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The Top Court in its decision on March 16, 2021, held that all consumer complaints instituted before coming into force of the new Consumer Protection Act, 2019 shall continue to be heard by the fora designated by the 1986 Act and not be transferred in terms of the new pecuniary limits established under the Act of 2019.

A Division Bench of Justice D.Y. Chandrachud and Justice M.R. Shah, while setting aside the impugned orders passed by the NCDRC, held, “Proceedings instituted before the commencement of the Act of 2019 on 20 July 2020 would continue before the fora corresponding to those under the Act of 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019.”

Consumer Protection Act, 2019 came into force on 20.07.2020. The Appellants instituted a consumer case before the National Consumer Disputes Redressal Commission (NCDRC) on 18.06.2020, under the provisions of erstwhile Consumer Protection Act, 1986.

The claim amount filed by the Appellants was Rupees 2.19 Crores. 

By order dated 30.07.2020, NCDRC dismissed the complaint of the Appellants on the ground that after enforcement of the Act of 2019, its pecuniary jurisdiction has been enhanced from rupees 1 crore to rupees 10 crore. Review petition was also dismissed by order dated 05.10.2020. 

It is to be noted that by an administrative notice dated 17.07.2020, issued by NCDRC, the registry was allowed to take up fresh filings since the law was to come into force on 20.07.2020. In such case, the Appellants is also aggrieved by the fact that contrary to the position taken in its case, other benches of the NCDRC did admit complaints before 20.07.2020.

The issue precisely was construction of Section 107 of the Act of 2019 among other provisions of the new legislation and its interplay with Section 6 of the General Clauses Act 1897.

Broad line of submission made by the Appellants were: 

(i) Section 107 of the Act of 2019 read with Section 6 of the General Clauses Act saves pending legal proceedings; hence the complaint which was filed before the enforcement of the new legislation should be allowed to proceed before the NCDRC under the Act of 1986 

(ii) In the absence of an express provision, the new legislation must operate prospectively 

(iii) In the absence of a provision for transfer of pending cases, complaints which were instituted prior to the enforcement of the Act of 2019 should not be disturbed.

Observations made by the Court

• There is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits. In deducing whether there is a contrary intent, the legislative scheme and procedural history may provide a relevant insight into the intention of the legislature.
• Drawing reference to the statement of objects and Reasons of the Act of 2019, which precisely provides for protection of the interest of consumers, the bench noted, “If cases which have been already instituted before the NCDRC were required to be transferred to the SCDRCs as a result of the alteration of pecuniary limits by the Act of 2019, a consumer who has engaged legal counsel at the headquarters of the NCDRC would have to undertake a fresh round of legal representation before the SCDRC incurring expense and engendering uncertainty in obtaining access to justice. Likewise, where complaints have been instituted before the SCDRC, a transfer of proceedings would require consumers to obtain legal representation before the District Commission if cases were to be transferred. Such a course of action would have a detrimental impact on the rights of consumers.”
• It would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation.
• The legislature cannot be attributed to be remiss in not explicitly providing for transfer of pending cases according to the new pecuniary limits set up for the fora established by the new law, were that to be its intention. The omission, when contextualized against the statutory scheme, portends a contrary intention to protect pending proceedings through Section 107(2) of the Act of 2019. This intention appears likely, particularly in light of previous decisions of the NCDRC which had interpreted amendments that enhanced pecuniary jurisdiction, with prospective effect.

[Southfield Paints and Chemicals Pvt. Ltd v. New India Assurance Co. Ltd (1975) 2 SCC 840, Premier Automobiles Ltd. v. Dr. Manoj Ramachandran, CIT Orissa v. Dhadi Sahu 1994 Suppl (1) SCC 257]

• Mere use of the word “entertain” under Section 34 of the 2019 Act, in defining jurisdiction is not sufficient to counteract the overwhelming legislative intention to ensure consumer welfare and deliberately not provide for a provision for transfer of pending proceedings in the Act of 2019 or under Section 106 of the Act of 2019 which is a power to remove difficulties for a period of two years after the commencement of the Act of 2019.

[Nusli Neville v. Ivory Properties (2020) 6 SCC 557, Hindustan Commercial Bank v. Punnu Sahu, (1971) 3 SCC 124]

Case Title: Neena Aneja v. Jai Prakash Associates | CIVIL APPEAL 3766-3767 of 2020

Statute/Provisions Involved: Consumer Protection Act, 1986, Consumer Protection Act, 2019

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