Proceedings instituted under Consumer Protection Act, 1986 not to be transferred to fora created under 2019 Act with newly prescribed pecuniary limits: Supreme Court

Supreme Court: The bench of Dr. DY Chandrachud* and MR Shah. JJ has held that the proceedings instituted before the commencement of the Consumer Protection Act 2019 on 20 July 2020 would continue before the fora corresponding to those under the Consumer Protection Act 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.

Background

The material provisions of the Consumer Protection Act 2019 came into force on 20 July 2020. The appellants instituted a consumer case against real estate developers before the National Consumer Disputes Redressal Commission on 18 June 2020 under the Consumer Protection Act 1986 . The NCDRC by its order dated 30 July 2020 dismissed the consumer case on the ground that after the enforcement of the Act of 2019, its pecuniary jurisdiction has been enhanced from rupees one crore to rupees ten crores. The appellants’ review petition was also dismissed by the NCDRC on 5 October 2020. In the present case, the claim of Rs. 2.19 crores is below the enhanced pecuniary jurisdiction of the NCDRC.

This gave rise to the issue as to whether a complaint which 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. In anticipation of the enforcement of the Act of 2019, an administrative notice was issued by the NCDRC on 17 July 2020 to allow the functioning of its registry for fresh filings on 18 July 2020, since the new law was to come into force on 20 July 2020.

Analysis

Impact of a change in forum on pending proceedings and retrospectivity

After considering a number of precedents that have interpreted the impact of a change in forum on pending proceedings and retrospectivity, the following position of law emerged:

“a change in forum lies in the realm of procedure. Accordingly, in compliance with the tenets of statutory interpretation applicable to procedural law, amendments on matters of procedure are retrospective, unless a contrary intention emerges from the statute.”

Section 107 of the Act of 2019

  • Section 107(1) of the Act of 2019 repeals the Act of 1986.
  • Section 107 (2) has saved “the previous operation” of any repealed enactment or “anything duly done or suffered thereunder to the extent that it is not inconsistent with the provisions of the new legislation”.
  • Section 107(3) indicates that the mention of particular matters in sub-Section (2) will not prejudice or affect the general application of Section 6 of the General Clauses Act.

Section 6 of the General Clauses Act

Section 6 of the General Clauses Act provides governing principles with regard to the impact of the repeal of a central statute or regulation. These governing principles are to apply, “unless a different intention appears”. Clause (c) of Section 6 inter alia stipulates that a repeal would not affect “any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed”. The right to pursue a validly instituted consumer complaint under the Act of 1986 is a right which has accrued under the law which was repealed.

Clause (c) of Section 6 has the effect of preserving the right which has accrued. Clause (e) ensures that a legal proceeding which has been initiated to protect or enforce “such right” will not be affected and that it can be continued as if the repealing legislation has not been enacted. The expression “such a right” in clause (e) evidently means the right which has been adverted to in clause (c).

“The plain consequence of clause (c) and clause (e), when read together is twofold: first, the right which has accrued on the date of the institution of the consumer complaint under the Act of 1986 (the repealing law) is preserved; and second, the enforcement of the right through the instrument of a legal proceeding or remedy will not be affected by the repeal.”

However, considering that right to a forum is not an accrued right, the question whether the pending legal proceedings are required to be transferred to the newly created forum by virtue of the repeal would still persist.

While Section 6(e) of the General Clauses Act protects the pending legal proceedings for the enforcement of an accrued right from the effect of a repeal, this does not mean that the legal proceedings at a particular forum are saved from the effects from the repeal.

Object of the Act of 2019

There is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits.

The Act of 2019 is enacted to provide “for protection of the interests of consumers” and has taken note of the evolution of consumer markets by the proliferation of products and services in light of global supply chains, ecommerce and international trade.

“New markets have provided a wider range of access to consumers. But at the same time, consumers are vulnerable to exploitation through unfair and unethical business practices. The Act has sought to address “the myriad and constantly emerging vulnerabilities of the consumers. The recurring theme in the new legislation is the protection of consumers which is sought to be strengthened by procedural interventions such as strengthening class actions and introducing mediation as an alternate forum of dispute resolution.”

In this backdrop, something specific in terms of statutory language – either express words or words indicative of a necessary intendment would have been required for mandating the transfer of pending cases.

“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. 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. Likewise, 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.”

Hence, it would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation.

Data on pendency of cases

Data drawn from annual reports of the Union Ministry of Consumer Affairs indicates pendency from financial year 2015-16 to financial year 2019-20 indicates that as on 31 October 2019, 21,216 cases were pending before the NCDRC and 1,25,156 cases were pending before the SCDRC. Many of these cases would have to be transferred if the view which the developer propounds is upheld.

“This will seriously dislocate the interests of consumers in a manner which defeats the object of the legislation, which is to protect and promote their welfare. Clear words indicative of either an express intent or an intent by necessary implication would be necessary to achieve this result. The Act of 2019 contains no such indication.”

Hence, the legislature cannot be attributed to be remiss in not explicitly providing for transfer of pending cases according to the new pecuniary limits set up for the fora established by the new law, were that to be its intention.

Conclusion

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 and not be transferred in terms of the new pecuniary limits established under the Act of 2019.

[Neena Aneja v. Jai Prakash Associates Ltd., 2021 SCC OnLine SC 225, decided on 16.03.2021]


*Judgment by: Justice Dr. DY Chandrachud

Know Thy Judge| Justice Dr. DY Chandrachud

Appearances before the Court by:

For appellants: Advocate P Vinay Kumar

For respondent: Senior Advocate Krishnan Venugopal

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