Supreme Court upholds pecuniary‑jurisdiction formula in Consumer Protection Act, directs performance audit by consumer bodies

A two‑judge bench of Justice Pamidighantam Sri Narasimha and Justice Manoj Misra heard challenges to Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 which prescribed pecuniary jurisdiction of district, state and national consumer commissions on the basis of the value of goods or services paid as consideration, instead of the compensation claimed. Petitions arose from a writ under Article 32 and an appeal against a National Commission order; the litigants included consumers who had sought large compensation while paying lower consideration at purchase.

The Court dismissed the constitutional challenge and held that Parliament had competence to prescribe pecuniary limits and that the 2019 Act’s classification by value of consideration was not arbitrary or violative of Article 14. The Court emphasised that the new criterion aimed to "streamline" jurisdictional allocation and to curb "exaggerated and inflated claims", noting that "the relief or compensation that a consumer could claim remained unrestricted" even where forum allocation depended on consideration paid. The Court, in its reasoning, observed: "…In order to pass the test, two conditions must be fulfilled, namely (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others, and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act." It further held that "value of consideration paid for good or service purchased is closer and more easily relatable to compensation than the self‑assessed claim for damages of a consumer."

Background The principal factual matrix involved two sets of consumers. In Writ Petition (C) No. 282 of 2021 the petitioner’s husband had bought a Ford Endeavour for Rs. 31.19 lakhs; after the vehicle caught fire and the husband died, the petitioner filed a consumer complaint seeking Rs. 51.49 crore. Under the 2019 Act, pecuniary jurisdiction depended on purchase consideration, compelling her to approach the district commission. In the related civil appeal the appellant sought Rs. 14.94 crore from an insurer after her husband (a Lions Club district governor) died of COVID‑19; the National Commission dismissed jurisdiction because the insurance premium (consideration) did not exceed Rs. 10 crore.

Petitioners argued that the 2019 Act’s shift from "compensation claimed" (the 1986 Act) to "consideration paid" produced arbitrary, discriminatory outcomes and unjustly restricted access to higher fora. The Union defended the statute as within Parliamentary competence and supported the change as a reasonable classification with a rational nexus to the legislative objective of "timely and effective administration and settlement of consumer disputes" and to reduce disproportionate caseloads at the National Commission.

The Court analysed (i) legislative competence to determine pecuniary jurisdiction, (ii) the Article 14 reasonable‑classification test, (iii) manifest arbitrariness, and (iv) alleged loss of remedy. Relying on precedents and constitutional entries, it affirmed Parliament’s power to prescribe monetary thresholds for jurisdiction and applied the twin test from Anwar Ali Sarkar to uphold the classification based on consideration paid. The Court rejected the claim that a consumer had a right to select forum by inflating compensation, citing that courts had jurisdiction to prevent abuse of process and reassess overvalued claims. The Court also addressed concerns on statutory functioning: it directed the Central Consumer Protection Council and the Central Consumer Protection Authority to "take such measures as may be necessary for survey, review and advise the government" to ensure effective and efficient redressal and working of the 2019 Act. The writ petition and the civil appeal were disposed of accordingly; no provision of the 2019 Act was struck down.

Case Details: Case No.: 2025 INSC 593; Writ Petition (Civil) No. 282 of 2021; arising out of SLP (C) No. 1738 of 2022 Case Title: Rutu Mihir Panchal & Ors. v. Union of India & Ors. Appearances: For the Petitioner(s): Mr. Shreeyash Lalit, Senior Counsel; Mr. Abhimanyu Bhandari, Senior Counsel For the Respondent(s): Mr. Vikramjit Banerjee, Learned ASG, assisted by Mr. Nachiketa Joshi