Overhaul of entire infrastructure of Consumer Protection Act necessary, says SC [read order]


The Supreme Court on 21 November observed that a systemic overhaul of the entire infrastructure is necessary if the Consumer Protection Act, 1986 is not to become a dead letter. A three-judge bench comprising Chief Justice TS Thakur and Justice DY Chandrachud and Justice L Nageswara Rao directed the Central Government to frame model rules relating to administration, selection and appointments of members, infrastructure etc., at all levels of consumer fora constituted under the Consumer Protection Act, 1986. These directions were issued in the case of State of UP & Ors. v. All U P Consumer Protection Bar Association [Civil Appeal No. 2740 OF 2007].

Previously, on 14 January 2016, the Supreme Court had constituted a Committee presided over by Mr Justice Arijit Pasayat, a former Supreme Court judge, to examine : (i) the infrastructural requirements of the State Commissions, deficiencies in infrastructure and remedial measures; (ii) the position of vacancies of members at the national, state and district level; (iii) the need for additional Benches at the national, state and district level; (iv) conditions of eligibility for appointment of non-judicial members; (v) administrative powers which have been or should be conferred on the presiding officers of the state and district fora; (vi) service conditions including pay scales governing the presiding officers and members; (vii) requirements of staff; (viii) creation of a separate cadre of staff at the national, state and district level; and (ix) other relevant issues.

An interim report was submitted by the Committee on 17 October 2016. The court noted as to how it showed a sobering reflection of how far removed reality lies from the goals and objectives which Parliament had in view while enacting the Consumer Protection Act, 1986. The Committee observed that the fora constituted under the enactment do not function as effectively as expected due to a poor organizational set up, grossly inadequate infrastructure, absence of adequate and trained manpower and lack of qualified members in the adjudicating bodies. Benches of the state and district fora sit, in many cases for barely two or three hours every day and remain non-functional for months due to a lack of coram. Orders are not enforced like other orders passed by the civil courts. The state governments have failed to respond to the suggestions of the Committee for streamlining the state of affairs.

The quality of presiding members, especially of non-judicial members at the state and district levels is poor. One of the reasons is that the remuneration which is being paid to non-judicial members of consumer fora varies from state to state and is too meager to attract qualified talent. Most of the non-judicial members are not even capable of writing or dictating small orders. At certain places non-judicial members act in unison against the presiding officer, while passing orders contrary to law, damaging the reputation of the adjudicating body. Presidents, as a result, prefer a situation where such non-judicial members absent themselves from work if only so that judicial work can be carried out by the presiding judge impartially and objectively. Many non-judicial members do not maintain punctuality and others attend to work sporadically once or twice a week. The Committee also observed that that the problem lies in – (i) absence of proper remuneration; (ii) appointment of former judicial officers who lack motivation and zeal; (iii) appointment of practicing lawyers as presiding officers of district fora; and (iv) political and bureaucratic interference in appointments. Many of the non-judicial members attend to the place of work only to sign orders which have been drafted by the presiding officer.

The Committee also furnished concrete examples of how bureaucratic and political influence has marred the selection process as a result of which the functioning of consumer fora is detrimentally affected. The court noted that the selection of persons as presiding officers and as members of the fora lacks transparency without a fixed criteria for selection. The SC approvingly quoted the proposal of the Committee that a written test should be conducted to assess the knowledge of persons who apply for posts in the district fora. Issues of conflict of interest also arise when persons appointed from a local area are appointed to a district forum in the same area.

The Supreme Court noted that the interim report of the Committee provides an unfortunate reflection of the state of affairs in the consumer fora at the district, state and national level. It was noted, that these bodies which are vested with important functions of a judicial nature continue to work despite the prevalence of such adverse conditions and in the face of the apathy of the governments both at the national and state level is a matter which requires immediate intervention by the Supreme Court.

The court said that a systemic overhaul of the entire infrastructure is necessary if the Consumer Protection Act, 1986 is not to become a dead letter. With the proliferation of goods and services in a rapidly growing economy, Parliament envisaged the enactment to be the corner-stone of a vibrant consumer movement. Reality has been distant from the aspirations of the law. Since the state of affairs which has been revealed before the Court warrants systemic changes, we propose to initially issue directions on certain specific issues in the present order within a judicially manageable framework.

After discussing the committee report in detail, the Supreme Court issued the following directions:

(i) The Union Government shall for the purpose of ensuring uniformity in the exercise of the rule making power under Section 10(3) and Section 16(2) of the Consumer Protection Act, 1986 frame model rules for adoption by the state governments. The model rules shall be framed within four months and shall be submitted to this Court for its approval;

(ii) The Union Government shall also frame within four months model rules prescribing objective norms for implementing the provisions of Section 10(1)(b), Section 16(1)(b) and Section 20(1)(b) in regard to the appointment of members respectively of the District fora, State Commissions and National Commission;

(iii) The Union Government shall while framing the model rules have due regard to the formulation of objective norms for the assessment of the ability, knowledge and experience required to be possessed by the members of the respective fora in the domain areas referred to in the statutory provisions mentioned above. The model rules shall provide for the payment of salary, allowances and for the conditions of service of the members of the consumer fora commensurate with the nature of adjudicatory duties and the need to attract suitable talent to the adjudicating bodies. These rules shall be finalized upon due consultation with the President of the National Consumer Disputes Redressal Commission, within the period stipulated above;

(iv) Upon the approval of the model rules by this Court, the state governments shall proceed to adopt the model rules by framing appropriate rules in the exercise of the rule making powers under Section 30 of the Consumer Protection Act, 1986;

(v) The National Consumer Disputes Redressal Commission is requested to formulate regulations under Section 30A with the previous approval of the Central Government within a period of three months from today in order to effectuate the power of administrative control vested in the National Commission over the State Commissions under Section 24(B)(1)(iii) and in respect of the administrative control of the State Commissions over the District fora in terms of Section 24(B)(2) as explained in this Judgment to effectively implement the objects and purposes of the Consumer Protection Act, 1986.

The court directed to list the matter on 7 March 2017, for further directions and for reporting compliance.

Read full order of the court:

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