The SC on July 08, 2021 {DR. A. SURESH KUMAR & ORS. vs. AMIT AGARWAL} held that since the application for condonation of delay was filed prior to the judgment of the Constitution Bench, which was delivered on 04.03.2020, the application for condonation of delay ought to have been considered on merits and should not have been dismissed on the basis of the Constitution Bench judgment in the case of New India Assurance Company Limited (infra).
It was also held by the Bench, comprising of Justice VINEET SARAN and Justice DINESH MAHESHWARI that the said judgment was to operate prospectively and the written statement as well as the application for condonation of delay had been filed much prior to the said judgment in the present case.
In the present dispute, the respondent had filed a claim for medical negligence against the appellants-Dr. A. Suresh Kumar and others. The appellants filed their reply but with a delay of 7 days beyond the period of 30+15 days (45 days). The National Consumer Disputes Redressal Commission (for short ‘NCDRC’) rejected the application for condonation of delay in filing the written statement in view of the Constitution Bench judgment of the Supreme Court in the case of New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited, (2020) 5 SCC 757 - the said order was assailed before the SC in present appeal.
Accordingly, the impugned order of the NCDRC was set aside, and the appeal was allowed by the SC.
]]>The SC on Jan 11, 2021 {IREO GRACE REALTECH PVT. LTD. vs. ABHISHEK KHANNA & OTHERS} held that in the present lis the terms of the Apartment Buyer‘s Agreement are oppressive and wholly one-sided, and would constitute an unfair trade practice under the Consumer Protection Act, 1986.
It was also held by the Bench, comprising of Justice Indu Malhotra, Justice D.Y. Chandrachud and Justice Indira Banerjee that the terms of the agreement authored by the Developer does not maintain a level platform between the Developer and the flat purchaser. It was held that the stringent terms imposed on the flat purchaser are not in consonance with the obligation of the Developer to meet the timelines for construction and handing over possession, and do not reflect an even bargain. It was held that the failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. It was also held that given the one-sided nature of the Apartment Buyer‘s Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.
The issues falling for consideration before the SC were whether the terms of the Apartment Buyer‘s Agreement were one-sided, and the Apartment Buyers would not be bound by the same, and also whether on account of the inordinate delay in handing over possession, the Apartment Buyers were entitled to terminate the agreement, and claim refund of the amounts deposited with interest.
The SC held that that the incorporation of one-sided and unreasonable clauses in the Apartment Buyer‘s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. Even under the 1986 Act, the powers of the consumer fora were in no manner constrained to declare a contractual term as unfair or one-sided as an incident of the power to discontinue unfair or restrictive trade practices. It was held that an unfair contract has been defined under the 2019 Act, and powers have been conferred on the State Consumer Fora and the National Commission to declare contractual terms which are unfair, as null and void. It was held that this is a statutory recognition of a power which was implicit under the 1986 Act. It was held that the Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer‘s Agreement.
DOCTRINE OF ELECTION
The SC held that an allottee may elect or opt for one out of the remedies provided by law for redressal of its injury or grievance. It was held that an election of remedies arises when two concurrent remedies are available, and the aggrieved party chooses to exercise one, in which event he loses the right to simultaneously exercise the other for the same cause of action. However, it was held that there are three elements of election viz. existence of two or more remedies, inconsistencies between such remedies, and a choice of one of them. It was held that if any one of the three elements is not there, the doctrine will not apply.
The SC held that Consumer Protection Act, 1986 was enacted to protect the interests of consumers, and provide a remedy for better protection of the interests of consumers, including the right to seek redressal against unfair trade practices or unscrupulous exploitation. It was held that remedies under the Consumer Protection Act were in addition to the remedies available under special statutes. It was further held that the absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear. Section 18 of the RERA Act specifies that the remedies are ―without prejudice to any other remedy available.
The SC finally held that allottees are not bound to accept the offer of allotment because of the inordinate delay in completing the construction of the Towers where units were allotted to them. It was held that the Occupation Certificate is not available even as on date, which clearly amounts to deficiency of service. It was held that the allottees cannot be made to wait indefinitely for possession of the apartments allotted to them, nor can they be bound to take the apartments in Phase 1 of the project. It was also held that the allottees have submitted that they have taken loans, and are paying high rates of interest to the tune of 7.9% etc. to the Banks. Consequently, the SC held that the allottees in Chart B are entitled to refund of the entire amount deposited by them.
]]>The SC on October 01, 2020 {M/S Magma Fincorp Ltd. vs Rajesh Kumar Tiwari} held that the Consumer Protection Act, 1986 has been enacted to protect the interests of consumers, by making provisions for the establishment of Consumer Councils and other fora for speedy redressal of consumer disputes and for matters connected therewith.
It was held by the SC Bench, comprising of Justice D Y Chandrachud and Justice Indira Banerjee, that the fora constituted under the Consumer Protection Act, 1986 are quasi judicial bodies, required to observe the principles of Natural Justice and to award relief of a specific nature and to award wherever appropriate, compensation to consumers.
The short question raised by the Financier in this appeal before the SC was, whether the Financier is the real owner of the vehicle which is the subject of a hire purchase agreement, and if so, whether there can be any impediment to the Financier, taking repossession of the vehicle, when the hirer does not make payment of instalments in terms of the hire purchase agreement.
Another question which arose for determination in this appeal before the SC was, whether service of proper notice on the hirer is necessary for repossession of a vehicle which is the subject of a hire purchase agreement, and if so, what is the consequence of non service of proper notice.
It was held by the SC that the Complainant has only made a vague assertion that the action of the Financier in taking possession of the vehicle, admittedly for default in payment of instalments, and in not releasing the vehicle to the Complainant, in spite of the Complainant’s assurance to the Financier to clear outstanding instalments and pay future instalments timely, amounts to an act of unfair trade practice and constitutes deficiency of service.
It was held that the repossession of a vehicle under hire, in accordance with the terms and conditions of a hire purchase agreement, and refusal to release the same on mere assurance of the Complainant to clear outstanding arrears of hire instalments, and pay future instalments in time, does not constitute ‘deficiency’ in service.
It was further held that the object of a notice before taking possession of a vehicle on hire under a Hire Purchase Agreement, is to enable the hirer, to make a written request to the Financier to revive the hire purchase agreement in terms of Clause 12 of the said agreement, upon payment of all outstanding dues together with damages, as might be mutually agreed upon.
The SC held that irrespective of whether the service provider adduces evidence or not, the decision of the District Forum has to be based on evidence relied upon by the Complainant. It was held that the onus of proof is on the Complainant making the allegation. It was held that Section 27 of the Consumer Protection Act casts an obligation on the District Forum, the State Commission or the National Commission to dismiss frivolous complaints with costs not exceeding Rs.10,000/-.
It was held that no adverse inference could have been drawn against the Financier for not producing the Hire Purchase Agreement before the District Forum, when there was no allegation in the complaint of breach by the Financier of the Hire Purchase Agreement, in taking possession of the vehicle. It was further held that the District Forum did not exercise its power under Section 13(4)(ii) to call upon the Financier to produce the Hire Purchase Agreement. It was also held that even otherwise, the District Forum did not direct the Financier to produce the Hire Purchase Agreement.
It was held that in the Complaint, there is not a whisper of application of any force in taking possession of the vehicle. It was held that the finding of the District Forum, of the vehicle having been lifted “forcefully” or “snatched” is, with the greatest of respect, contrary to the Complainant’s own case made out in the Complaint, and therefore perverse. It was held that it is well settled that a new case cannot be made out by way of evidence, when there are no pleadings to support the same.
It was held that the Financier remains the owner of the vehicle taken by the complainant on hire, on condition of option to purchase, upon payment of all hire instalments. It was held that the hire instalments are charges for use of the vehicle as also for the exercise of option to purchase the vehicle in future. It was held that the Financier being the owner of the vehicle, there was no obligation on the part of the Financier, to divulge details of the sale of that vehicle, and that too on its own, without being called upon to do so.
It was also held that the error and/or discrepancy in the address is minor and there are no materials on the basis of which the State Commission concluded that the error was deliberate. It was held by the SC that the finding of the State Commission, of the error in the address being deliberate, is unsubstantiated.
It was held that the Consumer Protection Act, 1986 does not override the Contract Act, 1872, and other enactments in force, applicable to the service availed by the consumer from the service provider.
It was also held that a Hire Purchase Agreement is an executory contract of sale, conferring no right in rem on the hirer, until the conditions for transfer of the property to him have been fulfilled. It was held that the Financier continues to be the owner of the goods under a hire purchase agreement. It was held that the hirer simply pays for use of the goods and for the option to purchase them. It was held that the finance charge, representing the difference between the price and the hire purchase price represents the sum which the hirer has to pay for the privilege of being allowed to pay the purchase price in instalments. It was also held that where the hirer had defaulted in payment of instalments and the agreement specifically provided that the Financier was entitled to repossess the vehicle in case of default, no case was made out against the Financier.
The SC held that whether the service of proper notice on the hirer would be necessary for repossession of a vehicle, which is the subject matter of a Hire Purchase Agreement, would depend on the terms and conditions of the Hire Purchase Agreement, some of which may stand modified by the course of conduct of the parties. It was held that if the hire purchase agreement provides for notice on the hirer before repossession, such notice would be mandatory. It was held that notice may also be necessary, if a requirement to give notice is implicit in the agreement from the course of conduct of the parties.
It was held that in a case where the requirement to serve notice before repossession is implicit in the hire purchase agreement, non service of proper notice would tantamount to deficiency of service for breach of the hire purchase agreement giving rise to a claim in damages. It was held that the Complainant consumer would be entitled to compensatory damages, based on an assessment of the loss caused to the complainant by reason of the omission to give notice. It was held that where there is no evidence of any loss to the hirer by reason of omission to give notice, nominal damages may be awarded.
The SC concluded that the impugned orders of the National Commission, the State Commission and the District Forum, under the Consumer Protection Act, 1986 cannot be sustained and the same are set aside. The appeal was accordingly allowed by the SC. It was held by the SC that the Financier shall, however, pay a composite sum of Rs.15,000/- to the Complainant towards damages for ‘deficiency’ in service and costs for omission to give the Complainant a proper notice before taking repossession of the vehicle.
]]>The SC on Aug 25, 2020 {Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt Ltd} held that a failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. It was held that there is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. It was held that the expression "service" in Section 2 (1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction.
It was held by the Bench, comprising of Justice D.Y. Chandrachud & Justice K M Joseph, that the agreement is manifestly one-sided: the rights provided to the developer for a default on the part of the home buyer are not placed on an equal platform with the contractual right provided to the home buyer in the case of a default by the developer.
It was held by the SC that the terms of the agreement have been drafted by the developer. It was also held that they do not maintain a level platform as between the developer and purchaser. It was held that the stringency of the terms which bind the purchaser are not mirrored by the obligations for meeting times lines by the developer. The agreement does not reflect an even bargain.
In the present case, the National Consumer Disputes Redressal Commission dismissed a consumer complaint filed by 339 flat buyers, accepting the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and, that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was stipulated in the Apartment Buyers Agreement. The said judgment was subject matter of present appeal before the Supreme Court.
The SC held that there has been a gross delay on the part of the developer in completing construction ranging between two and four years. It was held that despite successive extensions of time to deliver possession sought by the developer, possession was not delivered on time.
It was held that the nature and quantum of the delay on the part of the developer are of such a nature that the measure of compensation which is provided in clause 14 of the ABA would not provide sufficient recompense to the purchasers.
It was also held that Judicial notice ought to be taken of the fact that a flat purchaser who is left in the lurch as a result of the failure of the developer to provide possession within the contractually stipulated date suffers consequences in terms of agony and hardship, not the least of which is financial in nature. It was held that having paid a substantial amount of the purchase price to the developer and being required to service the debt towards loan installments the purchaser is unable to obtain timely possession of the flat which is the subject matter of the ABA.
It was held by the SC that the simple question which needs to address is whether a flat buyer who seeks to espouse a claim against the developer for delayed possession can as a consequence of doing so be compelled to defer the right to obtain a conveyance to perfect their title. It was held that it would, in its view, be manifestly unreasonable to expect that in order to pursue a claim for compensation for delayed handing over of possession, the purchaser must indefinitely defer obtaining a conveyance of the premises purchased or, if they seek to obtain a Deed of Conveyance to forsake the right to claim compensation. The SC held that this basically is a position which the NCDRC has espoused. It was held that it cannot countenance that view.
The SC held that in the present case, there exist, clear and valid reasons for not holding down the flat buying consumers merely to the entitlement to receive compensation at the rate of 5 per square foot per month in terms of clause 14 of the ABA.
The NCDRC has upheld the collection of the charges towards electricity based on the terms of the ABA. The SC, however, held that there is no infirmity in the finding of the NCDRC, which is based on the provisions contained in clause 23(b) of the ABA. It was held that the charges recovered are not contrary to what was specified in the contract between the parties. It was further held by the SC that there is no deficiency of service in regard to the demand of interest payable on the tax which was required to be deposited with the revenue. It was also held by the SC that the demand of parking charges is in terms of the ABA and hence it is not possible to accede to the submission that there was a deficiency of service under this head.
The SC held that it has come to the conclusion that the dismissal of the complaint by the NCDRC was erroneous. It was held that the flat buyers are entitled to compensation for delayed handing over of possession and for the failure of the developer to fulfil the representations made to flat buyers in regard to the provision of amenities. It was held by the SC that the reasoning of the NCDRC on these facets suffers from a clear perversity and patent errors of law. Allowing the appeals in part, the SC set aside the impugned judgment and order of the NCDRC dismissing the consumer complaint.
It was directed by the SC to the DLF to pay an amount calculated at the rate of 6 per cent simple interest per annum to each of the appellants. It was directed that the amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate. It was further held by the SC that the above amount shall be in addition to the amounts which have been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts.
]]>The SC on June 18, 2020 {Surendra Kumar Bhilawe vs The New India Assurance Company Limited} held that Sections 19 and 20 of the Sale of Goods Act, 1930, which deal with the stage at which the property in movable goods passes to the buyer, is of no assistance to the Insurer.
It was further held by the Bench, comprising of Justice R. Banumathi and Justice Indira Banerjee, that the National Commission failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate are to be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred, with effect from the date of its transfer.
It was held that the transferee might, within 14 days from the date of transfer, apply to the Insurer in the prescribed form, for making requisite changes in the certificate of insurance and the policy of insurance with regard to the factum of transfer of insurance. It was held that there could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle.
The SC also held that the policy of insurance in this case, was apparently a comprehensive policy of Insurance which covered third party risk as well. It was held that the Insurer could not have repudiated only one part of the contract of insurance to reimburse the owner for losses, when it could not have evaded its liability to third parties under the same contract of Insurance in case of death, injury, loss or damage by reason of an accident.
It was held that the FIR was lodged within three days of the accident. It was held that in the case of a major accident of the kind as in this case, where the said truck had turned turtle and fallen into a river, slight delay if any, on the part of the traumatized driver to lodge an FIR, cannot defeat the legitimate claim of the Insured. It was held that there was no delay at all in lodging the FIR. It was also held that in case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all.
The SC concluded that the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the State Commission ignoring vital admitted facts, including registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of ‘No Objection’ from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 157.
The appeal was, therefore, allowed by the SC. The impugned order of the National Commission under appeal was set aside and the order of the District Forum was restored. It was directed that the Insurer shall pay to the Appellant a sum of Rs. 4,93,500/- as directed by the District Forum with interest as enhanced by the Court to 9% per annum from the date of claim till the date of payment.
It was further held by the SC that the sum of Rs. 5,000/- awarded by the District Forum towards compensation for mental agony and Rs. 2,000/- awarded towards the cost of litigation, is grossly inadequate. It was directed that the Insurer shall pay a composite sum of Rs. 1,00,000/- to the Appellant towards costs and compensation for the agony caused to the Appellant by withholding his legitimate dues.
]]>The SC on May 20, 2020 {Canara Bank v. Leatheroid Plastics Pvt. Ltd.} held that the Commission was right in holding that the complainant had suffered loss because of inaction and negligence on the part of the Bank. It was held that this constituted deficiency in service. It was also held that any loss arising out of such deficiency was compensable under the provisions of the Consumer Protection Act, 1986.
It was held by the SC Bench, comprising of Justice U.U. Lalit & Justice Aniruddha Bose, that going through the two clauses, their proper construction would be that once the bank exercised the liberty to effect the insurance, it was implicit that such insurance ought to have covered the entire set of hypothecated assets, against which the credit facilities were extended. It was held that the bank could absolve themselves from any obligation in the event the claim was rejected wholly or in part. It was held that if, however, the bank in exercise of their liberty effected the insurance, then it became their obligation to cover the entire set of hypothecated assets. It was observed that the clause under which liberty is given to the bank to effect insurance starts with the phrase – “The bank is at liberty and is not bound to effect such insurance……”. It was held that the employment of the adjective “such” in this clause demonstrates that if the bank effected insurance, that policy would have to carry the features which a borrower’s policy would have covered as per the terms of the deeds or agreements.
The question falling for consideration before the SC in present case was as to whether there was any deficiency of service on the part of the bank in not covering the whole set hypothecated assets under the insurance policy. In the present case, there was a fire in the premises of the respondent, which caused damage to their stocks and machineries. As the insurance undertaken by Bank for respondent did not cover plant, machinery and accessories etc. - forming part of set of hypothecated assets. Therefore, the claim apropos them was not processed by the Insurance Company and the respondent did not get any compensation for those items.
It was held by the SC that the borrower’s liability in such a situation to repay to the bank could arise in the event of rejection of the claim or part thereof, such claim arising on account of loss/damage to the hypothecated assets. It was held but the grievance of the borrower here is that though the bank effected such insurance, part of the hypothecated securities was left out from the coverage. It was held that it is a case of underinsurance. It was observed that if the bank had exercised liberty to effect insurance, it was their duty to take out policies covering the entire set of hypothecated assets. It was held that would constitute part of services the bank were rendering to the borrower. It was further held that effecting insurance was not their absolute obligation. It was held but such obligation they had taken it upon themselves in present case.
The SC concluded that position could have been different in the event the Bank had alerted borrower at the time of effecting the policy that the entire set of assets was not being covered by the policies being effected by them. It was held that no such case has been made out.
In such circumstances, the SC held that it finds no reason to interfere with the order under appeal. The appeal was dismissed.
]]>Justice D Y Chandrachud & Justice Ajay Rastogi
The SC {The Joint Labour Commissioner and Registering Officer and Anr v. Kesar Lal} holds as a matter of interpretation, the provisions contained in the Consumer Protection Act 1986 must be construed in a purposive manner. It was held that parliament has provided a salutary remedy to consumers of both goods and services. It was further held that public authorities such as the appellants who have been constituted under an enactment of Parliament are entrusted with a solemn duty of providing welfare services to registered workers. It was held that the workers who are registered with the Board make contributions on the basis of which they are entitled to avail of the services provided in terms of the schemes notified by the Board. Public accountability is a significant consideration which underlies the provisions of the Consumer Protection Act 1986. It was also held that the evolution of jurisprudence in relation to the enactment reflects the need to ensure a sense of public accountability by allowing consumers a redressal in the context of the discharge of non-sovereign functions which are not rendered free of charge. It was held that this test is duly met in the present case.
It was held that so long as the service which has been rendered is not rendered free of charge, any deficiency of service is amenable to the fora for redressal constituted under the Consumer Protection Act 1986. It was further held that the Act does not require an enquiry into whether the cost of providing the service is entirely defrayed from the price which is paid for availing of the service. Further held that from the definition contained in Section 2(1)(d), a ‘consumer’ includes not only a person who has hired or availed of service but even a beneficiary of a service. It was held that the registered workers are clearly beneficiaries of the service provided by the Board in a statutory capacity.
In the present case, the issue was whether a construction worker who is registered under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and is a beneficiary of the Scheme made under the Rules framed pursuant to the enactment, is a ‘consumer’ within the meaning of Section 2(d) of the Consumer Protection Act 1986 and whether a beneficiary of a statutory welfare scheme is entitled to exact accountability by invoking the remedies under the Consumer Protection Act 1986. In view of aforesaid, the SC answered it in affirmative.
]]>Justice Arun Mishra, Justice Indira Banerjee, Justice Vineet Saran, Justice M. R. Shah & Justice S. Ravindra Bhat
The SC {NEW INDIA ASSURANCE CO. LTD. v. HILLI MULTIPURPOSE COLD STORAGE PVT. LTD.} holds that the District Forum has no power to extend the time for filing the response to the complaint beyond the period of 15 days in addition to 30 days as is envisaged under Section 13 of the Consumer Protection Act; and the commencing point of limitation of 30 days under Section 13 of the Consumer Protection Act would be from the date of receipt of the notice accompanied with the complaint by the opposite party, and not mere receipt of the notice of the complaint. It was held that this Judgment is to operate prospectively.
It was further held that the objection of not having received a copy of the complaint along with the notice should be raised on the first date itself and not thereafter, otherwise if permitted to be raised at any point later would defeat the very purpose of the Act, which is to provide simple and speedy redressal of consumer disputes.
In the present case, the reference was made to the Constitution Bench to decide whether Section 13(2) (a) of the Consumer Protection Act, which provides for the respondent/opposite party filing its response to the complaint within 30 days or such extended period, not exceeding 15 days, should be read as mandatory or directory. And it is answered as aforesaid by the SC – i.e. it is mandatory; limitation cannot be extended beyond 15 days; maximum time to file WS is 45 days in consumer matters.
]]>JUSTICE MOHAN M. SHANTANAGOUDAR & JUSTICE R SUBHASH REDDY
The SC {M/S NANDAN BIOMATRIX LTD. v. S. AMBIKA DEVI & ORS.} holds that entering into a buyback transaction would not preclude a farmer from taking benefit as a “consumer” under the Consumer Protection Act, 1986. It was held that the summary redressal available to the farmer under the 1986 Act may go a small but crucial way to provide instant relief in a sector which is already facing stress on several counts. It was further held that farmers faced with grievances against seed companies, may, in suitable cases, opt for other remedies such as a civil suit, relief under the Seeds Act, 1966 (the reform of which has been under process for some time), and so on. But excluding such farmers from the purview of the 1986 Act would be a complete mockery of the object and purpose of the statute.
In the present case, the District Forum dismissed the complaint, and held that the same was not maintainable since the Respondent was not a “consumer” within the meaning of the Consumer Protection Act, 1986 (“the 1986 Act”). On appeal by the Respondent, the State Commission set aside the order passed by the District Forum, holding that the Respondent was a “consumer” under the 1986 Act, and remanded the matter to the District Forum for disposal on merits. It is this order which was impugned before the National Commission by way of a revision petition filed by the Appellant. The National Commission also dismissed the revision. The SC maintained the order(s) of the National Commission and the State Commission, while dismissing the present appeal.
]]>Justice U U Lalit & Justice Vineet Saran
The SC {THE SUPERINTENDENT OF POST OFFICE, BOLANGIR DIVISION, BOLANGIR, ODISHA v. JAMBU KUMAR JAIN } holds that the Indira Vikas Patras (‘IVP’, for short) in the present matter were purchased through cash. It was held, at no stage, the identity of the purchaser was thus disclosed or registered with the Department. In a situation, where the IVPs were purchased either through Cheque of Pay Order or Demand Draft, there would still be a possibility, through link evidence, to establish the identity of the purchaser but in case of a purchase through the modality of cash, there would be nothing on record which could establish the identity of the purchaser. It may be that there are no claims in respect of the IVPs in question but that does not mean that any person can claim maturity sum in respect of such IVPs and offer an indemnity.
Further held, if the Department had refused to encash the Certificates upon presentation or even after encashment had refused to make the payment or had made short payment, there could still be a grievance about deficiency in service but if the Certificates themselves are lost and the identity of the initial holder could never be established through the record, the Department was well within its rights not to accept the prayer for return of the maturity sum.
It was further held that an IVP is akin to an ordinary currency note. It bears no name of the holder. Just as a lost currency note cannot be replaced, similarly the question of replacing a lost IVP does not arise. It was held that Rule 7(2) makes the position clear that a certificate lost, stolen, mutilated, defaced or destroyed beyond recognition will not be replaced by any post office. Similar is the position as regards the certificate which is either lost or stolen. Undisputedly there was no challenge to the legality of the rule 7(2). In the absence of a challenge to the provision, any direction should not really have been given. It was held that it is fundamental that no direction which is contrary to law can be given.
In the present case, complaint, being CDC No.43 of 2015 was filed by the respondent herein before the District Forum contending inter alia that 88 Indira Vikas Patras (‘IVP’, for short) of the denomination of Rs.5000/- each, purchased by the father of the complainant sometime during the period 1996 to 1998, were lost in the month of June 2001. A police complaint was lodged on 25.06.2001 alleging theft of those IVPs and thereafter by intimation dated 14.07.2001 a request was made to the Superintendent of Post Offices, Bolangir to stop payment of any amount upon maturity of the IVPs without proper verification of the holder. It was further submitted that despite demands made by the complainant, the value of the lost IVPs was not being made over by the Post Office to him and as such, there was deficiency in service on part of the Post Office.
It was held by the SC that the District Forum and the National Commission completely erred in accepting the claim. The SC set-aside the view taken by the National Commission and dismissed the original complaint.
]]>Supreme Court of India
Justice R SUBHASH REDDY & Justice MOHAN M. SHANTANAGOUDAR]
It was held by the SC {Monu Kumar & Ors. v. M/s. Metromax Infrastructure Pvt. Ltd.} that as complaint was filed on behalf of number of individual consumers, an application was filed seeking permission to file joint complaint and after hearing the arguments of the learned counsel, case was admitted and notice was issued. Further held that though expressly it is not stated that permission is granted in the application seeking permission to file joint complaint, but in view of the fact that admission of the complaint is recorded in the order dated 27.11.2015 and notice was issued the permission is to be read as inherent in the order of admission. When the specific application was moved seeking permission for filing joint application and having passed order of admission by issuing notice on such application, the Commission ought not to have rejected the application by the impugned order. The grant of permission is to be read inherently into the order dated 27.11.2015.
In the present case, the complaint was filed under Section 12(1)(c) of the Consumer Protection Act, 1986 (for short, ‘the Act’), by number of consumers having the same interest, they sought permission to file a joint complaint by filing separate application.
Accordingly, the impugned order was set aside by the SC, and the matter was remitted back to the National Consumer Disputes Redressal Commission, New Delhi with a direction to consider the matter afresh and dispose of the complaint case on its own merits.]]>
Supreme Court of India
Justice R SUBHASH REDDY & Justice MOHAN M. SHANTANAGOUDAR]
It was held by the SC {Subhechha Welfare Society v. Earth Infrastructure Pvt. Ltd. } that the finding of the NCDRC that recognised consumer association can file complaint on behalf of a single consumer, but cannot file complaint on behalf of several consumers in one complaint, is erroneous and there is no legal basis for that.
It was held that from a reading of Section 12(1)(b) of the Act read with Explanation to Section 12 it is clear that voluntary registered association can file a complaint on behalf of its members to espouse their grievances. There is nothing in the aforesaid provision of the Act which would restrict its application to the complaint pertaining to an individual complainant. Further held, if a recognised consumer association is made to file multiple complaints in respect of several consumers having a similar cause of action, that would defeat the very purpose of registration of a society or association and it would result only in multiplicity of proceedings without serving any useful purpose. Accordingly, the appeal was allowed and the complaint was held to be maintainable.
In the present case, the complaints filed by the appellant-complainant was dismissed vide impugned order dated 06.12.2016 on the ground that recognised consumer association can file complaint on behalf of single consumer only, but cannot file complaint on behalf of several consumers in one complaint as done in present case.
]]>Supreme Court of India
Justice R SUBHASH REDDY & Justice MOHAN M. SHANTANAGOUDAR]
It was held by the SC {Sobha Hibiscus Condominium v. Managing Director, M/s. Sobha Developers Ltd. & Anr.} in essence, a voluntary consumer association will be a body formed by a group of persons coming together, of their own will and without any pressure or influence from anyone and without being mandated by any other provisions of law. It was held that the appellant association which consists of members of flat owners in a building, which has come into existence pursuant to a declaration which is required to be made compulsorily under the provisions of Karnataka Apartment Ownership Act, 1972, cannot be said to be a voluntary association to maintain a complaint under the provisions of the Act. Therefore, the NC was right in dismissing the complaint of the appellant and the appeal was accordingly dismissed.
In the present case, the order rejecting the complaint filed by the appellant on the ground that the appellant-Condominium has no locus standi to file the complaint since neither it is a ‘consumer’ nor it is a ‘recognised consumer association’ within the meaning of Section 12 of the Act was assailed before the SC. The appellant body has come into existence pursuant to a declaration made by the opposite party in terms of the Karnataka Apartment Ownership Act, 1972.
]]>Justice U U Lalit and Justice Vineet Saran
The SC was considering the question whether the consumer can be asked to take the villa after 5 years from the last date of possession agreed upon- after the complaint has been filed under the Consumer Protection Act for refund of money by the Buyer?
It was held by the SC {Marvel Omega Builders Private Limited and Another versus Shrihari Gokhale and Another} that even assuming that the villa is now ready for occupation, the delay of almost five years is a crucial factor and the bargain cannot now be imposed upon the respondents / consumers. The respondents were, therefore, justified in seeking refund of the amount that they had deposited with reasonable interest on said deposited amount. It was held that the finding of the National Commission cannot therefore be said to be incorrect or unreasonable on any count. In the present case, the respondents had purchased the villa for Rupees 8.31 crores out of which they had already paid Rupees 8.14 crores to the builder by November, 2013; the possession of the villa was to be given by 31st of December 2014 by the builder. The Builder sought to give possession of the villa to the respondents during pendency of appeal before the Supreme Court by December, 2018. The Builder was however directed to refund the money by the SC - affirming the order of the National Commission.
The Appeal of the Builder was dismissed by the Supreme Court by directing that the villa in question shall not be sold nor any third party rights can be created by the Builder till the decree in favour of the respondents is completely satisfied and so long as the decree remains to be satisfied, said villa shall be under attachment and would be subject to such orders as may be required to be passed in connection with the execution of the order of the National Commission.
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Justice Abhay Manohar Sapre and Justice Dinesh Maheshwari
The SC {Treaty Construction and Another versus Ruby Tower Cooperative Housing Society Limited} was seized of the matter regarding the direction issued by the National Commission for payment of compensation of Rupees 3,00,000/- against the appellant / builder. And for not obtaining Occupancy Certificate, to pay Rupees 1000 per day by the builder, for every day of delay, in execution of the requisite deed, in favour of the respondent /society.
It was held by the SC that as the members of the respondent society took possession of the flat, without Occupancy Certificate, and there are alteration carried out by them, for which the Municipal Corporation has the objections to raise, and there is no material to hold the appellant liable for compensation; and then, for assessing the quantum of compensation - the compensation cannot be awarded. It was further held that there is no material on record, to find if the respondent society or its member suffered any loss; and if so, the extent thereof. Therefore, in view of that, the Supreme Court set aside the orders of the National Commission for payment of compensation, and also for imposition of penalty of Rs. 1000 per day, for not obtaining the Occupancy Certificate, on builder. The Appeal was partly allowed.
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Justice Indu Malhotra
It was held by the supreme court that the execution proceedings are separate and independent proceedings for execution of the decree. The execution proceedings are not continuation of the original proceedings of the suit / complaint.
It was also held in the case titled as "Karnataka Housing Board versus K A Nagamani", that the revision petition is not maintainable against the order passed in Appeal of execution, before NCDRC. The order of the High Court was confirmed which struck down the order of NCDRC, being without jurisdiction.
]]>Justice DY Chandrachud
In the case titled as "UP Housing and Development Board Versus Ramesh Chandra Agarwal", it was held by the apex court that mere registration does not oblige the authority to include every registered applicant in the draw of lots. It was further held that the applicant cannot seek allotment if he has not participated in the draw.
In the said case the newspaper advertisement in 1992 required registered applicants to furnish their written consent, for being included in the draw of lots. But the respondent before the Supreme Court did not provide the written consent as per the newspaper advertisement, therefore, it was held by the court that he was not entitled for allotment. The consumer complaint was dismissed, while allowing the Appeal and setting aside the order of NCDRC.
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Justice Hemant Gupta
The SC in the case titled as "New India Assurance Company Limited versus Luxra Enterprise Private Limited", held that the insurer cannot appoint the second surveyor or keep on appointing one surveyor after another, until the surveyor gives report in favour of the insurance company. The said practice of insurance company held to be illegal and arbitrary.
It was also held that the surveyor again and again cannot be appointed - until there is any proof that the report given by the first surveyor is arbitrary, or excessive. In the present case, on the basis of third surveyor report, the claim of the respondent was repudiated by the insurance company - which was held to be illegal and against the settled principles of law, therefore, the Appeal of the insurance company was dismissed by the Supreme Court.
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Justice DY Chandrachud
It was held by the Supreme Court that when a plot / flat / house has been allotted at a tentative or provisional price, subject to final determination of price, on the completion of the project. The development authority shall be entitled to revise or increase the price. But, however, where the allotment is at fixed price, such higher payments cannot be demanded.
It was held so in the case titled as "J Visakhapatnam Metropolitan Region versus Chavva Sheela Reddy", by the SC. The appellant, who was the public authority, was allowed to increase the rate by the Supreme Court after completion of the project, as the price was tentative, subject to final determination, when the same was allotted to the consumer.
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Justice DY Chandrachud
In the case titled as "Alka Shukla versus LIC", the appellant has taken LIC policy, according to which accident benefit cover is applicable when death is caused due to accident within 180 days.
In the said case the Death was caused by heart attack, when the deceased was travelling on bike, and the deceased fell down after heart attack from the bike. It was held that in the medical report the cause of Death was heart attack. The NCDRC rightly dismissed the complaint as the death cause was not due to accident. It was held that the incident is accident: when it is caused by any outward, violent and visible means. The Appeal of the claimant was accordingly dismissed.
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Justice DY Chandrachud
As per section 45 of the act, if the claim is raised before expiry of two years from the date of policy, and it is found that any information has been concealed by the insured, then, in that case, it is absolute ground to repudiate the claim. It is immaterial whether the information which is concealed, is material information or not - the said aspect of matter is not relevant and cannot be gone into by the court.
It was held in the case titled as "Reliance Life Insurance Versus Rekhoben Naresh Bhai Rathord", that non disclosure of earlier life insurance policies is material concealment, and ground to repudiate the Insurance claim. The concurrent findings in judgments of NCDRC and State Commission were set aside.
It was further held that the insured cannot take a plea- that it signed the blank form and the agent filled the form on its own. The Supreme Court of India held that the insured is bound by the information written in the application form, and he cannot justify the concealment by saying - that he only signed the blank Insurance form. The principles of utmost good faith reiterated by the SC while dismissing the claim of the insured - which was originally raised by way of consumer complaint.
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Justice Indu Malhotra
If the loan is insured and the premium has been given to the finance company, who had failed to transfer the same to the insurance company on time, before which the insured has died, then, in that case the Insurance claim cannot be repudiated on the ground that the premium was not received by the insurance company, and as the premium was not received therefore the cover of insurance has not started.
The fault of the finance company to transfer the insurance installment on time to the insurance company cannot result in denying of the claim of the insured, who had paid the first premium and died after paying that. The date of commencement of cover of the insurance policy for loan would be, the date on which the premium was given to the finance company by the insured, not that date on which the finance company has given the amount of insurance premium to the insurance company, by which date the insured had already died.
The the supreme court in Civil Appeal number 3962 of 2019 was concerned with the aforesaid issue and set aside the findings of national commission which had dismissed the complaint of the consumer and had repudiated the claim of the consumer deceased husband as the premium was not received by the insurance company before the death of insured.
The supreme court held that the date of payment of premium by the deceased husband of the appellant shall be the date of start of insurance policy and covering of risk, therefore, the appellant is not liable to pay installment of loan amount. The loan was secured from the date on which insurance premium was paid to the finance company.
In the present case the National Commission had set aside concurrent findings of the two forums below and had dismissed the complaint of the appellant. The supreme court while setting aside the said judgement had allowed the complaint of the complainant.
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