Why is the Pecuniary Jurisdiction of the Consumer Fora again changed?

The Consumer Protection Act, 2019 was passed by the Parliament in the year 2019 and received the assent of the President of India on 09.08.2019. The said act came into force on 20.07.2020 after certain sections of the Act were notified by the Central Government and as such the new Consumer Protection Act, 2019 replaced the old Consumer Protection Act, 1986.

Vide the new Act of 2019, the pecuniary jurisdiction of the Consumer Fora was increased. The following table showcases the pecuniary jurisdiction of the Consumer Fora under the Consumer Protection Act, 1986 and the Consumer Protection Act, 2019.

The rationale of increasing the pecuniary jurisdiction of the Consumer Fora was to decongest the National Commission and also the State Commissions and to transfer its burden to the District Forum. Because of the low pecuniary jurisdiction under the Act, thousands of Complaints were filed before the National Commission by invoking its Original Jurisdiction. However, apart from hearing the Complaints under its Original Jurisdiction, the National Commission also had to hear First Appeals and Revision Petitions under its Appellate and Revisional jurisdiction. Similar was the situation with the State Commissions as huge number of Complaints were filed before them, invoking its Original Jurisdiction and as such the National Commission and also the State Commissions were burdened with a lot of Consumer Cases and thus there were delays in adjudication of the same. Hence, under the new Act of 2019, the pecuniary jurisdiction of the Consumer Fora was raised so that the National Commissions and the State Commission would be having comparatively lesser burden.

Another big change that was introduced in the new Act was on the basis of which the pecuniary value of a particular consumer complaint was to be ascertained / calculated. Under the 1986 Act, the pecuniary value of a consumer complaint was to be based on the value of the goods and services and the compensation claimed. However, with the 2019 Act, the pecuniary value of a particular consumer complaint was to be ascertained on the basis of the amount paid towards the value of the Goods and Services. Here, the compensation claimed was not considered for the purposes of valuation of a Complaint.

For better understanding, let’s take an example of a person ‘Ram’ who had purchased a Vehicle worth Rs. 15 Lakhs, out of which he has paid Rs. 5 Lakhs and is seeking a compensation of 10 Lakhs (on various grounds). As per the 1986 Act the Complaint would be filed in the State Commission as value of goods is Rs. 15 lakhs plus the compensation claimed is Rs. 10 Lakhs. Thus, as per the 1986 Act, the pecuniary value of the case would be Rs. 25 Lakhs, which is within the pecuniary jurisdiction of the State Commission.

However, under the 2019 Act, the pecuniary value of the Consumer Complaint filed by Ram will be Rs. 5 lakhs as only the amount paid towards the goods and services is to be considered, irrespective of the total amount of the said goods and services or the compensation that is being claimed therewith. Hence, under the 2019 Act, Ram would have to file a Consumer Complaint before the District Forum.

As discussed above, the method of calculation of the pecuniary value of a case and the pecuniary jurisdiction of the Consumer Fora was changed so as to decongest the Consumer Fora and for faster adjudication of the Consumer disputes.

Accordingly, after 20.07.2020, no fresh Consumer Complaints having value more than Rs. 1 crore was filed before the National Commission. The same is evident by a Notice of the National Commission dated 20.07.2020 whereby the National Commission had directed that only Consumer Complaints having pecuniary value (calculated as per the 2019 Act) above Rs. 10 Crore could be filed before itself. You can click here for reading the said Notice (or click on the following link – http://ncdrc.nic.in/pdf_Files/notice20072020.pdf). Accordingly, since the pecuniary jurisdiction of the National Commission was increased to Complaints where the amount paid towards the value of the goods and services exceeds Rs. 10 Crore, very few Complaints could have been filed before the National Commission as for a Complaint to be filed before the National Commission, either it can be a class action consumer complaint representing several consumers, or it can be a Complainant who has purchased some goods or service and has paid more than Rs. 10 crore for that goods or service, which was obviously very rare. Hence, the number of cases that were being filed before the National Commission dropped significantly. The same is also evident from the website of the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution of the Government of India whereby it is clear and evident that in the NCDRC in the year 2019 – 7957 fresh cases were filed, whereas in 2020 – 3208 fresh cases were filed whereas in 2021 – only 1227 fresh cases were filed. The data can be accessed by clicking here (or click on the following link – https://doca.gov.in/doca-dashboard/) (A screenshot of the webpage is also being given at the end of this Article if in case the data on the website is moved somewhere else or changed with time).

Simultaneously, even for the State Commission, the number of Consumer Complaints that may be filed may have marginally reduced as the pecuniary jurisdiction of the State Commission was increased (although some of the matters that were previously being filed before the National Commission in the 1986 Act, would now be filed before the State Commission, but on a general basis, there is a huge volume of matters whose pecuniary value is much lower vis-à-vis that of the pecuniary jurisdiction of the State Commission now under the 2019 Act). As such, a lot of burden was suddenly shifted upon the District Fora and to a certain extent to the State Commission.

This shifting of burden to the District Fora and the State Commission seems to have been done without any previous planning / making prior arrangements. The author is an Advocate who regularly practices in the Courts of Delhi and has visited the National Commission, State Commission and a couple of District Fora. Having visited these Courts in the capital city of India, unfortunately, with utmost respect, the infrastructure of the State Commission and the District Fora is not upto the mark and as such perhaps the State Commission and the District Fora (especially the District Fora) was not able to take the huge burden of cases that were being filed before it and the infrastructure in place including the manpower of the registry was not able to match the huge and sudden influx of Consumer cases.

Further, on the other hand, although the courts in India including the National Commission and the State Commission are already overburdened with work, was being under-utilized (keeping in mind its previous load).

Hence, the Central Government, invoking its power to frame rules under Section 101 of the Consumer Protection Act, 2019 has reduced the pecuniary jurisdiction that was set in the 2019 Act. Now, the new pecuniary jurisdiction of the Consumer Fora is almost double of what it was in the 1986 Act (and not several times of the 1986 figures as was with the 2019 Act).

On 30.12.2021, the Central Government via gazette notification has changed the pecuniary jurisdiction of the Consumer Fora as has been depicted in the table hereinbelow:

The gazette notification whereby the pecuniary jurisdiction of the Consumer Fora was changed can be read by clicking here. (or by clicking on the following link – https://egazette.nic.in/WriteReadData/2021/232278.pdf).

If the pecuniary value of the Consumer Fora was decided in the 2019 Act after thorough discussion with the Presidents and Members of the Consumer Fora, things would have been much easier. Now, because of the sudden change in the pecuniary jurisdiction of the Consumer Fora, a lot of the Complainants, if eligible to approach a higher forum, would want to file withdrawal applications to file their consumer complaint before the higher consumer fora. The advantage of filing their consumer complaint before a higher forum would be that the general perception is that if the case is being before a higher forum directly by invoking its Original Jurisdiction, then the time wasted in pursuing the matter in appeals is lesser. The same is evident from the following table:

Thus, as may be evident from the above table, if a person files a Consumer Complaint before the District Forum, then there can be 4 rounds of litigation right up to the Hon’ble Supreme Court (to bring a quietus to the matter), and if the same case is filed before the State Commission, then there would be 3 rounds of litigation and if the same case is filed before the National Commission, then there would be only 2 rounds of litigation (The above figure is based on the presumption that either one of the party would file an appeal till the Supreme Court). Thus, as a matter of general practice, to my limited experience and understanding as a practicing Advocate, Consumers / Complainants prefer filing their Complaint directly before either the National Commission or the State Commission to save time. Apart from saving time, they also save out of litigation expenses of engaging an Advocate and all other incidental costs.

Another reason, that I can assume on the basis of my limited understanding is that there would be much more experienced advocates and better appreciation of the facts and law and also cases of similar Complainants / consumers can be clubbed together.  One more reason is also that in the District Forum, there are a lot of vacancies which are not filled up. The existing sitting members are not sufficient to hear the matters as per the 1986 Act, it was a much bigger task to hear and adjudicate the huge influx of consumer complaints suddenly without sufficient number of members in the District Forum.

Hence, one difficulty, amongst various other problems of suddenly changing the pecuniary jurisdiction of the Consumer Fora / Commission, is that Consumers / Complainants would withdraw their case and try filing it before the higher forum. For example, if some Complainant has recently filed his / her case before the Delhi State Commission, then such person would definitely want to file his / her case before the National Commission after withdrawing the case that was filed before the State Commission in order to save out on time, energy and money.

Another demerit will be that a lot of Consumers directly wish to file and fight their case before the Consumer Fora. By changing the pecuniary jurisdiction twice in less than two years only create a confusion in the minds of the common man and the Consumer Fora, which is considered to be not technical in its procedure and can be referred to as Consumer friendly, may confuse and entangle a common man.

Although, the move to change the pecuniary jurisdiction of the Consumer Fora can be considered to be a welcome move, however, it would have been appreciated if the present pecuniary jurisdiction slabs would be the ones mentioned in the 2019 Act. Let’s hope that in the intervening period of the pecuniary jurisdiction being reduced, the Government works ahead towards developing infrastructure and filling up vacancies in the Consumer Fora so that after a couple of years, the pecuniary jurisdiction, as originally envisaged under the 2019 Act can be restored for the larger benefit.