Consumer And Criminal Proceedings Are Distinct From Each Other with Respective Jurisdictions: NCDRC

Brief Facts of the Case

The complainant approached Kalindi Enterprises/builder to book a flat in the builder's scheme. The builder was constructing flats in a building known as 'Vrindavan Avenue' at Shanti Park, Thane. The complainant booked a flat for Rs. 5,56,990, paying an initial advance of Rs. 31,000 and the balance amount between August 1994 and September 1996. However, the builder failed to hand over possession of the booked flat, despite assurances that the project would be completed. By March 2003, the possession was still not handed over, leading the complainant to cancel the agreement. A compromise was reached, with the builder agreeing to pay Rs. 8,11,000 to the complainant and issuing five cheques. The first two cheques, amounting to Rs. 3,50,000, were initially unpaid but later settled by pay order along with an additional Rs. 75,000. However, the remaining three cheques were dishonored, leaving Rs. 4,61,000 unpaid. The complainant issued a notice and later discovered that the flat initially booked had been sold to third parties and the builder had misled the complainant and created third-party interest in the flat, constituting a deficiency in service and unfair trade practice. Furthermore, the complainant also filed a criminal complaint under Section 138 of the Negotiable Instruments Act because the cheques issued in his favor were dishonored. Notably, the builder was found guilty of committing the offense under the N.I. Act and has been convicted, receiving both a prison sentence and a fine.

The complainant moved to the District Forum and the Forum allowed the complaint. Aggrieved by this the order, the builder moved to the State Commission which later dismissed the complaint. Consequently the builder approached the National Commission with the Revision Petition.

Contentions of the Opposite Party

The builder argued that since the trial court had already imposed a fine and provided some compensation to the complainant, there was no justification for the consumer commission to award additional compensation. They claimed that this would amount to double jeopardy. Therefore, the builder contended that the Consumer Commission's award was legally flawed and should be set aside.

Observations by the Commission

The Commission observed that according to Section 100 of the Consumer Protection Act 2019 (equivalent to Section 3 of the Act 1986), the remedies provided by the Act are supplementary to, and not in contradiction with, any other existing law. This means that the compensation awarded by the consumer commission does not constitute a criminal sentence or punishment. Criminal courts operate under different legal principles, requiring proof beyond a reasonable doubt for culpable offenses, which is not applicable to consumer complaints regarding service deficiencies or unfair trade practices. The proceedings under the Consumer Protection Act are distinct from criminal proceedings, with both jurisdictions coexisting simultaneously. Therefore, the principle of double jeopardy does not apply in this context.

Additionally, the State Commission had noted that the petitioner had sold the subject flat to a third party before canceling the agreement, which was viewed unfavorably as an unfair trade practice. After considering all evidence, the State Commission affirmed the District Commission's findings, stating that the builder engaged in unfair trade practices by issuing dishonored cheques. The commission also emphasized that while operating in a revisional capacity, it must adhere to the statutory confines of the law and refrain from interfering with lower court findings unless there is evidence of jurisdictional errors or material irregularities. In this case, no such errors were found, and the State Commission's decision was deemed adequately reasonable.

The commission disposed off the revision petition and upheld the State Commission's order.

Case Title: M/S. Kalindi Enterprises Vs. Suresh G Kumar

Case Number: R.P. No. 1083/2023