Consumer Protection Act 2019 | Fixing Pecuniary Jurisdiction Based On Value Of Consideration Is Constitutional: Supreme Court

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 areneither 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.""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 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.The Court held that the classification of claims based on value of goods and services paid as consideration has a direct nexus to the object of creating a hierarchical structure of judicial remedies through tribunals.At the same time, taking note of some concerns expressed regarding the working of the Consumer Protection Act, 2019, the Court directed the Central Consumer Protection Council and the Central Consumer Protection Authority to exercise their statutory duties under Sections 3, 5, 10, 18 to 22 to take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the statute.The bench comprising Justices PS Narasimha and Manoj Misra 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. 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.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.Case Title: Rutu Mihir Panchal and others vs Union of India and others, WP(C) 282/2021Citation : 2025 LiveLaw (SC) 503Click here to read the judgmentAppearance:For Petitioner(s) Mr. Abhimanyu Bhandari, Sr. Adv. Mr. Somesh Tiwari, Adv. Ms. Vidula Mehrotra, Adv. Mr. Utsav Saxena, Adv. Mr. Shubhankar Singh, Adv. Mr. Aashna Mehra, Adv. Ms. Manisha Ambwani, AOR Mr. Shreeyash Lalit, Adv. Mr. Haresh Raichura, AOR Mrs. Saroj Raichura, Adv. Mr. Kalp Raichura, Adv. For Respondent(s) Mr. Vikramjit Banerjee, A.S.G. Mr. Nachiketa Joshi, Adv. Mr. Anmol Chandan, Adv. Mr. Priyanka Das, Adv. Mr. T.S. Sabarish, Adv. Mr. A. Deb Kuamar, Adv. Mr. Sabarish Subramanian, Adv. Mr. Shreekant Neelappa Terdal, AOR Mr. Amrish Kumar, AOR Mr. Viresh B. Saharya, AOR

Consumer Protection Act 2019 | Fixing Pecuniary Jurisdiction Based On Value Of Consideration Is Constitutional: Supreme Court

Yash Mittal

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