Supreme Court Questions Jurisdiction Criteria for Consumer Forums
The Supreme Court of India has raised a critical question about the jurisdictional criteria for consumer forums, asking whether it should be determined by the price of goods or services paid or by the compensation sought by the complainant. This query was posed to the Central government during the hearing of Avon Elastomers v. Bajaj Allianz General Insurance.
The Bench, comprising Justices KV Viswanathan and Arun Palli, requested the Centre to submit an affidavit addressing the inconsistencies in the current pecuniary jurisdiction distribution among the District, State, and National Consumer Disputes Redressal Commissions. Additionally, the Court sought clarity on a 2021 notification that reduced the National Commission’s pecuniary jurisdiction limit from ₹10 crore to ₹2 crore.
Arguments Presented to the Court
Senior Advocate Gagan Gupta, representing the petitioner, argued that determining jurisdiction based on the consideration paid for goods or services could exclude several legitimate claims from the purview of consumer forums. Gupta illustrated this with examples, such as a consumer who purchases a luxury car worth ₹2.5 crore but has a grievance regarding a minor defect, such as a faulty windshield. In this instance, the complaint would need to be filed with the National Commission. Conversely, a consumer who pays a ₹40 lakh advance for a car and experiences delivery delays could address their complaint at a district forum.
Gupta further highlighted issues faced by fixed deposit holders and savings account customers, who do not technically pay a ‘consideration’ for banking services, posing a challenge under a consideration-based test. Another example involved patients receiving subsidized or free medical treatment, questioning how their grievances would be managed if jurisdiction depended on payment amounts.
Responses from the Union of India
Additional Solicitor General Vikramjit Banerjee, representing the Union of India, noted that insurance contracts would not face such difficulties since the premium paid could be easily identified as the consideration. However, Advocate Jagdish Chandra Solanki, representing one of the respondents, pointed out that consumer forums also entertain complaints from voluntary consumer associations, the Central Authority, and the government itself, situations where the issue of consideration does not apply.
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Next Steps and Court’s Observations
The Supreme Court has granted the Union government time to address these anomalies before it proceeds with interpreting the provisions. “We believe the Union of India should reflect on these alleged discrepancies and provide a suitable affidavit,” the Court stated. The inquiry also extends to the rationale behind reducing the National Commission’s pecuniary jurisdiction from ₹10 crore to ₹2 crore, as per the 2021 notification.
In response to a reference to a prior Supreme Court decision in Rutu Mihir Panchal v. Union of India (2025), which upheld the validity of pecuniary jurisdiction provisions, the Bench clarified that the present case involved the interpretation of jurisdiction application, not its legality. “Our focus is on how pecuniary jurisdiction is interpreted, and we expect the Union of India to address the highlighted aspects through an affidavit,” the Supreme Court articulated.
The matter is scheduled for the next hearing on October 8.
