Perused I.A. No. 2868 of 2019, which is an application dated 09.02.2019 for transferring F.A. No. 1135 of 2014 from this Bench.

The F.A. No. 1135 of 2014 was filed against the impugned Order dated 23.04.2014 of the State Commission.

Arguments were heard on 21.01.2019, and the following Order was passed:

Heard learned counsels for the appellant and the respondent. Perused the material on record.

The first appeal is dismissed, with stern advice of caution to the appellant through imposition of cost of Rs.1 lakh to be deposited in the Consumer Legal Aid Account of the State Commission within four weeks of the date of pronouncement of the reasoned judgment.

Reasoned judgment to follow.

The F.A. is listed for pronouncement of the reasoned judgment today.

This I.A. has also been placed before this bench today.

The I.A. is patently ill-conceived and mischievous, and is not viewed favourably.

The I.A. is dismissed with stern advice of caution through imposition of cost of Rs.25,000/- to be deposited by the applicant with the Consumer Legal Aid Account of the State Commission within four weeks from today.

Let a copy of this Order be sent to the State Commission within ten days by the Registry.

The dispute relates to 1999, we are in 2019.

1. Learned counsels for the appellant – complainant co. and the respondent – bank were heard. The material on record was perused.

2. During arguments on 21.01.2019 the learned counsel for the complainant co. raised an objection that this bench was constituted of non-judicial members and as such was not competent in law to adjudicate the issues.

3. We feel it appropriate to briefly put the question of competence in perspective.

4. Notwithstanding that one of us has a doctorate in law and one of us has a graduate degree in law in the first division, and notwithstanding that one of us has had over five years’ experience in this Commission itself and one of us has had fair experience of court-work including revenue court–work (in which the CPC and the Evidence Act were applicable, civil court jurisdiction was barred, parties were represented through advocates, reasoned judgements were delivered and were subject to scrutiny), the fact is that we are not from the judicial service.

5. But, briefly, we would like to refer to the following:

Statement of Objects and Reasons

The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer councils and other authorities for the settlement of consumer disputes and for matter connected therewith.

To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the district, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.

Aims and Object

An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith.

Section 20 (1) (b)

The National Commission shall consist of—

(b) not less than four, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:—

(i) be not less than thirty-five years of age;

(ii) possess a bachelor's degree from a recognised university; and

(iii) be persons of ability, integrity and standing and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

Proviso to Section 20 (1) (b)

Provided that not more than fifty per cent. of the members shall be from amongst the persons having a judicial background.

Explanation. -- For the purposes of this clause, the expression “persons having judicial background” shall mean persons having knowledge and experience for at least a period of ten years as a presiding officer at the district level court or any tribunal at equivalent level:

Section 20 (1A) (ii)

A Bench may be constituted by the President with one or more members as the President may deem fit.

6. A reading of the above in conjunction makes clear to a sufficient extent the intention of the legislature and the intent of the legislation.

7. We would also like to refer to the judgment delivered by Hon’ble Supreme Court in the case of L. Chandra Kumar vs. Union of India and Ors. 18th March 1997 in Appeal (Civil) 481 of 1980 in which inter alia the following question was framed and answered by the Hon’ble Court:

(2) Whether the Tribunals, constituted either under Article 323A or under Article 323B of the Constitution, possess the competence to test the constitutional validity of a statutory provision/rule?

The Hon’ble Court had answered the question inter alia as below:

“However, it is important to emphasise that though the subordinate judiciary or Tribunals created under ordinary legislations cannot exercise the power of judicial review of legislative action to the exclusion of the High Courts and the Supreme Court, there is no constitutional prohibition against their performing a supplemental--as opposed to a substitution - role in this respect. That such a situation is contemplated within the constitutional scheme becomes evident when one analyses Clause (3) of Article 32 of the Constitution……”

(para 80 of the Judgment)

“…..So long as the jurisdiction of the High Courts under Articles 226/227 and that of this Court under Article 32 is retained, there is no reason why the power to test the validity of legislations against the provisions of the Constitution cannot be conferred upon Administrative Tribunals created under the Act or upon Tribunals created under Article 323B of the Constitution. …….”

(para 81 of the Judgment)

“There are pressing reasons why we are anxious to preserve the conferment of such a power on these Tribunals……”

(para 82 of the Judgment)

“………It has been contended before us that the Tribunals should not be allowed to adjudicate upon matters where the vires of legislations is questioned, and that they should restrict themselves to handling matters where constitutional issues are not raised. We cannot bring ourselves to agree to this proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Courts and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases involve an interpretation of Articles 14, 15 and 16 of the Constitution. To hold that the Tribunals have no power to handle matters involving constitutional issues would not serve the purpose for which they were constituted……. While saving the power of judicial review of legislative action vested in the High Courts under Article 226/227 of the Constitution, it will ensure that frivolous claims are filtered out through the process of adjudication in the Tribunal. The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter.”

(para 91 of the Judgment)

“Before moving on to other aspects, we may summarise our conclusions on the jurisdictional powers of these Tribunals. The Tribunals are competent to hear matters where the vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for the High Courts and the Supreme Court which have, under our constitutional setup, been specifically entrusted with such an obligation. Their function in this respect is only supplementary and all such decisions of the Tribunals will be subject to scrutiny before a Division Bench of the respective High Courts. The Tribunals will consequently also have the power to test the vires of subordinate legislations and rules. However, this power of the Tribunals will be subject to one important exception. The Tribunals shall not entertain any question regarding the vires of their parent statutes following the settled principle that a Tribunal which is a creature of an Act cannot declare that very Act to be unconstitutional. In such cases alone, the concerned High Court may be approached directly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before a Division Bench of their respective High Courts. We may add that the Tribunals will, however, continue to act as the only courts of first instance in respect of the areas of law for which they have been constituted. By this, we mean that it will not be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except, as mentioned, where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction of the concerned Tribunal.”

(para 94 of the Judgment)

“..…..For these reasons, it has been urged that the appointment of Administrative Members to Administrative Tribunals be stopped. We find it difficult to accept such a contention. It must be remembered that the setting-up of these Tribunals is founded on the premise that specialist bodies comprising both trained administrators and those with judicial experience would, by virtue of their specialised knowledge, be better equipped to dispense speedy and efficient justice. It was expected that a judicious mix of judicial members and those with grass- roots experience would best serve this purpose. To hold that the Tribunal should consist only of judicial members would attack the primary basis of the theory pursuant to which they have been constituted. Since the Selection Committee is now headed by a Judge of the Supreme Court, nominated by the Chief Justice of India, we have reason to believe that the Committee would take care to ensure that administrative members are chosen from amongst those who have some background to deal with such cases.”

(para 96 of the Judgment)

8. Statutory appeal under the Act 1986 lies in Hon’ble Supreme Court. Hon’ble High Court exercises superintendence (Article 227) over this bench. This bench’s Orders, functioning are subject to scrutiny, superintendence.

9. This bench has been constituted by Hon’ble President of the Commission, who is a retired judge of Hon’ble Supreme Court. Other single and division benches comprising of non-judicial members are functioning in the Commission. This bench has been adjudicating such issues in the routine.

10. The above (paras 4 to 9) put the question of competence in perspective.

11. We do not find any need to examine our competence, when the case before us is the first appeal of the appellant – complainant co.

12. In any case, this bench cannot determine its own competence.

13. We may also refer to Hon’ble Supreme Court’s Order dated 14.12.2018 in HDFC Bank Ltd. vs. Anurag Gupta in SLP (C) No. 31303-31304 / 2018, which is reproduced below:

Dated: 14.12.2018

ORDER:

Leave granted.

The National Consumer Disputes Redressal Commission (“NCDRC”) declined to condone a delay of twenty days in filing a revision against a decision of the State Consumer Disputes Redressal Commission. From the order of the NCDRC, we find that counsel appearing for the appellant declined to argue the matter on merits and in fact sought a transfer from the Bench which was hearing the proceedings to another Bench on the ground that only a Bench consisting of judicial members should hear the case. At the outset, we wish to make it clear that we disapprove of this conduct. The objection was thoroughly frivolous and an attempt to brow-beat the Bench.

We are apprised by the respondent who appears in person of the fact that the appellant all along appeared in the proceedings before the Bench concerned. We find that the refusal to argue the revision was unwarranted.

At the same time, we are equally conscious of the need to ensure that injustice should not result due to the behaviour of counsel. The issue which has been raised by the appellant before the NCDRC in revision ought to be addressed. An order imposing costs as a condition for condonation of delay would be appropriate.

Consequently, we order and direct that the appellant shall within a period of four weeks from today pay to the respondent a sum quantified at Rs. 1 lakh, which shall be in addition to the costs which have been imposed by the NCDRC. Conditional on the aforesaid payment, the delay of 20 days in filing the revision shall stand condoned.

Since the dispute between the parties relates to the year 2002, we request the NCDRC to endeavour expeditious disposal of the revisional proceedings.

The impugned order is, accordingly, set aside.

The appeals are, accordingly, allowed. No costs.

We also record the statement which has been made on behalf of the appellant by Mr. Dhruv Mehta, learned senior counsel that the objection which was urged before the NCDRC in regard to the Bench hearing the proceedings is not pressed.

14. Coming to the case at hand, i.e. coming to the f. a. no. 1135 of 2014 before us, the application for condonation of delay in filing the appeal was first considered.

15. The appeal has been filed against the Order dated 23.04.2014 of the State Commission with self-admitted delay of 125 days.

16. The State Commission vide its said Order dated 23.04.2014 had dismissed the complaint on limitation:

20) There was good relation between Director of complainant and Director of sister-concern. The objection was never raised by the complainant about alleged debits and transfers to the account of sister-concern. The last debit entry is of the year 1996. Complaint is not filed within two years from the last debit entry. Section 24-A of the Consumer Protection Act, 1986 is a legislative mandate to the Consumer Fora not to admit the complaint unless it has been filed within two years from the date on which cause of action arisen. No application for condonation of delay is filed to explain the delay. The contention of the complainant is that limitation will start when the alleged debits and transfers were brought to the knowledge of the complainant by Chartered Accountant. If the complainant would have exercised due diligence, the alleged transfers would have been noticed by the complainant.

21) It is true that cause of action is described as bundle of facts. Cause of action is a cause of action which gives occasion for and forms foundation of the complaint. One of the principle underlined the law of limitation is that litigants must have act diligently and not slept over their rights which does not lead to anomaly result causing hardship to the party. In case in hand, if the immediate action was taken by the complainant, the opponent could have recovered the amount transferred to the account of sister-concern. The complainant allowed the remedy of the opponent to die and thereafter preferred the complaint. As such conduct of the complainant causes hardship to the opponent. The complainant never tried to recover the amount transferred to the sister-concern from the sister-concern. The complainant neither pleaded case of fraud against the opponent nor established that there has been any fraud.

22) In the case of State Bank of India V/s. B.S. Agricultural Industries (I), II (2009) CPJ 29 (SC), the Hon’ble Apex Court held as under :-

“The expression, ‘shall not admit’ a complaint occurring in Section 24-A is sort of a legislative command to the Consumer Forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder. As a matter of law, the Consumer Forum must dealt with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the Consumer Forum to take notice of Section 24-A and give effect to it. If the complaint is barred by time and yet, the Consumer Forum decides the complaint on merits, the Forum would be committing an illegality and therefore, the aggrieved party would be entitled to have such order set aside.”

In the instant case, complainant has not moved an application for condonation of delay. Mr. Gai, A.R. for the complainant during the course of his arguments has placed reliance on the ruling laid own by Hon’ble National Commission in case of Uma Shankar Bhatt V/s. Punjab & Sind Bank & Ors.,I (2008) CPJ 31 (NC) to show that complaint is within limitation. In this case, it is observed as under :-

“Amount unauthorisedly transferred to third party, without any cheque or instructions issued by complainant. Gross negligence and deficiency in service alleged. Amount disbursed to third party without verification of signature of depositor, or doubting/suspecting as to why no cheque used, when whole amount lying in account being transferred in one go. Fraud committed by Branch Manager in collusion with others. Large amount misappropriated by unauthorized transfer. Bank liable to reimburse amount with interest. Compensation granted.”

It is to be noted here that in the case of Uma Shankar Bhatt, cause of action arose in 1997. Complainant all through requesting Bank to refund amount fraudulently transferred. Complainants letter was rejected by the Bank in 2001. Complaint filed by the complainant in the year 2002 and in the peculiar facts and circumstances of case, delay in filing complaint was condoned by the Hon’ble National Commission.

In case in hand the complainant never moved an application for condonation of delay. Without condoning the delay to file complaint, complaint cannot be entertained being barred by limitation. Ruling laid down by the Hon’ble National Commission in the case of Uma Shankar Bhatt is not applicable to the case in hand.

23) The complaint filed by the complainant is not within limitation. Hence, complaint is liable to be dismissed in view of Section 24-A of Consumer Protection Act, 1986. Hence, we pass the following order:-

ORDER :-

1. Complaint stands dismissed.

2. Parties to bear their own costs.

3. Copies of the order be furnished to the parties.

(paras 20, 21, 22 and 23 of the State Commission’s Order)

(emphasis supplied)

17. The appeal has been filed with self-admitted delay of 125 days. The stated reasons for delay in filing the appeal, as mentioned in paras 6 to 13 of the application for condonation of delay, are as below:

6. At the outset, the Appellant says that since it is a juristic entity, it had to act through its Director and authorized signatory viz. Mr. Achintya Mukherjee who was and is required to engage an Advocate to fight the case of the Appellant and to file the above appeal. Mr. Achintya Mukherjee was required to be in Jaipur, as his wife permanently resides there, and since she was unwell, his presence was necessary, both in May to June and August of 2014.

7. The Appellant submits that an authorized representative represented them at the State Forum. The Director of the Appellant, after a careful scrutiny of the Order, decided that it is essential that they be represented by an Advocate for filing the Appeal / Application. Given the straitened financial circumstances of the Appellant having no sources of income for the last decade, it took some time to engage suitable legal assistance and acquainting the Advocates with the facts of this case.

8. The Director of the Appellant, in his capacity as the Honorary Joint Secretary of the Bombay Telephone Users’ Association, was working from a municipal school building where the NGO was allotted space since 2003. Some of his personal papers and that of the Appellant were occasionally required to be available to him at that office for follow ups and computer work. In pursuance of their current policy to uniformly remove NGOs from municipal school buildings, the Municipal Corporation of Greater Mumbai has sealed this office, without notice. It has therefore taken the Director some locations which documents would allow the newly appointed Advocates to familiarize themselves with the facts of the case, and prepare the Appeal as well as Delay Condonation of Delay.

9. The Appellant further says that till 27th May, 2014, the copy of the impugned order was not ready and in order to obtain relevant information from the office of Hon’ble State Consumer Disputes Redressal Commission, Maharashtra, Mumbai, the Appellant had made Applications on the said 27th May 2014 from Jaipur under the provisions of Right to Information Act. The Appellant says that it was only in response to his application that the full text of the impugned order was finally received by the Appellant. Certified true copies of the relevant records were received, from time to time, and continued to be received till 11 August, 2014 from the office of the Consumer Forum. Additional RTI applications were required to be submitted for securing additional information, the last of which reply was received on 16th September, 2014.

10. However, these replies were in Marathi language. Consequently, the said Mr. Achintya Mukherjee was required to engage a person who was familiar with Marathi language, who explained to the Appellant contents thereof and thereafter an arrangement was made for translation of the necessary papers as received under the provisions of Right to Information Act, leading to additional time required to evaluate these replies and obtaining translated copies.

11. The Appellant further says that its Director, Mr. Achintya Mukherjee is a Senior Citizen and a Social Activist who is actively engaged in pursuing numerous Public Interest Litigation which are pending in various Courts of law, including the National Consumer Disputes Redressal at New Delhi and as the Honorary Secretary of Bombay Telephone Users’ Association, assists telecom consumers in many issues.

12. The Appellant submits that the delay, in filing this Memo of Appeal, is excusable and that there is sufficient cause, namely Legal and adequate reasons, for condoning the delay of 125 days in filing this Memo of Appeal. In any case, the Appellant submits that the delay, if any, in filing this Memo of Appeal be condoned as irreparable harm and injury would be caused to the Appellant whereas no harm or prejudice would be caused to the Respondent. The Appellant submits that balance of convenience is in its favour and no prejudice would be caused to the Respondent in case the said delay is condoned and the said Memo of Appeal is heard on merits.

13. The Appellant submits that the impugned order suffers from errors of law, which are apparent on the face of record and / or are perverse and / or has caused grave injustice to the Appellant. The appellant further submits that it had strong case on merits. the Appellant further submits that it is well-settled position in law that when substantive justice and technical considerations are pitted against each other, cause of substantive justice deserves to be preferred because the “other side” cannot claim to have vested right in injustice being done because of non-deliberate delay. The Appellant further submits that there is no presumption that delay is associated deliberately or on account of culpable negligence or on account of malafides. The appellant further submits that a litigant does not stand to benefit by restoring to delay.

1. In the facts and circumstances of the case, the Appellant prays:

(a) That the delay, in filing the present Memo of Appeal, be condoned in the interest of justice, equity and good conscience.

(paras 6,7,8,9,10,11,12 and 13 of the application for condonation of delay)

18. The Act 1986 is to provide speedy and simple redressal to consumer disputes (Statement of Objects and Reasons). The normative ideal period for disposing of an appeal is 90 days (section 19A of the Act). The period of limitation to file appeal is 30 days (section 19 of the Act).

This appeal has been filed with (further) admitted delay of 125 days.

19. The stated reasons for delay, as reproduced, verbatim, in toto, in para 17 above, point towards managerial inefficiency and perfunctory and casual attitude to the law of limitation, and are illogical and absurd in explaining convincingly and cogently the day-to-day delay in filing the appeal.

20. No just or sufficient cause to explain the delay is visible.

21. The application for condonation of delay being unconvincing and devoid of merit deserves to be dismissed. Resultantly the appeal also deserves to be dismissed on limitation.

22. We however want to also satisfy ourselves that there would be no miscarriage of justice if the delay is not condoned. Therefore we have also examined the merit in the State Commission’s impugned Order.

23. The case relates to debits made by the respondent – bank from the complainant co.’s account, allegedly without its prior written instructions / authorization, and crediting them to the accounts of the complainant co.’s sister concerns / their proprietor(s) / partner(s).

24. The debits in question were made by the bank in 1995-96 and 1996-97 (Rs. 2,95,450/- in 1995-96 and Rs. 6,59,430/- in 1996-97) and credited to the accounts of the complainant co.’s sister concerns /their proprietor/s / partner/s. Mafh’s Creations and Mahf’s International were sister concerns of the complainant co. One director of the complainant co. (Achintya Mukherjee) was a partner in Mafh’s Creations, a sister concern. Another director of the complainant co. (Rukhsana Amin) was the proprietor of Mafh’s International, another sister concern. The debits from the complainant co.’s account were credited to the accounts of its sister concerns / their proprietor/s / partner/s. The first debit was made on 20.04.1995, the last on 05.12.1996. Total number of transactions was 44. It is not as if the bank withheld any amount with itself. The debits from the complainant co.’s account were credited to the accounts of the complainant co.’s sister concerns / their proprietor/s / partner/s. It is also not as if the credits were made to any other third party. The debits relate to the financial years 1995-96 (from 20.04.1995) and 1996-97 (upto 05.12.1996). As stated by the complainant co., it first raised its objection to the debits with the bank in 1998-99 (vide statedly a letter dated 19.08.1998). The bank responded to the objection on 12.03.1999, that is, in the same financial year 1998-99. It is evident that the complainant co. took over 4 years and 8 months from the first debit and more than 3 years from the last debit to raise any objection with the bank. No objection regarding errors in making the debits was raised by the complainant co. during the financial years 1995-96 (from 20.04.1995), 1996-97, 1997-98 and 1998-99 (uptil 19.08.1998). Nowhere has it been shown by the complainant co. that while obtaining its periodic or annual statements of account from the bank, it disputed the transactions in question. The complainant is a private limited co. and was required to maintain its balance sheet, profit and loss account, etc., periodically and for each financial year. It was required to file its tax returns for each

assessment year. It is difficult to agree that the debits in question went unnoticed while preparing its financial and tax statements each year, year after year. 25. We may note that objection if any raised within reasonable time of a disputed transaction would have caused the bank to reverse the transaction(s) and remedy the alleged error(s). The first objection, as already stated, was made 4 years and 8 months after the first debit in dispute and 3 years after the last debit in dispute. And the objection was made only and only after the transferred amount had been withdrawn by its sister concerns / their proprietor/s / partner/s and only and only when there was no balance available in the recipient’s accounts to reverse the transactions. There is nothing on record that any criminal or civil action was brought by the complainant co. against its director/s or against its sister concerns or against their proprietor/s / partner/s or against their successor(s)-in-interest / legal heir(s). The sister concerns / their partner/s / proprietor/s have not been made opposite parties to the complaint. Only the bank has been arrayed as an opposite party. In such facts and situation, the question of limitation becomes materially significant and important, especially considering that the bank had by then been left with no opportunity available to reverse the transaction(s) and remedy the alleged error(s). It is also significant that no collusion between the bank and the complainant co.’s sister concerns / their partner/s / proprietor/s has been alleged or shown, as also that no fact or reason has been adduced or brought out for the bank to have whimsically or erratically or wrongly made the transfers in question. 26. In such facts and situation, the stated reason for condonation of delay in moving the State Commission, that the alleged error(s) came to notice on audit, on receipt of a letter from the auditor, has a decisive ring of untruth and is not acceptable. 27. The State Commission had dismissed the complaint on limitation. The State Commission’s Order dated 23.04.2014 is well-appraised and well-reasoned. We note in particular the extracts of the appraisal made by the State Commission in paras 20 and 21 of its Order, which have been quoted, verbatim, in para 16 above. The State Commission’s Order cannot be faulted. 28. A bare reading of the salient facts (as succinctly enunciated in paras 24, 25 and 26) shows that, first the complaint, and then the appeal, were (both) filed beyond limitation with clearly evident malafide and mischievous intent. Consumer fora are not meant to be tools for malafide or mischievous endeavours or objectives. 29. With the above discussion, the appeal is dismissed, both on limitation and on merit, with stern advice of caution to the appellant – complainant co. through imposition of cost of Rs. 1 lakh to be deposited in the Consumer Legal Aid Account of the State Commission within four weeks of the pronouncement of this Order. And the State Commission’s impugned Order is affirmed. 30. A copy of this Order be sent to the State Commission by the Registry within ten days.