Source: https://www.vakilno1.com/legal-news/important-judgments-on-consumer-protection-act-1986.html
Timestamp: 2019-04-20 00:56:44+00:00

Document:
The Supreme Court in the case had made some essential observation which are rudimentary for awarding compensation and quantum of compensation in consumer protection cases concerning real estate matters.
That the sine qua non for entitlement of compensation is proof of loss or injury suffered by the consumer due to the negligence of the opposite party. Once the said conditions are satisfied, the Consumer Forum would have to decide the quantum of compensation to which the consumer is entitled.
That there cannot be any dispute that the computation of compensation has to be fair, reasonable and commensurate to the loss or injury. There is a duty cast on the Consumer Forum to take into account all relevant factors for arriving at the compensation to be paid.
The Supreme Court also made reference to the case of Charan Singh v. Healing Touch Hospital and Others, wherein the Apex Court held that calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application.
That while awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant is able to establish his charge.
That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting.
That in cases where the Consumer Forum has directed delivery of possession, the party has to a certain extent already got a benefit. The cost of the land/flat would have gone up in the meantime. Of course, even in cases, where delivery of possession has been directed there could be compensation for harassment/ loss. But such compensation has to be worked out after looking into the facts of each case and after determining the amount of harassment/loss that has been caused to the consumer.
The Apex Court in the case observed that an Insurance company shall reject claim on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator.
The Court also noted that the Consumer Protection Act, 1986 is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.
Case Name: Ambrish Kumar Shukla & 21 ors. v. Ferrous Infrastructure Pvt. Ltd.
In the case, the National Commission while took up the issue whether a complaint under Section 12(1)(c) of the Consumer Protection Act filed on behalf of or for the benefit of only some of the numerous consumers having a common interest or a common grievance is maintainable or it must necessarily be filed on behalf of or for the benefit of all the consumers having a common interest or a common grievance against same person?
That a suit in terms of order 1 Rule 8 of the Code of Civil Procedure commonly termed as a class suit is intended on behalf or for the benefit of all the persons having a common grievance against the same party and seeking the same relief not on behalf of or for the benefit of only some of them.
A complaint under Section 12(1)(c) of the Consumer Protection Act can be instituted only by one or more consumers, as defined in Section 2(1)(d) of the Consumer Protection Act. Therefore, a group of Cooperative societies, Firms, Association or other Society cannot file such a complaint unless such society etc. itself is a consumer as defined in the aforesaid provision.
That more than one complaints under Section 12(1)(c) of the Consumer Protection Act are not maintainable on behalf of or for the benefit of consumers having the same interest i.e. a common grievance and seeking the same / identical against the same person.
That in case more than one such complaints have been instituted, it is only the complaint instituted first under Section 12(1)(c) of the Consumer Protection Act, with the requisite permission of the Consumer Forum, which can continue and the remaining complaints filed under Section 12(1)(c) of the Consumer Protection Actare liable to be dismissed with liberty to join in the complaint instituted first with the requisite permission of the Consumer Forum.
That individual complaints instituted before grant of the requisite permission under Section 12(1)(c) of the Consumer Protection Act can continue despite grant of the said permission but it would be open to such complainants to withdraw their individual complaints and join as parties to the complaint instituted in a representative character. However, once the requisite permission under Section 12(1)(c) of the Consumer Protection Act is granted, an individual complaint, expressing the same grievance will not be maintainable and the only remedy open to a consumer having the same grievance is to join as a party to the complaint instituted in a representative character.
The Competition watchdog – The Competition Commission of India has reiterated in this case that an individual consumer dispute cannot be treated as a competition concern under the Competition Act. The Commission also clarified the scope of the Competition Act i.e. to curb the anti-competitive practices.
The Commission was of the view that the said dispute between the Informant and the OP regarding non-redemption of discount coupons was an individual consumer dispute rather than a matter of competition concern and the same also does not cause any adverse effect on competition.
While highlighting cases when individual consumer disputes have been misunderstood as a Competition concern, the Commission pointed out that the scope of the Competition Act is primarily aimed to curb the anti-competitive practices having adverse effect on competition and to promote and sustain competition in the relevant markets in India. Whereas the Consumer Protection Act, 1986 is aimed to protect the interest of individual consumers against the unfair practices being widely prevalent in the market.
Reference was also made to the case of Subhash Yadav vs. Force Limited and Ors., wherein the Competition Commission of India opined the purpose of Competition Act is to protect and promote fair competition in the markets in India. However, for the protection of individual consumer interest, there is another statute already in existence known as Consumer Protection Act, 1986, which mainly deals with protection of consumer interest against the deficiencies in services or goods being purchased by the consumers from the sellers.
The Commission’s order can be accessed here.
Case name: National Insurance Company Ltd. v. Hindustan Safety Glass Works Ltd. & Anr.
In the case, the Insurance Company refused to compensate the Respondent on account of damage caused due to heavy rain during the mentioned period. The Insurance Company admittedly denied relief to the Insured on account of one of the conditions in the Policy which stated that National Insurance would not be liable for any loss or damage 12 months after the event that caused the loss or damage to the insured unless the claim is the subject matter of a pending action or arbitration.
That when a claim is made by the insured that itself is actionable. There is no question of requiring the insured to approach a court of law for adjudication of the claim. This would lead to encouraging avoidable litigation which certainly cannot be the intention of the insurance policies and is in any case not in public interest.
That in a dispute concerning a consumer, it is necessary for the Courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-à-vis the supplier of services or goods. It is to overcome this disadvantage that a beneficent legislation in the form of the Consumer Protection Act was enacted by Parliament.
That the provision of limitation in the Act cannot be strictly construed to disadvantage a consumer in a case where a supplier of goods or services itself is instrumental in causing a delay in the settlement of the consumer’s claim.
Case name: New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd.
In this case, the issue that came up before the Court pertained to the period within which the opposite party has to give his version to the District Forum in pursuance of a complaint, which is admitted under Section 12 of the Consumer Protection Act . According, to the statutory provision the opposite party is given 30 days’ time for giving his version and the said period for filing or giving the version can be extended by the District Forum, but the extension should not exceed 15 days. Thus, an upper cap of 45 days has been imposed by the Act for filing version of the opposite party.
In the case of Dr. J.J. Merchant & Ors. v. Shrinath Chaturvedi, the Supreme Court had held from the impugned provision under Consumer Protection Act it is apparent that on receipt of the complaint, the opposite party is required to be given notice directing him to give his version of the case within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum or the Commission. For having speedy trail, this legislative mandate of not giving more than 45 days in submitting the written statement or the version of the case is required to be adhered to. If this is not adhered to, the legislative mandate of disposing of the cases within three or five months would be defeated.
The conflict in the case arose by the judgement of the Supreme Court in the case of Kailash v. Nankhu & Ors.. The Respondent in the case while relying on the said case contended that the said provision with regard to extension of time beyond a particular limit is directory in nature and that would not mean that extension of time cannot exceed 15 days. Hence, it is directory in nature and not mandatory.
In the New India Assuarnace case, the Supreme Court eventually settled the issue by holding that the District Forum can grant a further period of 15 days to the opposite party for filing his version or reply and not beyond that.
Case name: Pratibha Pratisthan & Ors. v. Manager, Canara Bank & Ors.
In this case, the issue taken up by the Court was whether a complaint can be filed by a Trust under the provisions of the Consumer Protection Act.
The Supreme Court while arriving at its conclusion made reference to definition of complaint and complainant and consumer under the Consumer Protection Act and held that it is quite clear from the definition of a complainant that it does not include a Trust.
That a reading of the definition of the words ‘complaint’, ‘complainant’ and ‘consumer’ makes it clear that a Trust cannot invoke the provisions of the Act in respect of any allegation on the basis of which a complaint could be made. To put this beyond any doubt, the word ‘person’ has also been defined in the Act and Section 2(m) thereof defines a person as follows :- (m) “person” includes, − (i) a firm whether registered or not; (ii) a Hindu undivided family; (iii) a co-operative society; (iv) every other association of persons whether registered under the Societies Registration Act, 1860.
That on a plain and simple reading of all the above provisions of the Act it is clear that a Trust is not a person and therefore not a consumer. Consequently, it cannot be a complainant and cannot file a consumer dispute under the provisions of the Act.
In this case, decided by the National Commission, the Commission was confronted with the issue of deficiency in services in IVF procedure performed by the Doctor. The Commission while delivering its judgement made reference to medical literature relating to IVF procedure to arrive at the conclusion that No cure/ no success in IVF is not a negligence.
Case name: Manmohan Kur v. M/s Fortis Hospital & ors.
In this recent case, the Two-Judge Bench of the Supreme Court agreed with NCDRC’s holding in July 2017 whereby, the National Commission ruled that an Arbitration Clause in Buyer’s Agreement cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.
The Chhattisgarh High Court in a case in 2016 opined that remedy available to the Consumer under Consumer Protection Act is an additional remedy and other statutory remedy available to the Consumer under other statutory law would not bar the Consumer to avail remedy under the CPA.
A similar observation was also made by the Supreme Court in the case of Virendar Jain v. Alaknanda Cooperative Group Housing Society Limited and Others, wherein the Apex Court categorically stated that remedy available under the CP Act, 1986 is in addition to the remedies available under the other statute and the availability of alternative remedies is not a bar to the entertaining of a complaint filed under Consumer Protection Act .
The case can be accessed here.
Case name: Indian Machinery Company v. M/s Ansal Housing & Construction Ltd.
The seminal issue that arose in the case was that whether a second complaint to the District Forum under the Consumer Protection Act is maintainable when the first complaint was dismissed for default or non-prosecution. In the case, the National Commission took the view that the second complaint would not be maintainable.
However, in appeal, the Supreme Court set aside the National Commission’s order. The Court while arriving at its decision made reference to the case of New India Assurance Co. Ltd. Vs. R. Srinivasan, wherein it was opined that the rule of prohibition contained in Order 9 Rule 9(1) CPC cannot be extended to the proceedings before the District Forum or the State Commission. The fact that the case was not decided on merits and was dismissed in default of non-appearance of the complainant cannot be overlooked and, therefore, it would be permissible to file a second complaint explaining why the earlier complaint could not be pursued and was dismissed in default.
In view of the aforesaid, the Supreme Court considering the facts and circumstances of the case held that the second complaint filed by the appellant was maintainable on the facts of this case.
In the year 2013, the Ernakulam Consumer Disputes Redressal Forum passed a noteworthy order by holding that if an RTI applicant is denied information then the same would be a deficiency in service and the applicant will be entitled to compensation under the Consumer Protection Act, 1986.
In this case, the applicant sought information of the names of the councilors who failed to convene ward sabhas once in 3 months. The concerned PIO failed to give the requisite information to the applicant and subsequently the applicant approached Consumer Forum citing that denying his RTI application without any reasonable cause was deficiency in service on part of the Corporation. The Consumer Forum while holding that the case of complainant was within the purview of Section 2(i) (o) of the Consumer Protection Act, directed the concerned PIO to pay Complainant Rs. 5000/- as compensation.
While expanding the scope of Consumer Law, National Commission opened new doors in “Bhupesh Khurana and others Vishwa Budha Parishad and others” that imparting education falls within the ambit of service as defined under CPA. It was held in the case that fees are paid for services to be rendered by way of imparting education by educational institutions.
The key observation made by the National Commission in the case was that imparting of education by an educational institution for consideration falls within the ambit of ‘service’ as defined in the Consumer Protection Act. Fees are paid for services to be rendered by way of imparting education by the educational institutions. If there is no rendering of service, question of payment of fee would not arise. The Complainants had hired the services of the Respondent for consideration so they are consumers as defined in the Consumer Protection Act.
The Complainants in the case were admitted in the B.D.S. course for imparting education for consideration for which the college of the respondent was not affiliated and recognised for imparting education The National Commission held that this case clearly fell within the purview of deficiency as defined in the Consumer Protection Act.
The Supreme Court in the case while making reference to it’s verdict in the case of Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO and ors. held that supply does not mean sale. As a matter of fact, the company has brought its case to be covered by Section 2(1)(d)(ii) and not 2(1)(d)(i) as the dispute raised by the company is with regard to non-performance of the services for consideration within time frame. For the purposes of the maintainability of the complaint, therefore, what is important to be seen is whether there is deficiency in service within the meaning of Section 2(1)(d)(ii). Under Section 2(1)(o) the Act, 1986, `service’ means service of any description which is made available to potential users and includes the provision of facilities in connection with supply of electrical or other energy.
Case name: Laxman Thamappa Kotgiri v. G.M., Central Railway & ors.
The Supreme Court in the case observed that where contract for transportation is for consideration (i.e. freight charge), the mere fact that such consideration has not been paid would not make the service “free of charge” and Section 2 (1) (o) of the Consumer Protection act, 1986 is attracted.
In the case, the impugned student had left the institution within the short period and the vacancy caused had been filled up and therefore there had been no loss of any kind to the Respondent institution. Considering this fact as well as giving effect to the guidelines given by the University Grants Commission, it was held by the National Consumer Forum that if refund is not ordered, it will be unfair and unjust on the part of the Institution thereby bringing such kind of cases within the ambit of the Consumer Protection Act.
In this case of 2007, the National Commission while setting aside the State Commission’s order observed that the ambit and scope of Section 2(1)(o) of the Consumer Protection Act which defines service is very wide and it covers all services except rendering of services free of charge or a contract of personal service. The Commission was of the opinion that lawyers are rendering service. They are charging fees. It is not a contract of personal service. Therefore, there is no reason to hold that they are not covered by the provisions of the Consumer Protection Act, 1986.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.