Landmark judgements



[Civil Appeal Nos. 8072-8073 of 2009]




 In the complaint, filed before the District Forum, Ahmedabad (Rural) (for short "the District Forum"), the prayer of the respondent-complainant was as follows : "The complainant, therefore, most respectfully prays : That this Hon'ble Forum be pleased to hold that the opposite parties (joint and severally) to have practiced unfair trade practice, towards the complainant and direct them (jointly and severally) to remove unfair trade practice, practiced by them against the complainant;

This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to remove the deficiencies in their services and negligence towards the complainant. This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to refund the complainant a sum of Rs.14,00,000/- (Rupees Fourteen Lakh) and Rs.1,91,295/- to the complainant along with the 18% interest, from the date of payment to the complainant and the Hon'ble Forum be pleased to direct the opposite parties to forthwith to take back the said vehicle from the complainant, after refunding the complainant's money with interest, as prayed;

These appeals have been preferred against the order dated 16th December, 2008 of the National Consumer Disputes Redressal Commission (for short "the National Commission") in Revision Petition Nos.3349 of 2006 and 2858 of 2008.

2. The main question raised in these appeals is whether in the absence of any prayer made in the complaint and without evidence of any loss suffered, the award of punitive damages was permissible. Apart from the said main question, the appellant has also called in question the refund ordered and other relief granted in favour of the respondent-complainant.

4. The case of the complainant is that he had passion for driving and dream to visit Leh Ladakh, Jammu & Kashmir and Nepal by driving a motor car. By surfing the internet, he read advertisement given by the appellant as follows: "Introducing a world without borders, an SUV to end all SUVs. That's the new Chevrolet Forester. With the Power of 120 horses under its borne unique All-Wheels (AWD), it literally puts the four corners of the earth within your easy reach. It won't just get you there. But get you there. But get you there in unmatched comfort and luxury by-road, off-road or no- road."

5. Relying upon the same, he visited the agents of the appellant and was given a book titled "for a special journey called life". He was assured that the vehicle offered for sale will realise his dream. The brochure also assured that "the vehicle in question is an SUV to end all SUVs. And will put the four corners of the earth within your each and ...... it won't just get you their every time. But get you're there in unmatched comfort, by road, off-road or no road". He was also shown visual presentation of the vehicle and was also given a copy of the VCD. Accordingly, he purchased the vehicle on 1st May, 2004 for Rs.14 Lakhs and got accessories worth Rs.1,91,295/- fitted and also got the vehicle insured and registered.

6. Thereafter he realised that the vehicle was not fit for "off-road, no road and dirt road" driving as represented and had defects. Accordingly, he approached the appellant and its dealers who referred to the owner's manual at pages 8-6 column 1 & 3 printed by the Company to the effect : "off-road driving ..........But please keep in mind that AWD Chevrolet is a passenger car and is neither a conventional off-road vehicle nor an all terrain vehicle......... If the driving through water such as when crossing shallow streams, first check the depth of the water and the water stream bed for firmness and ensure that the bed of stream is flat .........the water should be shallow enough that it does not reach under carriage."

Thus he found that the owner's manual was contrary to the assurance in the brochure, internet and the book titled "for a special journey called life". He also realised that the vehicle was not SUV but a mere passenger car, not fit for "off-road, no road and dirt road" driving. He could not realise his dream to drive it to Leh Ladakh, Jammu & Kashmir and Nepal.

The action of the appellant was thus, "unfair trade practice". He sought permission to remove "unfair trade practice" and deficiencies in service and also to refund a sum of Rs.14 Lakhs the price of the vehicle and Rs.1,91,295/- the price of accessories with 18% interest from the date of purchase till the date of payment and also to pay compensation for physical and mental pain shock, suffering, agonies, hardships, inconvenience and expenses suffered by the complainant, to the tune of Rs.50,000/- or as thought fit in the interest of justice and the costs.

The said order of the District Forum was challenged by the appellant before the Consumer Disputes Redressal Commission, Gujarat State, Ahmedabad (for short "the State Commission"). The State Commission held that the vehicle had no mechanical or manufacturing defect but the advertisement that car was SUV amounted to "unfair trade practice". Accordingly, in substitution of the order of the District Forum, the complainant was held entitled to Rs.50,000/- as compensation which included costs of litigation. But at the same time, the complainant was required to pay Rs.5,000/- towards costs for undeserving claim. The appellant was directed not to describe the vehicle in question as SUV in any form of advertisement, website, literature etc. and to make the correction that it is a passenger car as mentioned in the manual.

Referring to the material on record, particularly, the undisputed correspondence, the said finding was also affirmed on merits. After referring to the definition of "unfair trade practice" under Section 2(1) (r) of the Consumer Protection Act, 1986 (for short "the Act"), it was concluded :

"Keeping in view the above definition of unfair trade practice and the material obtaining on record more particularly the representations made and held out by the respondent in their brochures relating to the vehicle in question, the owner's manual as also the clarification rendered by the manufacturer of the vehicle, there can be hardly any doubt that the motor vehicle Chevrolet forester AWD model was not a vehicle of the said description in as much as it was not a SUV vehicle. Therefore, the petitioner must have been misled on that score to believe that the vehicle offered for sale was a SUV. This act of the respondent would clearly fall within the mischief of unfair trade practice as envisaged in section 2(r) (supra). We therefore, affirm the findings of the State Commission in this behalf."

11. After recording the above finding the National Commission proceeded to consider the relief to be given. It was held that the State Commission was not justified in reversing the direction of the District Forum once the commission of "unfair trade practice" was established, even as per finding of the State Commission. Accordingly, the National Commission restored the relief given by the District Forum with slight modification as follows :

"Once it is found that respondent has indulged in unfair trade practice which had misled the petitioner to purchase the vehicle in question, in our view, the most appropriate relief to the petitioner would be to reinstate the petitioner to his original position before the purchase of the vehicle viz., refund of the price of the vehicle along with some compensation in that behalf. Keeping in view that the vehicle was used by the petitioner for a period of about one year and it has run approximately 14,000 kms, we consider it appropriate that the respondent should refund a sum of Rs.12,50,000 (Rupees twelve lacs fifty thousand only) to the petitioner subject to the condition that the vehicle in question, without the accessories, which the petitioner got fixed at a cost of Rs.1,91,295/-, is returned to the respondent."

 The above was not the end of the journey, though the above relief met the claim of the complainant in his complaint. The National Commission proceeded to consider the issue of punitive damages for "unfair trade practice" in selling the said vehicles to about 260 consumers. It was held that though the consumers had not approached the National Commission and a period of four years had passed, the appellant should pay punitive damages of Rs.25 lakhs and out of the said amount, a sum of Rs.5 Lakhs be paid to the complainant while the rest be deposited in the "Consumer Welfare Fund" of the Central Government to be utilized for the benefit and protection of the interests of the consumers generally. Final operative order passed by the National Commission is as follows :

18. So far as Direction (iii) is concerned, it is to be noted that there was no prayer for any compensation. There was no allegation that the complainant had suffered any loss. Compensation can be granted only in terms of Section 14(1)(d) of the Act. Clause (d) contemplates award of compensation to the consumer for any loss or injury suffered due to negligence of the opposite party. In the present case there was no allegation or material placed on record to show negligence." Thus, mere proof of "unfair trade practice" is not enough for claim or award of relief unless causing of loss is also established which in the present case has not been established.

20. We have already set out the relief sought in the complaint. Neither there is any averment in the complaint about the suffering of punitive damages by the other consumers nor the appellant was aware that any such claim is to be met by it. Normally, punitive damages are awarded against a conscious wrong doing unrelated to the actual loss suffered. Such a claim has to be specially pleaded. The respondent complainant was satisfied with the order of the District Forum and did not approach the State Commission.

He only approached the National Commission after the State Commission set aside the relief granted by the District Forum. The National Commission in exercise of revisional jurisdiction was only concerned about the correctness or otherwise of the order of the State Commission setting aside the relief given by the District Forum and to pass such order as the State Commission ought to have passed. However, the National Commission has gone much beyond its jurisdiction in awarding the relief which was neither sought in the complaint nor before the State Commission.

We are thus, of the view that to this extent the order of the National Commission cannot be sustained. We make it clear that we have not gone into the merits of the direction but the aspect that in absence of such a claim being before the National Commission and the appellant having no notice of such a claim, the said order is contrary to principles of fair procedure and natural justice. We also make it clear that this order will not stand in the way of any aggrieved party raising a claim before an appropriate forum in accordance with law.

21. Accordingly we allow these appeals and set aside the order of the National Commission to the extent of award of punitive damages.

....................J. [V. GOPALA GOWDA]

....................J. [ADARSH KUMAR GOEL]


October 9, 2014


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