Consumer Protection Act

Case BriefsDistrict CourtTribunals/Commissions/Regulatory Bodies

Consumer Disputes Redressal Commission Gujarat State, Ahmedabad: Justice V.P. Patel, President and U.P. Jani, Member, addressed an appeal which was raised in light of a complaint raised due to excess of electricity duty being charged.

Appellants filed the instant appeal under Section 15 of the Consumer Protection Act, 1986 on being dissatisfied with the decision of the District Commission.

 Factual Matrix

Complainant obtained electric connection for their industrial undertaking and consumed exclusively low-tension energy from the opponent company. Energy bills were raised by the opponent corporation and said bills included charges of electricity duty liable under the Bombay Electricity Duty Act, 1958 (Electricity Act). Complainant realized in the year 2012 that the opponents have been collecting electricity duty at a higher rate than the prescribed rates under the Electricity Act.

Opponent charged the electricity duty at the rate of 60%, 30%, 15%, 50% or 25% without any basis. Further, it was stated that the charges of electricity duty were collected by the opponent illegally and unconstitutional in service. It was stated that the opponents could charge the electricity duty as per rules, but they have charged at a higher rate than prescribed in the rules.

Vide letter on 19-12-2012, opponent replied that the electricity duty was required to be collected at the rate of 10% as per the rules and they have started to issue bill with electricity duty at the rate of 10%. Therefore, the complainant had filed a consumer complaint about the difference in amount.

Limitation Period 

Limitation prescribed under the local or special act will be applicable and no general provision of limitation Act will be applied for counting prescribed period.

As per Rule 12(1) of the Electricity Rules, the period of limitation prescribed is 1 year to file an application for refund. Electricity Rules were amended with effect from 31-07-2014.

Coram noted that the documents produced by the complainant addressed to the Collector of Electricity Duty can be said to be applicants for a refund of an amount of excess electricity duty under Rule 12 of the Electricity Rules.

Section 3 of Consumer Proetction Act cannot be said to be inconsistent with Rule 12 of the Electricity Duty Rules.

Since the Collector of Electricity Duty did not act in conformity with fundamental principles of judicial procedure, District Consumer Commission had jurisdiction to deal with the matter.

Commission observed that:

It is true that where the statute gives finality to the order of the Collector of Electricity Duty jurisdiction of Courts is excluded. However, Collector of Electricity Duty had not been complied with the fundamental principle of judicial procedure and acted in conformity of Electricity Duty Act.

In view of the above observation, Consumer Court has jurisdiction in this case.

Collector of electricity duty has not considered the period of 1 year under Section 12(2) of the rules and has not passed an order of refund of electricity duty, this amount to deficiency in service as well as unfair practice.

Hence, in the present matter, it was held that the complainant can get refund of the amount of Electricity Duty charge not prescribed under the Electricity Act and Rules.

As per the documentary evidence and arguments of the parties, Commission concluded that the complainant was not entitled to get any amount of electricity duty for last one year. Therefore, the appeal was allowed.

On verifying the amount deposited by appellant the same shall be refunded with interest. [Gujarat Urja Vikas Nigam Ltd. v. Cham Trawi Nets Organisation, Appeal No. 913 of 2014, decided on 24-05-2021]

Additional Read:

Section 2(1)(o) of Consumer Protection Act, 1986: Supply of electricity is included in the definition of service. [for the definition of “service” in CPA, 2019, see S. 2(42)]

Section 2(1)(c) of Consumer Protection Act, 1986: ‘Complainant’ means any allegation in writing made by the complainant that trader or service provider, as the case made, has charged for the goods or for the service mentioned in the complaint a price in excess of the price, fixed by or under any law in time being force.[for the definition of “complainant” in CPA, 2019, see S. 2(6)]

Case BriefsTribunals/Commissions/Regulatory Bodies

Delhi State Consumer Disputes Redressal Commission (DSCDRC): Coram of Dr Justice Sangita Dhingra Sehgal (President) and Anil Srivastava (Member) decided on the question whether if a car is purchased for the personal use of a company’s Vice President, would the acquisition of such a car come under the Consumer Protection Act.

Present complaint was filed against Mercedes Benz India Private Limited and T&T Motors Limited.

As per the facts of the matter, complainant 1 had purchased a ‘Mercedes Benz C 220’ Car from OP 2 for the personal use of Complainant 2, being Vice president of the company. The said car broke down during the rainfall in Delhi and was sent to OP 3 for repair.

However, till the finding of the present complaint, the complainants received more than five estimates for repair of the said car from the opposite parties, which in total amounted to more than the value of the car.

The car was not delivered by the OPs even after the lapse of 3 months due to which the complainants raised grievances to the OPs, alleging manufacturing defect in the vehicle resulting in deficiency of service and unfair trade practice.

OPs contended that the complainants cannot be stated to be a consumer under the Consumer Protection Act 1986 as the said car was purchased by the company for its Vice president and the same amounted to commercial purpose.

Further, it was added that the vehicle was used in violation of the instructions contained in Owner’s manual and due to negligence, the car broke down.

Cause for delay in repairing was due to the late approval by the Insurance company.

Analysis, Law and Decision

Whether Complainants are consumer or not?

 Bench referred to the decision of National Consumer Disputes Redressal Commission in Crompton Greaves Limited v. Daimler Chrysler India Private Limited, 2016 SCC OnLine NCDRC 2121 wherein it was observed that, If a car or other goods are purchased or the services are hired or availed by a company for the personal use of its directors or employees, the purpose behind such acquisition is not to earn profits or to advance the business activities of the company. 

The acquisition of the goods or the hiring or availing of services, in order to bring the transaction within the purview of section 2 (1) (d) of the Consumer Protection Act, therefore, should be aimed at generating profits for the company or should otherwise be connected or interwoven with the business activities of the company. The purpose behind such acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or services.

Hence, relying on the above-settled proposition of law, Commission in the present matter held that complainants are a consumer under the Consumer Protection Act, 1986 as the said car was purchased for the personal use of the complainant 2 and the purpose behind such purchase was not to earn profits or to advance the business activities of the company.

Deficiency of Service

 OPs failed to show any documentary evidence that the car broke down due to negligence on the part of the complainants or due to the violation of instructions contained in Owner’s manual, hence Commission was in consonance with the contention of the complainants that the said car suffered from some manufacturing defects which were suppressed by the OPs.

Complainant 2 was put to great inconvenience and remained without a vehicle for 4 months.

Bench directed the OP 2 to pay Rs 2,50,000 to the complainants as compensation for inconvenience, mental agony and harassment faced by the complainants and Rs 50,000 as litigation costs. [CJ DARCL Logistics Ltd. v. Mercedes Benz India (P) Ltd., Complaint No. 584 of 2013, decided on 05-05-2021]

Advocates before the Commission:

Manu Beri, Counsel for the Complainant.

Rabiya Thakur, Counsel for OP-1.

Counsel for OP-3.

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, 2021 SCC OnLine NCDRC 171, 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]

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 BriefsDistrict Court

State Consumer Dispute Redressal Commission, Odisha (SCDRC): Dr D.P. Choudhury (President) modified the compensation amount awarded to a Law Student in light of being subjected to ‘Deficiency of Service’ and ‘Unfair Trade by ‘Amazon’.

The instant appeal was filed under Section 15 of the erstwhile Consumer Protection Act, 1986.

Factual Matrix

While the appellant was in his first year of law school, the OP had floated an offer for sale of a Laptop without Laptop Bag for Rs 190 against the price of Rs 23,499.

OP had confirmed for placing of the order and two hours after receiving the confirmation, the appellant received a phone call from the OP’s Customer Care Service Department stating that the subject order stood cancelled due to the price recession issue.

Since the complainant was in need of a laptop to prepare his project, he raised an objection for such cancellation.

On not receiving any response from the OP, complainant issued a legal notice.

Deficiency in Service

Appellant had to purchase another laptop but suffered from mental agony for such cancellation, hence filed a complaint alleging the deficiency in service and unfair trade practice.

Complainant claimed compensation of Rs 50,000 and Rs. 10,000 towards litigation cost.

District Forum had allowed the complaint partly by directing the OP to pay compensation of Rs 10,000 for mental agony and to pay Rs 2,000 towards the cost of litigation.

Hence, the aforesaid impugned order was challenged by the complainant/appellant stating that the District Forum committed error in law by not deciding to direct to pay Rs 50,000 as compensation.

Analysis, Decision and Law

Bench observed that “When there is an advertisement made for offer placed by the OP and made the offer as per the material available on record and complainant placed the order and same got confirmed, the agreement is complete.”

Another aspect to be noted was that, when the OP had allowed Rockery Marketing at his platform as per written version, the responsibility of the OP could not be lost sight of.

Since there was a breach of contract by OP, OP is held to be liable to pay the damages.

Commission agreed with District Forum’s observation that OP not only negligent in providing service but was also involved in unfair trade practice.

Taking all the factors discussed above for consideration, Bench concluded that compensation awarded should be of Rs 30,000 for unfair trade practice and punitive damages of Rs 10,000. Further, with regard to the cost of litigation Rs 5000 needs to be awarded.

On failing to make the above payments to the complainant within 30 days, the said amounts will carry interest at the rate of 12% per annum.

In view of the above, the appeal was disposed of. [Supriyo Ranjan Mahapatra v. Amazon Development Centre India (P) Ltd., First Appeal No. 492 of 2018, decided on 11-01-2021]

Read More:

District Consumer Forum directs ‘Amazon’ to pay compensation for “deficiency in services”

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]

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)

Hot Off The PressNews

It has been reported to the Department that most of the honey brands sold in the market are adulterated with sugar syrup.

This is a serious matter as it will compromise our health in the troubled times of COVID 19 and add to the risk of Covid-19. The Department has asked the Central Consumer Protection Authority(CCPA) to look into the matter. The CCPA, in accordance with Section 19(2) of the Consumer Protection Act 2019, after preliminary examination, has referred the matter to the FSSAI, the food regulator, to take appropriate action in the matter and has offered to extend cooperation in the investigation of the matter for taking class action as envisaged in Section 10 of the Act.

The Department takes the consumer issues seriously.

Recently, taking note of an incident where a 40-year – an old man set himself on fire in a Rohini mall and got burn injuries after mobile phone service centre allegedly refused to replace a phone he had bought for his niece, a 12th class school student for her online classes, the Department took up the matter with the mobile phone company concerned. The mobile company has informed that they have decided to compensate the consumer with Rs. 1,00,000/- and a new Mobile handset.

Use of proper accurate and standards weights and measures are very important for effective functioning of any economy, as it plays an indispensable role in consumer protection as protection from malpractices of underweights or under-measure is an important function of the Government. The Legal Metrology (Packaged Commodities) Rules, 2011 are framed to regulate the pre-packaged commodities. Under these rules, the pre-packaged commodities have to comply with certain mandatory information on e-commerce platform by the seller in the interest of consumers. It was observed that some e-commerce entities are violating the mandatory requirement of declaration of information of the product on e-commerce platforms. Therefore, notices have been issued to various e-commerce entities for non-compliance.

The Department of Consumer Affairs in the Ministry of Consumer Affairs, Food & Public Distribution, Government of India, is the nodal department for consumer protection and it has been taking several measures for the protection of the interests and rights of the consumers. The Consumer Protection Act, 2019 has come into force from 20th July 2020, which provides for three-tier quasi-judicial machinery to provide simple and speedy redressal to consumer disputes. A Central Consumer Protection Authority (CCPA) has been established to regulate matters relating to violation of rights of consumers, unfair trade practice and false or misleading advertisements which are prejudicial to the interests of public and to promote, protect and enforce the rights of a consumer as a class.

Ministry of Consumer Affairs, Food & Public Distribution

[Press Release dt. 10-12-2020]

[Source: PIB]

Case BriefsSupreme Court

Supreme Court: The bench of UU Lalit and Vineet Saran, JJ has held that the Real Estate (Regulation and Development) Act, 2016 (RERA Act) does not bar the initiation of proceedings by allottees against the builders under the Consumer Protection Act, 1986.

“It is true that some special authorities are created under the RERA Act for the regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right “without prejudice to any other remedy available’, in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79.”

Background of the Case

The said decision of the Court came in the matter relating of delay in handing over the possession of flats to buyers by the developer. The apartments were booked by the Complainants in 2011-2012 and the Builder Buyer Agreements were entered into in November, 2013. As promised, the construction should have been completed in 42 months. The period had expired well before the Project was registered under the provisions of the RERA Act. Even after four years there were no signs of the Project getting completed and hence, a complaint was filed by the Buyers.

RERA Act vis-à-vis CP Act: Statutory Analysis

The Court discussed the following provisions for the purpose of deciding the case at hand:

  • Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine.
  • Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law.
  • Section 89 provides that the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.

The Court noticed that an allottee placed in circumstances similar to that of the Complainants, could have initiated following proceedings before the RERA Act came into force.

A) If he satisfied the requirements of being a “consumer” under the CP Act, he could have initiated proceedings under the CP Act in addition to normal civil remedies.

B) However, if he did not fulfil the requirements of being a “consumer”, he could initiate and avail only normal civil remedies.

C) If the agreement with the developer or the builder provided for arbitration:-

i) in cases covered under Clause ‘B’ hereinabove, he could initiate or could be called upon to invoke the remedies in arbitration.

ii) in cases covered under Clause ‘A’ hereinabove, in accordance with law laid down in Emaar MGF Ltd v. Aftab Singh, (2019) 12 SCC 751, he could still choose to proceed under the CP Act.

The Court noticed that on plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated hereinabove, would stand barred from invoking the jurisdiction of a Civil Court.

“The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear.”

To answer the question whether the Commission or Forum under the CP Act is a civil court or not, the Court referred to the decision in Malay Kumar Ganguli v. Dr. Sukumar Mukherjee, (2009) 9 SCC 221 , where it was held,

“The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court.”

Hence, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint.

The Court further discussed the proviso to Section 71(1) of the RERA Act which entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an appropriate application before the adjudicating officer under the RERA Act. It noticed,

“The proviso thus gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that the mandate in Section 12(4) of the CP Act to the contrary is quite significant.”

It was held that insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. Further, Section 18 itself specifies that the remedy under said Section is “without prejudice to any other remedy available”.

“Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act.”

[Imperia Structures v. Anil Patni,  2020 SCC OnLine SC 894, decided on 02.11.2020]

Case BriefsHigh Courts

Punjab & Haryana High Court: Suvir Sehgal, J., dismissed the writ petition for lack of maintainability and directed the petitioner to avail the statutory remedy under the Consumer Protection Act, 1986.

The petitioner has sought for the quashing of the order passed by the respondent in Consumer Complaint No. 35 of 2019 dated 08-01-2020, 26-02-2020 and 11-05-2020 and in M.A. No. 837 of 2020 dated 19-03-2020 along with direction for setting aside of final order dated 26-08-2019 and entire proceedings initiated under Section 27 of the Consumer Protection Act, 1986. This petition comes as a result of an order dated 26-08-2020 rendered by the State Commission in which the petitioner has been directed to refund an amount along with interest and compensation. It is to be noted that the order dated 26-08-2020 has not been appealed by the petitioner before the National Consumer Disputes Redressal Commission, New Delhi. The order was passed ex-parte due to the absence of the petitioner.

Counsel for the petitioner, Anand Chhibbar and Gaurav Mankotia contended that the petitioner has no relation with the present matter and that the respondent had not received any notice of the consumer complaint which let to his absence during the proceedings that ensued.

The petitioner was then questioned over the maintainability of the petition which led to the tribunal perusing Section 27-A(1) of the Consumer Protection Act, 1986 which affirms the remedy of appeal. The Court observed that as per the Act, an appeal from the State Commission lies before the National Commission. In the instant case the petitioner has erroneously approached the High Court instead of the National Commission.

The Court then referred to the case titled Cicily Kallarackal v. Vehicle Factory, (2012) 8 SCC 524 and stated that orders of the State Commission are appealable before the National Commission and that it would be improper for the Court to exercise its jurisdiction under Article 226 of the Constitution of India in the present petition.

In view of the above-stated facts, provisions and judgments the Court held that the Consumer Protection Act, 1986 itself provides for filing of an appeal before the specially constituted forum under the said Act and that deciding the present petition would be untenable.

Resultantly, the petition has been dismissed by the Court for being non-maintainable granting liberty to the petitioner to avail the remedy under the Consumer Protection Act, 1986.[Pranav Ansal v. State Consumer Disputes Redressal Commissioner, Punjab, 2020 SCC OnLine P&H 1182, decided on 13-08-2020]

Legislation UpdatesNotifications

Central Consumer Protection Authority

Central Government establishes the Central Consumer Protection Authority as a body corporate by the said name having perpetual succession and a common seal, with power, subject to the provisions of the Act and the rules and regulations made thereunder, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.

The said Authority has been established with effect from 24-07-2020 and has been constituted under Section 10(1) of the Consumer Protection Act, 2019

NOTIFICATION

Also Read:

Consumer Protection Act, 2019 comes into force

Ministry of Consumer Affairs, Food and Distribution

[Notification dt. 23-07-2020]

Hot Off The PressNews

The Consumer Protection Act, 2019 comes in to force from today i.e. 20th July 2020.

While briefing the media about the Consumer Protection Act, 2019 the Union Minister for Consumer Affairs, Food & Public Distribution Shri Ram Vilas Paswan said that this new Act will empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / spurious goods.

The Act includes establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.  The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements.Shri Paswan further said that the rules for prevention of unfair trade practice by e-commerce platforms will also be covered under this Act. The gazette notification for establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce are under publication.

Under this act every e-commerce entity is required to provide information 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, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.  He said that e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act. He further added that the New Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.

The new Act provides for simplifying the consumer dispute adjudication process in the consumer commissions, which include, among others,  empowerment of the State and District Commissions to review their own orders, enabling a consumer to file complaints electronically and file complaints in consumer Commissions that have jurisdiction over the place of his residence, videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

An Alternate Dispute Resolution mechanism of Mediation has been provided in the new Act.  This will simplify the adjudication process.  A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. Mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions.  There will be no appeal against settlement through mediation.

As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases upto Rs. 5 lakh. There are provisions for filing complaints electronically, credit of amount due to unidentifiable consumers to Consumer Welfare Fund (CWF).  The State Commissions will furnish information to Central Government on a quarterly basis on vacancies, disposal, pendency of cases and other matters.

The New Act also introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. The Act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods. The court may, in case of first conviction, suspend any licence issued to the person for a period of up to two years, and in case of second or subsequent conviction, cancel the licence.

Under this new Act, besides general rules, there are Central Consumer Protection Council Rules, Consumer Disputes Redressal Commission Rules, Appointment of President & Members in State/District Commission Rules, Mediation Rules, Model Rules and E-Commerce Rules and Consumer Commission Procedure Regulations, Mediation Regulations and Administrative control over State Commission & District Commission Regulations.

The Central Consumer Protection Council Rules are provided for constitution of the Central Consumer Protection Council, 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. The Council, which has a three-year tenure, will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and NER. There is also provision for having working groups from amongst the members for specific tasks.

Click here for presentation on salient features of CPA 2019

Also Read:

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

[Source: PIB]

Legislation UpdatesNotificationsRules & Regulations

The Central Government has appointed 20 July 2020, as the date on which certain provisions of the Consumer Protection Act, 2019 shall come into force. The Central Government has exercised the powers conferred by Section 1(3) of the Consumer Protection Act, 2019.

Following is a list of provisions that will come into force on 20 July 2020:   

Chapter

Title

Sections

I

Preliminary ? Definitions

Section 2

[except clauses (4), (13), (16), (40)]

II

Consumer Protection Councils

Sections 3 to 9

[both inclusive]

IV

Consumer Disputes Redressal Commission

Sections 28 to 73

[both inclusive; except sub-clause (iv) of clause (a) of sub-section (1) of 58]

V

Mediation

Sections 74 to 81

[both inclusive]

VI

 Product Liability

Sections 82 to 87

[both inclusive]

VII

 Offences & Penalties

Sections 90 and 91

VIII

 Miscellaneous

Sections 95, 98, 100 to 103 and 105 to 107

[except clauses (f) to (m) and clauses (zg), (zh), (zi) of sub-section (2) of Section 101]

The Centre has also notified certain rules that will come into force on 20 July 2020. Following is the list:

  • Consumer Protection (Central Consumer Protection Council) Rules, 2020
  • Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2020
  • Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2020
  • Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020
  • Consumer Protection (Mediation) Rules, 2020

Notification

Ministry of Consumer Affairs, Food and Public Distribution 

[Notification dt. 15-07-2020]

Case BriefsSupreme Court

Supreme Court: Alarmed by the growing trend amongst seed companies of engaging in frivolous litigation with farmers, virtually defeating the purpose of speedy redressal envisaged the Consumer Protection Act, 1986, the bench of MM Shantanagoudar and R. Subhash Reddy, JJ has said that the summary redressal available to the farmer under the 1986 Act may go a small but crucial way to provide instant relief in a sector which is already facing stress on several counts.

The Court was hearing a case where a Seed Company was contesting the farmers’ claims before consumer fora on the preliminary point of maintainability right up to the Supreme Court, compelling small agriculturists such as the Respondents to spend unnecessarily on litigation in order to secure relief for themselves, amounting to a sum which probably exceeds even the quantum of relief claimed. Rebuking the company, the Court said,

“This tendency to resist even the smallest of claims on any ground possible, by exploiting the relatively greater capacity of seed companies to litigate for long periods of time, amounts to little more than harassment of agriculturists.”

Discussing the serious issue of Farmer suicides, the Court observed that most Indian farmers own only small landholdings, which require expensive inputs such as irrigation, electricity, seeds, fertilizer, and pesticide, but do not generate sufficient output to cover the costs of the same. It further said that when agriculturists with such small landholdings do enter into agreements to grow crops on terms dictated by seed companies, it is in the hope of earning some profit that would offset the cost of their inputs and generate some income for the household.

“the success or failure of the crop would make or break the income of the farmer for the entire season. This can result in situations where small and medium scale farmers find themselves trapped in contracts where they buy expensive seeds which turn out to be defective, resulting in a failed season and severe financial hardship. The problem of indebtedness further worsens the plight of the farmer, and, all too often, manifests in the tragedy of suicide.”

The Court, hence, said that though the farmers faced with grievances against seed companies, may, in suitable cases, opt for other remedies such as a civil suit, relief under the Seeds Act, 1966, but excluding such farmers from the purview of the 1986 Act would be a complete mockery of the object and purpose of the statute. The Court, hence, held that the respondent Farmer in the case at hand was a “consumer” under the 1986 Act.

[Nandan Biomatrix Ltd. S. Ambika Devi, 2020 SCC OnLine SC 309, decided on 06.03.2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Single Judge Bench of V.K. Jain, J., allowed a revision petition filed against the order of the State Commission, whereby the petitioner was directed to reconstruct the tomb in the cemetery of the Cathedral at their own expenses and also pay a sum of Rs.25,000/- as compensation to the complainant.

The complainant/respondent had paid Rs. 1001/- to the opposite party/petitioner for granting permission to construct a family tomb in the cemetery of the said Cathedral. The permission was granted and the family tomb was constructed but later on, it was demolished by the petitioner and hence the respondent approached the appropriate fora claiming deficiency in services on the part of petitioner.

The main issue that arose before the Commission was whether the respondent would fall under the definition of consumer and whether the respondent can be said to have hired or availed the services of the Cathedral or its Trustees.

The Commission observed that as per the definition of the consumer under Section 2(1) (d) of the Consumer Protection Act (COPRA), a consumer is a person who either purchases goods or avails service for a consideration. The Commission then referred to the definition of service as given under Section 2(1)(o) of the COPRA.

The Commission held that from a perusal of Section 2(1)(o) of the COPRA, it becomes clear that granting permission in for construction of a family tomb in lieu of a certain sum of money does not amount to rendering services under the COPRA. At best it can be seen as permission granted to one of the devotees by a religious organization. Further, the Commission also held that a person who is granted such a permission would not fall under the ambit of consumer for the purpose of Section 2(1)(d) of the COPRA. Resultantly, the review petition was allowed and the order of State Commission was set aside. [Jacobite Syrian Cathedral v. Jippu Varkey, Revision Petition No. 2695-2696 of 2018, order dated 25-10-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): A Four member bench comprising of Sudhir Mital, Chairperson and Augustine Peter, UC Nahta, members and GP Mitta, J., directed for a matter to be closed under Section 26(2) of the Competition Act, 2002 due to the dispute falling under the arena of a consumer forum.

The issue raised in the present matter was filed under Section 19(1) (a) of the Competition Act, 2002 against Shoppers Stop Limited (OP) alleged to have contravened Section 3 of the said Act. The Informant had shopped for an amount of Rs 6,495 from the OP for which he had received two discount coupons worth Rs 500. The informant on his next purchase wished to get his coupons redeemed but was denied on the ground that for redemption there is a requirement of minimum shopping for Rs 4000/ to be done, in regard to the stated fact, the Informant submitted that he was not aware about this condition and due to being a senior citizen he was unable to read the same at the back of the coupon.

Further, the commission on giving due consideration to the submissions of the Informant, clarified by referring to the case of Sanjeev Pandey v. Mahindra & Mahindra, Case No. 17 of 2012 that the CCI is primarily aimed to curb the anti-competitive practices and consumer protection Act, 1985 protects the interests of individual consumers against the unfair practices.

Hence, in the present matter, the dispute is a consumer dispute and no prima facie case is being made out against the OP, therefore, the case has been ordered to be closed under Section 26(2) of the Act. [Rajendra Agarwal v. Shoppers Stop Limited,2018 SCC OnLine CCI 62, order dated 30-07-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Single Member Bench of NCDRC presided by V.K. Jain, J. upheld the order of State Commission of Haryana granting relief of about Rs two lakh from the Indian Farmers Fertilizers Cooperative Limited (IFFCO, the petitioner) for selling “adulterated” seeds to two farmers who suffered financial losses due to poor yield.

According to the complainant farmers, they were assured by the petitioner that the seeds would give proper yield of 8 to10 quintals per acre. On poor yield, they made complainants to the Agriculture Department which carried out an inspection and found the plants to be of different variety and about 60-70% of the plants with high growth without any fruits. The complainants approached the  District Forum concerned. Their claims were denied by the District Forum but were upheld by the State Commission on appeal. Aggrieved petitioner approached NCRDC.

The emphasis of the petitioner’s arguments was that that despite circular dated 03.01.2002, the Agriculture Department did not associate representative of the Seed Agency and the Scientists of KGK/KVK, HAU in the inspection and the report was prepared at the back of the petitioner without any notice to it.

Commission relied on its own decision in Reliance Life Sciences Pvt. Ltd. v. Umesh Singh Chandan Singh Saddiwal, 2016 SCC OnLine NCDRC 78 and Apex’s Court judgment in Maharashtra Hybrid Seeds Co. Ltd. v. Alavalapati Chandra Reddy, (1998) 6 SCC 738. The Commission held that the failure of the Seed Inspector or for that matter District Level Enquiry Committee to follow the procedure under Seed Act or Rules thereunder cannot be fatal to a complaint, filed under the provisions of the Consumer Protection Act. Hence, such failure cannot lead to dismissal of a Consumer Complaint, if the complainant is otherwise able to prove his case. Commission also noted that there is no way by which a farmer can compel the seed inspector or the committee to follow the said procedure. [IFFCO v. Vijay Kumar, Revision Petition No. 912 of 2018, order dated 14-06-2018]

Case BriefsSupreme Court

Supreme Court: In a decision, Indu Malhotra, J. speaking for herself and Dipak Mishra, CJ and Dr. D.Y. Chandrachud, J. gave directions to the State Governments to frame appropriate rules under Consumer Protection Act 1986, to address the issue of paucity of infrastructure in consumer fora all over the country.

In January 2016, Supreme Court constituted a three-member committee headed by (Retired) Justice Arijit Pasayat to examine various aspects relating to the issue as mentioned above. In November 2016, directions were issued to the Union Government to frame Model Rules under Sections 10(3) and 16(2) of Consumer Protection Act 1986, for the purpose of ensuring uniformity by the State Governments. In compliance with the said direction, Union of India filed final Draft Model Rules in March 2017, which have been accepted by all the parties concerned.

At this juncture, Supreme Court directed the State Governments to frame rules under Section 30 of the Act within three months in accordance with the Model Rules as framed by the Union. Further, directions were issued to the Union of India to address the matter of creation of additional posts in National Consumer Disputes Redressal Commission (NCDRC) as well as the expansion of its infrastructure. The matter was directed to be listed on August 28. [State of U.P. v. All U.P. Consumer Protection Bar Association, 2018 SCC OnLine SC 570, dated 18-05-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The perusal of the ‘Green’ guidelines for Haj-2008 in its clause 18 gave clarity on “Haj Committee of India not being in the purview of Consumer Protection Act 1986, which is not liable to compensate any pilgrims intending to go on ‘Haj’ pilgrimage.” The Bench comprising of V.K. Jain, J. (Presiding Member), dismissed the complaint on the above-stated basis.

The complainants were pilgrims intending to go for Haj pilgrimage and had applied accordingly. The procedure for the pilgrims to be chosen was done on the basis of draw of lots in which the complainants’ name appeared in a reserved quota and for that, they had paid an amount of Rs. 96,940/- which was the focal point of the complaint as the aggrieved had asked for the refund of the excess amount on not being accommodated in the ‘Green’ category and instead being placed in the ‘Azizia’ category but paying an amount equivalent to the same.

Therefore, the Commission on noting that the State Commission had allowed an appeal in favour of the complainants and the petitioner had filed a revision petition there against, concluded that the Haj Committee rendered its services without any profit motive and the pilgrims intending to go for the Haj pilgrimage, on their own, sign the declaration stating that they would not ask for any claims from the Haj Committee of India as it is not covered under Section 2(1)(d) of the Consumer Protection Act 1986 and thereby the consumer forum held no jurisdiction in the said case, which lead the NCDRC to set aside the impugned order and dismiss the complaint. [Haj Committee of India v. Abbas Ali,2018 SCC OnLine NCDRC 242, dated 04-06-2018]