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

National Commission

The National Commission is the highest level in the three-tier hierarchy of Consumer Forums.

Establishment of the National Commission

According to Section 53(1), the Central Government is responsible for establishing the National Consumer Disputes Redressal Commission.

Constitution of the National Commission

Section 54 states that the National Commission shall be constituted of the following:

• A President.
• A minimum of four members, with the exact number to be determined in consultation with the Central Government.

Appointment and Tenure of the President and Members

Qualifications of President and Members

• The President of the National Commission must be one of the following:
  • (a) A sitting or former judge of the Supreme Court, or a person qualified to be a Supreme Court judge.
  • (b) A sitting or former Chief Justice of a High Court.
  • (c) Someone who has held the position of Member or Judicial Member for at least three years.
  • (d) A person with at least 25 years of special knowledge and professional experience in fields like economics, law, finance, or public affairs, as deemed useful by the Central Government.
• A Member of the National Commission must be a person of ability, integrity, and standing, with at least 20 years of special knowledge and professional experience in relevant fields.
• Categories of Members: There are two types of members in the National Commission:
• Judicial Members:
  • A sitting or former judge of a High Court, or someone qualified to be a High Court judge.
  • A person who has held a judicial office in India for at least ten years.
• Non-Judicial Members:These members should have the same qualifications as other members.
  • If the President of the Commission is not a woman, at least one of the members must be a woman.

Method of Recruitment

• The President and Members of the National Commission are selected and appointed based on specific rules.
• Appointment of President: The President is appointed by the Central Government after consulting with the Chief Justice of India.
• Selection Committee for Members:A Search-cum-Selection Committee is responsible for selecting members. It consists of:
  • A Supreme Court Judge nominated by the Chief Justice of India (Chairperson).
  • Secretary of the Government of India, Ministry of Law and Justice (Department of Legal Affairs).
  • Secretary of the Government of India, Ministry of Consumer Affairs.
  • Two experts nominated by the Central Government.

Term of Office

• Term Duration: The President and members of the National Commission serve for a term specified by the Central Government, not exceeding five years from the date of assuming office.
• The term is set at three years according to the Tribunal, Appellate Tribunal Rules, 2017.
• Re-appointment: They are eligible for re-appointment.
• Age Limit: President must retire by age seventy, and other members by age sixty-seven.
• Retirement Age: President retires at seventy, and members at sixty-seven.

Vacancy

A vacancy in the office of the President or a member of the National Commission can occur under the following circumstances:

• Expiry of Term: The term of office of the President or member may come to an end upon the expiry of the specified term.
• Death: If the President or member passes away, their position becomes vacant.
• Resignation: A vacancy may occur if the President or member voluntarily resigns from their position.
• Removal: The President or member may be removed from office, leading to a vacancy.

Resignation

• The President or a Member of the National Commission can resign from their position by submitting a written resignation letter addressed to the Central Government.
• Upon resignation, the President or Member will continue to hold office until one of the following occurs:
• Expiry of Notice Period: The resignation notice period of three months from the date of receipt of the resignation letter expires.
• Permission to Relinquish Office: The Central Government grants permission for the President or Member to relinquish office before the notice period ends.
• Successor Takes Office: A duly appointed successor assumes office.
• Expiry of Term: The term of office expires, whichever happens first.

Removal

The grounds for removal of a President or Member of the National Commission include:

• Insolvency: If the individual has been declared an insolvent.
• Criminal Conviction: If the individual has been convicted of an offence involving moral turpitude.
• Incapacity: If the individual becomes physically or mentally incapable of performing their duties.
• Financial Interest: If the individual acquires a financial interest that prejudicially affects their functions.
• Abuse of Position: If the individual abuses their position, making their continuance in office prejudicial to public interest.
• Proviso to Rule 7: Before removing the President or Member on grounds other than insolvency, they must be informed of the charges against them and given an opportunity to be heard.

Inquiry of Misbehaviour or Incapacity

• When there are allegations against the President or a Member of the National Commission, the Ministry of Consumer Affairs in the Central Government conducts a preliminary scrutiny of the complaint.
• Before initiating such scrutiny, certain conditions must be met:
  • Written Complaint: The allegation must be in the form of a written complaint.
  • Complaint to Central Government: The complaint must be made to the Central Government.
  • Nature of Allegation: The allegation must pertain to either misbehaviour or incapacity to perform the functions of the office.
  • Definiteness: The allegation must be definite and not vague.
• If the Central Government finds merit in the allegation after preliminary scrutiny, it refers the case to a Committee for inquiry.
• The Committee is not bound by the Code of Civil Procedure, 1908, but must follow principles of natural justice.
• After concluding the inquiry, the Committee submits a report to the Central Government, detailing findings, reasons for findings on each charge, and any observations on the case.

Jurisdiction

Original Jurisdiction(Section 58(1)(a)(i) and (ii))

• Section 58(1)(a) of the Consumer Protection Act gives the National Commission the authority to handle certain types of complaints.
• The National Commission can take on complaints where the value of goods or services involved is over ten crore rupees.
• It also deals with complaints about unfair contracts when the value exceeds ten crore rupees.
• Section 58(1)(a)(i) allows the Central Government to change the monetary limits for the National Commission's jurisdiction if necessary.

Territorial Jurisdiction

• The National Commission has jurisdiction over the entire country of India, except for the State of Jammu and Kashmir.
• However, the Consumer Protection Act only applies if the cause of action arises within India.
• If the cause of action occurs outside of India, the National Commission does not have jurisdiction to hear the case under this Act.

Example Case

• Gulab Hotchand Bhagchandaney vs. Egyptian Airlines: In this case, the complainant claimed that they were mistreated by Egyptian Airlines in Barcelona.
• The court ruled that since the cause of action occurred in Barcelona, the complaint could not be maintained in India under the Consumer Protection Act.

Appellate Jurisdiction(Section 58(1)(a)(iii) and (iv))

• Under Section 58(1)(a) of the Consumer Protection Act, the National Commission has the authority to hear and decide appeals against orders issued by:
• Any State Commission
• The Central Consumer Protection Authority

Revisional Jurisdiction(Section 58(1)(b))

Under Section 58(1)(b) of the Consumer Protection Act, the National Commission has the authority to:

• Call for records and issue appropriate orders in any consumer dispute that is either:
• Pending before a State Commission
• Has been decided by a State Commission

Grounds for Revision

• The National Commission can revise a State Commission's decision if it finds that the State Commission has:
• Exercised jurisdiction not granted by law
• Failed to exercise jurisdiction that was granted
• Acted illegally or with material irregularity in its jurisdiction

Review Jurisdiction(Section 60)

• The National Commission has the authority, under Section 60 of the Consumer Protection Act, to review any order it has passed.
• This can be done either on its own initiative or upon an application made by any party involved in the case.
• The review must be requested within 30 days of the order being issued and is based on the presence of an apparent error in the record.

Exercise of Jurisdiction Through Benches(Section 58(2) and (3))

• Section 58(2) of the Consumer Protection Act allows the National Commission's jurisdiction, powers, and authority to be exercised by Benches constituted by the President.
• A Bench may consist of one or more members as decided by the President, with the senior-most member presiding over the Bench.
• If there is a disagreement among Bench members, the majority opinion prevails.
• If members are equally divided, they state their differing points and refer the matter to the President for resolution.
• The President can either decide the points himself or refer them to other members for majority decision.
• Section 58(3) requires that opinions on references be given within two months of the reference date.