2025 INSC 371 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.14157 OF 2024

M/S CITICORP FINANCE (INDIA) LIMITED …APPELLANT

VERSUS

SNEHASIS NANDA …RESPONDENT

J U D G M E N T

AHSANUDDIN AMANULLAH, J.

The present appeal impugns the Final Judgment and Order dated

19.01.2023 [2023 SCC OnLine NCDRC 19 ] in Consumer Complaint

No.919 of 2018 (hereinafter referred to as the ‘Impugned Order’) passed

by the learned National Consumer Disputes Redressal Commission, New

Delhi (hereinafter referred to as the ‘NCDRC’), whereby the complaint

filed by the respondent was allowed and the appellant was directed to

refund Rs.13,20,000/- (Rupees Thirteen Lakhs Twenty Thousand) with

interest @ 12% per annum and pay Rs.1,00,000/- (Rupees One Lakh) as

litigation cost.

FACTUAL BACKGROUND :

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2. The respondent-complainant purchased Flat No.701, B-Wing, 7

th

Floor, Riddhi Siddhi Heritage, Plot Nos.56 & 57, Sector-19, Airoli, Navi

Mumbai (hereinafter referred to as the ‘flat’) on 30.05.2006. The

respondent had availed a housing loan of Rs.17,64,644/- (Rupees

Seventeen Lakhs Sixty-Four Thousand Six Hundred Forty-Four) from

ICICI Bank, Malad, East Mumbai Branch. In February 2008, one Mr.

Mubarak Vahid Patel (hereinafter referred to as the ‘borrower’)

approached the respondent to purchase the flat for a consideration of

Rs.32,00,000/- (Rupees Thirty-Two Lakhs). On 09.02.2008, the

respondent and the borrower entered into a Memorandum of

Understanding (hereinafter referred to as the ‘MoU’) for sale of the flat.

On the same day, a Tripartite Agreement was purportedly entered into

between the respondent, borrower and the appellant. Subsequently, the

respondent and the borrower entered into an Agreement for Sale dated

12.02.2008 for the sale of the flat for a consideration of Rs.32,00,000/-

(Rupees Thirty-Two Lakhs). Out of the total consideration of

Rs.32,00,000/- (Rupees Thirty-Two Lakhs), Rs.1,00,000/- (Rupees One

Lakh) was paid through a post-dated cheque dated 12.02.2008 and for

the remaining Rs.31,00,000/- (Rupees Thirty-One Lakhs), the borrower

approached the appellant for a housing loan.

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3. The appellant and borrower entered into a Home Loan Agreement

dated 28.02.2008, by which the appellant agreed to grant a loan of

Rs.23,40,000/- (Rupees Twenty-Three Lakhs Forty Thousand) to the

borrower. As the flat was already mortgaged with ICICI Bank, the

borrower requested the appellant to disburse an amount of

Rs.17,80,000/- (Rupees Seventeen Lakhs Eighty Thousand) directly to

the respondent’s ICICI Bank account, in order to secure the release of

the flat. On 11.04.2008, the appellant granted in-principle approval for

the loan. The above payment was made by the appellant and thereafter

an amount of Rs.5,09,311/- (Rupees Five Lakhs Nine Thousand Three

Hundred Eleven) remained to be disbursed to the borrower. The

appellant issued a cheque for the balance sanctioned amount of

Rs.5,09,311/- (Rupees Five Lakhs Nine Thousand Three Hundred

Eleven) in favour of the borrower in 2009. However, the borrower did not

encash this cheque and closed the loan account.

4. On 16.04.2018, the respondent filed Consumer Complaint No.919

of 2018 before the NCDRC, inter alia, praying for directions to the

appellant to pay compensation due to the loss caused to him for non-

payment of the balance Rs.13,20,000/- (Rupees Thirteen Lakhs Twenty

Thousand) under an alleged Tripartite Agreement dated 09.02.2008.

Vide Order dated 06.09.2018 [2018 SCC OnLine NCDRC 1416 ], the

NCDRC, after hearing both parties, dismissed the complaint at the pre-

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admission stage holding that the respondent cannot be said to be a

‘consumer’ within the meaning of the Consumer Protection Act, 1986

(hereinafter referred to as the ‘Act’). The respondent then filed Review

Application No.326 of 2018 in Consumer Complaint No.919 of 2018,

which came to be dismissed by the NCDRC vide Order dated

20.09.2018. Thereafter, the respondent approached this Court by filing

Civil Appeals No.10408-10409 of 2018.

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By Order dated 06.09.2019,

this Court allowed the said civil appeals and set aside the Orders of the

NCDRC. It restored the matter back to the file of the NCDRC for the

complaint to be decided on merits.

5. On remand, the NCDRC considered the matter and vide the

Impugned Order allowed the complaint filed by the respondent. The

appellant was directed to refund Rs.13,20,000/- (Rupees Thirteen Lakhs

Twenty Thousand) with interest @ 12% per annum from 14.04.2008 till

the date of actual payment along with Rs.1,00,000/- (Rupees One lakh)

towards litigation cost. The respondent preferred Civil Appeal No.1593

of 2023

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in this Court against the Impugned Order seeking enhancement

of the amount awarded, which was dismissed on 17.04.2023.

SUBMISSIONS BY THE APPELLANT :

1

Snehasis Nanda v M/s Citicorp Finance (India) Limited (Formerly Citifinancial Consumer Finance India

Limited).

2

Snehasis Nanda v M/s Citicorp Finance (India) Ltd.

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6. Learned senior counsel Mr. Ritin Rai, for the appellant, submitted

that the Impugned Order suffers from several infirmities and ought to be

set aside. It was argued that the NCDRC failed to consider that the

respondent is not a ‘consumer’ of the appellant within the meaning of

Section 2(1)(d) of the Act. The MoU and the Agreement for Sale were

purportedly entered into between the respondent and the borrower. The

appellant is admittedly not a party to these and has undertaken no

obligations thereunder. Similarly, the respondent is not a party to the

Home Loan Agreement entered into between the appellant and the

borrower. It was submitted that no service was ever provided by the

appellant to the respondent and hence the respondent does not fall

under the definition of ‘consumer’ under the Act.

7. It was argued that in such scenario, the NCDRC had concluded,

without any evidence, that the appellant and the respondent were

‘possibly’ parties to a Tripartite Agreement under which the appellant was

directly responsible for paying the total sale consideration to the

respondent. The existence of such a ‘Tripartite Agreement’ has been

denied by the appellant. Pertinently, no such ‘Tripartite Agreement’

signed by the appellant was ever filed by the respondent. The

respondent, as the party averring the existence of such agreement,

bears the burden of proving the existence of the same. The NCDRC

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erred by presuming the existence of a Tripartite Agreement and placing

the burden of producing the same on the appellant.

8. It was further submitted that the appellant only had privity of

contract with the borrower. It is on the instruction of the borrower - Mr.

Mubarak Vahid Patel - that the appellant transferred an amount of

Rs.17,80,000/- (Rupees Seventeen Lakhs Eighty Thousand) to the ICICI

Bank for foreclosing the loan account of the respondent, as part of the

sale consideration for the flat. This payment does not evidence the

existence of any relationship between the appellant and the respondent,

as it was made on the request of the appellant’s customer viz. the

borrower.

9. Without prejudice to the aforesaid submissions, it was submitted

that the appellant also took an objection before the NCDRC that the

borrower was a necessary and proper party for the purpose of

adjudication of the complaint. The NCDRC in the Impugned Order failed

to adjudicate upon this objection raised by the appellant. Further, the

NCDRC allowed the complaint without any reasoning on the appellant’s

objection regarding the complaint being barred by limitation. Prayer was

made to allow the appeal by the learned senior counsel.

SUBMISSIONS BY THE RESPONDENT-IN-PERSON :

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10.Mr. Snehasis Nanda, respondent-in-person, submitted that the

Impugned Order has correctly taken note of the evidence and materials

on record and allowed the complaint, which does not require any

interference by this Court. It was submitted that the NCDRC, in a well-

reasoned order, has rightly found the appellant to be guilty of deficiency

in service and engaging in unfair trade practices, after going into the

entirety of the complaint and the supporting documents.

11.It was submitted that the Home Loan of the borrower was

approved by the appellant based on the Tripartite Agreement dated

09.02.2008 and the registered Agreement for Sale dated 12.02.2008,

without which the appellant was not supposed to process the home loan

application on the flat, as the said flat was mortgaged with another bank,

i.e., ICICI Bank. The NCDRC has rightly upheld the existence of the

Tripartite Agreement, after finding supporting evidence in the complaint.

On the question raised by the appellant on the respondent’s status as a

‘consumer’ under the Act, the submission is that this Court in Order dated

06.09.2019 passed in Civil Appeals No.10408-10409 of 2018 held in his

favour on this point.

12.It was argued that the appellant has deliberately misled all fora in

order to hide the existence of the Tripartite Agreement dated 09.02.2008

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and to escape the liability to pay. Prayer was made to dismiss the appeal

by the respondent.

ANALYSIS, REASONING & CONCLUSION :

13.We have heard learned senior counsel for the appellant and the

respondent-in-person at length.

14.The lis before this Court basically can be broadly classified under

two distinct heads. Firstly, as to whether the complainant would come

under the definition of ‘consumer’ in terms of the Act. Secondly, assuming

the first question is answered in the affirmative, whether any liability

rested on the appellant to disburse the entire amount of Rs.31,00,000/-

(Rupees Thirty-One Lakhs) i.e., the remaining consideration amount for

sale of the flat payable to the complainant-respondent by the borrower.

Ancillary issues arising are considered at the appropriate place infra. At

the outset, it would be useful to reproduce Section 2(1)(d) of the Act:

‘2. Definitions.—(1) In this Act, unless the context

otherwise requires,—

…

(d) “consumer” means any person who,—

(i) buys any goods for a consideration which has been

paid or promised or partly paid and partly promised, or

under any system of deferred payment and includes any

user of such goods other than the person who buys such

goods for consideration paid or promised or partly paid

or partly promised, or under any system of deferred

payment when such use is made with the approval of

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such person, but does not include a person who obtains

such goods for resale or for any commercial purpose; or

(ii)  hires or avails of any services for a consideration

which has been paid or promised or partly paid and

partly promised, or under any system of deferred

payment and includes any beneficiary of such services

other than the person who hires or avails of the services

for consideration paid or promised, or partly paid and

partly promised, or under any system of deferred

payment, when such services are availed of with the

approval of the first mentioned person but does not

include a person who avails of such services for any

commercial purpose;

Explanation.—For the purposes of this clause,

“commercial purpose” does not include use by a person

of goods bought and used by him and services availed

by him exclusively for the purposes of earning his

livelihood by means of self-employment;’

15.The respondent contends that this Court vide Order dated

06.09.2019 passed in Civil Appeals No.10408-10409 of 2018 has held

that he is a ‘consumer’ under the Act. We reproduce the relevant

discussion from the said Order:

‘xxx

At this stage, we are considering whether prima facie

there is material available on record to support and

substantiate the plea that the appellant is a consumer

within the meaning of the Act.

The documents referred to above prima facie do show

and support the case of the appellant. The matter shall of

course be gone into and if there are submission(s) to the

contrary from the other side, they will also be considered

before arriving at the final decision. However, the

National Commission ought not to have disposed of the

matter at the admission stage.

We, therefore, allow these appeals, set-aside the orders

of the National Commission and restore the matter back

to the file of the National Commission, which shall be

decided in accordance with law.

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We have considered the matter only from the

perspective whether prima facie it is evident that the

appellant is a consumer or not. The entire matter has to

be gone into and our prima facie view shall not debar

any of the parties to submit material and prove it to the

contrary. The entirety of the matter shall be gone into by

the National Commission on merits at the appropriate

stages.

xxx’

(emphasis supplied)

16. A bare glance at the Order dated 06.09.2019 passed in Civil

Appeals No.10408-10409 of 2018 makes it clear that this Court had

nowhere conclusively held that the respondent-complainant was a

‘consumer’ under the Act. All that this Court did was to observe, upon

perusing the documents produced before it, that it was of the prima facie

view that the appellant was a ‘consumer’; that such view was only prima

facie; that the other side could submit and show to the contrary; that the

NCDRC ought not to have disposed of the matter at the admission stage;

that the entirety of the matter be gone into, and; that the NCDRC should

decide in accordance with law. Even at that time, the respondent had not

produced a copy of the purported Tripartite Agreement before this Court.

That apart, usage of the term ‘prima facie’ and its import is obvious –

namely, that the NCDRC was left free to decide the issue, after hearing

the parties. The NCDRC in the Impugned Order has offered no reasoning

on how the respondent was a ‘consumer’ under the Act. As per the

complainant-respondent, there was a Tripartite Agreement and an

Indemnity Bond between the appellant, the complainant-respondent and

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the borrower intervened by a Home Loan agreement between the

appellant and the borrower as also a MoU and an Agreement for Sale

between the complainant-respondent and the borrower. Though the

existence of the Tripartite Agreement was specifically denied by the

appellant, the NCDRC has drawn an adverse inference against the

appellant only because a specific affidavit was not filed before it. Pausing

here, we may note that such statement re denial of the existence of the

purported Tripartite Agreement was made in the appellant’s reply only, in

the NCDRC, which was itself supported by an affidavit and thus, no

separate/special affidavit was required in this behalf. Moreover, and more

importantly, the onus is on the person who asserts a fact to prove it. In

the present case, where the respondent himself is a signatory to the

purported Tripartite Agreement, the presumption will be that he has

retained a copy of the same. Thus, non-production of the (complete)

Tripartite Agreement, if at all there was one, would lead to an adverse

inference, and under normal circumstances as also in the present case,

against the complainant-respondent, and not against the appellant. What

the complainant produced before the NCDRC was an unsigned,

unstamped and partly blank document, which he asserts is the Tripartite

Agreement between the appellant, the borrower and him.

17.Coming to the main merits, even if it is accepted that all the afore-

mentioned agreements were validly there, primarily the Tripartite

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Agreement, as contended by the respondent, a conjoint reading of all

would lead to the obvious conclusion that the essential transaction of

sale was between the complainant-respondent and the borrower who

was the buyer of the flat of the complainant-respondent for an agreed

consideration of Rs.32,00,000/- (Rupees Thirty-Two Lakhs). In the

specific factual setting, the respondent, having no privity of contract with

the appellant, cannot be termed a ‘consumer’ under the Act. This alone

was sufficient to dismiss the complaint. In Indian Oil Corporation v

Consumer Protection Council, Kerala, (1994) 1 SCC 397, it was held

that as there was no privity of contract between the concerned parties

therein, no ‘deficiency’ would arise and the action (complaint) would not

be maintainable before the concerned Consumer Forum. In Janpriya

Buildestate Pvt. Ltd. v Amit Soni, 2021 SCC OnLine SC 1269, the

Court held:

‘25. We have indicated the scheme of the Act. A claim

can succeed in a case of this nature if the consumer

establishes deficiency of service. No doubt, the law giver

contemplates other elements as contemplated in the

definition of the word ‘complaint’. The word ‘deficiency’

has been widely worded. Equally so, is the word

‘service’. A statute of this nature must, indeed, if

possible, be construed in favour of the consumer.

However, that is a far cry from holding that if deficiency is

not established, yet the opposite party must bear the

liability which cannot be thrust on its shoulders. We

would clarify that by making it clear that what we intend

to say is that when there is no privity between the

complainant and the opposite party, the opposite party

could not become liable under the Act. In other words, if

there is no law under which a person is to provide a

service and if it does not fall within the residuary clause,

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namely, ‘otherwise’ as defined under the word

‘deficiency’, it is necessary for a consumer to succeed,

that there must be a contract. It is in that context, we

indicated that the existence of an obligation under a

contract is a sine qua non for a consumer to successfully

prosecute a case under the Act.’

(emphasis supplied)

18. Ultimately, the loan which was sanctioned by the appellant to the

borrower was only for a sum of Rs.23,40,000/- (Rupees Twenty-Three

Lakhs Forty Thousand). Thus, here also we find that the Impugned Order

of the NCDRC holding that the appellant was bound to pay the entire

amount of Rs.31,00,000/- (Rupees Thirty-One Lakhs) and directing it to

pay the balance consideration of Rs.13,20,000/- (Rupees Thirteen Lakhs

Twenty Thousand), appears to be wholly without basis. In Tata Motors

Limited v Antonio Paulo Vaz, (2021) 18 SCC 545, the Court stated:

‘28. The record establishes the absolute dearth of

pleadings by the complainant with regard to the

appellant's role, or special knowledge about the two

disputed issues i.e. that the dealer had represented that

the car was new, and in fact sold an old, used one, or

that the undercarriage appeared to be worn out. This, in

the opinion of this Court, was fatal to the complaint. No

doubt, the absence of the dealer or any explanation on

its part, resulted in a finding of deficiency on its part,

because the car was in its possession, was a 2009

model and sold in 2011. The findings against the dealer

were, in that sense, justified on demurrer. However, the

findings against the appellant, the manufacturer, which

had not sold the car to Vaz, and was not shown to have

made the representations in question, were not justified.

The failure of the complainant to plead or prove the

manufacturer's liability could not have been improved

upon, through inferential findings, as it were, which the

District, State and National Commission rendered. The

circumstance that a certain kind of argument was put

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forward or a defence taken by a party in a given case

(like the appellant, in the case) cannot result in the

inference that it was involved or culpable, in some

manner. Special knowledge of the allegations made by

the dealer, and involvement, in an overt or tacit manner,

by the appellant, had to be proved to lay the charge of

deficiency of service at its door. In these circumstances,

having regard to the nature of the dealer's relationship

with the appellant, the latter's omissions and acts could

not have resulted in the appellant's liability.’

(emphasis supplied)

19.Further, the purported Tripartite Agreement, relied upon by the

complainant-respondent himself, states that the appellant would only pay

the foreclosure amount, out of the total loan amount sanctioned to the

borrower, to ICICI Bank for or on behalf of the borrower towards

foreclosure of respondent’s loan facility with it. No further liability to pay

any amount directly to the complainant-respondent was even envisaged

in the Tripartite Agreement. Thus, arguendo the Agreement for Sale did

mention that the loan amount of Rs.17,80,000/- (Rupees Seventeen

Lakhs Eighty Thousand) would be paid to ICICI Bank towards

foreclosure of the respondent’s loan account and the remaining would be

paid to the complainant-respondent by the appellant, it cannot be lost

sight of that such stipulation was only mentioned in the Agreement for

Sale, which is only between the complainant-respondent and the

borrower. This is clear even from that fact that ultimately the amount

which was sanctioned by the appellant to the borrower was only

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Rs.23,40,000/- (Rupees Twenty-Three Lakhs Forty Thousand) and not

Rs.31,00,000/- (Rupees Thirty-One Lakhs).

20.In the aforesaid background, we find that the appellant, assuming

any liability in this regard existed at all, taking the respondent’s case at

the highest, could not have been saddled with having to pay more than

what was envisaged under the Home Loan Agreement between the

borrower and the appellant. In any event, the appellant’s liability under

the Agreement for sale was restricted only to satisfying the dues of the

complainant-respondent with ICICI Bank which sum was in fact

quantified at Rs.17,87,763/- (Rupees Seventeen Lakhs Eighty Seven

Thousand Seven Hundred Sixty-Three) and, in any view of the matter,

could not have exceeded Rs.23,40,000/- (Rupees Twenty-Three Lakhs

Forty Thousand). Thus, the NCDRC could not have, under any

circumstance, taken a view that the appellant was liable to pay

Rs.31,00,000/- (Rupees Thirty-One Lakhs) both to ICICI Bank as well as

to the complainant-respondent, who was not a party to the ultimate

sanction of the loan by the Home Loan Agreement, which was between

the appellant and the borrower. Hence, even the second question is

answered in the negative.

21.As has been discussed above, it is clear that the complainant-

respondent cannot be said to be a ‘consumer’ under the Act as it had no

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privity of contract with the appellant, due regard being had to the totality

of the factual matrix. The purported Tripartite Agreement is dated

09.02.2008. The cause of action statedly had arisen in/by April/May,

2008. The respondent filed a complaint under the Act on 16.04.2018.

The Act provides as under:

‘24-A. Limitation period.—(1) The District Forum, the

State Commission or the National Commission shall not

admit a complaint unless it is filed within two years from

the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section

(1), a complaint may be entertained after the period

specified in sub-section (1), if the complainant satisfies

the District Forum, the State Commission or the National

Commission, as the case may be, that he had sufficient

cause for not filing the complaint within such period:

Provided that no such complaint shall be entertained

unless the National Commission, the State Commission

or the District Forum, as the case may be, records its

reasons for condoning such delay.’

(emphasis supplied)

22. Therefore, while the NCDRC is competent to condone any period

of delay in filing a complaint beyond two years from the date when the

cause of action arises, the discretion is circumscribed by twin conditions:

(i) that the complainant satisfy the NCDRC that he had sufficient cause

for not filing his complaint within such period, and; (ii) that the NCDRC

record the reasons for condoning such delay. We have perused the

ordersheets of the NCDRC pertaining to the complaint at hand. Neither

reasons nor a formal order condoning delay is forthcoming, either in the

ordersheets or in the Impugned Order. Despite the appellant raising the

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issue of limitation, the Impugned Order is silent on the said score. On a

probe into the pleadings, it transpires that the respondent was agitating

the dispute before, inter alia, the Banking Ombudsman, Reserve Bank of

India and even the High Court of Orissa by way of Writ Petition (Civil)

No.18429 of 2017. In this backdrop, at the initial stage(s) of hearing, the

respondent ought to have satisfied/attempted to satisfy the NCDRC on

the delay, and the NCDRC ought to have passed a reasoned order

condoning the delay or refusing to condone the delay. Be that as it may.

23. Another specific plea by the appellant, that the borrower should

have been joined in the proceedings before the NCDRC has also gone

unanswered. If the borrower had been arrayed as an Opposite Party in

the NCDRC, the question of whether a Tripartite Agreement was duly

executed and existed or not, could perhaps have been answered. It is

too late in the day to plug such non-joinder. In view of the borrower being

the purchaser of the flat in question and party to the MoU, the Agreement

for Sale, the Home Loan Agreement and the purported Tripartite

Agreement, he was, at the very least a proper party, but looked at from

the lens where the appellant denied the very existence of the Tripartite

Agreement, the borrower being the sole link between the respondent and

the appellant, the borrower would be a necessary party in the complaint.

We need only refer to the dicta in Udit Narain Singh Malpaharia v

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Additional Member Board of Revenue, Bihar, 1963 Supp (1) SCR

676, where the Court explained:

‘7. To answer the question raised it would be convenient

at the outset to ascertain who are necessary or proper

parties in a proceeding. The law on the subject is well

settled: it is enough if we state the principle. A necessary

party is one without whom no order can be made

effectively; a proper party is one in whose absence an

effective order can be made but whose presence is

necessary for a complete and final decision on the

question involved in the proceeding.

8. The next question is, what is the nature of a writ of

certiorari. What relief can a petitioner in such a writ

obtain from the Court. Certiorari. lies to remove for the

purpose of quashing the proceedings of inferior courts of

record or other persons or bodies exercising judicial or

quasi-judicial functions. It is not necessary for the

purpose of this appeal to notice the distinction between a

writ of certiorari and a writ in the nature of certiorari: in

either case the High Court directs an inferior tribunal or

authority to transmit to itself the record of proceedings

pending therein for scrutiny and, if necessary, for

quashing the same. It is well settled law that a certiorari

lies only in respect of a judicial or quasi-judicial act as

distinguished from administrative act. The following

classic test laid down by Lord Justice Atkin, as he then

was, in King v. Electricity Commissioners [(1924) 1 KB

171] and followed by this Court in more than one

decision clearly brings out the meaning of the concept of

judicial act:

“Wherever any body of persons having legal

authority to determine questions affecting the rights

of subjects, and having the duty to act judicially, act

in excess of their legal authority they are subject to

the controlling jurisdiction of the King's Bench

Division exercised in these writs.”

Lord Justice Slesser in  King v. London County

Council [(1931) 2 KB 215, 243] dissected the concept of

judicial act laid down by Atkin, L.J., into the following

heads in his judgment: “Wherever any body of persons

(1) having legal authority (2) to determine questions

affecting rights of subjects and (3) having the duty to act

judicially (4) act in excess of their legal authority — a writ

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of certiorari may issue”. It will be seen from the

ingredients of judicial act that there must be a duty to act

judicially. A tribunal, therefore, exercising a judicial or

quasi-judicial act cannot decide against the rights of a

party without giving him a hearing or an opportunity to

represent his case in the manner known to law. If the

provisions of a particular statute or rules made

thereunder do not provide for it, principles of natural

justice demand it. Any such order made without hearing

the affected parties would be void. As a writ of certiorari

will be granted to remove the record of proceedings of an

inferior tribunal or authority exercising judicial or quasi-

judicial acts, ex hypothhesi it follows that the High Court

in exercising its jurisdiction shall also act judicially in

disposing of the proceedings before it. It is implicit in

such a proceeding that a tribunal or authority which is

directed to transmit the records must be a party in the

writ proceedings, for, without giving notice to it, the

record of proceedings cannot be brought to the High

Court. It is said that in an appeal against the decree of a

subordinate court, the court that passed the decree need

not be made a party and on the same parity of reasoning

it is contended that a tribunal need not also be made a

party in a writ proceeding. But there is an essential

distinction between an appeal against a decree of a

subordinate court and a writ of certiorari to quash the

order of a tribunal or authority: in the former, the

proceedings are regulated by the Code of Civil

Procedure and the court making the order is directly

subordinate to the appellate court and ordinarily acts

within its bounds, though sometimes wrongly or even

illegally, but in the case of the latter, a writ of certiorari is

issued to quash the order of a tribunal which is ordinarily

outside the appellate or revisional jurisdiction of the court

and the order is set aside on the ground that the tribunal

or authority acted without or in excess of jurisdiction. If

such a tribunal or authority is not made party to the writ,

it can easily ignore the order of the High Court quashing

its order, for, not being a party, it will not be liable to

contempt. In these circumstances whoever else is a

necessary party or not the authority or tribunal is

certainly a necessary party to such a proceeding. In this

case, the Board of Revenue and the Commissioner of

Excise were rightly made parties in the writ petition.

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9. The next question is whether the parties whose rights

are directly affected are the necessary parties to a writ

petition to quash the order of a tribunal. As we have

seen, a tribunal or authority performs a judicial or quasi-

judicial act after hearing parties. Its order affects the right

or rights of one or the other of the parties before it. In a

writ of certiorari the defeated party seeks for the

quashing of the order issued by the tribunal in favour of

the successful party. How can the High Court vacate the

said order without the successful party being before it.

Without the presence of the successful party the High

Court cannot issue a substantial order affecting his right.

Any or that may be issued behind the back of such a

party can be ignored by the said party, with the result

that the tribunal's order would be quashed but the right

vested in that party by the wrong order of the tribunal

would continue to be effective. Such a party, therefore, is

a necessary party and a petition filed for the issue of a

writ of certiorari without making him a party or without

impleading him subsequently, if allowed by the court,

would certainly be incompetent. A party whose interests

are directly affected is, therefore, a necessary party.

10. In addition, there may be parties who may be

described as proper parties, that is parties whose

presence is not necessary for making an effective order,

but whose persence may facilitate the settling of all the

questions that may be involved in the controversy. The

question of making such a person as a party to a writ

proceeding depends upon the judicial discretion of the

High Court in the circumstances of each case. Either one

of the parties to the proceeding may apply for the

impleading of such a parry or such a party may suo motu

approach the court for being impleaded therein.

11. The long established English practice, which the

High Courts in our country have adopted all along,

accepts the said distinction between the necessary and

the proper party in a writ of certiorari. The English

practice is recorded in Halsbury's Laws of England, Vol.

11, 3rd Edn. (Lord Simonds') thus in para 136:

“The notice of motion or summons must be served

on all persons directly affected, and where it relates

to any proceedings in or before a court, and the

object is either to compel the court or an officer

thereof to do any act in relation to the proceedings

or to quash them or any order made therein, the

21

notice of motion or summons must be served on the

clerk or registrar of the court, the other parties to the

proceedings, and (where any objection to the

conduct of the judge is to be made) on the judge…”.

In para 140 it is stated:

“On the hearing of the summons or motion for an

order of mandamus prohibition or certiorari, counsel

in support begins and has a right of reply. Any

person who desires to be heard in opposition, and

appears to the court or Judge to be a proper person

to be heard, is to be heard notwithstanding that he

has not been served with the notice or summons,

and will be liable to costs in the discretion of the

court or Judge if the order should be made …”.

So too, the Rules made by the Patna High Court require

that a, party against whom relief is sought should be

named in the petition. The relevant Rules read thus:

Rule 3. Application under Article 226 of the

Constitution shall be registered as Miscellaneous

Judicial Cases or Criminal Miscellaneous Cases, as

the case may be.

Rule 4. Every application shall, soon after it is

registered, be posted for orders before a Division

Bench as to issue of notice to the respondents. The

Court may either direct notice to issue and pass

such interim order as it may deem necessary or

reject the application.

Rule 5. The notice of the application shall be served

on all persons directly affected and on such other

persons as the Court may direct.

Both the English rules and the rules framed by the Patna

High Court lay down that persons who are directly

affected or against whom relief is sought should be

named in the petition, that is all necessary parties should

be impleaded in the petition and notice served on them.

In “The Law of Extra-ordinary Legal Remedies” by Ferris,

the procedure in the matter of impleading parties is

clearly described at p. 201 thus:

“Those parties whose action is to be reviewed and

who are interested therein and affected thereby,

and in whose possession the record of such action

remains, are not only proper, but necessary parties.

It is to such parties that notice to show cause

against the issuance of the writ must be given, and

22

they are the only parties who may make return, or

who may demur. The omission to make parties

those officers whose proceedings it is sought to

direct and control, goes to the very right of the relief

sought. But in order that the court may do ample

and complete justice, and render a judgment which

will be binding on all persons concerned, all persons

who are parties to the record, or who are interested

in maintaining the regularity of the proceedings of

which a review is sought, should be made parties

respondent.”

xxx’

(emphasis supplied)

24. Further, the so-called Tripartite Agreement provides for the matter

being resolved by arbitration under the provisions of the (Indian)

Arbitration and Conciliation Act, 1996. In this context, we notice the

judgment in M Hemalatha Devi v B Udayasri, (2024) 4 SCC 255,

authored by one of us (Sudhanshu Dhulia, J.), where this Court held,

inter alia:

‘17. The exclusion of a dispute from arbitration may be

express or implied, depending again upon the nature of

the dispute, and a party to a dispute cannot be

compelled to resort to arbitration merely for the reason

that it has been provided in the contract, to which it is a

signatory. The arbitrability of a dispute has to be

examined when one of the parties seeks redressal under

a welfare legislation, in spite of being a signatory to an

arbitration agreement. “The Consumer Protection Act” is

definitely a piece of welfare legislation with the primary

purpose of protecting the interest of a consumer.

Consumer disputes are assigned by the legislature to

public fora, as a measure of public policy. Therefore, by

necessary implication such disputes will fall in the

category of non-arbitrable disputes, and these disputes

should be kept away from a private fora such as

“arbitration”, unless both the parties willingly opt for

arbitration over the remedy before public fora.

23

xxx

22. The question, however, is of election, or of choice,

and not of which party had approached the court first.

More importantly it would be the nature of the dispute,

which would determine the forum for its redressal. The

law gives this choice to the consumer to either avail a

remedy under the Consumer Protection Act, by filing a

complaint before the judicial authority, or go for

arbitration. This option is not available to the builder, as

they are not “consumers”, under the 2019 Act. It is the

respondent here Smt B. Udayasri who has to make a

“choice” between submitting before the private fora i.e.

the Arbitration Tribunal or to make a complaint before the

Consumer Forum, which is a public fora. She has

chosen to go to the latter. Her reply before the

Telangana High Court on the Section 11 application of

the builder is not her submission to the arbitration

process. In her reply, she informs the High Court of the

complaint made by her as a consumer before the District

Consumer Forum, which is a “judicial authority” and

hence Section 8 of the Arbitration Act, 1996 would come

into play and not an application under Section 11 of the

Arbitration Act, 1996.

xxx

35. It was held that the 1986 Act was enacted to provide

better protection of the interest of consumers and for

providing a redressal mechanism, which is cheaper,

easier, expeditious and effective. For this purpose,

various quasi-judicial forums were set up at district, State

and national level with a wider range of powers vested in

these Judicial Authorities. These Judicial Authorities

were vested with the powers to give relief of a specific

nature and to award compensation to the consumer

wherever it was felt necessary to impose penalty for non-

compliance of their orders, and the judicial authorities

were vested with such powers. Now compare this with

the power of the arbitrator. An arbitrator does not have

the power to impose a penalty. This is also one of the

essential differences between the two forums. It was

finally held that the provisions given under the 1986 Act

were in addition to, and not in derogation to, any other

provisions or any other law for the time being in force.

xxx

38. This Court in a series of decisions, while considering

both the provisions in the Consumer Protection Act, 1986

24

and the Arbitration Act, 1996, has held that the

Consumer Protection Act being a special and beneficial

legislation, the remedies provided therein are special

remedies and a consumer cannot be deprived of them

should he choose to avail such a remedy, in spite of an

arbitration agreement between the parties. It is a remedy

provided to the consumer where the consumer finds a

defect in either goods or services provided to him and

therefore seeks a redressal of his grievances before the

consumer forum provided to him by the legislature.

xxx

47. This Court ultimately held that the main purpose of

bringing an amendment inter alia in Sections 8 and 11 of

the Arbitration Act, 1996 was to minimise the scope of

judicial authority, which was to refuse reference to

arbitration only on the ground when it prima facie finds

that there was no valid arbitration agreement. The

legislative intent for the amendment was confined to

limiting judicial intervention, and once the Court finds that

there is a valid arbitration agreement, it has no option but

to refer the matter for arbitration. But this would not

mean that where the matter itself is non-arbitrable, or is

covered by a special legislation such as the Consumer

Protection Act, it still has to be referred for arbitration. In

para 59 of Emaar-3 [Emaar MGF Land Ltd. v Aftab

Singh, (2019) 12 SCC 751: (2018) 5 SCC (Civ) 652], it

was stated as under: (SCC pp. 781-82)

“59. The amendment in Section 8 cannot be given

such expansive meaning and intent so as to

inundate entire regime of special legislations where

such disputes were held to be not arbitrable.

Something which legislation never intended cannot

be accepted as side wind to override the settled

law. The submission of the petitioner that after the

amendment the law as laid down by this Court

in National Seeds Corpn. [National Seeds Corpn.

Ltd. v M. Madhusudhan Reddy, (2012) 2 SCC 506:

(2012) 1 SCC (Civ) 908] is no more a good law

cannot be accepted. The words ‘notwithstanding

any judgment, decree or order of the Supreme

Court or any court’ were meant only to those

precedents where it was laid down that the judicial

authority while making reference under Section 8

shall be entitled to look into various facets of the

arbitration agreement, subject-matter of the

25

arbitration whether the claim is alive or dead,

whether the arbitration agreement is null and void.

The words added in Section 8 cannot be meant for

any other meaning.”

Emaar-3   [Emaar MGF Land Ltd.   v.   Aftab Singh, (2019)

12 SCC 751: (2018) 5 SCC (Civ) 652] though ends with

a caveat, where it leaves the option with the party who

may have an option to choose between a public or

private forum, may consciously choose to go for private

fora. This is what it says: (SCC p. 783, para 63)

“63. We may, however, hasten to add that in the

event a person entitled to seek an additional special

remedy provided under the statutes does not opt for

the additional/special remedy and he is a party to an

arbitration agreement, there is no inhibition in

disputes being proceeded in arbitration. It is only the

case where specific/special remedies are provided

for and which are opted by an aggrieved person that

judicial authority can refuse to relegate the parties

to the arbitration.”’

(emphasis supplied)

25.As vivid from Emaar MGF Land Ltd. v Aftab Singh, (2019) 12

SCC 751 and M Hemalatha Devi (supra), even in a consumer dispute

under the Act, or for that matter, the Consumer Protection Act, 2019,

arbitration, if provided for under the relevant agreement/document, can

be opted for/resorted to, however, at the exclusive choice of the

‘consumer’ alone. As the appellant is not a ‘consumer’ in terms of the Act

and the existence of the Tripartite Agreement is doubtful, we need not

dwell further hereon.

26.On an overall circumspection of the facts and circumstances of

the case coupled with a survey of the precedents, we find that the

26

Impugned Order cannot be sustained. Accordingly, in view of the

discussions in the preceding paragraphs, the Impugned Order is set

aside.

27.The appeal is allowed. Parties to bear their own costs.

28. However, this Judgment shall not impact proceedings, if any,

inter-se borrower and respondent. This shall not ipso facto relax/extend

any period of limitation for resort to lawful remedies, as may be

applicable.

29. In view of the appeal being allowed, no order is required to be

passed in I.A. No.117048/2023 and I.A. No.188226/2023.

30. I.A. No.166893/2023 is the respondent’s application seeking

permission to appear and argue in person; as we have already heard

him, hence this application is formally allowed.

…….…………….....................J.

[SUDHANSHU DHULIA]

…………………..................…..J.

[AHSANUDDIN AMANULLAH]

NEW DELHI

MARCH 20, 2025