LEGAL ISSUE: The core legal issue is whether consumer complaints filed under the Consumer Protection Act, 1986, before the enforcement of the Consumer Protection Act, 2019, should be adjudicated under the old law or the new law, particularly concerning the change in pecuniary jurisdiction of consumer courts.
CASE TYPE: Consumer Law
Case Name: Neena Aneja & Anr. vs. Jai Prakash Associates Ltd.
Judgment Date: 16 March 2021
Date of the Judgment: 16 March 2021
Citation: Where available, provide the case citation in the Indian Supreme Court (INSC) format.
Judges: Dr Dhananjaya Y Chandrachud, J and M R Shah, J. The judgment was authored by Dr Dhananjaya Y Chandrachud, J.
Can a change in the pecuniary jurisdiction of consumer courts affect cases already filed? The Supreme Court of India recently addressed this crucial question in a case concerning the applicability of the Consumer Protection Act, 2019, to pending cases filed under the previous 1986 Act. This judgment clarifies whether cases should be transferred to new forums based on the enhanced pecuniary limits.
The core issue revolves around whether a consumer complaint filed and registered under the Consumer Protection Act of 1986, before the new Act of 2019 came into force, has to be entertained under the provisions of the old law or the new law. This includes the interpretation of Section 107 of the Act of 2019, and its interplay with Section 6 of the General Clauses Act, 1897.
The bench comprised of Justices Dr. Dhananjaya Y Chandrachud and M.R. Shah, with the judgment authored by Justice Dr. Dhananjaya Y Chandrachud.
Case Background
The appellants had booked a residential unit with the respondent, paying an advance of Rs. 3.50 lakhs on 25 November 2011. The total consideration was Rs. 56.45 lakhs, with possession expected within 42 months. The appellants paid Rs. 53.84 lakhs between December 2011 and the present date.
On 13 June 2017 and 27 April 2020, the appellants sought a refund with 18% interest. On 18 June 2020, they filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) for a refund with interest. The NCDRC dismissed the complaint on 30 July 2020, citing a lack of pecuniary jurisdiction due to the enforcement of the Consumer Protection Act, 2019, which increased the NCDRC’s jurisdiction from rupees one crore to rupees ten crores. The appellants’ review petition was also dismissed on 5 October 2020.
Timeline:
| Date | Event |
|---|---|
| 25 November 2011 | Appellants paid an advance of Rs. 3.50 lakhs for a residential unit. |
| Between December 2011 and the present date | Appellants paid Rs. 53.84 lakhs out of the total consideration of Rs. 56.45 lakhs. |
| 13 June 2017 | Appellants sought a refund of the consideration with 18% interest. |
| 27 April 2020 | Appellants again sought a refund of the consideration with 18% interest. |
| 18 June 2020 | Appellants filed a consumer complaint before the NCDRC for refund with interest. |
| 20 July 2020 | The Consumer Protection Act, 2019, came into force. |
| 30 July 2020 | NCDRC dismissed the consumer complaint for lack of pecuniary jurisdiction. |
| 5 October 2020 | NCDRC dismissed the appellants’ review petition. |
Course of Proceedings
The National Consumer Disputes Redressal Commission (NCDRC) initially dismissed the consumer complaint filed by the appellants due to a lack of pecuniary jurisdiction, citing the enhanced limits under the Consumer Protection Act, 2019. The NCDRC held that after the enforcement of the Act of 2019 on 20 July 2020, the limits of its pecuniary jurisdiction stood enhanced from rupees one crore to rupees ten crores and the complaint instituted by the appellants was consequently not maintainable. The appellants then filed a review petition, which was also dismissed by the NCDRC. This led to the appellants filing an appeal before the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation of Section 107 of the Consumer Protection Act, 2019, which deals with the repeal and savings of the previous Consumer Protection Act, 1986. Section 107(1) repeals the 1986 Act. Section 107(2) states that actions taken under the 1986 Act shall be deemed to have been done under the corresponding provisions of the 2019 Act, as long as they are consistent with the new law. Section 107(3) clarifies that the general application of Section 6 of the General Clauses Act, 1897, regarding the effect of repeals, is not affected by the specific provisions in Section 107(2).
Section 6 of the General Clauses Act, 1897, is crucial as it outlines the effect of repealing a statute. It generally saves any rights, privileges, obligations, or liabilities acquired or accrued under the repealed statute, and allows pending legal proceedings to continue as if the repealing act had not been passed, unless a different intention appears in the repealing act.
The relevant sections of the Consumer Protection Act, 2019, regarding pecuniary jurisdiction are:
- Section 34: Jurisdiction of the District Consumer Disputes Redressal Commission to entertain complaints where the value of goods and services does not exceed one crore rupees.
- Section 47: Jurisdiction of the State Consumer Disputes Redressal Commission to entertain complaints where the value of goods and services exceeds one crore rupees but does not exceed ten crore rupees.
- Section 58: Jurisdiction of the National Consumer Disputes Redressal Commission to entertain complaints where the value of goods and services exceeds ten crore rupees.
The Supreme Court also considered the previous pecuniary limits under the Consumer Protection Act, 1986, which were:
- Section 11: District Commission had jurisdiction up to rupees twenty lakhs.
- Section 17: State Commission had jurisdiction between rupees twenty lakhs and rupees one crore.
- Section 21: National Commission had jurisdiction above rupees one crore.
Arguments
Appellants’ Submissions:
-
Section 107(3) of the Consumer Protection Act, 2019, read with Section 6 of the General Clauses Act, 1897, saves pending legal proceedings. Therefore, the complaint filed before the enforcement of the new legislation should proceed before the NCDRC under the 1986 Act.
-
The relevant date is the date of the institution of the complaint, not the date when the matter is heard or decided.
-
The new legislation affects substantive rights of appeal by making a deposit of 50% of the decretal amount mandatory, which is not merely procedural.
-
The new legislation does not contain any provision for its retrospective operation and should operate prospectively.
-
There is no provision for the transfer of pending cases from the NCDRC to the SCDRC in the new Act of 2019.
Respondent’s Submissions:
-
The Consumer Protection Act, 2019, was enacted to strengthen remedies available to consumers, address delays, and ensure cases are resolved in forums closer to the complainants.
-
The expression “entertain” in Sections 34, 47, and 58 of the 2019 Act means “to adjudicate upon,” implying that the new pecuniary limits apply at every point when a matter is considered.
-
Section 107(2) covers concluded transactions, while Section 107(3) preserves Section 6 of the General Clauses Act, 1897. Section 6(e) applies to pending proceedings, but a change of forum is a procedural matter and not covered by Section 6(e).
-
A mere change in forum is different from a substantive alteration of rights. The Act of 2019 is a new law that created a new hierarchy of courts and must be treated as retroactive.
-
The Act of 2019 does not abrogate existing rights but strengthens them by providing an additional right of appeal.
-
The Act of 2019 abolished the old hierarchy of forums and established new ones, so pending cases under the 1986 Act cease to be pending.
-
The Act of 2019 indicates a contrary intention within the meaning of Section 6 of the General Clauses Act, 1897, meaning pending proceedings will not continue before the old forums.
-
The principle that a repeal of a statute obliterates the effects of the earlier legislation is subject to exceptions, but a change of forum is not one of them.
The respondent argued that the Act of 2019 is not merely an amendment to the 1986 Act, but a completely new law that abolished the old hierarchy and created a new one. Therefore, the pecuniary limits defined under the 2019 Act should apply to all pending actions.
| Main Submission | Appellants’ Sub-Submissions | Respondent’s Sub-Submissions |
|---|---|---|
| Applicability of Section 6 of the General Clauses Act |
|
|
| Nature of the New Act |
|
|
| Right to Appeal |
|
|
| Transfer of Pending Cases |
|
|
There was no innovativeness in the arguments by either side.
Issues Framed by the Supreme Court
The primary issue framed by the Supreme Court was:
- Whether a complaint filed and registered under the Consumer Protection Act, 1986, before the new Act of 2019 came into force, has to be entertained under the provisions of the erstwhile legislation.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reasoning |
|---|---|---|
| Whether a complaint filed under the 1986 Act should be entertained under the old or new law | The complaint should be entertained under the provisions of the 1986 Act. | Section 107(3) of the 2019 Act read with Section 6 of the General Clauses Act saves pending legal proceedings. The absence of a provision for transfer of pending cases indicates an intent to continue them under the old law. |
Authorities
The Supreme Court considered several cases and legal provisions to arrive at its decision. These authorities were categorized by the legal point they addressed:
| Authority | Legal Point | How the Authority was Considered |
|---|---|---|
| Venugopala Reddiar v. Krishnaswami Reddiar, AIR 1943 FC 24 (Federal Court) | Validity of pending proceedings when the court lost territorial jurisdiction. | Cited to show that the key question is whether there is a clear indication against the continuance of pending proceedings. |
| Colonial Sugar Refining Company Ltd. v. Irving, (1905) AC 369 (Privy Council) | Right to appeal as a substantive right. | Cited to emphasize that a right to appeal is a substantive right and any changes to it should not be retrospective unless a clear intention is manifested. |
| Kiran Singh v. Chaman Paswan, AIR 1954 SC 340 (Supreme Court) | Distinction between substantive right of appeal and mere change of forum. | Cited to show that a mere change in forum is not a substantive right and does not cause prejudice. |
| Garikapati Veeraya v. N Subbiah Choudhry, 1957 SCR 488 (Supreme Court) | Right of appeal as a vested right. | Cited as the locus classicus on the subject of the substantive right of appeal and that the right to appeal vests once the suit is instituted. |
| Mohd. Idris v. Sat Narain, AIR 1966 SC 1499 (Supreme Court) | Impact of a repealing act on pending proceedings. | Cited to highlight that the absence of a provision for transfer of pending actions in the repealing legislation saves proceedings at the old forum. |
| Manujendra Dutt v. Purnedu Prosad Roy Chowdhury, (1967) 1 SCR 475 (Supreme Court) | Jurisdiction of the Controller under the Calcutta Thika Tenancy Act after deletion of a section. | Cited to show that the deletion of a section does not affect pending proceedings and that the deletion would not affect the transfer of the suit or anything duly done under the deleted section. |
| New India Assurance Company Limited v. Smt Shanti Mishra, (1975) 2 SCC 840 (Supreme Court) | Change of forum operates retrospectively. | Cited to establish that a change of forum generally operates retrospectively, and the litigant must go to the new forum. |
| Maria Cristina De Souza v. Amria Zurana Pereira Pinto, (1979) 1 SCC 92 (Supreme Court) | Distinction between right of appeal and forum. | Cited to make a distinction between the right of appeal and the forum where the appeal can be lodged, with the latter being a procedural matter. |
| Hitendra Vishnu Thakur v. State of Maharashtra, (1994) 4 SCC 602 (Supreme Court) | Procedural law is generally retrospective. | Cited to show that procedural statutes are generally retrospective unless they create new disabilities or obligations. |
| Sudhir G Angur v. M Sanjeev, (2006) 1 SCC 141 (Supreme Court) | Change in procedural law applies to pending proceedings. | Cited to show that the relevant court is under a duty to take notice of the change in law relating to forum and apply it to a pending proceeding. |
| Ramesh Kumar Soni v. State of Maharashtra, (2013) 14 SCC 696 (Supreme Court) | Shifting of forum of trial is retrospective. | Cited to establish that any amendment shifting the forum of trial is retrospective unless the amending act indicates otherwise. |
| Commissioner of Income Tax, Orissa v. Dhadi Sahu, 1994 Suppl. (1) SCC 257 (Supreme Court) | Change of forum as a vested right. | Cited to highlight a view that a change of forum ceases to be a question of procedure and becomes a vested right when proceedings are initiated. This view was not followed by the court. |
| Ambalal Sarabhai Enterprises Ltd. v. Amrit Lal & Co., (2001) 8 SCC 397 (Supreme Court) | Savings of pending proceedings under Section 6 of the General Clauses Act. | Cited to show that a pending proceeding would be saved under Section 6(e) of the General Clauses Act only if it is related to a right, privilege, or obligation that has been acquired or accrued under Section 6(c). |
| Himachal Pradesh State Electricity Regulatory Commission v. Himachal Pradesh State Electricity Board, (2014) 5 SCC 219 (Supreme Court) | Right of appeal and forum as vested rights. | Cited to emphasize that the right of appeal and the forum is a vested right unless taken away by express provision or necessary intention. |
| Videocon International Limited v. Securities and Exchange Board of India, (2015) 4 SCC 33 (Supreme Court) | Change of forum and vested appellate rights. | Cited to show that a change in forum is not an absolute rule and that the amendment to Section 15-Z of the SEBI Act, having reduced the appellate package, adversely affected the vested appellate right of the litigant concerned. |
| Securities and Exchange of Board of India v. Classic Credit Limited, (2018) 13 SCC 1 (Supreme Court) | Change of forum can be substantive or procedural. | Cited to show that a change of forum could be substantive or procedural, and it may be procedural when the remedy was yet to be availed of, but where the remedy had already been availed of, the right may be treated as a vested substantive right. |
| Swapna Mohanty v. State of Odisha, (2018) 17 SCC 621 (Supreme Court) | Jurisdiction of the Director of Higher Education. | Cited to show that the Director continued to have jurisdiction to decide the appeal which was filed before him prior to the admission of the college to grant-in-aid. |
| Om Prakash Agarwal v. Vishan Dayal Rajpoot, (2019) 14 SCC 526 (Supreme Court) | Pecuniary jurisdiction of Small Cause Courts. | Cited to show that when a small cause suit is cognizable by the Court of Small Causes, no other court can take cognizance. |
| Delhi High Court Bar Association v. Court of Delhi, ILR (1994) 1 Del 271 (Delhi High Court) | Change of forum is a procedural matter. | Cited to show that a change of forum is a procedural matter and not a vested right. |
| Mahendra Panmal Duggad Jain v. Bhararilal Panmal Duggad Jain, (2008) 4 Mah LJ 803 (Bombay High Court) | Amendment to pecuniary jurisdiction. | Cited to show that unless a clear legislative intent can be discerned, the absence of a savings clause would not warrant transfer of cases to a new forum. |
| Vallabhaneni Lakshmana Swamy v. Valluru Basavaiah, (2004) 5 ALD 807 (Andhra Pradesh High Court) | Right to appeal and forum as substantive rights. | Cited to show that if the forum is changed and the right of the appeal in the forum are so inextricable that they cannot be separated by clear cut measure, then the right of appeal as well as the forum are both substantive rights. |
| Gobardhan Lal Soneja v. Binod Kumar Sinha, (1991) 2 PLJR 783 (Patna High Court) | Transfer of pending proceedings after alteration of pecuniary jurisdiction. | Cited to show that the transfer of pending proceedings from the Sub-Judge to the Munsif after pecuniary jurisdiction is altered by an amendment, is a valid exercise of power and there is no vested right to a forum. |
| Y.B. Ramesh v. Varalakshmi, (2010) 6 Kant LJ 43 (Karnataka High Court) | Subsequent amendment to pecuniary jurisdiction. | Cited to show that a subsequent amendment to pecuniary jurisdiction is said to have divested the concerned forum of its authority to hear the matter. |
| Hindusthan Commercial Bank Ltd. v. Punnu Sahu (Dead) Through Legal Representatives, (1971) 3 SCC 124 (Supreme Court) | Meaning of “entertain”. | Cited to show that the expression “entertain” means to adjudicate upon or proceed to consider on merits. |
| Nusli Neville Wadia v. Ivory Properties, (2020) 6 SCC 557 (Supreme Court) | Meaning of “entertain”. | Cited to show that the expression “entertain” means to adjudicate upon or to proceed to consider on merits. |
| State of Rajasthan v. Mangilal Pindwal, (1996) 5 SCC 60 (Supreme Court) | Effect of a repeal without a savings clause. | Cited to show that a repeal of a statute obliterates it, subject to exceptions for past and closed transactions. |
| Manish Kumar v. Union of India, Writ Petition (C) No. 26 of 2020 (Supreme Court) | Retrospectivity of procedural amendments. | Cited to show the position that amendments on matters of procedure are retrospective, unless a contrary intention emerges from the statute. |
| Southfield Paints and Chemicals Pvt. Ltd. v. New India Assurance Co. Ltd., Consumer Case No. 286 of 2000 (NCDRC) | Construction of amending act. | Cited to show that the NCDRC had previously construed amendments enhancing pecuniary jurisdiction as prospective. |
| Premier Automobiles Ltd. v. Dr Manoj Ramachandran, Revision Petitions Nos 400 to 402 of 1993 (NCDRC) | Amendments enhancing pecuniary jurisdiction are prospective. | Cited to show that the NCDRC had previously held that amendments enhancing pecuniary jurisdiction are prospective in nature. |
Judgment
The Supreme Court held that the complaints filed before the enforcement of the Consumer Protection Act, 2019, would continue before the forums corresponding to those under the 1986 Act, and would not be transferred based on the new pecuniary limits.
| Submission by the Parties | How the Court Treated the Submission |
|---|---|
| Appellants’ submission that Section 107(3) of the 2019 Act read with Section 6 of the General Clauses Act saves pending legal proceedings. | The Court agreed, holding that Section 6 of the General Clauses Act saves pending legal proceedings and the absence of a transfer provision indicates an intent to continue them under the old law. |
| Appellants’ submission that the relevant date is the date of the institution of the complaint. | The Court agreed, holding that the right to pursue a validly instituted consumer complaint under the Act of 1986 is a right which has accrued under the law which was repealed. |
| Appellants’ submission that the new legislation affects substantive rights of appeal. | The Court acknowledged that the new legislation does affect the right to appeal but did not find it to be a reason to transfer the case to the new forums. |
| Appellants’ submission that the new legislation should operate prospectively. | The Court agreed that a statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment. |
| Appellants’ submission that there is no provision for transfer of pending cases. | The Court agreed, holding that the absence of a transfer provision indicates an intent to continue them under the old law. |
| Respondent’s submission that the 2019 Act strengthened remedies for consumers. | The Court acknowledged this but held that the Act does not indicate an intent to transfer pending cases. |
| Respondent’s submission that the expression “entertain” in the 2019 Act means “to adjudicate upon.” | The Court accepted this definition but held it does not automatically mean that the new pecuniary limits apply to pending cases. |
| Respondent’s submission that a change of forum is a procedural matter. | The Court agreed with this principle but held that it does not apply when the legislature has shown a contrary intent. |
| Respondent’s submission that the 2019 Act is a new law and must be treated as retroactive. | The Court disagreed, holding that the Act does not indicate an intent to transfer pending cases. |
| Respondent’s submission that the 2019 Act does not abrogate existing rights but strengthens them. | The Court acknowledged this but held that the Act does not indicate an intent to transfer pending cases. |
| Respondent’s submission that the 2019 Act abolished the old hierarchy of forums. | The Court acknowledged this but held that the Act does not indicate an intent to transfer pending cases. |
| Respondent’s submission that the 2019 Act indicates a contrary intent within the meaning of Section 6 of the General Clauses Act, 1897. | The Court disagreed, holding that the Act does not indicate a contrary intent. |
| Respondent’s submission that a change of forum is not an exception to the principle that a repeal of a statute obliterates the effects of the earlier legislation. | The Court disagreed, holding that the Act does not indicate an intent to transfer pending cases. |
The court clarified that the change in pecuniary jurisdiction under the new Act is not applicable to cases that were filed before the new Act came into force.
Ratio Decidendi
The ratio decidendi of the judgment is:
-
Section 107(3) of the Consumer Protection Act, 2019, read with Section 6 of the General Clauses Act, 1897, saves pending legal proceedings initiated under the Consumer Protection Act, 1986.
-
The absence of a provision for transfer of pending cases to the new forums under the 2019 Act indicates a legislative intent to continue them under the old law.
-
The pecuniary jurisdiction limits under the Consumer Protection Act, 2019, do not apply to cases filed before the enforcement of the new Act.
Decision
The Supreme Court allowed the appeal and set aside the order of the National Consumer Disputes Redressal Commission (NCDRC). The court held that the complaint instituted by the appellants should be entertained and adjudicated upon by the NCDRC under the provisions of the Consumer Protection Act, 1986.
Significance of the Judgment
This judgment is significant for the following reasons:
-
Clarity on Applicability of New Act: The ruling provides clarity on how the Consumer Protection Act, 2019, applies to pending cases filed under the 1986 Act. It ensures that consumers who had already initiated complaints under the old law are not disadvantaged by the new pecuniary limits.
-
Protection of Vested Rights: It reaffirms the principle that vested rights, such as the right to pursue a complaint in a particular forum, are protected unless there is a clear legislative intent to the contrary.
-
Interpretation of Savings Clause: The judgment clarifies the interpretation of Section 107 of the Consumer Protection Act, 2019, and its interplay with Section 6 of the General Clauses Act, 1897, emphasizing the importance of savings provisions in protecting pending legal proceedings.
-
Consistency in Legal Proceedings: By ensuring that cases are adjudicated under the law that was in force when the complaint was filed, the judgment promotes consistency and predictability in legal proceedings.
-
Guidance for Consumer Courts: The ruling provides clear guidance for consumer courts on how to handle pending cases when there is a change in pecuniary jurisdiction, preventing confusion and ensuring fair adjudication.
The judgment ensures that the transition from the old to the new consumer protection law is smooth and does not prejudice consumers who had already initiated legal proceedings.
Flowchart of the Judgment
This flowchart illustrates the progression of the case and the Supreme Court’s decision.