New Delhi: The Supreme Court has directed the Union of India to file an affidavit within six weeks addressing alleged anomalies in determining the pecuniary jurisdiction of consumer fora, on the question of whether such jurisdiction should be based on the value of goods or services paid as consideration, or on the amount of compensation claimed.
A Bench of Justice K.V. Viswanathan and Justice Arun Palli was hearing a Special Leave Petition arising out of a judgment dated 21.10.2020 passed by the National Consumer Disputes Redressal Commission (NCDRC) in CC No. 844/2020, in a dispute between M/s Avon Elastomers (India) and M/s Bajaj Allianz General Insurance Co. Ltd. and others.
Mr. Gagan Gupta, Senior Advocate appearing for the petitioner, submitted that basing pecuniary jurisdiction on the value of goods or services paid as consideration would give rise to a host of anomalies, and would also leave several deficiencies in service outside the purview of the consumer commissions. Since the case arose out of an insurance contract, Mr. Vikramjit Banerjee, learned Additional Solicitor General appearing for the Union of India, submitted that there was no difficulty in ascertaining the consideration paid, which was the premium amount paid or agreed to be paid.
Illustrating the anomalies, learned Senior Counsel pointed out that fixed deposit holders and savings bank account holders are consumers even though no consideration is paid for such services. He also cited the case of subsidised medical services, where patients who pay no charges are still treated as consumers, submitting that the ASG had relied on judgments favouring the Union on this aspect. A further illustration was that of deficiencies alleged only against fixtures and fittings in a flat, where the absence of a break-up of consideration may require the entire value of the flat to be reckoned for determining the appropriate forum, and of a car purchaser with a grievance limited to a defective windshield being compelled to approach the National Commission solely because of the high value of the vehicle, while a purchaser who had merely paid an advance for a delayed delivery would fall within the District Commission's jurisdiction.
Mr. Jagdish Chandra Solanki, learned counsel for respondent no.1, submitted that proceedings before the consumer commissions are not initiated by consumers alone, and drew attention to Section 2(5) and Section 18 of the Consumer Protection Act, 2019, to submit that voluntary consumer associations, the Government and the Central Authority can also file complaints, in which case the question of consideration paid would not arise at all.
The Court observed that before interpreting the provisions, some time ought to be given to the Union of India to reflect on the anomalies raised and to place its response on record. The Union of India was accordingly directed to file an appropriate affidavit within six weeks, which should also address the reasoning behind the reduction of the pecuniary jurisdiction of the National Commission from Rs.10 crore, as fixed under the 2019 Act, to Rs.2 crore, by notification dated 30.12.2021. The Court clarified that the anomalies highlighted were only illustrative.
The learned ASG had submitted that the validity of the provisions relating to pecuniary jurisdiction had already been upheld in Rutu Mihir Panchal & Ors. vs. Union of India & Ors., reported in 2025 SCC OnLine SC 974. The Court, however, held that the question arising in the present case was one of interpretation of the provisions on pecuniary jurisdiction, and that to comprehensively address the matter, the Union of India should place an affidavit dealing with the aspects highlighted in the order.
The Court observed:
“We are of the opinion that before we interpret the provisions, some time to be given to Union of India to reflect over these alleged anomalies and come back to us with an appropriate affidavit.”
The matter has been listed for further hearing on 8th October, 2026.
Appearances:
For the Petitioner: Mr. Gagan Gupta, Senior Advocate with Mr. Anuroop Chakravarti, Advocate.
For the Respondent(s): Mr. Vikramjit Banerjee, Additional Solicitor General; Mr. Jagdish Chandra Solanki, Advocate.
Case Title: M/s Avon Elastomers (India) vs. M/s Bajaj Allianz General Insurance Co. Ltd. & Ors., Special Leave Petition (C) No. 3806/2021
