CONSUMER COMPLAINTS: PECUNIARY LIMITS OF CONSUMER COMMISSIONS

 

Consumer complaints:  Pecuniary limits OF CONSUMER COMMISSIONS

 

The Supreme Court has recently ascertained as regards valuation, what should be construed as part of valuation for preferring consumer complaints before District Consumer Commission, State Consumer Commission and National Consumer Commission as per the Consumer Protection Act 2019. The Consumer Protection Act 1986 has been completely overhauled and a new Act of 2019 is in place. The judgment rendered in RUTU MIHIR PANCHAL & ORS.VERSUS UNION OF INDIA & ORS. 2025 INSC 593 (Writ Petition Civil No. 282 of 2021) rendered in April 29^th 2025 is therefore significant. It is significant, because the competence of parliament to prescribe pecuniary limits and vires and constitutionality of Sections 34,47 and 58 of Consumer Protection Act 2019 were under challenge, besides the perceived ambiguity as regard how valuation could be arrived at in order to file the complaints before the respective pecuniary limits prescribed for respective Consumer Commissions.  

The Constitutionality of Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019, prescribing pecuniary jurisdictions of the District, State and National Commissions on the basis of value of goods and services paid as consideration, instead of compensation claimed were challenged in the writ petition2 under Article 32 of the Constitution and the civil appeal3 against the order of the National Consumer Disputes Redressal Commission.

The order of National Commission was impugned before the Supreme Court. The relevant portion of the order impugned are as under:

“…The Pecuniary Jurisdiction has been specified in the Consumer Protection Act, 2019, where the consideration paid, if exceeds Rupees Ten Crores, will give power to the National Consumer Disputes Redressal Commission to entertain any Complaint. It has nothing to do with the amount of Compensation to be claimed by any of the Complainant. ”

 

A comparative chart of the jurisdictions exercised by the district, state and national commission under the repealed 1986 Act and the present 2019 Act is as follows:

 

FORUM	1986 Act	2019 Act
DISTRICT COMMISSION	Section 11.(1) Subject to the other provisions of this Act, 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…	Section 34.(1) Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as claimed does not exceed rupees Twenty Lakhs… consideration does not exceed One Crore Rupees…
State Commission	Section 17. Subject to the other provisions of this Act, the State Commission shall have jurisdiction— (a) to entertain — (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds Rupees Twenty Lakhs but does not exceed rupees One Crore…	Section 47. (1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction — (a) to entertain — (i) complaints where the value of the goods or services paid as consideration, exceeds rupees One Crore, but does not exceed Rupees Ten Crore...
National Commission	Section 21. Subject to the other provisions of this Act, the National Commission shall have jurisdiction — (a) to entertain— (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds Rupees One Crore…	Section 58. (1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction — (a) to entertain — (i) complaints where the value of the goods or services paid as consideration exceeds Rupees Ten Crore…

 

The aforesaid pecuniary limits are further modified vide notification dated 30^th December 2021, whereunder the pecuniary limits of the Consumer Commissions shall be as under:

 

FORUM	2019 Act (Till November 2021)	2019 Act ( Amended new  notification)
District Commission	Value of goods and/or service does not exceed 1 Crore	Value of goods and/or service does not exceed 50 Lakhs.
State Commission	Value of goods and/or service from Rs 1 Crore , but does not exceed Rs 10 Crore	Value of goods and/or service from Rs 50 lakhs, but does not exceed Rs 2 Crore
National Commission	Value of goods and/or service above Rs 10 Crore	Value of goods and/or service above Rs 2 Crore

 

A plain reading of the provisions of 2019 Act, makes it clear, that the 2019 Act shifts the basis of the pecuniary jurisdiction of the District, State as well as National Commission from value of compensation claimed under the repealed 1986 Act to value of the consideration paid for the goods and services.

It is also recognized that classification based on value of goods or services on the basis of the amount paid as consideration is valid. “Consideration” is an integral part of forming any contract. It is also an integral part of the definition of a ‘consumer’.

The Supreme Court in Rutu Mihir (Supra) has held that there is no doubt about the fact that the Parliament has the legislative competence to enact the Consumer Protection Act, 2019. Under Entry 95 of List I read with Entries 11-A and 46 of List III6 and in exercise of power under Article 246, the Parliament has enacted the Consumer Protection Act, 2019. Thus, the legislative competence to prescribe jurisdiction and powers of a court, coupled with the power to constitute and organize courts for administration of justice, takes within its sweep the power to prescribe pecuniary limits of jurisdiction of the courts or tribunals. (Ref: In State of Bombay v. Narottamdas Jethabhai (1950) SCC 905)

Significantly, the Supreme Court has held in Rutu Mihir        Panchal (Supra) as under:

10.3 An agreement enforceable by law is a contract. In turn, every promise and every set of promises forming part of the consideration for each other, is an agreement.  And then, when, at the desire of the promisor, the promisee … has done…something, such act is called consideration. A proposal, when accepted, becomes a promise. Finally, when a person signifies to another his willingness to do anything… with a view to obtaining his assent it is a proposal. While this is the involution of formation of a contract, evolution in its making is evident when a proposal, as defined, becomes a promise and when such a promise is espoused by consideration it becomes an agreement and if that agreement is enforceable in law, it becomes a contract. Between evolution and involution, lies the essential core, the consideration, without which there is no agreement, and if there is no agreement, there is no contract.

 

10.4 It is in recognition of the first principles of formation of a contract that section 2(7) of the 2019 Act defines a consumer as any person who buys any goods or hires or avails any service for a consideration. The consideration could be in the present or future, in whole, part, or by deferred payment. Whichever be the mode, there must be a consideration. That is essential to be a consumer.

 

10.5 Therefore, vesting jurisdiction in the district, state or National Commission on the basis of value of goods or services paid as ‘consideration’, is neither illegal nor discriminatory. …..The myriad ways in which a consideration could be inferred would not derogate from the essentiality of consideration in every transaction leading to formation of a contract…”.

 

The Supreme Court in Rutu Mihir Panchal (Supra) has held that:

11.1 There is also a misconception that there is some kind of a loss of judicial remedy. No such event has occurred because of Sections 34, 47 and 58 of the 2019 Act. The relief or compensation that a consumer could claim remained unrestricted and at the same time, access to the state or the national commission is also not taken away. It is well settled that there is no right or a privilege of a consumer to raise an unlimited claim of compensation and thereby chose a forum of his choice for instituting a complaint. In Nandita Bose v. Ratanlal Nahta CC No. 833 of 2020 , this Court has held that a court or a tribunal will always have the jurisdiction to assess or reassess an overvalued or grossly undervalued claim in a petition in the following terms:

“4. …The principles which regulate the pecuniary jurisdiction of civil courts are well settled. Ordinarily, the valuation of a suit depends upon the reliefs claimed therein and the plaintiffs valuation in his plaint determines the court in which it can be presented. It is also true that the plaintiff cannot invoke the jurisdiction of a court by either grossly over-valuing or grossly under-valuing a suit. The court always has the jurisdiction to prevent the abuse of the process of law. Under Rule 10 of Order 7 of the Code the plaint can be returned at any stage of the suit for presentation to the court in which the suit should have been instituted...”

The Supreme Court has concluded in Rutu Mihir Panchal (Supra) in para 13, as under:

13. Conclusions: For the reasons stated above; (a) we dismiss the constitutional challenge to section 34, 47 and 58 of the 2019 Act and declare that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary; (b) Central Consumer Protection Council and the Central Consumer Protection Authority shall in exercise of their statutory duties under sections 3, 5, 10, 18 to 22 take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the statute.

It is therefore evident from the aforesaid illustrations that the limits determined by the parliament, thereby prescribing pecuniary limits for the complaints filed before the respective Consumer Commission falls within the domain of parliament and the value of services and goods for the purpose of ascertaining the value of complaint so as to file it, before appropriate commission have already been dealt with by the Supreme Court, in as much as for the purpose of determining the valuation, the value of goods or services or promise made shall fall within the meaning of consideration. In Rutu Mihir Panchal (Supra) para 10.4 it is further clarified that section 2(7) of the 2019 Act defines a consumer as any person who buys any goods or hires or avails any service for a consideration. The consideration could be in the present or future, in whole, part, or by deferred payment. Whichever be the mode, there must be a consideration.

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Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com