2015 (7) TMI 814 - SC - Indian Laws

Waiverof pre deposit - Complaint u/s 17(1) of Consumer Protection Act, 1986 - Held that - The second proviso to Section 19 of the Act mandates pre-deposit for consideration of an appeal before the National Commission. It requires 50% of the amount in terms of an order of the State Commission or 35,000/- whichever is less for entertainment of an appeal by the National Commission. Unless the appellant has deposited the predeposit amount, the appeal cannot be entertained by the National Commission. A pre-deposit condition to deposit 50% of the amount in terms of the order of the State Commission or ₹ 35,000/- being condition precedent for entertaining appeal, it has no nexus with the order of stay, as such an order may or may not be passed by the National Commission. Condition of pre-deposit is there to avoid frivolous appeals. If the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded, it is open to the National Commission to pass an appropriate interim order including conditional order of stay. Entertainment of an appeal and stay of proceeding pursuant to order impugned in the appeal stands at different footings, at two different stages. One (pre-deposit) has no nexus with merit of the appeal and the other (grant of stay) depends on prima facie case; balance of convenience and irreparable loss of party seeking such stay. - Interference is not called for - Decided against appellant.

Summary

Issues:
Interpretation of Section 19 of the Consumer Protection Act, 1986 regarding pre-deposit for consideration of an appeal before the National Commission.

Analysis:
The judgment involved an appeal against a common interim order passed by the National Consumer Disputes Redressal Commission. The State Commission had directed the appellants to pay a certain amount with interest to the complainants. The National Commission, in an interim order, required the appellants to deposit 50% of the awarded amount within three months for a stay. The appellant contended that this order was contrary to the provisions of Section 19 of the Act, citing a judgment of the Delhi High Court. The respondents argued that the order was a conditional stay order and not under the second proviso to Section 19. The Court examined Section 19, which mandates pre-deposit for appeal consideration, and emphasized that the pre-deposit condition is a prerequisite for entertaining an appeal by the National Commission to avoid frivolous appeals.

The Court referred to a case involving the Haryana General Sales Tax Act, highlighting the importance of complying with statutory provisions for appeal maintainability. It clarified that the pre-deposit requirement under the second proviso to Section 19 is essential for the National Commission to entertain an appeal. The Court distinguished between the pre-deposit condition and the grant of stay, noting that they are separate and serve different purposes. While the pre-deposit is a condition precedent for appeal consideration, the grant of stay depends on factors like prima facie case, balance of convenience, and irreparable loss to the party seeking stay.

Ultimately, the Court found no merit in interfering with the National Commission's order, as the pre-deposit condition was necessary to prevent frivolous appeals. The judgment dismissed the appeals, emphasizing that the pre-deposit requirement under Section 19 is distinct from the decision to grant a stay, which is at the discretion of the National Commission based on various factors.