CASE LAWS

                                                    UNDER

Consumer  Protection Act 1986[Amended 2002]

 

                               CASE CATEGORY  NO 1

 Challenge to the constitutionality of the act;

 Vishwabharti Housebuilding Co-operative Society v Karnataka State &others SC 2002

Karnataka State commission>high court of Karnataka >Supreme court

 Law point-

1.      Act is unconstitutional as running as parallar judiciary to civil courts which is against the provisions of constitution .

2.      Order of the consumer forum should be sent for execution under sec 25 to civil court ,sec 27 is illegal

  High court of Karnataka  held:

 1.      Act not unconstitutional

 2.      order for compliance should be sent to civil court

 Supreme court held:

1.      Act is made under the provisions of the constitution vii schedule ,list i ,ii & iii Article 246 part- 2 wherein it is said that parliament can constitute any judicial system other than Supreme court & High court

2.      Since procedure is laid down in the act itself under sec. 13 as a summery procedure and accordingly execution is also to be done under summery procedure Hence sec. 27 very much valid. Sec. 25 is an option to the consumer whether want to go to civil court or not.

NOTE: Sec.25&27 were given elaborate explaination in amendment 2002

 

 

    CASE CATEGORY NO 2

Housing

Late possession/ No possession/ Defective dwelling/ Area less/ Cost escalation/ Forfeiture of registration fee in case of cancellation of flat/ Approach road dispute

M.G.Gupta  V Lukhnow Development Authority SC 1993

 Facts of the case:

Authority invited applications,applications were more than flatsavailable, draw,full  payment made as per demand,possession not given as flate not ready.

§  Consumer forum in favour

§  State commission held in favour

§  Authority raised one more plea of jurisdiction of the commission –not consumer National commission held in favour .

 Supreme court along with many cases.   Laid down Law;

  !)Purchaser is a consumer against board/construction company  for services hired

  !!)Erring officer can be penalized with the payment of     compensation which is to be paid  to the consumer

2 Ghaziabad Development Authority V Balbir SinghSC,2004 ,[CTJ]PAGE 605 .

Law laid down

   !)Order for interest on the amount deposited should be on the basis of facts of the case and not always @18% as ordered by National commission.

    !!)If order for interest is given ,there should not be any further  order for compensation  as both the things cannot go together

   !!!)In case where compensation for mental agony is given,there should not be any tax deduction at sourse as such compensation is not an income

3. Banglore Development Authority  VS Syndicate Bank Y 17 MAY, 2005

 R V RAVEENDRAN

Laws Laid Down;

!) Delay in delivery of the HIG houses / possession of the houses amounts to deficiency in services

 !!) interest granted on the price paid, at the bank rate from 01.01.1986 till date the delivery of the   houses

!!!)  Reimbursement of the losses incurred on account of the non-delivery.

4. U.T Chandigah Administration And Others V Amarjeet Singh And Others (Supreme Court ) Cp Page 486 ,It Was Held By The Apex Court :

“That where an auction is on ‘as is where is basis’ with reference to a public auction of the existing site ,the purchase /lessee is not a consumer ,the owner is not a service provider ”

5.Faqir Chand Gulati V/S Uppal Agencies Pvt. Ltd. & Anr .Civil Appeal No. 3302 Of 2005  Date Of Judgment: July 10, 2008 SC

“ land owner, who enters into an agreement with a builder, for construction of an Apartment Building and for sharing of the constructed area, is a `consumer' entitled to maintain a complaint against the builder as a service-provider under the Consumer Protection Act, 1986.’

 ‘The District Forum, the State Commission and the National Commission committed a serious error in wrongly assuming that agreements of this nature being in the nature of joint venture are outside the scope of consumer disputes.’

 

CASE  CATEGORY No 3

 Medical profession/

Held it medical negligence when there is

!) Damage to organ due to negligence

!!) Wrong treatment due to wrong diagnosis

!!!) Money receipt or prescription or  discharge summery or test reports when not  provided

!V)When treatment not chosen  choose  as accepted and established  in medical norms /as per medical research/available medical literature.

V.Shantha V Indian Medical  Association SC 1995

(How medical practitioner come under consumer definition under consumer pratection act )

 

Laws Laid Down

!)Though Indian Medical Council Act has to provisions to control the medical practitioners and take disiplanary action against erring doctors,consumer courts are additional remedy to the consumer under consumer protection act to get compensated.

!!)Though medical PROFESSION is different from other OCCUPATIONS ,but commercialization has already taken place when services are given by payment though it is still a noble profession based on faith and trust.

!!!)Though medical profession is technical in nature but it cannot be said that the members of the forum are not capable to deal with such matters .They are equipped with expert opinions on the subject,medical literature and other reports  ,eminent people from the society ,judges or retired judges . Three members can be expert of three subjects only and if it is expected them to know every subject,it will be an immposible situation in all the courts.

 !V)Theory of res ipsa loquitur [ a thing speaks of itself]- in case any instrument left in the body ,a wrong part removed ,  allopathic treatment given by a homeopathic doctor etc.

V)Three steps necessary to be observed by the medical practitioners

V!)To decide whether he has to take up the case or not:If taken up the case, he is to decide what treatment is to be given.;Whether the treatment given as per the diagnosis made.

 V!!) Govt Hospital liable if contribution from the employees salary deducted

V!!!) Payment by insurance company amounts to payment made by the consumer

!X) If five methods available for treatment,one chosen,not negligent

X) Doctor not guarantor

X!)Error of judgement differt from wrong diagnosis

 

X!!)Fee/consideration is amust for falling under definition of consumer.

Jacob Mathew Vs State Of Punjab & Anr On 5 August, 2005

AUTHOR: R LAHOTI

 Law  laid down

‘It is a case of non- availability of oxygen cylinder either because of the hospital having failed to keep available a gas cylinder or because of the gas cylinder being found empty. Then, probably the hospital may be liable in civil law (or may not be _ we express no opinion thereon) but the accused appellant cannot be proceeded against under Section 304A IPC on the parameters of Bolam's test.’

‘Decisions in criminal case not found negligent do not affect cases under consumer protection act –gross negligence and intention to commit crime is the parameter in criminal cases.’

Harjot Ahluwalia V Springmeadows 1998 Sc

 Law laid down

Wrong injection by the nurse amounts to negligence on the part of doctor as well as nursing home                 

 CASE CATEGORY NO 4

 Definition of consumer under consumer protection act : meaning of commercial purpose

 Laxxmi Engeeneering works V P.S.G.Industrial institute 1995 SC 1429

Facts of the case ……

Laxmi engeeneering worksis a proprietaryconcern,registered as small scale industry.It places order to PSG Industrial institute for supply of machinery .Supply six months late and machines defective .Hence case before the state consumer dispute redressal commission Maharashrtra on various counts 4 lacs .Commission ordered for2.48 lacs National commission held-complainat not consumer as machinery for commercial purpose.Supreme court held:

1] Consumer forums are not courts though enjoy several  powers of civil courts. liberal meaning of consumer.

2]Meaning of commercial purpose defined under sec.2[1] d of the C.P.Act depends on the facts and circumstances of the case as to purchased goods are for the purpose of using himself for livelihood and self employment or for doing business ,selling ,manufacturing or trading of the same .

 Ref. Case-  Karnataka Power Transmission ... Vs Ashok Iron Works Pvt. Ltd On 9 February, 2009

BENCH: R LODHA, M KATJU

‘that supply of electricity to a consumer by KPTC is not sale of electricity. The expression `supply' is not synonym for `sale'. We reiterate what has been stated by this Court in Southern Petrochemical Industries Co. Ltd. (supra) that supply does not mean sale’

,hence not for commercial purpose

 M/S Harsolia Motors Vs M/S National Insurance Co. Ltd [National Commission ]

Law laid down

1.      Insurance ,not for further business but for indemnification of losses

2.      Electricity use in the industry not for further trading of electicity for profit and loss ,hence not for commercial purpose.

 

                                      CASE CATEGORY NO 5

 Education

1.      Non –refund of fee

2.      Break or transfer of contract of services to other institutes is deficiency in services

3.      Misleading ads stating the status of the institute as a recognized under some university is deficiency in services.

 Bhupesh Khurana &Others V Vishwa Budha Parishad &Others [2004]Cpj Sc

Facts of the case ….

1        11 complaint having same grievance against the same party on the same issue       

2         Admission on the basis of ad in the paper in 1991-1992 in BDS course with the impression institute affiliated with Magadh University &recognized by Dental council of India

3        No sign of examination which were to be held in Sep.1992

Law point :

1.      Student is a Consumer for hiring services

2.      Refund of fee and compensation allowed

 

Bihar School Examination Board Vs Suresh Prasad Sinha On 4 September, 2009

Author: M Katju Bench: R.V. Raveendran, Markandey Katju

 

 “Board conducts an examination in discharge of its statutory function, it does not offer its ‘services’ to any candidate. Nor does a student who participates in the examination conducted by the Board, hires or avails of any service from the Board for a consideration.”

 Other ref.case

   University &Others v sSanjay kumar 20.12.2002 NC.:

Law laid down

  Sending roll number is administrative service

 Alex j. Rebello v Vice Chancellor Benglore  University :                                                                      

1.      Checking papers is statutary function of the   university                                             

Registrar University of Bombay V Mumbai Gram Panchayat [1994] CPJ 146 [NC]  & Chaorman Board OF Examination V Mohideen Abdul Kadar [1997]CPJ 49 [NC]

Regional officer CBSE V Sheena Pathambern [2003]of SCC 179 at page 725 SC held:

!)University or board in conducting public examination ,evaluating papers ,announcing results etc are not the service providers.by taking consideration.

!!)On interim orders SC held:

            ‘This court has on several occasions earlier deprecated the practice of permitting the student to persue their study or to appear in the examination under the interim order in the petition..In most of such cases it is ultimately pleaded that since the course was over or result has been declared ,the matter deserve to be considered sympathetically”

Islamia Academy of education v state of Karnataka AIR 2003 Supreme Court 3724 Writ Petition (C350 Of 1993) No Decision On 14.08.2003

V N Khare C.J.I.S.N Variava ,K.G Balakrishnan

Law laid down

“Collection of fee in advance for entire course i.e.for all the year not permissible’

It is further explained ‘an educational institute can only charge prescribed fee for one semester/year if any institute feels that any particular student may leave in midstream[and the seat would lie vacant for the remaining years ] then at the highest it may require that student to give a bond /bank guarantee that the balance fees for the whole year shall be recovered from him even if the student left in the midstream’

           

 CASE CATEGORY  NO.-6

Insurance Company’s Liability For Agent’s Act

Hon’ble SC in the year 1997 in the matter of Harshad J. Shah & Anr. v.  L.I.C. of India & Ors. reported in AIR 1997 Supreme Court 2459

 ‘wherein their Lordships, after considering a similar contention, held that an agent has no authority to accept the premium on behalf of LIC’[by cash or cheque in his own name ]

 

 CASE CATEGORY  NO.-7

 Financing institutes /industries /banks

Laws laid down

2.      Fixed deposits and their maturity amount are Services by banks

3.      Lockers and their safety

Roll of company law board & right of consumer –sec.22 of sica/Declaration of Sick unit

Smt Kalawati &others V M/S United Vaish co-operative society &credit society 2002/CPJ/ 71/NCDRC

Fixed deposits ,money not paid back .Co-operative societies Act 1972 bars the jurisdiction of consumer forums .[section60]

HELD :

1.      No bar to consumer forums as forums are not court.

2.      Consumer forums are additional remedy to consumer even if registrar is the authority to redress the grievance.

Neela Vasnt Raje V Amogh industries SC 1993-

1.      Fixed deposit case for the first time under consumer protection act.

S Raghwachariv v s Narayanan &others Madrass High Court [CP] page 793

“When company under liquidation or BIFR consumer not barred to file case under consumer protection act as consumer forum is not court ,complaint is not suit.’

Regional Provident Fund Commissioner V Bhavani (Cp) P 563 Decided On 22nd April 2008, Supreme Court                         

‘ non payment of dues to the complainants[number of cases of similar nature on the similar point of law clubbed together ] under Employees Pension Schemes  amounts to deficiency in services .By becoming a member of the employees family pension scheme and contributing to the same ,one avails services rendered under section 2(1)(O) by the commission for implementing the scheme,hence is a consumer under section 2 ( 1 ) (d) of the act.’

 

CASE CATEGORY NO. 8        

Mediclaims/ Insurance Policies

Asha Rani Goyal V L.Ic Of India [Sc] 2000

Law laid down

For proving pre-existing disease ,three conditions must apply;

·         There must be concealment of fact

·         Fact so concealed must be of such importance for decision by Insurance co. whether to insure or not

·         Patient must have the knowledge of such disease prior to giving declaration .

 Shamim Khan V New India Insurance Company, Maharashtra State Consumer Dispute Redressed Commission

‘it is the doctors who decide what treatment is required to be given. Once the insured has paid the agreed amount of premium, insurance company is bound to meet the expenses. While deciding a Case of mediclaim in the matter of Shamim Khan V New India insurance company, Maharashtra State Consumer Dispute Redressed Commission has shown insurance firms their place, directing that it is the doctor and not the insurer who can decide whether a case requires emergency medical attention or not. It is further stated that “insurance company’s officers are not experts who can decide whether a particular case is of medical emergency or not.”

FACTS OF THE CASE

      - In the above mentioned case, Shamim Khan, the plaintiff who was working as a school teacher in Saudi Arabia suffered unbearable stomach pain when he visited India in July 2000, which led to severe bleeding. Khan was admitted to Bombay hospital where emergency surgery was conducted. Claim for total expenditure of Rs 41,158 was rejected on the plea that there was no emergency to undergo operation. Doctor’s certificate was then produced to prove the emergency in the case.

 

 

 

Apart from directing the claim of the consumer to be paid, court also fined the insurer Rs 5000 for rejecting the claim. The order came at a time when insurance companies are desperately trying to avoid passing claims and reimbursing expenses, borne by the insured under mediclaim policies. It is surely a big relief to the consumers at this juncture.

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