U.P. State Consumer Forum Overturns Jail Sentence For CEO Of Gr Noida Industrial Development Authority, Holds It ‘Defective’

Recently, the Uttar Pradesh State Consumer Forum overturned a ruling made by the Gautam Buddha Nagar District Consumer Forum, which had sentenced Ritu Maheshwari, the Chief Executive Officer (CEO) of the Greater Noida Industrial Development Authority (GNIDA), to one month in prison. Maheshwari was found guilty of not complying with a directive issued by the National Consumer Disputes Redressal Commission in 2014. However, the State Consumer Forum bench, consisting of Justice Ashok Kumar and member Vikas Saxena, considered the District Commission's order "defective" because it failed to give GNIDA an opportunity to present its side of the case. The bench further reiterated the need for Consumer Commissions to follow the provisions of the Code of Criminal Procedure (CrPC) when exercising powers under Section 27 of the Consumer Protection Act.

Brief Facts:

A Delhi-based entrepreneur named Mahesh Mitra (“Complainant”) lodged a complaint against the Greater Noida Industrial Development Authority (GNIDA) with the District Consumer Commission in Gautam Buddha Nagar (“District Commission”) requesting the allocation of a 2500 sq. metres plot, along with compensation and costs for the rejection of the said allocation previously. GNIDA contested the complainant’s claim, arguing that he had filed a time barred complaint before the District Commission. The District Commission ruled in favour of the complainant and directed GNIDA to allocate a plot ranging from 1000 sq. metres to 2500 sq. metres.

GNIDA appealed the decision in the NCDRC, and on 21-12-2010, the appeal was granted in favour of the GNIDA. The judgment modified the District Commission's order and instructed GNIDA to refund the deposited amount of Rs.20,000/- to the complainant with 6% interest from 06-01-2001. However, the complainant filed a Revision Petition before the NCDRC, challenging the judgment. In 2014, the NCDRC set aside the appeal's judgment and modified the District Commission's order. Subsequently, when the plot was not allocated within the specified timeframe, in January 2023, the CEO of GNIDA was sentenced to jail by the District Commission for failing to comply with the 2014 order issued by the NCDRC. Although the order did not specify the CEO's identity, it applied to the current CEO. GNIDA then filed an execution appeal in the U.P. State Consumer Dispute Redressal Commission (“State Commission”), against the District Forum's order of sentencing the CEO to 1-month imprisonment.

Observations by the Commission:

The State Commission referred to Section 27 of the Consumer Protection Act, 1986, which grants the commission powers similar to those of a judicial magistrate of the first class for the trial of offenses under the act. It noted that consumer commissions must adopt the procedure prescribed for "summary trials" under Chapter XXI of the Code of Criminal Procedure (“CrPC”) when proceeding under Section 27 of the Consumer Protection Act, 1986.

The State Commission also mentioned the Supreme Court's ruling in the case of Kamlesh Aggarwal vs Narain Singh Dabbas & Anr IV (2015) CPJ 1 (SC), which emphasized the need for consumer commissions to follow the provisions of the CrPC when exercising powers under Section 27. In this case, the Supreme Court stated that the district forum should have followed the procedures outlined in the CrPC when dealing with the application filed under Section 27 and passing the order. Similarly, the State Commission referred to the case of Rajesh Gade versus Minaxi Banodkar & Ors, I (2019) CPJ 378 (NC), where the NCDRC refused bail to the judgment debtor for non-compliance with the final order issued under Section 27 and concluded that there was no denial of due opportunity and that the State Commission had clearly directed that compliance with the final order would result in the immediate release of the convict. The NCDRC emphasized that the procedure prescribed under the CrPC should be followed in matters of penal provisions under Section 27 of the Consumer Protection Act.

Furthermore, the State Commission referred to Ramesh G. Kohali vs Shivanand Shanbag [2020 NCJ 640(NC)], in which the NCDRC considered the procedure to be followed by a consumer forum under Section 27. It concluded that the procedure approved by its larger bench should have been followed in that case, which involved the appellant being sentenced to imprisonment for non-compliance with the State Commission's order. As the prescribed procedure was not followed, the NCDRC set aside the impugned order and remitted the matter back to the State Commission to decide afresh, following the approved procedure.

Based on the aforementioned judgments of the Supreme Court and the NCDRC, the State Commission noted that in the present matter, the District Commission directly sentenced the CEO of the Greater Noida Authority without providing any notice under Section 251 of CrPC or following the prescribed procedure. Therefore, the State Commission deemed the District Commissioner's order defective and allowed the appeal.

“In this particular matter, the district commission has straightaway sentenced the CEO of the Greater Noida Authority on arriving at conclusion that he/she has not complied the order of NCDRC without giving any notice under section 251 of CrPC to the appellant (GNIDA) and has not followed the procedure prescribed in Code of Criminal Procedure as envisaged by the apex court and NCDRC. The impugned order is defective and irregular in that respect and is liable to be set aside, and the (GNIDA’s) appeal is fit to be allowed”

Case: Greater Noida Industrial Development Authority vs Mahesh Mitra

Case No.: Appeal Execution Application No. AEA/1/2023

Counsel for the Petitioner(s): Sri Prashant Chandra & Shri Rajesh Chadha

Counsel for the Respondent: Sri Mahesh Mitra (in person)

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