How to determine pecuniary jurisdiction of Consumer Forum and Commissions

Inclusion of amount of compensation and interest in the claim:

In 2003 following averment in the Complaint as prayer came up for consideration before a 3 member bench of National Commission:

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

A three member bench of National Commission concluded:

Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period up to the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

[Source: Shahbad Cooperative Sugar Mills Ltd. vs. National Insuranc Co. Ltd., 2003 (2)CPJ 81 (National Commission)] (3 Bench comprising of K G Member, R Rao, B Taimni)

However in 2016 without referring to the aforesaid case another 3 member bench of National Commission held (in Ambrish Kumar Shukla vs. Ferrus Infrastructure) that compensation and interest shall be included in determining the jurisdiction. It was held:

It is the value of the goods or services, as the case may be, and not the value or cost of removing the deficiency in the service which is to be considered for the purpose of determining the pecuniary jurisdiction.

The interest has to be taken into account for the purpose of determining the pecuniary jurisdiction of a Consumer Forum.

The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint, to determine the pecuniary jurisdiction of a Consumer Forum.

In a complaint instituted under Section 12(1)(c) of the Consumer Protection Act, the pecuniary jurisdiction is to be determined on the basis of aggregate of the value of the goods purchased or the services hired or availed by all the consumers on whose behalf or for whose benefit the complaint is instituted and the total compensation claimed in respect of such consumers.

A complaint under Section 12(1)(c) of the Consumer Protection Act can be instituted only by one or more consumers, as defined in Section 2(1)(d) of the Consumer Protection Act. Therefore, a group of Cooperative societies, Firms, Association or other Society cannot file such a complaint unless such society etc. itself is a consumer as defined in the aforesaid provision.

Ambrish Kumar Shukla vs. Ferrous Infrastructure Pvt. Ltd. decided on 07.10.2016 in CC  97/2016

Conflict of Opinion:

Thus there exists two judgments, both by the National Commission with same number of members and both on one subject, but both at variance inasmuch as the one pronounced earlier (Surjit Singh Jhandwal supra), holds that interest is not to be included in claimed amount while determining pecuniary jurisdiction, while the one pronounced later (Ambrish Shukla supra), holds that the interest has to be included for this purpose.

Even though National Commission is not a court of record, for subordinate Forums and State Commission it is difficult follow the conundrum.

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