Decided on :NEW DELHI; APRIL 29, 2025
Issue :The pecuniary jurisdiction OF Consumer Commissions
The Supreme Court today (April 29) upheld the constitutionality of the provisions of the Consumer Protection Act, 2019, 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.
The Court dismissed the constitutional challenge to Section 34, 47 and 58 of the 2019 Act and declared that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary.
The bench comprising Justice PS Narasimha and Justice Manoj Misra observed that “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.” The judgment authored by Justice Narasimha held that the “value of consideration is and can be a valid basis for classifying claims for determining pecuniary jurisdiction.
. 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 determination of jurisdiction of the district, state or national commissions on the basis of value of consideration paid for purchase of goods and services has rational nexus to the object of provisioning hierarchy of judicial remedies,” the Court stated
BACKGROUND
The SC bench heard the case, where a writ petition was filed under Article 32 of the Constitution challenging certain provisions of the Consumer Protection Act, 2019, regarding the determination of the pecuniary jurisdiction of the consumer fora (District, State, and National Commissions).
After the operation of the new consumer law, i.e., the Consumer Protection Act, 2019 (effective from 15 July 2020), the jurisdiction of the forums is determined based on the consideration paid for a product or service, not on the amount of compensation claimed.
Petitioner filed a Writ in the nature of Mandamus declaration or directions to declare that newly added Proviso of Section 34(1), Proviso to Section 47(1) and Proviso to Section 58(1)(a)(i) of the Consumer Protection Act, 2019
Under the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021, the pecuniary jurisdiction is based on the consideration paid for the purchase of goods or availing a service where the District Commissions can entertain complaints where value of the goods or services paid as consideration does not exceed 50 lakh rupees, the State Commissions can entertain complaints between ₹50 lakh–2 crore, and the National Commission is authorized to entertain complaint above ₹2 crore.
Facts of the Case :
In the present case, the petitioners were the legal heirs of a man who died when a Ford Endeavour car caught fire, leading to his death due to a manufacturing defect. They sought over ₹50 crores in damages, upon filing an application before the National Consumer Disputes Redressal Commission (NCDRC). However, the NCDRC dismissed their complaint because the car’s price (₹44 lakhs) fell below the monetary threshold for NCDRC jurisdiction.
They contend this rule causes anomalies and irrational classifications, violating Article 14 (right to equality) of the Constitution, because huge compensation claims could end up before lower forums based solely on the product’s purchase price.
Legal Issue
- 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 Article 14.
Classification based on value of goods or services on the basis of the amount paid as consideration is valid. “Consideration” is an integral part of forming any contract. It is also an integral part of the definition of a ‘consumer’
- Power Of Parliament to determine pecuniary jurisdiction
There is no doubt about the fact that the Parliament has the legislative competence to enact the Consumer Protection Act, 2019
It is in the above referred context we recognise the constitution and establishment of two statutory bodies,
a)The Central Consumer Protection Council under section 3
- b) Central Consumer Protection Authority under section 10 of the 2019 Act.
For the reasons stated above; (a) we dismiss the constitutional challenge to section 34, 47 and 58 of the 2019 Act and declare that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary
