Pecuniary Jurisdiction Under Consumer Protection Act 2019 Depends on 'Consideration Paid', Not Claimed Compensation: UP State Consumer Commission - 2025-08-20

UP Consumer Commission Clarifies Pecuniary Jurisdiction Under 2019 Act, Returns Insurance Claim Case to District Forum

Kanpur, U.P. - The Uttar Pradesh State Consumer Disputes Redressal Commission, in a significant ruling, has clarified the criteria for determining pecuniary jurisdiction under the Consumer Protection Act, 2019. The Commission, presided over by Hon'ble Mr. Justice Ajai Kumar Srivastava (President) and Hon'ble Mrs. Sudha Upadhyay (Member), held that its jurisdiction is determined solely by the "value of consideration paid" by the consumer, not the total value of the claim including compensation sought.

The bench consequently returned a complaint filed by M/S Suresh Collection against United India Insurance Company Limited, directing the complainant to file the case before the appropriate District Consumer Commission.

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Background of the Case

M/S Suresh Collection, a wholesale clothing business owned by Mangha Ram Tejwani, had filed a complaint seeking over ₹1.6 crore from United India Insurance Company Limited. The complainant's shops, located in Kanpur's Masood Complex, were destroyed in a massive fire on March 30, 2023. At the time of the incident, the business was insured under a "United Bharat Sukshma Udyam Suraksha Policy" with a sum insured of ₹75,00,000. The premium paid for this policy was ₹7,684.

Following the fire, the insurance company's surveyor initially proposed a claim settlement of ₹18,70,000, and later revised it to ₹37,45,000, representing a 50% deduction. Aggrieved by this, M/S Suresh Collection approached the State Commission seeking the full insured amount of ₹75 lakh, along with ₹60 lakh for business loss, ₹25 lakh for mental anguish, and additional litigation costs.

Arguments on Jurisdiction

The primary legal question before the Commission was its own pecuniary jurisdiction to hear the complaint.

• Insurer's Argument: Counsel for United India Insurance, Shri Prasoon Kumar Rai, argued that the State Commission lacked jurisdiction. He pointed out that under the Consumer Protection Act, 2019, jurisdiction is determined by the consideration paid for the goods or services. Since the complainant paid only ₹7,684 as the insurance premium, the case falls squarely within the jurisdiction of the District Commission.

• Complainant's Argument: The complainant’s counsel, Shri Sameer Dhingra, countered that while the premium was small, the total value of the relief sought—including the insured sum of ₹75 lakh and other compensations—was substantial, thus bringing the matter within the State Commission's purview.

Commission's Legal Analysis and Distinction Between 1986 and 2019 Acts

The Commission meticulously analyzed the legislative shift from the Consumer Protection Act, 1986, to the new Act of 2019. It highlighted a crucial difference in the wording of the jurisdictional clauses:

• 1986 Act (Section 17): Jurisdiction was based on the "value of the goods or services and the compensation, if any, claimed ."
• 2019 Act (Section 47): Jurisdiction is based on the "value of the goods or services paid as consideration ."

The Commission noted, "It is clear that the legislature has intentionally omitted the words 'compensation, if any, claimed' in Section 47 of the 2019 Act." This legislative change, the bench emphasized, shifts the basis of pecuniary jurisdiction from the potential claim value to the actual amount paid by the consumer.

The Commission cited the Supreme Court's judgment in Rutu Mihir Panchal & Ors Versus Union of India & Ors , which upheld the constitutionality of this legislative shift. The Supreme Court had acknowledged that this change means that for cases like insurance claims, where premiums are often low, most disputes will now be adjudicated by the District Commissions.

Final Decision

Based on this clear legal interpretation, the Commission concluded that the amount paid as consideration by the complainant was only ₹7,684. Therefore, the complaint did not meet the monetary threshold for the State Commission's jurisdiction.

The judgment stated, "Any amount sought under the head of 'compensation, if any, claimed' is not relevant and considerable for the purpose of pecuniary jurisdiction... Accordingly, this Commission is of the considered opinion that the present complaint is not maintainable before this Commission."

The Commission ordered the complaint to be returned to the complainant, granting them the liberty to file it before the appropriate District Consumer Commission. Both parties were directed to appear before the concerned District Commission on August 25, 2025.