DISSOLVING THE DUBEITY OVER JURISDICTIONAL ISSUES – SUSTAINING CONSUMER INTEREST
INTRODUCTION:
The Supreme Court of India (“SC”) vide its order dated 16th March 2021 (in Neena
Aneja and others (Appellants) v. Jai Prakash Associates Ltd. (Respondents))
created a significant precedent to embrace that enforcement of the Consumer
Protection Act, 2019 (hereinafter “the
Act of 2019”) does not warrant the abrogation and transfer of pending
consumer complaints from adjudicatory forums established under the Consumer
Protection Act, 1986 (hereinafter “the
Act of 1986”) to the corresponding adjudicatory forums under the Act of
2019. The SC bench of Hon’ble Justices DY Chandrachud and MR Shah were hearing
an appeal filed by the appellants aggrieved by an order of the National
Consumer Disputes Redressal Commission (hereinafter “NCDRC”) dismissing their complaint on the ground that institution
of proceedings should continue in appropriate forum established under the Act
of 2019 since the Act of 1986 stood repealed as on the date of hearing of
complaint and the Act of 1986 did not sustain a legal character in eyes of law.
In this regard, the bench made an extensive interpretation of Section 107 of
the Act of 2019 and Section 6 of the General Clauses Act, 1897 to comprehend
the constitutionality of proceedings under the Act of 1986 when the same loses
its structure and becomes ineffective.
FACTUAL BACKGROUND:
The Respondent is a part of the Indian conglomerate
having business interest in Real Estate, Engineering & Construction,
Hospitality, Power generation etc. based out of Noida. The Appellant upon
payment of a sum of money (‘consideration’)
was allotted a residential unit in one of the real estate projects. Due to
a dispute between the Appellant and the Respondent, the Appellant on 18th
day of June 2020 proffered a compliant in the then jurisdiction of the NCDRC
claiming refund of the consideration accounted for with interest. The NCDRC on
30th day of July 2020 dissolved the complaint with reasoning that
NCDRC was not competent in the case to entertain the complaint by Appellant as
the commencement of the Act of 2019 transposed the jurisdiction of such
adjudicatory forum through corresponding elevation of material interest measured
in monetary values which serve as the yardstick prior to the institution of
proceedings in the appropriate forum. The Appellants solicited the NCDRC to
review its earlier decision to dismiss the complaint of Appellants invoking
jurisdiction issue consequent to the promulgation of the Act of 2019. However,
the same failed to reap the result in favour of the Appellants and the appeal
was drawn to the apex court. For the purpose of interpretation and
comprehending the issues involved herein, the following dates find prominence:
|
Date of compliant to NCDRC |
18th
June 2020 |
|
Effective date of the Act of 2019 |
20th and
24th July 2020 |
|
Date of hearing |
30th
July 2020 |
ISSUES
INVOLVED:
The bench was hands on with the interpretation of the
following issues that had come into existence pursuant to the enactment of the
Act of 2019:
1. The Act of 1986 mandated prior thresholds required for making a complaint to appropriate forums viz. the District, State and National Commissions respectively. The promulgation of Act of 2019 elevated the threshold limits required prior to the institution of a compliant before the adjudicatory forums as stated hereinabove. Whether the enforcement of the Act of 2019 would mandate the abrogation and transfer of proceedings from the forum domiciled under the Act of 1986 to the appropriate forum established under the Act of 2019 or would the cases commenced prior to the enactment of the Act of 2019 subsist in the same forum established under the Act of 1986?
2. Does Section 107 of the Act of 2019 read with Section 6 of the General Clauses Act save the legal proceedings commenced under the Act of 1986?
3. Does the transfer of pending proceedings from one forum to another due to the transmission of the Consumer law is merely a procedural aspect and the same does not find relevance for applicability of Section 6 of the General Clauses Act?
4. Does the transfer of
a case from one forum to another consequent to the enactment of a repealing law
(specifically affecting jurisdiction of
the adjudicatory body) find a retrospective application?
In order to interpret the position of the apex court on
the issues stated hereinabove, it is pertinent to understand the nature of
consumer law and the salient provisions embedded therein in so far as
applicable to the present case.
THE
CONSUMER PROTECTION ACT, 2019:
The ministry of consumer affairs vide notifications
deployed dated 15th day of July 2020 and 23rd day of July
2020 elucidated that the provisions of the Act of 2019 shall take effect from
the 20th and 24th day of July 2020 respectively. By the
virtue of doing so, the Act of 1986 stood repealed and ineffective thereat. The
nature of the Act of 2019 is recognised and attributed as a consolidating
statue that has by the reason of its existence negated the provisions made
under the Act of 1986. Ironically, consumer who is considered as the king
became the victim of unfair practices employed in the market. The afflux of
growing time, increased competition in the market and greater vulnerability
from being exploited prompted the legislature to look beyond the Act of 1986 in
order to enhance the modalities for protecting the interest of the consumers.
The intent of the legislature behind dropping curtains for the Act of 1986
could be summated from the observation in the legislature as reproduced
hereinbelow:
Lok
Sabha Debate – For the motion of consideration of consumer protection bill
(December 20, 2018):
The bill provides for
protection of the interests of consumers and for the said purpose, to establish
authorities for timely and effective administration and settlement of
consumers' disputes and for matters connected therewith or incidental thereto.
The Act of 1986 on the other hand failed to find the
extended reach as envisioned under the Act of 2019 as stated above. The Apex
Court in the case of “C. Venkatachalam v. Ajitkumar C. Shah &
Ors. (2011)” held that “On the
perusal it appears that the Consumer Protection Bill, 1986 seeks
to provide for better protection of the interests of consumers
and for the purpose, to make provisions for the establishment
of Consumer Councils and other authorities for the settlement
of consumer disputes and for matters connected therewith.” The
plain construction of the objects of the respective statutes outline that the
Act of 2019 enumerates a wider scope of application. The Act of 1986 suffered
from the lack of lucidity as the statute through its provisions were on level
below its natural application. The Supreme Court in “Ireo Grace Realtech Pvt. Ltd. v.
Abhishek Khanna (2021)” categorically stated that “The provisions of the Consumer Protection Act, 2019 have to be
construed in favour of the consumer to achieve the purpose of enactment as it
is a social benefit oriented legislation.”
STATUTORY
STANDPOINT:
ESTABLISHMENT
OF ADJUDICATORY FORUMS:
The establishment of adjudicatory forums is mandated
under the Act of 1986 and 2019 respectively. The very purpose of these bodies
are not only to admit compliant by the consumers but also to adjudicate upon
such compliant and provide justice to the consumers in case of disputes. The
apex court in The Chairman, Thiruvalluvar Transport Corporation v. The Consumer
Protection Council (1995) postulated that “This law was enacted to provide for better protection of the interests
of consumers and for that purpose to make provision for the establishment of
consumer councils and other authorities for the settlement of consumers'
disputes etc.” Below summated are the statutory adjudicatory forums along
with their respective jurisdiction for the purpose of institution of
proceedings and adjudication thereof:
|
Forum |
Jurisdiction (in terms of threshold limits) |
|
|
Under the Act of 1986 |
Under the Act of 2019 |
|
|
District Commission |
Where the value of
goods or services or both along with compensation claimed, if any does not
exceed Rs. 20 Lakhs. (Which
shall be subject to further appeal to the State Commission) |
Where the value of
goods or services or both does not exceed Rs. 1 Crore. (Which shall be subject to further appeal
to the State Commission) |
|
State Commission |
Where the value of
goods or services or both along with compensation claimed, if any does
exceeds Rs. 20 Lakhs but does not exceed Rs. 1 Crore. (Which shall be subject to further appeal
to the National Commission) |
Where the value of
goods or services or both exceeds Rs. 1 Crore but does not exceed Rs. 10 Crore whether such transaction
involves unfair contracts or otherwise. (Which
shall be subject to further appeal to the National Commission) |
|
National Commission |
Where the value of
goods or services or both along with compensation claimed, if any does
exceeds Rs. 1 Crore. (Which
shall be subject to further appeal to the Supreme Court) |
Where the value of
goods or services or both exceeds Rs. 10 Crore whether such transaction
involves unfair contracts or otherwise. (Which
shall be subject to further appeal to the Supreme Court) |
SECTION
107 OF THE ACT OF 2019:
Section 107 of the Act of 2019 gives provision and effect
to the repeal of the Act of 1986 consequent to the inception of the repealing
statute. Section 107(2) rescues the pending proceedings or conduct thereof
undertaken under the Act of 1986 in so far that such conduct(s) or proceedings
are not inconsistent with the Act of 2019. Sub section 3 to Section 107
contemplates that the application of Section 6 of General Clauses Act shall remain
intact despite the savings clause under sub section 2.
SECTION
6 OF THE GENERAL CLAUSES ACT:
Section 6 of the General Clauses Act, 1897 demarcates the
jurisprudence on the operation of a repealing statute. Section 6 categorically
states that “unless a different intention appears” the repeal shall not
affect certain aspects. For the purpose of the case dealt herein, emphasis is
supplied on sub clause (c) and (e) of Section 6. Unless a different intention is derived consequent to the enactment
of a repealing statute, such repeal shall not:
a) Affect the right, privilege, obligation or liability
acquired, accrued or incurred under any enactment so repealed. (sub section c)
b) Affect any investigation, legal proceeding or remedy in
respect of any such right, privilege, obligation, liability and penalty.
The net effect that
could be observed is that the institution of a legal proceeding remains in
force under the erstwhile repealed act as if the repealing statute has not
found its inception in the books of law.
SUBMISSION
OF THE PARTIES:
A. SUBMISSION OF
THE APPELLANTS:
1. Under the Act of 2019, concerning the value of
transaction involved, the adjudication vests with the State Commission (“SCDRC”) instead of the NCDRC under the erstwhile legislation. There
ought to be a provision in the Act of 2019 for transferring such proceedings
from the jurisdiction of NCDRC to the SCDRC, in the absence of which the
proceedings deem to continue with such adjudicatory forum as if the old law
still finds itself in force.
2. The institution of suit in itself preserves the right of
the parties to appeal to the appropriate forums established under the
respective statutes. Hence the right of the Appellant is a substantive and
vested right which can be only taken away by an expression in the statute
itself.
3. The relevant date shall be the date of institution of the
compliant and not the date of hearing by the appropriate forum.
4. The change of forum consequent to the enactment of the
Act of 2019 is not just per say
procedural in nature but the same also involves the right of appeal which is
fundamental to any individual under any law.
5. Earlier when the pecuniary
limits were enhanced under the Act of 1986, the NCDRC in Southfield Paints and Chemicals
Pvt. Ltd. v. New India Assurance Co. Ltd. (2000) held that the change
of jurisdiction of forum under the Act of 1986 shall operate prospectively and
retrospective application does not find any relevance.
B. SUBMISSION OF
THE RESPONDENTS:
1. During the enactment of the Act of 2019, a conscious decision
was taken to enhance the limits of the NCDRC and the SCDRC so as to dispose large
quantum of pending cases consequent to the delay in disposal of cases under the
erstwhile law.
2. The fundamental premise of any law is that when a law
gets repealed, everything associated with such statute stands obliterated. Hence
the application of the provisions of the erstwhile law does not find
prominence.
3. Application of Section 6(e) of the General Clauses Act
applies to substantive legal proceedings but wherein the same excludes matters
involving merely procedural aspects.
4. The change of forum pursuant to the repeal of the Act of
1986 is procedural in nature and the
same has to be distinguished from substantive alteration that affects the right
of the parties.
5. Complaints filed before the NCDRC under the Act of 1986
has to be instituted in the corresponding forum i.e. SCDRC under the Act of 2019 which does not extinguish the
right of appeal of the Appellants but strengthens the right of appeal as the
Appellant is free to appeal to the NCDRC against the order of the SCDRC, if aggrieved.
6. The Act of 2019 does indicate a contrary intent within
the operation of Section 6 of the General Clauses Act which is evinced through
the statement of objects of the Act of 2019 thus negating the application of
Section 6 of the General Clauses Act.
ANALYSIS
OF DICTUM OF THE COURT:
After considering the merits of the case and the submissions
of the parties thereto, the SC contemplated and held the following:
1. Reliance was placed on Garikapati Veeraya v. N Subbiah
Choudhry (1957) to reiterate that remedy, appeal and matters connected
thereto are distinguished steps in a proceeding and are all connected by an
intrinsic unity so as to mean that all the steps mentioned hereinabove along
with the pursuit of justice has be regarded as one legal proceeding rather than
dispersing its character into various stages.
2. Reliance was placed on New India Assurance Company
Limited v. Smt. Shanti Mishra (1975) wherein interpretation of Section
110(A) of the Motor Vehicles Act 1939 was made out. It was held that “It is a well-established proposition that
such a change of law operates retrospectively and the person has to go to the
new forum even if his cause of action or right of action accrued prior to the
change of forum. He will have a vested right of action but not a vested right
of forum. If by express words the new forum is made available only to causes of
action arising after the creation of the forum, then the retrospective
operation of the law is taken away. Otherwise the general rule is to make it
retrospective.”
3. With respect to the repeal of a law, unless the repealed
statute does contain the savings clause for protecting the proceedings under
the erstwhile law, the repealed statute shall stand obliterated. In the Act of
2019, Section 107 categorically saves the operation of the Act of 1986 along
the proceedings and rights of the Appellant thereto.
4. The right to pursue a consumer compliant arose under the
Act of 1986 which is saved by the application of Section 6 of the General
Clauses Act.
5. The right to pursue a complaint through instrument of
legal proceeding at a particular forum is not disturbed by
the enactment of the Act of 2019. The application of Section 107 and General
Clauses Act is constructed only in cases wherein
rights of the parties are affected rather than the rights of the parties to
pursue at a particular forum. The application of the Section 107 and
Section 6 of the General Clauses Act does not apply to matters consisting only
procedural matters.
6. Under the Act of 2019, there is no express language to
exhibit that all proceedings pending under the Act of 1986 shall stand
transferred to the appropriate adjudicatory forums established under the Act of
2019. In the absence of a specific provision in this regard, it is disregarded
that any contrary intent appears on the enactment of the Act of 2019 which is
essential to save the application of Section 6 of the General Clauses Act.
7. In case, if the judiciary were to give effect to the fact
that all pending legal proceedings under the Act of 1986 be transferred to the
forums under the Act of 2019, then that would rest the case with SCDRC and would
involve the consumer to once again make legal representation to the SCDRC
including arranging again in entirety pertaining to the process of litigation
which is expected to cause serious hardship.
8. The Annual Report drawn from the Ministry of Consumer
Affairs demonstrates that as on 31st October 2019, 21,216 cases were
pending before the NCDRC and 1,25,156 cases were pending before the SCDRC and
if the enactment is given a retrospective application then the same would
disturb the interest of large number of consumers as many cases from the
figures from the ones above mentioned have to be transferred to SCDRC and the
District Commissions, as the case may be.
9. The enactment of the
Act of 2019 shall not disturb the pending proceedings instituted under the Act
of 1986 as the same is saved by the application and interpretation of Section
107 of the Act of 2019 read with Section 6 of the General Clauses Act. The
proceedings commenced under the Act of 1986 shall continue under the respective
forums established under the Act of 1986 as if the statute itself is construed
to be not repealed.
10. The application of the Act of 2019 shall be prospective in nature.
ENDING
REMARKS:
The Consumer Protection law is significant in protection
of the interest of the consumers vide the application of its provisions and
establishment of various bodies for rendering justice to the consumer. The fact
of repeal of any law and the subsequent inception of a new law undoubtedly
disturbs the jurisdiction of the adjudicatory bodies vis-à-vis pending legal proceedings initiated under the repealed statute
which if not addressed to can cause serious hardship to the prime stakeholder viz. the consumer of being involved in strenuous
litigation before a different forum.
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