Consumer Protection Act 2019 : Legislative Impact Assessment Study Recommends Revision Of Pecuniary Jurisdiction To Reduce Burden On District Forums

The Central Government has filed an affdavit containing the Legislative Impact Assessment of the Consumer Protection Act, 2019 as directed by the Apex court in the suo-motu matter dealing with the issue of vacancies in Consumer Commissions across the country.

In an order dated 11/08/2021, a Bench of Justices Sanjay Kishan Kaul and Hrishikesh Roy had directed the Union Government carry out a legislative impact study with respect to the Consumer Protection Act 2019 within 4 weeks. The bench noted that the same was in the context that the new Act expanded the jurisdiction of the consumer fora which would result in litigation shifting to the consumer fora, apart from the aspect of the variation in the pecuniary jurisdiction by increasing the jurisdiction of the state and district fora.

During the proceedings on 11/11/2021, the Bench of Justices Sanjay Kishan Kaul and M.M.Sundaresh while hearing the matter had again emphasised on the importance of a Legislative Impact Assessment of the Consumer Protection Act 2019. Additional Solicitor General Aman Lekhi had submitted that the LIA was ready for the court's perusal.

Legislative Impact Assessment of the Consumer Protection Act.

The LIA conducted by Centre for Consumer Affairs, India Institute for Public Administration, New Delhi notes that the objective of the study is four-fold

• Evaluate the quantum of cases which will enhance with increased pecuniary jurisdiction in the tribunals at different levels
• Analyse the number of commissions required at state and national level to deal with the increase in jurisdiction.
• Examine reasons for procedural delay in disposal of consumer complaints
• Suggest measures to make Consumer Commission more effective

Key Findings of the Report

The Report notes that between the time 20/07/2020 and 30/08/2021, 90% of the cases filed in District Commissions were pending. The corresponding figures for the State and National Commission are 83.9% and 79.3%.

The Report notes that "Low disposal and high pendency during the period July 2020 to August 2021 can be attributed to the large number of vacancies at the three-tier Consumer Commissions."

Further, it analyses the time taken for the disposal of complaints across district, state and national fora and notes that " vacancies in the positions of the Presidents and Members in the Commissions have also affected the timely disposal of complaints."

Quantum of cases which will enhance with increased pecuniary jurisdiction in the tribunals at different levels

The report notes that while there has been a decline in original complaints being filed both in SCDRC and NCDRC due to increase in pecuniary jurisdiction, there has been a 6.3% increase in complaints filed in District Commissions after enactment of CPA 2019.

Vacancies in Consumer Commissions

The Report finds that 50.4% of the posts of members in State Commissions are lying vacant and 45.4% in the District Commissions. After making a state-wise table noting the vacancies in State and District Commissions, the report notes that: "Even though State and District Commissions are technically functional….large number of vacancies have rendered them non-functional."

Infrastructure and Manpower Requirements

The Report notes that despite the existence of a scheme to provide funds for the construction of building by the Central Government, the State Government does not provide required space to construct the building..without the allotment of space by the State government, the Central Government cannot release money...where buildings have been constructed they have no funds for maintenance and are in poor state."

It further notes that while one time grant has been provided by the Central Government, regular budgets are not granted by the State government. It recommends that a mechanism should be put in place so that the State Government releases the amount for office expenses and Presidents of the Commissions can realise it.

The Report also notes that 54% of District Commissions have inadequate infrastructure, 50% face financial crunch, 37% do not have adequate storage space.

Key Recommendations

The burden of cases before the District Consumer Commissions is going to increase manifold with many new areas coming under the ambit of COPRA, 2019. Timely disposal of complaints will require adequate infrastructure, manpower and expertise of members.

Considering the infrastructure and manpower in the District Commissions, the Report notes that it is not good that more cases be filed at DCs by enhancing pecuniary jurisdiction. In this light, it recommends that the pecuniary jurisdiction be revised as under

• District Commission: 50 Lakhs (presently it is up to Rs 1 crore)
• State: 50 Lakhs to 2 Crore(Presently it is between Rs 1 crore to Rs 10 crore)
• National: Beyond 2 crore.(Presently it is above Rs 10 crore)

State Government must ensure additional benches for district commissions to deal with increased jurisdiction along with regional benches for State Commissions and National Commission.

Noting that vacancies are not filled up in time, it recommends that the State Government make a 'Standing Panel' and that Presidents and Members who have a very good record be considered for re-appointment.

Change in existing system of tenure appointment and instead creating a permanent cadre which will ensure continuity upto 60 years with power of removal.

Need for enhancement of perks being given to President and Members of DCDRCs in many states.

The report also makes some notable recommendations with respect to the Infrastructure, Manpower and Financial Powers of the Commissions

Need to provide space to each state and district commission as per norms adopted by the State Government for the requirements in District Courts.

Departing from the present system where Presidents of State Commissions and District Commissions are totally dependent upon the officers of the State Government for day-to-day expenditure, the Presidents of the Commissions could be given financial powers to be exercised within the budget allocated.

The LIA has made these notable recommendations in light of its observation that "Consumer Commissions to a very large extent are not able to deliver justice quickly and in a cost effective manner as envisaged under the Act. This may lead to consumers losing faith in the redressal mechanism."

It may be noted that in the order dated 10.11.2021, the Court had asked ASG Aman Lekhi and Amicus Gopal Sankarnarayanan to jointly examine the report and assist the court.

The matter is to be next heard on 01/12/2021.

Case Title: RE: Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India| SMW (C) No(s). 2/2021