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TMI Blog2025 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ................................................ 11 8. Re: Performance Audit of the Statute ................................................... 17 9. Conclusions ..................................................................................................... 28 1. Constitutionality of Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 Hereinafter referred to as the 2019 Act. prescribing pecuniary jurisdictions of the district, state and national commissions on the basis of value of goods and services paid as consideration, instead of compensation claimed are challenged in the writ petition W.P. (C) No. 282 of 2021. under Article 32 of the Constitution and the civil appeal Leave Granted and arising out of SLP (C) No. 1738 of 2022 against the order of the National Consumer Disputes Redressal Commission in Diary No. 19172/NCDRC/2021-CC dated 08.10.2021. against the order of the National Consumer Disputes Redressal Commission Hereinafter, "National Commission". 2. Facts in the Writ Petition: The short facts, to the extent that they are relevant for disposal of the writ petition are that the petitioner's husband purchased a sedan -Ford Endeavour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Consumer Protection Act, 2019, where the consideration paid, if exceeds Rupees Ten Crores, will give power to the National Consumer Disputes Redressal Commission to entertain any Complaint. It has nothing to do with the amount of Compensation to be claimed by any of the Complainant. " 4. Statutory Provisions: Before we consider the legal submissions of the petitioner/appellant and the respondent, a comparative chart of the jurisdictions exercised by the district, state and national commission under the repealed 1986 Act and the present 2019 Act is as follows : FORUM 1986 ACT 2019 ACT District Commission Section 11.(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs... Section 34.(1) Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees... State Commission Section 17. Subject to the other provisions of this Act, the State Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as consumers who claim identical compensation, but have paid different considerations at the time of purchase of goods or services are treated differently. To buttress their argument, they referred to Section 2(7) of the 2019 Act which defines "consumer" and includes within its ambit any person who buys goods/services for a consideration which is (i) fully paid or promised, (ii) partly paid or promised, (iii) under a system of deferred payment, and also includes (iv) a user of such goods or services. Thus, when the definition of "consumer" itself does not discriminate on the basis of the consideration paid and includes every consumer in the wide spectrum, restricting access to judicial remedies on the basis of consideration paid is illegal and arbitrary. 6.2 As a logical extension of the same argument, it is submitted that there is no rationale for introducing the new criterion for determining the pecuniary jurisdiction. It is argued that even if the object sought to be achieved is to curb instituting exaggerated claims, the same could have been done by way of increasing the pecuniary limits of the forums. 7. Mr. Vikramjit Banerjee, Ld. ASG appearing on behalf of the Union oppos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... li Sastri concurring with the majority held as under: "88. It had long been the practice in this country to constitute and organise courts with general jurisdiction over all persons and matters subject only to certain pecuniary and territorial limitations, and to confer special jurisdiction limited to certain specified cases or matters either on the ordinary courts in addition to their general jurisdiction or on tribunals set up to deal with such matters exclusively. The various Provincial Civil Court Acts as well as the provisions of the Civil and Criminal Procedure Codes invest the courts, both civil and criminal, with general jurisdiction, that is to say, power to adjudicate in respect of all persons and all matters except those that are specifically excluded or brought within the cognizance of tribunals with special or limited jurisdiction extending only to those matters. The grading of the court too in their hierarchy has reference to the pecuniary and territorial limits rather than to the nature and kind of the subject-matter which they are empowered to deal with." 9.1 Parliament has the legislative competence to prescribe jurisdiction and powers of courts. This power ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave power to clothe a court with any power or jurisdiction whatsoever. It would have to look to an outside authority and to another statute to become effective. Such an enactment is, so far as I know, unknown to legislative practice and history. Parliament by making administration of justice a provincial subject could not be considered to have conferred power of legislation on the Provincial Legislature of an ineffective and useless nature." (emphasis supplied) 9.2 In view of the above discussion, there can be no doubt about the legislative competence and also the power of the Parliament to prescribe limits of pecuniary jurisdiction of courts and tribunals and in our case, the district, state or the national commission. 10. Re: Submissions that the provisions are discriminatory and violative of Article 14: Sections 34, 47 and 58 vest jurisdictions in the district, state and national commission on the basis of value of goods or services paid as consideration. The precise question for our consideration is whether empowering the district, state and national commissions to exercise jurisdiction on the basis of value of the goods or services paid as consideration is violative of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a consumer. 10.5 Therefore, vesting jurisdiction in the district, state or national commission on the basis of value of goods or services paid as 'consideration', is neither illegal nor discriminatory. For this very reason, the submission made by Mr. Shreeyash Lalit that the width of the expression 'consumer' under Section 2(7) of the Act is arbitrarily restricted by Sections 34, 47 and 58 pales into insignificance. The myriad ways in which a consideration could be inferred would not derogate from the essentiality of consideration in every transaction leading to formation of a contract. As we are not dealing with gratuitous agreements, value of consideration is and can be a valid basis for classifying claims for determining pecuniary jurisdiction. We therefore reject the submission that sections 34, 47 and 58 are discriminatory and violative of Article 14. 11. This classification also has a direct nexus to the object sought to be achieved. It is thus not a suspect classification. Value of consideration paid for good or service purchased is closer and more easily relatable to compensation than the self-assessed claim for damages of a consumer. It is clear that the determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not taken away. It is well settled that there is no right or a privilege of a consumer to raise an unlimited claim of compensation and thereby chose a forum of his choice for instituting a complaint. In Nandita Bose v. Ratanlal Nahta 1987 AIR 1947, this Court has held that a court or a tribunal will always have the jurisdiction to assess or reassess an overvalued or grossly undervalued claim in a petition in the following terms: "4. ...The principles which regulate the pecuniary jurisdiction of civil courts are well settled. Ordinarily, the valuation of a suit depends upon the reliefs claimed therein and the plaintiffs valuation in his plaint determines the court in which it can be presented. It is also true that the plaintiff cannot invoke the jurisdiction of a court by either grossly over-valuing or grossly under-valuing a suit. The court always has the jurisdiction to prevent the abuse of the process of law. Under Rule 10 of Order 7 of the Code the plaint can be returned at any stage of the suit for presentation to the court in which the suit should have been instituted..." (emphasis supplied) In conclusion, while we hold that there is no unrestricted claim for compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue would depend on performance audit of the 2019 Act. The need for performance audit of a statute was considered by this Court in the case Yash Developers v. Harihar Krupa Co-operative Housing Society Ltd. & Ors. 2024 INSC 559; See Para 35 wherein it was held that assessing the working of the statute to realise if its purpose and objective are being achieved or not is the implied duty of the executive government. Reviewing and assessing the implementation of a statute is an integral part of Rule of Law. It is in recognition of this obligation of the executive government that the constitutional courts have directed governments to carry performance audit of statutes. 12.4 Four aspects for achieving justice are well founded and articulated as, i) distribution of advantages and disadvantages of society, ii) curbing the abuse of power and liberty, iii) deciding disputes and, iv) adapting to change. Adapting to change is important for achieving justice, as failure to adapt produces injustice and is, in a sense, an abuse of power. Thus, failure to use power to adapt to change is in its own way an abuse of power. In fact, the issue is not one of change or not to change, but of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that we recognise the constitution and establishment of two statutory bodies, the Central Consumer Protection Council under section 3 and Central Consumer Protection Authority under section 10 of the 2019 Act. 12.7 The Central Consumer Protection Council Hereinafter, "Council" is constituted under section 3; "3. Central Consumer Protection Council. (1) The Central Government shall, by notification, establish with effect from such date as it may specify in that notification, the Central Consumer Protection Council to be known as the Central Council. (2) The Central Council shall be an advisory council and consist of the following members, namely:- (a) the Minister-in-charge of the Department of Consumer Affairs in the Central Government, who shall be the Chairperson; and (b) such number of other official or non-official members representing such interests as may be prescribed." 12.8 To ensure that the advise is well considered and takes within its sweep plurality of thought and ideas, the Council comprises officials and non-officials, apart from Ministers-incharge of Consumer Affairs. In exercise of powers under section 101 of the 2019 Act, the Ministry of Consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights [Section 18(2)(e)]; (c) undertake and promote research in the field of consumer rights [Section 18(2)(f)]; (d) advise the Ministries and Departments of the Central and State Governments on consumer welfare measures [Section 18(2)(k)]. 12.11 Apart from the above, the Authority exercise vast powers under sections 19 to 22. In exercise of powers under section 101, the Ministry of Consumer Affairs has framed rules and regulations such as, 'The CCPA (Allocation and Transaction of Business) Regulations, 2020', 'The CCPA (Procedure for Engagement of Experts and Professionals) Regulations, 2021', 'The CCPA (Submission of Inquiry or Investigation by the Investigation Wing) Regulations, 2021', 'The CCPA (Form of annual statement of accounts and records) Rules, 2021'. 12.12 Purpose and object of constituting these authorities is clearly reflected in the preamble of the 2019 Act, the terms of which are; "An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution, as the petitioner expressed concern over the ineffective working of the institutions intended to exercise jurisdiction and power for consumer protection. While exercising judicial review of administrative action in the context of Statutes, laws, rules or policies establishing statutory or administrative bodies to implement the provisions of the Act or its policy, the first duty of constitutional courts is to ensure that these bodies are in a position to effectively and efficiently perform their obligations. This approach towards judicial review has multiple advantages. In the first place, while continually operating in the field with domain experts, these bodies acquire domain expertise, the consequence of which would also be informed decision-making and consistency. Further, the critical mass of institutional memory acquired by these bodies will have a direct bearing on the systematic development of the sector and this will also help handling polycentric issues. Thirdly, while continuously being on the field, and having acquired the capability of making real-time assessments about the working of the policies, these bodies will be in a position to visualize course corre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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