Test for Determining Pecuniary Jurisdiction of Consumer Fora

Value of Goods / Services “paid” V/s Value of Goods / Services “purchased”- NCDRC determines pecuniary jurisdiction of consumer fora

The National Consumer Disputes Redressal Commission (NCDRC), in a significant order passed in the case of Pyaridevi Chabiraj Steels (P) Ltd. v. National Insurance Company Ltd. stated 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’.

The facts of the case are that the Complainant had taken an insurance cover from National Insurance Company Limited under its Standard Fire and Special Perils Policy. A claim for compensation was filed with the Insurance company when the factory premises were severely hit by heavy rainfall and storm causing considerable damage to plant and machinery and stocks of the Complainant. Subsequently, the Insurance Company repudiated the claim, therefore the Complainant approached the NCDRC.

A preliminary point arose as to how the instant Complaint was maintainable before the NCDRC since the value of the consideration paid i.e., premium paid for taking the policies was only Rs.4,43,562/- which was less than the consideration paid of more than Rs.10,00,00,000/ as provided under Section 58 (1)(a)(i) of the Consumer Protection Act, 2019.

At this juncture, the Court took cognizance of the fact that given the facts of the matter, the instant Complaint was to be considered under the provisions of the Consumer Protection Act, 2019 which had come into force before the date of filing of the Complaint.

Whilst determining the question of pecuniary jurisdiction, the Commission opposed the view of taking a liberal interpretation and stated that the Parliament, while enacting the Act of 2019, was conscious of the fact that the Consumer should approach the appropriate Commission and hence specific provisions have been made under Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) that provide for pecuniary jurisdiction of the District, State and National Commission respectively. Upon perusal of the aforesaid sections, it is amply clear that for determining the pecuniary jurisdiction of the District, State or National Commission the value of the goods or services ‘paid’ as consideration alone has to be taken and not the value of the goods or services ‘purchased/ taken’.

In light of the above, the Commission held that the words “and compensation” were replaced with the word “paid” certainly to prevent consumers from directly approaching the NCDRC. Therefore, it concluded that it had no jurisdiction to entertain the instant Complaint as the provision of Section 58 (1) (a) (i) of the Act of 2019 are very clear and did not call for any two interpretations.