Condition of pre-deposit for entertaining appeal has no nexus with the order of stay #indianlaws

 A pre-deposit condition to deposit the amount being condition precedent for entertaining appeal, has no nexus with the order of stay, as such an order may or may not be passed by the National Commission. Condition of pre-deposit is to avoid frivolous appeals

In the present matter, Appeals (First) were preferred before the National Commission against the judgment passed by State Consumer Disputes Redressal Commission. The National Commission by its impugned common order passed conditional interim order subject to Appellants depositing 50% of the awarded amount (principal amount), within three months from the date of order.

Appellant contended that the impugned interim order passed by the National Commission was contrary to the provisions of Section 19 of the Consumer Protection Act, 1986 (CPA) as second proviso to Section 19 prescribes extent of amount to be deposited and the National Commission cannot pass an order asking the Appellant before it to deposit an amount more than 50% of the amount awarded by the State Commission or Rs. 35,000/- whichever is less.

The Court however held otherwise observing that Section 19 deals with appeals against the order made by the State Commission and its second proviso relates to “pre-deposit” required for an appeal to be entertained by the National Commission. This proviso mandates pre-deposit for consideration of an appeal before the National Commission requiring 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. A pre-deposit condition to deposit the amount being condition precedent for entertaining appeal, has no nexus with the order of stay, as such an order may or may not be passed by the National Commission. Condition of pre-deposit is to avoid frivolous appeals.

As observed, it was no one’s case that the Consumer Forum including 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 stands at different footings, at two different stages, namely, that (i) pre-deposit has no nexus with merit of the appeal and (ii) grant of stay depends on prima facie case; balance of convenience and irreparable loss of party seeking such stay.

[Shreenath Corp. vs. Consumer Education and Research Society]
(SC, 07.07.2014)