1998 (12) TMI 447 - HC - Companies Law

Consumer Protection Act, 1986 upheld by court, ensuring consumer rights protection and execution of forum orders.

Vishwabharthi House Building Co-operative Society Ltd. Versus Union of India

The court upheld the constitutionality and legislative competence of the Consumer Protection Act, 1986, emphasizing its objective of providing better ... Constitutional validity, Enforcement of orders by Forum/Commission, Issues Involved:1. Constitutionality of the Consumer Protection Act, 1986.2. Legislative competence of the Parliament to enact the Consumer Protection Act, 1986.3. Alleged violation of Articles 14 and 19 of the Constitution by the Consumer Protection Act, 1986.4. Execution of orders passed by the consumer forums under Section 25 of the Consumer Protection Act, 1986.Issue-wise Detailed Analysis:1. Constitutionality of the Consumer Protection Act, 1986:The petitioner argued that the Consumer Protection Act, 1986 ('the Act') was unconstitutional as it violated Articles 14 and 19 of the Constitution and amounted to creating parallel courts without amending the Constitution as per Article 368. The petitioner also contended that the Act negated the rules of justice and lacked provisions for the transfer of cases, thus offending Articles 226 and 227 of the Constitution.The respondents countered that the Act was enacted under the powers vested in the Parliament by the Constitution to provide better protection to consumers through speedy and effective justice. The Act aimed to establish consumer forums at various levels to handle consumer disputes, ensuring the principles of natural justice were observed. The Act was designed to supplement, not supplant, the existing judicial system, providing an additional forum for inexpensive and speedy resolution of consumer disputes.The court held that the Act did not violate the basic structure of the Constitution and was enacted with the objective of providing better protection to consumers. The court emphasized that the Act was a welfare legislation aimed at addressing consumer grievances efficiently and did not create a parallel hierarchy of courts.2. Legislative Competence of the Parliament to Enact the Consumer Protection Act, 1986:The petitioner argued that the Parliament lacked the legislative competence to enact the Act without first amending the Constitution. The respondents contended that the Act was enacted under Entry 11-A of the Concurrent List in the Seventh Schedule, which deals with the administration of justice and the constitution and organization of all courts except the Supreme Court and High Courts.The court held that the Parliament had the jurisdiction to enact the Act under Article 246 read with Entry 11-A of the Concurrent List. The court noted that the Act was intended to relieve the burden on existing courts and provide additional legal remedies without taking away the right of citizens to approach ordinary civil/criminal courts. The court rejected the argument that the Act created a parallel hierarchy of courts, emphasizing that it was designed to supplement the judicial system.3. Alleged Violation of Articles 14 and 19 of the Constitution by the Consumer Protection Act, 1986:The petitioner argued that the Act violated Article 14 of the Constitution by being discriminatory and not ensuring compliance with the principles of natural justice. The respondents countered that the Act provided a complete code for dealing with consumer complaints, ensuring compliance with the principles of natural justice.The court found that the Act did not violate Article 14 as it provided a comprehensive procedure ensuring compliance with the principles of natural justice. The court emphasized that the Act was designed to protect consumers' interests and provide speedy and inexpensive justice. The court rejected the argument that the Act was discriminatory or violated Article 14.4. Execution of Orders Passed by the Consumer Forums under Section 25 of the Consumer Protection Act, 1986:The petitioner argued that Section 25 of the Act was unconstitutional as it did not provide for the execution of orders passed by the consumer forums as decrees under the Code of Civil Procedure (CPC). The respondents contended that Section 25 provided for the enforcement of orders by treating them as decrees for execution purposes.The court held that Section 25 provided for the enforcement of orders passed by the consumer forums as if they were decrees of a civil court. The court noted that while the Act did not explicitly make the provisions of Order 21 of the CPC applicable, the orders could be executed by civil courts if the consumer forums recorded their inability to execute them. The court emphasized that the provision did not render Section 25 unconstitutional or unworkable.Conclusion:The court dismissed Writ Petition No. 30194 of 1996, finding it misconceived, and partly allowed Writ Petition No. 30149 of 1996 to the extent that orders passed under the Act, if not executed upon notice, shall be executable by civil courts. The court held that the Act was validly enacted by the Parliament and did not suffer from any constitutional infirmities. The petitioner in Writ Petition No. 30194 of 1996 was ordered to pay costs of Rs. 5,000.