Holding

Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019, which determine the pecuniary jurisdiction of consumer commissions based on the value of consideration paid, are constitutionally valid and do not violate Article 14.

Summary

The petitioners challenged the constitutionality of sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019, which base the pecuniary jurisdiction of district, state and national consumer commissions on the value of consideration paid rather than the compensation claimed. The challenge arose from a consumer complaint seeking massive compensation for a fatal car accident and a separate insurance claim where the compensation sought exceeded the jurisdictional threshold. The Court examined whether Parliament had the legislative competence to prescribe such jurisdictional limits and whether the classification violated Article 14 of the Constitution. It held that Parliament, under Entry 95 of List I and Entries 11‑A and 46 of List III, can prescribe pecuniary limits and that the consideration‑based classification is a rational, intelligible differentia linked to the objective of efficient consumer dispute resolution. Consequently, the provisions were declared constitutional, the constitutional challenge dismissed, and the Central Consumer Protection Council and Authority were directed to undertake measures for effective implementation of the Act.

Issues considered

The legislative competence of Parliament to prescribe pecuniary jurisdiction of consumer tribunals under the Consumer Protection Act, 2019.
Whether sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the 2019 Act violate Article 14 of the Constitution by being arbitrary or discriminatory.
Whether the classification based on the value of consideration paid is a valid and rational basis for jurisdictional limits.
Whether the provisions are manifestly arbitrary or ultra vires the Constitution.

Legislation cited

Constitution of Indias. Article 14, s. Article 246, s. Article 32, s. Entry 11-A List III, s. Entry 46 List III, s. Entry 95 List I
Consumer Protection Act, 2019s. 10, s. 101, s. 18, s. 19, s. 20, s. 21, s. 22, s. 2(7), s. 3, s. 34(1), s. 47(1)(a)(i), s. 5, s. 58(1)(a)(i)
Contract Act, 1872s. 2(a), s. 2(b), s. 2(d), s. 2(e), s. 2(h)
Insolvency and Bankruptcy Code, 2016s. 4
Legal Services Authority Act, 1987s. 22(c)(1)
Recovery of Debts and Bankruptcy Act, 1993s. 1(4)
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002s. 31(h)

Headnote

Issue for Consideration Constitutionality of ss.34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 prescribing pecuniary jurisdictions of the district, state and national commissions on the basis of value of goods and services paid as consideration, instead are challenged. Headnotes† Consumer Protection Act, 2019 – ss.34(1), 47(1)(a)(i) and 58(1) (a)(i) – Constitution of India – Art.246 and Entry 95 of List I read with Entries 11-A and 46 of List III – Power to determine pecuniary jurisdiction: Held: There is no doubt

Subjects

Consumer Protection ActPecuniary jurisdictionArticle 14Legislative competenceClassification based on considerationPerformance audit of statuteCentral Consumer Protection CouncilCentral Consumer Protection AuthorityJudicial reviewHierarchy of tribunals

Judgment

[2025] 4 S.C.R. 1983 : 2025 INSC 593

Rutu Mihir Panchal & Ors.
v.
Union of India & Ors.
(Writ Petition (Civil) No. 282 of 2021)
29 April 2025
[Pamidighantam Sri Narasimha* and Manoj Misra, JJ.]

Issue for Consideration
Constitutionality of ss.34(1), 47(1)(a)(i) and 58(1)(a)(i) of the
Consumer Protection Act, 2019 prescribing pecuniary jurisdictions
of the district, state and national commissions on the basis of
value of goods and services paid as consideration, instead of
compensation claimed are challenged.

Headnotes†
Consumer Protection Act, 2019 – ss.34(1), 47(1)(a)(i) and 58(1)
(a)(i) – Constitution of India – Art.246 and Entry 95 of List I
read with Entries 11-A and 46 of List III – Power to determine
pecuniary jurisdiction:
Held: There is no doubt about the fact that the Parliament has
the legislative competence to enact the Consumer Protection
Act, 2019 – Under Entry 95 of List I r/w. Entries 11-A and 46 of
List III and in exercise of power under Article 246, the Parliament
has enacted the Consumer Protection Act, 2019 – The legislative
competence to prescribe jurisdiction and powers of a court, coupled
with the power to constitute and organize courts for administration
of justice, takes within its sweep the power to prescribe pecuniary
limits of jurisdiction of the courts or tribunals – Parliament has
the legislative competence to prescribe jurisdiction and powers
of courts – This power extends to prescribing different monetary
values as the basis for exercising jurisdiction. [Paras 9, 9.1]

Consumer Protection Act, 2019 – ss.34(1), 47(1)(a)(i) and 58(1)
(a)(i) – Contract Act, 1872 – Constitution of India – Art.14 –
Whether ss.34, 47 and s.58 are violative of Article 14 of the
Constitution.

* Author
1984 [2025] 4 S.C.R.

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Held: No – Classification based on value of goods or services
on the basis of the amount paid as consideration is valid –
“Consideration” is an integral part of forming any contract – It
is also an integral part of the definition of a ‘consumer’ – It is in
recognition of the first principles of formation of a contract that
s.2(7) of the 2019 Act defines a consumer as any person who buys
any goods or hires or avails any service for a consideration – The
consideration could be in the present or future, in whole, part, or
by deferred payment – Whichever be the mode, there must be a
consideration – That is essential to be a consumer – Therefore,
vesting jurisdiction in the district, state or national commission on
the basis of value of goods or services paid as ‘consideration’, is
neither illegal nor discriminatory – The determination of jurisdiction
of the district, state or national commissions on the basis of value
of consideration paid for purchase of goods and services has
rational nexus to the object of provisioning hierarchy of judicial
remedies – The relief or compensation that a consumer could
claim remained unrestricted and at the same time, access to the
state or the national commission is also not taken away – It is well
settled that there is no right or a privilege of a consumer to raise
an unlimited claim of compensation and thereby chose a forum of
his choice for instituting a complaint – Thus, the classification of
claims based on value of goods and services paid as consideration
has a direct nexus to the object of creating a hierarchical structure
of judicial remedies through tribunals. [Paras 10.2, 10.4, 11, 11.1]
Contract Act, 1872 – Essentials of a Contract – Discussed.
[Para 10.3]

Statute – Performance Audit of the Statute:
Held: Legal reform through legislative correction improves the
legal system and it would require assessment of the working of
the law, its accessibility, utility and abuse as well – The Executive
branch has a constitutional duty to ensure that the purpose and
object of a statute is accomplished while implementing it – It has
the additional duty to closely monitor the working of a statute
and must have a continuous and a real time assessment of the
impact that the statute is having – Reviewing and assessing the
implementation of a statute is an integral part of Rule of Law – The
purpose of such review is to ensure that a law is working out in
practice as it was intended – If not, to understand the reason and
[2025] 4 S.C.R. 1985

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

address it quickly – It is in this perspective that this Court has, in
a number of cases, directed the Executive to carry a performance/
assessment audit of a statute or has suggested amendments to
the provisions of a particular enactment so as to remove perceived
infirmities in its working. [Para 12.4]

Consumer Protection Act, 2019 – ss.3, 10 – Central Consumer
Protection Council – Central Consumer Protection Authority –
Directions for measures necessary for effective and efficient
redressal and working of the statute:
Held: The Council and Authority being statutory authorities having
clear purpose and objects and vested with powers and functions
must act effectively and in complete coordination to achieve
the preambular object of the statute to protect the interest of
consumers – As they are impressed with statutory duty, their
functioning will be subject to judicial review – Vibrant functioning
of the Council and the Authority will subserve the purpose and
object of the Parliament enacting the 2019 legislation – Central
Consumer Protection Council and the Central Consumer Protection
Authority shall in exercise of their statutory duties u/ss.3, 5, 10,
18 to 22 take such measures as may be necessary for survey,
review and advise the government about such measures as may
be necessary for effective and efficient redressal and working of
the statute. [Paras 12.17, 13]

Case Law Cited
State of Bombay v. Narottamdas Jethabhai [1951] 1 SCR 51 :
(1950) SCC 905; State of West Bengal v. Anwar Ali Sarkar [1991]
Supp. 1 SCR 435 : (1952) 1 SCC 1; Nandita Bose v. Ratanlal
Nahata [1987] 3 SCR 792 : 1987 AIR 1947 – relied on.
Yash Developers v. Harihar Krupa Co-operative Housing Society
Ltd. & Ors. [2024] 7 SCR 1443; M/s Pyaridevi Chabiraj Steel Pvt.
Ltd. v. National Insurance Company Ltd. & Ors., CC No. 833 of
2020 – referred.

List of Acts
Constitution of India, Consumer Protection Act, 2019, Contract
Act, 1872.
1986 [2025] 4 S.C.R.

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List of Keywords
Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer
Protection Act, 2019; Performance Audit of the Statute; Central
Consumer Protection Council and the Central Consumer Protection
Authority; Legislative competence; Rule of Law; Consideration,
Consumer; Pecuniary jurisdiction; Value of the goods or services
paid as consideration.

Case Arising From
ORIGINAL/CIVIL APPELLATE JURISDICTION: Writ Petition (Civil)
No. 282 of 2021
Under Article 32 of The Constitution of India
With
Civil Appeal No. 5670 of 2025

Appearances for Parties
Advs. for the Petitioners:
Abhimanyu Bhandari, Sr. Adv., Somesh Tiwari, Ms. Vidula Mehrotra,
Utsav Saxena, Shubhankar Singh, Aashna Mehra, Ms. Manisha
Ambwani, Shreeyash Lalit, Haresh Raichura, Mrs. Saroj Raichura,
Kalp Raichura.
Advs. for the Respondents:
Vikramjit Banerjee, A.S.G., Nachiketa Joshi, Anmol Chandan,
Priyanka Das, T.S. Sabarish, A. Deb Kuamar, Sabarish Subramanian,
Shreekant Neelappa Terdal, 1 Amrish Kumar, Viresh B. Saharya.

Judgment / Order of the Supreme Court

Judgment

Pamidighantam Sri Narasimha, J.

Table of Contents*

1. Facts in the Writ Petition: ....................................................... 2
2. Facts in the Civil Appeal ......................................................... 3
3. Statutory Provisions: ............................................................... 4

* Ed. Note: Pagination as per the original Judgment.
[2025] 4 S.C.R. 1987

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

4. Submissions ............................................................................. 6
5. Analysis ..................................................................................... 8
6. Re: Power to determine pecuniary jurisdiction .................... 9
7. Re: Submissions that the provisions are discriminatory and 11
violative of Article 14 ...............................................................
8. Re: Performance Audit of the Statute .................................... 17
9. Conclusions .............................................................................. 28

1. Constitutionality of Sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the
Consumer Protection Act, 20191 prescribing pecuniary jurisdictions of
the district, state and national commissions on the basis of value of
goods and services paid as consideration, instead of compensation
claimed are challenged in the writ petition2 under Article 32 of the
Constitution and the civil appeal3 against the order of the National
Consumer Disputes Redressal Commission4.
2. Facts in the Writ Petition: The short facts, to the extent that they
are relevant for disposal of the writ petition are that the petitioner’s
husband purchased a sedan –Ford Endeavour Titanium car from S.P.
Vehicles Pvt. Ltd., authorised dealer of Ford India for an amount of
Rs. 31.19 Lakhs. Tragically, the vehicle caught fire on 20.11.2018
while being driven leading to death of petitioner’s husband. Though
criminal proceedings were initiated, the present proceedings are
concerned with the statutory proceedings initiated under the 2019
Act by way of consumer complaint before the District Consumer
Commission, Vadodara for compensation of Rs. 51.49 crores with
interest thereon. Pending disposal of the consumer complaint, the
appellant approached this Court by way of the present writ petition

1 Hereinafter referred to as the 2019 Act.
2 W.P. (C) No. 282 of 2021.
3 Leave Granted and arising out of SLP (C) No. 1738 of 2022 against the order of the National Consumer
Disputes Redressal Commission in Diary No. 19172/NCDRC/2021-CC dated 08.10.2021.
4 Hereinafter, “National Commission”.
1988 [2025] 4 S.C.R.

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under Article 32 of the Constitution alleging that she was compelled
to approach the district commission because of the statutory
regime under the 2019 Act, whereas under the repealed Consumer
Protection Act, 19865, she could have directly approached the national
commission based on compensation claimed. The relevant portion
of the prayer made in the writ petition is as follows:
“a) Be pleased to issue appropriate guidelines, Writ in the
nature of Mandamus or such other Writ or declaration or
directions to declare that newly added Proviso of Section
34(1), Proviso to Section 47(1) and Proviso to Section
58(1)(a)(i) of the Consumer Protection Act, 2019 directing
that for Pecuniary Jurisdiction instead of “Compensation
Claimed”, the “consideration paid at the time of purchase
of Services” will be applicable as quoted in Para 2.1, 2.2,
2.3, as violative of Article 14 of the Constitution of India on
the ground of Arbitrariness and contrary for the purpose
of hierarchy of Judicial System in India.
b)…..”
3. Facts in the Civil Appeal: In the civil appeal, the appellant’s husband,
a District governor of the Lions Club of Jhansi, passed away due
to COVID-19 on 25.07.2020. When her claim on the basis of
insurance policy offered by Lions International Club, up to two
million dollars as compensation to families of deceased members
was denied, she approached the national commission seeking Rs.
14.94 crore. However, the national commission rejected her petition
on the ground that the consideration for the insurance policy does
not exceed Rs.10 crores. The relevant portion of the order passed
by the national commission is reproduced hereinbelow for ready
reference;
“…The Pecuniary Jurisdiction has been specified in the
Consumer Protection Act, 2019, where the consideration
paid, if exceeds Rupees Ten Crores, will give power to
the National Consumer Disputes Redressal Commission
to entertain any Complaint. It has nothing to do with the
amount of Compensation to be claimed by any of the
Complainant. ”

5 Act No. 68 of 1986. Hereinafter, “1986 Act”.
[2025] 4 S.C.R. 1989

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

4. Statutory Provisions: Before we consider the legal submissions of the
petitioner/appellant and the respondent, a comparative chart of the
jurisdictions exercised by the district, state and national commission
under the repealed 1986 Act and the present 2019 Act is as follows:

FORUM 1986 ACT 2019 ACT
District Section 11.(1) Subject to Section 34.(1) Subject
Commission the other provisions of to the other provisions
this Act, the District Forum of this Act, the District
shall have jurisdiction Commission shall have
to entertain complaints jurisdiction to entertain
where the value of the complaints where the value
goods or services and of the goods or services
the compensation, if any, paid as consideration
claimed does not exceed does not exceed one crore
rupees twenty lakhs… rupees…
State Section 17. Subject to the Section 47. (1) Subject
Commission other provisions of this Act, to the other provisions
the State Commission shall of this Act, the State
have jurisdiction— (a) to Commission shall have
entertain — (i) complaints jurisdiction — (a) to
where the value of the entertain — (i) complaints
goods or services and where the value of the
compensation, if any, goods or services paid as
claimed exceeds rupees consideration, exceeds
twenty lakhs but does not rupees one crore, but does
exceed rupees one crore… not exceed rupees ten
crore...
National Section 21. Subject to the Section 58. (1) Subject
Commission other provisions of this Act, to the other provisions
the National Commission of this Act, the National
shall have jurisdiction — Commission shall have
(a) to entertain— (i) jurisdiction — (a) to
complaints where the value entertain — (i) complaints
of the goods or services where the value of the
and compensation, if any, goods or services paid
claimed exceeds rupees as consideration exceeds
one crore… rupees ten crore…

4.1 A plain and simple reading of the provisions makes it clear
that the 2019 Act shifts the basis of the pecuniary jurisdiction
of the district, state as well as national commission from value
1990 [2025] 4 S.C.R.

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of compensation claimed under the repealed 1986 Act to value
of the consideration paid for the goods and services. The
petitioners and the appellants claim that this legislative shift
must have the effect of annulling sections 34, 47 and 58 of the
Act as unconstitutional.
5. Submissions: Mr. Shreeyash Lalit and Mr. Abhimanyu Bhandari, Ld.
Sr. Counsel represented the petitioner and the appellant respectively.
Mr. Vikramjit Banerjee assisted by Mr. Nachiketa Joshi represented
the respondents.
6. Mr. Shreeyash Lalit would submit that under the new legal regime,
an anomaly has arisen regarding pecuniary jurisdiction and hierarchy
of judicial system. The argument is that the impugned provisions
gives rise to an anomalous situation wherein, for instance, a person
claiming compensation of Rs. 50 Cr, for a defect or deficiency in
goods purchased or services availed, for consideration lesser than
Rs. One Crore will have to go before the district commission and at
the same time one can approach the national commission even if
the compensation is less than Rs. One Crore.
6.1 Ld. Counsel argues that the new criterion for determining
the pecuniary jurisdiction is discriminatory as consumers
who claim identical compensation, but have paid different
considerations at the time of purchase of goods or services
are treated differently. To buttress their argument, they referred
to Section 2(7) of the 2019 Act which defines “consumer”
and includes within its ambit any person who buys goods/
services for a consideration which is (i) fully paid or promised,
(ii) partly paid or promised, (iii) under a system of deferred
payment, and also includes (iv) a user of such goods or
services. Thus, when the definition of “consumer” itself does
not discriminate on the basis of the consideration paid and
includes every consumer in the wide spectrum, restricting
access to judicial remedies on the basis of consideration paid
is illegal and arbitrary.
6.2 As a logical extension of the same argument, it is submitted
that there is no rationale for introducing the new criterion for
determining the pecuniary jurisdiction. It is argued that even if the
object sought to be achieved is to curb instituting exaggerated
[2025] 4 S.C.R. 1991

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

claims, the same could have been done by way of increasing
the pecuniary limits of the forums.
7. Mr. Vikramjit Banerjee, Ld. ASG appearing on behalf of the Union
opposed the writ petition and supported his argument on the basis
of written submission.
7.1 The first limb of his submission is that Parliament has the
legislative competence to determine the jurisdiction and also
pecuniary limits of courts and tribunals. To exemplify his
submission, he referred to some parliamentary enactments.
7.2 To counter the allegations of arbitrariness, Ld. ASG submitted
that the impugned provisions are based on a reasonable
classification. He would submit that classification created on
the basis of value of goods and services paid as consideration
not only creates an intelligible differentia, but also has a rational
nexus with the object sought to be achieved, which is “timely and
effective administration and settlement of consumer disputes”.
Further, it is argued, the impugned provisions are not manifestly
arbitrary and that they were brought in to prevent exaggerated
and inflated claims.
8. Analysis: The submissions made by the Ld. Counsels for the petitioner/
appellant and respondent can be considered in the context of (i)
power to determine pecuniary jurisdiction, (ii) reasonable classification
under Article 14, (iii) manifest arbitrariness, and (iv) loss of remedy.
We will consider each of these submissions independently.
9. Re: Power to determine pecuniary jurisdiction: There is no doubt about
the fact that the Parliament has the legislative competence to enact
the Consumer Protection Act, 2019. Under Entry 95 of List I read
with Entries 11-A and 46 of List III6 and in exercise of power under
Article 246, the Parliament has enacted the Consumer Protection
Act, 2019. The legislative competence to prescribe jurisdiction and
powers of a court, coupled with the power to constitute and organize

6 Item 95, List I: “Jurisdiction and powers of all courts, except the Supreme Court, with respect to an of the
matters in this List; admiralty jurisdiction.”
Item 11-A of List III: “Administration of justice; constitution and organization of all courts, except the
Supreme Court and High Courts.”
Item 46 of List III: “Jurisdiction and powers of all courts, except the Supreme Court, with respect to any
of the matters in this List.”
1992 [2025] 4 S.C.R.

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courts for administration of justice, takes within its sweep the power
to prescribe pecuniary limits of jurisdiction of the courts or tribunals.
In State of Bombay v. Narottamdas Jethabhai,7 Justice Patanjali
Sastri concurring with the majority held as under:
“88. It had long been the practice in this country to constitute
and organise courts with general jurisdiction over all persons
and matters subject only to certain pecuniary and territorial
limitations, and to confer special jurisdiction limited to certain
specified cases or matters either on the ordinary courts in
addition to their general jurisdiction or on tribunals set up to
deal with such matters exclusively. The various Provincial
Civil Court Acts as well as the provisions of the Civil and
Criminal Procedure Codes invest the courts, both civil and
criminal, with general jurisdiction, that is to say, power to
adjudicate in respect of all persons and all matters except
those that are specifically excluded or brought within the
cognizance of tribunals with special or limited jurisdiction
extending only to those matters. The grading of the court
too in their hierarchy has reference to the pecuniary and
territorial limits rather than to the nature and kind of the
subject-matter which they are empowered to deal with.”
9.1 Parliament has the legislative competence to prescribe
jurisdiction and powers of courts. This power extends to
prescribing different monetary values as the basis for exercising
jurisdiction. For example, under the Recovery of Debts and
Bankruptcy Act, 1993, it is prescribed under Section 1(4) that
the provisions of the Act shall not apply where the amount of
debt is less than 10 lakh rupees. Section 4 of Insolvency and
Bankruptcy Code, 2016 provides that Part II of the Code, relating
to insolvency resolution and liquidation for corporate persons is
made applicable to matters relating to insolvency and liquidation
of corporate debtors where the minimum amount of default is
Rs. One Crore. Similarly, the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act,
2002 also provides under Section 31(h) that the Act shall not
apply for securing repayment of any financial asset not exceeding
Rs. 1 lakh. Further, the Legal Services Authority Act, 1987 under

7 (1950) SCC 905
[2025] 4 S.C.R. 1993

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

Section 22(c)(1) provides that the permanent Lok Adalat shall
not have jurisdiction in matters where the value of the property
in dispute exceeds 10 lakh rupees. In Narottamdas Jethabhai
(supra), Justice Mahajan has observed as under:
“27. It seems to me that the legislative power
conferred on the Provincial Legislature by Item 1 of
List II has been conferred by use of language which is
of the widest amplitude (administration of justice and
constitution and organisation of all courts). It was not
denied that the phrase employed would include within
its ambit legislative power in respect to jurisdiction
and power of courts established for the purpose
of administration of justice. Moreover, the words
appear to be sufficient to confer upon the Provincial
Legislature the right to regulate and provide for the
whole machinery connected with the administration
of justice in the province. Legislation on the subject
of administration of justice and constitution of courts
of justice would be ineffective and incomplete unless
and until the courts established under it were clothed
with the jurisdiction and power to hear and decide
cases. It is difficult to visualise a statute dealing with
administration of justice and the subject of constitution
and organisation of courts without a definition of the
jurisdiction and powers of those courts, as without
such definition such a statute would be like a body
without a soul. To enact it would be an idle formality. By
its own force it would not have power to clothe a court
with any power or jurisdiction whatsoever. It would
have to look to an outside authority and to another
statute to become effective. Such an enactment is,
so far as I know, unknown to legislative practice
and history. Parliament by making administration of
justice a provincial subject could not be considered to
have conferred power of legislation on the Provincial
Legislature of an ineffective and useless nature.”
(emphasis supplied)

9.2 In view of the above discussion, there can be no doubt about the
legislative competence and also the power of the Parliament to
1994 [2025] 4 S.C.R.

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prescribe limits of pecuniary jurisdiction of courts and tribunals
and in our case, the district, state or the national commission.
10. Re: Submissions that the provisions are discriminatory and
violative of Article 14: Sections 34, 47 and 58 vest jurisdictions in
the district, state and national commission on the basis of value
of goods or services paid as consideration. The precise question
for our consideration is whether empowering the district, state
and national commissions to exercise jurisdiction on the basis of
value of the goods or services paid as consideration is violative of
Article 14.
10.1 If there is one test for determining whether a provision of ‘law’
is violative of the equality norm, which has been articulated with
precision and clarity, it is the independent and interconnecting
twin test, as explained in State of West Bengal v. Anwar Ali
Sarkar8 as;
“85. … In order to pass the test, two conditions
must be fulfilled, namely (1) that the classification
must be founded on an intelligible differentia which
distinguishes those that are grouped together from
others, and (2) that that differentia must have a
rational relation to the object sought to be achieved
by the Act.”
10.2 Classification based on value of goods or services on the basis
of the amount paid as consideration is valid. “Consideration”
is an integral part of forming any contract. It is also an integral
part of the definition of a ‘consumer’.
10.3 An agreement enforceable by law is a contract.9 In turn,
every promise and every set of promises forming part of the
consideration for each other, is an agreement. 10 And then,
when, at the desire of the promisor, the promisee … has done…
something, such act is called consideration11. A proposal,
when accepted, becomes a promise12. Finally, when a person

8 (1952) 1 SCC 1
9 Section 2(h) of the Indian Contract Act, 1872.
10 Section 2(e) of the Indian Contract Act, 1872.
11 Section 2(d) of the Indian Contract Act, 1872.
12 Section 2(b) of the Indian Contract Act, 1872.
[2025] 4 S.C.R. 1995

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

signifies to another his willingness to do anything… with a
view to obtaining his assent it is a proposal13. While this is the
involution of formation of a contract, evolution in its making is
evident when a proposal, as defined, becomes a promise and
when such a promise is espoused by consideration it becomes
an agreement and if that agreement is enforceable in law, it
becomes a contract. Between evolution and involution, lies
the essential core, the consideration, without which there is no
agreement, and if there is no agreement, there is no contract.
10.4 It is in recognition of the first principles of formation of a contract
that section 2(7) of the 2019 Act defines a consumer as any
person who buys any goods or hires or avails any service for
a consideration. The consideration could be in the present or
future, in whole, part, or by deferred payment. Whichever be
the mode, there must be a consideration. That is essential to
be a consumer.
10.5 Therefore, vesting jurisdiction in the district, state or national
commission on the basis of value of goods or services paid
as ‘consideration’, is neither illegal nor discriminatory. For
this very reason, the submission made by Mr. Shreeyash
Lalit that the width of the expression ‘consumer’ under
Section 2(7) of the Act is arbitrarily restricted by Sections
34, 47 and 58 pales into insignificance. The myriad ways in
which a consideration could be inferred would not derogate
from the essentiality of consideration in every transaction
leading to formation of a contract. As we are not dealing
with gratuitous agreements, value of consideration is and
can be a valid basis for classifying claims for determining
pecuniary jurisdiction. We therefore reject the submission
that sections 34, 47 and 58 are discriminatory and violative of
Article 14.
11. This classification also has a direct nexus to the object sought to be
achieved. It is thus not a suspect classification. Value of consideration
paid for good or service purchased is closer and more easily relatable
to compensation than the self-assessed claim for damages of a
consumer. It is clear that the determination of jurisdiction of the district,

13 Section 2(a) of the Indian Contract Act, 1872.
1996 [2025] 4 S.C.R.

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state or national commissions on the basis of value of consideration
paid for purchase of goods and services has rational nexus to the
object of provisioning hierarchy of judicial remedies. Mr. Vikramjit
Banerjee has brought to our notice the circumstances that have led
to the introduction of Sections 34, 47 and 58 under the 2019 Act. In
this context, reference is made to a “Study on impact of Consumer
Protection Act, 2019” wherein it is explained that,
“….The earlier standard of the manner of determining
the pecuniary jurisdiction i.e. ‘the value of the goods or
services and the compensation, if any, claimed often
resulted in a disproportionately larger amount of cases
falling under the pecuniary jurisdiction of the NCDRC,
as it took into account the value of the final good bought
or service availed and secondly upon the amount of
compensation that has been prayed for in the complaint.
Thus the modifications to the pecuniary jurisdiction were
meant to alleviate the disproportionate burden of cases
which fell upon the National Consumer Disputes Redressal
Commission (NCDRC) by apportioning a larger share
to the District and State Consumer Disputes Redressal
Commissions. It also made the procedure simpler and
easier for consumers as now the consumers can get
justice at the District level for monetary level upto Rs one
crore, which covers most of the matters relating to goods
and services which a common consumer uses/ avails.
The legislative intent behind omitting the “compensation”
claimed by a consumer in assessing the jurisdiction is
of streamlining the method of determining the pecuniary
jurisdiction by ousting individual whims of a consumer. As
there does not exist any guidance by which a consumer
may reasonably determine claims for compensation.
Naturally, this resulted in a situation wherein consumers
often claimed astronomical amounts of compensation
despite the actual consideration being relatively less and
as a consequence the District and State Commissions
would be ousted of jurisdiction.”
11.1 There is also a misconception that there is some kind of
a loss of judicial remedy. No such event has occurred
because of Sections 34, 47 and 58 of the 2019 Act. The
[2025] 4 S.C.R. 1997

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

relief or compensation that a consumer could claim remained
unrestricted and at the same time, access to the state or the
national commission is also not taken away. It is well settled
that there is no right or a privilege of a consumer to raise an
unlimited claim of compensation and thereby chose a forum
of his choice for instituting a complaint. In Nandita Bose v.
Ratanlal Nahta14, this Court has held that a court or a tribunal
will always have the jurisdiction to assess or reassess an
overvalued or grossly undervalued claim in a petition in the
following terms:
“4. …The principles which regulate the pecuniary
jurisdiction of civil courts are well settled. Ordinarily,
the valuation of a suit depends upon the reliefs
claimed therein and the plaintiffs valuation in his plaint
determines the court in which it can be presented.
It is also true that the plaintiff cannot invoke the
jurisdiction of a court by either grossly over-valuing
or grossly under-valuing a suit. The court always has
the jurisdiction to prevent the abuse of the process
of law. Under Rule 10 of Order 7 of the Code the
plaint can be returned at any stage of the suit for
presentation to the court in which the suit should
have been instituted...”
(emphasis supplied)

In conclusion, while we hold that there is no unrestricted claim
for compensation and that it is subject to the determination of
the court, we hold that classification of claims based on value
of goods and services paid as consideration has a direct nexus
to the object of creating a hierarchical structure of judicial
remedies through tribunals.
12. Re: Performance Audit of the Statute: In the written submissions,
Ld. Counsel for the petitioner has brought to our notice a decision of
the national commission in the case of M/s Pyaridevi Chabiraj Steel
Pvt. Ltd. v. National Insurance Company Ltd. & Ors.15

14 1987 AIR 1947
15 CC No. 833 of 2020
1998 [2025] 4 S.C.R.

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“6. …He further submitted that a liberal view should
be taken as if “the word value of consideration paid”
is taken to be the amount paid for the purchase of
goods or services by a Consumer then even though
Insurance Policy taken by the Consumer be above
10,00,00,000/-(Rupees Ten crore), factually there will be
no instance of making payment by any Consumer premium
of more than 10,00,00,000/-(Rupees Ten crore) and if such
a strict view is taken then the claims regarding Insurance
will have to be necessarily filed either before the District
Consumer Disputes Redressal Commission or before the
State Consumer Disputes Redressal Commission and
not before the National Consumer Disputes Redressal
Commission, which will create great hardship to such
Consumers.”
(emphasis supplied)

12.1 Apart from the observation made by the national commission,
the Ld. Counsel for the petitioners has submitted that wherever
value of goods and services paid as consideration is upto
Rs. One Crore, a consumer has to necessarily approach a
district commission. Taking the example of insurance claims,
it is submitted that only in rare cases the insurance premium
would exceed Rs. One Crore and as such the entirety of claims
based on deficiency of service by insurance company will be
restricted to district commission. The scheme under 2019
Act, it is submitted, has become lopsided and has impaired
the original jurisdiction of the state and national commissions.
12.2 This argument is not based on any illegality, much less on
legislative incompetency or ultra vires to Constitution. The
soundness of this submission will depend on the working of
the statute and the data that may be available for assessing
its impact. Its implementation and consequences have to be
closely examined, analysed and impact assessed.
12.3 A proper appreciation of this issue would depend on
performance audit of the 2019 Act. The need for performance
audit of a statute was considered by this Court in the case Yash
Developers v. Harihar Krupa Co-operative Housing Society
[2025] 4 S.C.R. 1999

Rutu Mihir Panchal & Ors. v. Union of India & Ors.

Ltd. & Ors.16 wherein it was held that assessing the working
of the statute to realise if its purpose and objective are being
achieved or not is the implied duty of the executive government.
Reviewing and assessing the implementation of a statute
is an integral part of Rule of Law. It is in recognition of this
obligation of the executive government that the constitutional
courts have directed governments to carry performance audit
of statutes.
12.4 Four aspects for achieving justice are well founded and
articulated as, i) distribution of advantages and disadvantages
of society, ii) curbing the abuse of power and liberty, iii) deciding
disputes and, iv) adapting to change. Adapting to change is
important for achieving justice, as failure to adapt produces
injustice and is, in a sense, an abuse of power. Thus, failure
to use power to adapt to change is in its own way an abuse
of power. In fact, the issue is not one of change or not to
change, but of the direction and the speed of change and such
a change may come in various ways, and most effectively
through legislation. Legal reform through legislative correction
improves the legal system and it would require assessment
of the working of the law, its accessibility, utility and abuse as
well. The Executive branch has a constitutional duty to ensure
that the purpose and object of a statute is accomplished while
implementing it. It has the additional duty to closely monitor
the working of a statute and must have a continuous and a
real time assessment of the impact that the statute is having.
As stated above, reviewing and assessing the implementation
of a statute is an integral part of Rule of Law. The purpose
of such review is to ensure that a law is working out in
practice as it was intended. If not, to understand the reason
and address it quickly. It is in this perspective that this Court
has, in a number of cases, directed the Executive to carry a
performance/assessment audit of a statute or has suggested
amendments to the provisions of a particular enactment so
as to remove perceived infirmities in its working.17

16 2024 INSC 559; See Para 35.
17 Id. See Para 36.
2000 [2025] 4 S.C.R.

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12.5 A peculiar feature of how our legislative system works is that an
overwhelming majority of legislations are introduced and carried
through by the Government, with very few private member
bills being introduced and debated. In such circumstances, the
judicial role does encompass, in this Court’s understanding,
the power, nay the duty to direct the executive branch to
review the working of statutes and audit the statutory impact.
It is not possible to exhaustively enlist the circumstances and
standards that will trigger such a judicial direction. One can
only state that this direction must be predicated on a finding
that the statute has, through demonstrable judicial data or
other cogent material, failed to ameliorate the conditions of the
beneficiaries. The courts will also do well, to at the very least,
arrive at a prima facie finding that much statutory schemes
and procedures are gridlocked in bureaucratic or judicial
quagmires that impede or delay statutory objectives. This
facilitative role of the judiciary compels audit of the legislation,
promotes debate and discussion but does not and cannot
compel legislative reforms.18
12.6 It is in the above referred context of conducting performance
audit of a statute that we recognise the constitution and
establishment of two statutory bodies, the Central Consumer
Protection Council under section 3 and Central Consumer
Protection Authority under section 10 of the 2019 Act.
12.7 The Central Consumer Protection Council19 is constituted
under section 3;
“3. Central Consumer Protection Council.
(1) The Central Government shall, by notification,
establish with effect from such date as it may specify
in that notification, the Central Consumer Protection
Council to be known as the Central Council.
(2) The Central Council shall be an advisory council
and consist of the following members, namely:—

18 Id, See para 41.
19 Hereinafter, “Council”.
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(a) the Minister-in-charge of the Department of
Consumer Affairs in the Central Government, who
shall be the Chairperson; and
(b) such number of other official or non-official
members representing such interests as may be
prescribed.”
12.8 To ensure that the advise is well considered and takes
within its sweep plurality of thought and ideas, the Council
comprises officials and non-officials, apart from Ministers-
in-charge of Consumer Affairs. In exercise of powers under
section 101 of the 2019 Act, the Ministry of Consumer
Affairs issued the Consumer Protection (Central Consumer
Protection Council) Rules, 2020 whereunder the composition
of Consumer Council is given. It is prescribed that it shall
comprise Minister in-charge of Consumer Affairs of Union
as the Chairperson, Minister of State or Deputy Minister in
charge of Consumer Affairs in the Central Government who
shall be the Vice-Chairperson, an administrator from UTs,
two Members of Parliament, representatives of Departments
of the Central Government, autonomous organisations
or regulators concerned with consumer interests, Chief
Commissioner of Authority, Registrar of the national
commission, representatives from consumer organisations
and experts in consumer affairs along with Secretaries-in-
charge of Consumer Affairs in the Centre and States.20 The
purpose and object of the Council is provided in section 5
of the 2019 Act in the following terms;
“5. Objects of Central Council: The objects of the
Central Council shall be to render advice on promotion
and protection of the consumers’ rights under this Act.”
12.9 On the other hand, the 2019 Act also establishes another
important body, the Central Consumer Protection Authority21
under section 10 of the Act;

20 Rule 3 of the Consumer Protection (Central Consumer Protection Council) Rules, 2020.
21 Hereinafter, “Authority”.
2002 [2025] 4 S.C.R.

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“10. Establishment of Central Consumer Protection
Authority
(1) The Central Government shall, by notification,
establish with effect from such date as it may specify
in that notification, a Central Consumer Protection
Authority to be known as the Central Authority
to regulate matters relating to violation of rights
of consumers, unfair trade practices and false or
misleading advertisements which are prejudicial to
the interests of public and consumers and to promote,
protect and enforce the rights of consumers as a class.
(2) The Central Authority shall consist of a
Chief Commissioner and such number of other
Commissioners as may be prescribed, to be appointed
by the Central Government to exercise the powers
and discharge the functions under this Act.”
12.10 The powers and functions of the Authority are provided under
section 18 of the Act and it empowers the Authority inter alia
to (a) protect, promote and enforce the rights of consumers
as a class, and prevent violation of consumers rights [Section
18(1)(a)]; (b) recommend adoption of international covenants
and best international practices on consumer rights to ensure
effective enforcement of consumer rights [Section 18(2)(e)]; (c)
undertake and promote research in the field of consumer rights
[Section 18(2)(f)]; (d) advise the Ministries and Departments
of the Central and State Governments on consumer welfare
measures [Section 18(2)(k)].
12.11 Apart from the above, the Authority exercise vast powers
under sections 19 to 22. In exercise of powers under
section 101, the Ministry of Consumer Affairs has framed
rules and regulations such as, ‘The CCPA (Allocation and
Transaction of Business) Regulations, 2020’, ‘The CCPA
(Procedure for Engagement of Experts and Professionals)
Regulations, 2021’, ‘The CCPA (Submission of Inquiry or
Investigation by the Investigation Wing) Regulations, 2021’,
‘The CCPA (Form of annual statement of accounts and
records) Rules, 2021’.
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Rutu Mihir Panchal & Ors. v. Union of India & Ors.

12.12 Purpose and object of constituting these authorities is clearly
reflected in the preamble of the 2019 Act, the terms of which are;
“An Act to provide for protection of the interests of
consumers and for the said purpose, to establish
authorities for timely and effective administration and
settlement of consumers’ disputes and for matters
connected therewith or incidental thereto.”
12.13 It is interesting to note that in the statement of objects and
reasons of the 2019 Act there is a reference to, “an institutional
void in the regulatory regime” of consumer protection. To obviate
this institutional void, the Parliament has under section 10 of
the 2019 Act established the Authority and vested in it various
powers and functions. The relevant portion of the statement
of objects and reasons is quoted here for ready reference;
“4. The proposed Bill provides for the establishment
of an executive agency to be known as the Central
Consumer Protection Authority (CCPA) to promote,
protect and enforce the rights of the consumers; make
interventions when necessary to prevent consumer
detriment arising from unfair trade practices and to
initiate class action including enforcing recall, refund
and return of products, etc. This fills an institutional
void in the regulatory regime extant. Currently, the
task of prevention of or acting against unfair trade
practices is not vested in any authority. This has been
provided for in a manner that the role envisaged for the
CCPA complements that of the sector regulators and
duplication, overlap or potential conflict is avoided.”
12.14 The purpose and object behind referring to the constitution
and functioning of the Council and the Authority is only to
ensure that the regulatory regime for consumer protection
is clearly identified, coordinated – if not centralised and
declared to be duty bearers for effective functioning of the
consumer protection regime. In a recent decision22, this Court
held that that the significance of creation and establishment
of these statutory and administrative bodies is not difficult

22 Lifecare Innovations Pvt. Ltd. v. Union of India, 2025 INSC 269.
2004 [2025] 4 S.C.R.

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to conceive. If these institutions and bodies work effectively
and efficiently, it is but natural that the purpose and object
of the legislation will be achieved in a substantial measure.
It is, therefore, necessary to ensure that in the functioning of
these bodies, there is efficiency in administration, expertise
through composition, integrity through human resources,
transparency and accountability, and responsiveness through
regular review, audits and assessments.23
12.15 We are also exercising jurisdiction under Article 32 of the
Constitution, as the petitioner expressed concern over the
ineffective working of the institutions intended to exercise
jurisdiction and power for consumer protection. While exercising
judicial review of administrative action in the context of Statutes,
laws, rules or policies establishing statutory or administrative
bodies to implement the provisions of the Act or its policy, the
first duty of constitutional courts is to ensure that these bodies
are in a position to effectively and efficiently perform their
obligations. This approach towards judicial review has multiple
advantages. In the first place, while continually operating in
the field with domain experts, these bodies acquire domain
expertise, the consequence of which would also be informed
decision-making and consistency. Further, the critical mass
of institutional memory acquired by these bodies will have a
direct bearing on the systematic development of the sector
and this will also help handling polycentric issues. Thirdly,
while continuously being on the field, and having acquired the
capability of making real-time assessments about the working
of the policies, these bodies will be in a position to visualize
course correction for future policymaking.24
12.16 Shifting the focus of judicial review to functional capability
of these bodies is not to be understood as an argument for
alternative remedy, much less as a suggestion for judicial
restraint. In fact, this shift is in recognition of an important
feature of judicial review, which performs the vital role of
institutionalizing authorities and bodies impressed with
statutory duties, ensuring they function effectively and

23 Id. See para 21.
24 Id. See para 22.
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Rutu Mihir Panchal & Ors. v. Union of India & Ors.

efficiently. The power of judicial review in matters concerning
implementation of policy objectives should transcend the
standard power of judicial review to issue writs to perform
statutory duty and proceed to examine whether the duty
bearers, the authorities and bodies are constituted properly
and also whether they are functioning effectively and efficiently.
By ensuring institutional integrity, we achieve our institutional
objectives. Further, effective and efficient performance of the
institutions can reduce unnecessary litigation.25
12.17 In conclusion we hold that the Council and Authority being
statutory authorities having clear purpose and objects and
vested with powers and functions must act effectively and
in complete coordination to achieve the preambular object
of the statute to protect the interest of consumers. As they
are impressed with statutory duty, their functioning will be
subject to judicial review. Vibrant functioning of the Council
and the Authority will subserve the purpose and object of the
Parliament enacting the 2019 legislation.
13. Conclusions: For the reasons stated above; (a) we dismiss the
constitutional challenge to section 34, 47 and 58 of the 2019 Act and
declare that the said provisions are constitutional and are neither
violative of Article 14 nor manifestly arbitrary; (b) Central Consumer
Protection Council and the Central Consumer Protection Authority
shall in exercise of their statutory duties under sections 3, 5, 10, 18 to
22 take such measures as may be necessary for survey, review and
advise the government about such measures as may be necessary for
effective and efficient redressal and working of the statute. With the
above directions, the Writ Petition and Civil Appeal are disposed of.
14. Pending applications, if any, are also disposed of accordingly.

Result of the case: Matters disposed of.

†
Headnotes prepared by: Ankit Gyan

25 Id. See para 23.