Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh (Presiding Member) addresses matter regarding claiming of insurance cover.

Instant appeal was filed under Section 19 of the Consumer Protection Act, 1986 challenging the decision of the State Consumer Disputes Redressal Commission.

Factual Matrix

Late Jai Prakash, husband/father of the Complainant met an unnatural death, had obtained four insurance policies from the Insurance Company. It was stated that the Insurance Company did not query three of the four policies.

In respect of the 4th policy, it was objected that the claim was on the ground that the death was not accidental but a case of suicide, falling under the exceptions to the policy, and the claim was declined.

Insurance Company argued that the three policies were concealed while taking the fourth policy i.e. the subject policy.

Commission agreed with the appraisal and reasoning of the State Commission’s findings that in the instant case non-disclosure of the previous policies by the life assured was not fatal to the claim.

Another argument made by the Insurance Company was that the life assured had committed suicide which fell under the exception clause of the policy, that it was not a case of accidental death. Further, the insurance company reported that the injuries on the deceased were only possible in cases of a suicide death.

Police in its Inquiry Report had concluded that the cause of the accident due to rail accident could not be ruled out.

The insurance company had raised the objection of suicide based on the “medico-legal” report of a private agency, prepared on perusal of the documents on record, after about one year of the incident.

Inquest is conducted as mandated under the Cr.P.C., Post Mortem is conducted by the concerned government Medical Officer, Investigation is conducted by the Police (a private agency engaged by the Insurance Co. does not substitute for the Police).

 It was further noted that there was no evidence on record that the Insurance Company made a police complaint or filed a complaint before the competent judicial magistrate that a false case of accidental death had been made out for a wrongful gain when the death was by suicide, or that any remedial action in case of the other three policies settled earlier was subsequently undertaken, or any disciplinary action against its functionaries responsible for settling the earlier three policies was taken.

Commission stated that weighing the evidence in its totality, the eventuality of the death being accidental cannot be ruled out and the benefit of preponderance of probability goes to the complainants.

Hence, State Commission erred in placing reliance on the report of a private agency engaged by the Insurance Company while ignoring the complete spectrum of evidence in the matter.

Therefore, the Insurance Company wrongly withheld the claim in respect of the subject policy.

Bench directed the Insurance Company to settle the claim of the subject policy with interest at 9% per annum.

For the undue harassment and the loss and injury caused to the Complainants and for the inconsistency and arbitrariness in decision making, a cost of Rs. 1 lakh is imposed on the Insurance Co. through its chief executive, of which Rs. 50 thousand shall be paid to the Complainants and Rs. 50 thousand shall be deposited in the Consumer Legal Aid Account of the State Commission.

“…advised to inculcate and imbibe systemic improvements for future, in that there is no inconsistency or arbitrariness in decision-making in identical facts and same points of law.”

[Kamla Devi v. Tata AIG Life Insurance Corporation, First Appeal No. 280 of 2013, decided on 10-06-2021]


For the Appellant: Mr. Praveen Kumar Aggarwal, Advocate

For the Respondents No. 1 &2: Mr. S. Hari Haran, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Deepa Sharma (Presiding Member) addressed a matter wherein a consumer was subjected to the agony of delayed possession of a flat by being duped and coerced by the project owner.

Factual Matrix

Complainant 3 had booked a flat in Garden Isels project of the OP and the possession was to be handed over within 42 months, i.e. 3 and a half year, for which he had taken a home loan and had paid an EMI.

OP duped the complainant when he complained of the delay in construction, when OP suggested the complainant of buying another flat. Afterwhich, complainants had bought a flat in the project Imperial Courts and in 2015, an allotment letter was issued, and OP promised to hand over the possession within 24 months.

Further, it was contended that in one month of October, 2015, the Complainant as per the plan and advice of OP sought cancellation of the purchased unit in Garden Isels and requested for the transfer of the amount in the account of Imperial Courts flat.  It was stated that due to the transfer of the said amount, complainant lost home loan monthly EMI paid for over 25 months, 5% deduction on cancellation of the unit and the late payment amount of 2 to 4 Lakhs calculated @ 12% p.a. on the late payment of the installments and this amount comes to approximately 14 to 16 Lakhs and it is recoverable from the Opposite Party along with compensation for harassment and mental agony.

OP was paid total sale consideration amount and as per the possession letter, the flat was to be handed over within 45 days, i.e. by 15th February, 2017. However, series of unfortunate events took place. It was submitted that OP informed the complainants about the shortage of material and therefore informed them that it would take a long time for them to install 7 ACs one Jacuzzi, well-furnished modular kitchen and wardrobes in all four bedrooms.

On the advice of the OP, the Complainants under duress decided to give up all the materials like installation 7 ACs, one Jacuzzi, well-furnished modular kitchen and wardrobes in all four bedrooms and for that purpose, the Opposite Party had given a discount of 4,72,900, while the actual cost of all those articles were more than 15 Lakhs.

It was submitted that the OP had done nothing to ensure the handing over of the possession of the Imperial Courts flat.

The agreement between the parties was biased and contrary to the settled principle of law and public policy, hence, the agreement could not be implemented in the present form. The Complainants were induced to enter into this agreement which OP now sought to enforce.

OP was forcing the complainants to take possession of a flat that was not proposed and the overall condition of the project was not what was represented. Therefore, the agreement stood breached and deserved to be cancelled.

Analysis, Law and Decision 

Crux of the problem was that the flat was to be handed over within 42 months plus 6 months of a grace period, i.e. within 4 years. Before the expiry of 4 years, the complainant had booked a flat at the other project of OP for which the allotment letter was handed over and possession was promised within 24 months.

Coram stated that it is a settled proposition of law that if somebody complaints inducement, force or coercion it is his duty to plead the facts which led to said inducement, coercion or force and thereafter, prove those facts.

It was noted by the Commission that the complainants acted voluntarily and during the existence of an allotment of their flat in Garden Isles project, they booked another flat in Imperial Courts and finding difficult in paying installments towards Imperial Courts flat, they sought cancellation of the allotment of the flat in Garden Isles even before the period within which the possession of the said flat was to be handed over to them and requested for transfer of the money paid against the said flat in the account of Imperial Courts.

When can possession of a flat not be refused?

Commission while referring to the decision of the Supreme Court in Ireo Grace Realtech (P) Ltd. v. Abhishek Khanna, (2021) 3 SCC 241 expressed that where the offer of possession is made along with Occupation Certificate, even if there is a delay in the said offer, the allottees cannot refuse to take the possession.

In light of the above facts and contentions of the matter, Coram held that there was no delay in the offer of possession and complainants since failed to give any valid reason and there existed no valid reason for the complainants to refuse to take possession and terminate the contract, the refusal to take possession is hence not justifiable.

Therefore, Complainants have failed to prove any fact on record to show that the OP had adopted an unfair trade practice or that the agreement was biased or one-sided. [Sudha v. Jaiprakash Associates Ltd., 2021 SCC OnLine NCDRC 166, decided on 29-04-2021]


Advocates before the Commission:

For the Complainant: Nakul Singh Pathania, Advocate

For the Opp.Party: Sukumar Pattjoshi, Sr. Advocate With Sumeet Sharma, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh, Presiding Member, held that,

“…selling a second-hand car, in place of a new car, after accepting the full consideration price for a new car, inter alia constitutes ‘unfair trade practice’ under Section 2(1)(r) of the Consumer Protection Act.”

Revision Petition was instituted under Section 21(b) of the Consumer Protection Act, 1986 impugning the State Commission’s Order.

Short point in the present case was the delivery of a second-hand car, instead of a new car, by the OPs to the Complainant, after obtaining the full consideration price of a new car.

State Commission determined that the District Forum was correct in concluding that a second-hand car was delivered to the complainant instead of a new one. Further, it was also determined that the compensation awarded by the District Forum was just and equitable.

State Commission’s Order: 

“OPs/respondents refuted the allegations leveled by the complainant in the complaint and averred that at the time of Chhattisgarh Rajyotsav Fair, the vehicle was booked by Hardeep Singh Hora, on payment of Rs.10,000/-. But, later on, no amount was paid by that person and the vehicle was never delivered to Hardeep Singh Hora and so it remained a branch new vehicle and it was sold to the complainant. As such it was not an old or secondhand vehicle and so no amount was payable to the complainant as compensation.” 

Bench noted from the examination made by two fora below, after obtaining the total consideration price of new car, a second-hand car, instead of a new car, was delivered by the OPs to the Complainant.

Commission remarked that the present case revolved around unfair trade practice and stated that:

Factum of selling a second-hand car, in place of a new car, after accepting the full consideration price for a new car, inter alia constitutes ‘unfair trade practice’ (“- – unfair method or unfair or deceptive practice – -”) within the meaning of Section 2(1)(r) of the Act 1986.

Hence, the district forum’s order which was upheld by the State Commission was sustained. [Shashank Shah v. Gurjeet Singh Maan, Revision Petition No. 1205 of 2014, decided on 01-04-2021]


Advocates before the Commission:

For the petitioner: Mr Manish Kumar, Advocate with Mr Piyush Kaushik, Advocate

For the Respondent: Mr Kaushik Mishra, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) while addressing the complaint reiterated the settled position of law, expressed that,

Section 58 of the Act provides that the National Commission shall have jurisdiction to entertain the Complaint where value of the goods or services paid as consideration exceeds rupees ten crores.

Complainant submitted that he was given a cash credit limit of Rs 25 lakhs by the State Bank of India.

It was submitted that OP/SBI had committed deficiency of service as an interest of Rs 18,66,719 had been demanded from the complainant against the outstanding loan of Rs 23 lakhs.

What was the prayer made by the complainant?

  1. Pass an award directing the Opposite Party to pay a sum of Rs 19,85,27,562 to the Complainant towards compensation and damages for negligence, deficiency in service and unfair trade practices;
  2. Pass an award directing the Opposite Party to pay a sum of Rs 5,00,000 to the Complainant for pain and mental agony;
  3. Pass an award directing the Opposite Party to pay a sum of Rs 4,00,00,000 to the Complainant for loss of closing of the industry of the complainant;
  4. Pass an award directing the opposite party to pay a sum of Rs 4,00,00,000 to the Complainant for the loss of reputation;
  5. And directing the Opposite Party to pay the cost of entire proceedings; rectification and
  6. Pass such further or other orders as this National Commission may deem fit and proper in the circumstances of the case and thus render justice.

Decision

Bench remarked that Consumer Protection Act, 2019 provides for a hierarchy of the Consumer Fora to deal with consumer complaints, depending upon the pecuniary value of the complaint.

In the instant case, the complainant had demanded disproportionate compensation to inflate the value of the complaint and reach the pecuniary jurisdiction of this Commission which is nothing but an abuse of the process of law.

Hence, the complaint was dismissed in view of the above discussion, since it did not fall within the pecuniary jurisdiction of the National Commission.[M.V. Madhu Sudhana v. SBI, 2020 SCC OnLine NCDRC 845, decided on 06-04-2021]

COVID 19Hot Off The PressNews

In view of the recent surge in the COVID-19 cases, NCDRC has taken the following decisions till further orders:

  • Physical Hearing and Hybrid Hearing of cases to remain suspended.
  • Cases listed for physical and hybrid hearings before NCDRC Benches from 12th April onwards, shall be taken up through video conferencing only.
  • Registry shall continue listing cases in terms of the Notice issues on 02 June, 2020, 9th June, 2020 and 26th June, 2020.
  • Filing/Dak shall be accepted and date stamped at entry gate of the Commission but same shall be processed after 4 days of filing.
  • public hearing will remain suspended till further orders.
  • some of the members of the Commission shall be allowed to work from home on rotational basis.

Nationa Commission Disputes Redressal Commission

[Notice dt. 10-04-2021]

Case BriefsSupreme Court

Supreme Court: The bench of Dr. DY Chandrachud* and MR Shah. JJ has held that the proceedings instituted before the commencement of the Consumer Protection Act 2019 on 20 July 2020 would continue before the fora corresponding to those under the Consumer Protection Act 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019.

Background

The material provisions of the Consumer Protection Act 2019 came into force on 20 July 2020. The appellants instituted a consumer case against real estate developers before the National Consumer Disputes Redressal Commission on 18 June 2020 under the Consumer Protection Act 1986 . The NCDRC by its order dated 30 July 2020 dismissed the consumer case on the ground that after the enforcement of the Act of 2019, its pecuniary jurisdiction has been enhanced from rupees one crore to rupees ten crores. The appellants’ review petition was also dismissed by the NCDRC on 5 October 2020. In the present case, the claim of Rs. 2.19 crores is below the enhanced pecuniary jurisdiction of the NCDRC.

This gave rise to the issue as to whether a complaint which was filed and registered under the Act of 1986, before the new Act of 2019 came into force, has to be entertained under the provisions of the erstwhile legislation. In anticipation of the enforcement of the Act of 2019, an administrative notice was issued by the NCDRC on 17 July 2020 to allow the functioning of its registry for fresh filings on 18 July 2020, since the new law was to come into force on 20 July 2020.

Analysis

Impact of a change in forum on pending proceedings and retrospectivity

After considering a number of precedents that have interpreted the impact of a change in forum on pending proceedings and retrospectivity, the following position of law emerged:

“a change in forum lies in the realm of procedure. Accordingly, in compliance with the tenets of statutory interpretation applicable to procedural law, amendments on matters of procedure are retrospective, unless a contrary intention emerges from the statute.”

Section 107 of the Act of 2019

  • Section 107(1) of the Act of 2019 repeals the Act of 1986.
  • Section 107 (2) has saved “the previous operation” of any repealed enactment or “anything duly done or suffered thereunder to the extent that it is not inconsistent with the provisions of the new legislation”.
  • Section 107(3) indicates that the mention of particular matters in sub-Section (2) will not prejudice or affect the general application of Section 6 of the General Clauses Act.

Section 6 of the General Clauses Act

Section 6 of the General Clauses Act provides governing principles with regard to the impact of the repeal of a central statute or regulation. These governing principles are to apply, “unless a different intention appears”. Clause (c) of Section 6 inter alia stipulates that a repeal would not affect “any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed”. The right to pursue a validly instituted consumer complaint under the Act of 1986 is a right which has accrued under the law which was repealed.

Clause (c) of Section 6 has the effect of preserving the right which has accrued. Clause (e) ensures that a legal proceeding which has been initiated to protect or enforce “such right” will not be affected and that it can be continued as if the repealing legislation has not been enacted. The expression “such a right” in clause (e) evidently means the right which has been adverted to in clause (c).

“The plain consequence of clause (c) and clause (e), when read together is twofold: first, the right which has accrued on the date of the institution of the consumer complaint under the Act of 1986 (the repealing law) is preserved; and second, the enforcement of the right through the instrument of a legal proceeding or remedy will not be affected by the repeal.”

However, considering that right to a forum is not an accrued right, the question whether the pending legal proceedings are required to be transferred to the newly created forum by virtue of the repeal would still persist.

While Section 6(e) of the General Clauses Act protects the pending legal proceedings for the enforcement of an accrued right from the effect of a repeal, this does not mean that the legal proceedings at a particular forum are saved from the effects from the repeal.

Object of the Act of 2019

There is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits.

The Act of 2019 is enacted to provide “for protection of the interests of consumers” and has taken note of the evolution of consumer markets by the proliferation of products and services in light of global supply chains, ecommerce and international trade.

“New markets have provided a wider range of access to consumers. But at the same time, consumers are vulnerable to exploitation through unfair and unethical business practices. The Act has sought to address “the myriad and constantly emerging vulnerabilities of the consumers. The recurring theme in the new legislation is the protection of consumers which is sought to be strengthened by procedural interventions such as strengthening class actions and introducing mediation as an alternate forum of dispute resolution.”

In this backdrop, something specific in terms of statutory language – either express words or words indicative of a necessary intendment would have been required for mandating the transfer of pending cases.

“One can imagine the serious hardship that would be caused to the consumers, if cases which have been already instituted before the NCDRC were required to be transferred to the SCDRCs as a result of the alteration of pecuniary limits by the Act of 2019. A consumer who has engaged legal counsel at the headquarters of the NCDRC would have to undertake a fresh round of legal representation before the SCDRC incurring expense and engendering uncertainty in obtaining access to justice. Likewise, where complaints have been instituted before the SCDRC, a transfer of proceedings would require consumers to obtain legal representation before the District Commission if cases were to be transferred. Such a course of action would have a detrimental impact on the rights of consumers. Many consumers may not have the wherewithal or the resources to undertake a fresh burden of finding legal counsel to represent them in the new forum to which their cases would stand transferred.”

Hence, it would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation.

Data on pendency of cases

Data drawn from annual reports of the Union Ministry of Consumer Affairs indicates pendency from financial year 2015-16 to financial year 2019-20 indicates that as on 31 October 2019, 21,216 cases were pending before the NCDRC and 1,25,156 cases were pending before the SCDRC. Many of these cases would have to be transferred if the view which the developer propounds is upheld.

“This will seriously dislocate the interests of consumers in a manner which defeats the object of the legislation, which is to protect and promote their welfare. Clear words indicative of either an express intent or an intent by necessary implication would be necessary to achieve this result. The Act of 2019 contains no such indication.”

Hence, the legislature cannot be attributed to be remiss in not explicitly providing for transfer of pending cases according to the new pecuniary limits set up for the fora established by the new law, were that to be its intention.

Conclusion

All proceedings instituted before 20 July 2020 under the Act of 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 and not be transferred in terms of the new pecuniary limits established under the Act of 2019.

[Neena Aneja v. Jai Prakash Associates Ltd., 2021 SCC OnLine SC 225, decided on 16.03.2021]


*Judgment by: Justice Dr. DY Chandrachud

Know Thy Judge| Justice Dr. DY Chandrachud

Appearances before the Court by:

For appellants: Advocate P Vinay Kumar

For respondent: Senior Advocate Krishnan Venugopal

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Vishwanath (Presiding Member) upheld the State Commission’s Order.

Petitioner/Complainant who was an account holder of HDFC Bank and was working as an officer with Qatar National Bank had deposited an amount of Rs 4,60,000. He found to his surprise that the entire balance was transferred from his account to another account as per the Bank Statement.

Later on filing a complaint in view of the above, the culprit was found by the police but only an amount of Rs 70,500 could be recovered.

Alleging deficiency in service and seeking recovery of the balance amount the consumer complaint was filed.

OPs denied that any of their employees were involved in any fraudulent act. Funds were transferred as per the instructions received from the Complainant through net banking and since the respondent did not respond to the verification email and messages about the transfer request, the said was affected.

Further, the OPs contended that the complainant was informed after the transaction was completed. Adding to this, it was stated that:

Only a Complainant could know about Net Banking Password ‘IPIN’ and nobody else could operate the account. They also took the plea that the alleged fraudulent transaction was reported to the Bank only on 31.12.2008, i.e., 47 days after the transaction date.

District Forum allowed the complaint, whereas the State Commission held that the complainant failed to establish negligence against the Bank.

State Commission also added that the Bank after following the due procedure, transferred the funds.

Being aggrieved with the State Commission’s Order, the present revision petition was filed.

Analysis and Decision

Bench noted that the petitioner availed of the Net Banking facility and signed the TPT Form agreeing to the terms and conditions. He being a Banker himself was aware of the nature of transactions. He was provided with a customer ID and Net Banking Password (IPIN), which he should have kept with himself. Before the transfer of funds, a customer was to add the name of beneficiaries. On any request for transfer of funds, the Bank sends a mail and SMS alert, which the Bank has done so in the present case.

The Bank waited for 24 hours and not receiving any adverse feed-back, effected the transfer. Once the transfer of funds was made, again the Petitioner was informed of the same by the Respondent/ Bank. Only after 47 days of transaction did the Petitioner choose to complain.

Hence, no deficiency in service on the part of the respondents was found.

Therefore, complainant failed to establish that the Bank had acted mala fidely, fraudulently and in violation of the security procedure. No illegality, jurisdictional error or material irregularity was found in the State Commission’s order.[Nikhil Phutane v. HDFC Bank Ltd., 2021 SCC OnLine NCDRC 51, decided on 09-03-2021]


Advocates before the Commission:

For the Petitioner: Mr Nikhil Jain, Advocate
For the Respondent: Mr Sharique Hussain, Advocate

Case BriefsHigh Courts

Delhi High Court: Prathiba M. Singh, J., directed that the National Consumer Disputes Redressal Commission to pronounce judgment in a case pending for 15 years, within two weeks of the date it is listed.

In the present matter, petitioners concern was the non-pronouncement of orders/judgment by the National Consumer Dispute Redressal Commission (NCDRC).

Petitioner had filed a complaint before the NCDRC alleging negligence by the doctors and hospital – Kanpur Medical Centre Private Ltd., due to which severe burns were caused to her as a newly born infant. Complaint was filed before the NCDRC I April, 2006 and the said complaint has been pending for more than 15 years.

Petitioners Counsel, Raghavendra M. Bajaj, submitted that repeated enquiries were made with NCDRC, but to no avail. Further, an application was moved by the petitioner by seeking re-hearing and pronouncement of judgment, despite which, matter was not listed before any Bench.

Adding to the above, Counsel submitted that he has received intimation that the application is now listed on 23-02-2021.

Supreme Court in the decisions of Anil Rai v. State of Bihar, (2001) 7 SCC 318 and Balaji Baliram Mupade v. State of Maharashtra, 2020 SCC OnLine SC 893 emphasised the importance of timely pronouncement of judgments and orders once submissions are heard.

Recently, in Supreme Court decision of JVNL v. CCM HIM JV [Civil Appeal No. 494 of 2021, decided on 12-02-2021] has reiterated its pronouncement in Anil Rai v. State of Bihar, (2001) 7 SCC 318 while clarifying that the same would not apply to High Courts.

Bench stated that the above pronouncements would apply to Subordinate Courts and tribunals equally.

 The Supreme Court decision in Sudipta Chakrobarty v. Ranaghat S.D. Hospital, 2021 SCC OnLine SC 107, dealt with cases where the NCDRC pronounced operative portions of orders with reasons to follow.

The entire purpose of the Consumer Protection Act, 1986, is supposed to provide speedy justice to complainants, which stands completely defeated in a case of the present nature where the matter has taken more than 15 years to be adjudicated and the same has not reached a conclusion yet.

Following directions have been issued to NCDRC:

  1. Whenever judgments are reserved, they ought to be pronounced in accordance with the timelines prescribed in Anil Rai v. State of Bihar, (2001) 7 SCC 318
  2. If orders are not pronounced within six months of being reserved and an application is filed by either party, the same ought to be listed before the President, NCDRC by the Registry of the NCDRC within two days, without fail. The NCDRC may issue a practice direction to this effect so that the same is complied with by the Staff of the Registry;

Hence, Court directed NCDRC to pronounce the judgment within two weeks of the date it has been listed. [Sandhya Srivastava v. Dr Neelam Mishra, 2021 SCC OnLine Del 892, decided on 18-02-2021]


Advocates who appeared for the matter:

For the Petitioner: Raghavendra M. Bajaj, Garima Bajaj, Agnish Aditya & Nikhil Bamal, Advocates

For the Respondents: Ajay Saroya, Advocate for R-3.

Case BriefsSupreme Court

Supreme Court: After the Court noticed that, in a case, where the National Consumer Disputes Redressal Commission (NCDRC) had passed the reasoned order 8 months after the pronouncement of the operative order, the bench of Indu Malhotra and Ajay Rastogi, JJ has asked the President of the NCDRC into the matter, and take necessary steps so that this practice is discontinued, and the reasoned Judgment is passed alongwith the operative order.

The Court also observed that in all matters where reasons are yet to be delivered, it must be ensured that the same are made available to the litigating parties positively within a period of two months.

In the present case, the operative order was pronounced on 26.04.2019 and the the reasoned order was passed on 20.12.2019 by the NCDRC. The Supreme Court then directed the Registrar of the NCDRC to submit a Report stating the number of cases in which reasoned judgments had not been passed, even though the operative order had been pronounced in Court.

By the report dated 27.7.2020, the Court was informed that as on 20.12.2019, there were 85 such cases in which the operative order had been pronounced, but reasoned judgments were not delivered so far.

“The fact which has been brought to our notice by the Registrar of the Commission can, in no manner, be countenanced that between the date of operative portion of the order and the reasons are yet to be provided, or the hiatus period is much more than what has been observed to be   the   maximum time period for even pronouncement of reserved judgments.”

The Court noticed that the rights of the aggrieved parties are being prejudiced if the reasons are not available to them to avail of the legal remedy of approaching the Court where the reasons can be scrutinized.

“It indeed amounts to defeating the rights of the party aggrieved to challenge the impugned judgment on merits and even the succeeding party is unable to obtain the fruits of success of the litigation.”

[Sudipta Chakrobarty v. Ranaghta SD Hospital, 2021 SCC OnLine SC 107, order dated 15.02.2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Division Bench of Dr S.M. Kantikar (Presiding Member) and Dinesh Singh (Member), while addressing the consumer complaint held that:

Mode of treatment/ skill differ from doctor to doctor and the doctor is not liable for negligence if he performs his duty with reasonableness and with due care.

Complainant 1 (hereinafter referred to as ‘the patient’) was suffering from congenital spinal deformity. Her father (complainant 2) consulted Dr Rajendra Prasad and advised Complainant 2 to contact OP 2. The patient was taken to OP 1 who examined the patient and advised urgent surgery and the delay otherwise will aggravate the disease.

Factual Matrix

It was alleged that operation took long time, the patient was taken to operation theatre (OT) at 9 a.m. and operation completed at 5 p.m. After the operation one junior doctor came from OT and informed the complainant 2 that operation was successful. The patient’s father went to see his daughter in the recovery room, but she was in semi-conscious state & crying. At 5.30 p.m., he noticed no movements in her legs and same was informed the duty doctors. The CT scan of the operated area was done and after examining CT report, the Opposite Party 2 expressed with sorry figure to the Complainant 2 and his elder brother, Dr. Sarveshwar Puri that one screw was pressing the spinal cord and as a result thereof the reoperation was necessary for removal of the said screw. It was further alleged that the C-arm was not used during the operation as it was not functioning properly and it was not disclosed by the Opposite Party 2. It was further alleged that during any spinal surgery, presence of Neurosurgeon was must, but in the present case, the operation was performed under the supervision of the Opposite Party 2 only, who was just an orthopaedic surgeon. After the operation on the insistence of the Complainant 2, then only from Neurosurgery Department Dr. S. S. Kale the Neurosurgeon (the Opposite Party 3) was called. Thereafter 2nd operation was conducted at 7.30 pm in the presence of the Neurosurgeon Dr S. S. Kale. The operation ended at 9.00 pm. The patient remained in ICU for 10 days, but no recovery in movements of the lower part of the body.

Patient became paralysed. On being aggrieved, complainants filed the consumer complaint under Section 21(a)(i) of the Consumer Protection Act against the AIIMS and the treating doctors for gross carelessness and deficiency in service causing complete paralysis of lower part of patient’s body and damage to other organs.

Analysis and Decision

Bench noted the fact that OP 2 i.e. the doctor at AIIMS ruled out the presence of any spinal cord anomalies with the help of investigations like CT and MRI of the whole spine. Thereafter, the patient was advised for corrective bony deformative surgery for the patient and in Commission’s opinion, it was reasonable and standard of spinal surgical practice from the AIIMS doctors.

From medical literature from the Standard textbooks on Spinal Surgery it is apparent that any surgical procedure complications are inherent.

It is not uncommon that while putting the rod into a corrective position, at times the screws moves slightly from the original position, which can cause neurological or vascular problem in few patients. 

In the instant matter, as soon as the neurological complication was noticed, the CT scan revealed one of the screws penetrating the spinal cord. Hence the decision to remove the same was taken in consultation with the parents of the child. Methylprednisolone was given as an established treatment protocol in acute spine cord injury and decongestants were given to prevent CSF leak. This cannot be construed as shortcomings or medical negligence.

Therefore, in view of the above discussion, Commission could not find the case of medical negligence and stated that the spinal correction surgery took place as per the accepted standards and referred to the Supreme Court decision in Achutrao Haribhau Khodwa v. State of Maharashtra, (1996) 2 SCC 634.

While adding that the Bench has sympathy for the patient for having Congenital Kyphoscoliosis deformity, however, sympathy cannot substitute for conclusive evidence of medical negligence.

Advice by the Commission:

AIIMS is a premier institute in India, renowned over the decades for its illustrious work. Its ‘Scoliosis and Spine’ Unit has been running since 1976, under ‘Orthopaedics’. We may observe that ‘Scoliosis and Spine’ requires an integrated concomitant approach by both ‘Orthopaedics’ and ‘Neurosurgery’. To take its Unit to the next level, as a systemic improvement, the Director, AIIMS may kindly consider enhanced integration of ‘Orthopaedics’ and ‘Neurosurgery’ in its said Unit, including by posting both ‘Orthopaedics’ and ‘Neurosurgery’ therein as well as working towards creating a speciality in its own right for ‘Spinal Surgery’, having knowledge in both ‘Orthopaedics’ and ‘Neurosurgery’. [Shrishti Puri v. AIIMS, Consumer Case No. 54 of 2007, decided on 09-02-2021]


Advocates who appeared:

For Complainants:

Anand S. Asthana, Advocate
Pankaj Singh, Advocate
Dr Someshwar Puri (complainant – 2)

For Opposite Parties:

Vikrant N. Vasudeva, Advocate

Mr Parv Ahluwalia, Advocate
Sarthak Chiller, Advocate
Dr Arvind Jaiswal (OP-2)

Dr Shashank Shekhar Kale (OP-3)

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) expressed that:

Section 50 of the Insurance Act imposes a statutory obligation on the part of the Insurance Company to issue notice before the expiry of three months from the date on which premium is payable and has not been paid and to give notice to the Policyholder informing him about the options available to him, unless the said conditions are set forth in the Policy.

The instant revision petition was filed under Section 21(1) (b) of the Consumer Protection Act, 1986 against the Order of Punjab State Consumer Disputes Redressal Commission.

Factual Matrix

Complainant’s son obtained a Personal Life Insurance Policy from petitioner 2 for a sum of Rs 2.70 lakh. On the said policy a quarterly instalment of the premium was fixed which was being paid through an agent. The complainant was the nominee.

Complainant’s son died in a road accident. Later the insurance company appointed a surveyor who demanded a bribe to make a favourable report, which the complainant did not pay.

Petitioner 1informed the complainant that since the premium due was not paid, therefore the claim of the complainant could not be considered.

On being aggrieved with the deficiency in service on the part of the petitioners, respondent filed a complaint before the District Forum.

District Forum concluded that there was no deficiency in service on the part of the petitioners as the Insurance Policy of the deceased had lapsed and the complaint was dismissed.

Though the State Commission while accepting the appeal and setting aside the District Forum’s order observed that:

“Consequently, the Complaint filed by the Appellant/ Complainant is allowed and the Respondents are directed to pay the sum insured of Rs.2.70 lakh under the Policy to the Appellant and Rs.1.00 lakh on account of accidental death of the young and unmarried son of the Appellant. The Respondents are also directed to pay Rs.20,000/- as compensation and Rs.10,000/- as litigation expenses to the Appellant.

The Respondents shall comply the order within 45 days of the receipt of copy of the order.”

Complainant aggrieved with the State Commission’s order filed the present revision petition.

Decision

Commission observed that the entire case revolved around Section 50 of the Insurance Act, which states as follows:

“50. Notice of options available to the assured on the lapsing of a policy:

An insurer shall (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable, but not paid), give notice to the policy-holder informing him of the options available to him (unless these are set forth in the policy)”.

Bench observed that the petitioner’s main issue was that the premium was payable on 06-03-2007 and even during the grace period it was not paid. Policy stood lapsed at the end of 31st day from the date of premium fell due.

Further, since the complainant did not apply for reinstatement, no benefits under the policy could be given to them. Petitioners kept notifying the complainant about the policy being lapsed and were also informed about the reinstatement option.

Later on not receiving any information from the insured, the policy lapsed and the same was notified to the complainant.

Hence, the Commission found that the petitioners had acted in accordance with the terms and conditions of the Policy, therefore the complaint deserved to be dismissed.

District Forum’s Order was upheld.[Tata AIG Life Insurance Company Ltd. v. Kishan Lal Arora, Revision Petition No. 4415 of 2013, decided on 01-02-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Anup Thakur (Presiding Member), held that a person who purchases a fully constructed real estate property (a Villa in the present case) with eyes wide open, cannot subsequently claim what all was offered in the original brochure.

Gist of the Case

In the instant matter, appellants case was that the complainant was an individual who had bought and moved into his villa in April, 2013 with his eyes wide open, under a specific agreement.

In light of the above, complainants could not file and maintain a consumer complaint qua the common items/concerns of all the other residents of the project.

Senior Counsel for the Appellants raised the following issues:

(i) Whether after having taken possession of the Villa, it was permissible to raise grievances regarding defects, given that the complainants had purchased an already constructed villa and had thus done so with their eyes wide open;

(ii) Whether the complainant, being one individual occupying one villa from out of 97 villas and 47 apartments in a housing complex could seek reliefs affecting all other residents, through an individual consumer complaint;

(iii) a sub-issue was whether the State Commission could have granted both reliefs which were, in fact, sought as an alternative to each other.

Analysis and Decision

Bench stated that complainant’s grievance qua the clubhouse as being only for the exclusive use of the residents of the villa, to the exclusive of all others, cannot stand. As per the agreement referred above, the complainant was provided with the facility of a clubhouse and he had paid a fee for it, in a similar manner, others including the apartment owners had also paid a fee for the use of the clubhouse.

Therefore, the Commission was unable to understand regarding how the complainant, in his individual capacity was claiming exclusiveness of the clubhouse only for the residents of the villa.

With regarding making demands by referring to the brochure, Commission answered the complainant that as far as the complainant was concerned, he visited the site, the villa, liked what he saw, signed an agreement, and was given possession of that, within a few months. The complainant clearly did all this with his eyes wide open. It was therefore not for him to now refer to what all had been promised in the brochure(s) and start making demands based on that.

Bench on perusal of the record opined that the instant appeal against the impugned order of the State Commission deserved consideration and could be partly allowed.

State Commission’s Order

Firstly the OP was directed to pay a consolidated amount of Rs 2 Lakh as compensation for the defects and deficiencies in the construction. The said order was evidence-based and for the said reason it is to be upheld.

Bench in view of the above considered it just that the amount of Rs 2 lakh be paid with simple interest of 6% per annum.

Bench however did not agree with the rest of the State Commission’s Order viz.

  • restraining OP from extending the clubhouse facilities to others,
  • directing the OPs to construct 6’ feet high boundary wall on the fourth remaining side of the campus
  • directing the OPs to construct 30’ X 40’ CC road at the entrance and in the entire campus.

Commission expressed that there was nothing in the complaint petition to show that there was even a claim that all other villa residents were of the same view. Indeed, if this had been the case, the complainant would have then filed a joint complaint or have come through the Association of villa owners.

Bench appreciated that the complainants had signed the agreement, after applying their mind to the aspects of community living in a villa in a project which had 96 other villas and that they were not the original allottees; rather, they came in January 2013, saw the villa, were satisfied with what they saw and were told, and then, with eyes wide open, signed the agreement.

The agreement in itself clearly spelt out that it would alone henceforth govern the relationship between the complainant and the OP.

Clause 4 of the agreement made the above aspect abundantly clear:

“4. The purchaser has applied for allotment of Villa No. 17 in the above said scheme “Manglam’s Arpan” and the seller has agreed to allot to the purchaser Villa/Shop in the said Scheme on the following terms & conditions. All other agreements and/or arrangements or letters, assurances written, oral or implied hereto, sales brochures, newspapers advertisements, etc. before made and which are in any way contradictory to or inconsistent with this agreement shall have no effect. The sellers hereby agrees to sell Purchaser hereby agrees to purchase on terms &conditions mentioned in this Agreement.”

Bench concluded that the complainants in light of the agreement could not have laid any claim to what was promised in the brochure. Along with this, the Commission added that the complainant could not have certainly claimed anything of behalf of themselves as well as on behalf of other residents and that too since December 2012, when they were nowhere in the picture.

A narrative which goes beyond what falls in the domain of the individual complainant can still have relevance but confined strictly to what directly affects the complainant, not beyond that.

The commission while partly allowing the appeal, laid down the following directions:

(i) order of the State Commission in para 19 (a), directing the OPs to pay to the complainants a consolidated amount of Rs 2 lakh as compensation for defects and deficiencies in construction, is upheld;

(ii) This amount of Rs.2 lakh shall carry interest @ 6% p.a. from the date of the impugned order of the State Commission, till the date of actual payment;

(iii) Rest of the order of the State Commission relating to common facilities and costs is set aside.

[Manglam Build-Developers Ltd. v. Aviral Mathur, 2021 SCC OnLine NCDRC 15, decided on 12-01-2021]


Advocates who represented the parties:

For the Appellant: Sukumar Pattjoshi, Sr. Adv. with Sunil Mund, Advocate

For the Respondent: Debesh Panda, Advocate with Naman Maheshwari, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) observed that:

“Conduct of the insured becomes relevant on the facts of each case to ascertain whether the discharge voucher in the full and final settlement was given  voluntarily or there was coercion or undue influence on the Complainant.”

The instant application was filed under Section 19 of the Consumer Protection Act, 1986 against the Maharashtra State Consumer Disputes Redressal Commission’s Order.

Complainant had obtained “Standard Fire and Special Perils” Insurance Policies for stocks of cotton etc. and plant and machinery. Due to a fire break out at the complainant’s factory, huge stock of cotton got damaged.

Surveyor assessed the loss at Rs 32,92,525 only, though the total loss suffered was to the tune of Rs 99,45,286. Complainant submitted that since he was facing financial difficulties he accepted the settlement offered by the OP and executed the Indemnity Bond and Discharge Voucher in the name of OP.

Further, alleging the deficiency in service by OP, he filed a Complaint before the State Commission.

Aggrieved by the State Commission’s Order, complainant preferred the present appeal before this Commission.

Analysis and Decision

Bench noted that in several insurance claim cases under the Consumer Protection Act, it has been held that if a Complainant satisfies the Consumer Forum that Discharge Vouchers were obtained by fraud, coercion, undue influence etc., they should be ignored, but if they were found to be voluntary, the Complainant will be bound by it resulting in rejection of the Complaint.

“…mere signing of Discharge Voucher will not bar the Complainant/Claimant from raising a dispute before this Commission.”

 Commission further stated the only question to be addressed is whether the Discharge Voucher was signed under undue influence or coercion?

Whether the Complainant received Rs 39,72,829 towards full and final settlement or under protest pending investigation?

Further, respondents counsel submitted that there was a clarity expressed to the Complainant that unless the Discharge Voucher was signed, payment would not be released and therefore, the Discharge voucher was signed under coercion.

Bench while concluding held that “If at all the Complainant had an objection to the nature of the settlement, he should have recorded the same while signing the settlement”, hence no infirmity in the State Commission’s order was found.

In light of the above, the instant appeal was dismissed. [Arihant Industries v. United India Insurance Co. Ltd., 2021 SCC OnLine NCDRC 8, decided on 04-01-2021]


Advocates for the parties:

For the Appellant: S.M. Tripathi, Advocate

For the Respondent: Nanita Sharma, Advocate

Legislation UpdatesNotifications

National Consumer Disputes Redressal Commission

Central Government establishes a National Consumer Disputes Redressal Commission to be known as the National Commission.

The President and every other member of the National Commission appointed immediately before the commencement of the Consumer Protection Act, 2019 shall continue to hold office as the President and Member of the National Commission as provided in Section 56 of the said Act.

NOTIFICATION


Ministry of Consumer Affairs, Food and Public Distribution

[Notification dt. 11-01-2020]

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench of Dr Dhananjaya Y Chandrachud, Indu Malhotra and Indira Banerjee, JJ., observed that

“Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer‘s Agreement.”

Judgment passed by the National Consumer Disputes Redressal Commission is in Challenge

Appellant-Developer challenged the decision of NCDRC wherein refund of the amounts deposited by the Apartment Buyers was directed on account of inordinate delay in completing the construction and obtaining the Occupation Certificate.

Issues for Consideration:

  • Determination of the date from which the 42 months period for handing over possession is to be calculated under Clause 13.3, whether it would be from the date of issuance of the Fire NOC as contended by the Developer; or, from the date of sanction of the Building Plans, as contended by the Apartment Buyers;
  • Whether the terms of the Apartment Buyer‘s Agreement were one-sided, and the Apartment Buyers would not be bound by the same;
  • Whether the provisions of the Real Estate (Regulation and Development) Act, 2016 must be given primacy over the Consumer Protection Act, 1986;
  • Whether on account of the inordinate delay in handing over possession, the Apartment Buyers were entitled to terminate the agreement, and claim a refund of the amounts deposited with interest.

Analysis

Bench made a pointwise analysis of the instant matter wherein in the first issue, the point of controversy was whether the 42 months’ period is to be calculated from the date when the Fire NOC was granted by the authority concerned as contended by the Developer; or, the date on which the Building Plans were approved as contended by the Apartment Buyers.

In accordance with Section 15 of the Haryana Fire Safety Act, 2009, it is mandatory for a Builder/Developer to obtain the approval of the Fire Fighting Scheme conforming to the National Building Code of India, and obtain a ‘No objection Certificate’ before the commencement of construction.

Clause 13.3 of the Apartment Buyer’s Agreement provides that the 42 months’ period has to be calculated from the date of approval of Building Plans and/or fulfilment of the pre-conditions imposed thereunder.

Bench opined that it was a mandatory requirement under the Haryana Fire Safety Act, 2009 to obtain the Fire NOC before the commencement of construction activity. The said requirement was stipulated in the sanctioned Building Plans, as also in the Environment Clearance.

 The 42 months‘ period in Clause 13.3. of the Agreement for handing over possession of the apartments would be required to be computed from the date on which Fire NOC was issued, and not from the date of the Building Plans being sanctioned.

In the instant matter, there was a delay of approximately 7 months in obtaining the fire NOC by Developer.

Whether the terms of the Apartment Buyer’s Agreement are one-sided?

Court observed on perusal of the clauses mentioned in the Agreement that the said clauses were wholly one-sided terms of the Agreement Buyer’s Agreement, which were entirely loaded in favour of the Developer and against the allottee at every step.

For the said issue, Court held that the terms of the Apartment Buyer‘s Agreement are oppressive and wholly one-sided, and would constitute an unfair trade practice under the Consumer Protection Act, 1986.

Incorporation of one-sided and unreasonable clauses in the Apartment Buyer’s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act.

Whether primacy to be given to RERA over the Consumer Protection Act?

Bench expressed that this Court has upheld the applicability of provisions of Consumer Protection Act as an additional remedy, despite the existence of remedies under special statutes, including the Arbitration and Conciliation Act, 1996.

In the decision of  Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751, it was held that the remedy under the Consumer Protection Act, 1986 is confined to the Complaint filed by a Consumer as defined by the Act, for defects and deficiency caused by the service provider.

In a recent decision of this Court in Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783, it was held that remedies under the Consumer Protection Act were in addition to the remedies available under special statutes. The absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear. Section 18 of the RERA Act specifies that the remedies are “without prejudice to any other remedy available”.

Whether the Apartment Buyers are entitled to terminate the Agreement or refund of the amount deposited with Delay Compensation?

Answering this issue, the Court categorised the buyer/allottees into two categories:

  • Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made
  • Apartment Buyers whose allotments fall in Phase 2 of the project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far.

For category 1, it was held that such allottees (barring an exception) were obligated to take possession of the apartments, since the construction was completed, and possession offered on 28-06-2019, after the issuance of Occupation Certificate on 31-05-2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from  27-11-2018 till the date of the offer of possession was made to the allottees.

So far category 2 is concerned, it was held that such allottees are entitled to refund of entire amount deposited by them, along with compensation and interest.

In view of the above discussion, civil appeals were disposed of. [Ireo Grace Realtech (P) Ltd. v. Abhishek Khanna, 2021 SCC OnLine SC 14, decided on 11-01-2021]

Case BriefsHigh CourtsTribunals/Commissions/Regulatory Bodies

It’s the last day of 2020, and here we are with the 20 most-read Case Briefs of the SCC Online Blog in the Year 2020.

The following lists consist of the most-loved Case Briefs by SCC Blog Readers.

[Bombay High Court]

Bom HC | State Govt. declares ATMA, XAT, MAT, GMAT entrance tests not to be valid eligibility for MBA/MMS courses, instead only MS-CET, CMAT and CET to be valid: Read HC’s decision on Government Circular

[Anmol Jagdish Baviskar v. Minister, Higher and Technical Education Department Mumbai; 2020 SCC OnLine Bom 3853, decided on 11-12-2020]


[National Consumer Disputes Redressal Commission]

If a person carries out trading in shares on an occasional basis by opening a Demat Account, will that person come under the ambit of Consumer? Read NCDRC’s opinion

[Vaman Nagesh Upaskar v. India Infoline Ltd., 2020 SCC OnLine NCDRC 469, decided on 28-10-2020]


[Bombay High Court]

Bom HC | If the wife is earning something for livelihood, can the same be a ground to refuse alimony under S. 24 of Hindu Marriage Act? Read Court’s ruling reiterating SC’s decision

[Arpana Vijay Manore v. Dr Vijay Tukaram Manore, 2020 SCC OnLine Bom 3925, decided on 09-12-2020]


[Delhi High Court]

Del HC | Schools free to decline Online Education Facility to students whose parents fail to pay tuition fees

[Queen Mary School Northend v. Director of Education, 2020 SCC OnLine Del 736 , decided on 08-07-2020]


[Allahabad High Court]

All HC | Offences under Ss. 498-A IPC and 3/4 of Dowry Prohibition Act compounded in light of settlement between parties

[Deena Nath v. State of U.P., 2020 SCC OnLine All 1057, decided on 23-09-2020]


[Supreme Court]

Maintenance of wife|Husband doesn’t have to pay maintenance in each of the proceedings under different Maintenance laws [Explainer on Supreme Court guidelines]

[Rajnesh v. Neha,  2020 SCC OnLine SC 903, decided on 04.11.2020]


[Kerala High Court]

Ker HC | If a particular income is not taxable under Income Tax Act, it cannot be taxed on basis of estoppel or any other equitable doctrine; Court reiterates principles for recovery under Income Tax Act

[Uniroyal Marine Exports v. CCE,  2020 SCC OnLine Ker 5175, decided on 17-11-2020]


[Allahabad High Court]

[Maintenance to Muslim wife] All HC | “S. 125 CrPC perhaps one of the most secular enactment ever made in this country”: HC while upholding maintenance awarded to a divorced Muslim wife

[Jubair Ahmad v. Ishrat Bano, 2019 SCC OnLine All 4065, decided on 18-10-2019]


[Kerala High Court]

Ker HC | No blanket order should be passed under S. 438 CrPC to prevent accused from being arrested when there is no crime registered against him; Court quashes order granting anticipatory bail

[State of Kerala v. Ansar M.C.,  2020 SCC OnLine Ker 4569, decided on 21-10-2020]


[Supreme Court]

SC clarifies law on admissibility of electronic evidence without certificate under Section 65B of Evidence Act, 1872

[Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, 2020 SCC OnLine SC 571, decided on 14.07.2020]


[Allahabad High Court]

All HC | Can a complaint filed in light of S. 138 NI Act be dismissed on ground of one day delay? Read Court’s reasoned order

[Pankaj Sharma v. State of U.P., 2020 SCC OnLine All 1339, decided on 22-09-2020]


[Chhattisgarh High Court]

Chh HC | Can an application for anticipatory bail under S. 438 CrPC be filed directly before the High Court? || Thorough Analysis

[Hare Ram Sharma v. State of Chhattisgarh, 2020 SCC OnLine Chh 639, decided on 18-11-2020]


[Bombay High Court]

[S. 125 CrPC] Bom HC | Wife cannot be denied maintenance on ground of having a source of income

[Sanjay Damodar Kale v. Kalyani Sanjay Kale, 2020 SCC OnLine Bom 694, decided on 26-05-2020]


[Calcutta High Court]

Cal HC | Rejection of complaint under S. 156(3) CrPC by Magistrate without taking cognizance under S. 190(1)(a) is an error in law; correct approach explained

[Pranati v. State of W.B., 2020 SCC OnLine Cal 132, decided on 21-01-2020]


[Delhi High Court]

Del HC | If interim maintenance by wife has already been secured under Domestic Violence Act, will application under S. 125 CrPC be maintainable? Court answers

[Rani v. Dinesh, Crl. Rev. P. 1091 of 2019 and Crl. M.A 13677 of 2020, decided on 02-12-2020]


[Himachal Pradesh High Court]

HP HC | Remedy under S. 125 CrPC and S. 12 of DV Act, 2005 are distinct and different; Law does not prohibit wife to proceed under both of the said statutory provisions simultaneously or otherwise; Petition dismissed

[Sachin Sharma v. Palvi Sharma,  2020 SCC OnLine HP 2109, decided on 26-10-2020]


[Chhattisgarh High Court]

Chh HC | S. 320 CrPC is no bar to the exercise of power of quashing of FIR in matrimonial matters; Petition allowed

[Gurumukh Das Chandani v. State of Chhattisgarh, 2020 SCC OnLine Chh 568, decided on 27-10-2020]


[Allahabad High Court]

All HC | Principle contained in S. 141 of NI Act is not applicable to a sole-proprietary concern, firm need not be arraigned as an accused while making a claim for recovery under S. 138 of the NI Act

[Dhirendra Singh v. State of U.P., 2020 SCC OnLine All 1130, decided on 13-10-2020]


[Karnataka High Court]

[MV Act] Kar HC | Will the insurance company be liable for compensation if the vehicle was insured as ‘private vehicle’ but plyed on ‘hire’ at the time of accident? HC decides

[United India Insurance Co. Ltd. v. Basavaraj, 2020 SCC OnLine Kar 1652, decided on 02-11-2020]


[National Consumer Disputes Redressal Commission]

NCDRC | Can a consumer claim refund of principal amount if flat not delivered on time? Commission untangles two fundamentals for Buyer — Consumer

[Ankur Goyal v. Rise Project (P) Ltd., 2020 SCC OnLine NCDRC 465, decided on 14-10-2020]

Law made Easy

[Disclaimer: This note is for general information only. It is NOT to be substituted for legal advice or taken as legal advice. The publishers of the blog shall not be liable for any act or omission based on this note]

The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration.”

Y.V. Chandrachud, J. in Prag Ice & Oil Mills v. Union of India, (1978) 3 SCC 459

 Introduction

“An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto”

The long title of the new Consumer Protection Act, 2019 (“2019 Act”) in the least number of words explains the whole and sole purpose of the Act. While the Consumer Protection Act, 1986 had nearly the same long title, but being around three decades old, did not inculcate the needful things that would have solved the problems of the modern and technology-dependent consumers, which is why a need was felt to replace the whole Act with a new one and bring a fundamental change.

The Parliament passed the Consumer Protection Bill, 2019 on 06-08-2019 to replace the Consumer Protection Act, 1986. The President of India gave its accent to the 2019 Act on 09-08-2019 and the same came into force on 20-07-2020. The 2019 Act has been enacted for the purpose of providing timely and effective administration and settlement of consumer disputes and related matters.

Related Read:

Substantial portion of Consumer Protection Act, 2019 along with related Rules to come into force on 20th July, 2020

Consumer Protection Act, 2019 comes into force from today

Brief History of Consumer Protection Act in India

Consumer Protection has always been a matter of great concern. In ancient India, effective measures were initiated to protect consumers from crimes in the market place. Ancient law-givers ably described various kinds of unfair trade practices and also prescribed severe punishments for wrongdoers. Mainly, acts of adulteration and false weights and measures were seriously dealt with.

In the medieval period, some Muslim rulers developed well-organized market mechanisms to monitor prices and the supply of goods to the markets. During the British period, the modern legal system was introduced in India and many laws were enacted to protect the interests of consumers generally.

Some of the laws which were passed during the British regime concerning consumer interests were: the Contract Act of 1872, the Sale of Goods Act of 1930, the Penal Code of 1860, the Drugs and Cosmetics Act of 1940, the Usurious Loans Act of 1918, and the Agriculture Procedure (Grading and Marketing Act) of 1937. These laws provided specific legal protection for consumers.

Today, the civil justice system is tainted with deficiencies that discourage the consumer from seeking legal recourse. However, the Consumer Protection Act of 1986, which provided easy access to justice, had brought a legal revolution in India as a result of its cost-effective mechanisms and popular support. However, with the gradual advancements in technology, the age-old 1986 Act was unable to keep up with the grievances of the modern consumer. Thus, a need was felt to substitute the old Act which resulted in the enactment of the Consumer Protection Act, 2019.

Key features of the Consumer Protection Act, 2019

  • The new Act which was drafted keeping in mind the needs of the modern consumers incorporates new terminologies which had no place in the old Act. Under Section 2(1)advertisement” is defined as any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents; which means that now a consumer who is aggrieved due to some kind of misleading advertisement can approach the authorities concerned seeking relief.
  • A provision for a minor being a consumer has been introduced under Section 2(5)(vii) of the Act where the parent or legal guardian can approach the authorities through the minor seeking relief.
  • A new clause of “product liability action[Section 2(35)] has been added with definition of “complaint” under Section 2(6)(vii) which lies against the product manufacturer [Section 2(36)], product seller [Section 2(37)] or product service provider [Section 2(38)] as the case may be.
  • Under the new Act, “consumer” is defined under Section 2(7) as a person who “buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose” or “hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.”

Thus, a consumer will now mean any person who “buys any goods” and “hires any services” which shall include both online and offline transactions through electronic means, teleshopping, direct selling or multi-level marketing.

  • The most important feature of the new Act definitely being the rights of the consumer under Section 2(9), which includes,
    • the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
    • the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
    • the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
    • the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
    • the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
    • the right to consumer awareness.
  • Section 2(10) and 2(11) of the Act talk about “defect” and “deficiency” “Defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied or as is claimed by the trader in any manner whatsoever in relation to any goods or product and the expression “defective” shall be construed accordingly; whereas “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes—(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and

(ii) deliberate withholding of relevant information by such person to the consumer.

  • The new additions include “e-commerce” Section 2(16), “electronic service provider” Section 2(17) along with the prescribed liabilities in relation to internet frauds. This has broadened the scope of the Act and it looks after the better protection of the rights of e-consumers and also enables them to proceed against e-commerce websites in the event of any infringement or violation.
  • Thereafter, a series of new terminologies have been added to Section 2 of the Act, for example a brand new concept of “product liability” has been included in the new Act which has been defined under Section 2(34) of the Consumer Protection Act, 2019 as “the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;” and in lieu of which the concepts of “product liability action”, “product manufacturer” etc. have also been included in the Act.

Central Consumer Protection Authorities

One of the major drawbacks of the previous Act was that there were no protection authorities in order to keep check, regulate and address the grievances of the consumers in an effective and speedy manner. Chapter III of the 2019 Act provides with the Central Consumer Protection Authority (CCPA) which has been added in order to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class. Central Authority shall consist of a Chief Commissioner and such number of other Commissioners as may be prescribed, to be appointed by the Central Government to exercise the powers and discharge the functions under this Act. It will consist of an investigation wing headed by a Director-General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.

An appeal to an order passed by the CCPA on this issue can be filed before the National Commission within a period of 30 days from the date of the receipt of such order.

How to make a complaint?

Section 17 states that a complaint relating to violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class, may be forwarded either in writing or in electronic mode, to any one of the authorities, namely, the District Collector or the Commissioner of Regional Office or the Central Authority.

The Central Authority under Section 21 has been provided with the powers to issue directions and penalties against false or misleading advertisements.

Consumer Dispute Redressal Commission (CDRC)

Chapter IV of the Act deals with the Establishment, Qualifications, Jurisdiction, Manner of Complaint, Proceedings etc. regarding the Consumer Disputes Redressal Commission. CDRC is empowered to resolve complaints with respect to unfair and restrictive trade practices, defective goods and services, overcharging and goods which are a hazard to life and safety. It has to be set up at three levels, i.e. the District, State and National levels (commissions). In comparison to the old Act, the jurisdictions of the commissions have been enhanced.

      District Consumer Disputes Redressal Commission (previously known as the District Forum):

District Commission shall consist of a President and not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government. The District Commission now has the jurisdiction to entertain complaints where the value of the goods and services paid as consideration does not exceed one crore rupees. Section 34(2)(d) categorically states that the complaint can now also be instituted in a District Commission within the local limits of whose jurisdiction the complainant resides or personally works for gain, apart from filing in the jurisdiction where the other side actually or voluntarily resides, or carries a business, or has a branch office or personally works for gain.

      State Consumer Disputes Redressal Commission (previously known as the State Commission):

The State Commission shall have jurisdiction to entertain the complaints where the consideration exceeds one crore rupees but does not exceed ten crore rupees.

      National Consumer Disputes Redressal Commission (previously known as the National Commission):

The National Commission shall have the jurisdiction to entertain complaints where the consideration paid exceeds ten crore rupees.

The jurisdiction in which the complaint is to be filed is now on the basis of the value of the goods and services paid, which was not the case in the 1986 Act where it was on the value of the goods and services and the compensation, if any, claimed. A great emphasis has been placed on mediation which will be dealt with further.

Mediation

The Act has introduced a new chapter (Chapter V) on mediation as an alternate dispute resolution mechanism in order to resolve the consumer dispute in a much faster way without having to approach the Commissions. Thus, in the events where the mediation is successful in whole, the terms of such agreement shall be reduced into writing accordingly. Where the dispute is settled only in part, the Commission shall record the statement of the issues which have been settled, and shall continue to hear the remaining issues involved in the dispute. In case of unsuccessful mediation the respective Commission shall within seven days of the receipt of the settlement report, pass a suitable order and dispose of the matter accordingly.

Offences and Penalties

Section 21(2) and Section 89 of the 2019 Act provides the Central Authority with the power to impose a penalty in respect of any false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. Apart from this, a separate chapter (Chapter VII) for offences and penalties has been introduced where detailed penalties and punishments have been mentioned in relation to non-compliance, or manufacturing for sale or storing, selling or distributing or importing products that are adulterated or spurious.

Related Rules and Regulations

  • The Consumer Protection (E-Commerce) Rules, 2020 which are mandatory and are not advisories, lay down all the important information relating to the e-commerce entities keeping in mind both the consumer and the product/service provider. Key highlights are:
    • E-commerce entities according to Rule 5 are required to provide information to consumers, relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options and country of origin.
    • These platforms will have to acknowledge the receipt of any consumer complaint within 48 hoursand redress the complaint within one month from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.
    • Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
    • The rules also prohibit the e-commerce companies from manipulating the priceof the goods or services to gain unreasonable profit through unjustified prices.
  • As per the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 which came into force on 20th July 2020, the amount of fee payable for filing the complaint in the District Commission up to Rs 5 lakhs has been made Nil according to Rule 7.
  • The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund(CWF).
  • State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
  • Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council(CCPC).
    • It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields.
    • It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region: North, South, East, West, and North-East Region.

Conclusion

The 2019 Act is a much required change in favor of the consumers considering the current age of digitization. It empowers them with clearly defined rights and dispute resolution process which will enable them to get their grievance addressed with a fast track mechanism.

In order to have a better understanding of the concepts have a glance over some of the landmark judgments given by our Courts according to the Consumer Protection Act, 1986 which is now repealed but the guidelines laid down in those cases helped in framing the new Consumer Protection Act, 2019.

  • The Delhi High Court while examining the concept of advertisement decided the case of,

 Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC OnLine Del 873

The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to Horlicks on the grounds that the same was misleading and disparaging. The Court relied on various judgments on misleading advertisements, disparagement and law governing publication of advertisements on television. Major decisions were:

Dabur (India) Ltd. v.  Colortek (Meghalaya) (P) Ltd., 2010 SCC OnLine Del 391

The Delhi High Court culled out the principles governing disparagement in the advertisements and held:

On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:

(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.

(ii) An advertisement must not be false, misleading, unfair or deceptive.

(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one’s product.

To this extent, in our opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.

 Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 SCC OnLine Del 802

In Pepsi Co. it was held that certain factors had to be kept in mind while deciding the question of disparagement. Those factors were:

(i) Intent of the commercial,

(ii) Manner of the commercial, and

(iii) Story line of the commercial and the message sought to be conveyed.

These factors were amplified or restated in the following terms:

“(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.

(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?

In this context it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavorable comparison but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect.

(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.”

Related Read:

Advertisement to Misleading Advertisement | Horlicks Ltd. v. Zydus Wellness Products

The complainant/respondent had participated in Mc Donald’s widely published scheme ‘Mc Donald’s Mein Khao Har Bar Prize Le Jao’ by placing two separate orders worth Rs 81. It was alleged by the complainant that Connaught Plaza Restaurants Ltd. (CPRL) a franchisee running Mc Donald restaurants has indulged in unfair trade practices by not giving the assured prizes as per the scheme, rather put the participants under the obligation to make a further purchase of a minimum Rs 20 in order to avail free French Fries. Also, the complainant had to send two SMS giving the coupon numbers, for which Rs 3 per SMS were charged. Moreover, the details of the entire scheme with its terms and conditions and the result of the winners were also concealed from the participating customers. Therefore, the complainant filed a consumer complaint before the District Forum praying to declare the scheme as unfair trade practice and that Connaught Plaza Restaurants Ltd. be directed to disclose the entire scheme and winners of the prizes. The District Forum allowed the complaint and awarded compensation and costs to the complainant of Rs. 10,000 and Rs.2,000.

Aggrieved, CPRL filed an appeal before the State Commission, but the State Commission modified the order of the District Forum by enhancing the compensation and awarding punitive damages to the tune of  Rs. 2,00,000 and Rs. 10,00,000.

CPRL then appealed before the NCDRC. The NCDRC held that no proof had been filed by the complainant that CPRL had collected the SMS charges or that it had an agreement with the Telecom Company/Service provider on sharing of SMS charges. Thus, the order of the State Commission could not be sustained on those grounds. On the other hand, it held that it is also true that the scheme was an unfair trade practice followed by Connaught Plaza Restaurants Ltd. This fact having been established by the concurrent findings given by the District and the State Commission. The complainant and other similar customers who may not have come forward to file a complaint need to be granted relief. Partly allowing the appeal, the NCDRC reduced the amount of compensation to Rs. 30,000 and costs to Rs. 70,000 respectively.

  • The National Consumer Disputes Redressal Commission (NCDRC) in the recent case of, Ernakulam Medical Centre P.R. Jayasree, 2020 SCC Online NCDRC 490 observed that,

“Releasing a dead body by a hospital to an unrelated third person unquestionably constitutes ‘deficiency in service’ within the meaning of Section 2(1)(g) and (o) of Consumer Protection Act, 1986.”

Related Read:

NCDRC | Releasing a dead body by a hospital to an unrelated third person unquestionably constitutes ‘deficiency in service’ within the meaning of S. 2(1) (g) & (o) of Consumer Protection Act, 1986

  • Recently, the Supreme Court in a judgment laid emphasis on the role of NCDRC in Union of India N.K. Srivastava, 2020 SCC OnLine SC 636, wherein the Court had dismissed an appeal which had aroused from an order of the National Consumer Disputes Redressal Commission. The complaint alleged medical negligence against Sarvodaya Hospital and Safdarjung Hospital. The NCDRC allowed the revision of Sarvodaya Hospital. While exonerating it of the finding of medical negligence, it held Safdarjung Hospital liable to pay the compensation of Rs 2 lakhs imposed by the State Consumer Disputes Redressal Commission.

The District Forum had dismissed the consumer complaint stating that there was no deficiency on the part of Sarvodaya Hospital in referring the complainant to a specialized facility. An appeal was filed before the State Consumer Disputes Redressal Commission by the original complainant. The SCDRC, by its judgment concluded that Sarvodaya Hospital was guilty of medical negligence and directed it to pay a sum of Rs 2 lakhs as compensation and costs quantified at Rs 20,000. However, the complaint was held not to be maintainable against Safdarjung Hospital. A revision was filed against the judgment of the SCDRC by Sarvodaya Hospital before the NCDRC which allowed the revision and came to the conclusion that Sarvodaya Hospital was not guilty of medical negligence, however, the NCDRC elaborated on the question as to whether Safdarjung Hospital had been correctly exonerated. The NCDRC held that though the complainant had not filed a revision against the order of the SCDRC specifically holding that Safdarjung Hospital was not amenable to the jurisdiction of the consumer fora, he was not precluded from challenging a finding which was adverse to him in the revision petition. On these facts, the NCDRC sustained the finding of medical negligence against Safdarjung Hospital and directed it to pay compensation quantified at Rs 2 lakhs.


† Editorial Assistant (Legal)

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Vishwanath (Presiding Member), held that since the Insurance Company itself insured the complainant’s vehicle and the vehicle had been stolen during the currency of the Policy and the Police were informed immediately, the Insurance Company could not repudiate the claim.

The instant revision petition was filed under Section 21(b) of the Consumer Protection Act, 1986 against the Order passed by Rajasthan State Consumer Disputes Redressal Commission.

Facts of the case

Respondent obtained an Insurance Policy from the petitioner for his Car being temporary registration for a sum of Rs 6,17,800.

In the night of 28-07-2011, Complainant’s car was stolen from Geeta Guest House, Jodhpur. Police could not trace the vehicle and submitted a negative final report. Complainant submitted an insurance claim with the Opposite Party/Insurance Company. Petitioner/Opposite Party repudiated the claim, on the ground that intimation of theft of the vehicle was given to the Insurance Company with delay, which was in violation of the Policy condition and though temporary registration of the vehicle expired on 19-07-2011, the Complainant did not get the vehicle permanently registered. Thirdly, the Complainant left the vehicle unattended outside the guesthouse, in violation of the Policy condition.

District Forum dismissed the complaint stating “as at the time of the theft the vehicle is not registered, there was no deficiency in service on the part of the Opposite Party”.

Against the order of the District Forum, the Complainant preferred an Appeal before the State Commission and State Commission set aside the order of the District Forum while allowing the appeal.

Aggrieved by the State Commission’s Order, Opposite Party/Insurance Company preferred the present Revision Petition.

Analysis and Decision

Core issue for the adjudication was in regard to the registration of the vehicle after expiry of temporary registration.

Since the Petitioner/Insurance Company had received the insurance premium and there was no violation of any specific condition in the Insurance Policy, the Insurance Company was liable to indemnify the insured for the loss suffered by the insured.

Though plying a vehicle on road without registration is a violation of provisions of Motor Vehicle Act, the Competent Authority to take action against a non-registered vehicle is the Police and other Government authorities. Insurance Company after accepting the premium, cannot escape from its liability and repudiate the claim on this technical ground.

Commission in view of the instant matter stated that:

The temporary registration of the vehicle expired on 19-07-2011 and the car got stolen on 28-07-2011, mere 9 days later. The Motor Vehicle Act does provide for registration of vehicle after its expiry on payment of certain fee.

Commission held that when the Insurance Company itself insured the complainant’s vehicle and the vehicle had been stolen during the currency of the Policy and the Police was informed immediately, the Insurance Company cannot repudiate the claim of the Complainant on a technical ground.

In view of the above-discussion, State Commission’s Order was justified and the same did not suffer from any illegality, therefore revision petition was dismissed. [United India Insurance Co. Ltd. v. Sushil Kumar Godara, 2020 SCC OnLine NCDRC 494, decided on 11-12-2020]


Advocates for the parties:

For the petitioner: Ms Suman Bagga, Advocate

For the Respondent: NEMO

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh (Presiding Member) while addressing the instant first appeal upheld the State Commission’s Order in regard to a claim filed by the insured with the insurance company.

The instant appeal was filed under Section 19 of the Consumer Protection Act, 1986 challenging the Order passed by the State Consumer Disputes Redressal Commission, Maharashtra.

Complainant Firm took an insurance policy to cover its plant and machinery, electrical installations and stock-in-trade. The premium was paid for the valid policy. In 2005, an incident of fire took place and the insurance company was intimated after which survey was conducted.

The complainant had claimed an amount of Rs 17,00,000 but the surveyor assessed the loss at Rs 1,54,500. Since the Complainant Firm failed to submit the relevant record for verification, as mentioned in the Surveyor’s Report. Hence, Insurance Company filed the claim as ‘no claim’.

State Commission vide its impugned Order dated 22-09-2015 allowed the Complaint at the loss assessed by the Insurance Co.’s Surveyor i.e. at Rs 1,54,500 and awarded the said amount with interest at the rate of 9% per annum.

Complainant Firm appealed before this Commission for enhancement in compensation, specifically for accepting its claimed loss of Rs 17,00,000.

Analysis and Decision

Investigation and Survey by an insurance company are fundamental in determining the amount payable to the insured.

Bench observed that an insurance company is duty-bound to appoint its surveyor in accordance with the provisions of the Insurance Act, 1938 (Section 64 UM Surveyors or loss assessors specifically refers). A Survey cannot be disregarded or dismissed without cogent reasons.

Further, the Commission also observed that the onus,

[a] of showing that the Report of the Surveyor appointed by the Insurance Co. was flawed and

[b] of showing that actually, in fact, the loss was Rs 17,00,000, was on the Complainant Firm, which onus it failed to discharge.

Hence, in view of the above discussion, the Commission held that the State Commission had passed a reasoned order.

State Commission’s impugned order was upheld and confirmed.[Wilson Home Appliances v. New India Assurance Co. Ltd., 2020 SCC OnLine NCDRC 493, decided on 10-12-2020]


Advocates who appeared for the matter:

For the Appellant:  Ms Manisha T. Karia, Advocate

For Respondent 1: Mr S. M. Tripathi, Advocate

For the Respondent 2: Ex parte