TaxTMI 
TaxTMI 
2023 (3) TMI 1379
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....ition 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 State Commission unless he possesses a bachel....
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....t 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- Chairperson; (b) Secretary in charge of Consumer Affairs of the State Government - Member; (c) Nominee of the Chief Secretary of the State--Member. (2)....
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....ules, 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 (JMFC), the candidates are tested by written examination and viva voce. (e) The Draft model Rules approved by this Hon'ble Court and accepted by all the parties are not adhered with. Hence, contrary to the directions of this Hon'ble Court. (f) The transparency and s....
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....ce 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 as well as a great deal of subjective, bureaucratic and political interference, and finally it will result in denial of justice which will be in violation of Article 14 of the Constitution of India. That while holding the aforesaid provisions unconstitutional, unreasonable and arbitrary, the High Cou....
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....t 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 consider as to whether Rules or guidelines can be made which would reduce the discretion available to the Search-cum-Selection Committees while carrying out appointments. It is submitted that in the course of discussions between the States, it was observed that most states were not in favour of conducting written tests. It is submitted that based on the discussion in the ....
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.... 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 further submitted that based on the further discussions in the meeting held on 13.01.2023 between Union of India and all the States/UTs to consider the uniform measures to guide the Selection Committees in the exercise of their selection processes, it has been proposed that the following proviso, to provide for the issuance of necessary instructions to guide the discretion available to the Selection Committee, could ....
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....rience. 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 overall consideration of the deliberations, it appears that the conduct of a written test which has several handicaps will not be feasible and shall not be most suitable measure for the purpose of selection. 4. While opposing the present appeals Dr. Uday Prakash Warnjikar and Dr. Tushar Mandalekar, learned Counsel appearing on behalf of the respective Respondents have vehemently submitted that in the facts and circumstances of the case the High Court has not committed any error in declaring Rule....
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....ssess 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 (hereinafter referred to as the Rules, 2017). It is further submitted that the State of Maharashtra also adopted and approved the model Rules on 24.05.2019 in exercise of powers conferred under the provisions of the Consumer Protection Act, 1986. It is further submitted that even prior thereto, model Rules 2012 were already in existence in the State of Maharashtra Under Section 30 of the Consumer Protection Act, 1986 and the said Rules already had the provision of written examination of 100 marks for aspiring candidates/applicants for the post of Presi....
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....e 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 have the person's rights adjudicated by a forum which exercises judicial powers in an impartial and independent manner, consistent with the recognized principles of adjudication." It is submitted that in the present case Under Rule 6(9) the Central Government has granted complete discretion to determine the selection procedure without laying down criteria and standards and the same is unreasonable and arbitrary. 4.9. It is further submitted that even the said provision is also unreasonable on the ground that there is no check and balance Under Rules....
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....inting 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 having experience of minimum 20 years for appointment of Member in the State Commission Under Rule 3(2)(b) and criteria of having experience of minimum 15 years for appointment of Member in District Commission as per Rule 4(2)(c) is absolutely arbitrary and illegal and unconstitutional and contrary to the provisions of Article 217 and 233 of the Constitution of India. It is further submitted that even the same is violative of the judgment and order passed by this Court in the case of Madras Bar Association (supra). 4.14. It is submitted that the High Court has rightly quashed the provision of ....
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....intment, 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-- xxx (b) a bachelor's degree from a recognised university and is a person of ability, integrity and standing, and has special knowledge and professional experience of not less than twenty years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine: 4. 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....
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....he 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 and zeal; (iii) appointment of practising lawyers as Presiding Officers of District Fora; and (iv) political and bureaucratic interference in appointments. Many of the non-judicial members attend to the place of work only to sign orders which have been drafted by the Presiding Officer. 5. The Committee has furnished concrete examples of how bureaucratic and political influence has marred the selection process as a result of which the functioning of consumer fora is detrimentally affected. Three instances furnished in the Report of the Committee provided a telling example of the state of affairs: (15) The Committee could make out that there has been considerable bureaucratic and political influence/interferen....
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....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 Commission; 28.3. The Union Government shall while framing the model Rules have due regard to the formulation of objective norms for the assessment of the ability, knowledge and experience required to be possessed by the members of the respective fora in the domain areas referred to in the statutory provisions mentioned above. The model Rules shall provide for the payment of salary, allowances and for the conditions of service of the members of the consumer fora commensurate with the nature of adjudicatory duties and the need to attract suitable talent to the adjudicating bodies. These Rules shall be finalised upon due consultation with the President of the National Consumer Disputes Redressal Commission, within the period stipulated above; 28.4. Upon ....
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.... 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 Service) Ordinance, 2021 which fell for consideration before this Court in Writ Petition (C) No. 502/2021 decided on 14.07.2021 - 2021 SCC Online SC 463. In the said decision this Court also considered the permissibility of legislative override. After considering catena of decisions of this Court on permissibility of legislative override this Court observed and held in paragraphs 42 to 44 as under: "42. The judgment of this Court in Madan Mohan Pathak v. Union of India (1978) 2 SCC 50 requires a close scrutiny as it was adverted to and relied upon by both sides. A writ petition was filed in the High Court of Calcutta for a mandamus directing the Life Insurance Corporation (LIC) to act in accordance with the terms of settlement dated 24.01.1974 read wi....
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....ourt 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 that "the law does not permit the legislature to take away what has been granted in implementation of the Court's decision. Such a course is impermissible." This Court in Cauvery Water Disputes Tribunal 1993 Supp (1) SCC 96 (2) declared the ordinance which sought to displace an interim order passed by the statutory tribunal as unconstitutional as it set side an individual decision inter partes and therefore, amounted to a legislative exercise of judicial power. When a mandamus issued by the Mysore High Court was sought to be annulled by a legislation, this Court quashed the same in S.R. Bhagwat v. State of Mysore (1995) 6 SCC 16 on the ground that it was impermissible legislative exercise. Setting at naught a decision of the Court without removing the defect pointed out in the judgment ....
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....020 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 Selection Committee is empowered with the uncontrolled discretionary power to determine its procedure to recommend candidates to be appointed as President and Members of the State and District Commission. The transparency and selection criteria are absent Under Rule 6(9). In absence of transparency in the matter of appointments of President and Members and in absence of any criteria on merits the undeserving and unqualified persons may get appointment which may frustrate the object and purpose of the Consumer Protection Act. It cannot be disputed that the Commissions are empowered with the powers of court and are quasi-judicial authorities and empowered to discharge judicial powers with the adequate powers of the court including civil and criminal. Therefore, the standards expected from the members of the tribunal should be as nearly as p....
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.... 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 having a minimum 20 years' experience for appointment as a Member in State Commission Under Rule 3(2)(b) and having a minimum 15 years' experience for appointment as a Member in District Commission Under Rule 4(2)(c). 7.1. It is required to be noted that under provision 4(1) of Rules, 2020, a person who is eligible to be appointed as a district judge (having minimum experience of 7 years) is qualified to be appointed as President of the District Commission but in order to be appointed as a Member, Section 4(2)(c) mandates a minimum experience of 15 years which is rightly held to be violative of Article 14 of the Constitution. 7.2. Similarly providing 20 years' experience Under Rule 3(2)(b) also rightly held to be arbitrary and violative of Article 14 of the Constitution. It is required to be noted that Under Section 3(2)(b), a ....
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....nbsp; 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 Governments have also to come with an amendment in the Rules, 2020 to provide 10 years' experience to become eligible for appointment of President and Member of the State Commission as well as the District Commission instead of 20 years and 15 years respectively, provided in Rule 3(2)(b) and Rule 4(2)(c) which has been struck down to the extent providing 20 years and 15 years of experience, respectively. Till the suitable amendments are made in 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 above, in exercise of powers Under Article 142 of the Constitution of India and to do complete justice, we direct that in future and hereinafter, a person having bachelor's degree from a recognized University and wh....