JUDGMENT
Arun B. Saharya, J.
(1) By this petition under Article 226 of the Constitution of India the petitioner-company is challenging the impugned order dated 20/24.5.1994 (Annexure-D) made by the State Commission (Consumer Disputes Redressal Commission) Delhi dismissing the petitioner’s application filed in the proceedings initiated against the petitioner/company under Section 27 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act)”.
(2) It is also prayed that the complaint of respondent No. 3 made against the petitioner/company as well as the warrants issued by the State Commission for the arrest of the Chairman of the petitioner company by the impugned order bequashed.
(3) Further, it is prayed that a declaration be issued that Section 27 of the Act is ultra vires and, that in the alternative the proceedings under Section 27 of the Act are governed by the procedure prescribed in the Code of Criminal Procedure by virtue of the provision made in Section 4 of Sub-section 2 of the said Code.
(4) The Writ Petition is opposed on behalf of respondent No. 3 on all counts, in addition to the plea that the petitioner has got an alternative remedy by way of an appeal or revision against the impugned order of the State Commission under Section 19 read with Section 21 of the Act.
(5) The facts and circumstances in which the impugned order has been made, may be briefly stated:
(6) On a petition made by respondent No. 3 the State Commission passed against the petitioner company a payment order dated 15/04/1993 directing the company to pay to respondent No. 3 an amount of Rs. 93,681.00 with interest on an amount of Rs. 83,681.00. The company preferred an appeal against the said payment order to the National Commission. Together with the appeal the company also prayed forstay,of operation of the impugned order of the Commission. The National Commission granted stay sought by the company subject to the condition that the company, deposited before the State Commission a sum of Rs.75,000.00 within one month to be paid to respondent No. 3 herein without insisting upon any surety and in default of compliance of this condition, it wasclarified that the stay, order shall stand automatically cancelled. This order waspassed by the National Commission on 16/09/1993. The appealpreferred by the company against the payment order dated 15/04/1993passed by the State Commission is still pending before the National Commission. In the meanwhile, on 15/07/1993 respondent No. 3 filed anapplication for action against the company under Section 27 of the Act. On l9.8.93the State Commission ordered notice to be issued to Sh. B.K. Sahni, Chairman ofthe company for 16/09/1993. That day one Mr. D.L. Sehgal appearedon behalf of the company and stated before the State Commission that The National Commission had stayed the operation of the payment order on certainconditions. He requested for time to file the order of the National Commission andto comply with that order. Accordingly the case was adjourned to 18/07/1993.That day an Advocate appeared for the company, and made a statement thatMr. B.K. Sahni, Managing Director of the company, had gone to Bombay. Butbeing specifically asked by the Commission the learned Counsel stated that he was not in a position to produce Mr. Sahni before the Commission on the nextdate of hearing. Consequently the State Commission issued bailable warrantsagainst Mr. Sahni returnable on 11.11.1993. A report was received that Mr. Sahnihad not been served as he was away to Bombay. Fresh bailable warrants were issued, for 7/01/1994 but report regarding service was not received backand bailable warrants were again issued for 24/02/1994 and then for 1 1/03/1994. Sh. D.L. Sehgal, Assistant Vice-President of the company enteredappearance and filed the application for cancellation of the bailable warrantsissued for appearance of the Chairman/Managing Director of .the company.This is the application which was dismissed by the impugned order.
(7) Before the State Commission two propositions were urged by the company.Firstly, that no notice could be issued under the Act to the Chairman /Director or anyof the officer of the company in proceedings against the company under Section 27 of the Act and that proceedings under Section 27 of the Act could be undertakenonly in accordance with the provisions made in the Code of Criminal Procedure for the trial of a warrant case. The State Commission after hearing Counsel for theparties dismissed both the pleas of the company by a detailed speaking order whichis the subject matter of challenge in this petition. With regard to liability of theChairman/Managing Director or any other person responsible for the conduct ofthe business of the company, the State Commission has recorded a finding that persons who are officially responsible for the conduct of the affairs of the company are liable to be punished for disobeying the orders of Competent Courts directed against thecompany inasmuch as command to the company Or a corporation is infact a command to those who are officially responsible for conduct of its affairs. If they, after being appraised of the order directed to the corporation, prevent complained or fail to take appropriate action, within their power, for the performance of the duty of obeying those orders, they and the corporate body are both guilty of disobedience and may be punished for contempt. Reliance for this purpose has been placed on the decision of the Supreme Court in Aligarh Municipal Board and Ors. v. Ekka Tanga Mazdoor Union and Others . Accordingly, the State Commission has held that action can be taken against the Managing Director or the Chairman or any other officer ofthe company under Section 27 of the Act.
(8) With regard to the second proposition about the procedure to be followed in a case under Section 27 of the Act, the Commission has held that in the absence of any specific provision made in the Act itself the Commission has to devise a procedure of its own which of course should be in conformity with the principles of natural justice.
(9) On a combined reading of the provisions made in Section 19 and Section 21, it appears to us that the impugned order of the State Commission is subject to statutory appeal to the National Commission under the Act. If it be contended that the impugned order is wrong, appeal would certainly lie to the National Commission under Section 19 read with Section 21(a)(ii). In the alternative, if it be contended, for whatever reasons, that the State Commission has acted beyond its jurisdiction, the order would be subject to correction in proceedings which are in the nature of revision envisaged under Section 21(b) of the Act.
(10) In any event, we find no error of jurisdiction or error apparent on the face of the impugned order made by the State Commission in the present case.
(11) Section 27 of the Act provides that where a trader or a person against whom a complaint is made, fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case maybe,such trader or person shall be punishable with imprisonment under the Act. By making this provision, the legislature has empowered each of the specified Fera to punish a person who fails or omits to comply with any order made by it under the Act. The power has been conferred upon each of the nominated quasi-judicial authorities for effectively enforcing compliance of its own orders. The exercise of such a power cannot be subjected to investigation inquiry and trial nor can a case of this kind be dealt with according to the provisions made for this purpose in respect of offences under the Code of Criminal Procedure. In the very nature ofa case envisaged under Section 27 of the Act, the provision made in Sub-section2 of Section 4 of the Code of Criminal Procedure cannot be invoked. The Commission has rightly held that in the exercise of its power under Section 27 ofthe Act it has to devise a procedure of its own. The proceedings under Section 27 of the Act are of a summary nature. It is open to the Fora created under the Act to adopt any procedure to deal with the case of this nature provided the procedure is fail and just.
(12) Learned Counsel for respondent No. 3 has invited our attention to the Statement of Objects and Reasons for enactment of the provisions made in the Act.Clause 4 of the Statement of Objects and Reasons states that the Act intends to provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the District, State and Central levels. These quasi-judicial bodies, “will observe the principles of natural justice”.
(13) So far as the question of personal liability of the Chairman/Managing Director is concerned, we find that the conclusions arrived at by the State Commission in the impugned order are perfectly reasonable. A person in charge of and responsible for the conduct of business of the company is liable to punishment for disobedience of the orders made by the concerned authorities.
(14) Section 27 of the Act was challenged on the plea that it is unconstitutional in another case of Ravi Kant v. National Consumer Redressal Consumer Disputes Redressal Commission and Others, in Cwp 3858/94. The challenge was rejected by another Division Bench of this Court by an order dated 26th September, 1994where the Bench observed that they did not find any merit in the said submission.We are also of the same view and our view is based upon the reasons that we have already set out hereinabove with regard to the nature of the provisions and the procedure that has to be adopted in proceedings under Section 27 of the Act.
(15) In the present case, we find no equity either in favor of the petitioner.On the contrary, it appears that the petitioner is resorting to dilatory tactics to thwart and abuse the process of law. As noticed earlier, the Chairman/Managing Director of the company chose not to appear before the State Commission in spite of his having knowledge of the proceedings under Section 27 of the Act. The company secured on 16th September, 1993 an order from the National Commission for conditional stay of the operation of the payment order of the State Commission. .That order envisaged payment by the company of a sum of Rs.75,000.00 within one month. This condition was not complied with. Yet,on the basis of the said conditional stay order the company tried to delay progress of the proceedings under Section 27 of the Act. The company did not stop it that. On 14thOctober, 1993, the company filed a Writ Petition being Cw 4845/93 in this Court for quashing the payment order dated 15th April, 1993 passed by the State Commission as well as conditional order of stay dated 16th September, 1993 passed by The National Commission. In that petition, the company also sought a declaration that Section 2(d) and 2(j) and Section 14(b) of the Act are ultra vires Articles 14, 19(1)(g) and 31 of the Constitution of India. Here, we may recall that Mr. D.L.Sehgal Assistant Vice-President of the petitioner company had already appeared before the State Commission and was fully aware of the proceedings under Section 27 of the Act even on 16th September, 1993. Yet, in Cwp 4845/93 the petitioners chose not to challenge the vires of Section 27 of the Act. That writ petition was dismissed by a speaking order dated 15th October, 1993 passed by a Division Bench comprising Hon’ble Mr. Justice D.P. Wadhwa and Hon’ble Mr. Justice VijanderJain. Rather than paying up the amount as directed by the State Commission and even by the National Commission, the petitioner has chosen to indulge an unnecessary litigation, apparently, with a view to harass respondent No. 3 and to avoid liability to make the payment. We are unable to appreciate such conduct ofthe petitioner. In these circumstances, we are of the opinion that the petitioner ought to pay costs of the present proceedings to respondent No. 3.
(16) For the aforesaid reasons, the Writ Petition is dismissed with costs. The fee of Counsel for respondent No. 3 is assessed at Rs. 10,000.00.