The Supreme Court in Neena Aneja v. Jai Prakash Associates Ltd. held that complaints filed under the Consumer Protection Act, 1986 before 20th July 2020 must remain in the same forum despite revised pecuniary limits under CPA 2019, ensuring continuity and fairness.
"Pending cases under the Consumer Protection Act, 1986 must be adjudicated in the forum where filed, unaffected by the revised pecuniary limits of the Consumer Protection Act, 2019."
Citation: AIR 2021 SUPREME COURT 1441
Date of Judgment: 16th March, 2021
Court: Supreme Court of India
Bench: DY Chandrachud (J), M.R. Shah (J), Sanjiv Khanna (J)
Facts
- The Consumer Protection Act, 2019 (CPA 2019) repealed the Consumer Protection Act, 1986 (CPA 1986). The material provisions of CPA 2019 came into force on July 20, 2020.
- The CPA 2019 introduced new pecuniary jurisdictional limits:
- District Commission: Up to ₹1 crore (previously ₹20 lakhs).
- State Commission: ₹1 crore–₹10 crores (previously ₹20 lakhs–₹1 crore).
- National Commission: Above ₹10 crores (previously above ₹1 crore).[1]
- The case involved a complaint filed by the appellants on June 18, 2020, under CPA 1986, seeking a claim of ₹2.19 crores, before the National Consumer Disputes Redressal Commission (NCDRC). The respondent developer objected, arguing that the case should now fall under the pecuniary limits of the State Commission as per CPA 2019.
Decision of the National Consumer Disputes Redressal Commission (NCDRC)
The National Consumer Disputes Redressal Commission (NCDRC) dismissed the complaint filed by the appellants on July 30, 2020, stating that the complaint did not fall under its jurisdiction following the enforcement of the Consumer Protection Act, 2019 (CPA 2019). According to the revised pecuniary limits under CPA 2019, consumer complaints for claims ranging between ₹1 crore and ₹10 crores were to be heard by the State Consumer Disputes Redressal Commission (SCDRC) instead of NCDRC.
The NCDRC held that since the CPA 2019 had come into force on July 20, 2020, its pecuniary jurisdictional limits would apply retrospectively, thereby excluding the appellants' case from its purview. A review petition filed by the appellants was also dismissed by the NCDRC on October 5, 2020, maintaining its stance that it lacked pecuniary jurisdiction over the matter.
Decision of the Supreme Court
The Supreme Court set aside the decisions of the NCDRC, ruling that the complaint filed under the Consumer Protection Act, 1986 (CPA 1986) before the commencement of CPA 2019 must continue to be heard in the forum where it was originally filed. The court emphasized that pending cases instituted under CPA 1986 are protected under Section 107 of CPA 2019 and Section 6 of the General Clauses Act, 1897, which safeguard the "previous operation" of repealed enactments.
The bench held that there was no express provision in CPA 2019 requiring the transfer of pending cases to fora under the new pecuniary limits. Consequently, such cases must remain in the jurisdiction where they were initially filed.
The court noted that transferring cases to different fora under CPA 2019 would cause undue hardship to consumers, including additional financial burdens, legal uncertainties, and delays, contrary to the legislative intent of CPA 2019.
The Supreme Court imposed a cost of ₹2 lakhs on the respondent developer for raising an objection without merit and directed the NCDRC to hear the appellants' complaint under CPA 1986. The Supreme Court further clarified that complaints instituted before July 20, 2020, must be adjudicated under the jurisdictional framework of CPA 1986, regardless of the revised pecuniary limits introduced by CPA 2019.
Key Legal Issues Discussed
1. Should complaints filed under CPA 1986 before July 20, 2020, continue in the same forum despite the revised pecuniary limits under CPA 2019?
Yes
The Supreme Court held that complaints filed under the Consumer Protection Act (CPA) 1986 before July 20, 2020, should continue in the same forum despite the revised pecuniary limits under CPA 2019. This conclusion was based on the interpretation of Section 107 of CPA 2019 and Section 6 of the General Clauses Act, 1897.
- Section 107(2) stipulates that actions taken or complaints filed under CPA 1986 are deemed valid under CPA 2019 unless inconsistent with its provisions.
- Section 107(3) explicitly preserves the application of Section 6 of the General Clauses Act, which protects the continuation of pending proceedings.
Court in paragraph 1, emphasized that CPA 2019 does not contain any express provision or necessary implication that mandates the transfer of pending complaints to a new forum based on revised pecuniary limits.
“107. Repeal and savings- (1) The Consumer Protection Act, 1986 is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act. (3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.”
“In terms of sub-section (1) of Section 107, the Act of 1986 stands repealed. Subsection (2) is prefaced with a non obstante provision. Under sub-section (2) anything done or any action taken or purported to have been done or taken under the repealed legislation is deemed to have been done or taken under the corresponding provision of the new legislation, insofar as it is not inconsistent with the latter provisions. Sub-section (3) of Section 107 stipulates that the specification of the matters contained in sub-section (2) does not prejudice or affect the general application of Section 6 of the General Clauses Act (with regard to the effect of repeal). Having repealed, the Act of 1986, the new legislation has also made transitional provisions in Section 3112, Section 4513 and Section 5614 for the continuance of persons appointed as members of the District Commission, the SCDRC and the NCDRC under the erstwhile legislation”
Further court in paragraph 23, with reference of New India Assurance Company Limited v. Smt Shanti Mishra[2] reiterated that a litigant's vested right to have their complaint adjudicated in the forum where it was filed remains intact unless explicitly curtailed. It differentiated between changes in substantive rights (prospective application) and procedural changes (usually retrospective unless specified otherwise).
“The first decision of this Court that interpreted a mere change in forum, that did not impact any other substantive or vested right of the litigant, was a three-judge bench decision of this Court in New India Assurance Company Limited v. Smt Shanti Mishra”
2. Does CPA 2019 apply retrospectively to complaints already filed under CPA 1986?
No
The Court held that the Consumer Protection Act (CPA) 2019 does not apply retrospectively to complaints already filed under the CPA 1986. Section 107 of the CPA 2019 and Section 6 of the General Clauses Act, 1897, were pivotal in reaching this conclusion. The following principles were established:
- Court in paragraph 11 and 12 highlighted that section 107(2) states that actions taken or complaints filed under the CPA 1986 are deemed valid under the CPA 2019 unless inconsistent with its provisions.
“Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.”
- Section 107(3) explicitly preserves the application of Section 6 of the General Clauses Act, which ensures the continuation of pending proceedings in the forum specified at the time of filing, unless expressly repealed or contradicted by the new Act.
“Section 107(3) of the Act of 2019 gives full effect to the provisions of Section 6 of the General Clauses Act, which means that nothing in the repeal of the earlier legislation will affect pending proceedings which may continue as if the new legislation has not been enacted.”
The Court in paragraph 23 emphasized that a litigant’s vested right to have their complaint adjudicated in the forum and under the law existing at the time of filing remains protected. CPA 2019 does not include any provision explicitly curtailing this right or mandating a retrospective transfer of cases to a new forum based on revised pecuniary limits.
“It is a well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. Otherwise, the general rule is to make it retrospective.”
The Court also clarified that while procedural laws can generally be retrospective, a litigant’s substantive right to the forum and legal framework under which the complaint was filed cannot be altered unless explicitly provided. CPA 2019 lacks such a provision.
3. Can pending cases under CPA 1986 be transferred based on CPA 2019’s pecuniary limits?
No
The Court held that pending cases under the Consumer Protection Act (CPA) 1986 cannot be transferred to new forums based on the pecuniary limits introduced by CPA 2019. The Court emphasized that Section 107 of CPA 2019 explicitly incorporates Section 6 of the General Clauses Act, 1897, which protects pending proceedings unless a contrary intention is expressed. The Court observed that CPA 2019 does not contain any provision mandating the transfer of pending cases to a different forum based on the revised pecuniary limits. Instead, it ensures that actions and proceedings initiated under CPA 1986 are deemed to have been done under the corresponding provisions of CPA 2019, as long as they are not inconsistent.
The judgment in Paragraph 12 specifically stated that the provisions of Section 107 of CPA 2019, read with Section 6 of the General Clauses Act, safeguard the continuation of pending proceedings under the earlier Act. Unless explicitly directed, pending cases must remain within the forum where they were filed under CPA 1986. The legislative intent was not to disrupt the adjudicatory process by retroactively applying the revised pecuniary limits or transferring cases to new forums.
“Section 107 of the Act of 2019 read with Section 6 of the General Clauses Act saves pending legal proceedings; hence the complaint which was filed before the enforcement of the new legislation should be allowed to proceed before the NCDRC under the Act of 1986”
This observation reinforces that pending cases under CPA 1986 must continue in the same forum where they were filed, irrespective of the changes in pecuniary limits introduced by CPA 2019.
4. Should proceedings filed under the Consumer Protection Act 1986 be transferred to new forums under the Consumer Protection Act 2019?Bottom of Form
No
The Supreme Court in paragraph 71 court held that all proceedings instituted under the Consumer Protection Act 1986 before the commencement of the Consumer Protection Act 2019 on July 20, 2020, must continue before the forums constituted under the 1986 Act and should not be transferred to the new forums established under the 2019 Act, even if the pecuniary limits have been revised.
“We have come to the conclusion that proceedings instituted before the commencement of the Act of 2019 on 20 July 2020 would continue before the fora corresponding to those under the Act of 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019”
The Court based its reasoning on Section 107 of the CPA 2019, which incorporates Section 6 of the General Clauses Act, 1897. Section 6 ensures that pending proceedings are safeguarded unless the new legislation explicitly directs otherwise. The CPA 2019 does not contain any provision mandating or implying that complaints already filed under the 1986 Act must be transferred based on the updated pecuniary limits. The Court emphasized that the date of filing determines the applicable forum, and complaints instituted before July 20, 2020, under the 1986 Act should proceed in the same forums, regardless of the new Act's changes.
The Court further explained that transferring cases mid-proceeding based on the new pecuniary limits would disrupt the adjudicatory process, cause unnecessary delays, and create hardships for litigants who had already commenced their cases under the framework of the 1986 Act. This interpretation upholds the vested rights of litigants and ensures continuity and fairness in the adjudication of pending cases.
“The Act of 2019 abolished the old hierarchy of fora under the Act of 1986 and established adjudicatory fora afresh. The case pending before one of the fora governed by the Act of 1986 ceases to be pending because the Act of 2019 has, by its repeal, abolished the existing adjudicatory bodies. Sections 28, 42 and 53 established new adjudicatory bodies afresh under the Act of 2019. This is evident from the provisions of Section 31, 45 and 56 under which judicial personnel of the erstwhile fora were permitted to continue under the Act of 2019”
5. Does the Consumer Protection Act 2019 affect the substantive rights of parties in cases filed under the Consumer Protection Act 1986?
No
The Supreme Court held that the Consumer Protection Act 2019 does not retroactively affect the substantive rights of parties in cases filed under the Consumer Protection Act 1986. Substantive rights, such as the right to appeal or the right to have a case adjudicated in a specific forum, are determined based on the law in force at the time of filing.
The Court emphasized that substantive rights are vested when a case is instituted, and these rights cannot be altered unless the new legislation explicitly provides otherwise. The CPA 2019 does not contain any express provision or necessary implication to retroactively change or remove substantive rights under the 1986 Act. Instead, the savings clause in Section 107 of the CPA 2019 and Section 6 of the General Clauses Act, 1897, ensures that these rights are preserved.
" It is pertinent to mention that the decision in Manujendra Dutt[3], was concerned with the provisions of the repealing Act that impacted a substantive right of litigants which was affected by virtue of the repeal and a resulting change in forum. This Court’s position, in interpreting Section 6 of the General Clauses Act, 1897 was clearly in favour of saving all substantive rights, including vested rights, that were acquired or accrued prior to the repeal. Under the unamended Act, the suit was transferred to the Controller under Section 29, which was deleted by the Amending Act.”
This interpretation protects litigants from being subjected to a new legal framework that could adversely impact their rights and ensures that justice is administered consistently and equitably
[1] Pecuniary jurisdiction amended further by ministry https://www.pib.gov.in/PressReleasePage.aspx?PRID=1786342
[2] (1975) 2 SCC 840.
[3] (1967) 1 SCR 475.