Markets do not work in a fair manner when producers are few and powerful whereas consumers purchase in small amounts and are scattered. This happens especially when large companies are producing these goods. These companies with huge wealth, power and reach can manipulate the market in various ways. At times false information is passed on through the media, and other sources to attract consumers. In India, the consumer movement as a ‘social force’ originated with the necessity of protecting and promoting the interests of consumers against unethical and unfair trade practices. Here’s an interesting read through with focus on the most recent consumer protection regime the country is going through.
The ‘social force’ has undoubtedly succeeded in bringing pressure on business firms as well as government to correct business conduct which may be unfair and against the interests of consumers at large. A major step taken in 1986 by the Indian government was the enactment of the Consumer Protection Act 1986, popularly known as COPRA. The enactment of COPRA has led to the setting up of separate departments of Consumer Affairs in central and state governments. With the COPRA the consumers got right to be informed, right to choose, right to seek redressal and right to represent It has enabled ordinary consumers to secure less expensive and often speedy redressal of their grievances.
With the passage of time after the enactment of COPRA 1986, it was felt to have a new enactment for consumer protection because of e-commerce, advertisement endorsement, product liability, Alternate dispute resolution mechanism (mediation), experiences of various case laws and more importantly to have a mechanism of decision making within certain time limitation so that cases may not be pending for very long time.
The Consumer Protection Act, 2019 comes in to force from 20th July 2020 with widespread changes in the area of Consumer protection. The new Act will empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant/ spurious goods. Under new act a Central/state/ district Consumer Protection Council to be known as the Central/state/district Council is being created who shall be an advisory council. The objects of the such Council shall be to render advice on promotion and protection of the consumers’ rights under this Act.
The Act includes establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/ publishers of misleading advertisements. The Central Authority shall have an Investigation Wing headed by a Director General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.
The rules for prevention of unfair trade practice by e-commerce platforms will also be covered under this Act. Under this act every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform. E-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act. The New Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.
The new Act provides for simplifying the consumer dispute adjudication process in the consumer commissions, which include, among others, empowerment of the State and District Commissions to review their own orders, enabling a consumer to file complaints electronically and file complaints in consumer Commissions that have jurisdiction over the place of complainants residence, videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.
An Alternate Dispute Resolution mechanism of Mediation has been provided in the new Act. This will simplify the adjudication process. A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. Mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions. There will be no appeal against settlement through mediation.
As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases up to Rs. 5 lakh. There are provisions for filing complaints electronically and credit of amount due to unidentifiable consumers to Consumer Welfare Fund (CWF). The State Commissions will furnish information to Central Government on a quarterly basis on vacancies, disposal, pendency of cases and other matters. The New Act also introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. The Act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods. The court may, in case of first conviction, suspend any licence issued to the person for a period of up to two years, and in case of second or subsequent conviction, cancel the licence.
| Basis | Consumer Protection Act, 198 6 | Consumer Protection Act, 2019 |
|---|---|---|
| Regulator | No Provision | Establishes the Central Consumer Protection Authority (CCPA) to promote, protect, and enforce the rights of consumers as a class. CCPA may issue safety notices, pass orders to recall goods, prevent u nfair practices and impose penalties for false and misleading advertisements. |
| Product liability | No Provision | Claim for product liability can be made against manufacturer, service provider, and seller. Aggregator is also liable |
| Unfair contracts | No Provision | Defined as contracts that cause significant change in consumer rights. Lists six contract terms which may be held as unfair. |
| Jurisdiction Commissions of | District: Up to Rs 20 lakh; State: Rs 20 lakh to Rs one crore; National: above Rs one crore. | District: Up to Rs one crore; State: Between Rs one crore to Rs 10 crore; National: above Rs 10 crore. |
| Alternate Dispute Resolution Mechanism | No Provision | Mediation cells will be attached to the District, State, and National Commissions |
| Penalties | Imprisonment between one month and three years or fine between Rs 2,000 – 10,000, or both. | Imprisonment up to three years, or a fine not less than Rs 25,000 extendable to Rs one lakh, or both. |
| E – commerce | No Provision | Defines direct selling, e – commerce and electronic service provider. The central government may prescribe rules for preventing unfair trade practices in e – commerce and direct selling |
| Time Limitation | No Provision | Time limitation at various stages for speedy decisions |
| Search and seizure | No Provision | Director General under Central Council for search and seizure |
1. Under this new Act there is provision provided for establishment of a Central Consumer Protection Authority (CCPA) to be known as the Central Authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.
2. The Central Authority shall have an Investigation Wing headed by a Director General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.
3. The District Collector (by whatever name called) may, on a complaint or on a reference made to him by the Central Authority or the Commissioner of a regional office, inquire into or investigate complaints regarding violation of rights of consumers as a class, on matters relating to violations of consumer rights, unfair trade practices and false or misleading advertisements, within his jurisdiction and submit his report to the Central Authority
4. A complaint related to violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class, may be forwarded either in writing or in electronic mode, to any one of the authorities, namely, the District Collector or the Commissioner of regional office or the Central Authority.
5. The Central Authority shall protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act, prevent unfair trade practices and ensure that no person engages himself in unfair trade practices, ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made thereunder and ensure that no person takes part in the publication of any advertisement which is false or misleading.
6. Where, after preliminary inquiry, the Central Authority is of the opinion that the matter is to be dealt with by a Regulator established under any other law for the time being in force, it may refer such matter to the concerned Regulator along with its report.
7. Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order.
8. Where the Central Authority is satisfied after investigation that any person is found to publish, or is a party to the publication of, a misleading advertisement, it may impose on such person a penalty which may extend to ten lakh rupees.
9. For the purpose of conducting an investigation after preliminary inquiry, the Director-General or any other officer authorised by him in this behalf, or the District Collector, as the case may be, may, if he has any reason to believe that any person has violated any consumer rights or committed unfair trade practice or causes any false or misleading advertisement to be made, shall,—(a) enter at any reasonable time into any such premises and search for any document or record or article or any other form of evidence and seize such document, record, article or such evidence; (2) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, as far as may be, for search and seizure under this Act.
10. Every document, record or article seized shall be returned to the person, from whom they were seized or who produced the same, within a period of twenty days of the date of such seizure or production, as the case may be, after copies thereof or extracts therefrom certified by that person
11. Where any article seized are subject to speedy or natural decay, the DirectorGeneral or such other officer may dispose of the article in such manner as may be prescribed.
12. A person aggrieved by any order passed by the Central Authority may file an appeal to the National Commission within a period of thirty days from the date of receipt of such order.
13. The State Government shall establish a District Consumer Disputes Redressal Commission, to be known as the District Commission, in each district of the State
14. the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees
15. A complaint shall be instituted in a District Commission within the local limits of whose jurisdiction,— (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain; or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case the permission of the District Commission is given
16. 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— (a) the consumer,— (i) to whom such goods are sold or delivered or agreed to be sold or delivered or such service is provided or agreed to be provided; or (ii) who alleges unfair trade practice in respect of such goods or service; (b) any recognised consumer association, whether the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service is provided or agreed to be provided, or who alleges unfair trade practice in respect of such goods or service, is a member of such association or not; (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
17. On receipt of a complaint made, the District Commission may, by order, admit the complaint for being proceeded with or reject the same: The admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was filed. Where the District Commission does not decide the issue of admissibility of the complaint within the period so specified, it shall be deemed to have been admitted.
18. At the first hearing of the complaint after its admission, or at any later stage, if it appears to the District Commission that there exists elements of a settlement which may be acceptable to the parties, it may direct the parties to give in writing, within five days, consent to have their dispute settled by mediation in accordance with the provisions of Act.
19. Where the parties agree for settlement by mediation and give their consent in writing, the District Commission shall, within five days of receipt of such consent, refer the matter for mediation. In respect of cases referred for mediation on failure of settlement by mediation, proceed with such complaint.
20. Where the complaint relates to any goods, the District Commission (a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by it; (b) if the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, proceed to settle the consumer dispute in the manner specified under the Act.
21. If the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, obtain a sample of the goods from the complainant, seal it and authenticate it in the manner as may be prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory to make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Commission within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by it; require the complainant to deposit to the credit of the Commission such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question; and on receipt of the report from the appropriate laboratory, it shall forward a copy of the report along with such remarks as it may feel appropriate to the opposite party;
22. If any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, require the opposite party or the complainant to submit in writing his objections with regard to the report made by the appropriate laboratory;
23. There are provisions of giving a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto
24. The District Commission shall, if admitted the complaint relates to any services,— (a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Commission; (b) if the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, it shall proceed to settle the consumer dispute— (i) on the basis of evidence brought to its notice by the complainant and the opposite party, if the opposite party denies or disputes the allegations contained in the complaint, or (ii) ex parte on the basis of evidence brought to its notice by the complainant, where the opposite party omits or fails to take any action to represent his case within the time given by the Commission; (c) decide the complaint on merits if the complainant fails to appear on the date of hearing.
25. No proceedings complying with the procedure laid down shall be called in question in any court on the ground that the principles of natural justice have not been complied with.
26. Every complaint shall be disposed of as expeditiously as possible and endeavor shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities:
27. Where during the pendency of any proceeding before the District Commission, if it appears necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case.
28. Every proceeding before the District Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, and the District Commission shall be deemed to be a criminal court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
29. Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, no appeal shall lie in cases pursuant to a settlement by mediation
30. Subject to the other provisions of this Act, the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore:
31. Any person aggrieved by an order made by the State Commission may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order. No appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited fifty per cent. of that amount.
32. An appeal filed before the State Commission or the National Commission, as the case may be, shall be heard as expeditiously as possible and every endeavour shall be made to dispose of the appeal within a period of ninety days from the date of its admission:
33. The National Commission may also declare any terms of contract, which is unfair to any consumer to be null and void.
34. Where the National Commission or the State Commission, as the case may be, on an application by a complainant or otherwise, is of the opinion that it involves the larger interest of consumers, it may direct any individual or organisation or expert to assist the National Commission or the State Commission, as the case may be.
35. Any person, aggrieved by an order made by the National Commission may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order: No appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent. of that amount in the manner as may be prescribed.
36. The District Commission, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
37. Whoever fails to comply with any order made by the District Commission or the State Commission or the National Commission, as the case may be, shall be punishable with imprisonment for a term which shall not be less than one month, but which may extend to three years, or with fine, which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees, or with both.
38. The District Commission, the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of first class for the trial of offences and shall be deemed to be a Judicial Magistrate of first class for the purposes of the Code of Criminal Procedure, 1973.
39. Under the new Act, a product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller for any harm caused to him on account of a defective product.
40. A product manufacturer shall be liable in a product liability action, if— (a) the product contains a manufacturing defect; or (b) the product is defective in design; or (c) there is a deviation from manufacturing specifications; or (d) the product does not conform to the express warranty; or (e) the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage.
41. A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product.
42. A product service provider shall be liable in a product liability action. Similarly, a product seller who is not a product manufacturer shall be liable in a product liability action,
43. Whoever, fails to comply with any direction of the Central Authority shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to twenty lakh rupees, or with both.
44. Any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.
45. The Director General or any other officer, exercising powers of search and seizure, who knows that there are no reasonable grounds for so doing, and shall, for every such offence, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees or with both.
46. For the purposes of preventing unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, the Central Government may take such measures in the manner as may be prescribed.
47. All persons performing any duty under this Act, while acting or purporting to act in pursuance of any of the provisions of this Act, shall be deemed to be public servants within the meaning of the Indian Penal Code.
48. Any offence punishable this Act, may, either before or after the institution of the prosecution, be compounded, on payment of such amount as may be prescribed.
Indian Medical Association v V.P. Shantha and others (Supreme Court) The Supreme Court held that Medical services fall within the scope of the Consumer Protection Act (CPA). The Court held that District, State and National Consumer Forum can summon experts in the field of medicine, examine evidence and generally act to protect the interest of consumers. Thus, there is no legal bar or deficiency in examining medical profession cases by consumer courts. It was also held that Doctors and hospitals who render service without any charge whatsoever to every person availing the service would not fall within the ambit of “service” and If the insurance policy company pays for the treatment, it is on behalf of the customer, and hence, it will be covered under the Act.
It was held that Medical services should be rendered in accordance with the law. In this case, the respondent doctor, Ashwin Patel, was trained in homoeopathy for four years and started his private practice. The appellant, approached the Supreme court for compensation for her deceased husband, who was administered allopathic drugs for viral fever, and later typhoid fever by the homoeopathy doctor. Her husband passed away within eight days of the treatment. The Court relied on a case to hold that a doctor, when consulted by a patient, owes him certain duties, namely, (a) a duty of care in deciding whether to undertake the case; (b) a duty of care in deciding what treatment to give; and (c) a duty of care in the administration of that treatment. A breach of any of these duties gives a cause of action for negligence to the patient.
The case arises as a result of the death of complainant Kamlaben Kushwaha’s 20-year-old son due to medical negligence by the petitioner doctor. The mother alleged that the medicines prescribed had no relation to the ailment – malaria, whereas the actual cause of death was said to be pulmonary oedema The National Commission places reliance on the codes, ethics and practices of the medical professionals regulatory bodies and notes that every doctor while treating a patient, even outpatients, is under a responsibility to record basic health parameters such as blood pressure, temperature, pulse rate etc. This record must also include brief summary of the symptoms, past illnesses. This is a primary duty of disclosure owed by the physician to the patient. The national commission also notes the denial of the doctor of having written the prescription served as evidence in the first place, but later accepts treating the patient. This conduct, in the language of the commission, does not reflect professional conduct worthy of a medical practitioner.
Educational institutions must refund any extra fee paid. In this landmark judgement concerning educational institutions, a student was asked to deposit lump sum fees of `18,734 as fees for coaching for medical entrance examinations for the next two years. This was deposited by the student in two complete instalments within the first six months of classes. However, the student realised later that the quality of the coaching institute was substandard, and therefore sought a refund for the remaining period, which was refused by the coaching institute. The Commission notes that educational institutes or coaching center that charge a lump sum fees for the whole duration or should refund the fees if service is deficient in the quality of coaching etc. Any clause saying that fees once paid shall not be refunded is unconscionable and unfair and therefore not enforceable.
This landmark case arises out of a complaint against Spring Meadows Hospital, where the minor child was admitted by his parents. The child was diagnosed with typhoid and was injected a solution by a nurse after which his condition deteriorated. He was shifted to an auto respiratory ICU at AIIMS, where it was found that due to the injection administered, his brain got damaged and he would only live in a vegetative state for life. The parents of the child approached the court for a case of medical negligence and demanded compensation, on behalf of the child. The National Commission held that definition of consumer is wide enough to cover the beneficiary. When a young child is taken to a hospital by his/ her parents and the child is treated by the doctor, the parents would come within the definition of the consumer having hired the services, and the young child would also become a “consumer” under the inclusive definition. Compensation can justifiably be claimed by both parents as well as the child.
Imposition of penalty for frivolous consumer claims. This case arises as a result of a complaint of an alleged wrongful debit from a bank account. The complainant trust maintained an account with the respondent HDFC Bank. The bank received instructions from the Employee Provident Fund Organisation (EPFO) that mentioned order of payment of Rs.1.47 crores against the trust, and that no other payments from the trust’s account be made until EPFO’s liability is settled by the trust. The trust, however, issued an instruction to the bank not to debit any amount until further communication as they wanted to seek a stay order. However, in payment of the statutory due to EPFO, the bank, after giving due time, debit the account with an amount of Rs.1.47 crores. The trust has challenged this as a deficiency in service and demanded the amount debited along with interest, damages, and legal expenses. The Commission dismissed the argument of the complainant that without any authority or mandate, debiting the amount due to EPFO of Rs.1.4 crores is a deficiency in service. An action in compliance with the direction of a statutory authority such as EPFO cannot be said to be willful negligence or deficiency in service. Hence, the action is legal and proper. Frivolous consumer cases are to be penalized. For this false litigation, the court imposed a penalty of Rs.25,000 on the complainant trust that would be paid to the HDFC Bank.
Punitive damages for pursuing a frivolous case. In this case, a government servant paid an initial amount for allotment of a plot of Rs. 5 lacs in 1997, by the Delhi Development Authority. He requested extra time for the instalment payment as he wished to avail loan facility from his office. Meanwhile, it was realised that the plot allotted to him through a draw of lots had already been allotted to another person, two years before the draw of lots. Due to this negligence of the DDA, the respondent approached the District forum, that dismissed the case. Subsequently, the state Consumer forum was approached that passed an order in favour of the respondent. While upholding the order of the State Commission, the national commission-imposed costs of Rs.2 lacs as well as punitive damages of Rs. 5 lac rupees on the DDA and asked them to recover the amount from erring officials who pursued the case for eighteen years. This long delay led to harassment of the respondent and filing of meritless appeals in various courts. This has not just added to litigation costs but also wasted time of several courts as well as the public exchequers money.
The Supreme Court in the case Chief Administrator, H.U.D.A. & Anr. v. Shakuntla Devi had made some observation which are basic for awarding compensation and quantum of compensation in consumer protection cases concerning real estate matters. It is sine qua non for entitlement of compensation is to proof of loss or injury suffered by the consumer due to the negligence of the opposite party. Once the said conditions are satisfied, the Consumer Forum would have to decide the quantum of compensation to which the consumer is entitled.
The Supreme Court in the case of Charan Singh v. Healing Touch Hospital and Others held that calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. It is held that while awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant is able to establish his charge.
The Supreme Court in this case observed that an Insurance company shall reject claim on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also held that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The Court also noted that the Consumer Protection Act, 1986 is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.
In this case the Apex Court has further expanded the scope and ambit of protecting consumers under Insurance claims by holding that an insurance company cannot reject motor vehicle claim on the ground that giving lift to passengers which was later stole by them did not tantamount to fundamental breach of terms of policy.
In this case, the National Commission took up the issue whether a complaint under Consumer Protection Act filed on behalf of or for the benefit of only some of the numerous consumers having a common interest or a common grievance is maintainable or it must necessarily be filed on behalf of or for the benefit of all the consumers having a common interest or a common grievance against same person? The National Commission has held that a complaint under the Consumer Protection Act can be instituted only by one or more consumers, as defined in Section 2(1) (d) of the Consumer Protection Act 1986. Therefore, a group of Cooperative societies, Firms, Association or other Society cannot file such a complaint unless such society etc. itself is a consumer as defined in the aforesaid provision. (In new act of 2019, this anomaly has been corrected as consumer council has power to protect the interests of consumer as a class)
Shri Rajendra Agarwal v. Shoppers Stop Limited The Competition Commission of India in Shri Rajendra Agarwal v. Shoppers Stop Limited has held that an individual consumer dispute cannot be treated as a competition concern under the Competition Act. The Commission also clarified the scope of the Competition Act i.e. to curb the anti-competitive practices. The CCI further pointed that the scope of the Competition Act is primarily aimed to curb the anti-competitive practices having adverse effect on competition and to promote and sustain competition in the relevant markets in India. Whereas the Consumer Protection Act, is aimed to protect the interest of individual consumers against the unfair practices being widely prevalent in the market. (In new act of 2019, this anomaly has also been corrected as consumer council has power to forward such cases to Regulators who are looking such cases)
In this case the National Commission was confronted with an intriguing concern pertaining to law of medical negligence. Firstly, whether patient’s “consent” is a mandatory requirement before performance of an invasive procedure? Secondly, whether non-explaining of risk involved in medical procedure by a Doctor amounts to medical negligence? The National Commission in the case ruled in favour of the Complainant and also slapped a fine on the Hospital and Treating Doctor of Rs. 10 lakhs.
The Supreme Court’s judgment in this case observed regarding securing consent of patient before commencing a treatment:
In the year 2013, the Ernakulam Consumer Disputes Redressal Forum passed a noteworthy order by holding that if an RTI applicant is denied information then the same would be a deficiency in service and the applicant will be entitled to compensation under the Consumer Protection Act, 1986. In this case, the applicant sought information of the names of the councilors who failed to convene ward sabhas once in 3 months. The concerned PIO failed to give the requisite information to the applicant and subsequently the applicant approached Consumer Forum citing that denying his RTI application without any reasonable cause was deficiency in service on part of the Corporation. The Consumer Forum while holding that the case of complainant was within the purview of Section 2(i) (o) of the Consumer Protection Act, directed the concerned PIO to pay Complainant Rs. 5000/- as compensation.
National Commission while expanding the scope of Consumer Law, opened new doors in this case that imparting education falls within the ambit of service as defined under CPA. It was held in the case that fees are paid for services to be rendered by way of imparting education by educational institutions. The key observation made by the National Commission in the case was that imparting of education by an educational institution for consideration falls within the ambit of ‘service’ as defined in the Consumer Protection Act. Fees are paid for services to be rendered by way of imparting education by the educational institutions. If there is no rendering of service, question of payment of fee would not arise.
Supply of Electricity not “sale” under Consumer Protection Act. The Supreme Court in the case of Karnataka Power Transmission Corporation v. Ashok Iron Works Private Limited while making reference to its verdict in the case of Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO and ors. held that supply does not mean sale.
All Professionals including Lawyers fall under the purview of Consumer Protection Act, 1986. The National Commission while setting aside the State Commission’s order observed that the ambit and scope of Section 2(1)(o) of the Consumer Protection Act which defines service is very wide and it covers all services except rendering of services free of charge or a contract of personal service. The Commission was of the opinion that lawyers are rendering service. They are charging fees. It is not a contract of personal service. Therefore, there is no reason to hold that they are not covered by the provisions of the Consumer Protection Act, 1986.
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