Case: Manohar Infrastructure and Constructions Private Limited And Ors Vs. Sanjeev Kumar Sharma and Ors

of party seeking such stay. 13. We are in complete agreement with the view taken by this Court in the case of Shreenath Corporation and Ors. (supra). Therefore, it is held that National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission while staying the order passed by the State commission. However, at the same time, while considering the stay application against the order passed by the State Commission and while passing the order to deposit the entire amount and/or any amount higher than 50 per cent of the amount, the National Commission has to assign some reasons and pass a speaking order why the conditional stay is being granted on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount. Such an order on the stay application is not to be passed mechanically. Even in the case of Shreenath Corporation and Ors. (supra), it is observed that if the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded by the State Commission, it is open to the National Commission to pass an appropriate interim order including a conditional order of stay. The order passed by the State Commission directing the appellant to refund the amount and/or pay any amount higher than 50 per cent can be said to be akin to a money decree. Even as per Order XLI Rule 5, the general rule is that normally there shall not be any unconditional stay of a money decree, however, at the same time, the Appellate Court may pass an appropriate conditional order while staying the impugned decree depending upon the facts of the case and by giving cogent reasons. Therefore, while considering the stay application requesting to stay the order passed by the State Commission and as observed and held hereinabove, the National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount while staying the order passed by the State commission, however, the National Commission has to pass a speaking order giving some reasons why in the facts of the particular case the conditional stay of the order passed by the State Commission is to be passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission and that too after giving an opportunity to the appellant as well as to the respondent. The order on the stay application is not to be passed mechanically. It must reflect an application of mind by the National Commission why the order passed by the State Commission is to be stayed on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission. However, at the same time, there is no discretion at all to stay the order passed by the State Commission subject to deposit of any amount less than 50 per cent of the amount which is required to be deposited as a pre-deposit before the appeal is entertained as per second proviso to Section 51 of the Act, 2019. 14. Now in so far as the various orders passed by this Court relied upon by the learned counsel for the respective appellant(s) by which, the special leave petition(s) have been disposed of directing the appellant(s) to deposit only 50 per cent of the amount as ordered by the State Commission are concerned, at the outset, it is noted that in none of the cases any law has been laid down by this Court. It appears that while issuing a notice(s), the appellant(s) was/were directed to deposit 50 per cent of the amount as ordered by the State Commission and thereafter without discussing any law and/or considering anything on merits and the scheme of the Act, 2019, more particularly, Section 51 of the Act, 2019, the special leave petition(s) has/have been disposed of. On the contrary, there is a direct binding decision of this Court in the case of Shreenath Corporation and Ors. (supra) laying down the law after discussing the scheme, object and purpose of pre-deposit and the power of the National Commission to grant conditional stay of deposit of the entire amount and/or any amount higher than 50 per cent of the amount. 15. The sum and substance of the above discussion and our conclusions would be that:- (i) pre-deposit of 50 per cent of amount as ordered by the State Commission under second proviso to Section 51 of the Consumer Protection Act, 2019 is mandatory for entertainment of an appeal by the National Commission; (ii) the object of the said pre-deposit condition is to avoid frivolous appeals; (iii) the said pre-deposit condition has no nexus with the grant of stay by the National Commission; (iv) while considering the stay application in staying the order passed by the State Commission, the National Commission can grant a conditional stay directing the appellant(s) to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission; (v) however, at the same time, the National Commission has to assign some cogent reasons and/or pass a speaking order when the conditional stay of the order passed by the State Commission is passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount either as an ex parte order or after hearing both sides and considering the facts and circumstances of the case. (vi) Thus, the National Commission can grant a conditional stay of the order passed by the State Commission on deposit of the entire amount and/or any amount higher than 50 per cent of the amount as ordered by the State Commission in the aforesaid manner.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]12. An identical question came to be considered by this Court in the case of Shreenath Corporation and Ors. (supra). In the aforesaid case, this Court was considering the pari materia provision under the Act, 1986 and second proviso to Section 19, which provided pre-deposit of amount specified therein, i.e., 50 per cent of the amount awarded by the State Commission or Rs.35,000/- whichever is less. In the aforesaid case, this Court had occasion to consider the object and purpose of predeposit condition while entertaining the appeal under Section 19 by the National Commission, against the order passed by the State Commission. In paragraphs 8 to 10, it is observed and held as under:-8. This Court in State of Haryana v. Maruti Udyog Ltd. [(2000) 7 SCC 348] , while dealing with the case of waiver of pre-deposit in an appeal under first proviso to Section 39(5) of the Haryana General Sales Tax Act held: (SCC p. 353, para 7)7. … There cannot be any dispute that right of appeal is the creature of the statute and has to be exercised within the limits and according to the procedure provided by law. It is filed for invoking the powers of a superior court to redress the error of the court below, if any. No right of appeal can be conferred except by express words. An appeal, for its maintainability, must have a clear authority of law. Sub-section (5) of Section 39 of the Act vests a discretion in the appellate authority to entertain the appeal if it is filed within sixty days and the amount of tax assessed along with penalty and interest, if any, recoverable from the persons has been paid. The aforesaid restriction is subject to the proviso conferring discretion upon the appellate authority to dispense with the deposit of the amount only on proof of the fact that the appellant was unable to pay the amount. Before deciding the appeal, the appellate authority affords an opportunity to the party concerned to either pay the amount or make out a case for the stay in terms of proviso to sub-section (5) of Section 39 of the Act. Once the conditions specified under sub-section (5) of Section 39 are complied with, the appeal is born for being disposed of on merits after hearing both the sides.9. The second proviso to Section 19 of the Act mandates pre-deposit for consideration of an appeal before the National Commission. It requires 50% of the amount in terms of an order of the State Commission or Rs 35,000, whichever is less for entertainment of an appeal by the National Commission. Unless the appellant has deposited the pre-deposit amount, the appeal cannot be entertained by the National Commission. A pre-deposit condition to deposit 50% of the amount in terms of the order of the State Commission or Rs 35,000 being condition precedent for entertaining appeal, it has no nexus with the order of stay, as such an order may or may not be passed by the National Commission. The condition of pre-deposit is there to avoid frivolous appeals.10. It is not the case of any of the appellants that the Consumer Forum, including the State and National Commissions, has no power to pass interim order of stay. If the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded, it is open to the National Commission to pass an appropriate interim order including conditional order of stay. Entertainment of an appeal and stay of proceeding pursuant to order impugned in the appeal stand on different footings, at two different stages. One (predeposit) has no nexus with merit of the appeal and the other (grant of stay) depends on prima facie case, balance of convenience and irreparable loss of party seeking such stay.13. We are in complete agreement with the view taken by this Court in the case of Shreenath Corporation and Ors. (supra). Therefore, it is held that National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission while staying the order passed by the State commission.However, at the same time, while considering the stay application against the order passed by the State Commission and while passing the order to deposit the entire amount and/or any amount higher than 50 per cent of the amount, the National Commission has to assign some reasons and pass a speaking order why the conditional stay is being granted on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount. Such an order on the stay application is not to be passed mechanically. Even in the case of Shreenath Corporation and Ors. (supra), it is observed that if the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded by the State Commission, it is open to the National Commission to pass an appropriate interim order including a conditional order of stay. The order passed by the State Commission directing the appellant to refund the amount and/or pay any amount higher than 50 per cent can be said to be akin to a money decree. Even as per Order XLI Rule 5, the general rule is that normally there shall not be any unconditional stay of a money decree, however, at the same time, the Appellate Court may pass an appropriate conditional order while staying the impugned decree depending upon the facts of the case and by giving cogent reasons. Therefore, while considering the stay application requesting to stay the order passed by the State Commission and as observed and held hereinabove, the National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount while staying the order passed by the State commission, however, the National Commission has to pass a speaking order giving some reasons why in the facts of the particular case the conditional stay of the order passed by the State Commission is to be passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission and that too after giving an opportunity to the appellant as well as to the respondent. The order on the stay application is not to be passed mechanically. It must reflect an application of mind by the National Commission why the order passed by the State Commission is to be stayed on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission. However, at the same time, there is no discretion at all to stay the order passed by the State Commission subject to deposit of any amount less than 50 per cent of the amount which is required to be deposited as a pre-deposit before the appeal is entertained as per second proviso to Section 51 of the Act, 2019.14. Now in so far as the various orders passed by this Court relied upon by the learned counsel for the respective appellant(s) by which, the special leave petition(s) have been disposed of directing the appellant(s) to deposit only 50 per cent of the amount as ordered by the State Commission are concerned, at the outset, it is noted that in none of the cases any law has been laid down by this Court. It appears that while issuing a notice(s), the appellant(s) was/were directed to deposit 50 per cent of the amount as ordered by the State Commission and thereafter without discussing any law and/or considering anything on merits and the scheme of the Act, 2019, more particularly, Section 51 of the Act, 2019, the special leave petition(s) has/have been disposed of. On the contrary, there is a direct binding decision of this Court in the case of Shreenath Corporation and Ors. (supra) laying down the law after discussing the scheme, object and purpose of pre-deposit and the power of the National Commission to grant conditional stay of deposit of the entire amount and/or any amount higher than 50 per cent of the amount.15. The sum and substance of the above discussion and our conclusions would be that:-(i) pre-deposit of 50 per cent of amount as ordered by the State Commission under second proviso to Section 51 of the Consumer Protection Act, 2019 is mandatory for entertainment of an appeal by the National Commission;(ii) the object of the said pre-deposit condition is to avoid frivolous appeals;(iii) the said pre-deposit condition has no nexus with the grant of stay by the National Commission;(iv) while considering the stay application in staying the order passed by the State Commission, the National Commission can grant a conditional stay directing the appellant(s) to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission;(v) however, at the same time, the National Commission has to assign some cogent reasons and/or pass a speaking order when the conditional stay of the order passed by the State Commission is passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount either as an ex parte order or after hearing both sides and considering the facts and circumstances of the case.(vi) Thus, the National Commission can grant a conditional stay of the order passed by the State Commission on deposit of the entire amount and/or any amount higher than 50 per cent of the amount as ordered by the State Commission in the aforesaid manner.