HOW THE COURTS MAKE LAW

It is well settled law as per  Article 141 that Judgements made by the Supreme court are binding on all lower courts of the country.Hence the laws laid down by the supreme court are binding on all high courts of the  country and accordingl law laid down by the high court of a particular state are binding on all lower courts/tribunals of that particular state.Then, does it mean, courts can make  law and  if so ,how. If  we  see to  the  things  carefully ,functions of executive body, legislature  and judiciary are well defined and no one is to interfere in any one’s functioning .Law is made by the parliament Judiciary is to give interpretatio to the law made by the legislature as and when dispute arises in respect of interpretation  made in a particular  case.It is how courts come in the picture.While giving interpretation to the acts /laws /rules ,courts do care for the intention and purpose  of the legislature so made .In number of judgements ,Apex court has made this observation while interpreting the law .In a case of Supreme court in the matter of Vijaya Bank V Gurunam Singh 2010 CTJ 1 (Supreme  Court) (CP) made it clear that  interpretation should be made keeping in view the purpose of the act

‘A statute being edict of the legislature ,in construing it,it is necessary to seek the intention of its maker ’

Thus we may arrive to the conclusion that Purpose and Intention of the Law is the most important factor when judiciary gives its interpretation .In other words ,Judiciary is to give explaination and help the law to be implemented in its proper spirit.

There are situations where law is silent and facts of the case demand elaborated meaning to the particular clause .In such situation many factors are taken into account,Circumstances of the case and purpose of the legislature are read together keeping in view the fundamental principal of natural justice.Such interpretations when made by the judiciary become precedence for future cases of similar nature under the similar circumstances and you may say ,it becomes law .But for all technical purposes ,it can be said precedence set up ,in simple and layman’s language ,it is a law laid down by the court or judiciary .

While looking into the law on consumers and specially Consumer Protection Act,many drastic orders have been made by the consumer forums and consumer commissions during the last decade and specially after amendment 2002 when this act got more teeth to deal with consumer matters .In fact these forums/commissions are not bound to follow CPC in technical sense and consumer courts enjoy ample power to interprete the law as well as procedural relaxation due to summary procedure provided through section 13 of the act .Section 14 also provide the courts to give relief to the consumers by compensation depending upon the circumstances,by rectification in the defective goods,by improving deficient services and even directing  to stop any unfair trade practices if found on the part of manufacturers ,traders or service providers.

In the recent past consumer commissions and Supreme court have made drastic judgement on the consumer issues which certainly make law. Insurance companies were rejecting the claims of the consumers on the plea of Pre Existing –disease in almost every case  which means claimant had not disclosed the ailment he was having at the time of filling up the prescribed  form. It was observed by the consumer courts that such rules were not disclosed to the insured at the time of filling proposal form as the terms &conditions are sent to the insurer only with the policy which reaches insurer after a month or so .Consumer courts /Commissions as well Apex court went on rejecting the plea of insurance companies on the ground that the terms not known to the insurer are not binding on them  and ultimately insurance companies amended their form which included terms and conditions now with the proposal form it self  And now unless it is proved that claimant was aware of the particular disease and had taken medicine or consultation for that particular disease ,his claim cannot be rejected marely due to such symptoms.In the case of  Asha Rani Goyal  v Life Insurance Corporation .in the year 2000, three criteria were set up for coming to the conclusion that the claimant had disease pre-existing as hereunder:

1)      One must have concealed the fact

2 )The fact so concealed should be of such importance that could affect the policy co. to take decision whether to issue policy or not.

3) The person so insured must be aware of that particular disease .

On the same footing courts also directed insurance companies not to reject renewal of the policy to elderly people due to their aging health etc.in a case of new India assurance Ltd v Consumer Education and Research Society and others in civil appael no 4116of 2008 ,United India Insuarance Co.Ltd  V Manubhai Dharamsinhbhai Gajrela and others cvil appeal no 4115of 2008,United India Inasurance Company Ltd V Mukat Lal Duggal and others civil appeal no 3633of 2008 ,it was held:

“A State cannot refuse  to renew ths policy at its whims and caprice –a medical policy involving a senior citizen cannot stand on different footing-claimant though not entitled for automatic renewal ,they deserve to be treated fairly”

There was a lot of hue and cry over the orders of the commissions when MCD and NDMC were held responsible for poor mainatanance of sever, roads ,parks and other utility services provided by statutary bodies. They came in defence with the plea that they are doing their statutary duties which do not come under the purview of consumer protection act and they are not rendering services with payment to the public by maintaining sever or parks etc. particular issue had taken many twists and turns but consumer commissions went on explaining through various judgements that these statutary bodies while planning their activities and making their annual policy  they are free to adopt any strategy  but once they have planned to do something and then do not follow their own decisions ,they are deficient in administrative implementation of  the govt. plans.This approach of the consumer commission has led to a situation that a new amendment bill to this act has a proposal to  bring these autonomous bodies under the purview of this act.

 Similar was the situation when educational institutions were hauled up for setting unreasonable rules for admission of the children in the schools and also for asking huge donations or charging for even issuing school leaving certificate etc..It was the consumer commissions orders against the educational institutions in the matter of  Bal Bharti Public School v Shiv Shankar Gupta [2007]which compelled the eduction ministry to issue notifications for setting reasonable norms in the welfare of the common public in the interest of student

In yet another cases of banks and financial bodies ,consumer commissions as well as Apex court seem to be not in favour of banks while alleging against credit card holders being defaulters in payments .Courts even do not seem to be favouring RBI for not issuing necessary guidelines for the banks to fix reasonable rate of interest for credit card holders in case of default on the payment of some instalments

Repossession of vehicle by banks and financial companies was another scene in the last few years when people who took loan were harassed and insulted in public and vehicle was almost snatched from them by musclemen even causing injuries to the owner of the vehicle .Apex court took a very serious note of such practices and warned the banks and directed to take only legal cource of action through civil recovery suit These directions by the apex court definitely make law by virtue of their interpretation of the rights of borrowers versus banks and financial institutions

This is how courts set up norms and interpret the law made by the legislature and in due course of time in becomes precedence for future cases of such nature under the same circumstances and similar facts .You may say in layman’s language that courts make law wherever interpretation or explaination to the clause is not clear or require further clarity under the given circumstances.

 

 

 

 

 

DR PREM LATA

 

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