TaxTMI 
TaxTMI 
2023 (3) TMI 1379
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....erest Litigation No. 11/2021 and Writ Petition No. 1096 of 2021, by which, the Division Bench of the High Court has struck down and has 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 (hereinafter referred to as the Rules, 2020) as arbitrary, unreasonable and violative of Article 14 of the Constitution of India, the Ministry of Consumer Affairs, Union of India and State of Maharashtra have preferred the present appeals. 2. In exercise of powers conferred by Sections 29 and 43, read with clauses (n) and (w) of Sub-section (2) of Section 101 of the Consumer Protection Act, 2019 (hereinafter referred to as the Act, 2019), the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs) framed the Rules, 2020. 2.1. Rule 3 of Rules, 2020 provides for qualifications for appointment of President and members of the State Commission. Rule 3(2)(b) provided that a person shall not be qualified for appointment as a member of the ....
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....Qualifications for appointment of President and member of District Commission.-(1) A person shall not be qualified for appointment as President, unless he is, or has been, or is qualified to be a District Judge. (2) A person shall not be qualified for appointment as member unless he-- (a) is of not less than thirty-five years of age; (b) possesses a bachelor's degree from a recognised University; and (c) is a person of ability, integrity and standing, and having special knowledge and professional experience of not less than fifteen years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine. (3) At least one member or the President of the District Commission shall be a woman. 6. Procedure of appointment.-(1) The President and members of the State Commission and the District Commission shall be appointed by the State Government on the recommendation of a Selection Committee, consisting of the following persons, namely:- (a) Chief Justice of the High Court or any Judge of the High Court nominated by him- Chairper....
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....intment, the selected candidate shall furnish an undertaking that he does not and will not have any such financial or other interest as is likely to affect prejudicially his functions as a President or member. 2.5. The validity of the aforesaid rules, namely, Rules 3(2)(b), 4(2)(c) and 6(9) were challenged before the High Court by the original writ Petitioner on the following grounds: (a) Uncontrolled discretion and excessive power to the selection committee to determine its procedure to recommend candidates to be appointed is arbitrary, unreasonable and in violation of Article 14 of the Constitution of India. (b) Considering the nature of work, the candidate's competency needs to be tested before being recommended for the appointment to discharge judicial functions. Therefore, the candidates who are being appointed must have a legal background. (c) In the absence of the appointment of competent candidates, the object of the Consumer Protection Act is likely to be frustrated. (d) The president and members of the State and District Commission are empowered with the powers of the Court. In the appointment of Judicial Magistrate First Class (....
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.... the Act, 2019, the selection without holding written examination, but, only on the basis of viva voce, would result into selection of unsuitable candidates which will further result in denial of justice. It was also argued on behalf of the original writ Petitioners that prescribing minimum experience of 20 years and 15 years for President and Members of State and District Commission respectively, is contrary to the directions issued by this Court in the case of Madras Bar Association v. Union of India and Anr. : (2021) 7 SCC 369. That thereafter, by the impugned common judgment and order the High Court has declared Rule 3(2)(b), Rule 4(2)(c) and Rule 6(9) of the Rules, 2020 as ultra-virus and unconstitutional, unreasonable, arbitrary and violative of Article 14 of the Constitution of India and contrary to the observations and directions issued by this Court in the case of UPCPBA (supra). The High Court has specifically observed that granting complete discretion under the Rules 2020 to the Selection Committee to determine its own procedure would result in creating a situation which has been narrated in the case of UPCPBA (supra) and will again lead to wide variations in standards a....
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.... It is made clear that we have not dealt with the validity of appointment made of the President of State Commission, Maharashtra State; ix. No orders as to costs. 2.7. The impugned common judgment and order passed by the High Court is the subject matter of present appeals. 3. Shri R. Venkataramani, learned Attorney General for India has submitted that after the matters were heard by this Court on 17.11.2022 and 18.11.2022, where this Court was of the prima facie view that Rule 6(9), which deals with the procedure of appointment, left too much discretion in the hands of the selection committee, and that there ought to have been some objective criteria on the basis of which the fitness and suitability of candidates be tested, such as a written examination. It is pointed out that based on the observations that fell from this Court on the previous dates of hearing, the matter was considered by the Government and pursuant thereto, a meeting was called between the Union of India and all the State governments to consider the desirability and feasibility of conducting a written examination for appointment to the State and District Commissions, or in the alternate, to conside....
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....instance, the number of applications received in the smaller states such as Assam or Goa or Sikkim are very low, and sometimes even lesser than the number of posts advertised. A written examination may lead to greater difficulties in filling up the vacant posts. (vii) Prescribing a uniform requirement of a written examination across tribunals is also not considered desirable, as each tribunal has its own eligibility criteria and different categories of persons would fall in their zone of consideration. For instance, several posts can only be manned by retired judges, and it would not be appropriate to subject judges of the Supreme Court or the High Courts to a written examination. Equally, very few people are actually eligible to be appointed as technical members to specialised tribunals such as TDSAT or APTEL, and eminent persons in the field of telecom or electricity may not wish to write examinations to leave lucrative careers in their areas of expertise. This would lead to the tribunals losing out on desirable persons, who may otherwise wish to join these tribunals in the spirit of public service. 3.1. Shri R. Venkataramani, learned Attorney General for India has fu....
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....the recruitment conditions ­ 10 marks (ii) For additional experience of every 2 years 1 mark (maximum 5 marks). In case of experience of fewer than 2 years, maximum marks for experience of 2 years i.e. 1 mark may be apportioned according to the number of years of experience. Experience of fewer than six months may be ignored for this purpose. 2. Higher Educational Qualification s 15 (i) For Graduate ­ 6 marks (ii)For Post Graduate - 6 marks (iii) For PhD. ­ 3 marks 3. Prior public service rendered 10 For every 4 years of regular service rendered in or under the Central/State Governments and Constitutional bodies ­ 2 marks (maximum 10 marks) 3.3. It is submitted that on an over....
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....dates are tested by written examination and viva voce, the similar procedure to be adopted for appointment in the District and State Commissions; (e) The transparency and selection criteria are absent in the Rules, 2020; (g) In absence of transparency in the matter of appointments of Chairman and Members, there is strong apprehension of political and executive interference. 4.3. It is further submitted that even the Law Commission in its 272nd Report suggested that the members of the newly constituted tribunals should possess the qualifications akin to the judges of the High Court and District Court. The Report further recommended uniformity in the appointments. 4.4. It is further submitted that as such this Court in the case of UPCPBA (supra) directed to frame model Rules under the Consumer Protection Act, 1986. It is submitted that by the said judgment, model Rules were approved by this Court and accepted by all the parties. It is submitted by adopting the model rules, many states notified the Consumer Protection (Appointment, Salary, Allowances and Conditions of Service of President and Members of State Commission and District Forum) Rules, 2017 (hereinaf....
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....Commissions are empowered with the powers of JMFC. It is submitted that despite the above when the Rules, 2020 are framed by the Central Government in exercise of powers Under Section 101 of the Act, 2019 which provides for the impugned Rule 3(2)(b) and Rule 4(2)(c) and Rule 6(9) made the things worse than the prevailing, prior to Rules, 2020. 4.7. It is further submitted that therefore, when the State and the District Commissions are performing the quasi-judicial functions and judicial functions and exercising the powers of the Court, to test the competence of the candidate written examination and viva-voce would be necessary. Only interviews of the aspiring candidates would lead to political interference and undeserving results through such a selection process. 4.8. It is further submitted that Rule 6(9) provides uncontrolled discretion to the Selection Committee. Uncontrolled discretion in the matter of recommendations of candidates to be appointed to discharge judicial functions is in clear violation of Article 14 of the Constitution of India. It is submitted this Court in the case of Madras Bar Association (supra) declared that "Article 14 clearly includes a right to hav....
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....he judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution. b) The test for determining the validity of a validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgment pointing out the defect is removed. c) Nullification of mandamus by an enactment would be impermissible legislative exercise [See : S.R. Bhagwat (supra)]. Even interim directions cannot be reversed by a legislative veto [See : Cauvery Water Disputes Tribunal (supra) and Medical Council of India v. State of Kerala]. d) Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the Rule of law and of Article 14 of the Constitution of India. 4.13. It is further submitted that even the criteria of....
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....Association (supra) : (2021) 7 SCC 369. 4.16. Making the above submissions and relying upon the above decisions, it is prayed to dismiss the present appeals. 5. Heard Shri R. Venkataramani, learned Attorney General for India, appearing on behalf of the Appellant(s) and Dr. Uday Prakash Warunjikar and Dr. Tushar Mandalekar, learned Counsel appearing on behalf of the respective Respondent(s). 6. By the impugned judgment and order the High Court has declared Rule 3(2)(b) and 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 unconstitutional, arbitrary, and violative of Article 14 of the Constitution of India. Rule 3(2)(b) and Rule 4(2) (c) and Rule 6(9) of Rules, 2020 which are declared to be unconstitutional read as under: 3. Qualifications for appointment of President and members of the State Commission.-- xxx (2) A person shall not be qualified for appointment as a member unless he is of not less than forty years of age and possesses-- ....
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....adequate and trained manpower and "lack of qualified members" in the adjudicating bodies. This Court in paragraphs 4 to 6 noted and observed as under: "4. The quality of presiding members, especially of non-judicial members at the State and district levels is poor. One of the reasons is that the remuneration which is being paid to non-judicial members of consumer fora varies from State to State and is too meagre to attract qualified talent. Most of the non-judicial members are not even capable of writing or dictating small orders. At certain places non-judicial members act in unison against the Presiding Officer, while passing orders contrary to law, damaging the reputation of the adjudicating body. The Presidents, as a result, prefer a situation where such non-judicial members absent themselves from work if only so that judicial work can be carried out by the Presiding Judge impartially and objectively. Many non-judicial members do not maintain punctuality and others attend to work sporadically once or twice a week. The Committee has observed that the problem lies in -- (i) absence of proper remuneration; (ii) appointment of former judicial officers who lack motivation an....
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....s". 6. The selection of persons as Presiding Officers and as Members of the fora lacks transparency without a fixed criteria for selection. The Committee has, in our view with justification, proposed that a written test should be conducted to assess the knowledge of persons who apply for posts in the District Fora. Issues of conflict of interest also arise when persons appointed from a local area are appointed to a District Forum in the same area. Ultimately in paragraph 28, this Court issued the following directions: 28.1. 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; 28.2. 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 C....
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.... of service of President and Members of the State Commission and District Forum) Rules, 2017. Rules, 2017 which were adopted provided that in every cases, the selection of Members of the District Fora and State Commission shall be on the basis of a written test of two papers (Rules 5 and 7). It appears that even the State of Maharashtra also adopted and approved the model Rules on 24.05.2019 and framed Rules, 2019 which had a written examination of 200 marks. It provided that State Commission shall hold the final examination of 250 marks for the post of Members. Out of 250 marks, 200 marks shall be for written examination and 50 marks shall be for viva-voce examination. In the case of Madras Bar Association (supra) decided on 27.11.2020 - (2017) (sic 2021) 7 SCC 369, this Court directed that while considering Tribunal/Appellate Tribunal and other Authorities (Qualifications, Experience and other conditions of Service of Members), the Rules, 2020 shall be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the tribunals. That thereafter, the Central Government framed Tribunal Reforms (Rationalisation and Conditions of Ser....
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....osition that mandamus cannot be set aside by a legislative act. Justice Hansaria was not in agreement with such view. Relying upon the judgment of this Court in A.V. Nachane v. Union of India (1982) 1 SCC 205, Justice Hansaria held that the legal stand taken by Justice Beg in the Madan Mohan Pathak case had received majority's endorsement and it was because of this that retrospectivity given to the relevant Rule assailed in A.V. Nachane was held to have nullified the effect of the writ and was accordingly invalid. In view of the difference of opinion, the matter was referred to a larger bench. We are informed by the leaned Amicus Curiae that the difference of opinion could not be resolved as the case was settled out of court. 43. In Virender Singh Hooda (2004) 12 SCC 588, this Court did not accept the contention of the Petitioners therein that vested rights cannot be taken away by retrospective legislation. However, it was observed that taking away of such rights would be impermissible if there is violation of Articles 14, 16 or any other constitutional provision. The appointments already made in implementation of a decision of this Court were protected with the reason....
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.... of separation of powers, the Rule of law and of Article 14 of the Constitution of India. 6.3. In the said decision, this Court struck down and declared that first proviso to Section 184(1) of the Finance Act, 2017, which provided for 50 years minimum age for appointment as Chairman or Member as unconstitutional by observing that the said first proviso to Section 184(1) is in violation of the doctrine of separation of powers as the judgment of this Court in the case of Madras Bar Association v. Union of India and Anr. - MBA III - (2017) 7 SCC 369 decided on 27.11.2020, has been frustrated by an impermissible legislative override. 6.4. Taking into consideration the aforesaid decisions, the 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 (supra) and the Madras Bar Association (supra) are unconstitutional and arbitrary. 6.5. Even otherwise also we are of the opinion that Rule 6(9) lacks transparency and it confers uncontrolled discretion and excessive power to the Selection Committee. Under Rule 6(9), the Selecti....
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....xamination and viva voce, which was under the Consumer Protection Act, 1986. 6.8. The Consumer Protection Act, 1986 has been repealed and the Consumer Protection Act, 2019 has come into force w.e.f. 24.07.2020 with a sole intention to provide adequate safeguards to the consumers and the pecuniary jurisdiction of the District Fora and State Commissions are enhanced substantially. However, there is no substantial change in the scheme with respect to the adjudication of the consumer disputes. No justification at all is shown to do away with the written examination while framing the Rules, 2020 under the Consumer Protection Act, 2019. Therefore, as rightly observed by the High Court, the Rule 6(9) of the Rules, 2020 is unconstitutional, arbitrary and violative of Article 14 of the Constitution of India, more particularly, when the same is wholly impermissible to override/overrule the earlier decisions of this Court and that too without any justification. We are in complete agreement with the view taken by the High Court. 7. Now so far as the Rule 3(2)(b) and Rule 4(2)(c) of the Rules, 2020 are concerned, the High Court has rightly quashed the said provisions which provided for ha....
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....er Model Rules, 2017 and to make the appointment of President and Members of the State Commission and the District Commission on the basis of the performance in written test consisting of two papers of 100 marks each and 50 marks for viva voce and the written test consisting of two papers may be as per the following schemes: Paper Topics Nature of test Max.marks Duration Paper­I (a) General Knowledge and current affairs (b) Knowledge of Constitution of India (c) Knowledge of various Consumers related Laws as indicated in the Schedule Objective Type 100 2 hours Paper-II (a) One Essay on topics chosen from issues on trade and commerce consumer related issues or Public Affairs. (b) One case study of a consumer case for testing the abilities of analysis and cogent drafting of orders. Descriptive type 100 3 hours 8.1. The Central Government and the concerned State Gov....