2006 (8) TMI 324 - HC - Companies Law

Issues Involved:
1. Maintainability of proceedings under Section 27 of the Consumer Protection Act in light of Section 446 of the Companies Act.
2. Jurisdiction of the District Forum to entertain penalty petitions under Section 27 of the Consumer Protection Act after winding up orders.
3. Validity of the State Commission's decision to treat an appeal under Section 15 as a revision petition under Section 17(1)(b) of the Consumer Protection Act.
4. Right of the petitioner to appeal to the National Commission under Section 21(b) of the Consumer Protection Act.
5. The effect of the winding-up order on the proceedings under the Consumer Protection Act.

Detailed Analysis:

1. Maintainability of Proceedings under Section 27 of the Consumer Protection Act:
The petitioner argued that the proceedings under Section 27 of the Consumer Protection Act are not maintainable once winding up orders are passed under Section 446 of the Companies Act. Section 446 states that no suit or legal proceeding shall be commenced or continued against the company without the leave of the Tribunal after a winding-up order. The petitioner cited the National Commission's judgment in *Ravikant v. Veena Bhatnagar* to support this argument, asserting that no proceedings against the company could commence or continue after the winding-up order without court leave.

2. Jurisdiction of the District Forum:
The petitioner contended that the District Forum lacked jurisdiction to entertain penalty petitions under Section 27 of the Consumer Protection Act due to the winding-up order and the appointment of an official liquidator by the Calcutta High Court. The petitioner argued that the company could not comply with the District Forum's orders as it was no longer in control of its affairs, which were now under the official liquidator.

3. State Commission's Decision to Treat an Appeal as a Revision Petition:
The petitioner challenged the State Commission's decision to re-register its appeal under Section 15 of the Consumer Protection Act as a revision petition under Section 17(1)(b). The petitioner argued that this re-registration impeded its right to file a revision petition before the National Commission under Section 21(b) of the Act. The petitioner claimed that the State Commission provided no justification for this conversion, thereby depriving it of the right to challenge the order in revision before the National Commission.

4. Right to Appeal to the National Commission:
The petitioner argued that the Act did not specifically provide for an appeal against the order passed under Section 27 of the Act when the impugned order was passed. The petitioner contended that its only remedy against the order under Section 27 was an appeal under Section 15, and the erroneous re-registration by the State Commission deprived it of the right to approach the National Commission.

5. Effect of Winding-Up Order on Proceedings under the Consumer Protection Act:
The respondent argued that the writ petition had no merit based on the Delhi High Court's decision in *Lunar Diamonds v. Consumer Disputes Redressal Forum*, which followed the Supreme Court's position in *Laxmi Engg. Works v. P.S.G. Industrial Institute*. The respondent also cited the Delhi High Court's judgment in *Ravi Kant v. National Consumer Disputes Redressal Commission*, which held that penal provisions under Section 27 of the Consumer Protection Act are in addition to the mode of recovery under Section 25 and are not impeded by winding-up proceedings.

Judgment:

The Court held that the penal provisions under Section 27 of the Consumer Protection Act are in addition to the mode of recovery under Section 25 and are not barred by the winding-up order. The Court relied on the Division Bench's judgment in *Ravi Kant v. National Consumer Disputes Redressal Commission*, which stated that the pendency of winding-up proceedings does not prevent the Commission from passing orders under Section 27.

Regarding the State Commission's decision to re-register the appeal as a revision petition, the Court found that the State Commission was unjustified in converting the appeal into a revision petition without providing any reasons. This conversion deprived the petitioner of the right to challenge the order in revision before the National Commission. However, the Court noted that remanding the matter to the State Commission would serve no useful purpose due to the concluded position of law established by the Division Bench.

Ultimately, the writ petition was dismissed, but the Court clarified the powers of the State Commission under Sections 15 and 17(1)(b) of the Consumer Protection Act. The Court appreciated the efforts of the amicus curiae in this case.

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