Why Paucity of Funds is NOT a valid Defence against Attachment of Property in a Consumer Forum in India?

 The reason why Paucity of Funds is not a valid defence is not a valid defence against attachment of property in India is that apart from being simply impractical, the power granted to the Consumer Forum under Section 25 of the new Consumer Protection Act 2019 empowers it to attach properties if its orders are not complied with. 

Even prior to the new Act, its very well established by the Hobble Supreme Court of India that 

In Shashikant Laxman Kale v. Union of India & Ors., (2014) 4 SCC 425 - the Hon' SC Held that Lack of funds cannot be a valid defence against non compliance of order. 

Kiran Singh & Ors. v. Chaman Paswan & Ors., (2015) SCC OnLine SC 1454 - Held that merely financial constraints is not a valid defence against attachment of property. 

Punjab National Bank v. Surendra Prasad Sinha, (1992) 1 SCC 7 - held that an order for attachment and sale of property can be passed against a judgment debtor who does not comply with the order of the Consumer Forum.

Delhi Development Authority v. Skipper Construction Co. (P) Ltd., (1996) 4 SCC 622 - Held that the judgment debtor cannot avoid attachment and sale of the property on the ground that he has no other property except the one sought to be attached.

National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 - In this case, the Supreme Court held that a plea of financial difficulty cannot be considered as a valid defense against attachment of property.

Under Section 27 of the Old Consumer Protection Act, 1986 the decrees passed by Consumer Forum would be executed in the same manner as if it had been passed by a Civil Court. 

Can Properties be Attached by Consumer Forum in India if order not complied with (New Consumer Protection Act 2019)?

In an execution petition in consumer forum in India, the grounds for attachment of property of a judgment debtor may include:

1. Non-payment of the awarded amount by the judgment debtor despite the expiry of the time limit for payment as mentioned in the order.

2. Willful disobedience of the order by the judgment debtor.

3. Refusal to comply with the order by the judgment debtor.

4. Lack of assets or property that can be used to satisfy the awarded amount.

Under the new Consumer Protection Act, 2019,  Section 25 states:

"25. Enforcement of orders.-

(1) Where an interim order made under this Act is not complied with, the District Commission or the State Commission or the National Commission, as the case may be, may order the property of the person, not complying with such order, to be attached.

(2) No attachment made under sub-section (1) shall remain in force for more than three months at the end of which, if the non-compliance continues, the property attached may be sold and out of the proceeds thereof, the District Commission or the State Commission or the National Commission may award such damages as it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto.

(3) Where any amount is due from any person under an order made by a District Commission or a State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Commission or the State Commission or the National Commission, as the case may be, and such Commission may order that the said amount be recovered as an arrear of land revenue."

Case Laws

1. Union of India v. Oswal Agro Furane Ltd. (2005) 5 SCC 227: In this case, the Supreme Court held that attachment of the judgment debtor's property can be ordered by the consumer forum if there is a failure to pay the awarded amount.

2. Mathew Varghese v. Rosamma Sebastian & Ors. (2010) 1 SCC 141: In this case, the Supreme Court held that attachment of the judgment debtor's property can be ordered by the consumer forum if there is willful disobedience of the order by the judgment debtor.

3. Sita Ram Gupta v. Punjab National Bank & Ors. (2011) 2 SCC 721: In this case, the Supreme Court held that attachment of the judgment debtor's property can be ordered by the consumer forum if the judgment debtor refuses to comply with the order.

4. Natraj Studios (P) Ltd. v. Navrang Studios & Ors. (2019) SCC OnLine SC 1433: In this case, the Supreme Court held that attachment of the judgment debtor's property can be ordered by the consumer forum if the judgment debtor does not have sufficient assets or property to satisfy the awarded amount.

In essence Section 25 of the Consumer Protection Act 2019 is self explanatory and the Consumer Court can enforce their orders like any other Civil Court of Laws in India.