2010 (7) TMI 287 - SC - Companies Law

Whether the cause shown by the appellant for his non-appearance was sufficient? Held that - Appeal allowed. The dismissal of the application filed by the appellant for recall of order dated 11-7-2007 is clearly vitiated by a patent error of law. In the petition filed by him, the appellant had averred that he could not file reply because of heart ailment and on the date of hearing he could not reach the High Court because of failure of the public bus transport system. Respondent No. 1 did not controvert these averments. Notwithstanding this, the Single Judge dismissed the application without even examining sufficiency of the cause shown by the appellant for his non-appearance on the date of hearing. Matter is remitted to the High Court for fresh adjudication.

Summary

Issues Involved:
1. Jurisdiction of the State Consumer Disputes Redressal Commission.
2. Validity of the High Court's decision to entertain a petition under Article 227 of the Constitution.
3. Dismissal of the appellant's application for recall of the High Court's order.

Detailed Analysis:

Jurisdiction of the State Consumer Disputes Redressal Commission:
The appellant, after retiring from Indian Railways, invested in fully secured debentures issued by respondent No. 1. Due to financial difficulties, respondent No. 1 revised the payment terms and failed to pay the dues as per the revised scheme. The appellant filed a complaint under the Consumer Protection Act, 1986, before the State Consumer Disputes Redressal Commission, Delhi, seeking payment of the due amount with interest and compensation. The State Commission passed interim orders for partial payments and ultimately directed respondent No. 1 to pay the maturity amount with interest as per the terms of the contract and additional interest post-maturity, along with litigation costs.

Validity of the High Court's Decision to Entertain a Petition under Article 227:
Respondent No. 1 initially appealed the State Commission's order under Section 21 of the Consumer Protection Act but later withdrew the appeal and filed a petition under Article 227 of the Constitution. The High Court allowed the petition, asserting that the State Commission lacked jurisdiction due to a scheme sanctioned under the Companies Act. The Supreme Court found that the High Court committed a jurisdictional error by entertaining the petition under Article 227 when an effective alternative remedy was available and had been availed by respondent No. 1. The Supreme Court emphasized that the Consumer Protection Act is a complete code providing for appeals and revisions, and the High Court should not have entertained the petition under Article 227.

Dismissal of the Appellant's Application for Recall of the High Court's Order:
The appellant's application to recall the High Court's order was dismissed without considering the sufficiency of the cause shown for his non-appearance due to a heart ailment and transport issues. The Supreme Court noted that the High Court failed to examine these uncontested averments, leading to a patent error of law.

Conclusion:
The Supreme Court allowed the appeals, set aside the High Court's impugned order, and remitted the matter for fresh adjudication. The High Court was directed to consider the availability and prior availing of an effective alternative remedy by respondent No. 1. If the High Court concludes that respondent No. 1 should pursue the appeal remedy, it should facilitate the recall of the National Commission's order dated 25-4-2007, allowing respondent No. 1 to continue with the appeal.