Comply with order once moratorium ends

NCLT Mumbai Bench's moratorium order was effective from December 3, 2018, to May 2, 2020.

Preet Kamal Singh purchased a Videocon DDB LED television on October 23, 2014, from Pinky Electronics, an authorised dealer. He had paid Rs 33,014. The manufacturer had given a five-year warranty for the product.

The television soon developed defects and stopped functioning. Singh took up the issue with the manufacturer whose service engineers made repeated attempts to correct the fault, but did not succeed. The set-top box was also found to be defective and failed within a month of purchase, yet it was not replaced.

As the manufacturer failed to resolve the issues, Singh filed a complaint before the District Forum. Videocon contested the case, arguing it was a distinct and separate entity from Videocon D2H, and could not be held liable. It also argued that there was no deficiency on its part as it had carried out repairs free of charge as provided under the warranty.

While the litigation was pending, Videocon offered to replace the television with a recent model. But Singh refused to accept it as he had already purchased another one. The company then offered to refund its price, but later backed out.

The Forum concluded that the television suffered from manufacturing defects as it had failed time and again even after repeated attempts to rectify the fault. So, it ordered Videocon Industries to refund the purchase price of Rs 33,014 and additionally awarded Rs 10,000 as compensation for harassment and Rs 7,000 as litigation costs. It gave Videocon Industries 30 days to comply with the order.

Videocon challenged this order in an appeal before the Chandigarh State Commission. It pointed out that the State Bank of India had initiated proceedings against it before the Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, and a moratorium order had been passed. It also pointed out that subsequently an Insolvency Resolution Professional had been appointed. It argued the law prohibited the filing of a suit or proceeding before any court or authority, so Singh's consumer complaint was not maintainable. The State Commission did not consider this objection valid and dismissed the appeal. So, Videocon filed a revision petition before the National Commission.

The Commission observed that its ruling that execution proceedings under the Consumer Protection Act would not be affected by any moratorium declared under the Insolvency and Bankruptcy Code, was no longer good law, as its judgement was based on a decision of the Bombay High Court, which had been overturned by the Supreme Court.

The National Commission pointed out that Videocon had not raised any defence regarding the maintainability of the complaint in the proceedings before the District Forum but had offered to settle the matter. It also noted that the order of moratorium passed by the Mumbai Bench of the National Company Law Tribunal (NCLT) was effective from December 3, 2018, to May 2, 2020, and the proceedings had come to an end. So, the National Commission concluded that there was no merit in Videocon's revision petition.

Accordingly, by its order of July 6, 2021 delivered by the Bench of C. Viswanath and Justice Ram Surat Ram Maurya, the National Commission dismissed the revision and upheld the order in Singh’s favour.

The writer is a consumer activist