NCDRC clarifies pecuniary jurisdiction to hear disputes

0
57
Pecuniary jurisdiction ncdrc

In a significant order, the National Consumer Disputes Redressal Commission (NCDRC) has held that, for determining the pecuniary jurisdiction of consumer fora, the value of the goods/services “paid” as consideration alone has to be taken, and not the value of the goods/services “purchased”.

In M/S Pyaridevi Chabiraj Steels Pvt Ltd v National Insurance Company Ltd & Ors, the order was passed by a bench of Justice R K Agrawal (president) and S M Kantikar (member) while hearing a consumer complaint filed on behalf of a Kolkata-based factory against its insurer, National Insurance Company.

The claim of the complainant was that the insurance company had wrongly repudiated its insurance claim worth ₹280 million (US$3.8 million), which was purchased by paying a premium of ₹443,562. The NCDRC held that the value of the consideration paid in the case was “less” than `100 million (the pecuniary jurisdiction of NCDRC as per section 58(1)(a)(i) of the Consumer Protection Act, 2019) and the complaint shall not be maintainable before the commission.

Under section 21(a)(i) of the Consumer Protection Act, 1986, the NCDRC had the jurisdiction to entertain complaints where the value of the good or services and compensation claimed exceeded ₹10 million. Under the new law, however, the jurisdiction of the NCDRC is to entertain complaints where the “value of the goods or services paid” as consideration exceeds `100 million.

This change, the NCDRC observed, was intended to ensure that consumers approach the appropriate consumer fora. It observed that, had the case been governed under the Consumer Protection Act, 1986, the NCDRC would have jurisdiction in the matter, since pecuniary jurisdiction was determined by taking the “value of the goods or services and compensation”, meaning the value of the goods or services and also the compensation would be added to arrive at a conclusion as to whether the NCDRC had the jurisdiction or not.

The NCDRC observed that the parliament, while enacting the 2019 act, was conscious of this fact, and to ensure that consumers should approach the appropriate consumer disputes redressal commission – whether it is district, state or national – only the value of the consideration paid should be taken into consideration while determining the pecuniary jurisdiction, and not value of the goods or services and compensation.

The NCDRC held that the complaint filed was not maintainable, as the consideration paid by the complainant was only ₹443,562, which is not above ₹100 million, and therefore the NCDRC had no jurisdiction to entertain the present consumer complaint, and the NCDRC held that the words “and compensation” were replaced with the word “paid” certainly to prevent consumers from directly approaching the NCDRC.

The dispute digest is compiled by Numen Law Offices, a multi-disciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at support@numenlaw.com. Readers should not act on the basis of this information without seeking professional legal advice.