Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath, Presiding Member, held that the complainant was not investing money in the share market exclusively for earning his livelihood, hence the same was he did not fall under the definition of Consumer.

Instant revision was filed by the petitioner under Section 21(b) of the Consumer Protection Act, 1986 against the order passed by the State Consumer Disputes Redressal Commission.

The revision petition was filed with a delay of 116 days.

Factual Background

The complainant/petitioner had purchased 2000 equity shares of Aravinda Remedies and 200 equity shares of Reliance Power Ltd. by making payments of Rs 13,700 and Rs 49,400 respectively. The OP delivered 1000 shares of Aravinda remedies instead 2000 shares amounting to Rs 6,850 leaving a refundable amount of Rs 6,850.

Further, OP delivered 200 shares of Reliance amounting to Rs 47,400 leaving a refundable amount of Rs 1,960. When the complainant enquired about his Demat Account, he came to know that 200 shares of Reliance Power Ltd. were transferred to the account of Ureka Stock and Share Broking Services without intimation to the complainant.

The OP also did not make a payment of Rs 27,480 being the differential price of the share which were credited to the Demat account of the complainant.

Aggrieved by the non-refunding of the aforesaid amount by the OP, the complainant filed the consumer complaint.

Complaint was partly allowed before the District Forum and on being aggrieved with the same, the complainant approached the State Commission, wherein the matter was remanded to District Forum and the forum dismissed the complaint as barred by limitation.

Further, the State Commission also dismissed the appeal since the transactions involved were commercial in nature.

Analysis, Law and Decision

Maintainability

State Commission had dismissed the complaint with the observation that the complainant was not a “consumer” as he was dealing in the share market.

As per Section 2(1)(d) of the Consumer Protection Act, 1986, a consumer is a person who buys goods or hires or avails services for consideration. The said section, however, carves out an exception by providing that the person who purchases goods or hires/avails services for the commercial purposes shall not be included in the definition of consumer.

Though Explanation to Section 2(1)(d) provides that if such services are availed exclusively for earning livelihood, he will be considered as a “Consumer”.

State Commission relied on the Judgment of this Commission in Steel City Securities Ltd. v. G.P. Ramesh, Revision Petition No. 3060 of 2011 and dismissed the complaint with the observation that the transaction was commercial in nature and the complainant was not a “consumer”.

Supreme Court’s decision in Morgan Stanley Mutual Funds v. Kartick Das, (1994) 4 SCC 224 was also cited, and the law laid down by the Supreme Court still holds good.

“33. Certainly, clauses (iii) and (iv) of Section 2(1)(c) of the Act do not arise in this case. Therefore, what requires to be examined is, whether any unfair trade practice has been adopted. The expression ‘unfair trade practice’ as per rules shall have the same meaning as defined under Section 36-A of Monopolies and Restrictive Trade Practices Act, 1969. That again cannot apply because the company is not trading in shares. The share means a share in the capital. The object of issuing the same is for building up capital. To raise capital, means making arrangements for carrying on the trade. It is not a practice relating to the carrying of any trade. Creation of share capital without allotment of shares does not bring shares into existence. Therefore, our answer is that a prospective investor like the respondent or the association is not a consumer under the Act. Q. 2: Whether the appellant company trades in shares?”

Hence, the complainant was not a consumer and the state commission had passed a well-reasoned order. [Baidyanath Mondal v. Kanahaya Lal Rathi, Revision Petition No. 3286 of 2016, decided on 29-4-2022]


Advocates before the Commission:

For the Petitioner: Mr Sahej Uban, Advocate with Petitioner in Person

For the Respondent: Mr Kanhaiya Lal Rathi (Respondent No.3 in person and

AR for Respondents Nos. 1 & 2)

Case BriefsHigh Courts

Orissa High Court: Narendra Kumar Vyas, J., directed the petitioner to approach Civil Court as the writ court cannot pronounce the legal right of the petitioner to receive compensation.

The instant petition was filed seeking compensation for the wrongful disconnection of electricity. The prayer sought is to award the compensation amounting to rupees one crores in favour of the petitioner at an early date and to take appropriate legal action against the opposite parties.

Counsel for Electricity Company submitted that it does not have any compensation policy. The Court observed that where licence is granted to a supplier for the supply of electricity and before the expiration of the period of licence, the State Electricity Board exercises option to purchase the undertaking of supplier, there is the question of compensation to be paid. But in the instant case, the petitioner is a consumer and has not been able to disclose a policy of the supplier regarding payment of compensation.

The Court thus held “In the circumstances, the writ Court cannot pronounce on a legal right of petitioner to receive compensation. Petitioner must approach the Civil Court and prove wrongful disconnection for decree of compensation.”[Pramod Kumar Rout v. Superintending Engineer Electrical Circle, 2022 SCC OnLine Ori 1123, decided on 13-04-2022]


Appearances

For the Appellants: Mr. A.K. Dash

For the Respondent: Mr. S.C. Das


Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Coram of R.K. Agarwal (President) and Dr S.M. Kantikar (Member) addressed a matter wherein a father had to face embarrassment and mental agony due to the sudden cancellation of rooms booked for his daughter’s marriage which resulted in claiming of compensation.

As per the facts of the case, the marriage of Complainant 1’s daughter was fixed and about 6 months in advance 25 rooms were booked for stay in ‘The Fern-An Ecotel Hotel’ – OP. After a span of 4 ½ months of booking, the hotel sent an email to the complainant about cancelling the said booking on the ground of the non-availability of rooms because of maintenance work.

Further, it was alleged that the reason for maintenance by the OP was completely false and malafide, though the hotel booking was open on the website during the said period.

Aggrieved by the deficiency in service, the conduct and negligent act of the OP, the consumer complaint was filed before the State Commission for Rs 23,45,500 for damages and mental agony.

Analysis, Law and Decision


Coram noted that there was no existence of any agreement between the parties and the appellant cancelled the booking and offered to refund the booking amount, but the complainants did not prefer to collect the amount but filed the Consumer complaint before the State Commission with the highly inflated claim.

For the above, Commission stated that bare quotation is not a confirmation of booking and there should be an agreement between the parties.

“The memories of marriage ceremonies are lifetime events in the life of bride and bridegroom and their family members to make their moments memorable. In our country, certainly, it is not an easy task for the parents to arrange their daughter’s marriage in a five-star hotel in place like Jaipur or any big cities. All of sudden cancellation of booking about 3 months prior to the date of marriage on account of maintenance is not acceptable reason.”

Elaborating further, Commission added that, in most of the star hotels, the maintenance schedule /calendar is fixed well in advance. As in the instant case, the Opposite Party was under the knowledge that the maintenance work would be completed up to 31.3.2012. Therefore, at the first instance only, the Opposite party would have rejected the booking.

In Coram’s opinion, the hotel management was at serious fault, which was well aware of their schedule of maintenance and the room reservations well in advance and the unilateral cancellation of rooms certainly caused huge loss and mental agony to the complainant and his family.

Hence, the act of the OP amounted to a deficiency of service which needed just and reasonable compensation to the complainants.

First appeal was allowed in view of the above discussion and OP was directed to pay Rs 2,53,950 to the complainants along with interest @9% per annum from the date of cancellation of the booking. [Fern-An-Ecotel Hotel v. Navratan Nahata, FA No. 750 of 2013, decided on 21-1-2022]


Advocates before the Commission:

For the Appellant : Mr. Sanjiv Arora, Advocate Mr. Shubham Arora, Advocate

For the Respondent : Mr. Ashok Mehta, Senior Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Coram of Dinesh Singh (Presiding Member) and Karuna Nand Bajpayee (Member) upheld the decision of the District Commission with respect to concealment of pre-existing fatal diseases at the time of taking insurance.

A revision petition was filed challenging the State Commission’s Order.

The dispute was with respect to the repudiation of the claim on the death of the insured. The parties in the present matter are the insurance company i.e., the petitioner and nominee/widow of the deceased insured was the respondent.

Repudiation of the claim was on the ground of concealment of pre-existing fatal diseases at the time of taking the insurance.

Crux

Whether or not the insured knew that he was suffering from fatal diseases, and he deliberately suppressed his medical condition when he took the policy.

The President of District Commission held that the insured had knowledge of his medical condition when he took the policy and he deliberately suppressed material facts when he took the policy. The other two members held that the insured came to know of his fatal diseases only subsequent to the taking of the policy, when the relevant tests and investigations were conducted in the hospital where he was admitted for treatment just before he died. Accordingly, the majority view was that the complaint deserved to be allowed.

State Commission observed that the onus of proving the fact that the insured had prior knowledge that he was suffering from fatal diseases and as such he deliberately suppressed these material facts at the time of filling up the proposal form was on the insurance co.

Further, it was noted that, there was no evidence on record to show that the insured had knowledge that he was suffering from fatal diseases prior to taking the policy and there was inadequate evidence to support that he had deliberately suppressed his medical condition.

Decision of NCDRC

Coram held that the State Commission’s decision was well appraised reasoned order, and no perversity was found for interference.

The Commission agreed with the counsel for the insurance company that suppression of material facts about pre-existing disease/medical condition would undoubtedly be a breach of the insurance contract, which was of utmost good faith.

In the present matter, the onus of establishing the fact that there was a deliberate suppression of material facts was on the insurance company which onus it failed to discharge by adducing the adequate evidence to substantiate such contention.

In view of the above discussion, the petition was dismissed.

Therefore, the award by the District Commission was upheld by the State Commission and has been confirmed. [LIC of India v. Mamta Sipani, 2022 SCC OnLine NCDRC 41, decided on 2-3-2022]


Advocates before the Commission:

For the Petitioner: Mr. Jai Vardhan, Advocate for Ms. Harvinder Kaur, Advocate

For the Respondent: Mr. Yashvir Singh Kadiyan, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members), noted allegations against Star India for providing a bouquet of channels at lesser prices resulting in denying of market access and also amounting to unfair pricing.

Background

Informant had filed information under Section 19(1)(a) of the Competition Act, 2002 against Star India (P) Ltd. (OP 1), Disney Broadcasting (India) Limited (OP 2) and Asianet Star Communications Private Limited (OP 3) alleging, inter alia, contravention of the provisions of Sections 4 of the Act.

Further, the informant was stated to be a Multi-System Operator engaged in the business of providing digital TV services, predominantly in Kerala. It also operated in Karnataka, Andhra Pradesh, Telangana and Odisha. Informant provides digital TV services to its customers directly as well as through Local Cable Operators (LCO) and currently provides services to about 10.02 lakh customers in Kerala and a minimal 1.19 lakh customers in all other States combined.

OP 2 was a broadcaster of satellite-based TV channels in India, having multiple channels of different languages and various genres including general entertainment, movies, kids’ entertainment, sports and infotainment.

As per the business arrangement, informant received broadcasting signals from OP-1 for a monetary consideration for the purposes of supplying the channels of OP-1 to customers and for that the informant entered into agreements with OP-1 from time to time.

Allegation

Informant alleged the abuse of dominant position by OPs by discriminating the informant in not extending the discounts, which are offered by its competitors.

Hence, offering discriminatory discounts was alleged to be in contravention of the provisions of Section 4(2)(a)(ii) of the Act being unfair/discriminatory prices, as also the provisions of Section 4(2)(c) as it denied market access to the informant as well due to the inability of the Informant to compete in the downstream market of the distribution of TV channels given the unfair advantage OP-1 had conferred upon the informant’s competitors.

After the introduction of the New Regulatory Framework, ADNPL started losing subscribers to Kerala Communicators Cable Limited (KCCL) as the latter offered low prices to LCOs who, in turn, offered lower prices to subscribers.

In gist, the informant alleged that OP-1 was in a dominant position on account of its significant market share, size and economic resources since it was a part of the global media conglomerate, dependence of consumers and its countervailing power. The said conduct violated provisions of Section 4(2) (a) (ii) of the Act and Section 4(2) (c) thereof since the discriminatory discounts amount to unfair/discriminatory price and denied market access to the Informant as it was unable to compete in the downstream market of distribution of TV channels considering the unfair advantage of OP-1 had conferred upon ADNPL’s competitor KCCL.

Analysis and Decision

The Commission observed that the crux amongst all the allegations was the offering of additional discounts to select MSOs and the main competitor of ADNPL in Kerala, viz KCCL, OP-1 had placed the MSOs at a huge disadvantage which was detrimental to the competition and competitors in the market.

Coram noted that the OP-1 had around 50 entertainment channels and over 15 sporting channels with exclusive content of the major sporting events such as ICC, IPL, ODIs, Wimbledon, French Open etc. making access to its bouquet of channels indispensable for any MSO operator, especially when some of the most popular as per TRPs, regional and nationwide channels belonged to the OPs.

OP-1 enjoyed a position of dominance in the relevant market.

KCCL was getting channels at about 30% of the MRP with about 70% discount whereas the maximum permissible discounts under the New Regulatory Framework was capped at 35%. OP 1 was alleged to have chosen an indirect way to provide discounts to circumvent the new Regulatory Framework by way of promotion and advertisement payments to KCCL through high valued advertising deals.

In view of the above, the Informant was constrained to price its channels at a higher price than that of KCCL and ultimately pay the price by losing consumers consistently whereas KCCL had gained new consumers.

Ultimately, the informant was offering services at loss making price just to prevent the subscriber base from migrating to KCCL’s services but in vain.

Due to the alleged discriminatory conduct of price discrimination between different MSOs and OP-1 resulted in significant loss in the consumer base of the informant and therefore, prima facie appeared to be a violation of the provisions of Section 4(2)(a)9ii) of the Act as also in contravention of the provisions of Section 4(2)(c) of the Act due to discriminatory pricing and denial of market access.

Therefore, alleged discriminatory conduct of price discrimination between different MSOs of OP-1 resulted into significant loss in the consumer base of the Informant and therefore prima facie appeared to be in violation of provisions of Section 4(2)(a)(ii) of the Act as also in contravention of the provisions of Section 4(2)(c) of the Act due to discriminatory pricing and denial of market access respectively.

Commission directed DH to cause an investigation in the above matter. [Asianet Digital Network (P) Ltd. v. Star India (P) Ltd., 2022 SCC OnLine CCI 5, decided on 28-2-2022]

Case BriefsHigh Courts

Kerala High Court: N. Nagaresh, J., decided whether medical service would fall within the ambit of Section 2(42) of the Consumer Protection Act, 2019 unless of course the service is free of charge or is under a contract of personal service.

Background

Doctors practising Modern Medicine in Kannur filed the present petition seeking to quash the orders of District and State Consumer Disputes Redressal Commissions, as sans jurisdiction and hence illegal.

They sought to declare that the Consumer Fora under the Consumer Protection Act, 2019 does not have jurisdiction to take cognizance of complaints in respect of medical negligence and deficiency in medical service as a medical profession and practice and practice does not come within the purview of term ‘service’ defined under Section 2(42) of the Consumer Protection Act, 2019.

Contention

Senior Counsel assisted by the counsel for the petitioners argued that the medical service/practice is not included in the illustrations in the inclusive definition of the term ‘service’ under Section 2(42) of the Consumer Protection Act, 2019 and hence the intention of the Parliament is clear that the Parliament did not want to include medical services/profession within the purview of the term ‘service’. The learned Senior Counsel pointed out that the Draft Bill of the new Consumer Protection Act, 2019 had included health sector among the illustrations of facilities that are treated as ‘service’ in Section 2(42) of the new Act. However, the health sector was removed from among the illustrations under Section 2(42). The obvious reason is that the lawmakers intended to exclude medical service/profession from the purview of the new Act.

Analysis

High Court noted the argument of the petitioners that a complaint in respect of medical negligence or deficiency in medical service was not maintainable before the District or State Consumer Disputes Redressal Commission for the reason that Section 2(42) of the Consumer Protection Act, 2019 does not take within its ambit the medical profession/medical services.

Supreme Court’s decision in Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 651, considered the question whether medical negligence/deficiency in the medical services would fall within the ambit of ‘service’ and it was held that the services rendered to a patient by a medical practitioner by way of consultation, diagnosis and treatment, both medical and surgical would fall within the ambit of ‘service’ as defined under Section 2(1)(o) of the Act, 1986.

The Act, 1986 was substituted by the Consumer Protection Act, 2019, wherein the term ‘service’ is defined under Section 2(42).

Further, it was added that both Sections 2(42) of the Act, 2019 and Section 2(1)(o) of the Act, 1986 more or less have the same meaning and implications. The only difference is that Section 2)42) of the Act, 2019 is more descriptive and takes specifically in the banking, financing, insurance, transport, processing supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information.

High Court opined that Section 2(42) of the Act would show that the Parliament intended to specifically underline that, certain services like Banking, Financing, Insurance, transport, etc., which are in the nature of public utility services, would come within the purview of services.

The said definition is inclusive and not exhaustive. Therefore, all services which are made available to potential users would fall under Section 2(42), except those services rendered free of charge or under a contract of personal service. The words “but not limited to” appearing in Section 2(42) clarifies the intention of the Parliament.

Hence,

Medical services therefore would indeed fall within the ambit of Section 2(42), unless of course the service is free of charge or is under a contract of personal service.

Bench added that, the District Commission considered the issue of maintainability of the complaint and noted that there was no difference to the meaning of ‘service’ in the old Act and the new Act. Therefore, District Commission rejected the objections as to the maintainability of the complaint.

Even the State Commission held that since no conscious change in the definition of “service” was made in the new Act, the petitioner’s contention that Health Sector had been deliberately excluded by the Parliament while enacting the new law, could not be accepted.

High Court dismissed the petition in view of the above. [Dr Vijil v. Ambujakshi T.P., 2022 SCC OnLine Ker 863, decided on 10-2-2022]


Advocates before the Court:

For the Petitioners:

By Advocates:

GOPAKUMARAN NAIR (SR.)

SOORAJ T.ELENJICKAL

RENOY VINCENT

ARUN ROY

HELEN P.A.

SHAHIR SHOWKATH ALI

For the Respondents:

By Advocates:

SRI.MANU S, ASGI

SRI.V.GIREESH KUMAR, CGC

Case BriefsSupreme Court

Supreme Court: The bench of L. Nageswara Rao and BR Gavai*, JJ interpreted the true scope of a “consumer” in terms of Section 2(1)(d) of the Consumer Protection Act, 1986 and has held that the ‘business to business’ disputes cannot be construed as consumer disputes. The entire Act revolves around “business-to-consumer” disputes and not for “business-to-business” disputes.

Analysis

Section 2(1)(d) of the said Act is in two parts.

  1. Section 2(1)(d)(i) of the said Act deals with buying of goods.
  2. Section 2(1)(d)(ii) of the said Act is with respect to hiring of services.

By the 1993 Amendment Act, wherever the word “hires” was used, the same was substituted by the words “hires or avails of”.  By the said 1993 Amendment Act, insofar as Section 2(1)(d)(i) is concerned, an Explanation was provided to the effect that ‘commercial purpose’ does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood by means of self-employment. Hence, though the original Act of 1986 excluded a person from the ambit of definition of the term ‘consumer’ whenever such purchases were made for commercial purpose; by the Explanation, which is an exception to an exception, even if a person made purchases for ‘commercial purpose’, he was included in the definition of the term ‘consumer’, if such a person bought and used such goods exclusively for earning his livelihood by means of self-employment.

By the 2002 Amendment Act, the legislature has done two things.

  1. It has kept the commercial transactions, insofar as the services are concerned, beyond the ambit of the term ‘consumer’ and brought it in parity with Section 2(1)(d)(i), wherein a person, who bought such goods for resale or for any commercial purpose, was already out of the ambit of the term ‘consumer’.
  2. The legislature did was that even if a person availed of the commercial services, if the services availed by him were exclusively for the purposes of earning his livelihood by means of self-employment, he would still be a ‘consumer’ for the purposes of the said Act.

Thus, a person who availed of services for commercial purpose exclusively for the purposes of earning his livelihood by means of self-employment was kept out of the term ‘commercial purpose’ and brought into the ambit of ‘consumer’, by bringing him on par with similarly circumstanced person, who bought and used goods exclusively for the purposes of earning his livelihood by means of self-employment.

“If a person buys goods for commercial purpose or avails services for commercial purpose, though ordinarily, he would have been out of the ambit of the term ‘consumer’, by virtue of Explanation, which is now common to both Sections 2(1)(d)(i) and 2(1)(d)(ii), he would still come within the ambit of the term ‘consumer’, if purchase of such goods or availing of such services was exclusively for the   purposes of earning his livelihood by means of self-employment.”

The upshot of the above-mentioned discussion led to the conclusion that when a person avails a service for a commercial purpose, to come within the meaning of ‘consumer’ as defined in the said Act, he will have to establish that the services were availed exclusively for the purposes of earning his livelihood by means of self-employment. There cannot be any straitjacket formula and such a question will have to be decided in the facts of each case, depending upon the evidence placed on record.

Ruling

The Court was deciding the case where NCDRC has come to a finding that the appellant had opened an account with the respondent-Bank, took overdraft facility to expand his business profits, and subsequently from time to time the overdraft facility was enhanced so as to further expand his business and increase his profits.

The Court affirmed the said ruling and observed that the relations between the appellant and the respondent is purely “business to business” relationship. As such, transactions would clearly come within the ambit of ‘commercial purpose’. It cannot be said that the services were availed “exclusively for the purposes of earning his livelihood” “by means of self-employment”.

[Shrikant G. Mantri v. Punjab National Bank, 2022 SCC OnLine SC 218, decided on 22.02.2022]


*Judgment by: Justice BR Gavai


Counsels

For appellant: Senior Advocate Shyam Divan

For respondent: Senior Advocate Dushyant Dave

Case BriefsTribunals/Commissions/Regulatory Bodies

National Disputes Redressal Commission (NCDRC): The Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member) expressed that, when a Statute provides for a particular period of limitation, it has to be scrupulously applied, as an unlimited limitation leads to a sense of uncertainty.

Instant revision petition had been filed by the complainant under Section 19 read with Section 21(a)(ii) of the Consumer Protection Act, 1986 against the order passed by the West Bengal State Consumer Disputes Redressal Commission at Kolkata.

State commission had rejected the application seeking condonation of delay of 120 days in filing the Revision Petition and consequently summarily dismissed the Revision Petition.

Issue

Whether the State Commission was justified in declining to condone the delay of 120 days in filing the Revision Petition before it or not?

Analysis and Decision

Commission expressed that it is trite law that the expression ‘sufficient cause’ cannot be construed liberally if negligence, inaction or lack of bonafides are attributable to the party, praying for exercise of such discretion in its favour.

In the present matter, petitioner failed to make out any cause, much less a ‘sufficient cause’ for condonation of delay of 120 days in filing the Revision Petition before the State Commission and the State Commission for the reasons recorded in the Impugned Order was justified in declining to condone the delay.

Hence, the present revision petition was dismissed.[Pallab Mohan Chakraborti v. Debayan Ganguly, Revision Petition No. 2447 of 2018, decided on 22-2-2022]


Advocates before the Commission:

Petitioner in Person

For the respondent: Ms. Pooja Shukla, Advocate

Mr. Surojit Gangopadhyay, Advocate Ms. Chitralekha Das, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission, New Delhi (NCDRC): The Coram of R.K. Agrawal (President) and Dr S.M. Kantikar (Member) addressed a matter wherein the builder took money from the purchaser for the formation of a co-operative housing society but failed to do so and when asked for the refund, he did not return the money as well.

An agreement was entered between the complainant and the OP to construct Bungalow and as per that, the complainant had paid Rs 10,00,000 as consideration. The said agreement was not notarized, after handing over the possession and Occupancy Certificate, OP had to form a Co-operative Society, for which an amount was collected from the complainant, which was Rs 75,000, but OP failed to do so and also did not enroll the complainant as a member or executed independent Deed of Sale.

Later it came to the complainant’s knowledge that the OP had executed a few individual sale deeds in respect of some purchasers but not for the complainant. The complainant got drafted a sale deed, but the OP demanded a further amount even after agreeing initially that he would execute the same.

The complainant even obtained a NOC under FEMA. Yet the sale deed was not executed by the builder.

Hence, on being aggrieved with the above circumstances, the party reached the consumer forum for a refund of Rs 10,00,000 along with interest @18% p.a.; compensation of Rs 5,00,000 and Rs 50,580 towards travel expenses due to postponement of Air Ticket to USA.

Analysis, Law and Decision

Coram noted that the appellant builder executed individual Sale Deeds in respect of some purchasers.

Commission found that the Complainant had agreed to join Co-operative Housing Society, but the appellant did not form any and also did not refund the money paid by the complainant as ‘advance towards the maintenance and formation of the Co-operative Housing Society”.

Based on the above discussion, the OP was liable for deficiency in service. [Dilip Sagun Naik v. Dr Maliyil Cheriyan Mathai, 2022 SCC OnLine NCDRC 30, decided on 17-2-2022]


Advocates before the Commission:

For the Appellant: Mr. Dileep Poolakkot, Advocate

For the Respondent: Mr. S.N. Joshi, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): While noting whether the flat owners can be prevented from the use of certain common spaces, the Coram of Justice R.K. Agarwal (President) held that under the provisions of the Maharashtra Apartment Ownership Act 1970 and even Maharashtra Ownership Flats (Regulation of the promotion of construction, sale management and transfer) Act, 1963, a Society had to be formed by the builder and the entire building premises including the open space in question was to be transferred to the Society or a legal body for its maintenance and further, as per Section 6 of the MAOA 1970, each flat owner is entitled to an undivided interest in the common areas and the facilities.

Complainants challenged the order of the Maharashtra State Consumer Disputes Redressal Commission under Section 21(b) of the Consumer Protection Act, 1986.

What was the dispute?

Dispute between the parties was with respect to the use of substantial open space surrounding the building.

The complainants were being prevented from using and enjoying the open space as respondent 1 had covered the said space by erecting an iron grill.

Factual Matrix

Respondent 4 Society had allotted Plot No. 29 in question to respondent 1 on lease. In terms of the resolution passed by the Society allowing its member to construct the multi-storied building on the allotted plot, respondent 1 entered into a Development Agreement with respondent 2 who further transferred his rights of development in favour of respondent 2 Partnership Firm in which respondent 3 was a Partner.

Further, on completion of the building, the completion certificate was obtained. As per the Development Agreement, the flat nos. 1 and 2 at the Ground Floor of the building in question were retained by respondent 1 and flat no’s 3,4, 5 and 6 situated at 1st and 2nd floors were purchased by the complainants executing necessary registered agreements.

Respondent 1 submitted that in the Development Agreement executed with Late Vinayak Shridhar Deshpande, the right of the open space surrounding the Building was not given to him. As per the sale agreement, only staircase and top terrace were to be declared as common space

Analysis, Law and Decision

Coram opined that there was merit in the conclusion arrived at by the District Forum that the rights of the parties with regard to the use of open space surrounding the building in question, were governed by the various provisions of the Maharashtra Ownership Act, 1970 and the respondents were under an obligation to form a Society/legal body to take care of the entire Building Premises.

The above was the reason that during the pendency of the Complaint, respondent 1 executed a Deed of Declaration on 10-01-2005 to bring the property in question under the provisions of the MAOA 1970. Though the said deed of the declaration was not submitted as required under the provisions of the Maharashtra Apartments Ownership Act, 1970.

Whether the open space constitutes as part of the common area and facilities?  

As per Section 3(f) of the MAOA, 1970, the open space in question was a part and parcel of the Common Areas and the Flat Owners were within their right to use the same.

Section 2 (e) of the Maharashtra Housing (Regulation and Development) Act, 2012 specifically include any open space around the building in the definition of “Common Areas and Amenities and Facilities”

Further, Coram stated that the Apartment Owner has the right to use the common area and facilities in accordance with the purpose for which they were intended without hindering or encroaching upon the lawful rights of the other apartment owners.

“The Common Area and Facilities remain undivided and no Apartment Owner or any other person shall bring any action for partition or division of any part thereof.”

While citing the decision of Supreme Court in Nahalchand Laloochand (P) Ltd. v. Panchali Cooperative Building Society Ltd., (2010) 9 SCC 536, it was noted that the Builder/Promoter has no right to sell any area of Building except the unsold flats.

Therefore, the District Forum’s decision was restored, and the State Commission’s decision was set aside. [Parvin G. Joshi v. Sarojini Gangadhar, 2022 SCC OnLine NCDRC 34, decided on 22-2-2022]


Advocates before the Commission:

For the Petitioner: Mr. Ankur Gupta, Advocate

For the Respondents: Mr. Rohan S. Darandale, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission, New Delhi (NCDRC): While addressing a case wherein there was a delay of 6 years in handing over the possession to the buyer, the Coram of Dr S.M. Kantikar (Presiding Member) and Binoy Kumar, Member, held that in view of catena of Supreme Court decisions on the said issue, the buyer was entitled to get legal possession along with compensation.

An appeal was filed under Section 51(1) of the Consumer Protection Act, 2019 against the decision of the State Consumer Disputes Redressal Commission Uttar Pradesh, whereby the complaint filed by the appellant/complainant was partly allowed.

Respondent/OP was engaged in developing a township and a flat was allotted to Anish Singhal who paid a sum of Rs 1,50,000 to the respondent/OP as a booking amount.

Further, the appellant/complainant returned the deposited amount to the original allottee Anish Singhal and paid a sum of Rs 2,50,000 to the respondent/OP, hence the respondent/OP transferred the flat in the name of appellant/complainant as per previous terms and conditions.

For a total price of Rs 18,21,763, the flat buyer agreement was signed and executed by all the parties. As per the agreement/contract, possession of the flat was to be given within a period of 18 months.

Appellant/Complainant had paid more than 50% of the total consideration as per the construction linked payment plan to the respondent/OP, but even after 6 years the said flat was not handed over.

On being aggrieved with the acts of respondent/OP, the appellant/complainant filed a complaint before the District Forum which was dismissed due to lack of pecuniary jurisdiction.

Analysis, Law and Decision

Commission expressed that appellant/complainant cannot wait for an indefinite time as he had invested heavily his hard-earned money with the intention to get legal possession of the flat.

Further, it was added that since the said agreement was a valid legal document, possession should have been given in 18 months i.e. by May, 2013 or by November, 2013 if the grace period of 6 months was added.

Coram found that there was a delay of about 6 years by the respondent/OP in obtaining the Occupancy Certificate and offer of possession. The reason for the delay was also unexplained.

Therefore, the appellant/complainant was entitled to get legal possession of his flat with reasonable compensation for the delay. [Ved Prakash Aggarwal v. Logix City Developers (P) Ltd., 2022 SCC OnLine NCDRC 35, decided on 22-2-2022]


Advocates before the Commission:

For the Appellant: In Person

For the Respondent: Binoy Kumar, Member

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Coram of Justice R.K. Agarwal (President) and Dr S.M. Kantikar (Member) analyses a matter wherein a patient developed serious issues after being operated, which led to her death, hence the doctors/hospital were alleged for medical negligence.

An appeal was preferred by Kapil Aggarwal and others (Appellants/Complainants) under Section 19 of the Consumer Protection Act, 1986 against the impugned order passed by the Haryana State Consumer Disputes Redressal Commission wherein the complaint of alleged medical negligence was dismissed against the Sarvodaya Hospital & Research Centre.

Factual Matrix

Complainant 1 had admitted his wife (patient) to Sarvodaya Hospital & Research Centre at Faridabad (Hospital). OP 2 examined the patient and was advised for removal of uterus. The patient was also suffering from umbilical hernia. The doctors specifically informed the patient’s condition was not suitable for two surgeries, which could prove fatal.

After being operated on, the patient’s condition was serious, hence she was shifted to ICU and put on oxygen and artificial ventilation support.

The Complainant was shocked to learn from the ICU bedside ticket that along with Hysterectomy, the surgery for hernia was also performed. No consent was given for hernia operation. Post operatively, the patient developed hypoxic encephalopathy. It was further alleged that in the ICU, Tracheostomy procedure was done four times.

It was also alleged that due to repeated X-ray & CT scan, the patient received heavy doses of radiation, which led to fall in Hb% to 8.3 g%. Due to the entire treatment being negligent, the patient’s death was caused.

On being aggrieved with the above, a complaint was filed seeking compensation to the tune of Rs 45,42,500.

Though the State Commission dismissed the above-stated complaint and on being aggrieved with the same, the instant first appeal was filed.

Analysis, Law and Decision

Coram noted from the medical record that based on the patient’s condition and the investigation, the doctors planned for Laparoscopic Total Hysterectomy.

As per the medical literature on laparoscopic hysterectomy surgeries, during the laparoscopic procedure umbilical port is used, and after TLH, at the time of removal, the umbilical port shall be closed.

In the instant case, admittedly, the patient had umbilical hernia and in the Commission’s opinion, the method adopted by the Surgeon was correct. Moreover, knowing the morbid obesity and other comorbidities, the operation was performed after obtaining high risk consent. Thus, it was TLH only and not the second surgery for the repair of hernia as no mesh and/or trackers were used for Umbilical Hernia repair surgery.

Whether it was a medical negligence wherein the patient suffered complication post-operatively?

In Commission’s opinion, both the procedures were performed as per standard of practice and unfortunately the patient developed serious complications post-operatively which were promptly treated by the team of doctors.

Further, the Coram relied on a Supreme Court decision in Achutrao Haribhao Khodwa v. State of Maharashtra, (1996) 2 SCC 634, wherein it was noticed that:

“in the very nature of medical profession, skills differs from doctor to doctor and more than one alternative course of treatment are available, all admissible. Negligence cannot be attributed to a doctor so long as he is performing his duties to the best of his ability and with due care and caution. Merely because the doctor chooses one course of action in preference to the other one available, he would not be liable if the course of action chosen by him was acceptable to the medical profession.” 

Supreme Court observed that every mishap shall not be construed as negligence of the treating doctor or the hospital to fasten the liability.

Hence, in the present matter, medical negligence would not be conclusively attributed against the hospital and doctors.

Therefore, the first appeal was dismissed. [Kapil Aggarwal v. Sarvodaya Hospital & Research Centre, 2022 SCC OnLine NCDRC 21, decided on 8-2-2022]


Advocates before the Commission:

For the Appellant :

Mr. Prashant T. Bhushan, Advocate

Dr. H. M. Gupta, G.P.A. of the Appellants

For the Respondent:

Mr. S.N. Parasar, Advocate for R-1 to 5

Mr. Maibam N. Singh, Advocate for R-6

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Coram of Dr S.M. Kantikar (Presiding Member) and Binoy Kumar (Member) while allowing an application for transfer expressed that,

“…it is true that the doctors are busy and conscious about their duties towards the patient, but they are not exempted from the legal proceedings and duty bound to attend the court proceedings (physical or virtual mode) either through their Counsel or on their own.”

Instant petition was a transfer application to transfer the complaint from the State Commission, Chhattisgarh to the State Commission, Odisha.

Analysis and Decision

The OPs were running a Medical Centre for more than 2 decades. They have digitalization and communication facilities like WIFI/internet which may be used for e-filing/virtual proceedings.

Coram expressed that, it is true that the doctors are busy and conscious about their duties towards the patient, but they are not exempted from the legal proceedings and duty-bound to attend the court proceedings (physical or virtual mode) either through their Counsel or on their own.

The Statement of Objects and Reasons of the Act 1986 speaks of “speedy and simple redressal to consumer disputes”. This is the case of alleged medical negligence which needs a holistic approach after giving fair opportunities to the parties on both sides, instead of taking a technical approach, Commission added.

Hence, in view of the above discussion, as per the provisions contained under Section 62 of the Consumer Protection Act, 2019 the transfer application was allowed.

The Commission directed the parties to appear before the State Commission, Odisha on 7-3-2022.[Manasi Mishra v. Aayush Hospital & Maternity Home, 2022 SCC OnLine NCDRC 22, decided on 9-2-2022]


Advocates before the Commission:

For the applicant: Suyash Pande, Advocate

For the non-applicants 1 to 4: Rohini Kumar, Advocate

Legal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

Appellate Tribunal for Electricity (APTEL)


State commission disallows benefit of increase in the tariff based on the change in law provision; Tribunal directs reconsideration

A Coram of R.K. Gauba (Officiating Chairperson) and Sandesh Kumar Sharma (Technical Member) decided on an appeal which was filed by Solar Power Project Developer (“SPD”) assailing order passed by respondent Bihar Electricity Regulatory Commission (“the State Commission”) disallowing the benefit of increase in the tariff based on the change in law provision with respect to increased Operation and Maintenance (O&M) costs of its 10MW solar power generating system.

Read full report here…


Armed Forces Tribunal (AFT)


AFT grants war injury pension to soldier who sustained injuries resulting in disability during Operation Hifazat

The Bench of Justice Dharam Chand Chaudhary (Member J) and Vice Admiral HCS Bisht (Member A), granted war injury pension to the ex-serviceman who had sustained injuries resulting in disability during Operation Hifazat.

Read full report here…


Arbitral Tribunal, New Delhi


Arbitral Tribunal finds SJDA at fault; directs to refund bid amount of Rs 84.24 crores to the claimant in New Township Project

“No permission for conversion of land was obtained and, therefore, even if all other conditions were fulfilled, the Claimant-Developer could not have commenced construction activities on the agricultural lands without obtaining conversion of land use.”

Read full report here…


 Competition Commission of India (CCI)


Apple charging a commission of up to 30% on all payments made through its in-app purchase system, is a violation of its dominant position? CCI orders investigation 

“Some consumers may have preference for closed ecosystem like Apple and others may have a preference for open ecosystems like that of Google.” 

Read full report here… 

Why did CCI suspend the Amazon-Future deal? Detailed analysis of CCI order imposing Rs 202 crores penalty on Amazon

“Amazon had misled the Commission to believe, through false statements and material omissions, that the Combination and its purpose were the interest of Amazon in the business of FCPL.”

Read full report here…

Is Google abusing dominant position in news aggregation? CCI gives prima facie findings; discusses Snippets, Mirror Image Websites, Paywall Options, etc.

“Google appears to operate as a gateway between various news publishers on the one hand and news readers on the other. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavourable to their revenue generation.”

Read full report here…


 Customs Excise & Service Tax Appellate Tribunal (CESTAT)


“Obiter dictum” not legally binding as precedent; jurisdictional commissioner cautioned for filing frivolous applications

Suvendu Kumar Pati (Judicial Member) dismissed an appeal which was filed in response to the order passed by this Tribunal for rectification of mistake on the ground that the order to the extent of availment of service of outdoor catering was not proper.

Read full report here…

Jurisdiction for claim of refund filed/initiated to be dealt under the provision Central Excise law and not by the provision of CGST law

Ashok Jindal (Judicial Member) dismissed the application filed by the Revenue (CCE & ST, Panchkula) for ratification of mistake in a final order by the Tribunal which was noticed by the Applicant. The Tribunal dealt with two issues (a) whether to ratify previous order & (b) to deal with the jurisdiction

Read full report here…

Is there any provision under Cenvat Credit Rules, 2004 or Finance Act, 1994 for reversal of CENVAT credit for services provided for which no consideration is received by an assessee? CESTAT analyses

“CENVAT Credit Rules or Finance Act there was no provision for reversal of CENVAT credit for the services provided for which no consideration for service provided was received by an assessee.”

Read full report here…


District Consumer Disputes Redressal Commission, Kolkata


Consumer cannot be forced to pay “service charge” in a restaurant: Consumer Forum finds conduct of restaurant contrary to principles of Consumer Protection Act

“The OPs must have been aware of the guidelines of Fair Trade Practice related to changing of service charge from the consumers by hotels/restaurant issued by Department of Consumer Affairs, Government of India, inter alia, stipulating that service charge on hotel and restaurant bill is “totally voluntarily” and not mandatory.”

Read full report here…


Income Tax Appellate Tribunal (ITAT)


If lessee is not actual owner of property, can actual rental expenses be claimed on return of income? ITAT decides

“The assessee-company has merely taken the assets on lease from the owner, and it is accordingly eligible to claim actual rental expenses in the return of income.”

Read full report here… 

Can merely disowning bank accounts exempt assessee from paying tax? Read why ITAT approved addition of Rs 12.81 Crores under S.68 of Income Tax Act

“Merely disowning the bank accounts by the assessee does not lead to the conclusion that the accounts are not maintained by him when there is a direct evidence contrary to the contention of the assessee.”

Read full report here…


 National Consumer Disputes Redressal Commission (NCDRC)


Homebuyers cannot be expected to wait indefinitely for taking possession: NCDRC allows consumer complaint against Builder, directs refund, imposes costs

Commission dealt with a complaint filed under Section 21 read with Section 2(c) of the Consumer Protection Act, 1986 by the complainant in respect of a plot allotted to him promoted by the OP, claiming deficiency of service due to delay in handing over possession of the plot allotted and claiming refund of amount deposited with compensation.

Read full report here… 

Insurer refuses to issue insurance policy as Risk Confirmation letter obtained on concealment of material fact by Insurance Broker: Policy will be vitiated? NCDRC answers

“Section 19 of Contract Act, 1872, provides that when the consent of an agreement is caused by coercion, fraud, or misrepresentation, the agreement is voidable at the option of the party whose consent is so caused.”

Read full report here…

Plastic pieces found in slices of bread, but compensation denied to consumer. Read why NCDRC set aside State Commission’s order of compensation

Ram Surat Maurya (Presiding Member) addressed a matter wherein Britannia was alleged to have pieces of plastic in its bread, but the complainant failed to prove that the bread was manufactured by the said company.

Read full report here…

Minor treated for “Measles” instead of “Stevens-Johnson Syndrome” due to wrong diagnosis and leading to medical negligence: Read detailed report on NCDRC’s decision

“The patient at her young age of 12 years suffered very serious and potentially fatal SJ syndrome. It was the patient’s sheer good luck that she survived in spite of such grossly inappropriate/inadequate treatment at every stage.”

Read full report here…


National Company Law Appellate Tribunal (NCLAT) 


Is it proper for NCLT to record finding regarding default when RP is yet to consider it and submit report? NCLAT discusses Ss. 95, 97, 99 IBC

“…there cannot be any dispute with the statutory scheme as contained in Section 97 that when application is filed by the Resolution Professional under Section 95, the Adjudicating Authority shall direct the Board within seven days of the date of the application to confirm that disciplinary proceedings pending against the Resolution Professional or not and the Board was required within seven days to communicate in writing either confirming the appointment of the Resolution Professional or rejecting the appointment of the Resolution Professional and nominating another Resolution Professional.” 

Read full report here…

Aggrieved with the categorisation as ‘unsecured creditor’, Tribunal secures ‘secured creditor’, having relinquished the security interest

The Coram of Ashok Bhushan J, (Chairperson), and Dr Alok Srivastava (Technical Member) while accepting the appeal and rejecting the claim of the respondent, the Tribunal was of the opinion that the Adjudicating Authority committed an error in rejecting the claim of the appellant to be ‘secured creditor’.

Read full report here…

Is approval with 90% vote of CoC required before allowing withdrawal of CIRP application even where CoC was not yet constituted? NCLAT clarifies law on S. 12-A IBC 

“…when the application is filed prior to the constitution of Committee of Creditors, the requirement of ninety percent vote of Committee of Creditors is not applicable and the Adjudicating Authority has to consider the Application without requiring approval by ninety percent vote of the Committee of Creditors.”

Read full report here…

Dominant position and Predatory Pricing or Win-Win for riders and drivers? NCLAT upholds CCI’s decision

“We do not think that Ola could operate independently of other competitors in the relevant market, and hence it did not enjoy a dominant position in the market.”

Read full report here…

Once Adjudicating Authority approves Resolution Plan, does it still remains a confidential document? Read what NCLAT says

“The category of creditors including the Members of the suspended Board of Directors or the partners of the corporate persons, who are entitled to participate in the meeting of the Committee of Creditors are entitled to receive copies of all documents.”

Read full report here…


 National Green Tribunal (NGT)


Rampant noise pollution, incessant use of horns; a Deplorable state of affairs! NGT finds Rajasthan in contempt of Supreme Court’s order 

While addressing the issue of pressure/air horns and motor vehicles being driven with intolerable sound in Rajasthan, the Bench comprising of Justice Sheo Kumar Singh (Judicial Member) and Dr. Arun Kumar Verma (Expert Member) found the State of Rajasthan in contempt of the Supreme Court’s order and issued notice to the state government to reply within three weeks.

Read full report here…


Securities Exchange Board of India (SEBI)


Twitter, Telegram and the tattered chances-Illicit act of swindlers recommending stock tips on social media; Tribunal acts immediately

“The tips circulated through the Channel create an inducing impact which are then followed by the subscribers and ironically, such stock tips may also prove to be true, if large number of recipients of such tips believe it and collectively act on it. Slowly and gradually, after seeing the price of the said thinly traded scrip actually rising, more and more subscribers start believing in the tips and start acting on it, which further strengthens the belief of such tips being genuine, as large number of individuals end up acting on such tips and by their collective buying actions, convert the deceitful, specious and baseless tips to realty”

Read full report here…

‘Billionaire’ dream turns into dread-Unauthorsied investment advisory amounted to fraud & misrepresentation

S.K. Mohanty, Whole Time Member while affirming an ex-parte interim order of SEBI, was of the view that the activities of the Noticees, Billionaire Solutions Pvt. Ltd. (Sole proprietor Akash Jaiswal) was covered within the definition of “fraud” defined under regulation 2(1)(c) of the PFUTP Regulations, 2003. And therefore was held liable for the violation of provisions of Section 12A (a), (b), (c) of the SEBI Act, 1992, Regulations 3 (b), (c) & (d), 4(1), 4(2)(k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations, 2003).

Read full report here…

Case BriefsSupreme Court

Supreme Court: The bench of Dr. DY Chandrachud* and AS Bopanna, JJ has held that failure on the part of the builder to provide occupancy certificate is a continuing breach under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 and amounts to a continuing wrong.

Factual Background

The appellant is a co-operative housing society. The respondent constructed Wings ‘A’ and ‘B’ and entered into agreements to sell flats with individual purchasers in accordance with the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 (MOFA). The members of the appellant booked the flats in 1993 and were granted possession in 1997. According to the appellant, the respondent failed to take steps to obtain the occupation certificate from the municipal authorities.

There was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided, however, the respondent time and again failed to provide the occupancy certificate to the appellant society. For this reason, a complaint was instituted in 1998 by the appellant against the respondent. The NCDRC on 20 August 2014 directed the respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the respondent failed to provide the occupancy certificate.

In the absence of the occupation certificate, individual flat owners were not eligible for electricity and water connections. Due to the efforts of the appellant, temporary water and electricity connections were granted by the authorities. However, the members of the appellant had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 50% higher than the normal charge.

Analysis

Obligations of Promoter under MOFA

Section 3 of the MOFA imposes certain general obligations on a promoter. These obligations inter alia include making disclosures on the nature of title to the land, encumbrances on the land, fixtures, fittings and amenities to be provided, and to not grant possession of a flat until a completion certificate is given by the local authority. The responsibility to obtain the occupancy certificate from the local authority has also been imposed under the agreement to sell between the members of the appellant and the respondent on the latter.

Sections 3 and 6 of the MOFA indicate that the promoter has an obligation to provide the occupancy certificate to the flat owners. Apart from this, the promoter must make payments of outgoings such as ground rent, municipal taxes, water charges and electricity charges till the time the property is transferred to the flat-owners. Where the promoter fails to pay such charges, the promoter is liable even after the transfer of property.

Limitation

In the instant case, the appellant submitted that since the cause of action is founded on a continuing wrong, the complaint is within limitation.

Section 24A of the Consumer Protection Act 1986 provides for the period of limitation period for lodging a complaint. A complaint to a consumer forum has to be filed within two years of the date on which the cause of action has arisen.

Section 22 of the Limitation Act 1963 provides for the computation of limitation in the case of a continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues

A continuing wrong occurs when a party continuously breaches an obligation imposed by law or agreement. The continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the respondent under the MOFA and amounts to a continuing wrong.

The appellants, therefore, were entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation.

“Rejecting the complaint as being barred by limitation, when the demand for higher taxes is made repeatedly due to the lack of an occupancy certificate, is a narrow view which is not consonance with the welfare objective of the Consumer Protection Act 1986.”

Consumer

Section 2(1)(d) of the Consumer Protection Act defines a ‘consumer’ as a person that avails of any service for a consideration. A ‘deficiency’ is defined under Section 2(1)(g) as the shortcoming or inadequacy in the quality of service that is required to be maintained by law.

In the present case, the NCDRC had held that the appellant is not a ‘consumer’ under the provisions of the Consumer Protection Act as they have claimed the recovery of higher charges paid to the municipal authorities from the respondent. Extending this further, the NCDRC observed that the respondent is not the service provider for water or electricity and thus, the complaint is not maintainable.

The respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as ‘consumers’ to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate.

[Samruddhi Co-operative Housing Society Ltd v. Mumbai Mahalaxmi Construction Pvt. Ltd, 2022 SCC OnLine SC 35, decided on 11.01.2022]


*Judgment by: Justice Dr. DY Chandrachud

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Ram Surat Maurya (Presiding Member) addressed a matter wherein Britannia was alleged to have pieces of plastic in its bread, but the complainant failed to prove that the bread was manufactured by the said company.

The present appeal was filed from the order of State Consumer Disputes Redressal Commission allowing the complainant and holding them as guilty of compensating negligence in preparing the bread and directing to pay Rs 2.51 lakhs as compensation.

The complainant was a medical practitioner who purchased one packet of “Britannia Premium Bake Super Soft Deluxe Bread” for his guests including one child at his residence. When the bread was served for consumption, the complainant noticed a few plastic pieces embedded inside several slices.

In view of the above, the complainant prevented his guest from having the bread and lodged a complaint at the Mumbai office of the OP. The officer of the OP came to the residence of the complainant and on examining the slices confirmed that there were plastic pieces inside the slices.

On the complainant’s insistence, he was given in writing that “prima facie paper-like body was seen in a number of slices.”

After the analysis in laboratory, a letter was sent to the complainant wherein it was written that “It is possible that during production, a new unchecked mould might have found its way without cleaning by air-blast, which is the rarest of the incidence.”

When the complainant made several correspondences with the officers of the OP, they vide a letter disowned the packet of the bread, being the packet of the OP.

After protesting against the analysis report, the complainant did not receive any response and a complaint raising the allegation of negligence by OP was filed.

State Commission on perusal of the facts on record found the OP to be guilty of committing negligence in the manufacture of the bread.

Analysis and Decision

Commission on perusal of records noted that the complainant neither produced the wrapper of the bread nor sample of bread for its analytic report before the State Commission. The burden of proof was upon the complainant to prove that:

  • The contaminated bread was manufactured by the appellant
  • In this bread, foreign materials (plastic pieces) were found.

Coram expressed that,

State Commission based its findings on (i) as the officers of the appellant had collected the sample as such they were satisfied that the product belonged to the appellant and (ii) in the letter of Karmakar (senior officer of company) dated 18.05.2001, he had admitted the possibility of new unchecked mould might have found its way without cleaning by air-blast, during production. These two circumstances were not sufficient to record a finding that the appellant had manufactured contaminated bread.

 Further, the appellant’s report was ignored as it was tested in its own laboratory.

On visual examination, some suspicion was noted by Karmakar and on its basis forming an opinion relating to contamination is not sufficient.

It was held that no evidence was found to prove that the bread sold contained plastic pieces, hence the appeal succeeded and was allowed.[Britannia Industries Ltd. v. Dr Surendra Ramkishan Dhelia, 2022 SCC OnLine NCDRC 12, decided on 3-1-2022]


Advocates before the Commission:

For the appellant: Sidharth Bawa, Advocate and Anuj Garg, Advocate

For the respondent: Nemo

Case BriefsSupreme Court

Supreme Court: In an interesting case where one SBI account holder was left with a balance of Rs. 59/- only in his account due to the existence of another bank account with strikingly similar name in the same branch, the bench of Sanjiv Khanna and Bela M. Trivedi*, JJ has set aside the “highly erroneous” impugned order passed by the National Consumer Disputes Redressal Commission solely relying upon the suo-moto report called for from SBI during the pendency of the revision application.

Factual Background

Sunil Kr. Maity had a saving account number 01190010167 with SBI since January, 2000. On 24.02.2010, the said account number was changed to number 10140478732. On 15.09.2012, the appellant went to deposit a sum of Rs. 500/- in the said account, when a staff of respondent-bank informed him that the account number had again been changed and wrote account number being 32432609504 on his passbook. The said amount was deposited in the said account number. Thereafter, on 16.01.2013, appellant deposited a cheque being no. 670013 for Rs. 3,00,000/- drawn on SBI of the said Branch.

When the appellant went to update his passbook on 11.12.2013, he noticed that his passbook showed the balance of Rs. 59/- only, though he had not made any transaction between 16.01.2013 to 11.12.2013. On the enquiry having been made, the respondent-bank informed the appellant that there was another customer by the name Sunil Maity whose account number was 32432609504 and the said account number was wrongly given to the appellant whose name was Sunil Kr Maity on 15.09.2012. The said Sunil Maity on 25.01.2013 and 28.01.2013 had withdrawn the sum of Rs. 1,00,000/- and Rs. 2,00,000/- respectively from the said account number.

When the matter reached the National Commission, it not only sought for a report from SBI at the revisional stage but set aside the findings and conclusion recorded by the District and State Forum, simply based on this report. The report indicated that the bank had every reason to believe that wrong account number was intentionally inserted by the appellant himself for reasons best known to the appellant or on account of negligence by the appellant by not keeping the passbook in his safe and proper custody.

Analysis

Explaining the scope of the revisional jurisdiction of the NCDRC under Section 21(b) of the said Act, the Court held that the same is extremely limited. It should be exercised only in case as contemplated within the parameters specified in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity.

In the instant case, the Court noticed that the NCDRC itself had exceeded its revisional jurisdiction by calling for the report from the bank and solely relying upon such report, had come to the conclusion that the two fora below had erred in not undertaking the requisite in-depth appraisal of the case that was required.

The Supreme Court was at a loss to understand as to how the NCDRC could have sought for a report at the revisional stage, that too from an officer of the party which already had an opportunity to submit all the documents necessary for the purpose of defending itself before the Consumer Forum, and as to how such a report in the form of an additional evidence produced at the revisional stage could be relied upon, in respect of which the two fora below had no opportunity to deal with.

Contrary to the NCDRC’s opinion, the Court observed that both the State Commission as well as the Consumer Forum had elaborately appreciated the documents on record and passed the reasoned orders.

On the reliability of the report submitted by the Bank, the Court said that the report that tries to absolve the respondent-bank of its liability is based on surmises and conjectures as it abstrusely and without evidence holds that the bank has every reason to believe that wrong account number was intentionally inserted by the appellant himself for reasons best known to the appellant or on account of negligence by the appellant by not keeping the passbook in his safe and proper custody.

“The suppositions are contradictory as well as incredulous and fanciful. The appellant did not know the second respondent and would not have known his account number unless given to him by a bank officer. There was no way that the appellant would have known that the second respondent, namely Sunil Maity had an account in the same branch. No sane person would deposit cash or cheque meant to be deposited in his account in an account number belonging to another person with similar name.”

On the other hand, the bank should have been extra cautious given the fact that accounts of the appellant, Sunil Kumar Maity, and the second respondent, Sunil Maity, were with the same bank branch. The Court found it rather surprising that the NCDRC set aside the findings and conclusion recorded by the District and State Forum, by simply relying on this report.

The Court hence, restored the State Commission’s order wherein it was held that,

“Given that it is virtually impossible for one to know the account number of another person, and more so, as passbook is stated to be updated by Group ‘D’ staff of the bank, it would be myopic not to believe that the goof up created at the end of the Appellant itself. Besides this, since the Appellant made a great blunder while crediting the amount of the cheque to the account of Respondent No. 2, we feel, the Appellant must own up due responsibility in this regard.”

[Sunil Kumar Maity v. State Bank of India, 2022 SCC OnLine SC 77, decided on 21.01.2022]


*Judgment by: Justice Bela M. Trivedi

District CourtHigh CourtsLegal RoundUpTribunals/Commissions/Regulatory Bodies

Here are some of the interesting Legal Stories from Week 4 of January 2022


Bishop Franco Mulakkal; A victim of faction feud in the Church and group fights of nuns? Read why Sessions Court acquitted the Bishop in nun rape case

 While hearing a case which had lead nation to one of the most controversial outbreak and had lifted the veil to showcase the alleged atrocities and harassment behind the four walls of the Church, Gopakumar G., Addl. Sessions Judge held that what seem to be a disturbing case of sexual violence by a Bishop, intoxicated with power, authority and position was nothing but a faction feud in the Church and the victim was a mere scapegoat in the hands of priests.

Read full report here…


Consumer cannot be forced to pay “service charge” in a restaurant: Consumer Forum finds conduct of restaurant contrary to principles of Consumer Protection Act

While holding against the service charge, charged by a restaurant, Consumer Forum directed for return of the amount charged as “service charge” along with compensation.

Read full report here…


Did Ola abuse its dominant position? Read to know

 NCLAT held that Ola’s below-cost pricing was not predatory pricing with a view to dislodging any competitor from the market but towards establishing itself as an effective and reliable brand in the market and also opening up a latent market to its advantage.

Read full report here…


Son ousted benighted widowed mother, deprived her right to “live a normal life” apart from maintaining and supporting her livelihood

G.S. Kulkarni, J., while addressing another unfortunate case concerning a mother who was ousted from the tenement she owned by her own son expressed that,

“This appears to be another clear case where the petitioner(son) has no other intention but to enjoy the tenement exclusively, ousting the roof over his mother’s head, taking advantage of her incapacity at such an old age.”

Read full report here…


Husband’s company can have ‘Virat Kohli’ as a brand ambassador, but cannot provide maintenance to wife: Man tried appearing as a pauper? Saket Courts adjudicates

 While addressing a case wherein the maintenance was sought by wife, Saket Courts held that,

“It cannot be believed that a person who was capable of supporting a family by getting married, would all of a sudden become devoid of all sources of income.”

Read full report here…


‘On Judgement Day, God shall admonish petitioner for committing un-Christian act’: Read weather Madras HC holds Catholic Priest prima facie accountable under S. 295A IPC for using ‘Bharat Mata’ and ‘Bhuma Devi’ in offensive manner

 “Bhuma Devi is considered as a Goddess by all believing Hindus. I use the expression “believing” because, even materialists, rationalists and non-believers also can be counted as Hindus. I may add tongue-in-cheek that even the great iconoclast and rationalist Periyar did not cease to be a Hindu. Bharat Mata evokes a deeply emotional veneration in a very large number of Hindus. She is often portrayed carrying the national flag and riding a lion. She is to many Hindus a Goddess in her own right.”

Read full report here…


Can merely disowning bank accounts exempt assessee from paying tax? Read why ITAT approved addition of Rs 12.81 Crores under S.68 of Income Tax Act

Stating that, “Urgent needs invite urgent action”, ITAT while addressing a very significant matter wherein assessee did not disclose the two bank accounts operated by him to the Income Tax Department, expressed that,

“Merely disowning the bank accounts by the assessee does not lead to the conclusion that the accounts are not maintained by him when there is a direct evidence contrary to the contention of the assessee.”

Read full report here…


Provision of Personal Hearing would defeat the purpose of Faceless Assessment Scheme? Del HC decides

The Division Bench of Manmohan and Navin Chawla, JJ., while focusing on the principles of natural justice and right to personal hearing observed that,

Faceless Assessment Scheme does not mean no personal hearing.

An assessee has a vested right to personal hearing and the same has to be given, if an assessee asks for it. 

Read full report here…


SPOTIFY v. POTIFY | Can the mark POTIFY conjure up mark SPOTIFY? Here’s detailed analysis of US Patent and Trademark Office decision in trademark clash

United States Patent and Trademark Office decided whether SPOTIFY is entitled against dilution by blurring under 15 U.S.C Section 1125(c).

Read full report here…


53-year-old man molested a 9-year-old minor boy by pressing his private parts: Court sentences man under POCSO Act

Jayakrishnan, Special Judge addressed a case wherein a minor boy aged 9 years old was subjected cruelly by a 53-year-old man who squeezed the boy’s private part causing him pain.

Read full report here…

Case BriefsHigh Courts

Delhi High Court: While addressing a trademark dispute between Rooh Afza and Dil Afza manufacturers, Asha Menon, J., expressed that, buying a bottle of sharbat may involve emotions, but not deep to the extent hoped for by the plaintiffs’ counsel (Rooh Afza manufacturers).

Factual Background

Plaintiff 1 is Hamdard National Foundation (India) and plaintiff 2 is Hamdard Dawakhana also trading as Hamdard Laboratories (India) which is a business held in trust, earlier trading as Hamdard Dawakhana. The Plaintiffs are engaged in the business of manufacturing and selling inter alia, Unani and Ayurvedic medicines, oils, syrups and non-alcoholic beverages for over 100 years.

Defendant company since the year 1949, was engaged in the business of manufacturing Unani medicines, syrups and botanical products.

Why was the present matter filed?

Present matter was filed on the ground that the defendant was not only infringing the well-known trademark of the plaintiffs in ‘Hamdard’ and ‘Rooh Afza’ but was also passing off its products as those of the plaintiffs by using the name ‘Dil Afza’.

The plaintiffs claimed that they had acquired immense reputation and goodwill in relation to ‘Rooh Afza’.

Further, it was claimed that the word ‘Rooh Afza’ was used in several products of the plaintiffs. The product/sharbat of the plaintiffs sold under the trademark ‘Rooh Afza’ in bottles, has a unique combination, layout, get-up and arrangement of features, particularly, a unique and distinct floral arrangement.

In March, 2020 plaintiffs came to know that the defendant had issued an advertisement launching its syrup/sharbat, bearing the mark ‘Dil Afza’ in deceptively similar ringlet bottles as that of the ‘Rooh Afza’ bottle.

The defendant had with mala fide intention, also adopted a deceptively similar mark, unique get-up, and design for its product. An application for registration of the mark ‘Sharbat Dil Afza’ in the name of the defendant seemed to have been filed on 10th June, 2018 on the basis of ‘proposed to be used’. Another application was filed on 4th July, 2018, claiming ‘user’ since 1949.

The plaintiffs claimed that it was due to oversight that the above application could not be opposed by the plaintiffs and therefore, the defendant had been granted registrations in respect of the mark ‘Sharbat Dil Afza’.

Analysis and Discussion

High Court noted that the mark of the plaintiffs and the mark of the defendant were both registered.

Under Section 28 of the Trade Marks Act, 1999, a validly registered trademark gives to the registered proprietor the exclusive right to use that trademark, except that where two persons are registered proprietors of trademarks that are identical or nearly resemble each other, their exclusive right to use any of those trademarks cannot be enforced against each other.

Whether this Court issue any directions under Section 124(5) of the Trade Marks Act, 1999?

Whether the use of defendant’s trademark for similar products would result in confusion?

Court denied accepting the contention of the defendant’s counsel that the trademark of the plaintiffs namely ‘Rooh Afza’ was not a well-known mark, cannot be accepted in view of the observations of the Lahore High Court in Unani Dawakhana v. Hamdard, 1930 SCC OnLine Lah 300.

On a prima facie view, the plaintiffs’ claim of having built a vast reputation and goodwill in respect of their trademark ‘Rooh Afza’, cannot be rejected.

Determination of Confusion

The standard to be adopted while determining confusion arising in the mind is of a consumer of imperfect memory or recollection and of ordinary sensibilities. It would be taking an extreme position, even if the consumers were connoisseurs, to believe that the use of the word ‘Rooh’ and ‘Dil’ would cause confusion because they connote deep emotion.

Buying a bottle of sharbat may involve emotions, but not deep to the extent hoped for by the learned counsel for the plaintiffs. In any case, those who appreciate this deep emotion would be the first to be able to distinguish between ‘Rooh’ and ‘Dil’.

In Court’s opinion there cannot be any confusion with regard to the use of words, ‘Dil’ and ‘Rooh’ as they do not denote the same thing.

Word ‘Afza’

Bench referred to the decision of this Court in Cadila Laboratories Ltd. v. Dabur India Ltd., 1997 SCC OnLine Del 360 and Vardhman Buildtech Pvt. Ltd. v. Vardhman Properties Ltd.2016 SCC OnLine Del 4738

Plaintiffs in the present matter do not state that they had applied for and obtained registration for the exclusive use of the word ‘Afza’. Hence it was clear that the exclusivity that the plaintiffs can claim is to the complete name ‘Rooh Afza’ and not to either of the two words that constitute the trademark.

The Court opined that, while ‘Rooh Afza’, that is the complete word, may have acquired a secondary meaning, indicative of sharbat produced by the plaintiffs, ‘Afza’ by itself does not appear to be of that category.

Whether the simultaneous use of ‘Dil Afza’ would prejudice the plaintiffs’ business?

In Class-5, relating to Unani/Ayurvedic medicines, the defendant had been using ‘Dil Afza’. Even if it is considered to have been in the market only since 1976, even then, for such a long time in the field of a more sensitive market of medicine, apparently, there has been peaceful co-existence with no confusion arising in the minds of the consumers.

Even if the sharbat has been produced only since 2020, no case has been made out to restrain the defendant from marketing its sharbat under the name ‘Dil Afza’.

 Decision

In view of the above discussion, the application was dismissed with a direction to the defendant to maintain a true account of sales of ‘Dil Afza’ syrup/sharbat during the pendency of the present suit and to submit to the court, a quarterly report and account, till the disposal of the suit.

High Court in light of Section 124(1)(b)(i) of the Trade Marks Act, 1999, the suit is stayed pending the final disposal of the rectification application filed by the plaintiffs. Conclusion of those proceedings, either side may move an application for listing of the suit before the court. [Hamdard National Foundation (India), Sadar Laboratories (P) Ltd., 2022 SCC OnLine Del 39, decided on 6-1-2022]


Advocates before the Court:

For the Plaintiffs:

S.P. Singh and Sunil Mishra, Advocates

For the Defendant:

N.K. Kantawala and Prakhar Sharma, Advocates

Case BriefsSupreme Court

Supreme Court: In a case where it was alleged that more than one consumer cannot institute a complaint unless they come within the definition of the word “complainant” of Section 2(5) of the Consumer Protection Act, 2019 and also satisfy the requirements of Section 38(11) read with Order I Rule 8 CPC, the bench of Hemant Gupta and V. Ramasubramanian*, JJ has held that it is wrong to contend that wherever there are more consumers than one, they must only take recourse to Order I Rule 8 CPC, even if the complaint is not on behalf of or for the benefit of, all the consumers interested in the matter.

Relevant Provisions

Section 2(5) of the Consumer Protection Act, 2019 reads as under:

“(5) “complainant” means—

(i) a consumer; or

(ii) any voluntary consumer association registered under any law for the time being in force; or

(iii) the Central Government or any State Government; or

(iv) the Central Authority; or

(v) one or more consumers, where there are numerous consumers having the same interest; or

(vi) in case of death of a consumer, his legal heir or legal representative; or

(vii) in case of a consumer being a minor, his parent or legal guardian;

35. Manner in  which  complaint  shall  be  made.­

(1) A complaint, in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided, may be filed with a District Commission by—

(c)  one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Commission, on behalf of, or for the benefit of, all consumers so interested.

38. Procedure on admission of complaint.

(11)  Where the complainant is a consumer referred to in sub-clause (v) of clause (5) of section 2, the provisions of Order I Rule 8 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Commission thereon.

Analysis

The Court agreed to the fact that the definition of the word “complainant” is little misleading. It, however, explained,

“There may be cases where only “a few consumers” and not “numerous consumers” have the same interest. There is nothing in the Act to prohibit these few consumers from joining together and filing a joint complaint.”

It is true that Section 2(5)(i) uses the expression “a consumer”. If the vowel “a” and the word “consumer” appearing in Section 2(5)(i) are to be understood to exclude more than one person, it will result in a disastrous consequence while reading Section 2(5)(vi). Section 2(5)(vi) states that in the case of death of a consumer, “his legal heir or legal representative” will be a complainant. Unless the words “legal heir” and “legal representative” are understood to mean ‘legal heirs’ and ‘legal representatives’, a meaningful reading of the provision may not be there.

The Court also took note of Section 13(2) of the General Clauses Act, 1897, which provides that words in the singular shall include the plural and vice versa in all Central Acts and Regulations, unless there is anything repugnant in the subject or context. Hence, it said that,

“We cannot read anything repugnant in the subject or context of Section 2(5) or 35(1)(c) or 38(11) of the Consumer Protection Act, 2019 to hold that the word in the singular, namely, “consumer” will not include the plural.”

Further, a joint complaint stands in contrast to a complaint filed in a representative capacity. For attracting the provisions of Section 35(1)(c), the complaint filed by one or more consumers should be on behalf of or for the benefit of numerous consumers having same interest. It does not mean that where there are only very few consumers having the same interest, they cannot even join together and file a single complaint but should take recourse only to independent and separate complaints.

Explaining by way of an example, the Court said,

“… a case where a residential apartment is purchased by the husband and wife jointly or by a parent and child jointly. If they have a grievance against the builder, both of them are entitled to file a complaint jointly. Such a complaint will not fall under Section 35(1)(c) but fall under Section 35(1)(a). Persons filing such a complaint cannot be excluded from Section 2(5)(i) on the ground that it is not by a single consumer. It cannot also be treated as one by persons falling under Section 2(5)(v) attracting the application of Order I Rule 8 CPC read with Section 38(11).”

Therefore, the proper way of interpreting Section 35(1) read with section 2(5), would be to say that a complaint may be filed by:

  1. a single consumer;
  2. a recognised consumer Association;
  3. one or more consumers jointly, seeking the redressal of their own grievances without representing other consumers who may or may not have the same interest;
  4. one or more consumers on behalf of or for the benefit of numerous consumers; and
  5. the Central Government, Central Authority or State Authority.

Further, it must be remembered that the provisions of the Consumer Protection Act are in addition to and not in derogation of the provisions of any other law for the time being in force, by virtue of Section 100. Even Section 38 which prescribes the procedure to be followed by the Commission for enquiring into the complaint, does not expressly exclude the application of the provisions of CPC. Though Sub-sections (9), (11) and (12) of Section 38 make specific reference only to a few provisions of the Code of Civil Procedure, the principle behind Order I Rule 1 enabling more than one person to join in a suit as plaintiff is not expressly excluded.

[Brigade Enterprises Ltd. v. Anil Kumar Virmani, 2021 SCC OnLine SC 1283, decided on 17.12.2021]


Counsels

For appellant: Senior Advocate Jayant Bhushan,

For Respondent: Senior Advocate Ajit Kumar Sinha

For intervenors: Advocate Omanakuttan K. K.


*Judgment by: Justice V. Ramasubramanian