Legal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

Armed Forces Tribunal (AFT)


Punishment of “Severe Reprimand” after summary trial not a “service matter”; Tribunal has no jurisdiction to deal with such issues

“While interpreting a provision or Statute affecting jurisdiction of courts, their exclusions or inclusions, their extent should be understood in a manner as is explicitly expressed by the law-maker and clearly implied from their intention. All exclusions must either be explicitly expressed or clearly implied.”

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 “Gross injustice done is a case of mind set and adhering to old junk system”; Tribunal imposes exemplary cost of Rs. 75,000 on government for not implementing the order of the High Court for about 23 years

The public interest demands that administration must abide by the promises held out to citizens. It is totally immoral to go back from the promises held out by the mighty state to the detriment of a small people.

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Customs, Excise and Services Tax Appellate Tribunal (CESTAT)


 Whether the supplementary invoices relate to the date of original clearance or the date on which the supplementary invoice was raised? Tribunal answers

 The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) partly allowed an appeal which was filed assailing order-in-original passed by the Commissioner of Central Excise, Customs & Service Tax, Cochin.

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Competition Commission of India (CCI)


TRP Scam: CCI orders closure of information filed against BARC alleging contravention of Competition Act

The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) refused to examine the information filed against Broadcast Audience Research Council on merits.

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Consumer Disputes Redressal Commission, Gujarat State, Ahmedabad


Hospital is liable with respect to medical negligence that may be direct liability or vicarious liability which means the liability of an employer for the negligent act of its employees.

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Income Tax Appellate Tribunal (ITAT)


‘Power’ of conducting IPL is vitally distinct from ‘Object’ of BCCI: ITAT explains substantive law, allows BCCI to continue registration under S. 12-A of Income Tax Act to avail tax exemption benefits

A two-Member Bench of Pramod Kumar (Vice President) and Ravish Sood (Judicial Member) allowed the Board of Control for Cricket in India (“BCCI”) to continue with its registration under Section 12-A of the Income Tax Act, 1961 making it eligible for income tax exemption benefits. The main controversy arose regarding the commercial nature of the Indian Premier League (“IPL”) organised by BCCI, however, there is significant discussion on substantive law in the decision of the Appellate Tribunal.

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Will hostel facility which is incidental to providing education as per object of assessee be a charitable purpose exempted under S. 11 of Income Tax Act? ITAT answers

Coram of Anil Chaturvedi (Accountant Member) and Suchitra Kamble (Judicial Member) allowed the appeal filed by the assessee challenging the assessment order made by the Income Tax authorities.

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National Consumer Disputes Redressal Commission (NCDRC)


Law on Builder-Buyer Dispute | 9-years delay in delivering possession of apartment: Read NCDRC’s decision on refund and interest

In a builder-buyer dispute, Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) noting the 9 years delay in delivery of possession of the apartment directed refund to the buyer.

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Law on Unfair Trade Practice | Builder insisting to sign on papers which stated that “buyer was receiving villa in full ready condition” even when it was not in a livable condition: Is builder’s act under ‘unfair trade practice’? NCDRC decides

Offering possession of incomplete construction and without obtaining “Completion Certificate” does not justify the act of the builder.

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Law on Force Majeure | Builder taking shelter of “Force Majeure” clause for delay in handing over possession: Justified or not? Read what NCDRC says

Expressing that the builder cannot take shelter of “Force Majeure” while delay in handing over possession Coram of C. Viswanath (Presiding Member) and Ram Surat Ram Maurya (Member) directed for a refund of buyers’ amount along with interest.

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Does an arbitration clause in an agreement bar consumer forum’s jurisdiction? NCDRC answers relying on SC decision

Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member)reiterated that the presence of an arbitration clause in the agreement does not bar the jurisdiction of consumer fora.

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Condonation of Delay: Is it a matter of right? NCDRC explains

Expressing its opinion of ‘Condonation of Delay’, Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) dismissed the present appeal calling it an abuse of process of law.

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Under what circumstances will a person cease to be a consumer? Significance of indulging in commercial activities by buying and selling property: Explained

Coram of Justice Deepa Sharma (Presiding Member) and Subhash Chandra (Member)directed a full refund of the principal amount along with interest, due to failure of delivering timely possession of an apartment purchased by the complainant.

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National Company Law Appellate Tribunal (NCLAT)


Existence of Dispute prior to issuance of Demand Notice-NCLT and NCLAT in rhythm, rejects appeal

The Coram of Ashok Bhushan, J (Chairperson), Jarat Kumar Jain, J (Judicial) and Dr Ashok Kumar Mishra (Technical) while dismissing an appeal found no infirmity in the order of the Adjudicating Authority.

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Securities Appellate Tribunal (SAT)


Relents unrelentingly | Tribunal concerns and the concerns of the concerned counterbalanced- 4 weeks and 2000 crore, to lift attachment order while withdraws for some on exigencies and age

“…we are of the opinion that even though it would have been appropriate for the respondent to await the result of the decision of this Tribunal, however, there is no embargo upon the Recovery Officer to proceed independently to recover the amount under Section 28A of the SEBI Act since there was no stay of the impugned order”.

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Securities Exchange Board of India (SEBI)


Exception granted for gifting shares in an acquisition| Proposed acquirer to file report within 21 days post-acquisition

S.K. Mohanty, Whole Time Member, while deciding an order, granted exemption to the Anived Family Trust (Proposed Acquirer) from complying with the requirements of Regulation 3(2) of the Takeover Regulations, 2011 with respect to the proposed direct acquisition in the, Renaissance Global Limited (Target Company), by way of proposed transaction as mentioned in the Application.

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Assuring profits in a market already subjected to risk- Debarred from the market for subjecting others to risk

“Investments in securities markets are subject to risks and hence the returns are unpredictable. Therefore, guarantee of assured profits by the Noticee in any manner through its plans/schemes is fraudulent and might have induced the investors to invest in such plans/schemes”.

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Telecom Disputes Settlement & Appellate Tribunal (TDSAT)


Dual Till, Light Touch Regulation and exclusion from liability to pay UDF by transit passenger; Telecom Tribunal’s decision deals a blow to BIAL

“An impression is created by isolated reading of Section 13(1)(d) that the Authority can only monitor such performance standards relating to quality as have been set specifically by the Central Government or its authorized authority. But full reading of the provisions in the Act and the binding effect of the Concession Agreement easily lead to the conclusion that power under Section 13(1)(d) is an additional power and it does not take away powers and duties of the Authority to monitor quality of the services on the basis of current prevailing national and international practices and the standards.”

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Case BriefsHigh Courts

Bombay High Court: Holding that mere repeal of the Consumer Protection Act, 1986 by the 2019 Act, without anything more, would not result in the exclusion of ‘health care’ services rendered by doctors to patients from the definition of service, the Division Bench of Dipankar Datta CJ and G.S. Kulkarni, J., expressed that present matter is,

“…a thoroughly misconceived Public Interest Litigation and we have no doubt that it deserves outright dismissal.”

In the instant matter, the Trust sought declaration from this Court that services performed by healthcare service providers are not included within the purview of the Consumer Protection Act, 2019 as well as for mandamus directing all consumer fora within the territorial jurisdiction of this Court not to accept complaints filed under 2019 Act against healthcare service providers.

Further, the petitioning Trust submitted that the 2019 Act having been brought into force upon the repeal of the Consumer Protection Act, 1986, registration of complaints, which were filed against doctors, by the consumer fora in the State of Maharashtra was illegal and shall be declared as such.

Analysis, Law and Decision

In High Court’s opinion, there was no material difference between the definition of service in Section 2(1)(o) of the 1986 Act and in Section 2(42) of the 2019 Act, except for inclusion of ‘telecom’ in Section 2(42) of the 2019 Act, the terms of the definition were identical.

Another significant point noted by the Bench was that Section 2(1)(o) of the 1986 Act did not include services rendered by doctors within the term “service”, but such definition was considered by the Supreme Court in its decision in Indian Medical Association v. V. P. Shantha, (1995) 6 SCC 651.

In view of the above, High Court upheld the decision of NCDRC.

Definition of “service” in both the enactments (repealed and new) are more or less similar and what has been said of “service” as defined in section 2(1)(o) of the 1986 Act would apply ex proprio vigore to the definition of the terms “service” in Section 2(42) of the 2019 Act.

 Hence, services rendered by doctors in lieu of fees/charges therefor were not beyond the purview of the 2019 Act.

In view of the above petition was dismissed petitioning Trust was directed to pay Rs 50,000. [Medicos Legal Action Group v. Union of India, 2021 SCC OnLine Bom 3696, decided on 25-10-2021]


Advocates before the Court:

Mr. Ashish S. Chavan a/w Mr. Adithya Iye a/w Mr. Kunal Shinde for petitioner.

Mr. Anil C. Singh, Addl. Solicitor General a/w Mr. Aditya Thakkar a/w Mr. D. P. Singh for respondent-UOI

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Expressing that the builder cannot take shelter of “Force Majeure” while delay in handing over possession Coram of C. Viswanath (Presiding Member) and Ram Surat Ram Maurya (Member) directed for a refund of buyers’ amount along with interest.

Facts in a Nutshell

Complainants had booked a unit in OP’s project and paid a booking amount as well. Later they were allotted a unit vide an allotment letter.

Subsequently, an Apartment Buyer’s Agreement was executed, wherein possession of the unit was promised within 39 months from the date of excavation, excluding an additional grace period of 6 months to complete the project.

Grievance

The grievance of the Complainants was that the OP, despite receiving more than 90% of the total consideration, failed to hand over possession of the Unit, within the promised time period and even possession in the near future seemed unlikely.

Contentions of the OP

OP while contending that the possession could not be delivered in time because some of the customers did not make timely payments also added that there was a shortage of labour due to construction of Commonwealth Games Village, shortage of water, dispute with construction agencies, delays in obtaining licenses, approvals, etc. Further, it was added that as per the Agreement, in case of delay caused due to “Force Majeure” events, the OP would be entitled to an extension of time, without incurring any liability.

Though, the Opposite Party failed to prove that there was an unforeseen and unexpected event that prevented the completion of the Project within the stipulated time period.

Analysis, Law and Decision

Commission expressed that the OP cannot take shelter of the “Force Majeure” Clause and the reasons cited by the OP for the delay of the project, appeared to be delaying tactics veiled as “Force Majeure” conditions and seemed to be an attempt to wriggle out of its contractual obligations.

It was noted that even after receiving the substantial amount OP failed to fulfil its contractual obligation of delivering possession of the Unit to the complainant within the time stipulated.

Conclusion

A person cannot be made to wait indefinitely for the possession of the flats allotted to him/her. The Complainants are, therefore, entitled to seek the refund of the amount paid along with compensation. [Manoj Kawatra v. Pioneer Urban Land & Infrastructure, Consumer Case No. 1442 of 2018, decided on 1-11-2021]


Advocates before the Commission:

For the Complainant: Aditya Parolia, Advocate

For the OP: T.V.S. Raghavendra Sreyas, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC):   Coram of Justice Deepa Sharma (Presiding Member) and Subhash Chandra (Member)directed a full refund of the principal amount along with interest, due to failure of delivering timely possession of an apartment purchased by the complainant.

Facts in a nutshell

Complainant had booked an apartment and made an initial payment of Rs 15,00,000 and an allotment letter was issued. Builder -Buyer agreement was also executed, and the complainant had paid a total sum of Rs 2,23,91,480 on several dates.

It was submitted the due date of delivery of possession was 42 months with a grace period of six months from the date of approval of the building plan. The delivery of the subject flat was not made within the stipulated period.

In view of the above grievance, complainant filed a complaint and prayed that OP be directed to hand over the subject property along with delayed compensation containing all the facilities promised otherwise a direction for a full refund should be ordered along with an interest of 18%.

Analysis, Law and Decision

Coram expressed that a person who buys a good ceases to be a consumer, if that person indulges itself in commercial activities qua the goods and in case of purchase of residential houses, it can be said that buyer is indulging into the activity of buying/selling the properties and purchased it for that purpose.

Settled Position of Law

Burden is upon the OP to prove that the complainant is indulging in commercial activities of sale and purchase of the flats and that he had booked the subject flat with the intention to sell it to earn profit as part of his commercial activities.

Since the OP failed to prove the above in the present matter, Commission held that the complainant was a consumer within the meaning of Section 2(1)(d) of the Act.

OP shall refund the entire principal amount of Rs 2,23,91,480/- to the complainant alongwith compensation in the form of simple interest at the rate of 10.25 % per annum, which is stated to be the interest rate under RERA, in Haryana, in respect of the cases where refund is made to the flat buyer on account of delay on the part of the developer in offering possession of the house, from the date of each payment till the date of refund.

OP shall also pay a sum of Rs 25,000 as cost of litigation to the complainant. [Aloke Anand v. IREO Pvt. Ltd., Consumer Case No. 1277 of 2017, decided on 1-11-2021]


Advocates before the Court:

For the Complainant: Nithin Chandran, Advocate

For the OP: Abhimanyu Bhandari, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Discussing a matter wherein allegedly a defective mobile phone was received From Amazon sellers, Bench of Dr Justice R.K. Agarwal (President) and Dr S.M. Kantikar (Member) emphasized the concept of punitive damages.

Present Consumer complaint under Section 2(1)(d)(i) read with Section 12(1)(c) of the Consumer Protection Act had been filed against Amazon Seller Service Private Limited seeking refund of the amount of Rs 9,119 paid towards purchase of Mobile Phone along with litigation and transportation cost of Rs 1 lakh and Punitive Damages to the tune of Rs 7,43,00,00,000 for causing legal injury and financial loss to the complainant and other innumerable consumers.

Complainant purchased a mobile phone from OP. It was contended that after using the Mobile Phone for a couple of days, it started heating up which compelled him to return the same as per the Easy Return Policy of the OP advertised on T.V. Serial, Media and Print Media.

Since, the Complainant was not able to click the option of Return/Exchange on their website, he called the Customer Support of the Opposite Party and was informed that they had changed its Return Policy on the items purchased.

Complainant sent an email to the OP stating that they had always advertised about Easy Returns and that at the time of purchase, it had not been mentioned that the Refund/Return Policy of the Opposite Party has been changed which amounted to Unfair Trade Practice on their part. Vide an email the OP apprised to the Complainant that if he had received a defective/damaged Phone, he would be eligible only for free replacement and not for a refund.

Further, in the invoice bill of the phone along with the order list, the option of returning the phone was given.

Hence, he stated that the action/inaction of the OP was in violation of the Right of Consumers to be informed about the product and to decide as to whether to purchase the same or not.

Complainant alleged that the OP was involved in Unfair Trade Practice by making a false promise and running misleading advertisement about Easy Refund of the Product. The OP was bound to disclose all the necessary information about its Product enabling the Consumers to take a decision as to whether buy the said product or not.

Analysis, Law and Decision

Commission while referring to the decision of Supreme Court in Magma Fincorp Ltd. v. Rajesh Kumar Tiwari, (2020) 10 SCC 399, answered the question as to whether the punitive damages claimed by the complainant can be treated as part of the compensation for determining the pecuniary jurisdiction of the commission.

In the said decision it was held that the Punitive damages cannot be treated as a form of compensation.

Punitive damages under Section 14(1)(d) of the Act cannot be granted by the Consumer Fora in cases of breach of contract unless the act is so reprehensible that it calls for punishment of the party in breach, by imposition of punitive or exemplary damages.

In the instant matter, Bench stated that some of the purchasers are purchasing the products on the online website and after using the said product for a few days, seek a refund of the amount paid by them.

The above was the reason why OP changed its policy of Easy Return.

Commission added that, in case the Complainant had received the defective mobile phone, the remedy was still available with him to get it replaced despite the change in Return/Refund Policy”.

OP had published in the newspaper, namely the Indian Express about the change in its Return Policy with the Heading “Amazon no longer has a return and get refund policy for mobiles” along with this, the said information was also published in NDTV Gadget 360 with the heading that “Mobile Purchased from Amazon India No longer Eligible for Return”

In so far as the option appearing in the Invoice Bill of the Mobile Phone regarding the refund, was concerned, Commission opined that since there was a gap of only 16 days from the date of change of policy, i.e. 07-02-2017 and purchasing of mobile phone, i.e. 23-02-2017, it was not possible to rectify the said mistake or reprint the Invoice Bill.

Therefore, present matter was not a fit case for awarding exemplary punitive damages and action/inaction of the OP did not warrant any punishment. [Paras Jain v. Amazon Seller Services (P) Ltd., 2021 SCC OnLine NCDRC 312, decided on 22-09-2021]


Advocates before the Commission:

For the Complainant: Mr Paras Jain, In-person

For the Opposite Party: Mr Joy Basu, Sr. Advocate with Mr Amit Kr. Mishra, Mr. Mohit Singh, Mr. Turab Ali Kazmi, Ms. Samridhi Hota and Mr. Kank B, Advocates

Legislation UpdatesNotifications

On August 17, 2021, the Ministry of Power has notified the following timelines for the replacement of existing meters with smart meters with prepayment feature:

  • All consumers (other than agricultural consumers) in areas with communication network, shall be supplied electricity with Smart Meters working in prepayment mode, conforming to relevant IS, as per Central Electricity Authority (Installation and Operation of Meters) (Amendment) Regulations, 2019.
  • All Union Territories, electrical divisions having more than 50% consumers in urban areas with AT&C losses more than 15% in financial year 2019-20, other electrical divisions with AT&C losses more than 25% in financial year 2019-20, all Government offices at Block level and above, and all industrial and commercial consumers, shall be metered with smart meters with prepayment mode by December, 2023.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

Delhi State Consumer Disputes Redressal Commission (DSCDRC): Coram of Dr Justice Sangita Dhingra Sehgal (President) and Anil Srivastava (Member)ordered the builder to refund the money deposited by the complainant, as a consequence of not being able to deliver the possession of flat on time. However, it was held that the builder was not liable to refund the EMI amount paid by the complainant towards loan sanctioned in favour of the complainant.

 Present consumer complaint was filed under Section 17 of the Consumer Protection Act, 1986 against OP 1 and OP 2.

Complainant had applied for booking of a flat in the OP 1’s project and was allotted a flat for the total sale consideration which was agreed at Rs 44,99,387.

Complainant and OP 1 entered into a Flat Buyers Agreement. It was stated in the agreement that the possession of the flat was to be delivered within 18 months from execution of the agreement along with a grace period of 6 months. Though, OP 1 failed to adhere to the stipulated time for delivery of possession and hence the complainant had to withdraw from the project.

Further, OP 1 informed the complainant regarding the deduction. Adding to this, it was submitted that the service tax paid on the entire transaction would also be forfeited.

Complainant got served a legal notice dated 03-10-2015, upon the OP 1 and sought refund of the amount deducted along with compensation for mental agony and harassment.

Alleging deficiency of service and unfair trade practice on the part of OP 1, the complainant approached this commission.

Analysis, Law and Decision

Territorial and Pecuniary Jurisdiction

Whether this commission has the jurisdiction to adjudicate the present complaint?

Coram on perusal of Section 17 of the Consumer Protection Act lead the Commission to the conclusion that it shall have the pecuniary jurisdiction in cases where the total claim including the compensation is more than twenty lakhs and less than One Crore. Moreover, clause 17(2) of the Act provides the extent of territorial jurisdiction, wherein it has been provided that the state commission shall have the jurisdiction to entertain cases where OP 1 at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or the cause of action arose.

Hence, the commission has pecuniary jurisdiction in the present matter.

To strengthen the above finding, Coram relied on the Rohit Srivastava v. Paramount Villas (P) Ltd., 2017 SCC OnLine NCDRC 1198.

Further, the Coram stated that relying on the above case, this Commission has both territorial and pecuniary jurisdiction.

Deficiency of Service 

The stated expression of Deficiency of Service was dealt with by the Supreme Court in Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512.

In Commission’s opinion, OP 1 was deficient in providing its services to the complainant since it had failed to handover the possession of the flat within the stipulated time period and the complainant was entitled to the refund of the money deposited to OP1.

OP 1’s deduction was not justified as the complainant had sought cancellation of the booking of the flat on account of deficient services provided by OP 1, hence the complainant was entitled to refund of the amount forfeited.

However, the Complainant was not entitled to receive an amount of Rs 6,33,289/- since this amount was paid as EMIs towards the loan sanctioned in favour of the Complainant. The OP 1 has no obligation to pay the EMI amount, since there exists no express agreement pertaining to the payment of EMIs to be done by the OP 1. [Kapila Narula v. Logix City Developers (P) Ltd., Complaint No. 149 of 2016, decided on 16-08-2021]


Advocates before the Court:

Ms. Suchita Sharma, Counsel for the Complainant.

Ms. Arushi Pathak, Counsel for the Opposite Party.

Case BriefsSupreme Court

Supreme Court: The Bench of Uday Umesh Lalit, Hemant Gupta and S. Ravindra Bhat, JJ., while giving major relief to homebuyers, held that rights of purchasers are the same as that of original allottees.

Appellant (builder) was aggrieved by the order of the National Consumer Disputes Redressal Commission (NCDRC).

Respondent (Purchaser) sought a direction against the builder, for a refund of the consideration amount of Rs 1,93,70, 883 received by the latter as consideration for the sale of a flat along with interest from the date different instalments were paid as well as compensation and costs.

Factual Matrix

As per the allotment letter, the possession of the flat was to be handed over within 36 months. The original allottee made payment to the tune of ₹1,55,89,329/-, for the first seven instalments as demanded by the builder.

After noticing the slow pace of construction, the original allottee decided to sell the flat. The purchaser who was in search of a residential flat was approached by her through a broker. He was assured that the possession of the flat would be delivered on time, and he agreed to purchase the flat and paid an amount of 1,00,000/- as advance towards the total sale consideration of ₹1,55,89,329/.

Further, it was submitted that the purchaser alleged that possession was not delivered in October, 2015 as promised (in the allotment letter).

Purchaser decided to wait for the possession and not to make any payment towards the sale; however, the original allottee insisted upon the execution of an agreement to sell and demanded payment of instalments, which she had made to the builder, stating that she could not wait for any further and she would forfeit the earnest money and cancel the deal.

The purchaser alleged that he made enquiries from the officials of the builder, who assured that the possession would be delivered by June 2016. Therefore, the purchaser, on 17.02.2016, entered into an agreement of sale with the original allottee, and paid an amount of ₹1,85,00,000/-.

Later, original allottee requested the builder to transfer the flat in favor of the respondent. Purchaser visited the site to acquaint himself with the extent of construction but he was denied entry by the builder’s employees citing security reasons and was informed that the possession would be delivered shortly.

But till the end of the year 2017, possession of the said flat was not delivered.

In view of the above-stated facts, the purchaser sought a refund of the amount, but was in vain. Purchaser expressed his shock on receiving the demand letter for the 11th instalment. But on refusal for the same, builder’s officials threatened the purchaser of cancellation and forfeiture of the amounts paid.

Hence, the appellant had approached the NCDRC for a direction to the builder to refund the entire amount with interest at the rate of 24%.

NCDRC ordered the following:

“…we direct the Developer to refund the amount deposited with the developer.”

Analysis, Law and Decision

Bench noted that the builder’s principal argument was that the rights of a purchaser were not the same as the original allottee.

Supreme Court expressed that the builder did not deny that upon issuance of the endorsement letter, the purchaser not only stepped into the shoes of the original allottee but also became entitled to receive possession of the flat.

Whether a subsequent purchaser is not entitled to similar treatment as the original allottee, and can be denied relief which otherwise the original allottee would have been entitled to, had she or he continued with the arrangement?

Purchasers step into the shoes of Original Allottees

An individual such as the original allottee, enters into an agreement to purchase the flat in an ongoing project where delivery is promised.

The terms of the agreement as well as the assurance by the builder are that the flat would be made available within a time- frame.

It is commonplace that in a large number of such transactions, allottees are not able to finance the flat but seek advances and funds from banks or financial institutions, to which they mortgage the property. The mortgage pay-outs start initially after an agreed period, commencing in a span of about 15 to 24 months after the agreement. This would mean that in most cases, allottees start repaying the bank or financial institutions with instalments (mostly equated monthly instalments) towards the principal and the interest spread over a period of time, even before the flats are ready.

Bench in view of the above-stated expressed that,

“…prolongation of the project would involve serious economic repercussions upon such original allottees who are on the one hand compelled to pay instalments and, in addition, quite often -if she or he is in want of a house -also pay monthly rents. Such burdens become almost intolerable.”

 Hence, allottees cannot indefinitely wait and prefer to find purchasers who might step into their shoes.

Conclusion

Supreme Court on perusal of the facts and circumstances of the case decided that the nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

Adding to the above, Court elaborated that, it cannot be said that a subsequent purchaser who steps into the shoes of an original allottee of a housing project in which the builder has not honoured its commitment to deliver the flat within a stipulated time, cannot expect any – even reasonable time, for the performance of the builder’s obligation. Such a conclusion would be arbitrary, given that there may be a large number- possibly thousands of flat buyers, waiting for their promised flats or residences; they surely would be entitled to all reliefs under the Act.

Since the purchaser agreed to buy the flat with a reasonable expectation that delivery of possession would be in accordance within the bounds of the delayed timeline that he had knowledge of, at the time of purchase of the flat.

Therefore, in the event the purchaser claims refund, on an assessment that he too can (like the original allottee) no longer wait, and face intolerable burdens, the equities would have to be moulded. Hence, it would be unfair to assume that the purchaser had knowledge of the delay.

The equities, in the opinion of this court, can properly be moulded by directing refund of the principal amounts, with interest @ 9% per annum from the date the builder acquired knowledge of the transfer, or acknowledged it.

In view of the above discussion, the order of the NCDRC was modified. [Laureate Buildwell (P) Ltd. v. Charanjeet Singh, 2021 SCC OnLine SC 479, decided on 22-07-2021]

Case BriefsDistrict Court

Delhi State Consumer Disputes Redressal Commission: Coram comprising of Dr Justice Sangita Dhingra Sehgal (President) and Anil Srivastava (Member) addressed a grievance pertaining to loss of photos either due to the Nikon Camera or Memory Card leading to the filing of the consumer complaint.

Facts that led to the present complaint

Complainant was the owner of a Nikon Digital Camera and he took the same camera on a trip to Europe to shoot some memorable photos. After a few days, the said camera started showing a warning to the effect that any further use shall delete all data due to which the complainant switched off the camera and stopped using it.

On return to India, the complainant informed OP-2 of the said fault which had occurred in the camera along with the memory card, who informed him that there was nothing wrong with the camera but the data card had been corrupted.

Complainant left the memory card with Op-2 in their shop for retrieving the data but it proved futile and complainant was told that the memory card will shown at the service centre of Op-1. However, after two weeks the memory card was returned telling the complainant that the retrieval of the data was not possible because the memory card had been totally damaged. It is further alleged that Op-2 offered a replacement of the faulty memory card which complainant declined. It is also stated that later on, Op-2 informed that the memory card was faulty and it was a defective product supplied by OP-3.

Complainant had filed the consumer complaint against all the OPs seeking Rs 5,00,000 compensation for the loss, mental agony and harassment.

District Forum

In District Forum’s opinion, all three OPs were at fault and deficient in providing the service to the complainant, hence liable to compensate the complainant for sufferance of any loss, mental agony and harassment.

Hence each OPs were directed to pay an amount of Rs 25,000

Present Complaint

Nikon impugned the District Forum’s Order on the ground that the Forum erred in not appreciating the fact that the actual problem was with the Memory Card alone and the camera manufactured by the Nikon was in proper working condition.

Further, it was stated that the District Forum failed to take into consideration the warranty clauses that clearly excluded the liability of Nikon from damage occurring due to improper care, misuse, etc.

Crux 

Whether Nikon is liable for Deficiency of Service and has caused mental agony and /or harassment to Respondent 1/Complainant due to Memory Card getting corrupted which was installed in the said camera?

Bench noted that Nikon was neither the manufacturer, dealer, importer, wholesaler of the Memory Card which got corrupted leading to the loss of the photos.

Further, there was nothing on record to show that the loss of photos was caused due to any malfunction of the camera.

Adding to the above, it was stated that Complainant did not face any issue with the Camera and was fully aware that the loss, if any, was caused by the corruption of the Memory Card only and not due to any other reason.

Therefore, order of the District Forum, restrictively to the finding whereby it has held the present Appellant/Nikon liable for loss, mental agony was set aside. [Nikon (P) Ltd. v. K. Prabhakran, First Appeal No. 859 of 2013, decided on 15-07-2021]


Advocates before the Commission:

Mr Saksham Tyagi, Counsel for the Appellant.

None for the Respondents.

Tribunals/Regulatory Bodies/Commissions Monthly Roundup

Here’s a run-through of all the significant decisions covered in the month of June, 2021 under the Section of Tribunals/Commission/Regulatory Bodies.


Armed Forces Tribunal

♦ AFT | Pension cannot be denied for disability being less than 20% where the disability is assessed at 15-19%“

The assessment of disability to the tune of 15-19% itself is a doubtful assessment and cannot be final for the simple reason that there is no barometer which can assess the disability percentage to the extent of 1% and therefore, the percentage of disability which has been assessed as 15-19% may be 20% also and there may be variation of at least two percent plus also. In case of doubt as the benefit should always be given to the applicant.”

https://wp.me/scenps-pension


Competition Commission of India

♦ CCI examines if airlines were involved in cartelization resulting in anti-competitive practice during Jat Agitation in 2016 || Synoptic view of Judgment

“…with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.”

https://wp.me/pcenps-130u

♦ ABFI prohibits State Baseball Associations from joining unrecognised leagues, threatens disciplinary action | CCI to examine such conduct in light of provisions of Competition Act

“ABFI isued communication to its affiliated State Baseball Association requested them no to entertain unrecognized bodies and further by requesting them not to allow their respective State players to participate in any of the tournaments organized by such unrecognized bodies, has violated the provisions of Section 4(2)(c) of the Act as it resulted in denial of market access to other federations.”

https://wp.me/pcenps-130J

♦ CCI | Did Google leverage dominance in Play Store? Director-General to conduct investigation in complaint by smart phone/smart TV users

“..by making pre-installation of Google’s proprietary apps conditional upon signing of ACC for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android and thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the Act.”

https://wp.me/scenps-google

♦ Are Tourist Taxi Unions in State of Goa preventing entry of App-based Taxi Aggregator Companies in Goa? Read a detailed account of CCI’s decision

“..despite the opposition of taxi unions, the State of Goa does not appear to have acceded to or conceded to the demands of the OPs and the policy allowing entry of app based taxi aggregators was eventually notified.”

https://wp.me/pcenps-13au

♦ CCI | Co-location facility of National Stock Exchange is anti-competitive? Is the service an autocratic move against traders? Comprehensive Report

A robust exchange acts as a backbone of the financial system and the provision of co-location facility by exchanges help increase volumes of trades manifold and provides liquidity to investors. This augurs well for the market, the companies and the economy.

https://wp.me/pcenps-13aA


Customs, Excise and Services Tax Appellate Tribunal

♦ CESTAT | Assessable Value to include Advertising and Marketing Costs, if relatable to Imported Goods; Tribunal provides relief to Volvo Auto India

https://wp.me/pcenps-1312


Income Tax Appellate Tribunal

♦ ITAT | Whether DTAA protection in respect of taxation of dividend in source jurisdiction, can be extended to ‘dividend distribution tax’ under S. 115-O, Income Tax Act, in the hands of a domestic company? Matter referred to larger Bench

“Whether the protection granted by the tax treaties, under Section 90 of the Income Tax Act, 1961, in respect of taxation of dividend in the source jurisdiction, can be extended, even in the absence of a specific treaty provision to that effect, to the dividend distribution tax under Section 115-O in the hands of a domestic company?”

https://wp.me/scenps-taxation


National Consumer Disputes Redressal Commission

♦ NCDRC | In a case of death insurance claim, can police investigation be replaced by private agency investigation engaged by insurance company? Commission spells out

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).

https://wp.me/pcenps-12Zd

♦ NCDRC | Builder unilaterally, high-handedly cancels sale agreement on not handing over timely possession: Commission decides builder-buyer dispute, levies interest to be paid by builder

“According to Section 8 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, if the builder is not able to hand over the possession over the building/flat within the time specified in the agreement then the builder is liable to pay interest to the purchaser of the flat for the period for which the possession has not been handed over.”

https://wp.me/pcenps-139u


National Company Law Appellate Tribunal

NCLAT | Can Banks debit amounts from Corporate Debtor Company after Moratorium Order? Is there an obligation of releasing ‘title deeds’ under Resolution Process? Read on

Banks cannot freeze accounts, nor can they prohibit the ‘Corporate Debtor’ from withdrawing the amount as available on the date of the moratorium for its day-to-day functioning.

https://wp.me/pcenps-12UG


Real Estate Regulatory Authorities

Rajasthan Real Estate Regulatory Authority, Jaipur

♦ Is S. 13 of RERA Act a mandatory requirement? Can promoter demand cost of plot more than 10% before registering sale agreement? | Raj RERA decides

https://wp.me/scenps-rera

Maharashtra Real Estate Regulatory Authority, Mumbai

♦ Can promoter/builder sell covered car parking by charging certain amount? Whether open parking has to be handed to society or can be sold in open market? MahaRERA decides

https://wp.me/pcenps-133Q


State Consumer Forums

State Consumer Disputes Redressal Commission, U.T. Chandigarh

♦ Consumer spending hefty amount has right to ask for record of expenditure. Can service provider evade liability? Read on

…every person who is shredding hefty amount from his pocket towards the services being provided to him, has the right to know as to how, where and in what manner, the same has been utilized.”

https://wp.me/pcenps-12OG

Consumer Disputes Redressal Commission Gujarat State, Ahmedabad

♦ Consumer Forum | Can complainant raise consumer dispute where excess electricity duty is charged? Is he overriding statutory remedy if he already approached the Collector? Read on

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

https://wp.me/pcenps-12Ns

State Consumer Disputes Redressal Commission, Telangana

♦ Can insurance company repudiate claim if insured suppresses fact of suffering from ailment while taking policy? Telangana State Consumer Forum answers

“If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.”

https://wp.me/pcenps-134C


Securities Appellate Tribunal

♦ Oscillating Independent Director; SAT to determine independency of Pradip K. Khaitan, independent director of Dhunseri Ventures Ltd.

https://wp.me/pcenps-12PM

♦ SAT | SEBI exonerated preferential allottees, exit providers and LTP contributors from manipulation | SAT terms it ‘cryptic’

https://wp.me/pcenps-135j

♦ SAT | Franklin Templeton gets interim relief | Gives due consideration to the 2 decades’ reputation

https://wp.me/pcenps-138Y


Securities Exchange Board of India

♦ Infosys insider trading | While in possession of Unpublished Price Sensitive Information, 2 employees of Infosys & 6 other entities violated Insider Trading Regulations on Infosys Stock [Detailed Report]

“The liability of acting partners and non-acting partners (collectively known as firm) for the injury to the third party is an outcome of joint and several liability of such partners under IPA, irrespective of whether that the conduct (act of omission or commission of the firm) which gave rise to the loss/injury to the third party is also in violation of any provision under securities law.”

https://wp.me/scenps-infosys

♦ Decoded | SEBI bars Director of Franklin Templeton AMC,  wife from accessing securities markets for 1 yr: Can redemption of units by Director of a mutual fund AMC be titled as fair conduct?

Laws dealing with information asymmetries (PIT Regulations and PFUTP Regulations) essentially seek to address the issues arising out of disparities in access to material information, that is otherwise not legally available to general investors, and to prevent those persons having access to such superior information from exploiting the informational advantage, in order to protect the integrity of the market and maintain investor confidence.

https://wp.me/pcenps-12Vh

♦ SEBI | Not so “independent” Independent director and a concocted scheme with affinity and consanguinity |SEBI takes on each violation with mordant remarks

“…remuneration and qualification are two crucial criterions to evaluate and adjudge the significance of a position held by a person in an organisation and his importance and status in participating in the management of a company.”

https://wp.me/pcenps-133k

♦ SEBI | Kingfisher’s chopped wings and shrinked wingspan | United Breweries Acquisition | Heineken exempted from the obligation under Takeover Regulations with exceptions

https://wp.me/pcenps-135X

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) decided an issue with regard to handing over of possession of flat and cancellation of sale agreement in a builder — buyer dispute.

Arun Kedia (HUF), Arun Kedia and Sabita Kedia (Husband and Wife), members of HUF filed the present complaint.

What led to the filing of the complaint?

OP 1 made advertisements from time to time, inviting applications from prospective buyers for the purchase of the flats.

In 2013, complainants approached the OP and booked a residential flat for purchase and deposited booking charges, in the office of the OP. In June, 2013, a registered sale agreement was executed between the parties. By that time the complainant had deposited an amount of Rs 73,51,426 in the office of the OP. The balance amount was to be paid in instalments.

Complainants paid the amount of instalments as mentioned in the agreement as and when it was demanded by the OP. According to the complainants, thereafter they neither received any demand letter nor possession of the allotted flat was handed to them till March, 2016. They received a demand letter but as in this letter no date of delivery of possession was mentioned as such, they did not deposit the amount demanded in it, rather wrote letters requesting to handover possession over the flat allotted to them.

It was also stated that the complainants were not allowed to go to the site and verify the progress in construction. OP assured the complainants that they would be given possession within a short time.

When the registered notice was served to the OP, they unilaterally cancelled the agreement, mentioning therein that in spite of the demand letter, they had not deposited the instalment as fixed in the agreement.

Complainants requested and sent registered notices to OP to cancel the agreement and hand over the possession, but since the notices were not complied with, the present complaint was filed.

Analysis, Law and Decision

Whether the complainants were defaulter in payment of instalments as fixed in the agreement in spite of the notice given by the OP, they failed to pay it within 7 days and hence the OP exercised its power under the agreement and revoked the agreement?

OR

OP had failed to complete the construction till March 2016 and in order to cover its default, the agreement was cancelled in a high-handed manner, to harass the complainants and divert their mind from asking possession?

Bench noted that the agreement fixed reciprocal liabilities upon both parties.

Further, it was added that if the opposite party has not abided by the terms of the agreement and committed a serious breach then it cannot blame the complainants that they have not deposited the instalments well within time or within seven days issue of the letter of demand.

Commission held that there was nothing on record to prove that the demand letters were actually issued to the complainants. Therefore, the allegation that the complainants committed default in payment on instalment for which the agreement was cancelled was not proved.

Adding to the above reasoning, Clause-14 of the agreement requires service of 30 days prior notice in writing of its intension to terminate the agreement. No such notice was issued by the opposite party to the complainants. Cancellation of agreement, of which the intimation was given through letter, was illegal. 

Coram held that there was nothing on record to show that till March, 2016, the construction was completed and a completion certificate was obtained from the competent authority.

According to Section 8 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, if the builder is not able to hand over the possession over the building/flat within the time specified in the agreement then the builder is liable to pay interest to the purchaser of the flat for the period for which the possession has not been handed over.

Due to latches on the party of the OP, the complainants suffered a loss. The agreement for sale had been cancelled illegally and malafide, in a high handed manner and the complainants were forced into litigation.

Commission directed the OP to handover the possession to the Complainants after taking balance sale consideration within 2 months and execute the final deed of transfer. OP shall also pay simple interest @6% p.a.to the complainants on the amount deposited by them from the due date of possession to the offer of possession after obtaining the Occupancy Certificate.  [Arun Kedia (HUF) v. Runwal Homes (P) Ltd., 2021 SCC OnLine NCDRC 189, decided on 24-06-2021]


Advocates before the Commission:

For the Complainant: Mr. R.M. Kedia, Advocate

Ms. Sabita Kedia, Complainant in person

For the Opp. Party: Ms. Anita Marathe, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) ordered an investigation by the Director-General against Google in view of prima facie contravention of provisions of Competition Act.

Informants filed the instant case under Section 19(1)(a) of the Competition Act against Google LLC, Google India Private Limited, Xiaomi Technology India Pvt. Ltd. & TCL India Holdings Pvt. Ltd. alleging contravention of various provisions of Sections 3 and 4 of the Act. OPs to be referred to as ‘Google’.

Informants stated that they were the consumers of Android-based smartphones, television devices and alleged that Google was guilty of anti-competitive practices which violate Section 4 with Section 32 of the Act.

It was alleged that Google imposed several restrictions, as summarized below, upon smart TV and smart mobile device OEMs by virtue of the agreements entered into with them which tantamount to abuse of its dominant position by Google, in terms of various provisions of Section 4 of the Act.

Analysis

It was noted that Google enters into two agreements with Android TV licensees i.e. Television App Distribution Agreement (TADA) and Android Compatibility Commitment (ACC).

Google makes AOSP available to any third parties under an open-source license, however, the Android Open Source Project license does not grant OEMs, the right to distribute Google’s proprietary apps such as Play Store, YouTube, etc. referred to as Google Applications in TADA. The AOSP license further does not grant Original Equipment Manufacturers (OEMs), the right to use the Android logo and other Android-related trademarks. In order to obtain those rights, Google requires OEMs to sign an optional, non-exclusive agreement, i.e. TADA. Further, TADA requires the OEMs to be in compliance with a valid and effective ACC.

Commission prima facie opined that by making pre-installation of Google’s proprietary apps conditional upon signing of ACC for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android and thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the Act.

ACC prevents OEMs from manufacturing/ distributing/ selling any other device which operates on a competing forked Android operating system.

Therefore, the dominance of Google in the relevant markets and pronounced network effects, by virtue of the stated restriction, developers of such forked Android operating system are denied market access resulting in violation of Section 4(2)(c) of the Act.

Further, Commission prima facie opined that obligations which appear to be applicable across all the devices manufactured by OEMs are akin to making a conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts and thus, violative of provisions of Section 4(2)(d) of the Act.

In relation to the mandatory preinstallation of all the Google Applications under TADA, it is observed that the device manufacturers who sign this agreement cannot pick and choose from the Google Applications for preinstallation. In essence, this entails compulsory tying of ‘must have’ Google apps, which is in contravention of Section 4(2)(a)(i) of the Act.

Elaborating more on the above aspect, Commission stated that Google prima facie leveraged dominance in Play Store in contravention of Section 4(2)(e) of the Act.

Commission directed the Director-General (‘DG’) to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act and the same to be completed within a period of 60 days.

As per the Coram, a case was made out for directing an investigation by the DG.[Kshitiz Arya v. Google LLC, 2021 SCC OnLine CCI 33, decided on 22-06-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

State Consumer Disputes Redressal Commission, Telangana: Justice MSK Jaiswal (President) and Meena Ramanathan (Member) upheld the District Commission’s Order observing the consequence of suppressing the material fact while taking an insurance policy.

If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.

Complainant had submitted that his wife has obtained new money back policy from the OPs with a duration of 20 years for an assured sum of Rs 10,00,000. At the time of accepting the policy, the OPs carried out mandatory medical tests on the proponent and issued the policy in question.

While the policy was in force, the holder died due to cardiorespiratory arrest.

Being the nominee, complainant made the claim with the OPs and to the utter shock and surprise, the OPs repudiated the claim on the ground that the deceased life assured was suffering from lung cancer and took treatment prior to obtaining the policy, hence the claim was repudiated.

Complainant prayed to direct the OPs to pay the amount.

It was stated that OPs investigated the matter, and it was revealed that the deceased life assured suppressed the material fact relating to her health condition giving incorrect answers in the proposal form.

Analysis, Law and Decision

Bench noted that OPs submission was that the insured was suffering from serious ailment viz., lung cancer and suppressed the said fact.

Commission reiterated the legal position that if the insured is found to have suppressed the information which was material for the insurer to decide about the issuance of the policy is made out, the insurance company cannot be made liable to indemnify the insured on the ground that contractual obligations between insured and insurer are based purely on good faith and if insured has knowingly failed to reveal the information which was within her exclusive knowledge, the insurer could not be said to be liable to indemnify the insured.

In the present case, the insurance company contended that even before taking the policy, the insured was suffering from a serious ailment and was undergoing treatment and evidence was placed on record with regard to the said contention.

Coram held that perusal of the crucial documents on record leaves no room for doubt that the insured was aware that she was suffering from a serious ailment for more than 6 months prior to taking the insurance policy and suppressing all those facts, she took the policy.

Therefore, District Commission’s Order holding that complainant was not entitled to any relief was upheld and the complaint was dismissed.[K.N. Vidyakarji v. Life Insurance Corporation of India, FA No. 402 of 2020, decided on 15-06-2021]


Advocates before the Commission:

Counsel for the Appellant: Karakot Nagekar Sai Kumar

Counsel for the Respondents: KRL Sarma

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, 2021 SCC OnLine NCDRC 182, 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 BriefsDistrict CourtTribunals/Commissions/Regulatory Bodies

State Consumer Disputes Redressal Commission, U.T. Chandigarh: The Coram of Justice Raj Shekhar Attri (President) and Padma Pandey, Rajesh K. Arya (Members) observed that a service provider cannot state that it was not obliged to provide any record/bills to the consumer, since a person who is spending hefty amount to receive the services has the right to know where, how and in what manner the money was spent.

Complainant had paid an amount of Rs 27 lakhs to the OPs for the construction of a residential house.

Regarding the completion of work, the complainant asked the OPs to provide the details of the bill, but to no avail and as a result, the complainant hired a professional to assess the work done.

After the assessment, it was found that the value of completion of work done by the OPs came to be Rs 16,77,629 whereas they received an amount of Rs 27 lakhs. Due to which the complainant stopped the work.

OPs extracted Rs 10,22, 371 extra from the complainant causing him financial loss and also failed to complete the construction work as per the agreement and demanded more amount.

In view of the above background, the Complainant sought directions to OPs to refund the excess amount.

OP’s Pleading

Opposite Parties pleaded that as per the agreement, the complainant was liable to pay an amount of Rs 62,84,800, Since 60% of the work was completed, the complainant was supposed to pay an amount of Rs 37,73, 880, out of which only Rs 27 lakhs were paid. OPs also submitted that the person who did the assessment was not an expert. Also, the complainant befooled the OP that his loan was going to get sanctioned and hence the OPs should continue the construction work, even in the absence of payment of remaining amount.

OPs also submitted that they were not obliged to provide the detail of bills for the said construction work.

Analysis, Law and Decision

Moot Question: Whether the OPs had received an excess amount from the complainant towards partial construction work of house done on his plot or not?

Bench opined that to come to any definite conclusion, an independent person qualified in the said field was required to be appointed to give his report resultantly, a Local Commissioner was appointed.

Unfair Trade Practice

Commission noted from the report of the Local Commissioner that through the material in the building and structure raised was as per the required specifications, yet the value of work which has been done at the site came to be Rs 15,04,630 only, whereas, on the other hand, the opposite parties have already received an amount of Rs 27 lacs from the complainant, which act clearly amounts to adoption of unfair trade practice.

Deficiency in Service

Adding to its analysis, Bench also stated that the complainant was right in seeking bills from the OPs. In fact, by not providing the bill, OPs were deficient in providing service.

OPs cannot wriggle out of the situation by stating that they were not obliged to provide any record/bills to the complainant, as the same was not agreed to between the parties, because every person who is shredding hefty amount from his pocket towards the services being provided to him, has the right to know as to how, where and in what manner, the same has been utilized.

Conclusion

Commission directed OPs to refund the amount of Rs 11, 95, 370 received in excess along with 12% interest within a period of 30 days.

To pay compensation for causing mental agony and harassment and also cost of litigation, in lumpsum, to the tune of Rs 50,000/-, to the complainant, within a period of 30 days

If the complainant had availed housing loan from any bank/financial institution for making payment towards price of plot in question, it shall have the first charge on the amount payable, to the extent, the same was due to be paid by the complainant. [Mubarak Masih v. Gautam Construction Company, Complaint Case No. 57 of 2019, decided on 27-05-2021]


Advocates before the Commission:

Abhishek Bhateja, Advocate for the complainant.

N.K. Nagar, Advocate for the opposite parties.

Case BriefsTribunals/Commissions/Regulatory Bodies

Kerala State Consumer Disputes Redressal Commission (KSCDRC): The Coram of Justice Sri K. Surendra Mohan (President) and T.S.P Moosath (Judicial Member), Ranjit. R and K.R. Radhakrishna (Members) decided on whether charging for the 3D glasses for a 3D movie would amount to violation of consumer rights or not.

In the present matter, it has been stated that the complainant had gone to the cinema theatre of the OP for viewing an English 3D Movie ‘Gravity’ in the year 2013, wherein he had carried with himself the 3D spectacles that he had purchased for the amount of Rs 30 n an earlier occasion for another movie.

Since the complainant was carrying his own spectacles he requested a movie ticket worth Rs 50, but the person in charge refused to give him the ticket and insisted that the complainant pays for the 3D glasses as well.

As per the complainant, the spectacles were found to be kept in a plastic cover after use and were being issued to viewers of the next show without any cleaning or sterilization.

Restrictive Trade Practice?

Complainant contended that, the spectacles necessary for viewing 3D movies were given free of cost, on earlier occasions when films like “My Dear Kuttichathan” were screened. The complainant, therefore, alleged that the charging of Rs 30, more than half of the ticket charge, as rent for the spectacles amounted to restrictive trade practice, actionable in law. He, therefore, approached the District Forum claiming compensation.

OPs contention:

The opposite party had not compelled any one to take the 3D glasses on rent. The 3D glasses collected after each show are subjected to a sterilization process and reused only after sterilization. It is not necessary to issue a bill for supplying 3D glasses on rent. No negligence or deficiency in service was committed by the opposite parties. Therefore, they disputed the liability of paying compensation.

Decision

 Coram held that the finding of the District Forum that charging Rs 30 as rent for the 3D spectacles was unjustified, cannot be found fault with. It was noted that Rs 30 charged as rent for the 3D spectacles was admittedly being recovered over and above the ticket charges, for which no entertainment tax had been admittedly been paid.

Violation of the Consumer Rights?

Commission held that the OP’s action of charging Rs 30 rent per 3D glasses for viewing the 3D Movie amounted to a serious violation of the consumer rights. OP in the said process would have extracted a tidy sum of money without providing any consequential benefit to the consumer who has availed the use thereof.

If 3D glasses are necessary for the better viewing of the 3D movie, it is imperative that the said glasses are supplied free of cost for the use of the viewers. Extraction of such amounts by individual theatre owners at their whims and fancies would only give room for exploitation of the consumers.

 Therefore, Coram agreed with the amount of compensation and punitive damages granted by the District Forum.

However, the Commission lastly added that the direction of the District Forum that charges for use of the 3D glasses could be extracted from customers who require the glasses and that too after publishing a notice is without any justification, as contended by the complainant. Any such permission to extract additional charges would not be in the interests of the rights of the consumers whose stakes in such matters are very low. Most consumers may not consider it worthwhile to litigate for small amounts like Rs 30. Therefore, the said direction was vacated.[Ravikrishnan N R v. Proprietor Remya Theatre, Appeal Nos. 431 of 2016 and 553of 2016, decided on 09-04-2021]

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 BriefsHigh Courts

Karnataka High Court: N. Sanjay Gowda, J., allowed the petition and quashed the demand note.

The facts of the case are such that the petitioner is supplied electricity by the licensee i.e. Hubli Electricity Supply Company Limited i.e. ‘HESCOM’. Apart from this, it is also supplying energy from the energy exchange every month which is called as purchase of electricity from Open Access Source. The petitioner is liable to pay tax on electricity consumed by it. A demand to pay a sum of Rs. 94, 47, 534 being a demand for payment was issued by HESCOM. The grievance of the petitioner is regarding whether the electricity tax which is to be paid should be levied on the price at which it purchases, be it from the licensee or from the Open Access Source. Aggrieved by the demand note, instant petition under Article 226 and 227 of the Constitution of India was filed on grounds of it being without jurisdiction and thus unconstitutional.

Counsel for the petitioner submitted that the price paid for purchase of electricity through Open Access Source is different than the price paid by it for the electricity sold to it by the licensee HESCOM.

Counsel for the respondents submitted that irrespective of source of electricity, every consumer is liable to pay tax on the electricity consumed within the State and since, admittedly, petitioner had consumed the electricity within the State of Karnataka, it was bound to pay electricity tax on the rates at which electricity has been supplied by HESCOM.

The Court observed that The Karnataka Electricity (Taxation n Consumption or Sale) Act, 1959 i.e ‘The Act’ was enacted to provide for levy of tax on consumption of electricity energy in the State of Karnataka in the year 1959 for sale of electricity energy in the State of Karnataka.

The intent of Section 3 of The Act is clear that whenever electricity is consumed by a consumer within the State of Karnataka, the consumer is bound to pay electricity tax on that on ad valorem basis at the rate of 6% on the charges payable on the electricity sold or consumed. The deliberate use of the expression “charges payable on electricity sold to or consumed by any consumers” would indicate that the charges for the electricity sold and for the electricity consumed could be different. Section 3 sub section 2 makes it clear that the source of electricity consumed by the consumers would be the yardstick for determination of the electricity charges on the basis of which an ad valorem rate have to be calculated.

Further, it was observed that as per Section 4 (1)(a), licensee is required to collect and pay to the State Government the electricity tax payable under the Act on the electricity charges included in the bill issued by him to the consumers. Thus, it is applicable in respect of electricity sold by the license.

Section 4 (1)(b) clearly states that the licensee shall collect and pay to the State Government the electricity tax payable on the units of electricity supplied to consumer by a non licensee through a license. Thus, a clear distinction is made on the manner in which the tax is paid.

The Court concluded that it is to be borne in mind that the person who sells the electricity would necessarily pay the wheeling and access charges to the licensee and the seller of the electricity would be basically using the infrastructure and paying for the distribution. The licensee, therefore, would have no preferential right.

The Court thus held “the demand made by HESCOM by computing the tax at the rate at which it was selling electricity to its consumers cannot be the basis for levying and collecting the electricity tax. HESCOM shall now calculate the electricity tax at the rate at which the petitioner had purchased the electricity from Open Access Source and issued a revised demand within a period of two weeks from the date of receipt of a certified copy of this order”

In view of the above, petition was allowed.[Southern Ferro Ltd. v. State of Karnataka, W.P. No. 105054/2017, decided on 15-03-2021]


Arunima Bose, Editorial Assistant has reported this brief.


Advocates before the Court:

Counsel for the Petitioner: Mr Gurudas Kannur (Senior Counsel) and Mr Narayan G. Rasalkar (Adv.)

Counsel for the respondent: Ms K. Vidyawati (Add. Adv. Gen), Mr Vinayak S. Kulkarni (for R1, 2 and 5) and Mr B. S. Kamate (Adv.)

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