Should consumer forum jurisdiction depend on price paid or compensation claimed? Supreme Court asks Centre

The Supreme Court recently asked the Central government to explain how the jurisdiction of consumer courts should be determined - whether by the value of goods or services paid for or by the amount of compensation being claimed [Avon Elastomers v. Bajaj Allianz General Insurance]. .A Bench of Justices KV Viswanathan and Arun Palli asked the Centre to file an affidavit addressing several anomalies flagged before it, arising from how pecuniary jurisdiction is currently split between the District, State and National Consumer Disputes Redressal Commissions.The Bench also asked the Centre to explain the reasoning behind a 2021 notification that reduced the National Commission's pecuniary jurisdiction from ₹10 crore to ₹2 crore..The Court was hearing a petition raising the question of how such jurisdiction ought to be determined. Senior Advocate Gagan Gupta, appearing for the petitioner, argued that basing jurisdiction on the value of goods or services paid as consideration would lead to a host of anomalies and could leave several genuine cases of deficient service outside the reach of consumer forums altogether.To illustrate this, Gupta gave the Court several examples. He pointed out that a person who buys a car worth ₹2.5 crore, but has a complaint only about a defective windshield, would have to approach the National Commission to get it fixed. In contrast, someone who pays just a ₹40 lakh advance for a car and faces a delay in its delivery would only need to approach a district commission. He also flagged that fixed deposit holders and savings account holders technically pay no “consideration” for a bank’s services, raising the question of how deficiencies in handling their money would be treated under a consideration-based test. He cited a third example concerning patients who receive subsidised or free treatment at hospitals, questioning how their complaints would be assessed if the pecuniary jurisdiction depended on the amount paid..Additional Solicitor General Vikramjit Banerjee, appearing for the Union of India, responded that at least in the case of insurance contracts, there would be no difficulty in identifying the consideration paid, since it would simply be the premium amount.Advocate Jagdish Chandra Solanki, appearing for one of the respondents, pointed out a further complication - complaints before consumer forums aren’t only filed by consumers who’ve paid for something. Under the Consumer Protection Act, 2019, voluntary consumer associations, the Central Authority and even the government itself can file complaints, in which case the question of consideration paid wouldn’t arise at all, Solanki said..The Bench then gave the Union government time to respond to these anomalies before interpreting the relevant provisions.“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 Court said..The Court also asked the Centre to explain the reasoning behind a 2021 notification that reduced the National Commission’s pecuniary jurisdiction from ₹10 crore, as originally fixed under the 2019 Act, to just ₹2 crore.When the ASG pointed out that the Supreme Court had earlier upheld the validity of the provisions on pecuniary jurisdiction in Rutu Mihir Panchal v. Union of India (2025), the Bench clarified that the present case concerned a different question altogether - the interpretation of how that jurisdiction should actually be applied, not its validity.“We are of the opinion that what arises in this case is the interpretation of the provisions providing for the pecuniary jurisdiction and in order to enable us to comprehensively address the matter, we are of the opinion that the Union of India… should place an affidavit addressing the aspects highlighted,” the Court said..The matter will heard next on October 8. .[Read Order]