Consumer Commissions Can Issue Arrest Warrants For Enforcing Compliance Of Orders: Delhi HC

The Delhi High Court has affirmed the authority of consumer commissions to issue arrest warrants under the Consumer Protection Act, 2019 (CP Act), holding that these bodies possess judicial powers comparable to those of a Judicial Magistrate of the first class for enforcing compliance of their orders.

The Single-Bench of Justice Sanjeev Narula, in an order dated September 25, 2024, upheld the validity of arrest warrants issued by the Delhi State Consumer Disputes Redressal Commission (SCDRC) against Rakesh Khanna, the director of VXL Realtors Pvt. Ltd., for failing to comply with the commission's order in a consumer dispute.

"Section 72 of the CP Act makes it abundantly clear that the objective of the provision is to enforce the orders of Consumer Commissions, by holding a company and its officers accountable for defying the directions of the Commissions. These Commissions are empowered with judicial authority akin to that of a Judicial Magistrate of the first class for the purpose of executing their directions. Hence, the issuance of arrest warrants against the directors of the Judgment Debtor Company for compelling compliance, is well within the ambit of the statutory framework of the CP Act," the Bench observed. 

The case originated from a complaint filed by a consumer, Naveen Kumar Aggarwal, against VXL Realtors Pvt. Ltd. The complaint alleged deficiency in services and unfair trade practices by the company. The State Commission had ruled in favor of Aggarwal, but the company did not comply with the order. During the enforcement proceedings, the SCDRC issued arrest warrants against Khanna, one of the company’s directors at the time.

Khanna challenged the arrest warrants before the National Consumer Disputes Redressal Commission (NCDRC), which upheld the decision of the SCDRC. Following this, Khanna approached the Delhi High Court, contending that he was not the director of the company at the time when the cause of action arose and therefore should not be held liable.

Khanna also argued that his resignation from the position of director predated the issuance of the warrant and claimed that the arrest order was issued without following due process under Order XXI Rule 41(3) of the Civil Procedure Code (CPC), which governs the execution of court orders.

However, the Court rejected Khanna's arguments, noting that his role as director placed an obligation on him to ensure the company complied with the State Commission’s order, regardless of when the cause of action arose. The Court underscored that the liability for non-compliance with the order extended to all officers responsible for the company's affairs at the time of the default.

"Petitioner’s role as a director places upon him an obligation to ensure that the Company complies with the order of the SCDRC, failing which he becomes liable under the provisions of the CP Act," the Court observed.

The Court clarified that the arrest warrants were issued under the specific provisions of the CP Act, which confers the power to enforce compliance, including the issuance of arrest warrants, on consumer commissions. The Court further held that the provisions of the CPC were not relevant in this context, as the CP Act grants commissions powers akin to that of a Judicial Magistrate for enforcing orders.

“The CP Act is explicit on this point: those in charge of a company at the time of non-compliance are accountable. By holding a directorial position during this period, the Petitioner is naturally included in this responsibility," the Court said. 

The Court emphasized that Section 72 of the Consumer Protection Act, 2019, grants consumer commissions, including the NCDRC, SCDRC, and DCDRC, powers similar to those of a Judicial Magistrate for the trial of offences and enforcement of their orders. These powers include the ability to issue arrest warrants when necessary to compel compliance with their directives.

Cause Title: Rakesh Khanna v. Naveen Kumar Aggarwal & Ors. [Neutral Citation No. 2024: DHC :7539]

Appearance:-

Petitioner: Advocates Saurav Kumar, Rajesh Kumar, JS Matta

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