Consumers are often confused as to which forum has the pecuniary jurisdiction to entertain their complaint. Despite the Consumer Protection Act, 1986 ("1986 Act") containing specific provisions catering to the pecuniary jurisdictions of fora, the interpretation of these provisions by the courts has led to emergence of divergent views with regard to maintainability of complaints before a forum.
Section 11(1) of the 1986 Act stipulated that the District Forum shall have jurisdiction to entertain complaints where the "value of the goods or services and the compensation, if any, claimed" does not exceed rupees twenty lakhs. Similarly, jurisdiction for State Commissions under Section 17(1)(a) was set for disputes between twenty lakhs and one crore; and National Commission for Disputes Redressal Commission ("NCDRC") under Section 21(a) for disputes valued at one crore and above.
2. AMBRISH KUMAR SHUKLA JUDGMENT
One of the most important decisions on this aspect was delivered by the NCDRC in the case of Ambrish Kumar Shukla1. Prior to the Ambrish Kumar Shukla judgment, there was already great ambiguity on the aspect of determination of pecuniary jurisdiction. Different fora had distinct parameters to determine pecuniary jurisdiction. Whilst some would consider actual value of goods/ services with the compensation claimed, some deemed market value of goods/ services along with "reasonable compensation" as proper factors to value complaints.
The Ambrish Kumar Shukla judgment settled that for the purpose of determining the pecuniary jurisdiction of a consumer forum under 1986 Act, the consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, plus the amount of the compensation, is to be considered. Further, this judgment stipulated that because the 1986 Act does not vest any power in consumer courts to award interest, the amount of the interest, which can be paid as compensation to the consumers, must also necessarily be considered, for determining the pecuniary jurisdiction. The Ambrish Kumar Shukla judgment was not exactly in sync with the wordings of the Sections 11, 17 and 21 of the 1986 Act, as it created two ways of determining the pecuniary jurisdiction: (1) consideration paid; or (2) agreed to be paid.
3. INTERPRETATION OF THE 'AMBRISH KUMAR SHUKLA' JUDGMENT
The usage of the phrase "consideration paid or agreed to be paid by the consumer, as the case may be" left a wide gap in the accurate interpretation of the jurisdiction provisions and invited a range of divergent views on this aspect. In the case of Rajnish Bhasin v. Jaypee Infratech2, the value of the flat in question was approximately INR 53,00,000/- out of which a sum of INR 48,00,000/- was paid by the consumer and a refund of the amount paid was sought as relief. The NCDRC in this case drew a distinction between cases in which a refund is sought and those in which the parties intend to conclude the transaction of sale. It was held that "consideration paid at the time of hiring of the service of the opposite party may also decide the pecuniary jurisdiction in certain cases, particularly in cases of refund, where no further amount is to be paid". In conclusion, because the amount paid and sought as refund (INR 48,00,000/-) coupled with interest @ 18% did not cross INR 1 crore (pecuniary jurisdiction for NCDRC), the complaint was deemed not maintainable before NCDRC.
Interestingly, in the case of Shailesh Srivastava v. Vatika Ltd3, despite the amount of refund claimed by the consumer being as low as INR 4,00,000/- (even after adding several heads of compensation towards mental agony, torture, etc. the amount sought did not exceed INR 1 crore), the NCDRC held, while dismissing the application challenging the maintainability of the complaint, that because the total value of the property booked was INR 96,00,00/-, the amount added with the compensation put the complaint within the jurisdiction of the NCDRC. While passing the said order, NCDRC did not take into account the earlier order passed in the matter of Rajnish Bhasin v. Jaypee Infratech.
It may not be incorrect to say that the Ambrish Kumar Shukla judgment made the determination of pecuniary jurisdiction largely discretionary. Without arguing the justifiability, it is safe to say that the language of the legislature is clear and the question of considering the actual amount paid as against the value of the goods/ services does not arise for complaints governed by the 1986 Act. Even though the Ambrish Kumar Shukla judgment permits consideration of the amount paid to decide the issue of pecuniary jurisdiction in certain cases, it refrains from mentioning such cases; consequently, this paves the way for ambiguity to creep in. In our opinion, the Ambrish Kumar Shukla judgment ought to have made a clear stipulation of the kind of cases in which the amount paid by a complainant has to be considered to determine the pecuniary jurisdiction. Such clarity would have averted the perplexity that has emanated from the Ambrish Kumar Shukla judgment.
4. PECUNIARY JURISDICTION UNDER THE CONSUMER PROTECTION ACT, 2019
Under the Consumer Protection Act, 2019 ("2019 Act") which came into effect from July 20, 2020, the pecuniary jurisdiction of the consumer courts was substantially modified. Section 34 of the 2019 Act reads that "...the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees..." Similarly, Sections 47 and 58 of the 2019 Act provide that: (1) the State Commissions shall have jurisdiction for disputes whose value exceeds INR 1 crore but remains less than INR 10 crores; and (2) the NCDRC is to have jurisdiction for disputes which are valued over INR 10 crores. However, the effect of the 2019 Act is prospective, which means that already pending cases before the consumer courts shall not be transferred to the concerned forum as per the revised jurisdiction.
Upon a perusal of these provisions, one would note that they categorically state only the amount paid as consideration by the consumers shall be considered for determining pecuniary jurisdiction. This understanding was ratified by the NCDRC in its judgment titled M/s Pyaridevi Chabiraj Steels Pvt. Ltd. v. National Insurance Company Ltd. & Ors.4 where the NCDRC held that under the provisions for determining the pecuniary jurisdiction of the District Commission, State Commission or the NCDRC, the value of the goods or services paid as consideration alone has to be taken, and not the value of the goods or services purchased/taken. It was also held that the provisions of Section 58 (1) (a)(i) of the 2019 Act are very clear and do not call for any two interpretations. It may also be interesting to note that while quoting the Ambrish Shukla judgment, the division bench of NCDRC also quoted the following example "if a person has agreed to purchase a Flat/ Apartment/ Plot for about Rs. 60,00,000/- and he is claiming refund as also compensation of Rs. 50,00,000/-, then the value will exceed Rs. 1,00,00,000/- and the Consumer Complaint has to be filed before the National Commission." This example has not considered/ expressed any view on the order passed in the case of Rajnish Bhasin v. Jaypee Infratech discussed above.
Despite certain decisions delivered by the consumer courts, our thoughts are aligned with the intent of the legislature, which is clear in stating that the value of the goods or services added with the compensation, are to be considered to determine the pecuniary jurisdiction under the 1986 Act, whereas, the value of the goods or services paid as consideration alone would be considered under the 2019 Act.
Such a major change in the pecuniary jurisdiction would, without a doubt, ease the burden of the NCDRC but increase the burden of the lower fora, especially the District Commission manifold. In practice, the District Commissions are often found to be under-equipped in terms of technical/ logistical support and under-staffed, both in terms of court staff and judicial members, which may give a serious blow to the disposal rate of consumer disputes, ultimately affecting the prime objective of this special legislation i.e. interest of the consumers. Long pendency of disputes before the commissions may also encourage opposite parties to arm-twist the consumers into settling the disputes without just compensation. While the revision in the pecuniary jurisdiction may have its pros, we are of the opinion, that without these proceedings being time bound, filing of complaints by aggrieved consumers and seeking justice may be a lost cause.
1. Ambrish Kumar Shukla & Ors v. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC)
2. IV (2018) CPJ 516 (NC)
3. Order dated 19.11.2019, CC/2683/2018, National Consumer Disputes Redressal Commission
4. Order dated 28.08.2020, CC/833/2020, National Consumer Disputes Redressal Commission
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