The Supreme Court has drawn a nuanced line around the powers of a third member of the National Consumer Disputes Redressal Commission (NCDRC) when two members of a Bench arrive at conflicting conclusions.
While the usual rule is that the third, or “referee”, member should answer the questions referred to them and send the matter back to the original Bench, the Court said an exceptional situation may justify the third member going further and deciding the appeal itself.
The Court held that such an exercise cannot automatically be treated as illegal merely because the third member ultimately disposed of the appeal.
A Bench of Justices Dipankar Datta and Sheel Nagu was examining a dispute arising from an order of the Allahabad High Court, which had set aside a decision delivered by a third NCDRC member on the ground that the member had travelled beyond the scope of the reference.
The Supreme Court has now sent the matter back to the High Court for a fresh examination of the challenge under Article 227 of the Constitution.
A Difference of Opinion at the NCDRC
The consumer dispute dates back to 2016. The complainants had approached the State Consumer Disputes Redressal Commission, which awarded compensation of ₹95 lakh along with interest at 15 per cent.
The matter then reached the NCDRC.
A two-member Bench hearing the appeal, however, failed to speak with one voice. The presiding member favoured allowing the appeal and dismissing the complaint altogether. The other member took a different route, proposing a modification of the State Commission’s order by reducing the compensation to ₹93 lakh with interest at 12 per cent.
With the Bench divided, the matter was referred under Section 58(3) of the Consumer Protection Act, 2019.
The referring Bench framed five questions for consideration by a third member.
The third member agreed with the view taken by the companion member. After answering the questions, the member also proceeded to decide the appeal, awarding compensation of ₹93 lakh along with interest and litigation costs.
That decision became the centre of the next round of litigation.
High Court Says Third Member Went Too Far
The first respondent challenged the third member’s order before the Allahabad High Court under Article 227.
The argument was straightforward: the third member was required only to answer the questions referred by the divided Bench. Once that task was completed, the matter should have been returned to the original Bench, which would then pass the final order based on the majority view.
The High Court accepted the challenge.
It concluded that the third member had exceeded the authority available under the reference, set aside the order and directed that the matter be reconsidered by another third member. The new member was to answer only the referred questions before the case returned to the Division Bench of the NCDRC.
The dispute then travelled to the Supreme Court.
What Was the Real Question?
The Supreme Court identified the central issue as whether a third member, after agreeing with one of the two differing members, could decide the appeal itself or whether the member was required to stop after answering the reference and return the case to the original Bench.
Examining earlier decisions, the Court reiterated the general principle governing such references.
Ordinarily, a referee Bench should answer the questions placed before it and return the matter to the Bench that made the reference. The original Bench can then resolve the dispute in light of the majority opinion.
But the Court also recognised that this is not an inflexible formula.
A referee Bench may deal with a subsidiary issue if that question arises logically and unavoidably while answering the reference. A practical and common-sense approach, the Court noted, may sometimes be necessary.
Broad Questions Can Change the Nature of the Exercise
The Supreme Court found significance in the manner in which the NCDRC reference had been framed.
The referring Bench had not confined itself to narrowly identifying the precise points on which its two members disagreed. Instead, it had formulated broader questions that went to the foundation of the consumer complaint and were closely intertwined with the evidence already on record.
In such circumstances, the Court said, the third member’s decision to answer those questions and, in the process, decide the appeal on merits could not automatically be branded an illegality requiring interference.
The Court also examined the legal framework governing references when members of a judicial or quasi-judicial Bench differ.
It noted that the Consumer Protection Act does not operate in a vacuum and that guidance must often be drawn from judicial precedent. The Court referred to the established approach that, while returning answers to the referring Bench remains the normal course, the referee Bench is not necessarily powerless to address issues that inevitably arise from the questions placed before it.
The Supreme Court, therefore, declined to treat the third member’s decision to dispose of the appeal as inherently unlawful.
Instead, it directed the Allahabad High Court to reconsider the Article 227 challenge on its merits, taking into account the nature of the questions referred and the circumstances in which the third member had delivered the decision.
The ruling makes one thing clear: a third member’s role is ordinarily limited to resolving the disagreement referred by the original Bench, but the boundaries of that role may expand where the reference itself places broader, inseparable issues at the member’s doorstep.
