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The Supreme Court has clarified the limits of a third or “referee” member's role when members of a National Consumer Disputes Redressal Commission (NCDRC) Bench differ, holding that although the normal course is for the referee member to answer only the questions referred and return the matter to the original Bench, an exceptional case may justify deciding the appeal itself.

Where a referring Bench, instead of specifying the precise points of difference under Section 58(3) of the Consumer Protection Act, 2019, frames broader questions going to the root of the complaint and inseparable from the evidence on record, the third member's decision to answer those questions and, in the process, decide the appeal on merits does not, in the circumstances, necessarily constitute an illegality warranting interference under Article 227 of the Constitution. The Court, hence, remanded the matter to the Allahabad High Court to decide the application of Article 227 afresh on merits.

A bench of Justice Dipankar Datta and Justice Sheel Nagu was hearing an appeal against judgment of a Single Judge of the Allahabad High Court, which had allowed an application under Article 227 filed by the respondent (respondent 1/R1) and quashed the order of a third member of the National Consumer Disputes Redressal Commission (NCDRC), on the ground that it exceeded the scope of the reference made to him.

The appellants had filed a complaint before the State Consumer Disputes Redressal Commission (SCDRC) in 2016, wherein a compensation of Rs 95 Lakh (with 15% interest) was awarded. R1's appeal against this order before the NCDRC came to be heard by a two-member bench, whose members made differing observations. While the presiding member allowed the appeal and dismissed the complaint, the companion member modified the SCDRC's order, reducing the compensation to Rs 93 Lakh (with 12% interest).

Thereafter, a reference was made under Section 58(3) of the CP Act, wherein the referring bench formulated five questions for the third member's opinion concerning the matter. The third member answered the questions in concurrence with the companion member's view, and went on to decide the appeal itself, reducing the compensation to Rs 93 Lakh (with interest and litigation costs).

Aggrieved by this, R1 approached the High Court under Article 227, contending that the third member ought only to have answered the referred questions and returned the matter to the referring bench, rather than deciding the appeal himself. The Single Judge accepted this contention, holding that the third member's order “gone in excess of the powers conferred on the referring member,” quashed it, and directed that the matter be heard afresh by a third member who would confine himself to answering the referred questions before sending the matter back to the Division Bench of the NCDRC.

Framing the issue, the bench noted, “the short question that emerges for decision in this appeal is, whether the third member was justified in deciding the appeal itself while concurring with the opinion of the companion member of the referring Bench or, should he have, after recording his answers to the questions referred, returned the case to the referring Bench to pass an appropriate order resting on the majority opinion?”

It also noted that the Single Judge had relied on its decision in Kesho Nath Khurana v Union of India & Ors, Commissioner of Income Tax, Delhi & Bansi Dhar & Sons and a Full Bench decision of the High Court in Shriram Industrial Enterprises Limited v Union of India & Others. Discussing the precedents, the bench summarised the settled position as, “normally, the course that should be adopted by the referee Bench is to return the questions referred with the answers to the Bench that made the reference to facilitate the said Bench to decide the issues arising for decision bearing in mind such answers. However, as held in Salil Sabhlok (supra), the referee Bench may answer any subsidiary question that may logically and unavoidably arise by adopting a common sense approach.”

The bench also noted that unlike Section 392 of the Code of Criminal Procedure, 1973 or Section 433 of the Bharatiya Nagarik Suraksha Sanhita, 2023, the CPC does not contain an akin provision, and that references in disputes governed by CPC must be decided by drawing guidance from precedent. As far as CP Act was concerned, the Court turned to Section 58(3), which provides that where members of a bench differ, “they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it.”

Perusing Section 58(3), the Court observed that it would prima facie appear that the third member had acted in excess of jurisdiction by deciding the appeal himself. However, the bench identified a crucial distinguishing feature that the referring bench in this case had not stated the specific points of difference as contemplated by the statute, but had instead formulated five questions that “required a consideration of the facts alleged and rebutted on merits.” The Court, thus, held, “the objection as to scope of the reference, in our view, is technical. While the statutory mandate under the CP Act requires the third member to confine himself to the point(s) of difference, the present case stands on a different footing. The referring order did not delineate the point(s) of difference; instead, it formulated questions which went to the root of the complaint and are inseparable from the evidence on record. The third member, necessarily, had to survey the entire gamut of material and the rival contentions raised before the referring Bench.”

The bench held that in answering the referred questions and simultaneously deciding the appeal on the basis of the resulting majority opinion, the third member has adopted “a common sense approach,” which Salil Sabhlok had recognised as permissible in exceptional cases, and the third member's approach ought not to be disapproved “at this distance of time.”

Considering the above, the Court concluded that the third member's failure to return the reference with mere answers, and his decision of the appeal itself, “did not commit such an illegality that the situation warranted an interference in exercise of jurisdiction under Article 227 of the Constitution.” While acknowledging that the Single Judge's approach found support in Kesho Nath Khurana, the Supreme Court held that, in light of Section 58(3) of the CP Act and the manner in which the reference itself had been framed, “we see no reason to uphold the conclusions recorded in paragraph 21 of the impugned order.”

The Court further noted that the Single Judge had not examined the correctness of the third member's answers on merits, having confined its interference to the procedural objection alone. In such circumstances, the bench held that “it is now imperative that the High Court decides the application under Article 227 of the first respondent one way or the other, on its own merits.”

In the light of above, the appeal was allowed by remanding the Article 227 application to the High Court for fresh decision on merits, with all issues of fact and law left open for the parties to raise before the roster bench. Noting the time already elapsed, it expressed its expectation that the application would be decided at an early date, and clarified that the NCDRC would not proceed further until the High Court renders its final decision. The impugned order was, thus, set aside.

Case: Askari Hussain & Ors v Dinesh Kumar & Ors

Citation : 2026 LiveLaw (SC) 871

Appearance:

For appellant: Mr Shankar Divate, Adv.

For respondent: Mr Gaurav Goel, Adv. and Mr Ankur Sood, Adv.

Click Here To Read/Download Order



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