Read Judgment: Ecgc Limited V. Mokul Shriram Epc Jv

Pankaj Bajpai

New Delhi, February 17, 2022: While relying on its Constitution Bench decisions in Garikapati Veeraya v. N. Subbiah Choudhry & Ors, AIR 1957 SC 540, and Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., Nagpur, AIR 1967 SC 344, the Supreme Court held that onerous condition of payment of 50% of the amount awarded, for filing appeal against the order of National Consumer Dispute Redressal Commission (NCDRC), will not be applicable to the complaints filed prior to the commencement of the Consumer Protection Act, 2019.

A Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian observed that the present appeal was directed against an order passed by the NCDRC whereby ECGC (Appellant) was directed to pay a sum of Rs. 265.01 crores along with interest @ 10% p.a., and in case of failure to deposit the said amount, the awarded amount would carry compensation in the form of simple interest @ 12% p.a. 

Going by the background of the case, Mokul Shriram (complainant) was awarded a contract for construction of rain water drainage, heavy sewerage and municipal road system by the Government of Basra, Iraq. The complainant obtained two specific contracts (Letter of Credit Comprehensive Risks Policies) by paying a sum of Rs. 10,38,03,912/- as premium to Appellant. Now, the grievance of the complainant was that the payment for invoices issued for the work done under the contract was suspended. Later, the contract also was withdrawn by the Government of Basra owing to some internal conflict. The appellant rejected the insurance claim of the complainant and thus relief was sought before the National Commission by filing a complaint u/s 21(a)(i) of the 1986 Act, which was allowed. 

After considering the submissions, the Top Court found that in terms of Section 67 of the Consumer Protection Act, 2019, no appeal against the order of National Commission shall be entertained by the Supreme Court unless the person has deposited fifty per cent of the amount required to be paid. 

Whereas, under the Consumer Protection Act, 1986, the condition was that no appeal shall be entertained by the Supreme Court unless the person who is required to pay the amount deposits fifty per cent of the amount or fifty thousand, whichever is less, added the Court. 

Speaking for the Bench, Justice Gupta quoted the decision in case of Neena Aneja & Anr. v. Jai Prakash Associates Ltd., 2021 SCC OnLine SC 225, wherein it was held that the proceedings instituted before the commencement of 2019 Act would continue before the fora corresponding to the provisions under the 1986 Act.

Accordingly, the Apex Court ruled in favour of the Appellant.

0 CommentsClose Comments

Leave a comment