ECGC LIMITED vs. MOKUL SHRIRAM EPC JV

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION I.A. NO. 99210 OF 2021 IN CIVIL APPEAL NO. 1842 OF 2021

O R D E R HEMANT GUPTA, J. 1. The present appeal is directed against an order passed by the 1 National Consumer Dispute Redressal Commission whereby the appellant herein was directed to pay a sum of Rs. 265.01 Crores along with interest @ 10% p.a. from 19.9.2016 within a period of three months. In case of failure to deposit the said amount, the awarded amount would carry compensation in the form of simple interest @ 12% p.a. The appellant has filed an application (IA No.

2 the provisions of the Consumer Protection Act, 1986 . It is the said application which is being decided by the present order. 2. The complainant was awarded a contract for construction of rain water drainage, heavy sewerage and municipal road system by the Signature Not Verified Digitally signed by R Natarajan Date: 2022.02.15 16:52:34 IST Reason: Government of Basra, Iraq. The complainant obtained two specific 1 National Commission 2 For short, the ‘1986 Act’ 1 contracts (Letter of Credit Comprehensive Risks Policies) by paying a sum of ₹10,38,03,912/- as premium to the appellant. The grievance of the complainant was that the payment for invoices issued for the work done under the contract was suspended. Later, the contract also was withdrawn by the Government of Basra owing to some internal conflict. The appellant herein rejected the insurance claim of the complainant and thus relief was sought before the National Commission by filing a complaint under Section 21(a)(i) of the 1986 Act. The said complaint was allowed on 27.1.2021. 3. The question now being examined here is as to whether the present appeal would be governed under the Consumer Protection 3 Act, 2019 or under the erstwhile 1986 Act. 4. In terms of Section 67 of the 2019 Act, no appeal against the order of National Commission shall be entertained by the Supreme Court unless the person has deposited fifty per cent of the amount required to be paid. Whereas, under the 1986 Act, by virtue of a proviso inserted vide Central Act 62 of 2002 w.e.f. 15.3.2003, the condition was that no appeal shall be entertained by the Supreme Court unless the person who is required to pay the amount deposits fifty per cent of the amount or fifty thousand, whichever is less. The two provisions read thus:

3 For short, the ‘2019 Act’ 2

5. Learned Attorney General appearing for the appellant submitted that the appeal has been preferred under Section 23 of the 1986 Act and not under the 2019 Act which came into force from 20.7.2020. It was stated that the condition of deposit of 50% of the amount is more onerous than what was provided under the 1986 Act. Therefore, keeping in view the principle that the law which is applicable at the time of initiation of the lis would be applicable, the provisions of 1986 Act would govern the present appeal and not the provisions of 2019 Act. The appellant has deposited ₹50,000/- vide demand draft in terms of second proviso to Section 23 of the 1986 Act while exercising its right of appeal under the 1986 Act. Hence, the present appeal be heard on merits.

4 2019 Act and Section 6 of the General Clauses Act, 1897 unequivocally operate against any question of retrospectivity. Sub- Section (2) of Section 107 of 2019 Act does not change the legal position as mentioned under Section 6 of the General Clauses Act. To appreciate the argument, Section 6 of the General Clauses Act and Section 107 of the 2019 Act are reproduced hereunder: 4 For short, the ‘General Clauses Act’ 3 “Section 6 of the General Clauses Act 6. Effect of Repeal. - Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not— (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or any thing duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.

Section 107 of the 2019 Act 107. (1) The Consumer Protection Act, 1986 is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act. (3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.” 4 7. Sub-section (2) of Section 107 of the 2019 Act protects the actions taken under the 1986 Act insofar as such actions are not inconsistent with the provisions of 2019 Act. Such actions shall be deemed to have been undertaken as per the corresponding provisions of 2019 Act. Sub-section (3) contemplates that the particular matters in sub-section (2) shall not prejudice or affect the general application of Section 6 of the General Clauses Act with regard to the effect of repeal. Referring to clause (c) of Section 6 of the General Clauses Act, it was argued that unless a different intention appears, the repeal shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. Further, Clause (e) stipulates that the repeal shall not affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment which may be imposed as if the repealing Act or the Regulation has not been passed. It was thus argued that the repeal of enactment does not affect any right acquired or accrued under the enactment so repealed or affect any legal proceeding in respect of such a right. Such effect was to be construed only when a different intention appears from the repealing statute. It was thus argued that the right to file an appeal under the 1986 Act has accrued in favour of the appellant in terms of Section 6(c) of the General Clauses Act and that no different intention is discernable from the repealing Act. 5 8. To support the above arguments, the learned Attorney General has relied upon Division Bench judgment of the Calcutta High Court reported as Nogendra Nath Bose v. Mon Mohan Singha Roy & 5 Ors. which was approved by this Court in a judgment reported as Hoosein Kasam Dada (India) Ltd. v. State of Madhya 6 Pradesh & Ors. . In Hoosein Kasam Dada , Hon’ble Mr. Justice S.R. Das speaking for the Bench with Hon’ble Mr. Justice M.C. Mahajan was examining a matter consequent to the amendment on 25.11.1949 by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act 57 of 1949) amending the Central Provinces and Berar Sales Tax Act, 1947. The proviso to Section 22(1) of the 1947 Act prior to the amendment as enacted provided that no appeal against an order of assessment shall be entertained unless it was satisfied that such amount of tax or penalty or both

amending act contemplated that no appeal shall be entertained unless an appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the

condition of preferring an appeal from the amount admitted to be due by the assessee than the payment of the tax and penalty of in respect of which an appeal has been preferred. 9. It may be relevant to mention that the Court also noticed the 5 AIR 1931 Cal. 100 6 AIR 1953 SC 221 6 argument of the learned counsel for the State that until actual assessment is made, there can be no lis and therefore, no right of appeal can accrue before that date. The Court observed that when assessee files a return, the lis may not immediately arise. The authority may assess the return under Section 11 of the 1947 Act, but if the authority is not satisfied as to the correctness of the return and call for evidence, a controversy arises. In the aforesaid case, the sales tax return was filed on 28.11.1947 and a notice by the Assistant Commissioner of Sales Tax was issued on 25.1.1949 i.e. prior to the amendment. This Court held as under:

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10. Subsequently, the Constitution Bench in a judgment reported as 7 Garikapati Veeraya v. N. Subbiah Choudhry & Ors. approved the judgment in Hoosein Kasam Dada, though the issue was in 7 AIR 1957 SC 540 8 respect of right of appeal to the Federal Court under the Government of India Act, 1935. The argument was that the appellant had a right to file an appeal as t he suit, out of which the proceedings arose before this Court, was filed on 22.4.1949. Hence, he had acquired a vested right to appeal to the Federal Court which has since been replaced by the Supreme Court. It was the said argument which was accepted by the Constitution Bench when the following principles were delineated: “23. From the decisions cited above the following principles clearly emerge: (i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.

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11. In a three-Judge Bench judgment reported as State of Bombay v. 8 M/s. Supreme General Films Exchange Ltd. & Anr. , the argument which arose for consideration was that the court fees payable on the memorandum of appeal would be as on the date of filing of the suit and not as per the amendment in the Court Fees Act, 1870 by Bombay Act 12 of 1954. The court fee on the memorandum of appeal was thus held to be payable as was applicable prior to the amendment of the Act. This Court held as under:

12. The Constitution Bench in Vitthalbhai Naranbhai Patel v. 8 AIR 1960 SC 980 10 9 Commissioner of Sales Tax, M.P., Nagpur was considering a matter where the date on which sales tax returns were filed was not disclosed. In the absence of the date of filing of the return, this Court held as under: “9. The decision in Hoosein Kasam Dada’s case, 1953 SCR 987: (AIR 1953 SC 221), proceeded on the ground that when a lis commences, all rights get crystallised and no clog upon a likely appeal can be put, unless the law was made retrospective, expressly or by clear implication. From the record of this case, we cannot say when the lis commenced, and unless it can be proved conclusively that it was before the amendment of the law, the rule in Hoosein Kasam Dada’s case, 1953 SCR 987: (AIR 1953 SC 221), cannot apply. There is no averment that right of appeal had vested, and has been wrongly taken away.” 13. In another Constitution Bench judgment of this Court reported as 10 M/s. Hardeodas Jagannath v. The State of Assam & Ors. , none of the previous judgments were referred to and thus, it prima facie appears to have taken a somewhat different view than what was held in the earlier Constitution Bench judgments. But if examined closely, the said judgment is not taking any contrary view and is in line with the earlier judgments of this Court. The issue was about an amendment dated 1.4.1958 in the Assam Sales Tax Act, 1947 requiring deposit of assessed tax and penalty as condition of filing of appeal. The assessee had filed half yearly returns for periods ending on 30.9.1956, 31.3.1957 and 30.9.1957 respectively. The premises of the assessee were searched on 6.3.1959 and the account books etc. were seized. A notice for reassessment was issued on 4.4.1959 under Section 19A of the 9 AIR 1967 SC 344 10 AIR 1970 SC 724 11 Assam Sales Tax Act, 1947. It was in this background, this Court held as under:

14. Since the returns were filed prior to the amendment but the notice for reassessment was issued after the Amending Act came into force, therefore, in view of the Hoosein Kasam Dada , the provisions of the Amending Act alone would be applicable and that is what has been held by this Court. 15. In a judgment reported as K. Raveendranathan Nair & Anr. v. 11 Commissioner of Income Tax & Ors. , it has been held that the relevant date for paying the court fee would be when the proceedings were initiated in the lowest court and not when the appeal was preferred before the High Court in view of the amendment in the Kerala Court Fees and Suits Valuation Act, 1959. 12 16. In Anant Mills Co. Ltd. v. State of Gujarat & Ors. , a four- 11 (2017) 9 SCC 355 12 (1975) 2 SCC 175 12 Judge Bench of this Court held that since the authority entertaining appeal has a jurisdiction to dispense with the compliance of requirement to deposit the amount of property tax, it is not onerous as discretion was vested with the appellate court. In another judgment reported as Gujarat Agro Industries Co. Ltd. 13 v. Municipal Corporation of the City of Ahmedabad & Ors. , the judgment in Anant Mills was followed. 17. This Court in a judgment reported as Ramesh Singh & Anr. v. 14 Cinta Devi & Ors. held that an appeal under the Motor Vehicles Act, 1988 contemplating deposit of twenty-five thousand rupees or fifty per cent of the amount whichever is less will not be applicable to the claim applications filed under Motor Vehicles Act, 1939. Similar is the view of another Bench of this Court in a judgment reported as M/s Gurcharan Singh Baldev Singh v. Yashwant 15 Singh & Ors. wherein the right of appeal conferred under the Motor Vehicles Act, 1939 could not be said to be taken away after repeal of such Act by the Motor Vehicles Act, 1988. 18. Mr. Nidhesh Gupta, learned senior counsel appearing for the respondent submitted that the amendment is procedural in nature and thus always retrospective. Reliance was placed upon 16 Thirumalai Chemicals Limited v. Union of India & Ors. . It was averred that procedure includes the manner and form of filing 13 (1999) 4 SCC 468 14 (1996) 3 SCC 142 15 (1992) 1 SCC 428 16 (2011) 6 SCC 739 13 of appeal, pre-deposit and limitation. The right of appeal is a statutory right which can be taken away by express provision of law, therefore, the conditions on which an appeal would lie is also within the legislative competence. 19. We find that the reliance on Thirumalai Chemicals Limited may not be correct as this Court held that Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA on 01.06.2000 or after. The said judgment in fact held that liberal provision of condonation of delay as provided in the new Act would be applicable. It was held as under: “28. Above discussion will clearly demonstrate that Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA on 01.06.2000 or after. On a combined reading of Section 49 of FEMA and Section 6 of General Clauses Act, it is clear that the procedure prescribed by FEMA only would be applicable in respect of an appeal filed under FEMA though cause of action arose under FERA. In fact, the time limit prescribed under FERA was taken away under the proviso to sub-section (2) of Section 19 and the Tribunal has been conferred with wide powers to condone delay if the appeal is not filed within forty-five days prescribed, provided sufficient cause is shown. Therefore, the findings rendered by the Tribunal as well as the High Court that the Tribunal does not have jurisdiction to condone the delay beyond the date prescribed under FERA is not a correct understanding of the law on the subject. 29. We, therefore, hold that the Appellate Tribunal can entertain the appeal after the prescribed period of 45 days if it is satisfied, that there was sufficient cause for not filing the appeal within the said period. We are therefore inclined to set aside the orders passed by the Tribunal and the High Court and remit the matter back to the Tribunal for fresh consideration in accordance with law on the basis of the 14 findings recorded by us…” 20. Mr. Gupta also referred to the three-Judge Bench judgment of this Court reported as Newtech Promoters and Developers Pvt. 17 Ltd. v. State of UP & Ors. wherein pre-deposit was required to be made while filing an appeal under the Real Estate (Regulation and Development) Act, 2016. The said judgment is not applicable as while framing the statute, Section 43(5) contemplating pre- deposit was part of the initially enacted provision. Similarly, another judgment reported as Tecnimont Pvt. Ltd. v. State of 18 Punjab & Ors. is also in respect of right of appeal on pre-deposit which was enacted originally in the Punjab Value Added Tax Act. 21. The learned counsel for the respondent has also relied upon Division Bench judgments in Sri Satya Nand Jha v. Union of 19 India & Ors. and M/s. Indian Oil Corporation v. Orissa Sales 20 Tax Tribunal, CTC & Ors. . It is to be noted that the Orissa High Court in Indian Oil Corporation was in fact considering the reverse proposition wherein condition of pre-deposit of 50% of the deposited amount of tax was deleted. The writ petition was filed by the assessee to challenge the notice issued by the State to deposit 50% of the deposited amount after the amendment. The Division Bench held as under: “24. The Apex Court time & again held that right of appeal is 17 2021 SCC On Line SC 1044 18 2019 SCC On Line SC 1228 19 2016 SCC OnLine Jhar 2323 20 2009 SCC OnLine Ori 353 15

22. The High Court of Jharkhand in Sri Satya Nand Jha was dealing with the amendment in Section 35 of the Central Excise Act, 1944 by Section 105 of the Finance Act, 2014 prescribing that 7.5% or 10% of the duty demand or penalty levied is to be deposited. In the said case, the pre-amended provision was that if the appellate authority on being satisfied that the deposit of the duty demanded or penalty levied would cause undue hardship, then the condition of pre-deposit could be dispensed with. But subsequent to the amendment, 7% of the duty assessed and 10% of the penalty levied was made mandatory to be deposited. It may be noticed that the second proviso clarified that the provisions of the amended Section 35 shall not be applied to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance Act, 2014. Therefore, the issue 16 arising in the said case was of legality and validity of the pre- deposit and not the retrospectivity of the said provision. 23. Mr. Gupta has relied upon the judgment of this Court in Manohar Infrastructure and Constructions Private Limited v. Sanjeev 21 Kumar Sharma & Ors. in which the dispute was that the NCDRC had granted stay subject to deposit of the entire decretal amount. No argument was raised or decided for retrospectivity of Section 51 of the 2019 Act but the question raised was whether the NCDRC could direct such deposit of the entire decretal amount pending appeal though the statute prescribes pre-deposit of 50% of the amount in dispute. 24. It was contended that the consumer protection legislation is a beneficial legislation, therefore, the interpretation which benefits the consumer should be preferred as held by this Court in Neena 22 Aneja & Anr. v. Jai Prakash Associates Ltd. . 25. It is to be noted that in Neena Aneja, this Court held that right to forum is not an accrued right. Section 6(e) of the General Clauses Act protects the pending legal proceeding for enforcement of the accrued right from the effect of repeal; it does not mean the legal proceeding at a particular forum was saved from the effect of repeal. This Court found that there was no express intention in the repealing enactment that all pending cases would stand transferred to the fora created under 2019 Act. This Court held as 21 Civil Appeal No. 7098 of 2021 with Ors. decided on 7.12.2021 22 2021 SCC OnLine SC 225 17 under: “ 78. Having stated the above position, we need to harmonize it with the principle that the right to a forum is not an accrued right, as discussed in Part C of this judgement. Simply put, while Section 6(e) of the General Clauses Act protects the pending legal proceedings for the enforcement of an accrued right from the effect of a repeal, this does not mean that the legal proceedings at a particular forum are saved from the effects from the repeal. The question whether the pending legal proceedings are required to be transferred to the newly created forum by virtue of the repeal would still persist. As discussed, this Court in New India Assurance (supra) and Maria Christina (supra) has held that forum is a matter pertaining to procedural law and therefore the litigant has to pursue the legal proceedings at the forum created by the repealing act, unless a contrary intention appears. This principle would also apply to pending proceedings, as observed in Ramesh Kumar Soni (supra), Hitendra Kumar Thakur (supra) and Sudhir G Angur (supra). In this backdrop, what is relevant to ascertain is whether a contrary intent to the general rule of retrospectivity has been expressed under the Act of 2019 to continue the proceedings at the older forum. 79. Now, in considering the expression of intent in the repealing enactment in the present case, it is apparent that there is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits. In deducing whether there is a contrary intent, the legislative scheme and procedural history may provide a relevant insight into the intention of the legislature. xx xx xx

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26. Having said so, this Court held that serious hardship would be caused to the consumers if the cases already instituted before National Consumer Disputes Redressal Commission were required to be transferred to the State Consumer Disputes Redressal Forum. Thereafter, the proceedings instituted before the commencement of 2019 Act would continue before the fora corresponding to the provisions under the 1986 Act. 27. Reliance was also placed upon judgment of this Court reported as 23 New India Assurance Co. Ltd. v. Smt. Shanti Misra wherein the change in forum was said to be covered under procedural law. In the said referred judgment, there was change of forum of filing of a claim application under the Motor Vehicle Act, 1939 from that of a civil suit. It was held that change of forum would apply retrospectively. It was held that claimant have a vested right of action and not of forum. Such is not the question posed before us in the present appeal. 28. The change of forum and period of limitation have been held to be 23 (1975) 2 SCC 840 19 procedural law even in the judgments reported in Videocon International Limited v. Securities and Exchange Board of 24 India , and Maria Cristina De Souza Sodder & Ors. v. Amria 25 Zurana Pereira Pinto & Ors. . 29. Mr. Gupta has also relied upon Harihar Polyfibres v. Regional 26 Director, ESI Corporation , Spring Meadows Hospital & Anr. 27 v. Harjol Ahluwalia & Anr. , Kishore Lal v. Chairman, 28 Employees’ State Insurance Corpn. and K.H. Nazar v. 29 Mathew K. Jacob & Ors. to contend that in respect of beneficial legislations, the interpretation which support the intention of law should be accepted. 30. In Harihar Polyfibres , this Court was examining the scope of expression wages in the Employees’ State Insurance Act, 1948. It was held that the Act in question was a beneficial legislation and thus any ambiguous expression was bound to receive a beneficial construction. The present dispute is not of any ambiguity, therefore principles laid down in this case are not applicable. 31. In Spring Meadows Hospital, this Court held that the definition clause of Section 2(1)(d)(ii) of the 1986 Act is wide enough to include not only the person who hires the services but also the beneficiary of such services. Thus, both the parents of the child as 24 (2015) 4 SCC 33 25 (1979) 1 SCC 92 26 (1984) 4 SCC 324 27 (1998) 4 SCC 39 28 (2007) 4 SCC 579 29 (2020) 14 SCC 126 20 well as the child would be consumer under the 1986 Act to claim compensation under the Act. In Kishore Lal, this court held that the definition of 'consumer' in the 1986 Act is apparently wide enough and encompasses within its fold not only the goods but also the services, bought or hired for consideration. In K.H. Nazar, the question was, whether a rocky land which was used for quarrying purposes can be treated as a “commercial site”, thus exempt from the purview of the Kerala Land Reforms Act, 1963. We are not concerned with interpretation to be given to a clause in the statute as in the judgments referred to by the respondents but only with the effect of substitution of a provision than earlier provisions. 32. The Division Bench of the Madras High Court in M/s. Dream 30 Castle & Anr. v. Union of India & Ors. dealing with amended Section 35 of the Central Excise Act by Finance Act No. 2 of 2014 held that when the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right or stated to be retrospective, unless it is definitely shown that the amended condition is more onerous than the unamended condition. It was held as under: “54. Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory. xx xx xx 30 W.P. No. 13431 of 2015 etc. decided on 18.4.2016 21 59. Therefore, if one condition that was already available in the statute for the exercise of a right of appeal, is merely replaced by another condition, the same cannot be said to be retrospective, unless it is definitely shown that the amended condition is more onerous than the unamended condition. When the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right. A mere chance of convincing the Appellate Authority to exercise the discretion for the grant of a total waiver is no vested right. The amendment, in our considered view, did not take away a right vested, but merely made a chance divested. What has now gone, is not the right, but the chance or hope. Therefore, the first contention of the learned Senior counsel for the petitioner is liable to be rejected.” 33. There is another line of judgments taking a view that right of appeal is a creation of statute and the legislature is competent to determine the conditions on which an appeal would lie. These are not the cases of amending or repeal of a statute, therefore, such judgments are not applicable to the questions arising in the present application. 34. In view of the binding precedents of the Constitution Bench judgments referred to above, we hold that onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act. Therefore, the I.A. is allowed. .............................................J. (HEMANT GUPTA) .............................................J. (V. RAMASUBRAMANIAN) NEW DELHI; FEBRUARY 15, 2022. 22