Supreme Court upheld constitutional validity to section 34, 47 and 58 of the Consumer Protection Act, 2019
In a recent judgment, Hon’ble Supreme Court upheld constitutional challenge to section 34, 47 and 58 of the Consumer Protection Act, 2019 and declared that empowering the district, state and national commissions to exercise jurisdiction on the basis of value of the goods or services paid as consideration is not violative of Article 14
ABCAUS Case Law Citation:
4537 (2025) (04) abcaus.in SC
In The instant case, constitutionality of Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 (the Act) was challenged on the ground that it prescribes 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.
The petitioner’s husband purchased a car from an authorised dealer of the company. Tragically, the vehicle caught fire while being driven leading to death of petitioner’s husband. Apart from the criminal proceedings initiated, statutory proceedings were also initiated under the 2019 Act by way of consumer complaint before the District Consumer Commission, for compensation and interest.
Pending disposal of the consumer complaint, the appellant filed the instant Petition under Article 32 of the Constitution before the Hon’ble Supreme Court alleging that she was compelled to approach the district commission because of the statutory regime under the 2019 Act which, whereas under the repealed Consumer Protection Act, 1986, she could have directly approached the national commission based on compensation claimed.
It was prayed that the newly added Proviso of Section 34(1), Proviso to Section 47(1) and Proviso to Section 58(1)(a)(i) of the Act directing for Pecuniary Jurisdiction instead of “Compensation Claimed”, be declared as violative of Article 14 of the Constitution of India on the ground of Arbitrariness and contrary for the purpose of hierarchy of Judicial System in India.
The Hon’ble Supreme Court observed that the 2019 Act shifted 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jurisdiction of the district, state as well as national commission from value of compensation claimed under the repealed 1986 Act to value of the consideration paid for the goods and services. The petitioners and the appellants claim that this legislative shift must have the effect of annulling sections 34, 47 and 58 of the Act as unconstitutional.
The Hon’ble Supreme Court observed that 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. For example, the Recovery of Debts and Bankruptcy Act, 1993, Insolvency and Bankruptcy Code, 2016, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Legal Services Authority Act, 1987 etc. All these acts provide different monetary values as the basis for exercising jurisdiction.
Thus, the question that was left to be decided was 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 Hon’ble Supreme Court observed 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 Hon’ble Supreme Court observed that in view of the essential ingredients of a contract i.e. promise, consideration, proposal and agreement, 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 Hon’ble Supreme Court opined that 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. derogate from the essentiality of consideration in every transaction leading to formation of a contract. As we are not dealing with gratuitous agreements, value of consideration is and can be a valid basis for classifying claims for determining pecuniary jurisdiction.
Accordingly, the Hon’ble Supreme Court rejected the submission that sections 34, 47 and 58 are discriminatory and violative of Article 14 of the Constitution.
The Hon’ble Supreme Court further observed that 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.
The Hon’ble Supreme Court held that there is no unrestricted claim for compensation and that it is subject to the determination of the court, it was further held that classification of claims based on value of goods and services paid as consideration has a direct nexus to the object of creating a hierarchical structure of judicial remedies through tribunals.
The Hon’ble Supreme Court further observed that in the statement of objects and reasons of the 2019 Act there is a reference to, “an institutional void in the regulatory regime” of consumer protection. To obviate this institutional void, the Parliament has under section 10 of the 2019 Act established two statutory bodies, the Central Consumer Protection Council under section 3 and Central Consumer Protection Authority under section 10 of the 2019 Act and vested in it various powers and functions.
The Hon’ble Supreme Court dismissed the constitutional challenge to section 34, 47 and 58 of the 2019 Act and declared that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary.
It was further held that 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.
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