Supreme Court cracks slides of Consumer Law to shape it with drastic change

(Judgments during 2021)

Year 2019 was a table - turning year when Consumer Protection Act 1986 was repealed and was replaced by the Act 2019. It was further a new chapter opened when it came into force in July 2020. Consequently year  2021 was full of queries ,debates and implementation problems arising out of new situations that emerged from repeal of old consumer protection act.

Lets start with the biggest news f the day .

After enhancement of pecuniary jurisdiction of the Consumer Commissions District Consumer Dispute Redressal Commissions were now empowered to take up cases upto one crore, state commission more than one crore to ten crore and ten crore onwards to National Commission. This had resulted into a big gap and almost all type of cases were now flooded to district commissions and State commission and National commission is now left with most of appeal cases or revision cases. Most of the high value cases like real estate ,medical negligence ,insurance .air lines ,carrier & cargo could easily be covered within one crore of amount leaving a very few for original jurisdiction of state and national commission . There was a remarkable imbalance in institution of cases of original jurisdiction before higher commissions

On the eve of ending year, Government of India has changed the pecuniary jurisdiction of all three Consumer commission by Notification CG-DL-E31122021-232278 Dated  30^st of December 2021

• The District Commission shall have the jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed fifty lakh rupees (up to Rs 50 lakh; earlier limit: up to 1 crore).
• The State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds fifty lakh but does not exceed two crore rupees (above Rs 50 lakh up to Rs 2 crore; earlier limit: above 1 crore and up to 10 Crore).
• The National Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds two crore rupees (above Rs 2 crore; earlier limit: above 10 crores).

Supreme Court has tried to solve all the matters which came before it for adjudication. It also took cognigence of some vital issues which were affecting the consumer rights in some or the other way and in spite of having such good law in their favour, they were sufferer at the end.

Certain cases decided by the Hon’ble Supreme Court in the year 2021 are bench-mark  judgments which will ever be remembered history making law

CASE 1.

 

Ireo Grace Realtech Pvt. Ltd.Versus Abhishek Khanna & Others,Civil Appeal No. 5785 Of 2019 (Supreme Court )

Bench -Dr Dhananjaya ,Y Chandrachud,  Indu Malhotra, Indira Banerjee.

Decided on –January11, 2021

Ref. Pioneer Urban Land and Infrastructure Ltd v. Govindan Raghavan.

 

Law Point –One sided unreasonale clauses in the contracts

 

Supreme Court agreed with the order of National Commission the bench comprising Justices DY Chandrachud, Indu Malhotra and Indira Banerjee observed that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement. and confirmed that the aforesaid clauses reflect the wholly one-sided terms of the Apartment Buyer‘s Agreement, which are entirely loaded in favour of the Developer, and against the allottee at every step..

"We are of the view that the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer's Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. An "unfair contract" has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. This is a statutory recognition of a power which was implicit under the 1986 Act. In view of the above, we hold that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer's Agreement."

 

 

CASE-2

Narinder Chopra V/S Jaiprakash Associates (NC)

Consumer Complaint No 3258 0f 2017along with IA 330 of 2021&IA 1130 Of 2021

Decided On 16.5.2021

 

Law Points:  

 

1. . Whether a matter involving question of law can be heard by a Bench with no judicial member.

2.    Whether Regulation 12 mandates the NCDRF President to constitute another bench with at least one judicial Member enabeling the bench to hear matter involving question of law

3.  Whether pending matters are to be transferred to appropriate commission after enhancement of pecuniary jurisdiction 

The Bench observed

 

On the Law point –1 whether a matter involving question of law can be heard by a Bench with no judicial member.

 

·         "No Tribunal can examine act of its parent statute. Specifically, no Bench can examine validity of provisions relating to composition of this Commission or relating to constitution of its Benches by the Hon'ble President of the Commission "

 

·          A Bench may be constituted by the President with one or more members as he may deem fit: Provided that the senior-most member of the Bench shall preside over the Bench.

 

·         “since now selection committee is headed by judges of Supreme court and nominated by CJI we have reason to believe that the committee would take care to ensure that

Administrative members are chosen from among those who have some background to deal with such cases

Hence no argument to create bench with only judicial background, SC retired judge is competent to decide capable members to adjudicate the matter

 

On the Law point No -2 Whether Regulation 12 mandates the NCDRF President to constitute another bench with at least one judicial Member enabling the bench to hear matter involving question of law

 

·         Regulation 12 Hearing of benches

When a bench is constituted by the president of the state commission or national commission as provided under sub section (2) of section 47 and sub section 2 of section 48 as the case may be, does not have a member with judicial background and any question of law arises and there is no precedent to decide on the point, then the bench constituted may refer the matter to the president to constitute another bench in which president should be the member.

Pointed out important word is “MAY” which calls for debate whether bench has mandate to refer the matter to president to constitute another bench with judicial member or is on wisdom of bench

 

On the Law point No-Whether Pending matters be transferred to appropriate commission after enhancement of pecuniary jurisdiction

 

Background

There is no provision for transfer of pending cases in the new Act of 2019 was another question to be delt by the Supreme Court  Replying to this query Court held  any direction for the transfer of existing cases would entail disturbing thousands of cases pending before the NCDRC and SCDRCs across the country. Data indicates that as on 31 October 2019, 21,216 cases were pending before the NCDRC and 1,25,156 cases were pending before the SCDRC This would cause serious hardship and prejudice to consumers and a waste of judicial time invested till date.

Hence coming to some conclusion, it is necessary to look into the following aspects 

 

!)Clear words indicative of either an express intent or an intent by necessary implication would be necessary to achieve this result. The Act of 2019 contains no such indication.

 

!!)The transitional provisions contained in Sections 31, 45 and 56 expressly indicate that the adjudicatory personnel who were functioning as Members of the District Commission, SCDRC and NCDRC under the erstwhile legislation shall continue to hold office under the new legislation. Such provisions are necessary because persons appointed to the consumer fora under the Act of 1986 would have otherwise demitted office on the repeal of the legislation. Similar intend can be presumed for transfer of cases also when it is specifically mentioned in section 107 to continue with the same arrangement so far it is not inconsistent to the new act

 

!!!)Previous decisions of the NCDRC which had interpreted amendments that enhanced pecuniary jurisdiction, with prospective effect. The NCDRC, in Southfield Paints and Chemicals Pvt. Ltd. v. New India Assurance Co. Ltd.58 construed amending Act 62 of 2002 by which the pecuniary limits of jurisdiction were enhanced with effect from 15 March 2003 as prospective by relying on its earlier decision in Premier Automobiles Ltd. v. Dr Manoj Ramachandran, where the NCDRC held that the amendments enhancing the pecuniary jurisdiction are prospective in nature

v)Section 6 of General clauses act 1897 makes it clear that pending proceedings will not be impacted in any manner

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