governs chit transactions and provides a complete remedy through the Registrar of Chits. The petitioner argued that the State Consumer Redressal Commission lacked jurisdiction to entertain the complaint under the Consumer Protection Act, 1986, as the latter is a general law. The petitioner relied on the Supreme Court judgment in Chairman, Thiruvalluvar Transport Corpn. v. Consumer Protection Council, which held that claims arising under a special enactment (Motor Vehicles Act) should not be entertained under the Consumer Protection Act.

The court acknowledged that the Chit Funds Act is a special legislation with a self-contained mechanism for dispute resolution through arbitration by the Registrar of Chits. Citing the Supreme Court's judgment in Chairman, Thiruvalluvar Transport Corpn.'s case and the Tamil Nadu State Consumer Disputes Redressal Commission's order in Selvam Chit Funds v. Alagusundaram, the court concluded that complaints regarding chit transactions should not be entertained under the Consumer Protection Act as the Chit Funds Act provides a comprehensive remedy.

Issue 2: Estoppel from Challenging Jurisdiction

The petitioner, having received notice from the State Commission, failed to appear and was set ex parte. The State Commission ordered the petitioner to pay the prize amount with interest and compensation. The petitioner appealed to the National Consumer Disputes Redressal Commission, which dismissed the appeal for non-prosecution, making the State Commission's order final. The petitioner did not comply with the order, leading the second respondent to file for execution, resulting in an order for the petitioner's imprisonment.

The court noted that the petitioner, by his conduct, had acquiesced in the proceedings before the State Commission and the National Commission. The petitioner did not challenge the jurisdiction at the initial stages and only raised it after the order became final. The court referenced the Supreme Court's judgments in Pannalal Binjraj v. Union of India and Maharashtra State Road Transport Corpn. v. Balwant Regular Motor Service, which held that parties who acquiesce in proceedings cannot later challenge jurisdiction.

The court emphasized that the petitioner's conduct led the second respondent to believe that the complaint was maintainable before the State Commission. By appealing to the National Commission and not challenging its dismissal, the petitioner further acquiesced in the proceedings. The court held that the petitioner is estopped from challenging the jurisdiction of the State Commission at this belated stage.

Conclusion

The court dismissed the writ petition, stating that the petitioner is not entitled to challenge the jurisdiction of the State Commission after the order has become final due to his conduct. The court directed the third respondent to execute the non-bailable warrant issued by the State Commission against the petitioner immediately.