Supreme Court Holds Consumer Fora Can Enforce Final Orders Passed Between 2003-2020; Rectifies Anomaly In S.25(1) Of 1986 Act

In a major ruling on Friday (Aug. 22), the Supreme Court settled a long-standing issue in the Consumer Protection Act, 1986, which prevented many flat buyers from enforcing orders pertaining to the execution of sale deeds by the developer between 2003 and 2020. From now, the final order passed between 2003 and 2020, directing the developer to execute the sale deed or deliver possession, can be enforced under Section 25(1) of the 1986 Act, the court said.Section 25(1) of the 1986 Act will now be read as:“Section 25. Enforcement of orders of the District Forum, the State Commission or the National Commission. (1) Where any order made under this Act is not complied with, the District Forum or the State Commission or the National Commission, as the case may be, enforce the same in the manner as if it were a decree or order made by the Court in a suit and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 shall, as far as may be, applicable and may order the property of the person, not complying with such order to be attached.” [Note : Before the Court's interpretation, "any order" was "an interim order"]The case arose from a complaint filed by Palm Groves Cooperative Housing Society against a builder for failing to execute a conveyance deed despite orders of the District Forum. When the builder resisted execution, a chain of appeals eventually brought the matter before the Supreme Court. At the heart of the dispute was Section 25 of the 1986 Act, which governs the enforcement of consumer forum orders. Prior to the 2002 amendment, the law allowed “every order” to be executed like a civil court decree. However, after the amendment, the section referred only to “interim orders,” while providing a mechanism under Section 25(3) solely for recovery of monetary amounts. This created a vacuum between 2003 and 2020, when forums could issue final non-monetary directions such as requiring a builder to execute a deed or deliver possession but had no explicit statutory route to enforce them. Rectifying the legislative defect, the bench comprising Justices J.K. Maheshwari and Rajesh Bindal read down Section 25(1) of the 1986 Act, as amended via 2002 Amendment to 1986 Act, making it in line with the new Consumer Protection Act, 2019 and pre-2002 Amendment era. Applying the tool of purposive interpretation, the Court said that the word 'an interim order' appearing in Section 25(1) of 1986 Act should be read as 'any order', which shall be enforced in the manner as it were a decree or order made by the court. This means, the Court had removed the anomaly created by the legislative defect, permitting the enforcement of the final order such as direction to the developer to execute a sale deed in the pending proceedings between 2003 and 2020. “keeping in view the object in mind for which the 1986 Act and the 2019 Act have been enacted, in our view, using different tools available for interpretation of statutes, in Sub-section (1) of Section 25 the words where 'an interim order' should be read as where 'any order'. Towards the end of sub-section (1) and before words 'may order the property…', following line shall be deemed to be added 'enforce the same in the manner as if it were a decree or order made by the Court in a suit and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 shall, as far as may be, applicable and'. This interpretation goes in line with what was being understood and applied by different fora even post 2002 Amendment in 1986 Act. This is evident from number of execution petitions filed, entertained and disposed of. Many are still pending.”, the Court said. “Where any order made under this Act is not complied with, the District Forum or the State Commission or the National Commission, as the case may be, enforce the same in the manner as if it were a decree or order made by the Court in a suit and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 shall, as far as may be, applicable and may order the property of the person, not complying with such order to be attached.”, the Court added.The Court described the situation as a classic case of legislative omission and drew support from Surjit Singh Kalra v. Union of India (1991), where it was held that if the choice lies between supplying by implication words that appear to have been accidentally omitted or adopting a construction that renders existing words meaningless, the Court may read in the omitted words to give effect to the statute's intended remedy. In a nutshell, the judgment is made retrospectively applicable, covering all pending execution cases from 2003 to 2020, when the Consumer Protection Act, 2019, reinstated the original position by expressly making “every order” enforceable. Resultantly, the Court issued a direction to the NCDRC to expedite the disposal of the pending execution petition at different stages: “As has been seen,...

Supreme Court Holds Consumer Fora Can Enforce Final Orders Passed Between 2003-2020; Rectifies Anomaly In S.25(1) Of 1986 Act

Yash Mittal

The Court read 'interim order' in S.25(1) as 'any order'.

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Supreme Court Holds Consumer Fora Can Enforce Final Orders Passed Between 2003-2020; Rectifies Anomaly In S.25(1) Of 1986 Act

Yash Mittal

The Court read 'interim order' in S.25(1) as 'any order'.

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

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