The Supreme Court on Tuesday upheld the constitutional validity of key provisions of the Consumer Protection Act, 2019 that determine the pecuniary jurisdiction of Consumer Commissions based on the actual amount paid for goods or services.

A bench comprising Justices PS Narasimha and Manoj Misra affirmed the validity of Sections 34, 47, and 58 of the 2019 Act, ruling that these provisions—unlike the earlier 1986 Act—rightly classify jurisdiction based on consideration paid rather than the compensation claimed. The Court emphasized that such classification is rational and serves the legislative purpose of streamlining dispute resolution through a structured hierarchy of forums.

Petitioners had challenged the shift, arguing it was arbitrary and discriminatory under Article 14. One petitioner, who sought ₹51.49 crore in compensation after her husband's death in a car fire, claimed she could have directly approached the NCDRC under the old law due to the high compensation amount. Another petitioner, who claimed ₹14.94 crore under an insurance policy after her husband's death from COVID-19, faced rejection as the policy premium was below ₹10 crore.

Dismissing the petitions, the Court ruled that the value of consideration—central to contract formation—is a valid and non-arbitrary basis for jurisdiction. It rejected the idea that consumers have an unfettered right to choose their forum by inflating compensation claims, reaffirming that tribunals retain the power to reassess overvalued claims to prevent misuse.

The Court also clarified that no judicial remedy is lost under the 2019 Act and that the ability to seek compensation remains intact, irrespective of the forum. Concerns that large insurance claims may now be heard by lower forums were termed issues of legislative policy, not constitutional defect.

To ensure effective implementation, the Court directed the Central Consumer Protection Council and Authority to conduct periodic reviews and advise the government on improvements. It underscored that regular audits of statutory frameworks are part of the rule of law.

The Supreme Court upheld the constitutionality of Sections 34, 47, and 58, dismissing the petitions and endorsing the legislative shift in determining pecuniary jurisdiction under the Consumer Protection Act, 2019.

Counsel:

• Petitioners: Senior Advocate Abhimanyu Bhandari, with Haresh Raichura and others.

• Respondents: ASG Vikramjit Banerjee, with Nachiketa Joshi and team.