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Extending The Power Of Review To Ex-Parte Orders Under CPA, 2019: An Analysis

Anusha G Rao &Varun Mascarenhas
9 Nov 2021 12:34 PM GMT
Extending The Power Of Review To Ex-Parte Orders Under CPA, 2019: An Analysis
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The 2019 Consumer Protection Act is well known for introducing a slew of changes in Consumer Dispute Redressal, to the erstwhile 1986 Act, whether by increasing the pecuniary jurisdiction of the Dispute Redressal Commissions, increasing the time limit for filing an Appeal, or changing the composition of the State Commission. However, there is one change made by the 2019 Act...

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The 2019 Consumer Protection Act is well known for introducing a slew of changes in Consumer Dispute Redressal, to the erstwhile 1986 Act, whether by increasing the pecuniary jurisdiction of the Dispute Redressal Commissions, increasing the time limit for filing an Appeal, or changing the composition of the State Commission. However, there is one change made by the 2019 Act that appears rather simplistic but is far more detailed in practical application, which is the change of District Consumer "Dispute Redressal Forums" to "Dispute Redressal Commissions". The pecuniary jurisdiction has been increased from  Rupees 20 Lakhs to 1 Crore upper ceiling, as well as a power to review has also been introduced, which was not present in the erstwhile 1986 Act. Hence, this Article seeks to explain the complexities of this name change vis-a-vis the Power of Review under Section 40 and its importance in light of rising ex-parte Orders in Covid times.

Power Of Review Under Section 40 CPA 2019

Under the new Act, Sections 40, 50 and 60 deal with the power to review Orders of the Dispute Redressal Commissions at District, State and National level respectively. This is a welcome change as it fills the lacunae in the erstwhile 1986 Act which had not provided for powers to the State Commission or District Consumer Forums to review the Orders passed by it. In the erstwhile Act, Section 22 (corresponding to Section 60 of the New Act) provided for powers of review and recall its own orders to the National Commission. Through the 2019 Act, the State and District Commissions have been provided with additional powers of review of any of its orders.

Section 40 of the Consumer Protection Act 2019 has now provided the District Commission with the power to review any Order, in certain instances like error apparent on the face the record, either suo moto or on Application filed by the Parties within 30 days of said Order.

This is an important move, since if the power of review was not accorded to the State or District Commission, the alternate remedy for rectifying an adverse order given by the District Commission, is to file an Appeal against any Order passed, be it ex-parte or final. This option would be both economically taxing and time consuming.

Further, In the Erstwhile Act, only the National Commission was accorded the power to set aside its own ex-parte orders, under Section 22A. The Supreme Court re-iterated this position in Samaresh Prasad Chowdhury Vs. UCO Bank & Ors, & Rajeev Hitendra Pathakvs. Achyut Kashinath Karekar, where it held that the power to set aside its own ex-parte orders has been accorded only to the National Commission and not the State Commission or District Forum, under the 1986 Act. Since the power of review and setting aside ex-parte orders have not been expressly laid down in the Statute, the District Consumer Forum and State Commission, cannot be said to have inherent powers to set aside ex-parte orders.

While the National Commission has powers to set aside ex-parte orders passed by it alone, the Hon'ble Supreme Court interpreted the word "order", under Section 21(a)(ii) of the Erstwhile Act, to mean and include "any orders". Therefore, by way of an appeal, the National Commission may set aside the ex-parte orders. This was observed by the Hon'ble Supreme Court in the case of M/s. Shiur Sakhar Karkhana Pvt Ltd. Vs. SBI, where the word "order", under Section 21(a)(ii) was interpreted to mean and include ex-parte orders as well. Therefore, the Court observed that through this provision, the National Commission may set aside ex-parte orders of the State Commission by way of an appeal.

Difficulties Posed By Ex Parte Orders During Covid-19 Pandemic

With respect to the Procedure of hearing Consumer Complaints, if the Opposite Party fails to appear either by themselves or through Authorized Representation, or file objections, then the Commission is well within its rights to place the Opposite Party as Ex-Parte on the basis of evidence brought to its notice by the Complainant and pass orders based on the findings. Thus, not making an appearance and objecting to the Complaint can prove to be very costly.

However, one must also factor that Companies based out of major metropolitan cities in India have the option to designate authorized representation in remote locations across India, to defend their cases, given the flexibility in the procedure of the consumer cases, where there is no mandatory requirement representation by Advocates. Added to this, is the Covid-19 pandemic, lockdowns and travel restrictions, which often made it difficult for Parties to make appearance, leading to likelihood of passing ex-parte orders.

Relevance Of Section 40 Applications In Setting Aside Ex-Parte Orders

By way of interpretation of the term "any order", under Section 40 & 50, to mean and include ex-parte orders, the District and State Commissions are now setting aside ex-parte orders passed by them. An instance where the power envisaged under this Section was in the case of Nipun Sharma vs G.L.C Members Co-operative House Building Society, First Appeal No.366 of 2021, where the State Consumer Dispute Redressal Commission of Punjab acknowledged that while District Commission's do have the power to set aside ex-parte Orders on account of Section 40, the same can only be done if there exists an error apparent on the face of record and if the reasons are duly recorded by said Commission. The President of the State Commission while allowing an Appeal and reversing an Order of the District Commission which had set aside an ex-parte Order, specifically reserved a comment that "No doubt that the power to review any order has been vested in the District Commission, if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order."

Further, in the light of the Supreme Court Order in Re:Cognizance of Extension of Limitation, Suo Moto Writ Petition (Civil) No. 3 of2020, whereby directions were issued to exclude the period between 14th March 2020 to 15th March 2021 in computation of Limitation, and in cases where the limitation had expired during the said period, an additional period of 90 days was provided.

In the light of this Order, extending the limitation in filing petitions, applications, suits, appeals etc, one of the District Commissions in Maharashtra, allowed a Section 40 Application filed against an ex-parte Order passed against the Opposite Party for not entering appearance, and set aside the said Order. Though the reasoning for allowing an ex-parte order was in the light of the above Supreme Court Directions, yet, it has once again proved that District Commissions (as well as State Commissions) are empowered to review their own orders, including ex-parte orders.

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