Forum Shopping: Punjab & Haryana High Court Imposes Cost For Filing Writ Instead of Approaching National Commission

Forum Shopping: Punjab & Haryana High Court Imposes Cost For Filing Writ Instead of Approaching National Commission

The Punjab and Haryana High Court (HC) imposed cost of Rs. 2 lakh for filing a writ petition before it and circumventing the alternate remedy available under the Consumer Protection Act (Act).

The Single Judge of the HC Justice Anil Kshetarpal observed, "One of the biggest evils faced by the Judiciary is 'forum shopping'."

The HC clarified that a State Commission has the power to proceed under Section 27 of the Consumer Act if the order passed in the complaint has not been complied with. It added that "In view of the statutory remedy of appeal (under the Consumer Protection Act, 1986), it will not be appropriate for the High Court to entertain a writ petition."

A writ petition was moved before the HC by the Managing Directors of C&C Towers Ltd., against execution proceedings instituted before the State Consumer Disputes Redressal Commission, under Section 27 of the Act. Section 27 comprises of penalty if the person fails to comply with the order of the District Forum.

It was contended before the HC that the proceedings under Section 27 were not maintainable as the National Company Law Tribunal (NCLT) had already an passed order of moratorium under Section 14 of the Insolvency Code.

It was stated that suspension has been declared regarding the institution of suits or continuation of pending suits or proceedings against the corporate debtor (C&C Towers Ltd.) that will include execution of any judgment, decree, or order in any court of law, tribunal, arbitration panel, or other authority.

Issues before the HC

- Whether the proceedings under Section 27 of the Act, 1986 can be allowed to proceed as per Section 14 of the Insolvency Code?

- Whether the HC can entertain writ petitions against orders passed by the State Commission under Section 27 of the Act, particularly when a statutory remedy of appeal under Section 27-A is available before the National Consumer Dispute Redressal Commission?

It was contended by the writ petitioner that no further proceedings can be done in the aforesaid Execution Application by the State Consumer Commission.

The Single Judge disagreed with the arguments and stated that "This Court does not find that the proceedings before the State Commission are without jurisdiction. Under the 1986 Act, Section 27 of the 1986 Act, lays down the penalties including imprisonment. Hence, the proceedings before the State Commission cannot be said to be 'wholly without jurisdiction'."

The Court held that the appropriate remedy against an order under Section 27 of the Act would be to approach the NCDRC under Section 27A. It noted, "There is no doubt that NCDRC is competent to examine and will decide holistically the plea (appeal) sought to be taken in these writ petitions."

The Bench referred to the judgment of a Coordinate Bench in the case titled Pranab Ansal v. State Consumer Dispute Redressal Commission, wherein it was held that in view of the statutory remedy of appeal, it will not be appropriate for the HC to entertain a writ petition against orders passed by the State Commission.