The Supreme Court of India, on April 29, 2024, upheld the validity of the pecuniary jurisdiction provisions in the Consumer Protection Act, 2019, stating that determining jurisdiction based on the value of goods or services paid as consideration — rather than the compensation claimed — is constitutional and not discriminatory.

“Vesting jurisdiction in the district, state or national commission on the basis of value of goods or services paid as ‘consideration’ is neither illegal nor discriminatory,”
— Supreme Court Bench

Read Also:- Supreme Court Stays Delhi High Court Order to Revise CLAT-UG 2025 Merit List

The constitutional challenge was raised against Sections 34, 47, and 58 of the Consumer Protection Act, 2019. The petitioners argued that this method of determining jurisdiction violated Article 14 of the Constitution, which guarantees equality before the law. However, the Supreme Court firmly rejected this claim.

The bench, comprising Justice PS Narasimha and Justice Manoj Misra, stated that basing jurisdiction on the value of consideration has a rational connection to the Act’s objectives. This system supports a proper hierarchical structure of forums and ensures efficiency in consumer dispute redressal.

“Value of consideration paid for a product or service is a closer and more objective measure than self-assessed damages. This classification is logical and constitutionally sound,”
— Justice PS Narasimha (authored the judgment)

Read Also:- Supreme Court Criticizes Madhya Pradesh Police Over Custodial Death: "Man Dies, No Arrest In 10 Months!"

After the Consumer Protection Act, 2019 came into effect on 15 July 2020, pecuniary jurisdiction of consumer forums is determined not by the amount of damages claimed, but by the price paid for the goods or services. As per the 2021 Rules:

District Commissions: Handle cases where value paid does not exceed ₹50 lakh

State Commissions: Handle cases from ₹50 lakh to ₹2 crore

National Commission (NCDRC): Handles cases above ₹2 crore

Read Also:- Delhi High Court: Compassionate Appointment Can Be Denied If Family Received Sufficient Financial Benefits

In the case titled “Rutu Mihir Panchal & Others vs Union of India & Others” (WP(C) 282/2021), the petitioners challenged this rule after their claim of ₹50 crore was dismissed by the NCDRC because the purchase price of the car (₹44 lakh) was below the required threshold. The case involved the death of a man due to a fire in a Ford Endeavour vehicle, allegedly caused by a manufacturing defect.

The petitioners argued that such a system leads to irrational results, where high compensation claims could still be heard by lower-level forums, merely due to the product’s purchase price. However, the Supreme Court emphasized that the structure ensures that cases are handled efficiently and fairly, based on objective factors.

“This classification has a direct nexus to the object of creating an efficient and logical forum hierarchy,”
— Supreme Court Observation

Read Also:- Madras High Court Sets Aside Discharge of Minister MRK Paneerselvam in Disproportionate Asset Cases

At the same time, the Court acknowledged certain practical concerns and directed the Central Consumer Protection Council and the Central Consumer Protection Authority to fulfill their duties under Sections 3, 5, 10, and 18 to 22. These bodies were instructed to review and recommend improvements for the Act’s smooth functioning.

Case Title: Rutu Mihir Panchal and others vs Union of India and others, WP(C) 282/2021

Appearance:

For Petitioner(s) Mr. Abhimanyu Bhandari, Sr. Adv. Mr. Somesh Tiwari, Adv. Ms. Vidula Mehrotra, Adv. Mr. Utsav Saxena, Adv. Mr. Shubhankar Singh, Adv. Mr. Aashna Mehra, Adv. Ms. Manisha Ambwani, AOR Mr. Shreeyash Lalit, Adv. Mr. Haresh Raichura, AOR Mrs. Saroj Raichura, Adv. Mr. Kalp Raichura, Adv.

For Respondent(s) Mr. Vikramjit Banerjee, A.S.G. Mr. Nachiketa Joshi, Adv. Mr. Anmol Chandan, Adv. Mr. Priyanka Das, Adv. Mr. T.S. Sabarish, Adv. Mr. A. Deb Kuamar, Adv. Mr. Sabarish Subramanian, Adv. Mr. Shreekant Neelappa Terdal, AOR Mr. Amrish Kumar, AOR Mr. Viresh B. Saharya, AOR