Supreme Court Upholds Consumer Protection Act 2019: Key Takeaways on Pecuniary Jurisdiction
The Supreme Court of India recently delivered a significant judgment addressing the constitutional validity of certain provisions of the Consumer Protection Act, 2019. The case, titled Rutu Mihir Panchal & Ors. vs. Union of India & Ors., revolved around the pecuniary jurisdiction of consumer dispute redressal commissions under the new Act. The petitioners challenged Sections 34(1), 47(1)(a)(i), and 58(1)(a)(i) of the Act, arguing that these provisions were discriminatory and violative of Article 14 of the Constitution. Here’s a detailed breakdown of the judgment, the arguments presented, and the Court’s reasoning.
The dispute arose from two separate cases. In the first, the petitioner’s husband purchased a car for Rs. 31.19 lakhs, which tragically caught fire, leading to his death. The petitioner filed a consumer complaint seeking compensation of Rs. 51.49 crores. Under the Consumer Protection Act, 2019, the pecuniary jurisdiction of consumer commissions is determined by the value of the goods or services paid as consideration, not the compensation claimed. This meant the petitioner had to approach the District Commission, whereas under the repealed 1986 Act, she could have directly approached the National Commission based on the compensation claimed.
In the second case, the appellant’s husband, a District Governor of the Lions Club, passed away due to COVID-19. The appellant’s claim for insurance compensation was denied, and she approached the National Commission seeking Rs. 14.94 crores. However, the National Commission rejected her petition, stating that the consideration for the insurance policy did not exceed Rs. 10 crores, which was the threshold for its jurisdiction under the 2019 Act.
The petitioners argued that the new criterion for determining pecuniary jurisdiction was arbitrary and discriminatory. They contended that consumers claiming identical compensation but having paid different considerations for goods or services were treated differently, violating Article 14. They also argued that the new provisions impaired access to justice by forcing consumers with high compensation claims but low consideration values to approach lower forums.
The respondents, represented by the Union of India, defended the provisions, stating that Parliament had the legislative competence to determine the jurisdiction of courts and tribunals. They argued that the classification based on the value of consideration was reasonable and had a rational nexus with the object of the Act, which was to ensure timely and effective redressal of consumer disputes. They also highlighted that the new provisions aimed to prevent exaggerated claims and distribute cases more evenly across forums.
The Supreme Court, in its judgment, upheld the constitutional validity of the impugned provisions. The Court emphasized that Parliament had the authority to prescribe pecuniary jurisdiction and that the classification based on the value of consideration was valid. The Court referred to the definition of a ‘consumer’ under the Act, which includes anyone who buys goods or services for a consideration, and held that the value of consideration was a legitimate basis for determining jurisdiction.
The Court also addressed concerns about the effectiveness of the new provisions, directing the Central Consumer Protection Council and the Central Consumer Protection Authority to review and assess the working of the Act. The Court emphasized the importance of performance audits to ensure that the statute achieves its intended objectives.
In conclusion, the Supreme Court dismissed the writ petition and the civil appeal, upholding the provisions of the Consumer Protection Act, 2019. The Court’s judgment reaffirms the legislative competence of Parliament and underscores the need for continuous review and improvement of consumer protection mechanisms.
Petitioner Name: Rutu Mihir Panchal & Ors..Respondent Name: Union of India & Ors..Judgment By: Justice Pamidighantam Sri Narasimha, Justice Manoj Misra.Place Of Incident: Vadodara, Jhansi.Judgment Date: 29-04-2025.Result: dismissed.
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