All Consumer Complaints Filed Before CPA 2019 Should Be Heard By Fora As Per Pecuniary Jurisdiction Under CPA 1986 : Supreme Court[Read Judgment]

In a significant verdict, the Supreme Court on Tuesday held that consumer complaints filed before the coming into effect of the Consumer Protection Act 2019(CPA 2019) should continue in the fora in which they were filed as per the pecuniary jurisdiction under the previous Consumer Protection Act of 1986(CPA 1986).

A bench comprising Justices DY Chandrachud and MR Shah set aside the directions of the National Consumer Disputes Redressal Commission that the previously instituted cases as per the 1986 Act should be transferred to the respective fora as per the new pecuniary limits under the 2019 Act.

The material provisions of the Consumer Protection Act 2019 came into effect with the notification published on July 20, 2020. The new Act had repealed the 1986 Act.

The Supreme Court ordered that all proceedings instituted before July 20, 2020 shall continue to be heard by the fora constituted under the 1986 Act and they are not to be transferred to the new fora as per the pecuniary jurisdiction as per the 2019 Act.

"...we have come to the conclusion that proceedings instituted before the commencement of the Act of 2019 on 20 July 2020 would continue before the fora corresponding to those under the Act of 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019", the bench observed.

"All proceedings instituted before 20 July 2020 under the Act of 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 as explained above and not be transferred in terms of the new pecuniary limits established under the Act of 2019", the Court ordered.

This significant pronouncement, which settles a widespread confusion prevailing in consumer fora across the country, came in the case Neena Aneja and others vs Jai Prakash Associates Ltd.

The 2019 Act had increased the pecuniary jurisdiction of consumer fora as follows :

State Commission :- Increased to Rs. Ten Crores from Rs. One Crore.

National Commission :- Above Rs. Ten Crores from Rs.One Crores.

In the instant case, the Supreme Court held that the consumer complaint, seeking a claim of Rs 2.19 Crores, filed on June 18, 2020, should be heard by the NCDRC. The case was related to a dispute between a flat purchaser and a developer. It was the developer who objected to the continuation of the proceedings in the NCDRC.

The Supreme Court imposed a cost of Rupees Two Lakhs on the developer, payable to the complainants.

Reasoning of the Court

The judgment authored by Justice DY Chandrachud laid special emphasis on Section 107 of the CPA 2019, which repealed the 1986 Act.

Section 107 (2) has saved "the previous operation" of any repealed enactment or "anything duly done or suffered thereunder to the extent that it is not inconsistent with the provisions of the new legislation". Section 107(3) indicates that the general application of Section 6 of the General Clauses Act is not prejudiced.

Section 6 of the General Clauses Act provides governing principles with regard to the impact of the repeal of a central statute or regulation. These governing principles are to apply, "unless a different intention appears". Clause (c) of Section 6 inter alia stipulates that a repeal would not affect "any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed".  Clause (e)  of Section 6 ensures that a legal proceeding which has been initiated to protect or enforce "such right" will not be affected and that it can be continued as if the repealing legislation has not been enacted.

The plain consequence of clause (c) and clause (e), when read together is two-fold:

first, the right which has accrued on the date of the institution of the consumer complaint under the Act of 1986 (the repealing law) is preserved; and

second, the enforcement of the right through the instrument of a legal proceeding or remedy will not be affected by the repeal.

The Court also noted that there is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits.

The judgment also talked about the hardship which would be caused to the consumers if the pending cases are to be transferred to new fora.

"One can imagine the serious hardship that would be caused to the consumers, if cases which have been already instituted before the NCDRC were required to be transferred to the SCDRCs as a result of the alteration of pecuniary limits by the Act of 2019. A consumer who has engaged legal counsel at the headquarters of the NCDRC would have to undertake a fresh round of legal representation before the SCDRC incurring expense and engendering uncertainty in obtaining access to justice. Likewise, where complaints have been instituted before the SCDRC, a transfer of proceedings would require consumers to obtain legal representation before the District Commission if cases were to be transferred. Such a course of action would have a detrimental impact on the rights of consumers. Many consumers may not have the wherewithal or the resources to undertake a fresh burden of finding legal counsel to represent them in the new forum to which their cases would stand transferred".

Such a course of action will result in thousands of cases being transferred across the country, from the NCDRC to the SCDRCs and from the SCDRCs to the District Commission, the Court noted.

Difficulty to attribute to Parliament an intent to cause hardship to consumers

The Court observed that it would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers, with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation.

Referring to the statistics of the Union Ministry of Consumer Affairs, the Court noted that as on 31 October 2019, 21,216 cases were pending before the NCDRC and 1,25,156 cases were pending before the SCDRC.

Many of these cases would have to be transferred if the argument of the respondent is upheld. This will seriously dislocate the interests of consumers in a manner which defeats the object of the legislation, which is to protect and promote their welfare.

The judgment also took note of earlier NCDRC decisions, which held that the previous amendments to the 1986 Act which raised the pecuniary jurisdictional limit were prospective in nature.

It also said that Sections 34, 47 and 58 of the 2019 Act, which speak of the powers of the fora at different level to "entertain" complaints within the pecuniary limits of their jurisdiction,will undoubtedly apply to complaints which were instituted after the Act of 2019 came into force

Case Details

Title : Neena Aneja and others vs Jai Prakash Associates Ltd.

Bench : Justices DY Chandrachud and MR Shah

Citation : LL 2021 SC 164

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