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CASE NO.: Appeal (civil)  92 of 1998

PETITIONER: The Secretary, Thirumurugan Co-operative  Agricultural Credit Society    

RESPONDENT: M. Lalitha (dead) through LRs. & Ors.                            

DATE OF JUDGMENT: 11/12/2003

BENCH: Shivaraj V. Patil  & D.M. Dharmadhikari.

JUDGMENT: J U D G M E N T

Shivaraj V. Patil J.

       The respondents, being the members of the appellant-society,  had pledged paddy bags for obtaining loan.  The appellant-society  issued notices to the respondents demanding payment of loan amount  with interest thereon.  The respondents filed petitions in the  District Consumer Disputes Redressal Forum, Thiruchirapally  seeking direction to the appellant to release the paddy bags  pledged on receipt of the loan amount or in the alternative to  direct the appellant to pay the market value of the baddy bags  with interest thereon from the date of pledging till the date of  release and also to pass an order for compensation for mental  agony and suffering.  The appellant contested the claims of the  respondents before the District Forum raising a preliminary  objection that Consumer Forum had no jurisdiction to decide the  dispute between members and cooperative society in view of Section  90 of the Tamil Nadu Cooperative Societies Act, 1983 (for short  ‘the Act’). The District Forum, in the light of the pleadings of  the parties, raised the following points for determination:-

"1)     Whether the complainants are consumers and  whether there is any consumer disputes  within the meaning of the Consumer  Protection Act and whether this Forum has  no jurisdiction to entertain the  complaints of this nature and decide the  issue?

2)      Whether there is any deficiency in service  and negligence on the part of the opposite  party in all the complaints?

3)      Whether the complainants in all the  complaints are entitled to the reliefs  prayed for?"

       The District Forum answered the points 1 and 2 in favour of  the respondents and granted relief.

       The appellant took up the matters in appeal before the State  Consumer Disputes Redressal Commission.  The respondents also  filed appeal to the extent they were  aggrieved in regard to  payment of interest from 14.9.1992.  The State Commission, by the  common order, allowed the appeals filed by the appellant and  dismissed the appeals filed by the respondents.  The State  Commission held that complaints filed by the respondents were  themselves not maintainable having regard to Section 90 of the

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Act. Hence, the State Commission did not deal with the other  contentions.

       Aggrieved by the order of the State Commission, the  respondents approached the National Consumer Disputes Redressal  Commission by filing revision petition.  The National Commission,  after hearing the learned counsel for the parties and dealing with  the contentions advanced by them, found fault with the order of  the State Commission.  Consequently, the revision petition was  allowed.  The order of the State Commission was set aside  restoring the order passed by the District Forum.  Hence, this  appeal.

       The learned counsel for the appellant urged that (1) Section  90 of the Act impliedly ousts the jurisdiction of all courts and  tribunals including that of a civil court under Section 9 CPC and  the Consumer Forum created under the Consumer Protection Act, 1986  (for short ‘the 1986 Act’) from adjudicating upon the issues  falling within the scope of said Section; on the facts of the  present case, the dispute is covered by the said Section.  For  this purpose, he relied on Section 156 of the Act; (2) the Act  being a special enactment and when specific provisions are made  exclusively to deal with the disputes between a cooperative  society and its members, the disputes raised before District Forum  by the respondents were not maintainable; (3) The Act read with  the Rules creates special rights and liabilities for the members  and the management and lays down that all questions about the said  rights and liabilities are to be determined by the Registrar and  that has the provisions for appeal, revision and review.  Hence  the case in any event is covered by the proposition (2) set out at  page 682 in Dhulabhai and others vs. The State of Madhya Pradesh  and another [1968 (3) SCR 662]; and (4) If the argument of the  respondents is accepted a situation may arise where one party may  approach a forum under the 1986 Act and the other under the Act,  or the same party may approach two forums one after the other or  simultaneously.  In such a situation there is likelihood of  conflict of decisions, which should be avoided.  He drew our  attention to certain provisions of the Act and the 1986 Act. He  cited few decisions in support of his submissions.  He  alternatively submitted that in case his contentions are not  accepted, the State Commission having not decided other  contentions on merit in the appeal filed by the appellant, the  matter may be remanded to the State Commission to adjudicate the  issues other than the issue of maintainability.

       In opposition, the learned senior counsel, who assisted the  Court at our request in the absence of any representation despite  service of notice on the respondents, supported the impugned  order, contending that Section 3 of the 1986 Act clearly shows  that the remedy available under the 1986 Act is in addition to and  not in derogation of the other remedies available;  having regard  to the Statement of Objects and Reasons and the purpose sought to  be served by the 1986 Act, it cannot be said that District Forum  had no jurisdiction to decide the disputes.  He submitted that  even under Section 156 of the Act, the jurisdiction of the  District Forum is not barred; if at all, it is only the  jurisdiction of the civil court in respect of certain matters is  barred.  He added that a consumer may include a member of  cooperative society; reliefs that can be granted under the 1986  Act are wider beside being speedy.  He also drew our attention to  certain provisions of both the Acts and placed reliance on few  decisions in support of his submissions.

       We have carefully considered the submissions made on either  side.  The provisions of the Act to the extent they are relevant

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are:   

"Section 90.  Disputes \026 (1) If any dispute  touching the constitution of the board or the  management or the business of a registered  society (other than a dispute regarding  disciplinary action taken by the competent  authority constituted under sub-section (3) of  Section 75 or the Registrar or the Society or  its board against a paid servant of the society)  arises \026

(a)     among members, past members and persons  claiming through members, past members and  deceased members, or     

(b)     between a member, past member or person  claiming through a member, past member or  deceased member and the society, its board or  any officer, agent or servant of the society, or

(c)     between the society or its board and any past  board, any officer, agent or servant, or any  past officer, past agent or past servant, or the  nominee, heirs or legal representatives of any  deceased officer, deceased agent, or deceased  servant of the society, or

(d)     between the society and any other registered  society, such disputes shall be rendered to the  Registrar for decision.

Explanation \026 For the purpose of this section, a  dispute shall include \026

(i)     a claim by a registered society for any debt  or demand due to it from a member, past member  or the nominee, heir or legal representative of  the deceased member whether such debt or demand  be admitted or not.

(ii)    A claim by a registered society against  a member, past member or the nominee, heir or  legal representative of a deceased member for  the delivery of possession to the society of  land or other immovable property resumed by it  for breach of the conditions of assignment or  allotment of such land or other immovable  property, and

(iii)  a decision by the board under sub-section  (3) of Section 34:

Provided that no dispute relating to, or in  connection with, any election shall be referred  under this sub-section till the date of the  declaration of the result of such election."

Section 156 \026 "Bar of jurisdiction of civil  courts  - Notwithstanding anything contained in  any other law for the time being in force no  order or award passed, decision or action taken  or direction issued under this Act by an  arbitrator, a liquidator, the Registrar or an

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officer authorized or empowered by him, the  Tribunal or the Government or any officer  subordinate to them, shall be liable to be  called in question in any court and no  injunction shall be granted by any court in  respect of anything which is done or intended to  be done by or under this Act."

Section 3 of the 1986 Act reads:-

"Section 3.     Act not in derogation of any  other law \026 The provisions of this Act shall be  in addition to and not in derogation of the  provisions of any other law for the time being  in force."          

       Before proceeding further, it is useful to know the  background, the objects and reasons and purpose for which the 1986  Act is enacted. Consequent upon Industrial Revolution and vast  development and expansion in the field of international trade and  commerce, variety of consumer goods entered the market  to meet  the needs of the consumers and most of services like insurance,  transport, electricity, housing, entertainment, finance and  banking have been made available to the consumers.  Well-organized  sectors of manufacturers and traders with better energy and  markets have emerged affecting relationship between the traders  and consumers.  With the help and aid of media both electronic and  print, the advertisements of goods and services in television,  newspapers and magazines have created great impact and influence  on the demand for the same by the consumers though there may be  manufacturing defects or deficiencies or short-comings in the  quality, quantity and the purity of the goods or there may be  deficiency in the services rendered.  In the interest of the  public and to protect the consumers, it became necessary to check  adulterated and substandard articles in the market.  Despite  various other statutes such as Indian Contract Act, 1972, Sale of  Goods Act, 1930, the Indian Penal Code, 1960, The Standard of  Weights and Measures Act, 1976 and the Motor Vehicles Act,1988  etc. being in operation, very little could be achieved in the  field of consumer protection.  Though the MRTP Act 1969 and the  Prevention of Adulteration Act, 1954 provide relief to the  consumers yet it became necessary to protect the consumers from  the exploitation and to save them from adulterated and substandard  goods and deficiency in services and to safeguard their interest.

       In General Assembly a Consumer Protection Resolution  No.39/248 was passed and India is a signatory to this Resolution.   The United Nations had passed a resolution in 1985 indicating  certain guidelines under which the governments could make laws for  better protection of the interest of the consumers and such laws  were more necessary in developing countries to protect the  consumer from hazardous to their health and safety and to make  them available speedier and cheaper redress.  With this  background, the 1986 Act was enacted. The Statement of objects and  reasons show that the Consumer Protection Bill 1986 sought to  provide for better protection of the interest of the consumers and  for the purpose, to make provision for the establishment of  consumer council and other authorities in the settlement of  consumer disputes and for matters connected therewith.  It seeks,  interalia, to promote and protect the rights of consumers such as  protection against marketing of goods which are hazardous to life  and property; the right to be informed about the quality,  quantity, potency, purity, standard and price of goods to protect

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the consumer against unfair trade practices; the right to be  assured, wherever possible, access to an authority of goods at  competitive prices; the right to be heard and to be assured that  the interest of consumers will receive due consideration at  appropriate forums; the right to seek redressal against unfair  trade practices or unscrupulous exploitation of consumers and  right to consumer education. The object is also 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  principles of natural justice and have been empowered to give  relief of specific nature and to award, wherever appropriate,  compensation to consumers. Penalties for non-compliance of orders  given by Quasi Judicial bodies have also been provided.

       The preamble of the Act declares that it is an Act to  provide for better protection of the interest of consumers and for  that purpose to make provision for the establishment of consumer  councils and other authorities for the settlement of consumers  disputes and matters connected therewith.  In Section 3 of the Act  in clear and unambiguous terms it is stated that the provisions of  1986 Act shall be in addition to and not in derogation of the  provisions of the any other law for the time being in force.

       From the statement of objects and reasons and the scheme of  1986 Act, it is apparent that the main objective of the Act is to  provide for better protection of the interest of the consumer and  for that purpose to provide for better redressal, mechanism  through which cheaper, easier, expeditious and effective redressal  is made available to consumers.  To serve the purpose of the Act,  various quasi judicial forums are set up at the district, State  and National level with wide range of powers vested in them.   These quasi judicial forums, observing the principles of natural  justice, are empowered to give relief of a specific nature and to  award, wherever appropriate, compensation to the consumers and to  impose penalties for non-compliance of their orders.   

       As per Section 3 of the Act, as already stated above, the  provisions of the Act shall be in addition to and not in  derogation to any other provisions of any other law for the time  being in force.  Having due regard to the scheme of the Act and  purpose sought to be achieved to protect the interest of the  consumers, better the provisions are to be interpreted broadly,  positively and purposefully in the context of the present case to  give meaning to additional/extended jurisdiction, particularly  when Section 3 seeks to provide remedy under the Act in addition  to other remedies provided under other Acts unless there is clear  bar.

       The view we are taking is supported by the earlier decisions  of this Court.  In Lucknow Development Authority vs. M.K. Gupta  [(1994) 1 SCC 243], this Court observed, thus: -

"We therefore come straight away to the legal  issue involved in these appeals. But before  doing so and examining the question of  jurisdiction of the District Forum or State or  National Commission to entertain a complaint  under the Act, it appears appropriate to  ascertain the purpose of the Act, the objective  it seeks to achieve and the nature of social  purpose it seeks to promote as it shall  facilitate in comprehending the issue involved  and assist in construing various provisions of

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the Act effectively. To begin with the preamble  of the Act, which can afford useful assistance  to ascertain the legislative intention, it was  enacted, ’to provide for the protection of the  interest of consumers’. Use of the word  ’protection’ furnishes key to the minds of  makers of the Act. Various definitions and  provisions which elaborately attempt to achieve  this objective have to be construed in this  light without departing from the settled view  that a preamble cannot control otherwise plain  meaning of a provision. In fact the law meets  long felt necessity of protecting the common man  from such wrongs for which the remedy under  ordinary law for various reasons has become  illusory. Various legislations and regulations  permitting the State to intervene and protect  interest of the consumers have become a haven  for unscrupulous ones as the enforcement  machinery either does not move or it moves  ineffectively, inefficiently and for reasons  which are not necessary to be stated. The  importance of the Act lies in promoting welfare  of the society by enabling the consumer to  participate directly in the market economy. It  attempts to remove the helplessness of a  consumer which he faces against powerful,  business, described as, ’a network of rackets’  or a society in which, ’producers have secured  power’ to ’rob the rest’ and the might of public  bodies which are degenerating into storehouses  of inaction where papers do not move from one  desk to another as a matter of duty and  responsibility but for extraneous consideration  leaving the common man helpless, bewildered and  shocked. The malady is becoming so rampant,  widespread and deep that the society instead of  bothering, complaining and fighting against it,  is accepting it as part of life. The enactment  in these unbelievable yet harsh realities  appears to be a silver lining, which may in  course of time succeed in checking the rot."

       In Fair Air Engineers Pvt. Ltd. And another vs. N.K. Modi  [(1996) 6 SCC 385], this Court, after referring to Lucknow  Development Authority case (supra), held that the provisions of  the Act are to be construed widely to give effect to the object  and purpose of the Act.  It went on to say that "It is seen that  Section 3 envisages that the provisions of the Act are in addition  to and are not in derogation of any other law in force. It is  true, as rightly contended by Shri Suri, that the words "in  derogation of the provisions of any other law for the time being  in force" would be given proper meaning and effect and if the  complaint is not stayed and the parties are not relegated to the  arbitration, the Act purports to operate in derogation of the  provisions of the Arbitration Act. Prima facie, the contention  appears to be plausible but on construction and conspectus of the  provisions of the Act we think that the contention is not well  founded. Parliament is aware of the provisions of the Arbitration  Act and the Contract Act, 1872 and the consequential remedy  available under Section 9 of the Code of Civil Procedure, i.e., to  avail of right of civil action in a competent court of civil

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jurisdiction. Nonetheless, the Act provides the additional  remedy."  Further, dealing with the jurisdiction of the forums  under the 1986 Act in paragraph 16 this Court has stated, thus: - "16. It would, therefore, be clear that the  legislature intended to provide a remedy in  addition to the consentient arbitration which  could be enforced under the Arbitration Act or  the civil action in a suit under the provisions  of the Code of Civil Procedure. Thereby, as  seen, Section 34 of the Act does not confer an  automatic right nor create an automatic embargo  on the exercise of the power by the judicial  authority under the Act. It is a matter of  discretion. Considered from this perspective, we  hold that though the District Forum, State  Commission and National Commission are judicial  authorities, for the purpose of Section 34 of  the Arbitration Act, in view of the object of  the Act and by operation of Section 3 thereof,  we are of the considered view that it would be  appropriate that these forums created under the  Act are at liberty to proceed with the matters  in accordance with the provisions of the Act  rather than relegating the parties to an  arbitration proceedings pursuant to a contract  entered into between the parties. The reason is  that the Act intends to relieve the consumers of  the cumbersome arbitration proceedings or civil  action unless the forums on their own and on the  peculiar facts and circumstances of a particular  case, come to the conclusion that the  appropriate forum for adjudication of the  disputes would be otherwise those given in the  Act." (emphasis supplied)

       Again in Spring Meadows Hospital and another vs. Harjol  Ahluwalia through K.S. Ahluwalia and another [(1998) 4 SCC 39],  this Court, having taken note of the background in which the 1986  Act came to be placed on the statute book, observed that the Act  creates a framework for speedy disposal of consumer disputes and  an attempt has been made to remove the existing evils of the  ordinary court system.  The Act being a beneficial Legislation  should receive a liberal construction.         A Bench of three learned Judges of this Court in a recent  decision in State of Karnataka vs. Vishwabharathi House Building  Coop. Society and others [(2003) 2 SCC 412], expressed the view  that the 1986 Act was brought into force in view of the long-felt  necessity of protecting the common man from wrongs wherefor the  ordinary law for all intent and purport had become illusory and  that in terms of the said Act, a consumer is entitled to  participate in the proceedings directly as a result whereof his  helplessness against a powerful business house may be taken care  of.  Referring to the Fair Air Engineers (P) Ltd. Case  (aforementioned) the Court stated that the provisions of the said  Act are required to be interpreted as broadly as possible.  On the  question of jurisdiction it is stated that the forums under the  Act have jurisdiction to entertain a complaint despite the fact  that other forums/courts would also have jurisdiction to  adjudicate upon the lis.  It is also noticed that the Act provides  for a further safeguard to the effect that in the event a  complaint involves complicated issues requiring recording of  evidence of experts, the complainant would be at liberty to  approach the civil court for appropriate relief.

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       The learned counsel for the appellant strongly relied on the  decision of this Court in Chairman, Thiruvalluvar Transport  Corporation vs. Consumer Protection Council [(1995) 2 SCC 479].  A  deeper look at the facts of that case and question considered  therein make it clear that it governs the fact of that case having  regard to the specific provisions contained in the Motor Vehicles  Act, 1988.  In brief the facts of the case are that a person was  traveling in an omni bus, the driver of the bus tried to overtake  a bullock-cart due to which the bullocks got panicky whereupon the  driver swerved the bus to the left and applied brakes.  In this  situation the person, who was sitting in the rear seat, was thrown  in the front and hit against the iron bar sustaining a serious  head injury and subsequently succumbed to the injury.  The legal  representatives of the deceased victim did not file claim petition  before the Motor Accidents Claims Tribunal constituted under the  Motor Vehicles Act, 1988.  After expiry of the period of  limitation for filing claim petition before the Motor Accidents  Claims Tribunal, the LRs of the deceased filed a complaint  claiming Rs.20 lakhs before the National Commission.  As can be  seen from paragraph 6 of the judgment, the question that arose for  consideration was whether the National Commission had jurisdiction  to entertain the claim application and award compensation in  respect of an accident involving the death of a person caused by  the use of a motor vehicle.  Taking note of the fact that the  Claims Tribunals constituted under the Motor Vehicles Act, 1988  had jurisdiction to entertain claim for compensation which clearly  fell within the ambit of Section 165 of the Motor Vehicles Act,  1988, held that the 1988 Act can be said to be a special Act in  relation to claims of compensation arising out of the use of a  motor vehicle.  It is observed that the accident occurred had  nothing to do with service provided to the deceased, if one reads  the provision along with the definition of complaint in Section  2(1)(c) and service in Section 2(1)(o) of the 1986 Act.  This  Court held that the complaint in that case could not be said to be  in relation to any service hired or availed by the consumer  because the injury sustained by the consumer had nothing to do  with the service provided or availed by him.  That was a case in  which it was found that the National Commission had no  jurisdiction at all.  That was not a case of additional remedy  available before a forum created under the 1986 Act.  In our view  the said decision does not advance the case of the appellant in  any way.         The decision in Dhulabhai case (supra) also does not help  the appellant.  The present case is not one where the question to  be considered is as to the exclusion of jurisdiction of civil  court in view of the provisions of Section 90 read with Section  156 of the Act.  Provisions of 1986 Act, as already made clear  above, apply in addition to the other provisions available under  other enactments.  It follows that the remedies available under  the 1986 Act for redressal of disputes are in addition to the  available remedies under the Act.  Under the 1986 Act we have to  consider as regards the additional jurisdiction conferred on the  forums and not their exclusion.  In Dhulabhai case consideration  was whether the jurisdiction of the civil court was excluded.    Propositions (1) and (2) indicate that where the statute gives a  finality to the orders of the special tribunals the jurisdiction  of civil courts must be held to be excluded if there is adequate  remedy to do what the civil courts would normally do in a suit.   Further, where there is an express bar of the jurisdiction of the  court, an examination of the scheme of the particular Act to find  the adequacy or the sufficiency of the remedies provided may be  relevant but is not decisive to sustain the jurisdiction of the  civil court.  The remedies that are available to an aggrieved  party under the 1986 Act are wider.  For instance in addition to  granting a specific relief the forums under the 1986 Act have

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jurisdiction to award compensation for the mental agony,  suffering, etc., which possibly could not be given under the Act  in relation to dispute under Section 90 of the Act.  Merely  because the rights and liabilities are created between the members  and the management of the society under the Act and forums are  provided, it cannot take away or exclude the jurisdiction  conferred on the forums under the 1986 Act expressly and  intentionally to serve a definite cause in terms of the objects  and reasons of the Act, reference to which is already made above.   When the decision of Dhulabhai’s case was rendered the provisions  similar to 1986 Act providing additional remedies to parties were  neither available nor considered.  If the argument of the learned  counsel for the appellant is accepted it leads to taking away the  additional remedies and forums expressly provided under the 1986  Act, which is not acceptable.         The question of conflict of decisions may not arise.  If the  parties approach both the forums created under the Act and the  1986 Act, as indicated in the case of Fair Air Engineers (P) Ltd.  (supra), it is for the forum under the 1986 Act to leave the  parties either to proceed or avail the remedies before the other  forums, depending on the facts and circumstances of the case.         Thus, having regard to all aspects we are of the view that  the National Commission was right in holding that the view taken  by the State Commission that the provisions under the Act relating  to reference of disputes to arbitration shall prevail over the  provisions of the 1986 Act is incorrect and untenable.  The  National Commission, however, did not take note of the fact that  the State Commission had not decided the other contentions raised  in the appeals on merits.  We are inclined to accept the  alternative submission made on behalf of the appellant for  remanding the case to the State Commission for deciding the other  issues on merits while affirming that the complaints before the  district forum made by the respondents were maintainable and the  district forum had jurisdiction to deal with the disputes.  In  this view, while affirming the order of the National Commission as  to the maintainability of the disputes before the forum under the  Act, we remand the appeals to the State Commission for their  adjudication on other issues on merits without going to the  question of maintainability of the disputes before the forum under  the 1986 Act.           Before parting with the case we place on record our  appreciation of the assistance given by Shri T.L.V. Iyer, learned  senior counsel.         The appeal is disposed of in the above terms.         No costs.