SRI DOMMARAJU SUBRAMANYAM vs STATE OF KARNATAKA
- Court
- Karnataka High Court
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®
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ST
DATED THIS THE 1 DAY OF SEPTEMBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 34302 OF 2024 (GM-CON)
BETWEEN
1. SRI DOMMARAJU SUBRAMANYAM,
AGED ABOUT 54 YEARS,
SON OF D.CHENGALRAJU
RESIDING AT. No.1, 12TH CROSS,
OPP. ST ANNS SCHOO1L, AKSHAYA NAGAR,
BANGALORE -68
2. SRI. KORAPATI VENKATA DURGAPRASAD,
SON OF RATNAKAR,
AGED ABOUT 36 YEARS,
NO. 9, 4TH FLOOR, BLE ARI DRIVE
BELARY ROAD, GANGANAGAR,
BENGALURU-560032 ...PETITIONERS
(BY SRI. ASHWIN VAISH., ADVOCATE FOR
SMT. YASHASWI DASARI., ADVOCATE)
…PETITIONERS
AND
1. STATE OF KARNATAKA
COMMISSIONER OF POLICE, 2,
ALI ASKER RD, VASANTH NAGAR,
BENGALURU, KARNATAKA 560001
REPRESENTED BY HCGP
2. MRS. BINDU SINGH,
WIFE OF NARENDRA BAHADUR SINGH,
AGED 48 YEARS,
RESIDING AT NO.2/2B, 3RD CROSS,
NGR LAYOUT, BOMMANAHALLI,
BANGALORE-560 068
Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA
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3. ASSISTANT REGISTRAR-CUM-ASSISTANT,
ADMINISTRATIVE OFFICER DISTRICT CONSUMER,
DISPUTES REDRESSAL COMMISSION,
BENGALURU, URBAN DISTRICT,
BENGALURU-5600026 ...RESPONDENTS
(BY SRI. MOHAMMED JAFAR SHAH., AGA FOR R1;
SRI. V. RANGARAMU., ADVOCATE FOR R2;
R3-SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE AN
APPROPRIATE WRIT DECLARING AS ILLEGAL ORDER DATED
08.02.2024 AND CONSEQUENTIALLY SET ASIDE ORDER DATED
08.02.2024 AND PROCEEDINGS ENUMERATING THEREFROM PASSED
BY THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL
COMMISSION BENGALURU URBAN in E.A NO. 10/2024 ARISING OUT
OF C.C NO. 494/2016 PRODUCED AS ANNEXURE-A AND ETC.,
THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING
BEEN RESERVED FOR ORDERS ON 24.07.2026, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CAV ORDER
1. The Petitioners are before this Court seeking for the
following reliefs:
i. Issue an appropriate writ declaring as illegal order
dated 08.02.2024 and consequently set aside order
dated 08.02.2024 and proceedings enumerating
therefrom passed by the II Additional District
Consumer Disputes Redressal Commission Bengaluru
Urban in E.A.No.10/2024 arising out of
C.C.No.494/2016 produced as Annexure-A; and/or
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ii. Issue such other writ or writs or pass any such
order or orders as this Hon’ble Court may deem fit
under the facts and circumstances of the case, in the
interest of justice.
2. Respondent No.2 had instituted Consumer Complaint
No.494/2016 before the District Consumer
Commission, which came to be allowed by order
dated 15.03.2017. Pursuant thereto, respondent
No.2 initiated Execution Application No.10/2024 on
03.02.2024 under Order XXI Rule 11 of the Code of
Civil Procedure, 1908 (hereinafter, “ CPC ”), read with
Sections 71 and 72 of the Consumer Protection Act,
2019 (hereinafter, “ CP Act ”), seeking enforcement
of the order passed in the consumer complaint.
3. The execution petition sought recovery of the
decretal compensation of Rs.7,83,298/-, together
with interest thereon amounting to Rs.8,85,715/-,
costs awarded to the complainant, execution costs
and advocate’s fee, aggregating to Rs.16,95,013/-.
The decree-holder also sought attachment and sale
of the movable properties of the judgment-debtor
(hereinafter, “ JDR ”) and arrest and detention of the
JDR in civil prison. The petitioners herein are the
Directors of the JDR, namely, M/s. Sanchaya Land
and Estate Pvt. Ltd.
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4. When the execution petition was taken up on
08.02.2024, the Execution Court took note of the
complaint filed under Section 200 of the Code of
Criminal Procedure, 1973 (hereinafter, “ CrPC ”),
alleging non-compliance by the JDR with the order
dated 15.03.2017 passed in Consumer Complaint
No.494/2016. The sworn statement of the
complainant was recorded. Upon consideration of the
material placed before it, the Execution Court formed
an opinion that a prima facie case existed against the
JDR for an offence punishable under Section 72 of
the CP Act and accordingly took cognisance of the
said offence and directed issuance of summons.
5. The summons issued to the JDR came to be returned
with the endorsement “left”; however, consequently,
by order dated 06.04.2024, a Non-Bailable Warrant
(hereinafter, “ NBW ”) was issued against the JDR
through the Station House Officer, R.T. Nagar Police
Station. The matter was thereafter adjourned from
time to time awaiting the execution report. On
29.05.2024, the NBW was re-issued. Again, on
18.07.2024, the NBW was re-issued through the
Commissioner of Police, Bengaluru City. As the
warrant remained unexecuted, it was once again re-
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issued on 21.09.2024 through the Commissioner of
Police, Bengaluru.
6. On 27.11.2024, the NBW was returned unexecuted
with a report that the JDR had vacated the premises.
It is in the aforesaid circumstances that the
petitioners have called in question the order dated
08.02.2024 passed by the Execution Court, whereby
cognisance was taken of the alleged offence
punishable under Section 72 of the CP Act.
7. The submission of Sri. Ashwin Vaish., learned counsel
for the petitioners is that;
7.1. The order dated 08.02.2024 taking cognisance
of the alleged offence under Section 72 of the
CP Act is illegal and unsustainable in law. It is
contended that the Execution Court has
adopted a procedure unknown to law by
converting the execution proceedings into
criminal proceedings and, on that basis,
proceeded to take cognisance and issue
summons to the JDR.
7.2. Learned counsel further submits that the power
available to the Execution Court in execution
proceedings could not have been invoked for
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issuance of NBW against the JDR in the manner
in which it has been done. According to him,
the Execution Court, while exercising
jurisdiction in an execution proceeding, was
required to strictly adhere to the procedure
prescribed by law and could not have resorted
to coercive criminal process without following
the procedure contemplated under the CP Act
and the CrPC. On this ground also, it is
contended that the impugned order and the
consequential proceedings are liable to be set
aside.
7.3. Learned counsel submits that Section 72 of the
CP Act has to be read in conjunction with
Sections 4 and 5 of the CrPC insofar as the
procedure relating to initiation and prosecution
of an offence thereunder is concerned.
According to him, before fastening criminal
liability upon the petitioners, who are Directors
of the JDR-Company, the Consumer
Commission was required to determine whether
any statutory or legally sustainable basis
existed for attributing vicarious criminal liability
to the Directors for the alleged non-compliance
by the Company.
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7.4. It is further contended that the order passed in
the consumer complaint was against the
Company and not against the individual
Directors in their personal capacity. The liability
arising under the said order, therefore, cannot
automatically be extended to the Directors
merely by virtue of them holding office as
Directors. Learned counsel submits that the
Company and its Directors are distinct legal
entities and, in the absence of a specific
adjudication or statutory basis fastening
personal liability upon the Directors, the
Directors cannot be treated as personally liable
for satisfaction of the decretal amount payable
by the Company.
7.5. Learned counsel further submits that an offence
under Section 72 of the CP Act would arise only
upon a proper determination that there has
been deliberate or wilful non-compliance with
the order of the Consumer Commission. Such
determination, according to him, would
necessarily require consideration of whether the
JDR had the means and ability to comply with
the order and whether the alleged non-
compliance was deliberate. In the case of
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Directors, it would additionally require a
determination as to whether the particular
Director had any role in, or responsibility for,
the alleged non-compliance.
7.6. It is submitted that a Director cannot be
saddled with criminal liability merely because
he occupies the position of a Director in the
Company. Learned counsel contends that the
petitioners cannot be proceeded against for the
alleged default of the Company in the absence
of a specific finding establishing their individual
criminal liability. The mere fact that the
petitioners are Directors of the JDR-Company,
according to learned counsel, does not make
them personally liable either for the decretal
debt or for the alleged offence under Section 72
of the CP Act.
7.7. Learned counsel also submits that the issuance
of the NBW was wholly premature and contrary
to the prescribed procedure. It is contended
that, although summons had initially been
ordered to be issued, the Execution Court
proceeded to issue an NBW without there being
proper service of summons upon the concerned
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persons. According to him, at the mere instance
of the Decree Holder, the Court could not have
dispensed with the ordinary process of service
and immediately resorted to the coercive
process of an NBW.
7.8. It is further contended that the coercive
process of arrest cannot be employed for the
purpose of securing the presence of the
Directors merely because the Company is the
JDR. The Company and its Directors are distinct
legal persons, and the Directors cannot be
treated as synonymous with the Company for
the purposes of execution or criminal
prosecution. Consequently, the NBW could not
have been issued against the petitioners
without first establishing the legal basis for
their personal liability and following the
procedure prescribed by law.
7.9. On these grounds, learned counsel submits that
the order dated 08.02.2024 taking cognisance
under Section 72 of the CP Act, as well as the
consequential issuance of summons and NBW
against the petitioners, are without jurisdiction
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and contrary to the procedure established by
law and are therefore liable to be quashed.
7.10. In this regard, he relies on the decision of the
Hon’ble Supreme Court in Jolly George
Varghese v. Bank of Cochin [(1980) 2 SCC
360] more particularly paragraphs 10, 11, 12
and 13 thereof, which are reproduced hereunder
for easy reference;
10. Equally meaningful is the import of Article 21 of
the Constitution in the context of imprisonment for
non-payment of debts. The high value of human
dignity and the worth of the human person
enshrined in Article 21, read with Articles 14 and 19,
obligates the State not to incarcerate except under
law which is fair, just and reasonable in its
procedural essence. Maneka Gandhi case [(1978) 1
SCC 248] as developed further in Sunil Batra v.
Delhi Administration [(1978) 4 SCC 494 : 1979 SCC
(Cri) 155] , Sita Ram v. State of U.P. [(1979) 2 SCC
656 : 1979 SCC (Cri) 576 : (1979) 2 SCR 1085] and
Sunil Batra v. Delhi Administration [ WP No. 1009 of
1979, decided on December 20, 1979] lays down
the proposition. It is too obvious to need elaboration
that to cast a person in prison because of his
poverty and consequent inability to meet his
contractual liability is appalling. To be poor, in this
land of daridra narayana, is no crime and to recover
debts by the procedure of putting one in prison is
too flagrantly violative of Article 21 unless there is
proof of the minimal fairness of his wilful failure to
pay in spite of his sufficient means and absence of
more terribly pressing claims on his means such as
medical bills to treat cancer or other grave illness.
Unreasonableness and unfairness in such a
procedure is inferrable from Article 11 of the
Covenant. But this is precisely the
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interpretation we have put on the proviso to
Section 51 CPC and the lethal blow of Article
21 cannot strike down the provision, as now
interpreted.
11. The words which hurt are "or has had since the
date of the decree, the means to pay the amount of
the decree". This implies, superficially read, that if at
any time after the passing of an old decree the
judgment-debtor had come by some resources and
had not discharged the decree, he could be detained
in prison even though at that later point of time he
was found to be penniless. This is not a sound
position apart from being inhuman going by the
standards of Article 11 (of the Covenant) and Article
21 (of the Constitution). The simple default to
discharge is not enough. There must be some
element of bad faith beyond mere indifference to
pay, some deliberate or recusant disposition in the
past or, alternatively, current means to pay the
decree or a substantial part of it. The provision
emphasises the need to establish not mere omission
to pay but an attitude of refusal on demand verging
on dishonest disowning of the obligation under the
decree. Here considerations of the debtor’s other
pressing needs and straitened circumstances will
play prominently. We would have, by this
construction, sauced law with justice,
harmonised Section 51 with the Covenant and
the Constitution.
12. The question may squarely arise some day as to
whether the proviso to Section 51 read with Order
21 Rule 37 is in excess of the Constitutional
mandate in Article 21 and bad in part. In the present
case since we are remitting the matter for
reconsideration, the stage has not yet arisen for us
to go into the vires, that is why we are desisting
from that essay.
13. In the present case the debtors are in distress
because of the blanket distraint of their properties.
Whatever might have been their means once, that
finding has become obsolete in view of later
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happenings. Sri Krishnamurthi Iyer for the
respondent fairly agreed that the law being what we
have stated, it is necessary to direct the executing
court to re-adjudicate on the present means of the
debtors vis-a-vis the present pressures of their
indebtedness, or alternatively whether they have
had the ability to pay but have improperly evaded or
postponed doing so or otherwise dishonestly
committed acts of bad faith respecting their assets.
The court will take note of other honest and urgent
pressures on their assets, since that is the exercise
expected of the court under the proviso to Section
51. An earlier adjudication will bind if relevant
circumstances have not materially changed.
7.11. By relying on Jolly George Varghese, his
submission is that mere non-payment of the
decretal amount or mere failure to satisfy the
decree cannot, by itself, justify the arrest and
detention of a judgment-debtor. Before ordering
detention under Section 51 of the CPC, the
Execution Court is under a mandatory obligation
to record a finding, on the basis of cogent
material, that the judgment-debtor has or has
had the means to pay the decretal amount and
has deliberately, wilfully or in bad faith refused
or neglected to discharge the decree. The Court
is also required to consider the present financial
condition of the judgment-debtor, his bona fide
liabilities and other pressing necessities, since
poverty or genuine inability to pay cannot be
equated with wilful default. It is therefore
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contended that, in the absence of a specific
finding regarding the petitioner’s present means
and deliberate evasion of payment despite
possessing sufficient resources, the order
directing arrest and detention is contrary to the
mandate of Section 51 CPC as interpreted by the
Hon’ble Supreme Court and is also violative of
the constitutional guarantee of fairness under
Article 21 of the Constitution of India.
7.12. He relies on the decision of the Hon’ble Supreme
Court in Kamlesh Aggarwal v. Narain Singh
Dabbas [(2015) 11 SCC 661], more particularly
para 16 and 18 thereof, which are reproduced
hereunder for easy reference:
16. Having regard to the fact situation that the
appellant, who is a consumer, has been litigating the
matter before the District Forum, the State
Commission and the National Commission for the
last 17 years to get her legitimate right of getting
the sale deed registered in respect of the allotted
site made by Navchetna Sahkari Awas Samiti Ltd. in
her favour who is its member since 1962, therefore,
we deem it proper to exercise our power under
Article 142 of the Constitution of India for the reason
that the State Commission has erred in not
remanding the case to the District Forum, after it
has found fault with the order of the District Forum
in convicting and sentencing the officers of
Navchetna Sahkari Awas Samiti Ltd., who are the
respondents herein, for not following the procedure
as provided under the Criminal Procedure Code and
for that reason we deem it just and proper to
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remand the case to the District Forum with a
direction to the District Forum to follow the
procedure under Section 262 read with Chapter XX,
Section 251 of the Code of Criminal Procedure to
initiate penal action against the respondents
under Section 27 of the Act for non-compliance
with the statutory provisions .
18. Further, it is needless to observe in this order
that apart from initiating proceedings under Section
27 of the Act, the alternative right is also
available to the appellant to execute the order
of the District Forum by invoking the
provisions of the Code of Civil Procedure, 1908
under Order 21 read with Rule 32 for seeking
direction to the respondents to get sale deed in
respect of Plot No. 114, Village Khoda, Ghaziabad
executed by Navchetna Sahkari Awas Samiti Ltd.
and register the same before the Sub-Registrar and
put her in possession of the same in accordance with
the aforesaid provisions. The execution of the decree
in the aforesaid terms is permissible in law in view
of the provisions of Sections 13(4), (6) and (7) of
the Act, as the provisions of Order 21 read with Rule
32 of the Code of Civil Procedure are applicable to
the District Forum to follow the procedure for
execution of the order passed by it.
7.13. By relying on Kamlesh Aggarwal, his
submission is that the power to arrest and detain
a judgment-debtor is not the only mode
available for enforcement of a decree. The
Hon’ble Supreme Court has recognised that the
decree-holder has alternative and efficacious
remedies under the provisions of Order XXI of
the Code of Civil Procedure, particularly Rule 32,
for securing compliance with a decree directing
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performance of an act. Therefore, where the
decree is capable of being enforced through
other recognised modes of execution, the
Execution Court ought to consider and exhaust
such less coercive measures before resorting to
the drastic remedy of arrest and detention. It is
thus contended that, in the facts of the present
case, the impugned order directing arrest of the
petitioner, without examining the availability or
efficacy of other modes of execution under Order
XXI CPC, is contrary to the principles recognised
by the Hon’ble Supreme Court and is therefore
unsustainable in law.
7.14. He relies on the decision of the Division Bench of
this Court in Parmjit Singh v. Union of India
& Ors [dated 18.12.1998 in WP No.10363 of
1994 reported in MANU/KA/0084/1999], more
particularly para 8 thereof, which is reproduced
hereunder for easy reference;
8. It follows, therefore, that where a trader or a
person omits to comply with any order made by the
District Forum, the State Commission or the National
Commission, as the case may be, the complainant in
that event can file a complaint before such Forum or
Commission and if despite opportunity, the trader or
a person fails or omits to comply with the order
passed under the Act, the appropriate Forum or
the Commission can direct the filing of the
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complaint in a Court of competent jurisdiction .
Upon filing of such complaint, the procedure
prescribed under the Code of Criminal Procedure has
to be followed and on proof of the allegations, the
accused shall be convicted for the offence and
sentenced to the penalties as contemplated under
Section 27 of the Act. The provisions of Section 27
are not distinct from Section 25 of the Act. Section
27 in effect and in essence is a provision beneficial
to the trader, who can avoid the conviction and
sentence by complying the order of the Forum or the
State and the National Commissions when
complained of by the Consumer. It is only upon his
failure and omission, that a trader shall be deemed
to be guilty of the commission of an offence triable
by a ordinary Magistrate in accordance with the
procedure prescribed under the Code of Criminal
Procedure.
7.15. By relying on Parmjit Singh, his submission is
that proceedings under Section 27 of the
Consumer Protection Act, 1986 are penal in
nature and constitute an independent statutory
remedy for securing compliance with the orders
passed by the Consumer Forum. Such
proceedings are required to be conducted in
accordance with the procedure prescribed under
the Code of Criminal Procedure, and punishment
can be imposed only upon proof of wilful non-
compliance. Parmjit Singh, further recognises
that the object of Section 27 of the Consumer
Protection Act, 1986 is primarily to secure
compliance with the order of the Consumer
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Forum, and not merely to punish the opposite
party. Therefore, it is contended that where the
statute itself provides a specific penal
mechanism for enforcing compliance, recourse
to arrest and detention under the provisions of
the Code of Civil Procedure ought not to be
adopted mechanically or as the first resort. The
Execution Court was therefore required to bear
in mind the availability of the statutory remedy
under Section 27 of the Consumer Protection
Act, 1986 while considering the decree-holder’s
prayer for arrest and detention of the petitioner.
7.16. He relies on the decision of the Hon’ble Supreme
Court in Inder Mohan Goswami v. State of
Uttaranchal and Ors [(2007) 12 SCC 1], more
particularly para 55 thereof, which is reproduced
hereunder for easy reference;
55. In complaint cases, at the first instance, the
court should direct serving of the summons along
with the copy of the complaint. If the accused
seem to be avoiding the summons, the court,
in the second instance should issue bailable
warrant. In the third instance, when the court
is fully satisfied that the accused is avoiding
the court’s proceeding intentionally, the
process of issuance of the non-bailable warrant
should be resorted to. Personal liberty is
paramount, therefore, we caution courts at the first
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and second instance to refrain from issuing non-
bailable warrants.
7.17. By relying on Inder Mohan Goswami , his
submission is that personal liberty is a cherished
constitutional right and any order curtailing such
liberty must be passed only as a measure of last
resort. The Hon’ble Supreme Court has held that
coercive processes involving deprivation of
personal liberty should be invoked in a
graduated manner and only after the Court is
satisfied that the person concerned is
deliberately evading the process of law. Drawing
an analogy from the said principle, it is
contended that the Execution Court ought not to
have ordered the arrest and detention of the
petitioner without first exhausting less intrusive
measures available in law and without recording
a clear finding that the petitioner was wilfully
evading the execution proceedings. In the
absence of such satisfaction, the impugned order
directing arrest constitutes a disproportionate
restriction on the petitioner’s personal liberty
and is liable to be set aside.
7.18. He relies on the decision of the Division Bench of
this Court in Naganagouda Veeranagouda
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Patil v. Malatesh H. Kulkarni [1998 Crl. L.J.
1707], more particularly para 5 thereof, which is
reproduced hereunder for easy reference;
5 . We need to record here that the learned
Advocates who represented the petitioners
vehemently submitted that if the complainant’s
learned Advocate were to be permitted to carry out
the examination-in-chief that it was not only a
breach of the provisions of Section 200, Cr.P.C. but
that it would completely nullify the provisions of that
section and would in fact have the totally opposite
effect of what was originally intended by the
Legislature when this section was incorporated in
the Cr.P.C. in 1973. They have demonstrated to us,
and perhaps with considerable justification that a
private complaint presented to the learned
Magistrate is invariably drafted by an Advocate and
that therefore, there could be a certain degree of
padding, that there could be also a skillful
orientation of facts, a clever slant in the projection
and a skillful effort to bring the complaint within the
ambit of the four corners of a penal section and that
the sum total of this artful exercise very often
results in process being issued in criminal cases
against the opposite party even though there may
not have been justification to do so. The learned
Advocates have pointed out that this sets of a total
chain re-action in so far as a lot of harassment is
caused to the accused even during the service of
process and thereafter, and that having regard to
the load on the trial Courts and the appeal Courts
that an accused is required to contend with the
proceeding for a long period of time, to undergo
harassment and expenditure, as it is an uphill task
to demonstrate finally that there was no justification
for the issue of process. We do see considerable
force in this argument because the whole purpose
of enacting Section 200, Cr.P.C. was in order to
weed out unjustified litigation and the
immediate fall out of such unjustified complaints is
the heavy burden on the Courts until those
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proceedings are finally disposed of. Learned
Advocates did also demonstrate to us the inevitable
side effects of such litigations which could be used to
coerce parties into settlements which is not the
intention of the law and judicial process can never
be abused with this end in view. The effort on the
part of the learned Advocates was directed towards
impressing on the Court the absolute need to tighten
up the scrutiny procedure for purposes of ensuring
that only valid and genuine complaints survive and
that all the others are eliminated at the scrutiny
stage. They have therefore submitted that the whole
purpose of enacting Section 200, Cr.P.C. would be
frustrated completely if the complainant’s learned
Advocate were to be permitted to carry out the
examination-in-chief because in that event the
complaint would be bodily reproduced in the
examination-in-chief and there would be less scope
for the Presiding Judge to be able to assess the
genuineness of the grievance that has been
projected. It was therefore submitted that it is
absolutely imperative that the learned Advocate be
precluded from taking any part in the scrutiny
process so that the Court has an unrestricted
opportunity of independently examining the
complaint, ascertaining from the complainant
and the witnesses as to what the true position
is and deciding whether it should be
entertained or not .
7.19. By relying on Naganagouda Veeranagouda
Patil, his submission is that where the law
contemplates initiation of penal proceedings, the
Court is under a duty to undertake an
independent and careful scrutiny of the material
before permitting such proceedings to continue.
The object of such scrutiny is to ensure that
criminal process is not invoked mechanically or
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used as a tool of harassment or coercion, and
that only genuine cases proceed further. It is
therefore contended that, in the present case,
before adopting a coercive measure resulting in
deprivation of the petitioner’s personal liberty,
the Execution Court ought to have independently
satisfied itself that the statutory preconditions
for such action were fully established. According
to the learned counsel, the impugned order,
having been passed without such rigorous
scrutiny and without recording the necessary
findings regarding wilful and deliberate non-
compliance, suffers from non-application of mind
and is liable to be interfered with.
7.20. He relies on the decision of the Hon’ble Kerala
High Court in Mohammed Kutty v.
Mohammed [2006 Crl. L.J. 3601], more
particularly para 6 thereof, which is reproduced
hereunder for easy reference;
6 . The role of the Magistrate at that stage is only to
ascertain whether there are sufficient grounds to
proceed. It is for the learned Magistrate to play the
role assigned to him under the Code fully and
ascertain whether there is sufficient ground to
proceed. A reading of the relevant provisions in
Chapter XV of the Code of Criminal Procedure would
indicate that the counsel for the complainant has no
specific role when the complainant and his witnesses
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are examined under Section 200 Cr.P.C. Such
examination must be conducted by the Magistrate.
The mandate of Section 200 Cr.P.C is that the
magistrate shall examine the complainant and
the witnesses present. At the trial stage, the
counsel for the complainant will be there to examine
the complainant and assist the Court But at the
stage of Section 200 Cr.P.C, the law does not
specifically enable the counsel for the complainant to
adduce evidence. It is the duty of the magistrate
to examine the complainant.
7.21. By relying on Mohammed Kutty’s case , his
submission is that where the statute mandates
the Court to undertake a preliminary scrutiny
before initiating penal consequences, such
exercise must be performed independently by
the Court and cannot be reduced to a mere
formality. The Hon’ble Kerala High Court has
emphasised that it is the duty of the Magistrate
to personally examine the complainant and
satisfy himself that sufficient grounds exist to
proceed, thereby underscoring the importance of
judicial application of mind at the threshold
stage. Drawing support from this principle, it is
contended that, before directing the arrest and
detention of the petitioner or permitting penal
consequences to follow, the Execution Court was
required to independently examine whether the
statutory conditions precedent had been fulfilled
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and whether there existed material justifying
such coercive action. In the absence of such
independent satisfaction and recorded findings,
the impugned order is vitiated by non-
application of mind and is therefore
unsustainable in law.
7.22. Though there are several other decisions which
had been produced along with the memos filed,
learned counsel for the petitioners has submitted
that he would not be relying on those decisions.
7.23. He refers to Section 71 of the Consumer
Protection Act, 2019 which is reproduced
hereunder for easy reference;
71. Enforcement of orders of District
Commission, State Commission and National
Commission. Every order made by a District
Commission, State Commission or the National
Commission shall be enforced by it in the same
manner as if it were a decree made by a Court in a
suit before it and the provisions of Order XXI of the
First Schedule to the Code of Civil Procedure, 1908
(5 of 1908) shall, as far as may be, applicable,
subject to the modification that every reference
therein to the decree shall be construed as reference
to the order made under this Act
7.24. By relying on Section 71 of the CP Act, his
submission is that every order made by a District
Commission, State Commission or the National
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Commission shall be enforced by it in the same
manner as it were a decree by a Court in a suit
before it and the provision of Order XXI of the
First Schedule of the Code of Civil Procedure,
1908 would apply. On that basis, he submits that
the application of Order XXI of the CPC would
necessarily indicate that these execution
proceedings are civil in nature and as such, no
arrest warrant or a non-bailable warrant could
have been issued by the Execution Court under
Section 71.
7.25. He refers to Section 72 of the Consumer
Protection Act, 2019 which is reproduced
hereunder for easy reference;
72. Penalty for non-compliance of order. (1)
Whoever fails to comply with any order made by the
District Commission or the State Commission or the
National Commission, as the case may be, shall be
punishable with imprisonment for a term which shall
not be less than one month, but which may extend
to three years, or with fine, which shall not be less
than twenty-five thousand rupees, but which may
extend to one lakh rupees, or with both.
(2) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), the District
Commission, the State Commission or the National
Commission, as the case may be, shall have the
power of a Judicial Magistrate of first class for the
trial of offences under sub-section (1), and on
conferment of such powers, the District Commission
or the State Commission or the National
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Commission, as the case may be, shall be deemed
to be a Judicial Magistrate of first class for the
purposes of the Code of Criminal Procedure, 1973.
(3) Save as otherwise provided, the offences under
sub-section (1) shall be tried summarily by the
District Commission or the State Commission or the
National Commission, as the case may be.
7.26. By referring to Section 72 of the CP Act, he
submits that Section 72 provides a penalty for
non-compliance which is distinct from
enforcement of the orders under Section 71. His
submission is that under Section 72, when the
JDR fails to comply with any order, he shall be
punishable with imprisonment for a term which
shall not be less than one month, but which may
extend to three years or with fine which shall not
be less than Rs.25,000/- but which may extend
to Rs.1,00,000/- or with both.
7.27. The penalty he submits is distinct from
enforcement of an award passed by the District
Commission, State Commission and National
Commission.
7.28. He refers to Section 4 of the Code of Criminal
Procedure, 1973 which is reproduced hereunder
for easy reference.
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4. Trial of offences under the Indian Penal
Code and other laws.— (1) All offences under the
Indian Penal Code (45 of 1860) shall be
investigated, inquired into, tried, and otherwise
dealt with according to the provisions hereinafter
contained.
(2) All offences under any other law shall be
investigated, inquired into, tried, and otherwise
dealt with according to the same provisions, but
subject to any enactment for the time being in force
regulating the manner of place of investigating,
inquiring into, trying or otherwise dealing with such
offences
.
7.29. By referring to Section 4 of CrPC his submission
is that all offences shall be investigated,
enquired into and tried as per the provisions of
the CrPC. The Execution Court has not followed
the procedure under the Code of Criminal
Procedure.
7.30. He refers to Section 5 of the Code of Criminal
Procedure, which is reproduced hereunder for
easy reference;
5. Saving— Nothing contained in this Code shall, in
the absence of a specific provision to the contrary,
affect any special or local law for the time being in
force, or any special jurisdiction or power conferred,
or any special form of procedure prescribed, by any
other law for the time being in force.
7.31. By relying on Section 5 of CrPC, his submission
is that nothing contained in the Code, in the
absence of specific provisions to the contrary
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would affect any special or local law for the time
being in force or any special jurisdiction or power
conferred or any special form of procedure
prescribed by any other law for the time being.
7.32. He submits that there is no particular specific
provision made under the Consumer Protection
Act, 2019. Section 72 requires the procedure
under the CrPC to be followed by designating the
District Commission, State Commission and
National Commission to be a Judicial Magistrate
of First Class for trial of offences under Sub-
section (1), and on conferment of such powers,
the District Commission, State Commission and
the National Commission shall be deemed to be
a Judicial Magistrate of the First Class for the
purpose of CrPC.
7.33. His submission therefore is that even if the
District Commission, State Commission and
National Commission were to be held to be
deemed to be a Judicial Magistrate of First Class,
each of the above Commissions would have to
follow the procedure under the CrPC. None of
those provisions have been followed by the
District Commission and as such the said order
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taking cognisance and the consequential orders
issuing NBW are required to be set aside.
8. Sri.V.Rangaramu., learned counsel for respondent
No.2 submits that;
8.1. Both Section 71 and Section 72 of the Consumer
Protection Act, 2019 are required to be read
together. On an award being passed by the
District Commission, State Commission or the
National Commission, the Decree Holder i.e., the
complainant would be entitled to both enforce
the award passed in terms of Section 71 and if
such award were not to be complied by the JDR,
penalty under Section 72 would be a natural
consequence of such non-compliance of the
Award.
8.2. He submits that the application filed by
respondent No.2 is under Order XXI of the Code
of Civil Procedure for enforcement of the decree
passed under Section 71 of the CP Act and for
imposition of penalty under Section 72 of the CP
Act. Summons have been issued, having
returned with the endorsement "left". The
Execution Court has issued NBW. Since the
Execution Court is deemed to be Judicial
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Magistrate of the First Class in terms of Sub-
section (2) of Section 72.
8.3. On that ground, he submits that non-compliance
of the award required the Execution Court to
take action under the CrPC, which it has so done.
The complaint had been filed under Sections 71
and 72 of the CP Act, the sworn statement of the
complainant was recorded for the purpose of
Section 72 of the CP Act. The Commission acting
as a Judicial Magistrate of the First Class, being
of the considered opinion that prima facie case
has been made out, had taken cognisance of the
non-compliance with the award passed under
Section 72 of the CP Act. The action taken by
the District Commission is in compliance with
Section 72 of the CP Act.
8.4. There is no infirmity in the said order requiring
this Court to intercede, and on that ground, he
submits that the writ petition is required to be
dismissed.
9. Heard Sri.Ashwin Vaish., learned counsel appearing
for the petitioners, Sri.Mohammed Jafar Shah.,
learned AGA appearing for respondent No.1 and
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Sri.V.Rangaramu., learned counsel appearing for
respondent No.2. Perused papers.
10. The points that would arise for consideration are;
(i) Whether the District Consumer Disputes
Redressal Commission, while exercising
powers under Section 72 of the
Consumer Protection Act, 2019, could
take cognisance of the alleged offence of
non-compliance on the basis of an
execution application filed under Section
71 of the Act read with Order XXI of the
Code of Civil Procedure, 1908 or whether
a separate complaint and the procedure
prescribed under the Code of Criminal
Procedure were required to be followed?
(ii) Whether, in the facts and circumstances
of the present case, the District
Commission has complied with the
mandatory procedural requirements
contemplated under Section 72 of the
Consumer Protection Act, 2019 and the
Code of Criminal Procedure, 1973 before
taking cognisance and issuing process
against the petitioners?
(iii) Whether the issuance of Non-Bailable
Warrants against the petitioners
pursuant to the order dated 08.02.2024
is sustainable in law, particularly when
summons had not been duly served, and
the statutory prerequisites for resorting
to coercive process are alleged to be
absent?
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(iv) Whether the petitioners, being Directors
of the judgment-debtor company, could
be proceeded against under Section 72
of the Consumer Protection Act, 2019
and subjected to penal consequences in
the absence of any allegation or finding
regarding their personal responsibility,
wilful disobedience or vicarious liability?
(v) Whether the impugned order dated
08.02.2024 taking cognisance and all
consequential proceedings, including the
issuance of Non-Bailable Warrants, call
for interference by this Court in exercise
of its supervisory jurisdiction under
Articles 226 and 227 of the Constitution
of India?
(vi) What Order?
11. This Court answers the above points as follows:
12. Answer to Point No.(i): Whether the District
Consumer Disputes Redressal Commission,
while exercising powers under Section 72 of the
Consumer Protection Act, 2019, could take
cognisance of the alleged offence of non-
compliance on the basis of an execution
application filed under Section 71 of the Act read
with Order XXI of the Code of Civil Procedure,
1908 or whether a separate complaint and the
procedure prescribed under the Code of Criminal
Procedure were required to be followed?
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12.1. Sri. Ashwin Vaish, learned counsel for the
petitioners, contended that the order taking
cognisance is without jurisdiction. According to
him, the execution application filed under
Section 71 of the CP Act was a proceeding for
enforcement of the order as a decree. The
Commission, however, treated the same
proceedings as a criminal complaint under
Section 72 of the CP Act and proceeded to take
cognisance. It was argued that such a
procedure is not contemplated by law.
12.2. Learned counsel submitted that Sections 71
and 72 operate in different fields. Section 71
deals with enforcement of the order, whereas
Section 72 deals with the penal consequence of
non-compliance. His submission was that the
proceedings under Section 72 had to be
initiated in the manner prescribed by the CrPC
and that the Commission could not proceed
under Section 72 merely on the basis of an
execution application.
12.3. Learned counsel placed reliance on Kamlesh
Aggarwal v. Narain Singh Dabbas [(2015)
11 SCC 661] (paragraph 16) and Parmjit
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Singh v. Union of India & Ors. [WP No.
10363 of 1994 reported in
MANU/KA/0084/1999] (paragraph 8), to
contend that penal action for non-compliance
with an order of the Consumer Commission was
required to be pursued before a criminal court
in accordance with the Code of Criminal
Procedure. It was therefore argued that the
Commission could not convert an execution
proceeding into a criminal proceeding.
12.4. Sri. V. Rangaramu, learned counsel for
respondent No.2, opposed the said contention.
He submitted that Sections 71 and 72 of the CP
Act have to be read together. According to him,
a person in whose favour an order has been
passed is entitled to enforce the order under
Section 71 and, where there is non-compliance,
also to invoke Section 72. The two remedies
are not inconsistent.
12.5. Learned counsel further pointed out that, in the
present case, a complaint was in fact filed and
the sworn statement of the complainant was
recorded before cognisance was taken. The
Commission, having been conferred with the
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powers of a Judicial Magistrate of the First
Class under Section 72(2) of the CP Act, was
competent to consider the complaint and, on
being satisfied that there was a prima facie
case, to take cognisance of the offence.
12.6. Before considering the rival submissions, it is
necessary to determine which procedural law
applies to the present proceedings. The order
taking cognisance was passed on 08.02.2024.
The Code of Criminal Procedure, 1973 was in
force on that date. The Bharatiya Nagarik
Suraksha Sanhita, 2023 came into force only
on 01.07.2024.
12.7. Section 531 of the Bharatiya Nagarik Suraksha
Sanhita, 2023 repeals the Code of Criminal
Procedure, 1973 but saves proceedings which
were pending immediately before the new
Sanhita came into force. Section 531(2)(a)
provides that such proceedings are to continue
under the Code of Criminal Procedure, 1973 as
if the Sanhita had not come into force.
12.8. The present proceedings were pending before
01.07.2024. Cognisance had already been
taken on 08.02.2024 and the warrants were
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issued thereafter. Consequently, the present
proceedings are governed by the Code of
Criminal Procedure, 1973. The validity of the
order taking cognisance and the proceedings
that followed will therefore have to be
examined with reference to CrPC.
12.9. Coming to the principal question, Section 71 of
the CP Act provides for enforcement of an order
of the Consumer Commission in the same
manner as if it were a decree of a civil court.
Order XXI of the CPC is therefore applicable to
such enforcement.
12.10. Section 72, on the other hand, deals with
failure to comply with an order of the
Commission and makes such failure punishable.
Section 72(2) specifically confers on the
Commission the powers of a Judicial Magistrate
of the First Class for the trial of offences under
Section 72(1). Section 72(3) further provides
that the offence shall be tried summarily.
12.11. The language of Section 72 is significant. The
legislature has not required the Commission to
send the matter to a separate criminal court.
On the contrary, it has expressly conferred
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upon the Commission the powers of a Judicial
Magistrate of the First Class for the purpose of
trying the offence under Section 72.
12.12. Sections 71 and 72 therefore provide two
different remedies arising from the same non-
compliance. Section 71 enables the successful
consumer to obtain enforcement of the order.
Section 72 provides for penal consequences
where the order is not complied with. The fact
that the two provisions operate differently does
not mean that they cannot be invoked in
respect of the same default.
12.13. There is nothing in the CP Act which requires a
person to choose between the two remedies.
The Act also does not prohibit the Commission
from dealing with enforcement under Section
71 and the penal proceedings under Section 72.
12.14. It is true that enforcement under Section 71
and prosecution under Section 72 are different
in nature. The former is intended to secure
enforcement of the order, while the latter is
penal in character. However, this distinction
does not make the two remedies mutually
exclusive.
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12.15. In the present case, the mere fact that the
application contained prayers relating to
execution and also referred to non-compliance
with the order would not, by itself, invalidate
the proceedings under Section 72. What is
relevant is whether the requirements for taking
cognisance of the offence were otherwise
satisfied.
12.16. The record shows that a complaint under
Section 200 of the CrPC was filed and that the
sworn statement of the complainant was
recorded. The Commission thereafter
considered the material and formed a prima
facie opinion regarding the alleged offence
before taking cognisance.
12.17. The contention that the Commission had no
jurisdiction to take cognisance and that the
complainant was required to approach a
separate criminal court cannot therefore be
accepted.
12.18. The scheme under the Consumer Protection
Act, 2019 is materially different from the
scheme under the Consumer Protection Act,
1986. Under the 2019 Act, Section 72(2)
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expressly confers on the Commission the
powers of a Judicial Magistrate of the First
Class for trial of the offence under Section
72(1). The offence is also required to be tried
summarily.
12.19. The decision in Parmjit Singh (paragraphs 2
and 3), relied upon by the petitioners, was
rendered under the 1986 Act. The said decision
proceeded on the statutory scheme then in
force, under which the Consumer Forum did not
itself try the offence but could direct the
complainant to approach a competent criminal
court. The 2019 Act has subsequently
introduced a different scheme by conferring the
requisite magisterial powers on the Commission
itself. The said decision, therefore, does not
govern the present proceedings.
12.20. The same distinction applies to the decision of
the Hon'ble Supreme Court in Kamlesh
Aggarwal (paragraph 1). that case also arose
under the Consumer Protection Act, 1986 and
dealt with Section 27 of that Act. The
observations in that case have to be
understood in the context of the statutory
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scheme then applicable. The 2019 Act has
materially altered that scheme by empowering
the Commission itself to try the offence under
Section 72 summarily.
12.21. At the same time, the observation in Kamlesh
Aggarwal (paragraph 18), that the successful
party has an alternative remedy of enforcing
the order under Order XXI Rule 32 remains
relevant for understanding the relationship
between the civil and penal remedies. It
supports the conclusion that enforcement of the
order and penal action for its non-compliance
are separate remedies which may coexist.
12.22. The reliance placed on Sections 4 and 5 of the
CrPC also does not alter the position. Section
4(2) itself recognises that offences under laws
other than the Penal Code are to be dealt with
under the Code, subject to any special
enactment regulating the manner of
investigation, inquiry or trial. Section 5 similarly
preserves any special procedure prescribed by
another law.
12.23. Section 72 of the CP Act contains such a special
procedure. It confers magisterial powers upon
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the Consumer Commission and provides for
summary trial. Therefore, the special procedure
prescribed by Section 72 has to be given effect
to along with the relevant provisions of the
Code of Criminal Procedure.
12.24. There is also no substance in the contention
that the execution application was simply
converted into a criminal complaint. The record
specifically shows that a complaint under
Section 200 of the CrPC was filed and that the
sworn statement of the complainant was
recorded before cognisance was taken. The
Commission thereafter considered whether a
prima facie case existed.
12.25. Therefore, the proceedings cannot be said to
have been initiated merely by converting the
execution application into a criminal case. The
fact that the complaint arose out of the same
order which was also the subject matter of
execution does not take away the Commission's
power to consider the alleged offence under
Section 72.
12.26. This Court answers point No.(i) by holding that
the District Consumer Disputes Redressal
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Commission was competent to take cognisance
of an offence under Section 72 of the Consumer
Protection Act, 2019. Sections 71 and 72
provide separate but complementary remedies.
The Commission, having been expressly
conferred with the powers of a Judicial
Magistrate of the First Class under Section
72(2), was not required to send the
complainant to a separate criminal court.
13. Answer to Point No.(ii): Whether, in the facts
and circumstances of the present case, the
District Commission has complied with the
mandatory procedural requirements
contemplated under Section 72 of the Consumer
Protection Act, 2019 and the Code of Criminal
Procedure, 1973 before taking cognisance and
issuing process against the petitioners?
13.1. Sri. Ashwin Vaish, learned counsel for the
petitioners, submitted that even assuming that
the Commission had jurisdiction to proceed
under Section 72 of the Consumer Protection
Act, 2019, the procedure prescribed by law was
not followed. His submission is that the
Commission did not apply its mind
independently before taking cognisance and
that the order taking cognisance was passed as
a matter of formality.
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13.2. He placed reliance on Naganagouda
Veeranagouda Patil v. Malatesh H.
Kulkarni [1998 Crl. L.J. 1707] (paragraph 5),
to contend that the Court is required to
independently examine the complaint before
taking cognisance. He also relied upon
Mohammed Kutty v. Mohammed [2006 Crl.
L.J. 3601] (paragraph 6), in support of the
submission that the Magistrate is required to
personally examine the complainant under
Section 200 of the CrPC.
13.3. According to learned counsel, these
requirements were not complied with in the
present case. He therefore submitted that the
order taking cognisance suffers from non-
application of mind.
13.4. Sri. V. Rangaramu, learned counsel appearing
for respondent No.2, submitted that the
procedure prescribed by law was duly followed.
He pointed out that a complaint under Sections
71 and 72 of the CP Act was filed and that the
sworn statement of the complainant was
recorded. Thereafter, the Commission,
exercising the powers of a deemed Judicial
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Magistrate of the First Class, considered the
material and formed the opinion that a prima
facie case was made out.
13.5. He submitted that these were the steps
required at the stage of taking cognisance in a
summary proceeding under Section 72 of the
CP Act and that no further enquiry was
necessary at that stage.
13.6. The procedure to be followed has to be
considered having regard to the nature of the
proceeding. A proceeding under Section 72 is a
summary proceeding. Section 72(3) expressly
provides that the offence shall be tried
summarily.
13.7. The Commission was therefore required to
follow the procedure applicable to a Magistrate
taking cognisance of an offence on a complaint,
subject to the provisions relating to summary
trial. It was not necessary for the Commission
to follow the procedure applicable to a regular
criminal trial before taking cognisance and
issuing process.
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13.8. The requirement at this stage has to be
understood in that context. The question is
whether the Commission followed the
procedure required for taking cognisance and
whether it had sufficient material to form a
prima facie opinion.
13.9. It is useful, at this stage, to notice what is
meant by a summary trial. Section 72(3) of the
CP Act provides that the offence shall be “ tried
summarily ”. The expression has a specific
meaning under the CrPC.
13.10. Chapter XXI of the CrPC, comprising Sections
260 to 265, deals with summary trials. Section
260 specifies the Magistrates who may try
cases summarily and the offences which may
be so tried. Section 262 provides that, in a
summary trial, the procedure prescribed for the
trial of summons cases is to be followed,
subject to the modifications contained in the
said Chapter. Section 263 provides for a brief
record of the proceedings. Section 264 requires
the Court, where the accused does not plead
guilty, to record the substance of the evidence
and a brief statement of the reasons for the
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finding. Section 265 deals with the language of
such record and judgment.
13.11. The object of Chapter XXI is to provide a
simpler and quicker procedure than the
procedure followed in an ordinary criminal trial.
13.12. Section 262 reads as under:
“262. Procedure for summary trials .—(1) In trials
under this Chapter, the procedure specified in this Code
for the trial of summons-case shall be followed except as
hereinafter mentioned.
(2) No sentence of imprisonment for a term exceeding
three months shall be passed in the case of any conviction
under this Chapter.”
13.13. Section 72 of the CP Act contains two features
which are relevant for the present purpose.
First, Section 72(3) does not merely permit a
summary trial. It mandates that the offence
“ shall be tried summarily ”. Second, Section
72(2) begins with the words “ Notwithstanding
anything contained in the Code of Criminal
Procedure, 1973 ” and thereafter confers on the
Commission the powers of a Judicial Magistrate
of the First Class for the trial of the offence
under Section 72(1).
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13.14. The use of the non-obstante clause is
significant. Section 72(1) provides for
punishment which may extend to three years.
The legislature, therefore, specifically provided
that the offence under Section 72 could be tried
summarily by the Commission notwithstanding
anything contained in the Code of Criminal
Procedure.
13.15. Sections 4(2) and 5 of the CrPC also recognise
the operation of a special procedure prescribed
by another enactment. The position is therefore
clear. The procedure relating to summary trials
under the Code applies to proceedings under
Section 72, subject to the special provisions
contained in Section 72 of the CP Act.
13.16. This Court is conscious that Section 262(2) of
the CrPC ordinarily restricts the sentence that
may be imposed in a summary trial, whereas
Section 72(1) of the CP Act provides for a
higher punishment. The apparent inconsistency
does not arise for consideration at the present
stage. Section 72 contains a specific provision
governing the offence and also begins with a
non-obstante clause. The punishment
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prescribed by Section 72(1) is therefore the
punishment specifically provided by the special
enactment.
13.17. This Court is not required, in the present
proceedings, to decide the extent of
punishment that may ultimately be imposed in
a summary trial under Section 72 of the CP Act.
That question does not arise while considering
whether cognisance was properly taken and
process was issued. The reference to Section
262 of CrPC is only for explaining the nature of
the procedure contemplated by Section 72 of
the CP Act.
13.18. Once the nature of the proceeding is kept in
view, the principal objection raised by the
petitioners cannot be accepted. The
Commission was not required to conduct a
regular criminal trial before taking cognisance
and issuing process. At that stage, it was
required to receive the complaint, examine the
complainant in accordance with Section 200 of
the CrPC and consider whether the material
disclosed a prima facie case.
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13.19. The record shows that these steps were
followed. The complaint was filed under Section
200 of the CrPC, the sworn statement of the
complainant was recorded and the Commission
thereafter formed a prima facie opinion
regarding the alleged non-compliance.
13.20. The reference made by the petitioners to
Kamlesh Aggarwal is also relevant in this
context. Though the said decision has been
distinguished while considering Point No.(i) on
the question of forum, the reference therein to
“ the procedure under Section 262… of the Code
of Criminal Procedure ” in paragraph 16 remains
relevant for understanding the nature of the
proceedings. It supports the conclusion that
proceedings for non-compliance are to follow
the summary procedure contemplated by the
CrPC.
13.21. The record, therefore, shows compliance with
the procedure required at the stage of taking
cognisance. A complaint under Section 200 of
the CrPC was filed and the sworn statement of
the complainant was recorded. The Commission
was of the opinion that there is a prima facie
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case before taking cognisance and issuing
summons. These are the relevant steps at the
threshold. The Commission was not required to
conduct a detailed examination of the entire
case or record a finding on every aspect of the
alleged offence before issuing process.
13.22. The decisions relied upon by learned counsel
for the petitioners do not assist the petitioners
on the facts of the present case.
13.23. In Mohammed Kutty the Court considered the
requirement under Section 200 of the CrPC. In
paragraph 6, it was observed: “The mandate of
Section 200 Cr.P.C is that the magistrate shall
examine the complainant and the witnesses
present” and further “It is the duty of the
magistrate to examine the complainant” . There
is no dispute with the said proposition. The
question is whether that requirement was
complied with in the present case. The answer
is in the affirmative. The record specifically
shows that the sworn statement of the
complainant was recorded. Thus, the
requirement considered in Mohammed Kutty
was complied with in the present case.
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13.24. The decision in Naganagouda Veeranagouda
Patil , is also of no assistance to the petitioners.
In paragraph 5, the Court emphasised the need
for independent consideration of the complaint
and observed that “the Court has an
unrestricted opportunity of independently
examining the complaint” . The complainant's
sworn statement was recorded and the
Commission thereafter formed its own view
that a prima facie case existed.
13.25. The actual issue considered in Naganagouda
(paragraph 2) was whether the complainant's
advocate could conduct the examination-in-
chief of the complainant. That question does
not arise in the present case. The principle laid
down in the said decision is therefore not
violated.
13.26. Learned counsel for the petitioners further
submitted that the Commission ought to have
made a deeper enquiry into whether the
alleged non-compliance was wilful before taking
cognisance. This submission cannot be
accepted at the stage at which cognisance was
taken. At that stage, the Commission was
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required to consider whether the complaint and
the material placed before it disclosed a prima
facie case of non-compliance. A detailed
enquiry into the defence of the accused was not
necessary before issuing process.
13.27. The petitioners may contend during the course
of the proceedings that the non-compliance was
not wilful, that they had no role in the alleged
default, or that there were other circumstances
which prevented compliance with the order.
Those are matters which can be considered in
the proceedings in accordance with law.
13.28. They cannot, however, be treated as grounds
for holding that cognisance itself was bad when
the Commission had before it a complaint
alleging non-compliance and had recorded the
complainant's sworn statement. The allegation
of non-application of mind also cannot be
accepted on the material placed before this
Court.
13.29. The petitioners have not pointed to any
material in the record to show that the
Commission failed to independently consider
the complaint or that it merely acted on the
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submissions of the complainant or his counsel.
What the record shows is that the complaint
was received, the sworn statement of the
complainant was recorded and the Commission
thereafter formed a prima facie opinion. The
mere assertion that there was non-application
of mind is not sufficient to interfere with the
order. The material on record must disclose
such failure. No such material has been shown
in the present case.
13.30. This Court must also keep in view the limited
scope of interference under Articles 226 and
227 of the Constitution. At this stage, this
Court is not required to re-appreciate the
material in the manner of an appellate court.
The question is whether the Commission
followed the procedure prescribed by law and
whether there was material before it to take
cognisance. On the record available, the
required procedure was followed. The
complainant was examined and the
Commission recorded its satisfaction that a
prima facie case existed.
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13.31. This Court answers point No.(ii) by holding that
the District Commission complied with the
procedural requirements applicable to a
proceeding under Section 72 of the CP Act. A
complaint under Section 200 of the CrPC was
received, the sworn statement of the
complainant was recorded and the Commission
formed a prima facie opinion before taking
cognisance and issuing process. At the stage of
taking cognisance, the Commission was not
required to conduct a detailed enquiry into the
defence of the petitioners or determine all
questions relating to wilful non-compliance.
Such matters could be considered in the
proceedings in accordance with law.
Accordingly, the challenge to the order of
taking cognisance on the ground of non-
compliance with the procedure prescribed
under Section 72 of the CP Act and the CrPC
fails.
14. Answer to Point No. (iii): Whether the issuance
of Non-Bailable Warrants against the petitioners
pursuant to the order dated 08.02.2024 is
sustainable in law, particularly when summons
had not been duly served, and the statutory
prerequisites for resorting to coercive process
are alleged to be absent?
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14.1. Sri. Ashwin Vaish, learned counsel for the
petitioners, submitted that a Non-Bailable
Warrant could not have been issued in the
present proceedings, particularly when
summons had not been duly served upon the
petitioners.
14.2. He submitted that Section 71 of the CP Act
deals with enforcement of an order as a decree
and that the proceedings under the said
provision are civil in nature. According to him,
therefore, an arrest warrant could not have
been issued in the execution proceedings.
14.3. Learned counsel further submitted that even if
the proceedings under Section 72 of the CP Act
are treated as penal proceedings, the
Commission could not have straightaway issued
a Non-Bailable Warrant at the instance of the
decree-holder. According to him, the
Commission was required to follow the normal
and graduated procedure for securing the
presence of the accused.
14.4. He relied upon Inder Mohan Goswami v.
State of Uttaranchal [(2007) 12 SCC 1]
(paragraph 55) in support of the submission
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that a Non-Bailable Warrant should be issued
only when the Court is satisfied that the
accused is avoiding the proceedings. He also
relied upon Jolly George Varghese v. Bank
of Cochin [(1980) 2 SCC 360] (paragraph 10)
to contend that personal liberty cannot be
interfered with merely because an amount is
due and that there must be a finding of wilful
default.
14.5. Sri.V.Rangaramu, learned counsel appearing for
respondent No.2, submitted that summons had
been issued to the petitioners and that the
same was returned with the endorsement
“left”. He submitted that the Commission,
having been conferred with the powers of a
Judicial Magistrate of the First Class under
Section 72(2) of the CP Act, was competent to
issue a Non-Bailable Warrant for securing the
presence of the petitioners when they failed to
appear.
14.6. According to learned counsel, the subsequent
steps taken by the Commission were therefore
in accordance with law.
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14.7. The challenge to the Non-Bailable Warrants has
to be examined with reference to the
circumstances in which they came to be issued.
The fact that the proceedings arise out of an
execution application does not, by itself,
determine whether a warrant could be issued.
It is necessary to see whether the warrant was
issued in the execution proceedings under
Section 71 of the CP Act or in the proceedings
under Section 72 of the CP Act and, in the
latter case, whether the requirements for
issuing such process were satisfied.
14.8. The sequence of events has been set out
hereinabove. After cognisance was taken,
summons was issued. The first Non-Bailable
Warrant was issued on 06.04.2024. It was
thereafter re-issued on 29.05.2024,
18.07.2024 and 21.09.2024. On each occasion,
the warrant could not be executed. On
27.11.2024, the warrant was returned with the
report that the judgment-debtor had “vacated
the premises”.
14.9. Thus, the record shows that the ordinary
process had not secured the presence of the
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persons against whom process had been
issued. The first Non-Bailable Warrant was not
issued immediately after cognisance was taken.
It was issued after summons had been issued
which was returned with the endorsement
“left”. The subsequent repeated attempts to
execute the warrant also did not result in
securing their presence. Even assuming that
the summons had not been served because the
petitioners had left the premises, the fact
remains that the ordinary process had failed to
secure their presence. If, on the other hand,
the summons was duly served and the
petitioners did not appear, that would also be a
relevant circumstance while considering the
further process to be issued.
14.10. The question, therefore, is whether the
subsequent issue of the Non-Bailable Warrant
was justified in the circumstances.
14.11. Learned counsel for the petitioners relied upon
Inder Mohan Goswami . The said decision
lays down that the power to issue a Non-
Bailable Warrant has to be exercised carefully
and that the Court should ordinarily adopt a
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graduated approach. In paragraph 55, the
Hon'ble Supreme Court observed “…In the third
instance, when the court is fully satisfied that
the accused is avoiding the court’s proceeding
intentionally, the process of issuance of the
non-bailable warrant should be resorted to…” .
14.12. The principle laid down in the said decision is
that a Non-Bailable Warrant should not
ordinarily be issued as a matter of course or at
the first instance. The Court must consider
whether the ordinary process has failed and
whether the circumstances justify the use of a
more coercive process.
14.13. In the present case, the first Non-Bailable
Warrant was issued only after summons.
Thereafter, repeated attempts were made to
execute the warrant. Those attempts were
unsuccessful and the last report stated that the
judgment-debtor had “vacated the premises”.
14.14. The facts therefore show that the ordinary
process had not been effective in securing the
presence of the petitioners. The circumstances
were sufficient for the Commission to consider
the use of further process.
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14.15. It was next contended that the Non-Bailable
Warrant had been issued merely at the instance
of the decree-holder. The sequence of dates
does not support this submission. Cognisance
was taken and summons was issued on
08.02.2024. The first Non-Bailable Warrant was
issued only on 06.04.2024. Thus, the warrant
was not issued immediately upon taking
cognisance. It followed the failure of the
summons process to secure the appearance of
the petitioners.
14.16. It was also submitted that the Commission had
not expressly recorded that the petitioners
were avoiding the proceedings. There is no
requirement that the Court must use any
particular words or formula while issuing a
warrant. What has to be seen is whether the
circumstances before the Court justified the
decision. In the present case, summons had
been issued, the petitioners had not appeared,
and repeated attempts thereafter to execute
the warrants had failed. The last report stated
that the premises had been vacated. These
circumstances were available to the
Commission when it continued the process.
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Therefore, it cannot be said that the Non-
Bailable Warrant was issued mechanically or
without any material before the Commission.
14.17. Learned counsel for the petitioners also relied
upon Jolly George Varghese (paragraph 1).
That decision concerned detention of a
judgment-debtor in execution proceedings
under the proviso to Section 51 of the Code of
Civil Procedure. The Hon'ble Supreme Court
considered the circumstances in which a
judgment-debtor could be detained in civil
prison for non-payment of a decree. In
paragraph 10, the Hon'ble Supreme Court
observed: “this is precisely the interpretation
we have put on the proviso to Section 51 CPC”.
In paragraph 11, the Court further observed
that it had “harmonised Section 51 with the
Covenant and the Constitution”.
14.18. The facts and the legal setting of that case are
different from the present case. The warrant
under consideration here was not issued as a
mode of enforcing payment of the decretal
amount under Section 71 of the CP Act. It was
issued in proceedings under Section 72 of the
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CP Act after cognisance of an alleged offence
had been taken.
14.19. The purpose of the warrant was to secure the
presence of the persons against whom criminal
process had been issued. It was not a direction
to detain a judgment-debtor merely because
the decretal amount had not been paid.
14.20. The principles considered in Jolly George
Varghese (paragraph 10) regarding detention
in civil execution therefore cannot be applied in
the same manner to the present proceedings
under Section 72 of the CP Act.
14.21. The submission based on Section 71 of the CP
Act also requires consideration. It is correct that
Section 71 provides for enforcement of the
order of the Consumer Commission as if it were
a decree of a civil court. A Non-Bailable
Warrant cannot be issued merely as a means of
enforcing payment of the decretal amount
under that provision. That, however, is not the
basis on which the warrants in the present case
were issued. The warrants were issued after
cognisance had been taken under Section 72 of
the CP Act. The Commission was exercising the
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powers conferred upon it under Section 72(2).
The purpose of the warrant was to secure the
presence of the persons against whom the
proceedings under Section 72 were pending.
14.22. There is therefore no inconsistency between the
civil nature of enforcement under Section 71 of
the CP Act and the use of criminal process
under Section 72 of the CP Act.
14.23. The submission of the learned counsel for
respondent No.2 that the Commission, having
been vested with the powers of a Judicial
Magistrate of the First Class under Section
72(2) of the CP Act, was competent to issue
process for securing the presence of an accused
is well founded. The existence of the power,
however, does not mean that it can be
exercised without judicial consideration. The
Court must consider the circumstances of the
case and whether the ordinary process has
failed.
14.24. In the present case, summons had been issued.
Thereafter, the warrants were repeatedly
issued but could not be executed. The last
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report stated that the judgment-debtor had
“vacated the premises”.
14.25. There was, therefore, material before the
Commission to show that the ordinary process
had not secured the presence of the
petitioners. There is also nothing on record to
suggest that the warrants were issued for any
purpose other than securing their presence in
the proceedings.
14.26. The petitioners have also raised questions
regarding their substantive liability, including
the contention that the underlying order was
against the Company and not against them
personally and that the alleged default was not
wilful.
14.27. Those questions are separate from the question
of whether process could be issued to secure
their presence. The merits of such defences will
have to be considered in the proceedings under
Section 72 of the CP Act in accordance with
law.
14.28. At this stage, the Court is only concerned with
the validity of the process adopted for securing
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the presence of the petitioners. The fact that
the petitioners may have a defence on the
merits does not, by itself, render the warrant
illegal.
14.29. This Court answers point No.(iii) by holding that
the Non-Bailable Warrants cannot be held to be
illegal merely because the proceedings
originated in an execution application under
Section 71 of the CP Act. The warrants were
issued in the proceedings under Section 72 of
the CP Act after cognisance had been taken and
were intended to secure the presence of the
petitioners.
15. Answer to Point No. (iv): Whether the
petitioners, being Directors of the judgment-
debtor company, could be proceeded against
under Section 72 of the Consumer Protection
Act, 2019 and subjected to penal consequences
in the absence of any allegation or finding
regarding their personal responsibility, wilful
disobedience or vicarious liability?
15.1. Sri.Ashwin Vaish, learned counsel for the
petitioners, submitted that the order passed in
the consumer complaint was against M/s.
Sanchaya Land and Estate Pvt. Ltd. and not
against the petitioners in their individual
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capacity. He submitted that a company is a
legal person distinct from its Directors and that
the liability of the Company cannot
automatically be imposed upon its Directors.
15.2. According to learned counsel, before a Director
can be subjected to penal consequences for
non-compliance with an order passed against
the Company, there must be an allegation and
material showing that the particular Director
was personally responsible for the non-
compliance. If vicarious liability is sought to be
imposed, there must also be a statutory
provision which permits such liability.
15.3. He further submitted that Section 72 of the CP
Act, read with Sections 4 and 5 of the CrPC,
required the Commission to consider the
individual role of each Director before
proceeding against him. According to him, the
Commission was required to determine whether
the petitioners had the authority and ability to
comply with the order and whether the alleged
non-compliance was deliberate or wilful.
15.4. Learned counsel relied upon Jolly George
(paragraph 11) in support of the submission
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that a person cannot be subjected to coercive
consequences merely because an order for
payment has not been complied with and that
deliberate default is relevant before a person
can be deprived of his liberty.
15.5. Sri.V.Rangaramu, learned counsel appearing for
respondent No.2, submitted that the
consequence under Section 72 of the CP Act
follows from non-compliance with an order of
the Consumer Commission. He submitted that
the petitioners are Directors of the judgment-
debtor Company and are responsible for the
management and affairs of the Company.
15.6. According to learned counsel, the Company
could act and comply with the order only
through the persons managing its affairs. The
petitioners, being its Directors, could not avoid
responsibility for the Company's non-
compliance by merely relying upon the
separate legal personality of the Company.
15.7. He further submitted that the Commission was
acting as a deemed Judicial Magistrate under
Section 72(2) of the CP Act and was therefore
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justified in taking cognisance against the
petitioners.
15.8. The submission of the petitioners proceeds on
the basis that since the consumer order was
passed against the Company, the Directors
cannot be proceeded against under Section 72
of the CP Act. This submission, in the opinion of
this Court, cannot be accepted in the manner in
which it has been put forward.
15.9. It is true that a company is a juristic person
separate from its Directors. The Company has
its own legal identity and its liabilities cannot
ordinarily be treated as the personal liabilities
of its Directors. But that is not the real question
in the present proceedings. The question is
whether the persons who were responsible for
the affairs of the Company and for ensuring
compliance with the order can be proceeded
against when the Company has failed to comply
with the order.
15.10. A company is an artificial legal person. It has
no physical existence and cannot, by itself, take
any step. Every act of the Company is
necessarily performed through the persons who
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are in charge of its affairs. Compliance with an
order passed against the Company is no
exception.
15.11. The legal personality of the Company therefore
cannot be used as a shield by the persons who
were responsible for managing its affairs and
ensuring compliance with the order.
15.12. Section 72(1) of the CP Act provides for
punishment where a person “fails to comply
with any order” of the Commission. The
provision has to be understood in the context of
the nature of the obligation imposed by the
order. Where the order is directed against a
Company, the Company is required to comply
with it. But the Company can comply only
through its Directors or other persons who are
entrusted with the management of its affairs. If
the persons responsible for the management of
the Company were permitted to avoid the
consequences of non-compliance merely by
stating that the order was against the Company
and not against them personally, the penal
provision could easily be defeated in every case
involving a corporate judgment-debtor. That
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cannot be the object of Section 72 of the CP
Act.
15.13. The separate legal personality of a company
protects its Directors from being treated as
personally liable for every corporate debt. It
does not protect a Director from liability for his
own acts or omissions in relation to the
Company's failure to comply with a binding
order. This distinction between decretal liability
and responsibility for compliance is important.
15.14. The petitioners are not being proceeded against
under Section 72 of the CP Act merely for the
purpose of recovering the amount awarded
against the Company from their personal
assets. The civil liability to satisfy the consumer
order and the penal consequence arising from
failure to comply with that order are distinct.
15.15. Section 71 of the CP Act provides the
mechanism for enforcement of the order.
Section 72 of the CP Act deals with the
consequence of non-compliance. Therefore, the
fact that the petitioners may not be personally
liable for the Company's debt does not answer
the question whether they can be proceeded
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against for the Company's failure to comply
with the order when they themselves were
responsible for the affairs of the Company.
15.16. A Director cannot say that because the
Company is a separate legal entity, he has no
responsibility whatsoever for acts which he was
himself required to undertake on behalf of the
Company. The material placed before this Court
shows that the petitioners are the Directors of
the judgment-debtor Company. The Company
was required to comply with the order passed
by the Consumer Commission. The petitioners,
being Directors responsible for the affairs of the
Company, were the persons through whom the
Company was required to act. It would be
unrealistic to accept the submission that the
Company had an independent physical
existence through which it could comply with
the order without any action on the part of its
Directors or persons managing its affairs.
15.17. The responsibility of the Directors is not based
merely upon the fact that they have been given
the designation of Director. It arises from their
position in the management of the Company
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and their responsibility to ensure that the
Company complies with orders binding upon it.
15.18. In the circumstances of the present case, the
petitioners cannot, at the threshold, disown
responsibility for compliance merely by relying
upon the separate legal personality of the
Company. The contention that there must first
be a final finding regarding the individual role
of each Director also cannot be accepted.
15.19. At the stage of taking cognisance, the
Commission was not required to conduct a
detailed trial regarding the internal functioning
of the Company. It was required to examine
whether the complaint and the material placed
before it disclosed a prima facie case of non-
compliance and whether the persons proceeded
against were connected with the Company and
its affairs.
15.20. The petitioners admittedly occupy the position
of Directors. The Company was the judgment-
debtor and was required to comply with the
order. The complaint alleged non-compliance.
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15.21. These circumstances were sufficient for the
Commission to take cognisance and issue
process. The question whether one Director had
a greater role than another, whether any
particular Director was in charge of the relevant
affairs, and whether any Director had a specific
reason for not being able to comply are matters
which can be examined in the proceedings. A
final finding of guilt is not required before
process can be issued.
15.22. This does not mean that every person who
happens to be described as a Director is
automatically guilty under Section 72 of the CP
Act. The criminal liability has ultimately to rest
upon responsibility for the conduct which
constitutes the offence. A Director who had no
connection with the affairs relevant to
compliance, or who had ceased to be a Director
before the relevant period, or who had no
authority or responsibility in relation to the
subject matter of the order, may place those
circumstances before the Commission. But that
is a matter of defence.
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15.23. A Director who was in charge of and
responsible for the affairs of the Company
cannot avoid the proceedings merely by saying
that the order was addressed to the Company.
The distinction, therefore, is between automatic
liability by reason of designation, which cannot
be accepted, and liability arising from
responsibility for the affairs and compliance of
the Company, which can be examined and
established in the proceedings.
15.24. The petitioners have also contended that there
is no finding that the alleged disobedience was
wilful. The submission requires consideration in
the context of the stage of the proceedings. The
Commission, while taking cognisance, was not
required to record a final finding that the
petitioners had deliberately disobeyed the
order. Such a finding would require
consideration of the evidence and the defence
of the accused.
15.25. At the stage of cognisance, the Commission
had to determine whether there was sufficient
ground to proceed. The subsequent conduct of
the petitioners is also relevant in this context.
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As noticed while considering Point No.(iii),
summons was issued, and thereafter Non-
Bailable Warrants were repeatedly issued but
could not be executed. The last report stated
that the judgment-debtor had “vacated the
premises”. These circumstances do not by
themselves establish guilt. They do, however,
provide the surrounding circumstances in which
the Commission was required to deal with the
alleged non-compliance. The question of
wilfulness can therefore be examined during
the proceedings and need not have been
conclusively decided at the stage of taking
cognisance.
15.26. The argument that there is no express
provision in Section 72 of the CP Act creating
vicarious liability also does not, in the
circumstances of this case, warrant quashing of
the proceedings at the threshold. The
petitioners have proceeded on the basis that
they are being made liable merely because they
are Directors. That is not the correct manner in
which the proceedings are to be understood.
The case against the petitioners is that they
were Directors responsible for the affairs of the
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judgment-debtor Company and that the
Company failed to comply with the order of the
Consumer Commission. The liability alleged
against them is therefore connected with their
responsibility for the Company's compliance
and not merely with the fact that their names
appear in the records of the Company. Where
the material before the Commission shows that
the persons proceeded against were the
persons responsible for the affairs of the
Company, the absence of an automatic
deeming provision does not prevent the
Commission from examining their individual
responsibility in the proceedings.
15.27. It is also necessary to bear in mind that Section
72(2) of the CP Act expressly confers upon the
Consumer Commission the powers of a Judicial
Magistrate of the First Class for trying offences
under Section 72 of the CP Act. The
Commission was therefore exercising a penal
jurisdiction distinct from its jurisdiction to
enforce the order as a decree under Section 71
of the CP Act.
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15.28. Once cognisance was taken of the alleged
offence of non-compliance, the Commission
was entitled to proceed against the persons
whom the complaint and material disclosed as
being responsible for the Company's affairs and
compliance. The petitioners cannot, therefore,
succeed merely by showing that the original
consumer order was addressed to the
Company.
15.29. The petitioners have urged that they are
merely Directors and that the Company is a
separate legal entity. The expression “merely
Directors” cannot, however, be considered in
isolation. A Director may occupy different
positions depending upon the nature of the
Company, the manner in which its affairs are
conducted and the responsibilities entrusted to
him. A person who is actively managing the
Company and is responsible for its affairs
stands on a different footing from a person who
has no role in the management. In the present
case, the petitioners have been shown as
Directors of the judgment-debtor Company.
The Company was required to comply with the
order. The petitioners, being persons
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responsible for its affairs, cannot at the
threshold contend that they had no
responsibility whatsoever for ensuring
compliance.
15.30. Whether they can establish otherwise is a
matter for the proceedings before the
Commission. The Court must also distinguish
between the question of taking cognisance and
the question of establishing guilt. At the stage
of cognisance, the Commission is not required
to determine the entire case finally. It has to
consider whether there is sufficient material to
proceed. At the stage of trial, the petitioners
will have an opportunity to show that the
alleged non-compliance was not attributable to
them, that they had no control over the
relevant affairs of the Company, that they had
no authority to comply with the order, or that
there were circumstances which prevented
compliance. If such a defence is established,
the consequences will follow in accordance with
law. But the existence of a possible defence
cannot, by itself, render the initial cognisance
invalid.
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15.31. The present case is therefore not one where the
petitioners are sought to be made personally
liable for the Company's debt merely because
they are Directors. The proceedings concern
alleged non-compliance with an order of the
Consumer Commission. The Company was
required to comply with that order, and the
petitioners, as Directors responsible for its
affairs, were the persons through whom such
compliance was required to be effected. The
responsibility of the petitioners is therefore not
founded merely on their designation. It is
founded on their position as persons
responsible for the affairs of the judgment-
debtor Company and for ensuring compliance
with the order binding upon it.
15.32. The separate legal personality of the Company
cannot be permitted to defeat proceedings for
an alleged failure which was within the
responsibility and control of the persons
managing the Company. At the same time, this
Court makes it clear that the finding that the
petitioners were responsible for the affairs of
the Company at the relevant time does not
amount to a finding of guilt under Section 72 of
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the CP Act. The prosecution or complainant
must still establish the ingredients of the
offence against the particular petitioners in
accordance with law.
15.33. The Commission will have to consider the
material placed before it, including any
explanation or defence raised by the
petitioners, and thereafter determine whether
the alleged non-compliance is attributable to
them.
15.34. Thus, while the petitioners cannot claim
immunity merely because the order was passed
against the Company, their ultimate penal
liability has to be determined with reference to
their individual responsibility.
15.35. This Court answers Point No. (iv) by holding
that the consumer order was passed against
M/s. Sanchaya Land and Estate Pvt. Ltd. , which
is a separate legal entity. That, however, does
not by itself prevent proceedings under Section
72 of the CP Act against its Directors who were
responsible for the affairs of the Company and
for ensuring compliance with the order. A
company can act only through its Directors and
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persons managing its affairs. The petitioners,
being Directors responsible for the affairs of the
judgment-debtor Company, were responsible
for taking the necessary steps to secure
compliance with the order. They cannot avoid
the operation of Section 72 of the CP Act
merely by relying upon the separate legal
personality of the Company. At the same time,
this Court does not hold that every Director is
automatically guilty of an offence under Section
72 of the CP Act merely by reason of holding
the office of Director. What is relevant is the
responsibility of the particular Director for the
affairs of the Company and for compliance with
the order.
15.36. In the present case, there was sufficient basis
for the Commission to proceed against the
petitioners at the stage of cognisance. The
Commission was not required at that stage to
conduct a full enquiry or record a final finding
regarding their individual responsibility or
wilfulness. The questions whether the
petitioners were in charge of the affairs of the
Company, whether they had the authority and
ability to secure compliance, whether the non-
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compliance was attributable to them and
whether their conduct was wilful can be
considered in the proceedings under Section 72
of the CP Act.
16. Answer to Point No. (v): Whether the impugned
order dated 08.02.2024 taking cognisance and
all consequential proceedings, including the
issuance of Non-Bailable Warrants, call for
interference by this Court in exercise of its
supervisory jurisdiction under Articles 226 and
227 of the Constitution of India?
16.1. Sri. Ashwin Vaish, learned counsel for the
petitioners, submitted that the impugned order
and the proceedings which followed are liable
to be interfered with under Articles 226 and
227 of the Constitution.
16.2. His submission was that the Execution Court
had adopted a procedure not known to law by
treating the execution proceedings as a criminal
complaint and thereafter taking cognisance
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under Section 72 of the CP Act. He further
submitted that there was no finding regarding
the individual responsibility of the petitioners,
who are Directors of the judgment-debtor
Company.
16.3. It was also contended that the Non-Bailable
Warrants were issued without proper service of
summons and without satisfying the
requirements governing the issue of such
coercive process.
16.4. According to learned counsel, these defects go
to the root of the proceedings and, therefore,
the order dated 08.02.2024 as well as all
consequential proceedings are liable to be set
aside.
16.5. Sri.V.Rangaramu, learned counsel appearing for
respondent No.2, submitted that there is no
illegality in the impugned order warranting
interference by this Court. According to him,
the Commission acted within the jurisdiction
conferred upon it by Section 72 of the CP Act
and followed the procedure applicable to the
proceedings.
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16.6. He further submitted that the petitioners have
an opportunity to appear before the
Commission and place their defence and that
there is no justification for invoking the
extraordinary jurisdiction of this Court to stop
the proceedings at this stage.
16.7. The present point is the culmination of the
issues considered earlier. The objections raised
by the petitioners have already been examined
while answering the preceding points.
16.8. On Point No.(i), this Court has held that the
Commission had jurisdiction to take cognisance
of the alleged offence under Section 72 of the
CP Act. The decisions rendered under the
earlier enactments, relied upon by the
petitioners, have also been considered and
found not to govern the present proceedings in
view of the scheme of the Consumer Protection
Act, 2019.
16.9. On Point No.(ii), this Court has held that the
procedure adopted by the Commission cannot
be said to be a procedure unknown to law.
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16.10. On Point No.(iii), this Court has held that the
issuance and subsequent re-issuance of the
Non-Bailable Warrants cannot be said to be
wholly unjustified in the facts of the case,
particularly when the petitioners did not appear
and the process issued by the Court could not
be executed.
16.11. On Point No.(iv), this Court has held that the
fact that the original consumer order was
passed against the Company does not, by itself,
prevent proceedings under Section 72 of the CP
Act against the Directors who were responsible
for the affairs of the Company and for ensuring
compliance with the order.
16.12. In view of these findings, the principal grounds
urged by the petitioners for interference do not
survive.
16.13. The jurisdiction of this Court under Articles 226
and 227 of the Constitution is wide. However,
Article 227 is not an appellate jurisdiction.
Interference is warranted only where the order
under challenge suffers from lack of
jurisdiction, patent illegality, material
procedural irregularity resulting in failure of
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justice, or any other exceptional circumstance
requiring intervention.
16.14. In the present case, no such ground is made
out.
16.15. This finding is confined to the question whether
the proceedings can be maintained against the
petitioners. It does not amount to a finding of
guilt. The petitioners are entitled to establish
before the Commission that the alleged non-
compliance was not attributable to them or that
the ingredients of the offence are otherwise not
established.
16.16. These are matters which can properly be
considered by the Commission in the
proceedings under Section 72 of the CP Act.
Section 72(2) treats the Commission as a
Judicial Magistrate of the First Class “for the
purposes of the Code of Criminal Procedure”.
The petitioners can therefore appear before the
Commission and raise all objections and
defences available to them in law.
16.17. The availability of another remedy does not, as
an absolute rule, bar the jurisdiction of this
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Court under Articles 226 and 227. It is
nevertheless a relevant consideration in
deciding whether that discretionary jurisdiction
should be exercised. In the present case, the
Commission is already seized of the matter and
is competent to consider the objections raised
by the petitioners. The petitioners have not
appeared before the Commission to place their
defence. No exceptional circumstance has been
shown which requires this Court to bypass the
proceedings pending before the competent
forum.
16.18. The object of the Consumer Protection Act,
2019 also requires the proceedings to be
allowed to proceed without unnecessary
interruption. Section 71 of the CP Act provides
for enforcement of the orders of the
Commission, while Section 72 of the CP Act
deals with failure to comply with such orders.
The statutory scheme would be defeated if
proceedings for non-compliance could be
stalled at the threshold without any
jurisdictional defect being established.
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16.19. At the same time, the Court is conscious that
the proceedings under Section 72 of the CP Act
are penal in nature. The petitioners are entitled
to all safeguards available in law, and their guilt
cannot be presumed merely because
cognisance has been taken or a Non-Bailable
Warrant has been issued. Their defence has to
be considered by the competent Court.
16.20. The conduct of the petitioners is relevant only
to the question of exercise of discretionary
jurisdiction. The record shows that summons
was issued, followed by repeated attempts to
secure their presence, and that the warrants
could not be executed. This Court is not
treating their absence as proof of guilt.
However, in the absence of any jurisdictional
defect or patent illegality, such circumstances
do not justify terminating the proceedings at
the instance of persons who have not appeared
before the Court dealing with the matter.
16.21. The present case, therefore, does not call for
exercise of the supervisory jurisdiction of this
Court. The Commission has acted within the
jurisdiction conferred upon it by Section 72 of
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the CP Act. The petitioners' objections
concerning their individual responsibility can be
examined in the proceedings before the
Commission. No error has been shown which
goes to the root of the proceedings or warrants
their termination at this stage.
16.22. This Court answers point no.(v) by holding that
the impugned order dated 08.02.2024 taking
cognisance and the consequential proceedings,
including the issuance of Non-Bailable
Warrants, do not call for interference under
Articles 226 and 227 of the Constitution. The
Commission had jurisdiction under Section 72
of the CP Act. The petitioners, being Directors
responsible for the affairs of the judgment-
debtor Company, can be proceeded against
under the said provision. Their ultimate liability
and the defences available to them are matters
to be considered by the Commission in
accordance with law.
17. Answer to Point No. (vi): What Order?
17.1. For the reasons recorded, and in terms of the
answers to the points, this Court passes the
following:
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ORDER
(i) The writ petition is dismissed .
(ii) The petitioners shall appear before the
II Additional District Consumer Disputes
Redressal Commission, Bengaluru
Urban, in E.A.No.10/2024, and may
place before it whatever defence is open
to them, including any contention
regarding the personal responsibility of
either petitioner for the default of the
company. The Commission, exercising
the powers of a Judicial Magistrate of
the First Class under Section 72 of the
Consumer Protection Act, 2019, shall
consider such defence and shall proceed
with the matter in accordance with law.
(iii) The enforcement of the order in
C.C.No.494/2016 under Section 71 of
the Consumer Protection Act, 2019 read
with Order XXI of the Code of Civil
Procedure may proceed independently
and in accordance with law.
This Court has been assisted by Mr.
Sourav, Law Clerk, in reviewing this
judgement.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
SR
List No.: 2 Sl No.: 2