The Supreme Court has held that auditing and assessing the implementation of a statute is an integral part of the Rule of Law. The Court stated that the judiciary has both the power and the duty to direct the executive to conduct a performance audit of laws to ensure that their objectives are being met. However, such a direction should be based on a finding that the statute has, through demonstrable judicial data or other cogent material, failed to ameliorate the conditions of the beneficiaries.

"Reviewing and assessing the implementation of a statute is an integral part of Rule of Law. It is in recognition of this obligation of the executive government that the constitutional courts have directed governments to carry performance audit of statutes," the Court said. A bench comprising Justice PS Narasimha and Justice Joymalya Bagchi made these observations while deciding a plea challenging the provisions of the Consumer Protection Act, 2019 which fix pecuniary jurisdiction of the district, state and national commissions based on the value of consideration instead of the quantum of compensation claimed.

The Court rejected the challenge. During the hearing, an argument was raised that the 2019 Act has failed in achieving its objectives. In this context, the Court made the observations pertaining to legislative audit.

Reference was made to the judgment in Yash Developers v. Harihar Krupa Co-operative Housing Society Ltd (2024) wherein it was held that assessing the working of the statute to realise if its purpose and objective are being achieved or not is the implied duty of the executive government. “The purpose of such review is to ensure that a law is working out in practice as it was intended. If not, to understand the reason and address it quickly,” the Court stated, highlighting that judicial intervention is warranted when statutes become gridlocked in bureaucratic or judicial delays that defeat their objectives.

The purpose of such review is to ensure that a law is working out in practice as it was intended. If not, to understand the reason and address it quickly. It is in this perspective that this Court has, in a number of cases, directed the Executive to carry a performance/assessment audit of a statute or has suggested amendments to the provisions of a particular enactment so as to remove perceived infirmities in its working.

The bench noted that in India's legislative setup, where most laws are introduced by the government and private member bills are rare, the judiciary has both the power and duty to prompt executive introspection when legislative performance falls short. However, the Court clarified that while it can facilitate such audits and even suggest amendments, it cannot compel legislative reforms. "A peculiar feature of how our legislative system works is that an overwhelming majority of legislations are introduced and carried through by the Government, with very few private member bills being introduced and debated.

In such circumstances, the judicial role does encompass, in this Court's understanding, the power, nay the duty to direct the executive branch to review the working of statutes and audit the statutory impac t. It is not possible to exhaustively enlist the circumstances and standards that will trigger such a judicial direction . One can only state that this direction must be predicated on a finding that the statute has, through demonstrable judicial data or other cogent material, failed to ameliorate the conditions of the beneficiaries. The courts will also do well, to at the very least, arrive at a prima facie finding that much statutory schemes and procedures are gridlocked in bureaucratic or judicial quagmires that impede or delay statutory objectives.

This facilitative role of the judiciary compels audit of the legislation, promotes debate and discussion but does not and cannot compel legislative reforms." In the context of the Consumer Protection Act, 2019, the Court noted that there are two statutory bodies, the Central Consumer Protection Council and Central Consumer Protection Authority which are duty-bound to advise the Government regarding the proper implementation of the Act. "If these institutions and bodies work effectively and efficiently, it is but natural that the purpose and object of the legislation will be achieved in a substantial measure.

It is, therefore, necessary to ensure that in the functioning of these bodies, there is efficiency in administration, expertise through composition, integrity through human resources, transparency and accountability, and responsiveness through regular review, audits and assessments," the Court observed. The Court held that the hold that the Council and Authority being statutory authorities having clear purpose and objects and vested with powers and functions must act effectively and in complete coordination to achieve the preambular object of the statute to protect the interest of consumers. The Court directed that the Central Consumer Protection Council and the Central Consumer Protection Authority shall in exercise of their statutory duties under sections 3, 5, 10, 18 to 22 take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the statute.

Case Title: Rutu Mihir Panchal and others vs Union of India and others, WP(C) 282/2021 Citation : 2025 LiveLaw (SC) 503 Click here to read the judgment