Supreme Court: Consumer complaints Instituted Before CPA 2019 Came Into Force Will Continue before Fora envisioned under 1986 Act

Supreme Court: Consumer complaints Instituted Before CPA 2019 Came Into Force Will Continue before Fora envisioned under 1986 Act

The Supreme Court (SC) passed an order in the case titled Neena Aneja (Appellant) v. Jai Prakash Associates Limited (Respondent). A plea was filed against the decision of the National Consumer Dispute Redressal Commission (NCDRC) wherein it had dismissed a case on the ground that after the enforcement of the Consumer Protection Amendment Act of 2019 (CPA), its pecuniary jurisdiction stood enhanced from Rs 1 crore to Rs 10 crore.

The decision was rendered by the Supreme Court bench comprising of Justices DY Chandrachud and MR Shah. The Supreme Court judgment reads, "All proceedings instituted before 20 July 2020 under the Act of 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 as explained above and not be transferred in terms of the new pecuniary limits established under the Act of 2019."

In the instant case, the claim was for an amount of Rs 2.19 crore, which was below the enhanced pecuniary jurisdiction of the National Commission. The dispute was between a flat purchaser and a developer. It was the developer who objected to the continuation of the proceedings in the NCDRC.

The Top Court held that the consumer complaints filed before the Consumer Protection Act 2019 (CPA 2019) came into force, should continue in the fora in which they were filed as per the pecuniary jurisdiction under the previous Consumer Protection Act of 1986 (CPA 1986).

The Court added that the case should not be transferred in terms of the pecuniary jurisdiction set for the fora established under the 2019 Act. It further ordered that all proceedings instituted before 20 July 2020 shall continue to be heard by the fora constituted under the 1986 Act.

Issue before the Supreme Court

Whether a complaint that was filed and registered under the Act of 1986, before the new Act of 2019 came into force, has to be entertained under the provisions of the erstwhile legislation?

The SC stated, "One can imagine the serious hardship that would be caused to the consumers if cases which have been already instituted before the NCDRC were required to be transferred to the SCDRCs as a result of the alteration of pecuniary limits by the Act of 2019."

It added that "A consumer who has engaged legal counsel at the headquarters of the NCDRC would have to undertake a fresh round of legal representation before the SCDRC incurring expense and engendering uncertainty in obtaining access to justice."

The bench clarified that "Where complaints have been instituted before the SCDRC, a transfer of proceedings would require consumers to obtain legal representation before the District Commission if cases were to be transferred. Such a course of action would have a detrimental impact on the rights of consumers. Many consumers may not have the wherewithal or the resources to undertake a fresh burden of finding legal counsel to represent them in the new forum to which their cases would stand transferred."

The Apex Court ruled that transferring these complaints as per the pecuniary jurisdiction laid down in Act 2019 will impact the interests of the consumer and defeat the object of the legislation, which is to protect and promote consumer welfare.

The Court has also imposed a cost of Rs. 2 lakh on the developer, payable to the flat purchaser.