Consumer Protection Act 2019 : Plea In Supreme Court Challenges Determination Of Pecuniary Jurisdiction Based On Consideration Paid

The Supreme Court on Friday adjourned a writ petition filed challenging the vires of newly notified provisos of Sections 34(1), 47(1)(a) and 58(1)(a)(i) of the Consumer Protection Act 2019, which deal with the pecuniary jurisdiction of district, state and national level fora.

A bench comprising Justice Vineet Saran and Justice Dinesh Maheshwari decided to adjourn the case after a letter seeking the same was circulated on behalf of the petitioner. The Court had issued notice on the petition earlier.

The writ petition filed under Article 32 of the Constitution challenges the provisions in the Consumer Protection Act 2019 which state that pecuniary jurisdiction will be reckoned based on the consideration paid at the time of purchasing the product or the service instead of the compensation claimed.

According to the petitioners, since the coming into force of the impugned provisions of the Act from 15th July 2020, the new criteria for computing compensation claim under the provisos has shifted from 'Amount claimed' to "consideration paid at time of purchasing service or product'.

The petition filed through Advocate Haresh Raichura and drawn by Advocate Saroj Raichura, has stated that an anomaly has arisen after coming into force of provisions of Consumer Protection Act 2019, regarding 'Pecuniary Jurisdiction' and 'Hierarchy of Judicial System'.

The petitioners have submitted that they are legal heirs of a man who died when the Ford Endeavour Titanium car in which he was travelling burnt down due to manufacturing defects.

The legal heirs claimed a compensation of more than 50 crores on account of his death. Since the claim was above Rs.10 crores, the complaint was filed before the National Consumer Disputes Redressal Commission. However, the NCDRC held that the pecuniary jurisdiction has to be calculated based on the price paid for the car, which was around Rupees 44 lakhs. Therefore, the NCDRC dismissed the complaint as not maintainable.

The NCDRC held that "for determining pecuniary jurisdiction of the District Commission, State Commission or National Commission the value of the goods or services paid as consideration alone has to be taken".

According to the petitioners, this rule for pecuniary jurisdiction will lead to anomalies. This can lead to a situation where a person claiming compensation of Rs 51 crore is required to file complaint before the District Forum just because the value of the product is less than one crore. This means that while the NCDRC is considering a complaint seeking compensation of Rs 11 crores, a District Forum can deal with a complaint seeking compensation of Rs 51 crores. This, according to the petitioners, is arbitrary and unreasonable.

The yardstick of classification for pecuniary jurisdiction is wholly irrational, the petitioners argue.

The petitioner has therefore urged the Court to issue directions to declare that these newly declared provisos which came into force by notification dated 15th July 2020 given by the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs) as violative of Article 14 of the Constitution on the ground of unreasonable classification arbitrariness and disruption caused to the judicial hierarchy.

Advocate Shreeyash Lalit appeared for the petitioner at the time of admission hearing.

(Case : Rutu Mihir Panchal and others vs Union of India and others, WP(c) 282/2021)