SC upholds validity of Pecuniary Jurisdiction clauses in Consumer Protection Act, 2019
The jurisdiction of consumer forums is to be determined based solely on the value of goods or services paid as consideration, rather than the value of goods or services and the compensation claimed, as was the practice under the 1986 Act.
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In a significant ruling, the Supreme Court has affirmed the constitutional validity of the provisions under the Consumer Protection Act, 2019, that define the pecuniary jurisdiction of consumer forums.
The Court, on April 29, clarified that the jurisdiction should be determined based on the actual consideration paid for goods or services, excluding any compensation claimed. This interpretation aims to prevent the practice of inflating compensation claims to bring cases within the purview of higher consumer forums, thereby ensuring a more efficient and streamlined consumer dispute resolution process.
“The classification of claims based on the 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,” the Court said.
Hence, it dismissed the petitions which had challenged provisions laying down the pecuniary jurisdiction of the District, State and National Consumer Commissions.
The Court was hearing a writ petition filed under Article 32 of the Constitution, along with a civil appeal stemming from an order passed by the National Consumer Disputes Redressal Commission (NCDRC).
In the writ petition, the petitioner contested the amendment introduced by the Consumer Protection Act, 2019, which shifted the basis for determining pecuniary jurisdiction from the compensation claimed—as was the practice under the repealed 1986 Act—to the amount of consideration actually paid.
A bench of Justices PS Narasimha and Manoj Misra upheld the constitutionality of Sections 34, 47, and 58 of the Consumer Protection Act, 2019, noting that these provisions appropriately determine jurisdiction based on the consideration paid, unlike the earlier 1986 Act which considered the compensation claimed. The Court held that this classification is reasonable and aligns with the legislative objective of creating a more efficient and structured forum hierarchy for resolving consumer disputes.
