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CASE NO.:

Appeal (civil) 3044-3045 of 2005

PETITIONER:

State of Haryana and Anr.

RESPONDENT:

National Consumer Awareness Group and Ors.

DATE OF JUDGMENT: 04/05/2005

BENCH:

K.G. Balakrishnan & B.N. Srikrishna

JUDGMENT:

JUDGMENT

B.N. SRIKRISHNA, J.

Leave granted.

What is the content of the statutory consultation with the Chief Justice of

the High Court postulated under Section 16(1)(a) of the Consumer Protection

Act, 1986, is the core issue subjected to debate before us in these two

appeals.

The Consumer Protection Act, 1986 (hereinafter referred to as `the Act')

was brought into force on 24.12.1986. It is an Act "to provide for better

protection of the interests of consumers and for that purpose to make

provision for the establishment of consumer councils and other authorities

for the settlement of consumers' disputes and for matters connected

therewith." The Act established fora at district level, state level and

national level and laid down the procedure of appointing the members of the

fora and their respective Chairmen. The dispute pertains to the statutory

procedure contemplated for appointments of the Chairman of the State

Commission-the forum at the State level.

Section 16(1) provides for the composition of the State Commission

including the appointment of the President and members of the State

Commission. As originally enacted, Section 16 read as under :

"16. Composition of the State Commission.- (1) Each State Commission shall

consist of-

(a) a person who is or has been a Judge of a High Court, appointed by the

State Government, who shall be its President;

(b) two other members who shall be persons of ability, integrity and

standing and have adequate knowledge or experience of, or have shown

capacity in dealing with, problems relating to economics, law, commerce,

accountancy, industry, public affairs and administration, one of whom shall

be a woman.

By (Amendment) Act 50 of 1993, which was retrospectively made effective

with effect from 18.6.1993, an amendment was made to Section 16 by the

addition of a proviso and the amended section read as under :

"16. Composition of the State Commission.- (1) Each State Commission shall

consist of-

(a) a person who is or has been a Judge of a High Court, appointed by the

State Government, who shall be its President:

Provided that no appointment under this clause shall be made except

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after consultation with the Chief Justice of the High Court;

(b) two other members who shall be persons of ability, integrity and

standing and have adequate knowledge or experience of, or have shown

capacity in dealing with, problems relating to economics, law, commerce,

accountancy, industry, public affairs and administration, one of whom shall

be a woman:

Provided that every appointment made under this clause shall be

made by the State Government on the recommendation of a Selection

Committee consisting of the following namely:-

(i) President of the State Commission. -Chairman

(ii) Secretary of the Law Department of the State. -Member

(iii) Secretary incharge of the Department dealing with

Consumer Affairs in the State. -Member

By a further amendment, vide (Amendment) Act, 62 of 2002, Section 16 (1)(b)

was substituted by new provision of sub-sections (1A) and (1B) which were

inserted in Section 16. The amended Section 16, brought into force with

effect from 15.3.2003, reads as under :

"16. Composition of the State Commission :- (1) Each State Commission shall

consist of-

(a) a person who is or has been a Judge of a High Court, appointed by

the State Government, who shall be its President :

Provided that no appointment under this clause shall be made except

after consultation with the Chief Justice of the High Court.

(b) not less than two, and not more than such number of members, as may

be prescribed, and one of who shall be a woman, who shall have the

following qualifications, namely :-

(i) be not less than thirty-five years of age;

(ii) possess a bachelor's degree from a recognised university; and

(iii) be persons of ability, integrity and standing, and have adequate

knowledge and experience of at least ten years in dealing with problems

relating to economics, law, commerce, accountancy, industry, public affairs

or administration:

Provided that not more than fifty per cent. of the members shall be

from amongst persons having a judicial background.

Explanation....

Provided further that ....

(a) ...

(b) ...

(c) ...

(d) ...

(e) ...

(f) ...

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(1-A) Every appointment under sub-section (1) shall be made by the

State Government on the recommendation of a Selection Committee

consisting of the following members, namely :-

(i) President of the State Commission-Chairman;

(ii) Secretary of the Law Department of the State-Member;

(iii) Secretary incharge of the Department dealing with Consumer Affairs in

the State-Member :

Provided that where the President of the State Commission is, by

reason of absence or otherwise, unable to act as Chairman of the

Selection Committee, the State Government may refer the matter to

the Chief Justice of the High Court for nominating a sitting Judge

of that High Court to act as Chairman.

(1-B) (i) The jurisdiction, powers and authority of the State Commission

may be exercised by Benches thereof.

(ii) A Bench may be constituted by the President with one or more

members as the President may deem fit.

(iii) If the members of a Bench differ in opinion on any point, the

points shall be decided according to the opinion of the majority, if there

is a majority, but if the members are equally divided, they shall state the

point or points on which they differ, and make a reference to the President

who shall either hear the point or points himself or refer the case for

hearing on such point or points by one or more or the other members and

such point or points shall be decided according to the opinion of the

majority of the members who have heard the case, including those who first

heard it.

(2) The salary or honorarium and other allowances payable to, and the

other terms and conditions of service of, the members of the State

Commission shall be such as may be prescribed by the State Government.

Provided that the appointment of a member on whole-time basis shall

be made by the State Government on the recommendation of the

President of the State Commission taking into consideration such

factors as may be prescribed including the work load of the State

Commission.

(3) .....

(4) ....."

Justice Amarjeet Chaudhary, the then incumbent, was to demit his office on

4.9.2003 on completion of his term as President of the Haryana State

Consumer Disputes Redressal Commission (hereinafter referred to as `the

State Commission'). On 25.8.2003 the Chief Minister of Haryana addressed a

letter to the Chief Justice of Punjab & Haryana High Court drawing his

attention to the vacancy that was likely to arise on 5.9.2003, and

expressed his view that Justice R.S. Mongia, retired Chief Justice of

Gauhati High Court, would be a befitting incumbent to be appointed to the

said post and requested for communication of the views of the Chief Justice

of Punjab and Haryana High Court. By a communication dated 26.8.2003, the

Chief Justice of the Punjab & Haryana High Court drew the attention of the

Chief Minister to the decision of this Court in Ashish Handa v. Hon'ble the

Chief Justice of High Court of Punjab & Haryana and Ors.1 and took the

stand: "...even for initiation of the proposal...the executive is expected

to approach the Chief Justice when the appointment is to be made for taking

the steps to initiate the proposal, and the procedure followed should be

the same as for appointment of a High Court Judge. That would give greater

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credibility to the appointment made." He, however, postponed a decision, as

the seniormost Judge of the collegium was out of station. By a confidential

communication dated 27.8.2003, the Chief Justice informed the Chief

Minister that the collegium of the High Court had met and considered the

names of several persons, and unanimously decided to recommend Justice R.C.

Kathuria (retired) of the Punjab & Haryana High Court as most suitable and

fit for appointment as President of the State Commission. A copy of the

relevant resolution was forwarded for information. The resolution took note

of the credentials of the three retired Judges, whose suitability was

considered, and decided to recommend Mr. Justice R.C. Kathuria as most

suitable and fit for appointment. Justice R.S. Mongia was also one of the

three retired Judges, whose suitability was considered by the said

resolution.

By a letter dated 29.10.2003 the Chief Minister, Haryana, raised certain

objections to the proposal made by the Chief Justice. The collegium of the

High Court considered the letter dated 29.10.2003 of the Chief Minister,

Haryana and reiterated its earlier recommendation. By a letter of 1.12.2003

the Chief Minister drew the attention of the Chief Justice to what he

considered were the deficiencies in the candidature of the learned Judge,

whose name was proposed by the High Court. Once again, the High Court after

calling for several records and considering various other aspects of the

matter reiterated its stand that there was no reason to recall the earlier

recommendations to appoint Justice R.C. Kathuria (Retired) as the President

of the State Commission. By another letter dated 7.1.2004, the Chief

Minister of Haryana drew the attention of the Chief Justice of Punjab &

Haryana High Court to the newly introduced Section 16(1A), vide (Amendment)

Act 62 of 2002, and stated that since the post of the President of the

State Commission was vacant at the moment, a Hon'ble sitting Judge of the

Punjab & Haryana High Court was required to be nominated to act as Chairman

of the Selection Committee to be constituted under Section 16(1A). There

was certain other correspondence about certain representations made, which

is not material.

In response to a representation dated 22.12.2003 received from the National

Consumer Awareness Group, Respondent No. 1, on 31.12.2003 the Government of

India, Department of Consumer Affairs, issued a clarification to all the

State Governments/ U.T. Administration including the Government of Haryana

State inter alia opining, in substance, that the procedure contemplated for

constitution of a Selection Committee would be equally applicable for

appointment of the President of the State Commission, though for that

purpose the Chief Justice of the High Court be requested to nominate a

sitting Judge of the High Court to act as Chairman of the Selection

Committee.

In the meanwhile, Civil Writ Petition No. 174/04 was filed by the first

respondent before the High Court of Punjab & Haryana at Chandigarh invoking

Articles 226/227 of the Constitution for a mandamus to the Union of India,

the Chief Justice of Punjab and Haryana High Court, State of Haryana and

Department of Consumer Affairs, State of Haryana, to follow the procedure

as laid down in Section 16 of the Consumer Protection Act in its letter and

spirit for the appointment of the President of the State Commission.

Another writ petition, C.W.P. No. 17262/03, which had been filed earlier by

one Dharminder Singh Rawat, Advocate, on the connected subject of

initiation of the proposal, was heard along with C.W.P. No. 174/04 filed by

the first respondent. The High Court by a common judgment allowed the two

writ petitions and made appropriate directions to the State Government

therein. The High Court followed the decision of this Court in Ashish Handa

(supra) which held the field at the material time. By taking the view that

the process of consultation contemplated under Section 16 (1)(a) of the Act

was almost identical to the process of consultation required under Article

217 of the Constitution, the High Court upheld the appointment of Justice

M.R. Agnihotri, a retired Judge of the High Court, as the President of the

State Commission, as communicated by the Registrar of the High Court to the

Haryana Government on 10.6.1994. Finding that there was substantial

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compliance with Section 16(1)(a) of the Act, the appointment of Justice

Agnihotri was upheld and the writ petition challenging his appointment was

dismissed. On the question of interpretation of the newly introduced

Section 16(1A), the High Court was of the view that there was no conflict

between the provisions of Sections 16(1)(a) and 16(1A) of the Act as they

could effectively operate in their respective fields, which did not

overlap. The High Court was further of the view that the provisions of

Section 16(1A) would have hardly any, much less an effective, role in the

appointment of the President of the State Commission in terms of Section

16(1)(a), and that the Selection Committee contemplated by Section 16(1A)

could not be utilized for the selection of the President for which a

separate provision was made under Section 16(1)(a). The writ petition was

accordingly allowed and appropriate directions were issued.

At the outset, Mr. Shanti Bhushan, learned counsel appearing for the

appellant-State of Haryana submitted that the appeal was being pursued not

so much for appointment or non-appointment of a particular incumbent - in

any event, time the great healer having solved the problem, but only for

the purpose of settling the question of interpretation to be placed on the

provisions of Sections 16(1)(a) and 16 (1A) of the Act.

In a recent judgment in Ashok Tanwar and Anr. v. State of Himachal Pradesh

and Ors.2, (to which both of us were parties), the Constitution Bench of

this Court had occasion to consider the issue of "consultation with the

Chief Justice of High Court" under Section 16 of the Consumer Protection

Act, 1986. The Constitution Bench specifically overruled the decision in

Ashish Handa (supra) only on this issue holding that the process and

context of "consultation with the Chief Justice of the State High Court"

within the meaning of Section 16(1)(a) is not to be equated with the

consultation contemplated under Article 217 of the Constitution for

appointment of a High Court Judge, observing :

"It is thus clear that the expression "consultation" used in Article 217 of

the Constitution in relation to appointment of High Court Judges cannot be

read in the same way into "consultation" as contemplated under Section 16

of the Act in the light of what is stated above in Supreme Court Advocates-

on-Record Assn.3" (vide paragraph 19)

The Constitution Bench pointed out that, though the process may be similar

in several other aspects, the two consultations cannot be held to be

qualitatively identical as one was for appointment to a statutory post,

while the other was a Constitutional appointment. It was also held (vide

paragraph 20) that the requirement of consultation with two seniormost

Judges of the High Court could not be read into the consultation required

under Section 16 (1A) for appointment of the Chairman of the State

Commission, and that consultation with the Chief Justice of the High Court

was sufficient. Although overruling Ashish Handa (supra) on this aspect of

the matter, the Constitution Bench referred with approval to the said

judgment and said :

"In Ashish Handa (supra) this Court, having regard to what is stated above,

held that it is the Chief Justice of the High Court, who should initiate

the process in the matter of appointment of a Judge, sitting or retired, as

President of the State Commission." (vide paragraph 21)

Finally, it concluded thus :

"Certain statements made by this Court in Ashish Handa (supra) in para 3,

give an impression that the Chief Justice of a High Court has to consult

his two seniormost colleagues before recommending a sitting or retired

Judge for appointment as President of a State Commission as per Section 16

of the Act. In our view that is not the correct position and we do not

approve the same. To put it positively, we state that for the purpose of

Section 16 of the Act, a Chief Justice of a High Court need not consult his

two seniormost colleagues in the High Court for recommending a sitting or

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retired Judge of a High Court for appointment as President of a State

Commission." (vide paragraph 22)

A careful reading of Ashok Tanwar (supra) shows that the Constitution Bench

differed from Ashish Handa (supra) only on the issue whether consultation

with the Chief Justice meant consultation with the collegium of the High

Court. In other respects, Ashish Handa (supra) is approved.

Mr. Shanti Bhushan, learned counsel for the appellants, urged that even

with the interpretation of Section 16(1)(a), as decided by the Constitution

Bench in Ashok Tanwar (supra), it still leaves undecided the question as to

who should initiate the proposal for appointment to be made under Section

16(1)(a). He contended that `consultation' meant meeting of minds between

two Constitutional authorities of equal rank and there was no reason why

the Chief Justice should not initiate the proposal. We are unable to accept

this contention. In the first place, the processual mechanics of

`consultation' was decided in Supreme Court Advocates-on-Record Association

(supra) judgment by a decision of nine learned Judges and reiterated in

Ashish Handa (supra), with which the Constitution Bench in Ashok Tanwar

(supra) did not disagree. The only point of disagreement between Ashish

Handa (supra) and Ashok Tanwar (supra) was on the issue whether the

consultation with the Chief Justice meant consultation with the collegium

of the High Court. The manner of initiation of proposal has remained same

throughout and it is not open for us to take a different view of the

matter. Learned counsel attempted to pursuade us to refer the matter to a

larger Bench. We decline to do so as the law is quite settled; it is

binding on us and we agree with it. Thus, the manner of initiation of

proposal for a consultation with the Chief Justice under Section 16(1)(a)

of the Act must take place in the manner as laid down by the judgment of

this Court in Ashish Handa's case (supra).

The next contentious issue raised before us is with regard to the import of

the amendment in the Act by introduction of Section 16(1A). Shri M. N.

Krishnamani, learned counsel for the Union of India, sought to canvass the

interpretation given by Government of India (vide D.O. letter dated

31.12.2003) that the provisions of Section 16(1A) may also be used for

appointment of the President of the State Commission.

Learned counsel for the Union of India urged that sub-section (1A) of

Section 16 itself contemplates that every appointment made under sub-

section (1) of Section 16 has to be made on the recommendation of a

Selection Committee consisting of - (i) President of the State Commission

as Chairman; (ii) Secretary of the Law Department of the State; and (iii)

Secretary incharge of the Department dealing with Consumer Affairs in the

State as Members. He also emphasized the proviso to sub-section (1A) which

has been added to take care of the situation where the President of the

State Commission is absent, or otherwise unable to act as Chairman of the

Selection Committee in which case the State Government may request the

Chief Justice of the High Court to nominate a sitting Judge of that High

Court to act as Chairman.

We are unable to accept this contention of the learned counsel for the

Union of India. It is inconceivable that sub-section (1A) is intended for

appointment of the President of the State Commission itself. In the first

place, we cannot accede to the contention that the Chairman of the State

Commission, who is or has been a Judge of the High Court, can be selected

by a Selection Committee comprising two Secretaries of the State

Government. Nothing could be more erosive of judicial independence than

such interpretation of sub-section (1A). This conclusion of ours is driven

home by the proviso to sub-section (1A). This proviso is intended to take

care of a contingency where there exists a President of the State

Commission, who is unable to Chair the Selection Committee meeting because

of absence or other similar reasons. It is only in such a situation, that

the State Government may request the Chief Justice of the High Court to

nominate a sitting Judge to act as Chairman of the Selection Committee. If

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the argument of the learned counsel of the Union of India and the

construction canvassed by him is admitted, it would mean that even where

the President of the State Commission is appointed for the first time, the

procedure would be that he would be appointed by a Committee of which two

Secretaries would be members. That would be obviously destructive of

judicial independence.

The learned counsel, alternatively, argued that the scheme contemplated by

sub-section (1A) is quite workable even in a situation where there exists

already a President, but the question arises of his re-appointment which

would make him unable to act as Chairman of the Selection Committee. In

such cases, a sitting Judge of the High Court could be nominated by the

Chief Justice of the High Court to act as a Chairman. Even this argument

does not commend itself to us. A literal reading of sub-section (1A) may

prima facie suggest that appointments under clauses (a) and (b) of sub-

section (1) are also governed by the procedure contemplated therein, under

sub-section (1A), but as rightly held by the High Court the two sub-

sections have to be harmoniously construed. The procedure contemplated

under sub-section (1A) can apply only in respect of appointment of members

falling within the contemplation of clause (b) of sub-section (1) of

Section 16. In our view, the High Court has given adequate and justifiable

reasons for this interpretation with which we agree. The interpretation

given by the circular, and the view taken by the Union of India in the

matter of Section 16(1A), is incorrect and we hold that the procedure

contemplated therein applies only to the appointments made under clause (b)

of sub-section (1) of Section 16.

In our view, no fault can be found with the impugned judgment of the High

Court on both the counts. Seeing no merit in these appeals, we dismiss the

appeals.

No order as to costs.