REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4307 OF 2007

Rajeev Hitendra Pathak & Others               ... Appellants

Versus

Achyut Kashinath Karekar & Another        ... Respondents

WITH

CIVIL APPEAL NO.8155 OF 2001

M.O.H. Leathers        ... Appellants

Versus

United Commercial Bank         ... Respondents

J U D G M E N T

Dalveer Bhandari, J.

1. These appeals emanate from the order dated 16.11.2005  

in Revision Petition No.551 of 2005 and order dated 12.7.2001  

in  Miscellaneous  Petition  No.1  of  2001  in  Original  Petition  

No.110 of  1993 passed by the National  Consumer Disputes  

Redressal Commission, New Delhi.  

2. The  main  question  which  arises  for  consideration  is  

whether  the  District  Consumer  Forums  and  the  State  

Commissions have the power to set aside their own  ex parte  

orders or in other words have the power to recall  or review  

their own orders?

3. The questions  of  law involved  in  both the  appeals  are  

identical, therefore, we deem it appropriate to dispose of both  

these appeals by a common judgment.

4. Brief  facts  necessary  to  dispose  of  these  appeals  are  

recapitulated as under:

CIVIL APPEAL NO.4307 OF 2007

5. Smita Achyut Karekar was admitted to Ashirwad Nursing  

Home as she was suffering from the ailment of slip disc.  The  

operation  was  performed  on  8.10.1997.   It  was  noticed,  at  

about  3.45  pm  on  that  day,  that  her  blood  vessels  had  

ruptured accidentally during the surgery.  She was declared  

dead at 5.35 pm.

6. The  complainants  issued  a  legal  notice  on  24.7.1999.  

Reply  to  the  legal  notice  was  sent  on  7.8.1999.   The  

complainants filed complaint alleging deficiency in service and  

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claimed  compensation  of  Rs.15,00,000/-.  The  complainants  

did  not  take  necessary  steps  to  remove  objection  and  to  

complete procedure under the Consumer Protection Act, 1986.  

The  State  Commission,  Maharashtra  issued  notice  to  the  

opposite  parties/appellants  herein  on  10.02.2004.  On  

9.9.2004, the State Commission dismissed the complaint for  

want of prosecution.  On 04.11.2004, the complainants filed  

an application for recalling 9.9.2004 order and consequently  

the State Commission recalled the order dated 9.9.2004 and  

restored the complaint.  

7. The appellants  aggrieved by the said order preferred a  

Revision  Petition  No.551  of  2005  before  the  National  

Consumer Disputes Redressal Commission, New Delhi.  The  

appellants in the revision petition made two main arguments  

before the Commission : firstly, that the State Commission did  

not  have the power  to restore  the complaint  and, secondly,  

that  the  State  Commission  restored the complaint   without  

issuing  notice  to  the  appellants.  The  National  Commission  

dismissed the revision petition which has been challenged by  

the appellants before this Court.

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8. The  appellants  relied  on  the  judgment  in  the  case  of  

Jyotsana  Arvind  Kumar  Shah  &  Others  v.  Bombay  

Hospital Trust  (1999) 4 SCC 325.  In this case, the Court  

held  that  the  State  Commission did  not  have  the  power  to  

review or recall its ex parte order.   

9. In  New  India  Assurance  Co.  Ltd.  v.  R.  Srinivasan  

(2000) 3 SCC 242, this Court took the contrary view and held  

that the State Commission could review or recall its  ex parte   

order.   

10. In the instant case, a two-Judge Bench of this Court vide  

judgment  and order  dated  17.9.2007 reported  in  2007  (11)  

SCALE 166  noted the controversy and observed as under:

“5. In Jyotsana’s case it was observed at para 7 as  follows:  

“We heard  the  learned  counsel  on both  sides for quite some time. When we asked  the  learned  counsel  appearing  for  the  respondent to point out the provision in  the  Act  which  enables  the  State  Commission  to  set  aside  the  reasoned  order passed, though ex parte, he could  not lay his hands on any of the provisions  in the Act. As a matter of fact, before the  State Commission the appellants brought  to its notice the two orders, one passed  by the Bihar State Commission in Court  Master,  UCO  Bank v. Ram  Govind  

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Agarwal 1996 (1) CPR 351 and the other  passed  by  the  National  Commission  in  Director,  Forest Research Institute v.  Sunshine Enterprises 1997 (1) CPR 42  holding that the redressal agencies have  no power to recall or review their ex parte  order.  The  State  Commission  had  distinguished the abovesaid orders on the  ground  that  in  those  two  cases  the  opponents had not only not appeared but  also  failed  to  put  in  their  written  statements.  In other  words,  in  the  case  on  hand,  according  to  the  State  Commission,  the  opponent  (respondent)  having  filed  the  written  statements,  the  failure to consider the same by the State  Commission  before  passing  the  order  would be a valid ground for setting aside  the  ex  parte  order.  The  State  Commission, however, fell into an error in  not bearing in mind that the Act under  which it is functioning has not provided it  with any jurisdiction to set aside the ex  parte reasoned order. It is also seen from  the order of the State Commission that it  was influenced by the concluding portion  of  the  judgment  of  the  Bombay  High  Court  to  the  effect  that  the  respondent  (writ  petitioner)  could  approach  the  appellate  authority  or  make  an  appropriate  application  before  the  State  Commission for setting aside the ex parte  order,  if permissible under the law. Here  again,  the  State  Commission  failed  to  appreciate  that  the  observation  of  the  High Court would help the respondent, if  permissible under the law. If the law does  not  permit  the  respondent  to  move  the  application for setting aside the ex parte  order, which appears to be the position,  the order of the State Commission setting  aside  the  ex  parte  order  cannot  be  

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sustained.  As stated earlier,  there is  no  dispute that there is no provision in the  Act enabling the State Commission to set  aside an ex parte order.”

6. Subsequently,  in  New  India  Assurance  case  this Court appears to have taken a different view as  it is evident from what has been stated in para 18,  the same reads as follows:  

“We only intend to invoke the spirit  of  the principle behind the above dictum in  support  of  our view that  every court  or  judicial  body  or  authority,  which has  a  duty to decide a lis between two parties,  inherently possesses the power to dismiss  a case in default. Where a case is called  up  for  hearing  and  the  party  is  not  present,  the  court  or  the  judicial  or  quasi-judicial body is under no obligation  to keep the matter pending before it or to  pursue  the  matter  on  behalf  of  the  complainant  who  had  instituted  the  proceedings.  That is  not the function of  the court or, for that matter of a judicial  or quasi-judicial body. In the absence of  the complainant, therefore, the court will  be well within its jurisdiction to dismiss  the  complaint  for  non-prosecution.  So  also,  it  would  have  the  inherent  power  and jurisdiction to restore the complaint  on good cause being shown for the non- appearance of the complainant.”

7. In the latter case i.e. New India Assurance case  reference was not  made to the  earlier  decision in  Jyotsana  case.  Further  the  effect  of  the  amendment to the Act in 2003 whereby Section 22A  was  introduced  has  the  effect  of  conferment  of  power  of  restoration on the  National  Commission,  but  not  to  the  State  Commission.  In  view  of  the  divergence  of  views  expressed  by  coordinate  

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Benches, we refer the matter to a larger Bench to  consider  the  question  whether  the  State  Commission  has  the  power  to  recall  the  ex  parte  order.  Records be placed before the Hon’ble  Chief  Justice of India for appropriate orders.”

11. We have been called upon to decide whether the State  

Commission has the power to recall an ex parte order.

12. Shri  Siddharth  Bhatnagar,  learned  senior  counsel  

appearing for the appellants in Civil Appeal No.4307 of 2007  

submitted  that  the  Consumer  Tribunals  set  up  under  the  

Consumer Protection Act, 1986 are creatures of that Statute  

and derive their powers only from the express provisions of the  

Statute.  He has drawn our attention to various provisions of  

the  Consumer  Protection  Act,  1986  to  strengthen  his  

submission.   He  referred to  Section  13(4)  of  the  Consumer  

Protection Act, 1986 which reads as under:

“13 (4) For the purposes of this Section, the District  Forum shall have the same powers as are vested in  a  Civil  Court  under  the  Code  of  Civil  Procedure,  1908 (5 of 1908), while trying a suit in respect of the  following matters, namely:-  

(i) the summoning and enforcing the attendance  of any defendant or witness and examining the  witness on oath;  

(ii) the discovery and production of any document  or other material object produced as evidence;  

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(iii) the reception of evidence on affidavits;  

(iv) the  requisitioning  of  the  report  of  the  concerned  analysis  or  test  from  the  appropriate  laboratory  or  from  any  other  relevant source;  

(v) issuing of any commission for the examination  of any  witness; and  

(vi) any other matter which may be prescribed.”  

13. Mr.  Bhatnagar  has  also  drawn  our  attention  to  

Regulation  26(1)  of  the  Consumer  Protection  Regulations,  

2005, framed in exercise of powers conferred by Section 30-A  

of the Consumer Protection Act, 1986.  Regulation 26(1) reads  

as follows:

“26. Miscellaneous— (1)  In  all  proceedings  before  the Consumer Forum, endeavour shall be made by  the  parties  and their  counsel  to  avoid  the  use  of  provisions  of  Code  of  Civil  Procedure,  1908  (5  of  1908):

Provided  that  the  provisions  of  the  Code  of  Civil  Procedure, 1908 may be applied which have been  referred  to  in  the  Act  or  in  the  rules  made  thereunder.”

14. Mr. Bhatnagar submitted that only very few provisions of  

the Code of Civil Procedure have been made applicable to the  

proceedings  before  the  District  Forums  and  the  State  

Commissions  under  Section  18 of  the  Consumer  Protection  

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Act,  which  applies  Sections  13  and  14  to  the  State  

Commission  and  the  National  Commission  (under  Section  

22(1)  are  those  under  Section  13(4)).    He  relied  on  the  

judgment of this Court in  Morgan Stanley Mutual Fund  v.  

Kartick Das  (1994) 4 SCC 225 to strengthen his argument  

that the consumer tribunals can derive powers only from the  

express provisions in the Statute.  In the said case, the Court  

observed as under:

“44. A careful reading of the above discloses that  there is no power under the Act to grant any interim  relief of (sic or) even an ad interim relief. Only a final  relief  could  be  granted.  If  the  jurisdiction  of  the  Forum to grant relief is confined to the four clauses  mentioned  under  Section  14,  it  passes  our  comprehension  as  to  how  an  interim  injunction  could ever be granted disregarding even the balance  of convenience.”

15. Mr. Bhatnagar also placed reliance on another judgment  

of  this Court  in  Gulzari Lal Agarwal  v.  Accounts Officer  

(1996) 10 SCC 590.  In this case, the Court relied on earlier  

judgment of this Court in the case of Morgan Stanley Mutual  

Fund and  observed  that  the  Consumer  Forum  has  no  

jurisdiction  or  power  to  pass  any  interim  order  pending  

disposal of the original complaint filed before it.

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16. Mr. Bhatnagar relied on Section 17 of the Act which deals  

with the jurisdiction of the State Commission.  Sections 17-A  

and  17-B  were  added  by  the  2002  Amendment  of  the  Act  

dealing  with  the  “Transfer  of  Cases”  and  “Circuit  Benches”  

respectively.  The objects and reasons for introducing the said  

provisions by way of the said amendment were as follows:

“Objects and Reasons— Clause 15 (old)  seeks to  insert  a  new  Section  17-A  to  empower  the  State  Commission  to  transfer  a  case  from  one  District  Forum to another District Forum within the State if  required for  the  ends of  justice.   It  also  seeks to  insert another new Section 17-B to enable the State  Commissions to hold Circuit Benches.”

17. Mr. Bhatnagar also relied on Section 22 of the Act, which  

deals  with  the  power  and  procedure  of  the  National  

Commission.  Before the 2002 Amendment, the said provision  

was as follows:

“22. Power of and procedure applicable to the  National Commission— The National Commission  shall,  in  the  disposal  of  any  complaints  or  any  proceedings before it, have—

a) the  powers  of  a  Civil  Courts  as  specified  in  Sub-Sections (4), (5) and (6) of Section 13;

b) the  power  to  issue  an  order  to  the  opposite  party directing him to do any one or more of  the  things  referred  to  in  clauses  (a)  to  (i)  of  Sub-Section (1) of Section 14,

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and follow such procedure as may be prescribed by  the Central Government.”

18. After the 2002 Amendment,  Section 22 of the Act now  

reads as follows:

“22.  Power  and  procedure  applicable  to  the  National  Commission  —  (1)  The  provisions  of  Sections  12,  13  and  14  and  the  rules  made  thereunder  for  the  disposal  of  complaints  by  the  District  Forum  shall,  with  such  modifications  as  may be considered necessary  by the  Commission,  be  applicable  to  the  disposal  of  disputes  by  the  National Commission.

(2) Without prejudice to the provisions contained in  Sub-Section  (1),  the  National  Commission  shall  have  the  power  to  review  any  order  made  by  it,  when  there  is  an  error  apparent  on  the  face  of  record.”

19. The 2002 Amendment also introduced Section 22A which  

reads as follows:

“22A. Power to set aside ex parte orders.-Where  an order is passed by the National Commission ex  parte against the opposite party or a complainant,  as the case may be, the aggrieved party may apply  to the Commission to set aside the said order in the  interest of justice.”

20. Mr.  Bhatnagar  contended  that  Section  22(2)  was  

introduced in 2002 to give the National Commission the power  

to review its own order.  This power could not have been used  

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by the Commission before the amendment.  After amendment,  

now the Commission has specific  power  to  set  aside  an  ex  

parte  order.  This power has only been given to the National  

Commission and not extended to the District Forums or the  

State  Commissions.   If  the  legislature  intended to  give  this  

power to the State Commissions and District Forums then it  

would have extended the same to those forums also.   

21. Mr.  Bhatnagar  has  also  drawn  our  attention  to  the  

objects  and reasons for  carrying out  the  amendment  which  

reads as follows:

“Objects and Reasons— Clause 21 (old)  seeks to  substitute  Section  22  so  that  the  provisions  of  Sections  12,  13  and  14  and  the  rules  made  thereunder  for  the  disposal  of  complaints  by  the  District  Forum,  shall,  with  such  modifications  as  may be considered necessary  by the  Commission,  be  applicable  to  the  disposal  of  disputes  by  the  National Commission.  It also seeks to empower the  National Commission to review any order made by it  when  there  is  an  error  apparent  on  the  face  of  record. These provisions will make the powers and  procedures in respect of the National Commission  more explicit.  It also seeks to insert new Sections  22-A, 22-B and 22-C and 22-D.  New Section 22-A  empowers the National Commission to set aside ex  parte  orders  against  the  opposite  party  or  complainant in the interest of justice……..”

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22. Mr. Bhatnagar submitted that the limited applicability of  

the  provisions  of  the  Civil  Procedure Code to  the  Tribunals  

under the Act is under Section 13(4) of the Act.  There is no  

power of review or recall under the said provision.  Even under  

Section 13(4)(vi), no Rule has been framed in terms of Section  

30(1)  by  the  Central  Government  which  provides  power  to  

review or recall of orders.

23. Learned senior counsel for the appellants also relied on  

M/s  Eureka  Estates  (P)  Ltd.  v.  A.P.  State  Consumer  

Disputes Redressal Commission and Others  AIR 2005 AP  

118 in which the Court observed that the District Forums and  

the  State  Commissions  are  entitled  to  exercise  only  such  

powers which are specifically  vested in them under  the  Act  

and the Rules.   

24. Mr.  Bhatnagar  submitted  that  it  is  evident  from  the  

Statement of Objects and Reasons of the Act that the purpose  

of  the  Act  is  to  provide  speedy  and  simple  redressal  to  

consumer disputes.  It is for this reason that all the provisions  

of  the  Civil  Procedure  Code  have  not  been extended to  the  

Consumer Forums.    

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25. Mr. Bhatnagar further submitted that the salutary object  

of speedy and simple redressal under the Act is to be found  

inter alia in Sections 13(2) and (3) of the Act which provide for  

the  procedure  to  be  adopted  by  the  forum in  deciding  the  

complaints admitted by it.  The said provisions read as follows:

13.  (2) The District Forum shall, if the complaints  admitted by it under Section 12 relates to goods in  respect  of  which  the  procedure  specified  in  Sub- Section (1) cannot be followed, or if the complaint  relates to any services,—  

(a)refer  a  copy  of  such complaint  to  the  opposite  party directing him to give his version of the case  within a period of thirty days or such extended  period  not  exceeding  fifteen  days  as  may  be  granted by the District Forum;

(b)where the opposite party, on receipt of a copy of  the complaint,  referred to him under clause (a)  denies  or  disputes  the  allegations  contained  in  the complaint, or omits or fails to take any action  to represent his case within the time given by the  District Forum, the District Forum shall  proceed  to settle the consumer dispute,—

(i) on  the  basis  of  evidence  brought  to  its  notice  by  the  complainant  and  the  opposite party, where the opposite party  denies  or  disputes  the  allegations  contained in the complaint, or  

(ii) ex parte on the basis of evidence brought  to  its  notice  by  the  complainant  where  the opposite party omits or fails to take  any  action to  represent  his  case  within  the time given by the Forum.  

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(c) where the complainant fails to appear on the  date of hearing before the District Forum, the  District  Forum  may  either  dismiss  the  complaint for default or decide it on merits.

(3) No proceedings complying with the procedure  laid down in Sub-Sections (1) and (2) shall be called  in  question  in  any  court  on  the  ground  that  the  principles of natural justice have not been complied  with.”   

26. Mr.  Bhatnagar  also  relied  on  Section  12(3)  of  the  Act  

which reads as follows:

“12(3) On  receipt  of  a  complaint  made  under  Sub-Section (1), the District Forum may, by order,  allow  the  complaint  to  be  proceeded  with  or  rejected:

Provided  that  a  complaint  shall  not  be  rejected  under  this  Sub-Section  unless  an  opportunity  of  being heard has been given to the complainant:

Provided  further  that  the  admissibility  of  the  complaint shall ordinarily be decided within twenty- one days from the date on which the complaint was  received.”

27. Mr.  Bhatnagar  tried  to  explain  the  legislative  intent  

behind introducing Section 22-A.  According to him, only  the  

National  Commission has been given power  to  set  aside  ex  

parte orders and the same power has not been extended to the  

District Forums or the State Commissions because against the  

orders  of  the  District  Forums  and  the  State  Commissions,  

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appeal or revision can be filed before the State Commission  

and the National Commission respectively.  But in the case of  

the  orders  of  the  National  Commission,  prior  to  the  

amendment,  the  parties  were  compelled  to  approach  this  

Court  even  against  the  orders  by  which  the  cases  were  

dismissed in default.  It became extremely expensive and time  

consuming.  In this view of the matter, it became imperative to  

give this power to the National Commission.

28.  According  to  the  counsel  for  the  appellants,  in  New  

India  Assurance  Co.  Ltd.,  this  Court  did  not  notice  the  

earlier decision in Jyotsana’s case.  He submitted that the  

Tribunals  constituted  under  the  Consumer  Protection  Act,  

1986 exercise only such powers as are expressly conferred by  

the provisions of the said Act and Rules framed thereunder.  

Since  no  power  of  review  and  recall  was  conferred  on  the  

District Forums and the State Commissions, they can exercise  

no such power.

29. The counter affidavit was filed by the respondents stating  

that the Commission was justified in setting aside the ex parte   

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order and restoring the respondents’ complaint.  The counter  

affidavit also states  that the respondents cannot be deprived  

of  their  right  without  contest  on  the  basis  of  trivial  

technicalities.

30.  The respondents relied upon the judgment of this Court  

in  New India Assurance Co. Ltd.   in which this Court held  

that the Consumer Courts have inherent powers to restore the  

complaints  dismissed  for  default.   It  is  also  stated  in  the  

counter  affidavit  that  due  to  old  age,  respondent  no.1  lost  

track  of  the  case  and therefore,  the  State  Commission  was  

justified in setting aside the ex parte order in order to ensure  

that justice is done to the parties.  

CIVIL APPEAL NO.8155 OF 2001

31. In  Civil  Appeal  No.8155  of  2001,  the  National  

Commission  passed  an  ex  parte order  and  in  the  appeal  

against the order, this Court gave liberty to the appellants to  

approach the Commission for setting aside the ex parte order.  

Thereafter,  an application was filed by the complainants for  

review  of  the  order.   The  Commission  vide  order  dated  

12.7.2001  (relied  on  the  judgment  of  Jyotsana’s  case)  

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dismissed the application.   Aggrieved by the said order,  the  

appellant has filed this appeal.  

32. Mr.  M.S.  Ganesh,  learned senior counsel  appearing on  

behalf  of  the  appellants  in  Civil  Appeal  No.8155  of  2001  

submitted  that  the  National  Commission  has  implied  and  

inherent power to recall the order dated 30.5.1996 passed in  

Original Petition No.110 of 1993.

33. Mr.  Ganesh  also  submitted  that  the  notice  of  hearing  

sent  by  the  National  Commission  was  never  served  on  the  

counsel  for  the  appellants  yet  the  National  Commission  

proceeded to an ex parte decision on the appellants’ complaint  

and dismissed it on the ground of limitation.

34. According  to  Mr.  Ganesh,  the  decision  in  Jyotsana’s  

case  is manifestly per incuriam.   It does not even refer to the  

doctrine  of  implied  powers  and  was  not  aware  of  its  

applicability.  The later decision in New India Assurance Co.  

Ltd.   is expressly mindful of the doctrine. He submitted that  

an  external  aid  to  the  interpretation  of  the  Consumer  

Protection Act, 1986 also reinforces the above construction of  

the Act.   

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35. We  have  carefully  scrutinized  the  provisions  of  the  

Consumer  Protection  Act,  1986.   We  have  also  carefully  

analyzed the submissions and the cases cited by the learned  

counsel for the parties.

36. On  careful  analysis  of  the  provisions  of  the  Act,  it  is  

abundantly  clear  that  the  Tribunals  are  creatures  of  the  

Statute and derive their power from the express provisions of  

the Statute.  The District Forums and the State Commissions  

have not been given any power to set aside ex parte orders and  

power of review and the powers which have not been expressly  

given by the Statute cannot be exercised.

37. The  legislature  chose  to  give  the  National  Commission  

power  to  review  its  ex  parte  orders.  Before  amendment,  

against  dismissal  of  any  case  by  the  Commission,  the  

consumer  had  to  rush  to  this  Court.   The  amendment  in  

Section 22 and introduction of Section 22-A were done for the  

convenience of the consumers.  We have carefully ascertained  

the legislative intention and interpreted the law accordingly.   

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38. In  our considered opinion,  the  decision  in  Jyotsana’s  

case  laid down the correct law and the view taken in the later  

decision of this Court in  New India Assurance Co. Ltd.   is  

untenable and cannot be sustained.

39. In view of the legal position, in Civil Appeal No.4307 of  

2007, the findings of the National Commission are set aside as  

far as it  has held that the State Commission can review its  

own  orders.  After  the  amendment  in  Section  22  and  

introduction of  Section 22A in the Act  in the year 2002 by  

which  the  power  of  review  or  recall  has  vested  with  the  

National  Commission  only.   However,  we  agree  with  the  

findings  of  the  National  Commission  holding  that  the  

Complaint No.473 of 1999 be restored to its original number  

for hearing in accordance with law.

40. There  has  been  considerable  delay  in  disposal  of  the  

complaint.  Therefore,  we  direct  the  State  Commission  to  

dispose  of  the  Complaint  No.473  of  1999  [in  Civil  Appeal  

No.4307 of 2007] as expeditiously as possible and in any event  

within three months from the date of the communication of  

this order.

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41. Similarly, in Civil Appeal No.8155 of 2001,  we set aside  

the impugned order and  direct the National Commission to  

dispose  of  the  Original  Petition  No.110 of  2003  de novo as  

expeditiously  as  possible  and  in  any  event  within  three  

months from the date of the communication of this order.

42. Both the appeals are disposed of accordingly.  The parties  

are directed to bear their own costs.

…………………………..J.                                                  (Dalveer Bhandari)

…………………………..J. (Mukundakam Sharma)     

……….…………………J.                                              (Anil R. Dave)

New Delhi; August 19, 2011

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