Consumer Commission (District Commission) | Law of Torts - CLAT PG PDF Download

District Commission [Sec. 28]

The Consumer Protection Act, 1986 outlined the composition of the District Forum and the State Commission. However, under the Consumer Protection Act, 2019, the qualifications, appointments, and service conditions for the Presidents and members of these Consumer Commissions are now largely determined by the Central Government through prescribed rules.

Establishment of the District Commission [Sec. 28(1)]

• According to Section 28(1) of the Consumer Protection Act, 2019, every state government is required to establish a District Consumer Disputes Redressal Commission, known as the District Commission, for each district within the state.
• States have the flexibility to set up more than one District Commission within a single district if deemed necessary.
• In cases where multiple District Commissions are established in a district, one will be designated as the Principal District Commission, while the others will be called Additional District Commissions.
• For instance, if a district has three District Commissions, one will be the Principal District Commission, and the others will be the I Additional District Commission and II Additional District Commissions.

Constitution of the District Commission

According to Section 28(2) of the Consumer Protection Act, each District Commission will be made up of:

• A President.
• Two or more members, with the exact number decided in consultation with the Central Government.

Appointment and Tenure of the President and Members

• The Central Government can set rules for the qualifications, recruitment, appointment procedure, term of office, resignation, and removal of the District Commission's President and members.
• The Consumer Protection (Qualification for Appointment, Method of Recruitment, Procedure of Appointment, Term of Office, Resignation and Removal of the President and Members of the State Commission and District Commission) Rules, 2020 were created by the Central Government under these powers.

Qualifications of President and Members

• The Presidentmust be a:
  • Sitting judge of a District Court
  • Former judge of a District Court
  • Qualified person to be a judge of a District Court
• A District Commission Membermust be:
  • At least 35 years old
  • A graduate from a recognized university
  • Possessing ability, integrity, standing, and
  • At least 15 years of special knowledge and professional experience in areas like consumer affairs, law, public affairs, economics, etc.
• If the President is not a woman, at least one member must be a woman to ensure a balanced perspective.

Disqualifications for Appointment as President or Member

• A person cannot be appointed as President or member if they have been convicted of a morally corrupt offense, declared insolvent, of unsound mind, removed from government service, or have a conflicting financial interest.

Method of Recruitment

• Appointments for the President and Members of the District Commission are made by the State Government based on recommendations from a Selection Committee.
• The Selection Committeeincludes:
  • Chairman: The Chief Justice of the High Court or a nominated High Court Judge.
  • Member: Secretary in charge of Consumer Affairs of the State Government.
  • Member: Nominee of the Chief Secretary of the State.
• The Secretary in charge of Consumer Affairs is the convener of the Committee.

Procedure for Appointment

• The State Government initiates the appointment process six months before a vacancy or immediately upon a vacancy occurring.
• Vacancies can arise due to retirement,death,resignation,removal, or the creation of a new post.
• Advertisements for vacancies are published in leading newspapers, inviting applications from eligible candidates.
• Received applications are scrutinized, and a list of eligible candidates is prepared for the Selection Committee.
• The Selection Committee considers all applications and may shortlist candidates based on its criteria.
• The Committee prepares a merit list and recommends candidates to the State Government.
• The State Government verifies the credentials of the recommended candidates before appointment.
• Selected candidates must provide a certificate of physical fitness and an undertaking regarding financial interests before appointment.

Term of Office

• Members of the District Commission serve a term of 4 years or until the age of 65 years, whichever comes first.
• Members are eligible for reappointment for one more term of 4 years, subject to the age limit of 65 years, based on the recommendation of the Selection Committee.

Vacancy

• Vacancies in the District Commission can occur due to the expiry of a member's term, death, resignation, or removal.

Resignation

• The President or a Member can resign by writing to the State Government.
• They will continue to hold office until the earliest of the following:
  • Three months from the resignation notice date
  • State Government permission to resign
  • Successor's appointment
  • Expiry of term

Removal

• Grounds for removal of a President or Memberinclude:
  • Insolvency
  • Conviction of a moral turpitude offence
  • Physical or mental incapacity
  • Prejudicial financial interest
  • Abuse of position
• Before removal, the individual must be informed of the charges and given a chance to be heard.

Inquiry of Misbehaviour or Incapacity

• Allegations against a President or Member of a District Commission undergo preliminary scrutiny by the State Government.
• Conditions for scrutiny:
  • Written complaint to the State Government
  • Allegation of misbehaviour or incapacity
  • Definite (not vague) allegation
• If the allegation has merits, the State Government refers the case to the State Commission for inquiry.
• The State Commission completes the inquiry within three months or as specified by the National Commission.
• The State Commission follows principles of natural justice and regulates its own procedure.
• After the inquiry, the State Commission submits a report to the State Government with findings and reasons for each charge.

Terms and Conditions of Service

Salary and Allowances

• The President is entitled to a salary and allowances similar to those of a District Judge in the super time scale of pay.
• A Member receives a salary equal to the minimum pay of a Deputy Secretary of the State Government, along with other applicable allowances.
• If the President or Member is receiving a pension, their salary is reduced by the amount of the pension.
• Salaries for the President and Members increase by 3% annually.

Jurisdiction

Original Jurisdiction

• The District Commission has the authority to handle complaints with a claim value of up to Rs. 1 crore.
• It can entertain complaints where the value of goods or services does not exceed one crore rupees.
• The Central Government can adjust the pecuniary jurisdiction of the District Commissions.

Territorial Jurisdiction

• Each District Commission has specific geographical limits for exercising jurisdiction.
• If there is one opposite party, they must ordinarily reside,carry on business,have a branch office, or personally work for gain within the District Commission's jurisdiction.
• If there are multiple opposite parties, all or some must meet the same criteria.
• The complainant must reside or personally work for gain within the jurisdiction.
• The cause of action must arise wholly or partly within the District Commission's jurisdiction.

Review Jurisdiction

• The District Commission can review its own orders if there is an apparent error in the record.
• Reviews can be initiated by the commission itself or upon application by any party within thirty days of the order.

State Commission [Sec. 42]

Following the District Commission in the hierarchy of Consumer Redressal commissions established under the Act, the State Commission holds a significant position.

Establishment of the State Commission [Sec. 42(1)]

• According to Sec. 42(1), it is mandatory for every State Government to set up a State Consumer Disputes Redressal Commission, referred to as the State Commission, within the state.

Constitution of the State Commission [Sec. 42(3)]

• As per Sec. 42(3), each State Commission is required to comprise:
  • a President, and
  • a minimum of four members, with the maximum number of members determined in consultation with the Central Government.

Appointment and Tenure of the President and Members [Sec. 43]

• Sec. 43 empowers the Central Government to establish rules through notifications regarding the following aspects:
  • Qualifications
  • Method of recruitment
  • Appointment procedure
  • Term of office
  • Resignation
  • Removal of the President and members of the State Commission
• In accordance with the authority granted by Sec. 29, the Central Government has formulated the Consumer Protection (Qualification for Appointment, Method of Recruitment, Procedure of Appointment, Term of Office, Resignation and Removal of the President and Members of the State Commission and District Commission) Rules, 2020.

Qualifications of President and Members [R. 3]

• Rule 3 outlines the qualifications and appointment criteria for the President and members of the State Commission.
• According to sub-Rule (1):
  • The President of the State Commission must be either a sitting judge of a High Court or a former judge of a High Court.
• As per sub-Rule (2), the Member of the State Commission must meet the following criteria:
  • Be at least 40 years old.
  • Have a minimum of ten years' experience as a presiding officer of a District Court or an equivalent tribunal, or a combination of such service in the District Court and tribunal.
  • Alternatively, be a graduate from a recognized University with special knowledge and professional experience of not less than fifteen years in fields such as consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health, or medicine.
  • Possess ability, integrity, and standing.
• Therefore, there are two categories of members in a State Commission:
  • Judicial Members
  • Non-Judicial Members
• The proviso to Sec. 3(2)(a) limits the number of judicial members to 50%. This means that no more than 50% of the members of a State Commission can be judicial members, while more than 50% can be non-judicial members.
• If the President of the Commission is not a woman, at least one of the members of the Commission must be a woman.

Disqualifications for Appointment as President or Member

• Rule 5 outlines the conditions under which individuals are disqualified from being appointed as President or Members of the State Commission.

Method of Recruitment [R. 6]

• The process of selecting and appointing the President and Members of a State Commission is identical to that of the President and Members of a District Commission.

Procedure for Appointment [R. 6]

• The procedure for selecting and appointing the President and Members of a State Commission mirrors that of the President and Members of a District Commission.

Term of Office [R. 10]

• The terms of office for the President and Members of a State Commission are the same as those for the President and Members of a District Commission.

Vacancy

• The rules concerning vacancies in the offices of the President or Members of a State Commission are the same as those for the members of a District Commission.
• The only distinction is that in cases of removal of the President or a Member of the State Commission, the inquiry will be conducted by the National Commission.

Terms and Conditions of Service

• Sec. 30 allows the Central Government to set rules for the salary, allowances, and other terms of service for the President and members of the District Commission.
• The Consumer Protection Model Rules, 2020 govern these terms and conditions.

Salary and Allowances

• President of the State Commission: Receives a salary and allowances similar to a sitting High Court judge.
• Member of the State Commission: Receives a salary equivalent to the minimum pay of an Additional Secretary in the State Government, along with other allowances.
• If the President or Member is also receiving a pension, their salary is reduced by the amount of the pension.
• Salaries for the President and Members increase by 3% annually.

Jurisdiction

Original Jurisdiction

• Pecuniary Jurisdiction: The State Commission can handle complaints where the value of goods or services exceeds one crore rupees but does not exceed ten crore rupees. It can also address complaints against unfair contracts where the value does not exceed ten crore rupees.
• The Central Government can adjust the pecuniary jurisdiction of the State Commissions if necessary.

Territorial Jurisdiction

• The State Commission determines territorial jurisdiction using the same principles as the District Commission.

Appellate Jurisdiction

• The State Commission can hear appeals against orders from any District Commission within the State.

Revisional Jurisdiction

• The State Commission can review records and issue orders in consumer disputes:
• Pending before any District Commission.
• Decided by any District Commission within the State.
• Grounds for revision include:
  • Exercising jurisdiction not granted by law.
  • Failing to exercise granted jurisdiction.
  • Acting illegally or with material irregularity.

Review Jurisdiction

• The State Commission can review its own orders if there is an obvious error in the record, either on its own or by request from any party within 30 days of the order.

Exercise of Jurisdiction Through Benches

• The State Commission's jurisdiction and powers can be exercised by Benches constituted by the President.
• The senior-most member presides over the Bench.
• If Bench members disagree, the majority opinion prevails.
• In case of a tie, the President resolves the disagreement.