LEGAL ISSUE: Validity of rules regarding qualifications and appointment procedures for members of State and District Consumer Commissions.
CASE TYPE: Consumer Protection Law
Case Name: The Secretary Ministry of Consumer Affairs vs. Dr. Mahindra Bhaskar Limaye & Ors.
Judgment Date: 3 March 2023
Date of the Judgment: 3 March 2023
Citation: (2023) INSC 178
Judges: M. R. Shah, J. and M.M. Sundresh, J. (authored by M.R. Shah, J.)
Can the government set its own rules for appointing members to consumer courts, or should there be a more transparent process? The Supreme Court of India addressed this question in a recent judgment, upholding the High Court’s decision that certain rules were arbitrary and violated the Constitution. The core issue revolved around the fairness and transparency of the appointment process for members of State and District Consumer Commissions under the Consumer Protection Act, 2019. The Supreme Court bench, comprising Justices M. R. Shah and M.M. Sundresh, delivered the judgment, with Justice M.R. Shah authoring the opinion.
Case Background
The Ministry of Consumer Affairs, Union of India, framed the Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020, under the Consumer Protection Act, 2019. These rules set the qualifications and procedures for appointing members to the State and District Consumer Commissions. Specifically, Rule 3(2)(b) and Rule 4(2)(c) of the Rules, 2020, specified the qualifications for members of the State and District Commissions, respectively. Rule 6(9) outlined the procedure for appointment by the Selection Committee.
The High Court of Judicature at Bombay, Nagpur Bench, struck down Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) of the Rules, 2020, deeming them arbitrary, unreasonable, and violative of Article 14 of the Constitution of India. The Ministry of Consumer Affairs and the State of Maharashtra appealed this decision to the Supreme Court.
Timeline
Date | Event |
---|---|
2019 | Consumer Protection Act, 2019 enacted. |
3 January 2012 | Model rules 2012 were already in existence in the State of Maharashtra made on 03.01.2012 under Section 30 of the Consumer Protection Act, 1986. |
20 July 2020 | Consumer Protection Act, 2019 came into force, repealing the 1986 Act. |
2020 | Ministry of Consumer Affairs frames the Consumer Protection Rules, 2020. |
2 February 2021 | Vacancy notice issued for members of State and District Commissions. |
14 September 2021 | High Court of Judicature at Bombay, Nagpur Bench, strikes down Rules 3(2)(b), 4(2)(c), and 6(9) of the Consumer Protection Rules, 2020. |
17 November 2022 | Supreme Court hears the matter and raises concerns about Rule 6(9). |
18 November 2022 | Supreme Court hears the matter and raises concerns about Rule 6(9). |
13 January 2023 | Meeting held between Union of India and all the States/UTs to consider uniform measures to guide the Selection Committees. |
3 March 2023 | Supreme Court upholds the High Court’s decision. |
Course of Proceedings
The High Court of Judicature at Bombay, Nagpur Bench, heard a Public Interest Litigation (PIL) and a Writ Petition challenging the constitutional validity of Rules 3(2)(b), 4(2)(c), and 6(9) of the Consumer Protection Rules, 2020. The petitioners argued that these rules were arbitrary, unreasonable, and violated Article 14 of the Constitution. The High Court agreed, striking down the rules and directing the Union of India to frame new rules within four weeks, keeping in view the observations made in the judgment. The High Court also quashed the vacancy notice dated 2nd February, 2021, and cancelled the selection process initiated under it.
Legal Framework
The Consumer Protection Act, 2019, empowers the Central Government to frame rules for the appointment of members to the State and District Consumer Commissions. The Ministry of Consumer Affairs, exercising this power, framed the Consumer Protection Rules, 2020. The following rules were challenged:
- Rule 3(2)(b) of the Consumer Protection Rules, 2020, stated that a person shall not be qualified for appointment as a member of the State Commission unless he possesses a bachelor’s degree from a recognized university and has special knowledge and professional experience of not less than twenty years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine.
- Rule 4(2)(c) of the Consumer Protection Rules, 2020, stated that a person shall not be qualified for appointment as a member of the District Commission unless he is a person of ability, integrity and standing, and having special knowledge and professional experience of not less than fifteen years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine.
- Rule 6(9) of the Consumer Protection Rules, 2020, stated that the Selection Committee shall determine its procedure for making its recommendation keeping in view the requirements of the State Commission or the District Commission and after taking into account the suitability, record of past performance, integrity and adjudicatory experience.
These rules were challenged for violating Article 14 of the Constitution, which guarantees equality before the law.
Arguments
The petitioners before the High Court argued that:
- Rule 6(9) grants excessive and uncontrolled discretionary powers to the Selection Committee, violating Article 14 of the Constitution.
- The nature of work requires candidates to have their competency tested, preferably through a written examination, before being recommended for appointment.
- Without competent candidates, the purpose of the Consumer Protection Act would be defeated.
- The president and members of the State and District Commissions exercise powers similar to a court; therefore, the selection process should be as rigorous as that for judicial officers.
- The rules lack transparency and a fixed selection criteria.
- There is a strong apprehension of political and executive interference in the absence of a transparent selection process.
- The rules do not adhere to the model rules approved by the Supreme Court in the case of State of Uttar Pradesh and Others Vs. All Uttar Pradesh Consumer Protection Bar Association; (2017) 1 SCC 444.
- The minimum experience requirements of 20 years and 15 years for members of State and District Commissions, respectively, are contrary to the directions issued by the Supreme Court in Madras Bar Association Vs. Union of India and Another; (2021) 7 SCC 369.
The Attorney General of India, representing the Union of India, submitted that:
- After the Supreme Court raised concerns about Rule 6(9), the government considered the feasibility of conducting a written examination.
- Most states were not in favor of a written test due to the low number of vacancies, the need for diverse expertise, and the possibility of dissuading experienced professionals from applying.
- Instead, the government proposed adding a proviso to Rule 6(9) that would allow the Central Government to issue instructions to guide the Selection Committee.
- The government also proposed a marking system for selection, with 60 marks for the interview and 40 marks for special achievements.
The respondents argued that the rules should ensure the highest standards and strict scrutiny for candidates, and that the selection method under the Rules, 2020, would lead to the appointment of incompetent candidates.
The respondents also contended that the selection method under Rules, 2020, confers uncontrolled discretion and excessive power to the selection committee to determine its procedure to recommend candidates to be appointed, which is arbitrary, unreasonable, and in violation of Article 14 of the Constitution of India.
Submissions of Parties
Main Submission | Sub-Submissions |
---|---|
Petitioners (before High Court): Rules are arbitrary and violate Article 14. |
|
Union of India: Justification for the Rules and Proposed Amendments. |
|
Respondents: Rules should ensure high standards and strict scrutiny. |
|
Issues Framed by the Supreme Court
The Supreme Court considered the following issues:
- Whether Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) of the Consumer Protection Rules, 2020, are unconstitutional, arbitrary, and violative of Article 14 of the Constitution of India.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
Issue | Court’s Decision | Brief Reasons |
---|---|---|
Whether Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) of the Consumer Protection Rules, 2020, are unconstitutional, arbitrary, and violative of Article 14 of the Constitution of India. | Yes, the Supreme Court upheld the High Court’s decision that these rules are unconstitutional, arbitrary, and violative of Article 14. | Rule 6(9) lacks transparency and confers uncontrolled discretion to the Selection Committee. Rules 3(2)(b) and 4(2)(c) prescribe excessive experience requirements that are not in line with the qualifications for judicial appointments. The rules also contradict the Supreme Court’s previous directions in UPCPBA and Madras Bar Association. |
Authorities
The Supreme Court considered the following authorities:
Authority | Court | How it was Considered | Legal Point |
---|---|---|---|
State of Uttar Pradesh and Others Vs. All Uttar Pradesh Consumer Protection Bar Association; (2017) 1 SCC 444 | Supreme Court of India | Followed | The Supreme Court had previously directed the framing of model rules for the appointment of members to consumer forums, emphasizing the need for transparency and objective criteria. The Court noted that the 2020 Rules did not adhere to the model rules. |
Madras Bar Association Vs. Union of India and Another; (2021) 7 SCC 369 | Supreme Court of India | Followed | The Supreme Court had directed that advocates with 10 years of experience should be eligible for appointment as judicial members in tribunals. The Court held that the experience requirements in the 2020 Rules were excessive and contrary to this direction. |
Consumer Protection Act, 2019 | Parliament of India | Considered | The Court examined the legislative framework of the Act, emphasizing that the commissions are quasi-judicial bodies with powers similar to a court. This underscored the need for a rigorous and transparent selection process. |
Article 14 of the Constitution of India | Constitution of India | Considered | The Court emphasized that the rules should not be arbitrary or unreasonable and should ensure equality before the law. The Court found that Rules 3(2)(b), 4(2)(c) and 6(9) violated this constitutional principle. |
Article 217 of the Constitution of India | Constitution of India | Considered | The Court referred to this provision to emphasize that a lawyer needs 10 years of experience to be appointed as a High Court Judge. |
Article 233 of the Constitution of India | Constitution of India | Considered | The Court referred to this provision to emphasize that a lawyer needs 7 years of experience to be appointed as a District Judge. |
Judgment
The Supreme Court upheld the High Court’s decision, declaring Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) of the Consumer Protection Rules, 2020, as unconstitutional, arbitrary, and violative of Article 14 of the Constitution. The Court found that Rule 6(9) lacked transparency and gave excessive discretionary powers to the Selection Committee. The Court also held that the minimum experience requirements of 20 years and 15 years for members of State and District Commissions, respectively, were excessive and not in line with the qualifications for judicial appointments.
How each submission made by the Parties was treated by the Court?
Submission | Court’s Treatment |
---|---|
Petitioners (before High Court): Rules are arbitrary and violate Article 14. | The Court agreed that Rules 3(2)(b), 4(2)(c), and 6(9) were arbitrary and violated Article 14. |
Union of India: Justification for the Rules and Proposed Amendments. | The Court rejected the justification that written tests were not feasible. The proposed amendments were not considered sufficient to address the issues. |
Respondents: Rules should ensure high standards and strict scrutiny. | The Court agreed that the rules should ensure high standards and strict scrutiny, and that the selection process should include a written examination. |
How each authority was viewed by the Court?
The Supreme Court relied on the following authorities in its reasoning:
- The Supreme Court followed its previous decision in State of Uttar Pradesh and Others Vs. All Uttar Pradesh Consumer Protection Bar Association; (2017) 1 SCC 444, emphasizing the need for model rules and objective criteria for appointments.
- The Supreme Court followed its decision in Madras Bar Association Vs. Union of India and Another; (2021) 7 SCC 369, highlighting that the experience requirements in the 2020 Rules were excessive.
- The Court considered the framework of the Consumer Protection Act, 2019, emphasizing that the commissions are quasi-judicial bodies, requiring a rigorous and transparent selection process.
- The Court held that Rules 3(2)(b), 4(2)(c) and 6(9) violated Article 14 of the Constitution of India.
What weighed in the mind of the Court?
The Supreme Court emphasized the need for transparency, objectivity, and fairness in the appointment of members to consumer commissions. The Court was concerned about the lack of a written examination and the excessive discretionary powers given to the Selection Committee under Rule 6(9). The Court also noted that the experience requirements of 20 years and 15 years for members of State and District Commissions, respectively, were excessive and not in line with the qualifications for judicial appointments.
Sentiment | Percentage |
---|---|
Need for Transparency and Objectivity | 30% |
Concern about Discretionary Powers | 25% |
Excessive Experience Requirements | 20% |
Importance of Written Examination | 15% |
Adherence to Previous Directions | 10% |
Ratio | Percentage |
---|---|
Fact | 30% |
Law | 70% |
Logical Reasoning
Issue: Validity of Rules 3(2)(b), 4(2)(c), and 6(9) of the Consumer Protection Rules, 2020
Rule 6(9): Grants excessive discretionary power to Selection Committee, lacks transparency, and no written exam.
Rules 3(2)(b) & 4(2)(c): Prescribe excessive experience requirements (20 & 15 years) for members.
Previous Judgments: Supreme Court’s directions in UPCPBA and Madras Bar Association are not followed.
Conclusion: Rules are arbitrary, unreasonable, and violate Article 14 of the Constitution.
The Court reasoned that the selection process should be fair, transparent, and objective, ensuring that competent candidates are appointed to the commissions. The Court noted that the commissions exercise quasi-judicial functions and should have members with the necessary skills and experience. The Court rejected the government’s argument that a written examination was not feasible, stating that such a test was necessary to assess the merits of the candidates. The Court also emphasized that the experience requirements should be in line with the qualifications for judicial appointments.
The Supreme Court quoted the following from the judgment:
“The transparency and selection criteria are absent under Rule 6(9). In absence of transparency in the matter of appointments of President and Members and in absence of any criteria on merits the undeserving and unqualified persons may get appointment which may frustrate the object and purpose of the Consumer Protection Act.”
“It cannot be disputed that the Commissions are empowered with the powers of court and are quasi-judicial authorities and empowered to discharge judicial powers with the adequate powers of the court including civil and criminal. Therefore, the standards expected from the members of the tribunal should be as nearly as possible as applicable to the appointment of judges exercising such powers.”
“No justification at all is shown to do away with the written examination while framing the Rules, 2020 under the Consumer Protection Act, 2019.”
The Court did not have a dissenting opinion.
Key Takeaways
- The appointment process for members of State and District Consumer Commissions must be transparent, objective, and fair.
- The Selection Committee should not have excessive discretionary powers.
- A written examination is necessary to assess the merits of candidates.
- Experience requirements should be reasonable and in line with the qualifications for judicial appointments.
- The Supreme Court has directed that till the suitable amendments are made in Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020, a person having a bachelor’s degree and 10 years experience in the relevant field shall be treated as qualified for appointment of President and Members of the State Commission and District Commission.
- The Supreme Court has also directed that the appointment of President and Members of the State Commission and District Commission shall be made on the basis of performance in written test consisting of two papers of 100 marks each and 50 marks for viva voce.
Directions
The Supreme Court directed the Central Government and the concerned State Governments to amend the Consumer Protection Rules, 2020, to:
- Provide that the Selection Committee shall follow the procedure for appointment as per Model Rules, 2017.
- Make the appointment of President and Members of the State and District Commissions based on a written test consisting of two papers of 100 marks each and 50 marks for viva voce.
- Provide 10 years’ experience to become eligible for appointment of President and Member of the State Commission as well as the District Commission instead of 20 years and 15 years, respectively.
The Court also directed that until the amendments are made, appointments should be made based on the above criteria, in exercise of powers under Article 142 of the Constitution of India.
Development of Law
The ratio decidendi of this case is that the appointment process for members of State and District Consumer Commissions must be transparent, objective, and fair, and that the rules should not be arbitrary or unreasonable. This case reinforces the principle that quasi-judicial bodies must have members who are qualified and competent to discharge their duties. This case also clarifies that the court will not allow legislative override of its previous judgments without any valid justification. This case also reiterates the importance of transparency and objectivity in the appointment process of members of quasi-judicial bodies. This case also sets the criteria for appointment of members of State and District Consumer Commissions till the suitable amendments are made in Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020.
Conclusion
The Supreme Court’s decision in Ministry of Consumer Affairs vs. Dr. Mahindra Bhaskar Limaye & Ors. upholds the importance of a fair and transparent appointment process for members of consumer commissions. The Court’s ruling ensures that these quasi-judicial bodies are staffed with competent individuals who can effectively protect consumer rights. By striking down the arbitrary rules and directing the government to implement objective criteria, the Supreme Court has reinforced the principles of equality and justice.