2025 (5) TMI 1901 - SC - Indian Laws

Concept of consumerism - distinction between the public and the private - recognizing and protecting the rights of a consumer vis- -vis a trader or a service provider - whether the grievance redressal mechanism provided to a consumer is adequate or not - seeking appointment and functioning Members and Presidents of the District Commissions in the State of Maharashtra - qua appointment under Rule 3(2)(a) of the 2020 Rules - violation of the principles of Administrative Law and is contrary to Article 233(2) of the Constitution - appointments to the posts of Judicial and Non-Judicial Members of the State Commission under Rule 3(2)(a) and Rule 3(2)(b) of the 2020 Rules - non-compliance of the directions issued in Limaye - I 2023 (3) TMI 1379 - SUPREME COURT under Article 142 of the Constitution - HELD THAT - It appears to us that by inadvertence the directions issued in Limaye I 2023 (3) TMI 1379 - SUPREME COURT were made applicable to the posts of President of the State Commission Judicial Members of the State Commission and the President of the District Commission. The lis before this Court in Limaye - I (supra) being only with respect to the constitutional validity of Rules 3(2)(b) 4(2)(c) and 6(9) of the 2020 Rules the directions issued therein shall not be applicable to the posts of President of the State Commission Judicial Members of the State Commission and President of the District Commission. Thus the review petitions seeking to clarify the directions issued in Limaye - I (supra) stand allowed to the extent that there shall be no requirement of a written examination followed by a viva voce for selection to the posts of President of the State Commission Judicial Members of the State Commission and President of the District Commission under Rules 3(1) 3(2)(a) and 4(1) of the 2020 Rules respectively. The striking down of Rule 10(2) of the 2020 Rules as invalid with respect to the term of office of the President of the District Commission and Members of the State and District Commissions can also not be found fault with in light of the settled position of law on the aspect of tenure of office in special fora. Non-compliance of the directions issued in Limaye - I (supra) under Article 142 of the Constitution especially with respect to Paper II. A direction issued by this Court in exercise of the power conferred under Article 142 of the Constitution with specific reference to the conduct of a written examination followed by a viva voce may not be read like a statute. It is only suggestive and can only be construed to be a guiding factor. What must be seen is the substantial compliance of the directions issued which we find to be present in the instant case. One must ensure that justice is rendered and mere technicalities shall not stand in the way of substantive justice. There is nothing wrong in the question paper that was set and there is no glaring error in the same. Accordingly both Paper I and Paper II of the advertisement are valid. Validity of the appointments made by the State of Maharashtra Admittedly the appointed candidates had not been arrayed as parties before the High Court of Bombay. We are conscious of the fact that Writ Petition No. 3680/2023 had been filed before the High Court of Bombay at the initial stage of the selection process itself and also that appointments by the State of Maharashtra were made vide order dated 05.10.2023 subsequent to the matter having been reserved for judgment. However considering the nature of the lis and the grievance sought to be espoused the appointed candidates are certainly proper and necessary parties to the litigation as they have gone through the entire selection process. A decision taking away the civil rights that accrued to them could not have been rendered without hearing them. we are inclined to grant the said relief on one more count. The candidates merely participated in the selection process pursuant to the advertisement made by the State of Maharashtra. Thus their participation in the selection process was bona fide and genuine. As already held by us Paper II is valid. Therefore in the absence of any proof that the selection process was tainted appointments made pursuant to the same are upheld. DIRECTIONS Thus we deem it fit to pass the following directions in exercise of the powers conferred under Article 142 of the Constitution - 1) The Union of India is directed to file an affidavit on the feasibility of a permanent adjudicatory forum for consumer disputes either in the form of a Consumer Tribunal or a Consumer Court within a period of 3 months from today on the touchstone of the constitutional mandate. Such a forum shall consist of permanent members including both staff and the Presiding officers. The Union of India may also consider facilitating sitting Judges to head the fora. The strength may be increased adequately. 2) In view of the submission made on behalf of the Union of India we direct the Union of India to notify the new Rules within a period of 4 months from the date of this Judgment strictly adhering to the following a. The earlier view of this Court in Rojer Mathew (supra) MBA - III (supra) and MBA - IV (supra) with respect to the tenure of office being five years being both logical and necessary must be incorporated in the new Rules to be notified. b. The composition of the Selection Committee shall be such that the members from the Judiciary must constitute the majority. To achieve the same the Selection Committee shall comprise two members from the Judiciary one of whom shall be the Chairperson and the third member from the Executive all of whom shall have voting rights. However this shall not preclude the concerned Secretary from being an ex-officio Member of the Selection Committee without voting rights. The proposal made by the Union of India qua Rule 6(1) of the 2020 Rules may be accordingly modified. c. No written examination followed by a viva voce shall be required for appointment and reappointment to the posts of President of the State Commission Judicial Members of the State Commission and President of the District Commission. d. A written examination followed by a viva voce shall be required only for appointment and reappointment to the posts of Non-Judicial Members of the State Commission and Members of the District Commission. e. The written examination for appointments to the State and District Commissions shall be conducted in consultation with the respective State Service Commissions. f. The proposal made by the Union of India qua Rule 4(1) of the 2020 Rules as recorded by us in Para 72 of this Judgement that the qualification for appointment to the post of President of the District Commission shall be restricted to either a serving or a retired District Judge stands accepted. 3) Upon notification of the new Rules by the Union of India all the States are directed to complete the process of recruitment under the same within a period of 4 months from the date of the notification of the said Rules. 4) As regards the status of appointment to the posts of Presidents and Members of the State and District Commissions we are pleased to issue the following directions We make it clear that for all those appointments which have been allowed to continue vide this Judgment the tenure shall be a period of 4 years. Such persons shall not be entitled to claim the benefit of this Judgment qua a five-year tenure subject to the directions issued hereinabove. We also make it clear that this Judgment shall apply prospectively except to the extent indicated in the directions hereinabove. Pending applications if any shall also stand disposed of.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this judgment include:

• The constitutional and statutory validity of the Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 ("2020 Rules"), specifically Rules 3(2)(b), 4(2)(c), 6(1), 6(9), and 10(2).
• The appropriate qualifications, recruitment procedures, and tenure for appointment of Presidents and Members of State and District Consumer Commissions under the Consumer Protection Act, 2019 ("2019 Act").
• The extent and manner of judicial involvement and dominance in the Selection Committee constituted for appointments to Consumer fora, vis-`a-vis the doctrine of separation of powers.
• The validity and applicability of directions issued in the earlier judgment in The Secretary Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye ("Limaye - I") regarding written examinations and viva voce for appointments.
• The legality and effect of appointments made by the State of Maharashtra and Telangana to Consumer Commissions pursuant to selection processes conducted under the impugned rules and notifications.
• The permissibility of reappointments to the Consumer Commissions, and the applicable procedures and qualifications for such reappointments.
• The adequacy and structure of the consumer grievance redressal mechanism, including the need for permanent tenure and staff for Consumer fora.

2. ISSUE-WISE DETAILED ANALYSIS

A. Constitutional and Statutory Validity of the 2020 Rules (Rules 3(2)(b), 4(2)(c), 6(1), 6(9), and 10(2))

Legal Framework and Precedents: The 2019 Act empowers the Central Government to frame rules regarding qualifications, recruitment, appointment procedures, tenure, resignation, and removal of Presidents and Members of the State and District Consumer Commissions (Sections 29, 43, and 101). Earlier, the Consumer Protection Act, 1986 and corresponding rules governed these appointments. The Court's earlier decisions in Rojer Mathew v. South Indian Bank Ltd., Madras Bar Association v. Union of India (MBA - III and MBA - IV), and State of Uttar Pradesh v. All Uttar Pradesh Consumer Protection Bar Association (UPCPBA) laid down principles on judicial dominance in appointments, tenure of office, and procedural safeguards.

Court's Interpretation and Reasoning: The Court found that Rules 3(2)(b) and 4(2)(c) of the 2020 Rules, which fixed experience requirements for Non-Judicial members at 20 and 15 years respectively, were arbitrary and violative of Article 14 of the Constitution. The Court held 10 years' experience sufficient, aligning with prior judgments.

Rule 6(1), which prescribed the composition of the Selection Committee as including only one judicial member (the Chief Justice or nominee) alongside two executive members, was struck down for diluting judicial involvement, violating the doctrine of separation of powers and judicial independence. The Court emphasized that the judiciary must have a dominant role in appointments to quasi-judicial Consumer fora, as established in Rojer Mathew and MBA judgments.

Rule 6(9), which gave the Selection Committee unfettered power to determine its own procedure for appointments without a mandated written examination and viva voce, was also declared unconstitutional in Limaye - I. The Court mandated a written examination and viva voce for Non-Judicial members to ensure transparency and meritocracy.

Rule 10(2), reducing the tenure of office from five years (under the 2019 Rules) to four years, was found inconsistent with the Court's earlier rulings that a minimum tenure of five years is necessary to attract competent members and ensure judicial independence.

Key Evidence and Findings: The Court relied on the constitutional mandate for judicial independence, separation of powers, and prior Supreme Court precedents. The arbitrary experience requirements were inconsistent with statutory provisions and constitutional guarantees. The executive dominance in the Selection Committee was found to be detrimental to the independence and impartiality of Consumer fora.

Application of Law to Facts: The impugned 2020 Rules were inconsistent with constitutional principles and earlier judicial pronouncements. The Court directed the Union of India to amend the Rules to ensure judicial majority in the Selection Committee, appropriate qualifications, and a minimum tenure of five years.

Treatment of Competing Arguments: The State contended that the executive's role was necessary and that the tenure and experience requirements were policy decisions. The Court rejected these, holding that judicial independence and constitutional mandates override such policy considerations. The Court also rejected the argument that Rule 6(3) saved Rule 6(1) from invalidity.

Conclusions: The Court struck down Rules 3(2)(b), 4(2)(c), 6(1), 6(9), and 10(2) to the extent inconsistent with constitutional mandates and prior judgments, directing fresh rules to be framed accordingly.

B. Requirement of Written Examination and Viva Voce for Judicial and Non-Judicial Appointments

Legal Framework and Precedents: Limaye - I mandated a written examination and viva voce for appointments to Consumer fora to ensure merit and transparency, particularly for Non-Judicial members.

Court's Interpretation and Reasoning: The Court recognized practical difficulties in requiring judicial members and Presidents of State Commissions (who must be or have been High Court Judges) to undergo written exams and viva voce. Consequently, it relaxed this requirement for these posts, clarifying appointments shall be made in consultation with and subject to concurrence of the Chief Justice of the High Court.

Key Evidence and Findings: The Court took note of difficulties faced by States and the nature of judicial appointments. It distinguished between judicial and non-judicial posts, permitting examination requirements only for Non-Judicial members.

Application of Law to Facts: The Court allowed review petitions seeking clarification of Limaye - I to exempt judicial appointments from examination requirements.

Treatment of Competing Arguments: The Union Government and States argued impracticality of exams for judicial posts; the Court accepted this on a concession basis.

Conclusions: Written examination and viva voce are mandatory only for Non-Judicial members; judicial members and Presidents of State and District Commissions are exempt, subject to judicial consultation.

C. Validity of Appointments Made by States of Maharashtra and Telangana

Legal Framework and Precedents: The appointments were made pursuant to the impugned 2020 Rules and subsequent amendments, with some conducted before Limaye - I and others after.

Court's Interpretation and Reasoning: The Court held that appointments made by Maharashtra on 05.10.2023, pursuant to written exams and viva voce, were valid and the appointees are entitled to complete their tenure. The Court emphasized principles of natural justice, noting that these appointees were not parties before the High Court and must be heard before any adverse order.

Appointments in Telangana, made before Limaye - I, were upheld as the directions in Limaye - I are prospective and do not affect concluded selections.

Key Evidence and Findings: The Court examined the timelines of selection processes, adherence to examination requirements, and procedural fairness.

Application of Law to Facts: The Court allowed continuation of service for appointed candidates and reinstatement in Telangana, overruling High Court orders setting aside appointments.

Treatment of Competing Arguments: Some petitioners challenged appointments on procedural grounds; the Court rejected such challenges where selection was bona fide and substantially compliant with directions.

Conclusions: Valid appointments stand; appointees may complete tenure; selection processes must adhere to constitutional and judicially mandated procedures.

D. Reappointment and Procedure Therefor

Legal Framework and Precedents: Rule 10(2) of the 2020 Rules provided for reappointment on the basis of Selection Committee recommendation. Earlier 2019 Rules contained provisions for reappointment without repeating selection process if qualifications were met.

Court's Interpretation and Reasoning: The Court held that the High Court's suggestion to apply Rule 8(18) of 2019 Rules (under the repealed 1986 Act) for reappointments was untenable, as those Rules stand repealed. There cannot be revival of repealed Rules by implication. The 2020 Rules, though partially struck down, remain the operative law, and reappointments must be governed by the new Rules to be framed.

The Court clarified that no vested right to reappointment exists; it is subject to Selection Committee satisfaction under the prevailing Rules.

Key Evidence and Findings: The Court analyzed statutory provisions, rule-making powers, and principles of administrative law regarding repealed legislation.

Application of Law to Facts: Pending reappointments must await new Rules. Those seeking reappointment must comply with examination requirements if applicable, except judicial posts exempted as above.

Treatment of Competing Arguments: Petitioners claimed entitlement to reappointment without examination; the Court rejected such claims.

Conclusions: Reappointments are discretionary, governed by new Rules; no automatic right to reappointment exists; examination requirements apply as per new Rules.

E. Adequacy and Structure of Consumer Fora and Need for Permanent Tenure

Legal Framework and Precedents: The Court referred to constitutional provisions (Articles 14, 38, 39, 47), Directive Principles, and earlier judgments emphasizing socio-economic justice and consumer protection as constitutional imperatives.

Court's Interpretation and Reasoning: The Court emphasized that consumerism is integral to constitutional values, encompassing social, economic, political, and environmental justice. It highlighted the need for permanent structures for Consumer fora, with permanent staff and members, to ensure efficiency, independence, and quality of justice.

The Court urged the Union of India to consider establishing permanent Consumer Tribunals or Courts with adequate strength and judicial leadership.

Key Evidence and Findings: The Court drew upon constitutional philosophy, historical evolution of consumerism, and practical challenges faced by Consumer fora under tenure-based appointments.

Application of Law to Facts: The Court directed the Union to file affidavits and take steps towards permanent adjudicatory structures.

Treatment of Competing Arguments: The Court noted the absence of a clear mechanism for tenure security and administrative control in Consumer fora and called for reforms.

Conclusions: Consumer fora should have permanent members and staff; tenure security is essential to judicial independence and quality justice; the Union of India must revamp the structure accordingly.

3. SIGNIFICANT HOLDINGS

"Rule 6(1) of the 2020 Rules, which provides for the composition of the Selection Committee, has been rightly struck down, placing reliance upon the doctrine of separation of powers and earlier decisions of this Court in Rojer Mathew (supra), MBA - III (supra) and MBA - IV (supra), as the composition of the Selection Committee as per the said Rule indicates executive dominance."

"The tenure of office of the President and Members of the State Commission and the President and Members of the District Commission fixed at four years under Rule 10(2) of the 2020 Rules is not legally sustainable, especially in view of the dictum in Madras Bar Association III."

"Written examination and viva voce shall be mandatory only for Non-Judicial Members of the State Commission and Members of the District Commission. No such examination shall be required for appointment or reappointment of the President of the State Commission, Judicial Members of the State Commission, and President of the District Commission, who shall be appointed in consultation with and subject to the concurrence of the Chief Justice of the High Court."

"Appointments made pursuant to a bona fide selection process substantially complying with the directions issued by this Court shall be upheld and the appointees shall be allowed to complete their tenure."

"There cannot be revival of repealed Rules by implication; reappointments must be governed by the prevailing Rules, and no vested right to reappointment exists."

"Consumer fora must be restructured to have permanent members and staff with secure tenure to ensure independence, efficiency, and quality of adjudication, in consonance with the constitutional mandate."

"The Selection Committee for appointments to Consumer fora shall have judicial majority, with two judicial members including the Chairperson, and one executive member with voting rights; the Secretary in charge of Consumer Affairs may be an ex-officio member without voting rights."

"The Union of India is directed to notify new Rules within four months incorporating the above principles and States shall complete recruitment processes accordingly."