1998 JTR(SC) 113
1999 AIR(SC) 80 ; 1998 AIR(SCW) 3430 ; 1998 2 AllCJ 904 ; 1998 33 AllLR 590 ; 1998 3 AWC 1962 ; 1998 DNJ 255 ; 1998 4 JT 322 ; 1998 2 MLJ 65 ; 1999 1 RLW(Raj) 3 ; 1998 3 SCC 247 ; 1998 2 SLJ 1276 ; 1998 KHC 843 ; 1998 8 Supreme 544
1998(8) Supreme 544
Supreme Court of India
S.P. Bharucha & V.N. Khare, JJ.
Marine Container Services South Pvt. Ltd. -Appellant
versus
Go Go Garments -Respondent
Civil Appeal No. 446 of 1998
(Arising out of SLP(C) No. 8436 of 1997)
Decided on 23-1-1998
Act
Referred
:CONSUMER PROTECTION ACT : S.3, ., S.2(c)
CONTRACT ACT : S.230
(A) The Consumer Protection Act operates alongside the Contract Act, with Section 230 of the Contract Act addressing agent-principal contractual defenses. The National Commission erred in holding that the Contract Act does not apply to complaints under the Consumer Protection Act, as an agent retains the right to invoke Section 230 where facts support a defense arising from contract enforcement, irrespective of the consumer forum. The third clause of Section 230s presumptionsthat an agent bound by a disclosed principals contract cannot be sueddoes not bar jurisdiction when it has not been established that the principal cannot be sued in India.
(B) An agent is entitled to invoke Section 230 of the Contract Act in consumer proceedings if the dispute involves enforcement of a contract; the Consumer Protection Act does not oust the applicability of the Contract Act; and a finding that a principal is outside Indian jurisdiction must be based on evidence, not inference.
Facts of the case:
A respondent agent filed a complaint under the Consumer Protection Act alleging deficiency in services by the appellant. The appeal challenged an order of the National Consumer Disputes Redressal Commission that held Section 230 of the Contract Act did not apply to consumer complaints.
Findings of Court:
The National Commissions view that the Contract Act is inapplicable to consumer complaints was erroneous; the agent is entitled to the protection of Section 230 if the facts support it; and the presumption under the third clause of Section 230 cannot be applied without a finding that the principal cannot be sued.
Issues:
Whether Section 230 of the Contract Act applies to complaints filed under the Consumer Protection Act; whether an agent can invoke the provisions of the Contract Act in consumer proceedings; and whether a presumption under Section 230 bars adjudication without a finding on the principals enforceability.
Ratio Decidendi:
Section 230 of the Contract Act applies to consumer complaints where an agent seeks to enforce a contractual defense; the Consumer Protection Act is supplementary, not exclusive; and the third clause presumption requires a factual basis before it can oust jurisdiction.
Result:
The appeal is allowed and the order of the State Consumer Disputes Redressal Commission is restored.
(A) The Consumer Protection Act operates alongside the Contract Act, with Section 230 of the Contract Act addressing agent-principal contractual defenses. The National Commission erred in holding that the Contract Act does not apply to complaints under the Consumer Protection Act, as an agent retains the right to invoke Section 230 where facts support a defense arising from contract enforcement, irrespective of the consumer forum. The third clause of Section 230s presumptionsthat an agent bound by a disclosed principals contract cannot be sueddoes not bar jurisdiction when it has not been established that the principal cannot be sued in India.
(B) An agent is entitled to invoke Section 230 of the Contract Act in consumer proceedings if the dispute involves enforcement of a contract; the Consumer Protection Act does not oust the applicability of the Contract Act; and a finding that a principal is outside Indian jurisdiction must be based on evidence, not inference.
Facts of the case:
A respondent agent filed a complaint under the Consumer Protection Act alleging deficiency in services by the appellant. The appeal challenged an order of the National Consumer Disputes Redressal Commission that held Section 230 of the Contract Act did not apply to consumer complaints.
Findings of Court:
The National Commissions view that the Contract Act is inapplicable to consumer complaints was erroneous; the agent is entitled to the protection of Section 230 if the facts support it; and the presumption under the third clause of Section 230 cannot be applied without a finding that the principal cannot be sued.
Issues:
Whether Section 230 of the Contract Act applies to complaints filed under the Consumer Protection Act; whether an agent can invoke the provisions of the Contract Act in consumer proceedings; and whether a presumption under Section 230 bars adjudication without a finding on the principals enforceability.
Ratio Decidendi:
Section 230 of the Contract Act applies to consumer complaints where an agent seeks to enforce a contractual defense; the Consumer Protection Act is supplementary, not exclusive; and the third clause presumption requires a factual basis before it can oust jurisdiction.
Result:
The appeal is allowed and the order of the State Consumer Disputes Redressal Commission is restored.
Order
Special leave granted.
2. The respondent has been served and has put in an appearance and filed a counter. It was not represented when the SLP had been called out on an earlier date, when it was adjourned due to its absence. It is not represented today, even after the SLP has been passed over once.
3. The order that is under appeal was passed by the National Consumer Disputes Redressal Commission. It says:
“In our opinion, Section 230 of the Contract Act in terms will apply only to suits instituted before a regular Civil Court and not to complaints filed under the Consumer Protection Act which is a special legislation intended to protect consumers in India against the exploitation of manufactures, traders and providers of service by supply of defective goods or by deficiency in service resulting in loss to the consumer.”
The National Commission took the view that, inasmuch as the respondent was pursuing the remedy available to it under the provision of the Consumer Protection Act and had claimed that it had hired the services of the appellant and there was deficiency in rendering such services, its complain was maintainable, for the protection given to an agent under Section 230 of the Contract Act was available only when the action arose out of or in relation to the enforcement of a contract.
4. We are not a little surprised to read that the Contract Act does not apply to complaints filed under the Consumer Protection Act. The Contract Act applies to all the litigants before the Commission under the Consumer Protection Act included. Whether in proceedings before the Commissioner or otherwise, an agent is entitled to invoke the provisions of Section 230 of the Contract Act and, if the facts found support him, his defense based thereon cannot be brushed away.
5. The District Consumer Disputes Redressal Forum, Madras, before whom the respondent had instituted the claim, had found in favour of the appellant, both on the basis of Section 230 of the Contract Act as also on the issue of limitation. The State Consumer Disputes Redressal Commission, Madras, in appeal, upheld the decision of the District Forum based on Section 230 of the Contract Act and, therefore, found it unnecessary to consider the aspect of limitation. The National Forum, as aforesaid, took the contrary view on the applicability of Section 230 of the Contract Act on the mistaken basis referred to above as also by reliance on the third clause of the presumptions to the contrary in Section 230, that is to say that an agent is bound by a contract entered into by his principal who, though disclosed, cannot be sued. That the principal here is “some company in Taiwan situated far outside the jurisdiction of the consumer courts in India” does not mean that it could be inferred, for it had not been so found by the District or State Commissions, that it could not be sued.
6. The judgment and order of the National Commission is erroneous. It must be set aside and the order of the State Commission restored.
7. The appeal is, accordingly, allowed with no order as to costs.
(S.P.) Appeal allowed.
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