Under the 2019 law, a district forum can decide a consumer dispute up to <span class='webrupee'>₹</span>1 crore as against <span class='webrupee'>₹</span>20 lakh under the old law.
Under the 2019 law, a district forum can decide a consumer dispute up to 1 crore as against 20 lakh under the old law.

Citing poor infra, SC seeks legislative impact study on consumer law

A Supreme Court bench, headed by justice Sanjay Kishan Kaul, directed the government to place the said study before the court to indicate if social, economic and institutional impacts were taken into account prior to replacing the 1986 consumer protection law with the 2019 law.
UPDATED ON FEB 25, 2021 09:31 AM IST

Concerned over massive vacancies and severe deficiency in the infrastructure across consumer courts in the country, the Supreme Court has asked the Central government whether a “legislative impact study” was carried out before a new consumer protection law was notified in July 2020.

An SC bench, headed by justice Sanjay Kishan Kaul, directed the government to place the said study before the court to indicate if social, economic and institutional impacts were taken into account prior to replacing the 1986 consumer protection law with the 2019 law, which was brought into force in July 2020.

The bench, which also included justice Hemant Gupta, underlined that the new law widened the meaning of “consumer” allowing them to file a complaint from his place of residence; brought e-commerce platforms within the fold of the law; provided for time-bound redressal; made celebrity-endorsers also liable and enhanced the monetary jurisdiction of the consumer courts at all levels.

Under the 2019 law, a district forum can decide a consumer dispute up to 1 crore as against 20 lakh under the old law. Similarly, pecuniary jurisdiction of state commission has been enhanced from 1 crore to 10 crore, and a national commission can now decide disputes over and above 10 crore.

Citing these radical changes, the bench said: “The new act expands the jurisdiction of the consumer forums to many new areas and thus, logically a legislative impact study ought to have been completed, keeping in mind the litigation, which will shift in the subjects added to the jurisdiction of the consumer tribunals. There is also a shifting of pecuniary jurisdiction. This would also result in transfer of a large number of cases between forums. Thus, the legislative impact study ought to have taken this into consideration as to what are the cases which are likely to be shifted.”

Noting that more than 600 vacancies existed across the consumer courts, the court emphasised that these aspects should have formed a part of the “legislative impact study” to ascertain the volume of cases the consumer courts at different levels will be burdened with not only now but in the reasonable time in the future.

“There should have been analysis, both at the state level and at the national level of the number of fora which are required to deal with the increase in the financial jurisdiction and the expanded legal area of jurisdiction,” maintained the bench, as it took up suo motu (on its own) case on the alleged “inaction of the government” in appointing members of the consumer courts and providing adequate infrastructure.

The bench heard senior counsel Gopal Shankarnarayan and advocate Aditya Narayan as amicus curiae, who assisted the court, and additional solicitor general Aman Lekhi, representing the government, when it regretted that even though the national consumer commission had six vacancies, the matter was with the Appointment Committee of Cabinet (ACC) since July 2020 without any decision on fresh appointments.

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“This is hardly expected at the apex level, as it creates a cascading effect down, which does not speak well of the institution. We expect due care to be taken in this behalf so that at least these vacancies are filled up by the time we take up these proceedings on the next date,” rued the court, fixing April 12 as the next date.

The court also directed chief secretaries of all the state governments to send the latest vacancy positions to the national commission for uploading it on the website and also notify the new rules for appointments in the consumer courts, besides filing their reports on the existing infrastructure.

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