SUPREME COURT HOLDS THAT THERE WILL BE NO TRANSFER OF CASES ON THE GROUND OF ENHANCED PECUNIARY LIMIT UNDER THE CONSUMER PROTECTION ACT, 2019

Recently, the #SupremeCourt of India in the case of Neena Aneja and Others vs Jai Prakash Associates Ltd (Civil Appeal Nos. 3766-3767 of 2020), vide its Judgment dated 16.03.2021 held that #consumercomplaints instituted under the Consumer Protection Act of 1986 (the ‘Act of 1986’) will continue before the same forum and will not be transferred in terms of the modified pecuniary jurisdiction provided under the new #ConsumerProtectionAct, 2019 that came into force on 20.07.2020 (the ‘Act of 2019’).

The facts of the case involve the Appellants who booked a Flat with the Respondents for a total sale consideration of Rs 56.45 Lacs and possession was intended to be delivered within 3 years from the execution of the Agreement. The Appellants have paid Rs 53.84 Lacs out of the total sale consideration as on December 2011.

In 2017 and 2020, the Appellants sought a refund of the paid consideration with interest due to delay in delivering the possession of the Flat. Thereafter, the Appellants-Complainants filed a consumer complaint before the National Consumer Disputes Redressal Commission (‘NCDRC’) on 18.06.2020 (Consumer Complaint). The consumer case was instituted under the provisions of the Act of 1986. During the pendency of the matter, the Act of 2019 was enacted, which repealed the Act of 1986. Hence, the NCDRC, vide its Order dated 30.07.2020, dismissed the Consumer Complaint on the ground that the Claim was of Rs. 2.19 Crores and after the enforcement of the Act of 2019, its pecuniary jurisdiction has been enhanced from Rupees 1 Crore to 10 Crores. Therefore, the Complaint is not maintainable, as the Claim is below the enhanced pecuniary jurisdiction of the NCDRC.

The Complainants filed a Review Petition, which was also dismissed by the NCDRC, vide Order dated 05.10.2020. Thereafter, the Complainants filed an Appeal before the Supreme Court of India against the Orders of the NCDRC.

One of the issues before the Supreme Court was whether a complaint which was filed and registered under the Act of 1986, before the enforcement of the Act of 2019, has to be dealt according to the provisions of the Act of 1986 or the Act of 2019.

While dealing with the aforesaid issue, the Supreme Court referred to Section 21 of the Act of 1986, which provides for jurisdiction of the NCDRC and pointed out that under the said provision, the pecuniary limits of NCDRC was enhanced from Rs 20 Lacs to Rs 1 Crore. The Supreme Court also looked into other provisions related to the pecuniary jurisdictions of other forums established under the Act.

The Supreme Court considered a number of precedents that have interpreted the impact of change in forum on pending proceedings and principle of retrospectivity and made the following observations:

1. That the change in forum lies in the realm of procedure. Accordingly, in compliance with the tenets of statutory interpretation applicable to procedural law, amendments on matters of procedure are retrospective, unless a contrary intention emerges from the statute.
2. The Section 6(e) of the General Clauses Act, 1897 protects the pending legal proceedings initiated for the enforcement of an accrued right from the effect of the repeal. The Supreme Court held that the forum is a matter pertaining to procedural law and therefore the litigant has to pursue the legal proceedings at the forum created by the repealing act, unless a contrary intention appears. It further said that this principle would also apply to the pending proceedings.
3. The Supreme Court further referred to the object of the 2019 Act, which is enacted to provide “for protection of the interests of consumers” and has taken note of the evolution of consumer markets by the proliferation of products and services in light of global supply chains, ecommerce and international trade. The theme of the Act of 2019 is to ensure protection of consumers, which is sought to be strengthened by procedural interventions such as strengthening class actions and introducing mediation as an alternate forum of dispute resolution.
4. It is significant to point here that for the purpose of mandating the transfer of pending cases, something specific in terms of statutory language either in the form of express words or words indicative of a necessary intention would have been required.

The Supreme Court observed that it would be incorrect to object the continuation of the proceedings before the NCDRC on the ground that under the Act of 2019, the pecuniary limits of the jurisdiction exercisable by the NCDRC have been enhanced and the Complaint filed by the Appellants which was validly instituted under the Act of 1986 should be transferred to the State Consumer Dispute Redressal Commission (‘SCDRC’). And this course of action will result in thousands of cases being transferred across the country from NCDRC to the SCDRCs and from SCDRCs to the District Commissions.

The Supreme Court finally observed that this will seriously dislocate the interests of the consumers in a manner which defeats the object of the Act of 2019, which is to protect the welfare of the consumers. Thus, the Supreme Court held that there is no explicit provision for transfer of pending cases according to the new pecuniary limits set up for the Forums under the Act of 2019, as this was not the intention of the Legislature. Therefore, all proceedings instituted before 20.07.2020 under the Act of 1986 shall continue to be heard by the same forum and that the cases would not be transferred as per the new pecuniary limits under the Act of 2019.

Lakshmi Vishwakarma

Senior Legal Associate

The Indian Lawyer & Allied Services