Supreme Court

Manohar Infrastructure and Constructions Private Limited and Ors. vs. Sanjeev Kumar Sharma and Ors.

MANU/SC/1191/2021

07.12.2021

Consumer

National Commission can direct deposit of entire or more than 50% of amount determined by State Commission for stay

The original Appellant – builder has preferred the present Appeal against impugned order passed by the National Consumer Disputes Redressal Commission, New Delhi (“National Commission”) by which, the National Commission, while staying the order passed by the State Commission has directed the Appellant to deposit the entire decretal amount with the State Commission.

The short question which is posed for consideration of this Court is “Whether in an appeal under Section 51 of the Consumer Protection Act, 2019 and while considering the stay application to stay the order passed by the State Commission, the National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission while entertaining the appeal under Section 51 of the Act, 2019?”

On a fair reading of Section 51 of the Act, 2019, more particularly, second proviso to Section 51, it appears that the Appellant(s) in an appeal against the order passed by the State Commission may prefer an appeal, however, before the appeal is entertained by the National Commission, the Appellant(s) has to deposit 50 per cent of the amount. So, it is the pre-condition to deposit 50 per cent of the amount as ordered by the State Commission before his appeal is entertained by the National Commission. Therefore, it is a condition precedent to deposit 50% of the amount before his appeal is entertained by the National Commission. However, that does not take away the jurisdiction of the National Commission to order to deposit the entire amount and or any amount higher than 50 per cent of the amount while considering the stay application to stay the order passed by the State Commission.

Pre-deposit of 50 per cent of amount as ordered by the State Commission under second proviso to Section 51 of the Consumer Protection Act, 2019 is mandatory for entertainment of an appeal by the National Commission. The object of the said pre-deposit condition is to avoid frivolous appeals. The said pre-deposit condition has no nexus with the grant of stay by the National Commission. While considering the stay application in staying the order passed by the State Commission, the National Commission can grant a conditional stay directing the Appellant(s) to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission.

However, at the same time, the National Commission has to assign some cogent reasons and/or pass a speaking order, when the conditional stay of the order passed by the State Commission is passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount either as an ex parte order or after hearing both sides and considering the facts and circumstances of the case. Thus, the National Commission can grant a conditional stay of the order passed by the State Commission on deposit of the entire amount and/or any amount higher than 50 per cent of the amount as ordered by the State Commission in the aforesaid manner.

The impugned order(s) passed by the National Commission, directing the Appellant(s) to deposit the entire decretal amount while staying the respective order(s) passed by the State Commission have been passed mechanically and without assigning any reason and no speaking order is passed. Therefore, the matters are remanded to the National Commission to decide the said applications afresh and pass an appropriate order on the said application.

Tags : Pre-deposit Condition Jurisdiction

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