SC Validates 2019 Consumer Law; Highlights Consumer Rights And Vigilant Statutory Role

The Supreme Court has upheld validity of the Consumer Protection Act, 2019, by declaring that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary.

A bench of Justices P S Narasimha and Manoj Misra, however, directed the Central Consumer Protection Council and the Central Consumer Protection Authority to 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, working of the statute.

The court held that the Council and Authority being statutory authorities having clear purpose and objects must act effectively and in complete coordination – As they are impressed with statutory duty, their functioning will be subject to judicial review. Vibrant functioning of the Council and the Authority will subserve the purpose and object of the Parliament enacting the 2019 legislation, Court said.

The court dismissed plea by Ritu Mahal Panchal and others, challenging the validity of the Act which prescribed pecuniary jurisdictions of the District, State and National Commissions on the basis of value of goods and services paid as consideration, instead of the compensation claimed.

The bench emphasized that there can be no doubt about legislative competence and also power of the Parliament to prescribe limits of pecuniary jurisdiction of courts and tribunals.

Examining a question whether empowering the district, state and national commissions to exercise jurisdiction on the basis of value of the goods or services paid as consideration is violative of Article 14, the bench observed that, classification based on value of goods or services on the basis of 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, Court noted.

It pointed out 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, the court said.

With regards to the statutory bodies under the 2019 Act, the bench observed that if these institutions and bodies work effectively and efficiently, it is but natural that the purpose and object of the legislation will be achieved in a substantial measure. 

"It is, therefore, necessary to ensure that in the functioning of these bodies, there is efficiency in administration, expertise through composition, integrity through human resources, transparency and accountability, and responsiveness through regular review, audits and assessments," the Court conclusively said.

Case Title: Rutu Mihir Panchal & Ors. v. Union of India, WP(C) No. 282 of 2021