2017 (4) TMI 306 - SC - Indian Laws

Consumer protection - power of administrative control vested in the National Commission over the State Commissions under Section 24(B)(1)(iii)- Held that - The Union Government shall for the purpose of ensuring uniformity in the exercise of the rule making power under Section 10(3) and Section 16(2) of the Consumer Protection Act, 1986 frame model rules for adoption by the State Governments. The model rules shall be framed within four months and shall be submitted to this Court for its approval; (ii) The Union Government shall also frame within four months model rules prescribing objective norms for implementing the provisions of Section 10(1)(b), Section 16(1)(b) and Section 20(1)(b) in regard to the appointment of members respectively of the District fora, State Commissions and National Commission; (iii) The Union Government shall while framing the model rules have due regard to the formulation of objective norms for the assessment of the ability, knowledge and experience required to be possessed by the members of the respective fora in the domain areas referred to in the statutory provisions mentioned above. The model rules shall provide for the payment of salary, allowances and for the conditions of service of the members of the consumer fora commensurate with the nature of adjudicatory duties and the need to attract suitable talent to the adjudicating bodies. These rules shall be finalized upon due consultation with the President of the National Consumer Disputes Redressal Commission, within the period stipulated above; (iv) Upon the approval of the model rules by this Court, the State Governments shall proceed to adopt the model rules by framing appropriate rules in the exercise of the rule making powers under Section 30 of the Consumer Protection Act, 1986; (v) The National Consumer Disputes Redressal Commission is requested to formulate regulations under Section 30A with the previous approval of the Central Government within a period of three months from today in order to effectuate the power of administrative control vested in the National Commission over the State Commissions under Section 24(B)(1)(iii) and in respect of the administrative control of the State Commissions over the District fora in terms of Section 24(B)(2) as explained in this judgment to effectively implement the objects and purposes of the Consumer Protection Act, 1986.

Issues Involved:
1. Infrastructural deficiencies in consumer fora.
2. Vacancies and appointments of members.
3. Administrative control and rule-making powers.
4. Remuneration and service conditions of members.
5. Political and bureaucratic interference.
6. Recommendations for systemic overhaul.

Issue-wise Detailed Analysis:

1. Infrastructural Deficiencies in Consumer Fora:
The judgment highlights the "deficiency of infrastructure" in consumer fora, noting that many lack "proper court-rooms with lights and fans, chairs and tables." Chambers of presiding members are described as "pathetic," with inadequate or untrained staff, and a lack of stenographers. Record rooms are often too small, with files kept in the open, leading to them being misplaced or eaten by termites. State Governments have been slow to allot land for new buildings, and there is a significant delay in filling vacancies. The Committee's findings underscore the need for proper infrastructure and timely appointments to ensure effective functioning.

2. Vacancies and Appointments of Members:
The judgment reveals that vacancies for the posts of President and members in various State Commissions, such as Tamil Nadu and Jammu & Kashmir, have remained unfilled for over a year. The Committee noted instances where State Governments took up to 7-10 months to approve recommendations for appointments. The quality of non-judicial members is poor due to inadequate remuneration and political interference. The Committee has proposed conducting a written test to assess the knowledge of applicants for district fora posts.

3. Administrative Control and Rule-Making Powers:
Section 24B of the Consumer Protection Act, 1986, provides for administrative control, granting the National Commission control over State Commissions and the latter over district fora. The judgment interprets this to include overseeing administrative matters, such as posting and control over members, appointment of staff, and provision of infrastructure. The Union Government is directed to frame model rules for the appointment and service conditions of members to ensure uniformity and objectivity across states.

4. Remuneration and Service Conditions of Members:
The Committee observed that the remuneration for non-judicial members varies across states and is too low to attract qualified talent. The judgment highlights the need to align the service conditions of members of the National Commission with those of High Court judges to resolve the existing anomaly where members of a higher forum have inferior conditions compared to those of a lower forum. The Union Government is directed to frame model rules for the remuneration and service conditions of members.

5. Political and Bureaucratic Interference:
The judgment addresses the issue of political and bureaucratic interference in the selection process, citing instances where relatives of politicians and bureaucrats were appointed as non-judicial members. The Committee provided examples of non-judicial members who were irregular in attendance or misused their positions. The judgment emphasizes the need for transparency and objectivity in the selection process to prevent such interference.

6. Recommendations for Systemic Overhaul:
The judgment underscores the need for a systemic overhaul to prevent the Consumer Protection Act, 1986, from becoming a "dead letter." The Committee's recommendations include enhancing the pecuniary jurisdiction of district fora, improving the quality of adjudication, and ensuring checks and balances. The Union Government is directed to frame model rules for the appointment and service conditions of members, and the National Commission is requested to formulate regulations to ensure effective administrative control.

Directions Issued:
1. The Union Government must frame model rules for the appointment and service conditions of members within four months and submit them to the Court for approval.
2. The Union Government must also frame model rules prescribing objective norms for the appointment of members within four months.
3. The National Commission is requested to formulate regulations under Section 30A within three months to ensure effective administrative control.
4. The State Governments of Tamil Nadu and Jammu & Kashmir are directed to appoint the President and members of the State Commissions at the earliest.
5. The President of the State Commission in Uttar Pradesh is directed to take disciplinary action against a non-judicial member for unauthorized absence.

The proceedings are to be listed before the Court on 7 March 2017 for further directions and compliance reporting.

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