Appointment rules for Consumer Commission declared arbitrary and unreasonable by Supreme Court

Supreme Court in a recent Judgement (The Secretary Ministry of Consumer Affairs      Vs. Dr. Mahindra Bhaskar Limaye & Ors. D.D. 03 March 2023) upheld the judgement of High court by which declared Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) Consumer Protection Rules 2020 arbitrary, unreasonable, and violative of Article 14 of the Constitution of India and held that Section 4(1) of the Rules, 2020 allows a person who is eligible to be appointed as a district judge (with a minimum experience of 7 years) to be appointed as President of the District Commission, but Section 4(2)(c) mandates a minimum experience of 15 years for appointment as a Member, which is violative of Article 14 of the Constitution.

The rules deal with qualifications for appointment, method of recruitment, and procedure of appointment of the President and members of the State and District Consumer Dispute Redressal Commissions. The Ministry of Consumer Affairs framed the Rules, 2020 under Sections 29 and 43 of the Consumer Protection Act, 2019. The impugned rules specified qualifications for appointment to the Commissions, including educational qualifications, age, and experience in relevant fields, and provided for a Selection Committee to determine the procedure for making recommendations for appointments.

The High Court had struck down and declared Rule 3(2)(b), Rule 4(2)(c), and Rule 6(9) of the Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation, and removal of President and Members of State Commission and District Commission) Rules, 2020 as arbitrary, unreasonable, and violative of Article 14 of the Constitution of India.

The Ministry of Consumer Affairs and the State of Maharashtra have appealed against a common judgment and order passed by the High Court of Judicature Bombay.

The Supreme Court observed that earlier this court in Case UPCPBA had constituted a committee, led by former Judge Arijit Pasayat, to look into the conditions of eligibility for appointment of non-judicial members. The committee found that the Consumer Protection Fora set up under the Consumer Protection Act, 1986 were not functioning effectively due to a poor organizational setup, grossly inadequate infrastructure, absence of adequate and trained manpower, and a "lack of qualified members" in the adjudicating bodies.

The Supreme Court is observing the correctness of a judgment and the constitutional validity of certain rules in the context of appointing non-judicial members to the Fora constituted under the Consumer Protection Act, 1986. The court refers to an earlier decision in the case of UPCPBA and notes that the issue of conditions of eligibility for appointment of non-judicial members was discussed in that case as well. The court had earlier constituted a committee to examine various issues, including the conditions of eligibility for appointment of non-judicial members, which had observed that the Fora constituted under the Consumer Protection Act, 1986 do not function effectively due to various reasons including the lack of qualified members in the adjudicating bodies.

Supreme Court notes that in a previous case, State of Uttar Pradesh Vs. All Uttar Pradesh Consumer Protection Bar Association, the Court considered the draft model rules for the appointment, salary, allowances, and conditions of service of President and Members of the State Commission and District Forum, which were framed by the Union of India. The Court directed the State Governments to frame appropriate rules in accordance with the final draft model rules submitted by the Union of India. Many states, including Maharashtra, adopted and approved the model rules and framed their own rules for the appointment of members of the District Fora and State Commission. In another case, Madras Bar Association, the Court directed that the Rules, 2020 be amended to make advocates with at least 10 years of experience eligible for appointment as judicial members in tribunals. The Central Government then framed the Tribunal Reforms (Rationalization and Conditions of Service) Ordinance, 2021, which was later considered by the Court in a writ petition where the Court also examined the permissibility of legislative override.

Supreme Court held that High Court in the impugned judgment and order has rightly observed and held that Rule 3(2)(b), Rule 4(2)(c) and Rule 6(9) of the Rules, 2020 which are contrary to the decisions of this Court in the cases of UPCPBA and the Madras Bar Association are unconstitutional and arbitrary.

The Supreme Court believes that Rule 6(9) lacks transparency and gives excessive and uncontrolled discretion to the Selection Committee in recommending candidates for appointment as President and Members of the State and District Commissions. This lack of transparency and selection criteria can result in undeserving and unqualified individuals being appointed, which goes against the purpose of the Consumer Protection Act. Since the Commissions are empowered with judicial powers, the members should have the same standards as judges. Rule 6(9) gives the Selection Committee the power to determine its own procedure, which is arbitrary and unreasonable.

The Supreme Court notes that the new Rules, 2020 have removed the mechanism of a written examination, which was previously confirmed by the Court. Previously, under the Consumer Protection Act, 1986, there were Rules, 2017 and Rules, 2019 in some states, including Maharashtra, that provided for a written examination and viva voce.

The Supreme Court finds no justification for doing away with the written examination while framing the new Rules, 2020. Therefore, the Supreme Court agrees with the High Court's view that Rule 6(9) of the Rules, 2020 is unconstitutional, arbitrary, and violative of Article 14 of the Constitution of India, especially since it goes against earlier decisions of the Court without justification.

The Court observed that Section 4(1) of the Rules, 2020 allows a person who is eligible to be appointed as a district judge (with a minimum experience of 7 years) to be appointed as President of the District Commission, but Section 4(2)(c) mandates a minimum experience of 15 years for appointment as a Member, which is violative of Article 14 of the Constitution.

Similarly, under Section 3(2)(b) of the Rules, a presiding officer of a court with a minimum experience of 10 years is eligible to become President of the State Consumer Commission, and even a judge of the High Court (present or former) is qualified for the appointment of the President. However, providing a minimum experience of 20 years under Rule 3(2)(b) is arbitrary and violative of Article 14 of the Constitution.

The Court agreed with the High Court that these provisions are unconstitutional, arbitrary, and violative of Article 14 of the Constitution of India. The Court also noted that in a previous case (Madras Bar Association v. Union of India), it had directed to consider a minimum experience of 10 years, after detailed reasoning. Thus, the Court saw no reason to interfere with the impugned judgment and order passed by the High Court.

The Supreme Court of India has directed the Central and State Governments to amend the Consumer Protection Rules, 2020 to reduce the required years of experience to 10 years for the appointment of President and Members of the State Commission and District Commission. This is in response to the court striking down the previous requirement of 20 years and 15 years of experience, respectively. Until the necessary amendments are made, the court has directed that a person with a bachelor's degree.

The Secretary Ministry of Consumer Affairs Vs. Dr. Mahindra Bhaskar Limaye & Ors.