Supreme Court: NCDRC to deposit more than 50 percent of amount determined by SCDRC for stay

Supreme Court: NCDRC to deposit more than 50 percent of amount determined by SCDRC for stay

The Supreme Court also held pre-deposit for entertaining appeal, mandatory under Section 51 of the Consumer Protection Act, 2019

The Supreme Court on Tuesday held that the National Consumer Disputes Redressal Commission (NCDRC) can direct the deposit of the entire amount or more than 50 percent of the amount. Determined by the State Consumer Disputes Redressal Commission (State Commission) for granting conditional provided such an order is a speaking one with cogent reasons.

[Manohar Infrastructure and Constructions Private Limited vs Sanjeev Kumar Sharma & ors].

A Bench of Justices MR Shah and BV Nagarathna also confirmed that pre-deposit for entertaining appeal under Section 51 of the Consumer Protection Act, 2019 is mandatory.

"The National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount while staying the order passed by the State commission, however, the National Commission has to pass a speaking order giving some reasons why in the facts of the particular case the conditional stay of the order passed by the State Commission is to be passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission and that too after giving an opportunity to the appellant as well as to the respondent," the judgment said.

The order on the stay application should not be passed mechanically, the Court further said.

A batch of petitions filed by a group of builders was dealt by the top court. It was aggrieved by the direction of the NCDRC to deposit the entire decretal amount determined by the SCDRC for conditional stay.

The Court faced a question - whether the NCDRC can pass an order to deposit the entire amount and/or any amount higher than the 50 percent in terms of the order of the State Commission while, entertaining the appeal in view of Section 51 of the Consumer Protection Act, 2019.

Section 51 of the Consumer Protection Act, 2019 provides that no appeal by a person, who is required to pay any amount in terms of order of the State Commission shall be entertained by the NCDRC unless the appellant has deposited 50 percent of that amount.

The Court in answering the question laid down the following:

1. Pre-deposit of 50 per cent of amount as ordered by the State Commission under second proviso to Section 51 of the Consumer Protection Act, 2019 is mandatory for entertainment of an appeal by the National Commission;

2. The object of the said pre-deposit condition is to avoid frivolous appeals

3. The said pre-deposit condition has no nexus with the grant of stay by the NCDRC

The NCDRC can grant a conditional stay directing the appellant to deposit the entire amount and/or any amount higher than 50 per cent of the amount determined by the State Commission.

However, while doing so, the NCDRC has to assign some cogent reasons and pass a speaking order - either as an ex-parte order or after hearing both the sides while considering the facts and circumstances of the case.

"It must reflect an application of mind by the National Commission why the order passed by the State Commission is to be stayed on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission," the Court ruled.

However, the Bench made it clear that there is no discretion at all to stay the order passed by the State Commission subject to deposit of any amount less than 50 per cent of the amount. It is required to be deposited as a pre-deposit before the appeal is entertained as per second proviso to Section 51 of the Act.