During the 1990s, the Supreme Court gave several judgments which interpreted the Consumer Protection Act (and other consumer-related acts) liberally and greatly expanded the ambit of the Consumer Courts. This trend followed the Supreme Court observation "The provisions of the (Consumer Protection) Act have to be construed in favour of the consumer to achieve the purpose of the enactment as it is a social benefit oriented legislation" in the historic Lucknow Development Authority Vs. M.K. Gupta case (III(1993) CPJ 7 (SC)).
But now the pendulum seems to be swinging the other way and in several decisions, the apex court has reversed the earlier pro-consumer decisions given by itself and has even struck down pro-consumer provisions of the law. In a recent decision, it has annulled a provision of the Consumer Protection Act (CPA) which was quite useful to the consumers.
As is well-known, whenever the goods or services purchased by a consumer are defective, he/she can file a complaint before the District Consumer Forum and get the problem solved and also get compensation. Sec 11(2) of the CPA specifies the District Forum before which the complaint can be filed. According to the original 1986 version of this section, a complaint can be filed before the District Forum within whose jurisdiction, i) the cause of action arises, or ii) all the opposite parties reside or carry on business or iii) one of the opposite parties resides or carries on business, provided that the other opposite parties do not object or if the Forum gives permission. It was found that this definition of the Forum jurisdiction caused a lot of problems for consumers who bought goods or services through mail (or the internet). If the seller was in Delhi and the goods or services you purchased were defective, you had to file the complaint in Delhi only. Therefore, an amendment was passed by the parliament in 1993 enabling the consumer to file a complaint before a Forum within whose jurisdiction the opposite party has a branch office. Filing a complaint before such a Forum does not impose an unreasonable penalty on the opposite party since it has a branch office there and can easily arrange to defend itself before the Forum. Before the amendment, the scales were loaded in favour of the opposite party, because he could cheat the public secure in the knowledge that very few people have the resources to file a complaint before his home Forum. After the amendment, filing a complaint was much easier and so the vendor had to be very careful. The amendment of Sec. 11(2) of the CPA was a great boon to the consumers.
But in a recent decision (IV (2009) CPJ 40 (SC)), the Supreme Court has annulled this amendment. In the case before it, a consumer had brought an insurance policy from National Insurance Company for a godown in Ambala, Haryana. There was a fire in the godown and to obtain compensation from the insurance company, the consumer filed a complaint before the Chandigarh State Commission since the insurance company had a branch in Chandigarh. The insurance company objected that the case should have been filed before the Haryana State Commission within whose jurisdiction the cause of action arose, but its objections were turned down by the State Consumer Commission as well as the National Commission. An appeal was filed before the Supreme Court by the insurance company.
The Supreme Court ruled in favour of the company saying the amendment to Sec. 11(2) (which allowed filing the complaint before a Forum within whose jurisdiction the opposite party has a branch office) came into effect in 2003, but the cause of action for the complaint arose in 1999 and so the amendment was not applicable. It added that even if the amendment were applicable to the case, the words "branch office" meant "branch office in the place where the cause of action arose". The court admitted that this would be departing from the plain words of the Act, but such departure was necessary "to avoid absurdity".
There are two problems with this decision of the Supreme Court. Firstly, the amendment of Sec. 11(2) was brought about in 1993 and not 2003. Therefore it is applicable to the present case whose cause of action arose in 1999. Secondly, it is surprising that the Supreme Court failed to appreciate the reasons for amending Sec. 11(2) given above. It is not clear how the amended Sec. 11(2) would lead to an absurdity. The Supreme Court has exhorted repeatedly (e.g., III(1993) CPJ 7 (SC)) that any interpretation of the CPA by the courts should not be contrary to its attempted objective. The present Supreme Court judgment goes against this exhortation given by itself. Also, by annulling what has been passed by the parliament, it has usurped the lawmaking function of the legislative wing of the government in violation of the Constitution of India. Judiciary can only interpret the law, it can not delete sections of the law.
This is not the first time the Supreme Court has annulled provisions of existing laws. In another recent judgment (III (2009) CPJ 2 (SC)), it struck down Sec. 2(6) of the Kerala Shops and Commercial Establishments Act (which defined an apprentice to be an employee) as "legal fiction".
Prarthana Kashinath, Mysore Grahakara Parishat