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Consumer Protection Act, 1986 — Section 2(1)(o) — Deficiency in service by Statutory Boards and Development Authorities

June 4th, 2014

Consumer Protection Act, 1986 — Section 2(1)(o) — Deficiency in service by Statutory Boards and Development Authorities — Whether covered under the Act? — Held, statutory Boards and Development Authorities which are allotting sites with promise of development, are amenable to jurisdiction of consumer forum in case of deficiency of services.

U.T. Chandigarh Administration & Anr. v. Amarjeet Singh & Ors., (2009)4 SCC 460; Karnataka Industrial Areas and Development Board v. Nandi Cold Storage Pvt. Ltd., (2007)10 SCC 481 & Narne Construction (P) Ltd. v. Union of India, (2012)5 SCC 359, Referred.

(Para 6)

Haryana State Agricultural Marketing Board v. Bishamber Dayal Goyal [Bench Strength 2], Civil Appeal No. 3122/2006 (26/03/2014), 2014(4) SCALE 134: 2014(4) JT 354 [Gyan Sudha Misra, J.: Pinaki Chandra Ghose, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) — Deficiency in service — Failure on part of service provider to facilitate utilization and enjoyment of plots, effect of — Respondents were allotted plots by appellant board upon depositing the 25% of price of plots — Respondents did not pay installments in terms of allotment letters due to failure on part of appellant to provide basic amenities at Mandi Area — On non-payment of installments, appellant imposed interest and penalty charges as prescribed in allotment letter — Respondents filed a complaint before District Forum alleging deficiency of services, failure to notify subject Mandi as Market Area and failure to develop and provide basic amenities in said locality — Appellant was directed By district Forum to withdraw demand notice and further directed not to charge any interest on installments — Appeal assailing order passed by National Commission, affirming order passed by State Commission, which further confirmed order passed by District Forum — Held, Appellant board as service provider is obligated to facilitate utilization and enjoyment of the plots as intended by allottees and set out in allotment letter — Inaction on part of appellant in providing requisite facilities for more than a decade clearly establishes deficiency of services as respondents were prevented from carrying out grain business — However, respondents were also incorrect in refusing to pay installments and violating the terms of installment letter — Thus, there is a need for proportionate relief as levy of penal interest and other charges on respondents will be grossly unfair — Adequate relief has been granted even to respondents/complainants by awarding interest @ 12 per cent per annum on entire deposited amounts — Appeal dismissed — Punjab Agricultural Produce Markets Act, 1961 — Section 7 — Allotment of plots in market area — Duty to facilitate utilization.

Municipal Corporation, Chandigarh & Ors. v. Shantikunj Investment (P) Ltd.& Ors., (2006)4 SCC 109 & Haryana State Agricultural Marketing Board v. Raj Pal, (2011)13 SCC 504, Referred.

(Para 7, 8 & 9)

(Para 6, 8 & 9)

Pariwar Co-operative Housing Society Ltd. v. Chandrashekar M. Virkud [Bench Strength 2], Civil Appeal No. 10240/2013 (Arising out of SLP (C) No. 27607/2008) (12/11/2013), Civil Appeal No. 10240/2013 (Arising out of SLP (C) No. 27607/2008) [H.L. Gokhale, J.: Kurian Joseph, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14(1)(d) — Just and reasonable compensation — Grant of — Held, it is the duty of the Tribunals, Commissions and the Courts to consider relevant facts and evidence in respect of facts and circumstances of each and every case for awarding just and reasonable compensation — Motor Vehicles Act, 1988 — Section 168 — Just and reasonable compensation.

Ningamma and Anr. Vs. United India Insurance Company Ltd., (2009) 13 SCC 710, Oriental Insurance Company Ltd. Vs. Jashuben & Ors, (2008) 4 SCC 162, R.D. Hattangadi Vs. Pest Control (India) Pvt. Ltd. & Ors, (1995) 1 SCC 551, Laxman @ Laxman Mourya Vs. Divisional Manager Vs. Oriental Insurance Co. Ltd. & Anr., (2011) 10 SCC 756, Ibrahim Vs. Raju, (2011) 10 SCC 634 & R.K. Malik Vs. Kiran Pal, (2009) 14 SCC 1, Referred.

(Para 84)

(Para 133)

Savita Garg Vs. Director, National Heart Institute, (2004) 8 SCC 56, Relied on.

(Para 109)

Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 & Santosh Devi v. National Insurance Co. Ltd., (2012) 6 SCC 421, Relied on.

(Para 132)

(Para 46)

(Para 99)

Thazhathe Purayil Sarabi & Ors. Vs. Union of India & Anr., (2009) 7 SCC 372 & Kemp and Kemp on Quantum of Damages, (Special Edn., 1986), Relied on.

(Para 100)

Nizam Institute of Medical Sciences Vs. Prasanth S. Dhananka & Ors., (2009) 6 SCC 1 & Kemp and Kemp on Quantum of Damages, (Special Edn., 1986), Relied on.

Arun Kumar Agarwal Vs. National Insurance Company, (2010) 9 SCC 218 & Rajesh & Ors. Vs. Rajvir Singh and Ors., 2013 (6) SCALE 563, Referred.

(Para 145)

Balram Prasad v. Kunal Saha [Bench Strength 2], CA No.2867/2012 with CA No.692/2012 with CA No.2866/2012 with CA No.731/2012 & CA No.858/2012 (24/10/2013), 2013(14) JT 47: 2013(13) SCALE 1: 2013(7) Supreme 323: 2013(8) SLT 513: 2014(1) SCC 384 [Chandramauli Kumar Prasad, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14(1)(d) — Medical negligence — Liability of junior doctor holding PG degree — Death of claimants’ wife due to medical negligence — Appellant was held liable alongwith hospital and senior doctors and his liability fixed at Rs.25,93,000 towards compensation to husband of deceased — Held, it is acknowledged that appellant, being a junior doctor who might have acted on the direction of the senior doctors who undertook the treatment of the claimant’s wife in AMRI-Hospital — However, he was an independent medical practitioner with a post graduate degree and still stood as a second fiddle and perpetuated the negligence in giving treatment to the claimant’s wife — Since he is a junior doctor whose contribution to the negligence is far less than the senior doctors involved, therefore this Court directs him to pay a compensation of Rs. 5 lakhs to the claimant, as a reminder and deterrent to him against being casual and passive in treating his patients in his formative years of medical profession.

Malay Kumar Ganguly Vs. Dr. Sukumar Mukherjee, (2009) 9 SCC 221, Relied on.

(Para 122)

Balram Prasad v. Kunal Saha [Bench Strength 2], CA No.2867/2012 with CA No.692/2012 with CA No.2866/2012 with CA No.731/2012 & CA No.858/2012 (24/10/2013), 2013(14) JT 47: 2013(13) SCALE 1: 2013(7) Supreme 323: 2013(8) SLT 513: 2014(1) SCC 384 [Chandramauli Kumar Prasad, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14(1)(d) — Compensation for loss of dependency — Use of multiplier method to determine, Justifiability of — Death of claimants’ wife due to medical negligence — Deceased was a recent graduate in Psychology from a highly prestigious Ivy League School in New York — Held, National Commission or this Court requires to determine just, fair and reasonable compensation on the basis of the income that was being earned by the deceased at the time of her death and other related claims on account of death of the wife of the claimant — Determination of compensation by following the multiplier method does not justify under the head of loss of dependency.

Indian Medical Association Vs. V.P. Shantha & Ors, (1995) 6 SCC 651, Spring Meadows Hospital & Anr. Vs. Harjol Ahluwalia, (1998) 4 SCC 39, Charan Singh Vs. Healing Touch Hospital, (2002) 7 SCC 668, J.J. Merchants & Ors. Vs. Srinath Chaturbedi, Savita Garg Vs. Director, National Heart Institute, (2004) 8 SCC 56, State of Punjab Vs. Shiv Ram & Ors., Samira Kholi Vs. Dr. Prabha Manchanda & Anr., P.G. Institute of Medical Sciences Vs. Jaspal Singh & Ors., Nizam Institute of Medical Sciences Vs. Prasanth S. Dhananka & Ors., (2009) 6 SCC 1, Malay Kumar Ganguly Vs. Dr. Sukumar Mukherjee, (2009) 9 SCC 221, & V. Kishan Rao Vs. Nikhil Superspeciality Hospital & Anr., Relied on.

(Para 98)

Malay Kumar Ganguly Vs. Dr. Sukumar Mukherjee, (2009) 9 SCC 221, Relied on.

(Para 125 & 127)

Reshma Kumari v. Madan Mohan, (2009) 13 SCC 422, Relied on.

(Para 81 & 82)

HELD: The C.I.I. is determined by the Finance Ministry of Union of India every year in order to appreciate the level of devaluation of money each year. Using the C.I.I. as published by the Government of India, the original claim of Rs.77.7 crores preferred by the claimant in 1998 would be equivalent to Rs.188.6 crores as of 2013 and, therefore the enhanced claim preferred by the claimant before the National Commission and before this Court is legally justifiable as this Court is required to determine the just, fair and reasonable compensation. Therefore, the contention urged by the appellant-doctors and the AMRI Hospital that in the absence of pleadings in the claim petition before the National Commission and also in the light of the incident that the subsequent application filed by the claimant seeking for amendment to the claim in the prayer of the complainant being rejected, the additional claim made by the claimant cannot be examined for grant of compensation under different heads is wholly unsustainable in law in view of the decisions rendered by this Court in the aforesaid cases. Therefore, this Court is required to consider the relevant aspect of the matter namely, that there has been steady inflation which should have been considered over period of 15 years and that money has been devalued greatly. Therefore, the decision of the National Commission in confining the grant of compensation to the original claim of Rs.77.7 crores preferred by the claimant under different heads and awarding meager compensation under the different heads in the impugned judgment, is wholly unsustainable in law as the same is contrary to the legal principles laid down by this Court in catena of cases referred to supra. We, therefore, allow the claim of the claimant on enhancement of compensation to the extent to be directed by this Court.

(Para 82)

Balram Prasad v. Kunal Saha [Bench Strength 2], CA No.2867/2012 with CA No.692/2012 with CA No.2866/2012 with CA No.731/2012 & CA No.858/2012 (24/10/2013), 2013(14) JT 47: 2013(13) SCALE 1: 2013(7) Supreme 323: 2013(8) SLT 513: 2014(1) SCC 384 [Chandramauli Kumar Prasad, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 21 — Manufacturing defect in vehicle — Direction to provide new vehicle modified with replacement of chassis by NC, Legality of — Chassis of brand new three wheeler motor vehicle of appellant, a physically challenged person, broke down within a short period — District Forum considering it a manufacturing defect allowed complaint and directed respondents to make available new vehicle — National Commission in revision petition modified direction of new vehicle with direction to replace chassis with a brand new one with fresh warranty — Appeal — Held, National Commission did not find any jurisdictional error or perversity in the finding recorded by District Forum on issue of deficiency in service or in conclusion recorded by District Forum that there was manufacturing defect in the vehicle sold to appellant — Therefore, by interfering with order of District Forum, National Commission transgressed the limits of its jurisdiction — Appeal allowed — Respondents to implement order of District Forum.

Rubi (Chandra) Dutta v. United India Insurance Company Limited, (2011) 11 SCC 269, Referred.

(Para 14 & 15)

Momna Gauri v. Regional Manager [Bench Strength 2], Civil Appeal No. 8815/2013 (Arising out of SLP (C) No. 25770/2012) (27/09/2013), 2013(14) SCALE 82 [G.S. Singhvi, J.: C. Nagappan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), 2(1)(g) & 11 — Sale of plot of land simpliciter — Whether covered under the Act? — Held, when it comes to “housing construction”, same has been specifically covered under the definition of ‘service’ by an amendment inserted by Act 50 of 1993 with effect from 18th June, 1993 — On the other hand, where a sale of plot of land simpliciter is concerned, and if there is any complaint, the same would not be covered under the said Act.

(Para 6)

Ganeshlal v. Shyam [Bench Strength 2], Civil Appeal No. 331/2007 (26/09/2013), Civil Appeal No. 331/2007 [H.L. Gokhale, J.: J. Chelameswar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), 2(1)(g) & 11 — Dispute of sale of plot of land simpliciter — Determination by Consumer Forum, Execution of sale deed in pursuant to, Effect of — Appellant agreed to sell a plot of land to respondent by virtue of an agreement — On failure of appellant to hand over the possession of the concerned plot of land, respondent filed a complaint — District Forum passed an order directing appellant to deliver possession of concerned plot of land — Appeal against grant of relief to respondent by consumer forum — Held, since appellant executed the sale deed, and the concerned plot of land has been handed over to respondent, appellant cannot be granted any relief, namely to dismiss the complaint which was filed in District Consumer Forum which has now been entertained and acted upon by the conduct of appellant himself.

(Para 7)

Ganeshlal v. Shyam [Bench Strength 2], Civil Appeal No. 331/2007 (26/09/2013), Civil Appeal No. 331/2007 [H.L. Gokhale, J.: J. Chelameswar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A, 21 & 12 — Complaint — Filed after expiry of statutory limitation — Duty of consumer forum — Held, statutory period of limitation of 2 years from date of accrual of cause of action is unambiguous — Consumer forum must feel convinced that the same has been filed within the period of limitation or that the complainant has succeeded in showing sufficient cause for delayed filing of the complaint.

HELD; A reading of Sections 12 and 24A makes it clear that a complaint filed after expiry of two years counted from the date of accrual of cause of action cannot be admitted by any Consumer Forum unless the complainant is able to show that he had sufficient cause for not filing the complaint within the prescribed period and the concerned forum records reasons for condoning the delay. The embargo contained in Section 24-A against admission of a complaint is unambiguous and if that section is read in conjunction with Section 12, which prescribes the procedure for entertaining the complaint, it becomes clear that before admitting a complaint and issuing process, the Consumer Forum must feel convinced that the same has been filed within the period of limitation or that the complainant has succeeded in showing sufficient cause for delayed filing of the complaint.

(Para 15)

Muneesh Devi v. Uttar Pradesh Power Corporation Ltd. [Bench Strength 3], C.A. No. 4075/2013 (19/07/2013), 2013(10) SCC 478: 2013(9) SCALE 640: 2013(4) SCV(Civil) 567 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 21 — Limitation — 156 days delay in filing complaint — Non-consideration delay due to proceedings before other for a — Complaint for compensation by dependent widow of deceased who was died due to burst of transformer — Initially suit was file before Civil Court which was not allowed to prosecute for want of court fees — Application for waiver of court fees was also dismissed — Thereafter appellant approached the writ court seeking mandamus for awarding compensation which was unsuccessful — SLP against the same was also dismissed summarily — Last resort was made by filing complaint for awarding compensation of Rs. 25 lacs before National Commission which was dismissed on limitation — Challenged — Held, appellant has mentioned all facts of previous litigation in the application for condonation of delay — The National Commission completely ignored the fact that the appellant is not well educated and she had throughout relied upon the legal advice tendered to her — It has neither pleaded nor any material is on record to infer that the appellant had not acted bona fide before the judicial for a — Therefore, it was an eminently fit case for exercise of power under Section 24- A(2) of the Act — Impugned order is set aside and delay is condoned — Matter is remitted back to consider on merits.

HELD: The National Commission did not take cognizance of the appellant’s assertion that before filing the complaint, she had pursued remedies before the civil Court, the High Court and this Court and dismissed the complaint as barred by time by simply observing that she could not substantiate her assertion of having made representation dated 28.7.2000.

In the application filed by her for condonation of delay, the appellant made copious references to the civil suit, the writ petition and the special leave petition filed by her and the fact that the complaint filed by her was admitted after considering the issue of limitation. She also pleaded that the cause for claiming compensation was continuing. The National Commission completely ignored the fact that the appellant is not well educated and she had throughout relied upon the legal advice tendered to her. She first filed civil suit which, as mentioned above, was dismissed due to non payment of deficient court fees. She then filed writ petition before the High Court and special leave petition before this Court for issue of a mandamus to the respondents to pay the amount of compensation, but did not succeed. It can reasonably be presumed that substantial time was consumed in availing these remedies. It was neither the pleaded case of respondent No.1 nor any material was produced before the National Commission to show that in pursuing remedies before the judicial forums, the appellant had not acted bona fide. Therefore, it was an eminently fit case for exercise of power under Section 24-A(2) of the Act. Unfortunately, the National Commission rejected the appellant’s prayer for condonation of delay on a totally flimsy ground that she had not been able to substantiate the assertion about her having made representation to the respondents for grant of compensation.

(Para 16)

In view of the above, we hold that the impugned order is legally unsustainable and is liable to be set aside.

(Para 17)

In the result, the appeal is allowed, the impugned order is set aside. The delay in filing of complaint by the appellant under Section 21 of the Act is condoned and the matter is remitted to the National Commission for disposal thereof on merits.

(Para 18)

HELD: The 1986 Act was enacted by Parliament in the backdrop of the fact that India has signed Consumer Protection Resolution No. 39 of 248 passed by the General Assembly of the United Nations. With a view to fulfil the objectives enshrined in the guidelines adopted by the General Assembly of the United Nations and keeping in view the proliferation., of international trade and commerce and vast expansion of business and trade which resulted in availability of variety of consumer goods in the market, the Consumer Protection Bill was introduced in Parliament to provide for better protection of the interest of consumers.

(Para 9)

Haryana Urban Development Authority v. Tej Refrigeration Industries Ltd. [Bench Strength 2], C.A. No. 5852/2013 (Arising out of SLP (C) No. 14452/2013) (16/07/2013), 2013(9) SCALE 635 [G.S. Singhvi, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 12 — Complaint — Filed after statutory limitation — Requirement to decide limitation — Held, Sections 12 and 24A makes it clear that a complaint filed after expiry of two years counted from the date of accrual of cause of action cannot be admitted by any Consumer Forum unless the complainant is able to show that he had sufficient cause for not filing the complaint within the prescribed period and the concerned forum records reasons for condoning the delay — The Consumer Forum must feel convinced that the same has been filed within the period of limitation or that the complainant has succeeded in showing sufficient cause for delayed filing of the complaint.

HELD: A reading of Sections 12 and 24A makes it clear that a complaint filed after expiry of two years counted from the date of accrual of cause of action cannot be admitted by any Consumer Forum unless the complainant is able to show that he had sufficient cause for not filing the complaint within the prescribed period and the concerned forum records reasons for condoning the delay. The embargo contained in Section 24-A against admission of a complaint is unambiguous and if that section is read in conjunction with Section 12, which prescribes the procedure for entertaining the complaint, it becomes clear that before admitting a complaint and issuing process, the Consumer Forum must feel convinced that the same has been filed within the period of limitation or that the complainant has succeeded in showing sufficient cause for delayed filing of the complaint.

(Para 11)

Unfortunately, most of the Consumer Forums in the country do not follow the provisions of Section 12 read with Section 24A and large number of complaints are entertained without considering the issue of limitation. This results in over burdening of the dockets of Consumer Forums and consequential delay in the disposal of other deserving cases.

(Para 12)

Haryana Urban Development Authority v. Tej Refrigeration Industries Ltd. [Bench Strength 2], C.A. No. 5852/2013 (Arising out of SLP (C) No. 14452/2013) (16/07/2013), 2013(9) SCALE 635 [G.S. Singhvi, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 12 — Limitation — Complaint filed after six years accrual of cause of action — Allowed without deciding limitation despite objection — District Forum allowed complaint of respondent against appellant which was filed after six years of cancellation of allotment of plot in question — Respondent neither filed application for condonation of delay nor District Forum decided it despite specific defence of limitation set up by appellant Board — State Commission and National Commission did not interfere with the order — Challenged — Held, the order passed by the District Forum without even adverting to the issue of limitation was ex-facie without jurisdiction and the State Commission and the National Commission committed serious error by dismissing the appeal and the revision filed against the order of the District Forum, consequently appeal is allowed and order passed by lower fora are set aside as time barred.

(Para 14 & 15)

(Para 10)

Jagmittar Sain Bhagat v. Director, Health Services, Haryana [Bench Strength 2], Civil Appeal No. 5476/2013 (Arising out of S.L.P. (C) No. 11381/2012) (11/07/2013), 2013 AIR(SC) 3060: 2013(10) SCC 136: 2013(9) SCALE 103: 2013(5) Supreme 631: 2013(4) SCV(Civil) 501 [B.S. Chauhan, J.: S.A. Bobde, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 11, 17, 21 & 2(1)(d)(ii) — Approach to Forum for retiral benefits by government servant — Allowability — Appellant/Medical Officer took voluntary retirement — Preferred complaint for non-payment of retiral benefits, and deduction of penal rent from his dues of retiral benefits without giving any show cause notice to him — Rejection — Challenged — Held, by no stretch of imagination a government servant can raise any dispute regarding his service conditions or for payment of gratuity or GPF or any of his retiral benefits before any of the Forum under the Act — The appropriate forum, for redressal of any his grievance, may be the State Administrative Tribunal, if any, or Civil Court but certainly not a Forum under the Act.

Morgan Stanley Mutual Fund v. Kartick Das, (1994) 4 SCC 225, Secretary, Board of Secondary Education, Orissa v. Santosh Kumar Sahoo & Anr., AIR 2010 SC 3553, Bihar School Examination Board v. Suresh Prasad Sinha, AIR 2010 SC 93, Maharshi Dayanand University v. Surjeet Kaur, (2010) 11 SCC 159 & Regional Provident Fund Commissioner v. Bhavani, AIR 2008 SC 2957, Referred.

(Para 16, 17 & 18)

HELD: Statutory provisions make it crystal clear that the Act is made to deal with the rights of consumers wherein marketing of goods, or “services” as defined under the Act have been provided. Therefore, the question does arise as to whether the Forum under the Act can deal with the service matters of government servants.

(Para 11)

In view of the above, it is evident that by no stretch of imagination a government servant can raise any dispute regarding his service conditions or for payment of gratuity or GPF or any of his retiral benefits before any of the Forum under the Act. The government servant does not fall under the definition of a “consumer” as defined under Section 2(1)(d)(ii) of the Act. Such government servant is entitled to claim his retiral benefits strictly in accordance with his service conditions and regulations or statutory rules framed for that purpose. The appropriate forum, for redressal of any his grievance, may be the State Administrative Tribunal, if any, or Civil Court but certainly not a Forum under the Act.

(Para 16)

Jagmittar Sain Bhagat v. Director, Health Services, Haryana [Bench Strength 2], Civil Appeal No. 5476/2013 (Arising out of S.L.P. (C) No. 11381/2012) (11/07/2013), 2013 AIR(SC) 3060: 2013(10) SCC 136: 2013(9) SCALE 103: 2013(5) Supreme 631: 2013(4) SCV(Civil) 501 [B.S. Chauhan, J.: S.A. Bobde, J.] <<LAWPACK SUPREME COURT>>
Electricity Act, 2003 — Sections 173, 174 & 175 — Electricity Act, 2003 and Consumer Protection Act, 1986 — Inconsistency between, Effect of — Held, in case of inconsistency between the Electricity Act, 2003 and the Consumer Protection Act, 1986, the provisions of Consumer Protection Act will prevail, but ipso facto it will not vest the Consumer Forum with the power to redress any dispute with regard to the matters which do not come within the meaning of “service” or “complaint” — Consumer Protection Act, 1986 — Sections 2(1)(o) & 2(1)(c) — Redressal of dispute.

(Para 43 & 47(i))

HELD: The inconsistency would arise only if the provisions of the Electricity Act, 2003 run counter to the provisions of the Consumer Protection Act, 1986 or if while enforcing provision on one statute, provisions of other statute is violated. We find that the entire object and reasons of Consumer Protection Act is not crossed over by the Electricity Act, 2003 and whenever such situation arise the Electricity Act, 2003 has left the option open for the consumer to take recourse under other Laws.

(Para 43)

(Para 20)

(Para 23)

(Para 30)

(Para 22)

(Para 18)

(Para 24, 25 & 26)

(Para 47(iii))

Uttar Pradesh Power Corporation Ltd. v. Anis Ahmad [Bench Strength 2], Civil Appeal No. 5466/2012 (Arising out of SLP (C) No. 35906/2011) (01/07/2013), 2013(3) SCV(Civil) 401: 2013 AIR(SC) 2766: 2013(8) SCC 491: 2013(10) JT 610: 2013(9) SCALE 334: 2013(5) Supreme 642: 2013(9) SLT 554 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 3, 2(1)(b), 2(1)(c) & 2(1)(d) — Unauthorized use of electricity — Complaint before consumer Forum, Maintainability of — Held, Consumer Forum cannot derive power to adjudicate a dispute in relation to assessment made under Section 126 or offences under Sections 135 to 140 of the Electricity Act, as the acts of indulging in “unauthorized use of electricity” as defined under Section 126 or committing offence under Sections 135 to 140 do not fall within the meaning of “complaint” as defined under Section 2(1)(c) of the Consumer Protection Act, 1986 — Acts of indulgence in “unauthorized use of electricity” by a person, neither has any relationship with “unfair trade practice” or “restrictive trade practice” or “deficiency in service” nor does it amounts to hazardous services by the licensee — Such acts of “unauthorized use of electricity” has nothing to do with charging price in excess of the price — Therefore, acts of person in indulging in ‘unauthorized use of electricity’, do not fall within the meaning of “complaint”, and, therefore, the “complaint” against assessment under Section 126 is not maintainable before the Consumer Forum — Since offences referred to in Sections 135 to 140 can be tried only by a Special Court constituted under Section 153 of the Electricity Act, 2003, in that view of the matter also the complaint against any action taken under Sections 135 to 140 of the Electricity Act, 2003 is not maintainable before the Consumer Forum — Electricity Act, 2003 — Sections 126, 135 to 140 — Action under — Complaint before Consumer Forum against, Maintainability of.

(Para 45, 46 & 47)

Uttar Pradesh Power Corporation Ltd. v. Anis Ahmad [Bench Strength 2], Civil Appeal No. 5466/2012 (Arising out of SLP (C) No. 35906/2011) (01/07/2013), 2013(3) SCV(Civil) 401: 2013 AIR(SC) 2766: 2013(8) SCC 491: 2013(10) JT 610: 2013(9) SCALE 334: 2013(5) Supreme 642: 2013(9) SLT 554 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 3, 12 & 2(1)(d) — Right to seek remedy under the Act — Availability of alternate remedy under special statute, Effect of — Appellants were enrolled as members of respondent No.1-Cooperative Group Housing Society — They applied for flats, which were being constructed by respondent No.1 and deposited the installments of price — Respondent No.1 returned the amount deposited by the appellants and indirectly terminated their membership — Appellants challenged by filing complaints under Consumer Protection Act — Respondent No.1 raised the objection regarding maintainability of complaints in view of Haryana Cooperative Societies Act, 1984 — District Forum overruled the objections raised by respondent No.1 but dismissed the complaints by observing that there was no deficiency in service on the part of respondent No.1 — Appeals and the revisions filed by the appellants were dismissed by the State Commission and the National Commission respectively solely on the ground that the appellants cannot be treated as consumer within the meaning of Section 2(1)(d) of the Act — Challenged before Supreme Court — Held, in the complaints, the appellants had primarily challenged the action of respondent No.1 to refund the amounts deposited by them and thereby extinguished their entitlement to get the flats — Therefore, the mere fact that the action taken by respondent No.1 was approved by the Assistant Registrar, Cooperative Societies and higher authorities, cannot deprive the appellants of their legitimate right to seek remedy under the Act, which is in addition to the other remedies available to them under the Cooperative Societies Act — Appeals allowed — Matters are remanded to the State Commission with the direction to decide the appeals on merits after giving opportunities of hearing to the parties.

Secretary, Thirumurugan Co-operative Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305, Kishore Lal v. ESI Corporation, (2007) 4 SCC 579, National Seeds Corporation Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506, Fair Air Engineers (P) Ltd. v. N.K. Modi, (1996) 6 SCC 385, Thirumurugan Co-operative Agricultural Credit Society v. M. Lalitha (supra), Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294 & Trans Mediterranean Airways v. Universal Exports, (2011) 10 SCC 316, Referred.

(Para 14 & 16)

Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243 & Chandigarh Housing Board v. Avtar Singh, (2010) 10 SCC 194, Relied on.

B.K. Prabha v. Secretary Kendriya Upadyarasanga, (2004) 2 CLT 305, Overruled.

(Para 12)

Virender Jain v. Alaknanda Co-operative Group Housing Society Limited [Bench Strength 3], Civil Appeal No. 64/2010 (23/04/2013), 2013(9) SCC 383: 2013(9) JT 92: 2013(6) SCALE 571 [G.S. Singhvi, J.: Ranjana Prakash Desai, J.: S.A. Bobde, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 21 — False representation and unfair trade practice — Finding of, Ayurvedic practitioner prescribing Allopathic medicines, Entitlement to — Son of the appellant was given treatment for the problem of epilepsy by Respondnet No. 1 who was passing off Allopathic medicines as Ayurvedic medicines — National Commission by the impugned judgment held that respondent No.1 having made the false representation was guilty of unfair trade practice but held that in the light of letter dated 24th February, 2003 respondent No.1 was entitled to prescribe Allopathic medicines — Respondents relied on a letter dated 24th February, 2003 issued by Secretary, Medical Education Department, Government of U.P. to suggest that the Aurvedic/Unani Practitioners practicing Ayurvedic System are also authorised to use allopathic medicines under U.P. Indian Medical Council Act, 1939 — Held, incident and treatment as alleged by the appellant relate to the period 1994 to 1997 — Therefore, letter dated 24th February, 2003 is of no avail to the respondents as the same was not in existence during the period of treatment — From the letter it is clear that in connection with some case the High Court of Allahabad issued direction to take action against the quacks who are practicing in Allopathic Medicine but not registered with Medical Council — Respondents has not brought to notice any Act known as U.P. Indian Medical Council Act, 1939 but there is an Act known as U.P. Indian Medicine Act, 1939 — In any case respondent No.1 has nowhere pleaded that he was registered with the Medical Council or enrolled in the State Medical Register — He has not cited even the registration number and no specific plea has been taken that he has already been registered with the U.P. State Medical Council — Even the registration number has not been mentioned — Merely on the basis of a vague plea; the National Commission held that respondent No.1 was entitled to practice and prescribe modern Allopathic medicine.

(Para 13 & 14)

(Para 15 & 16)

Bhanwar Kanwar v. R.K. Gupta [Bench Strength 2], Civil Appeal No. 8660/2009 (05/04/2013), 2013(2) SCV(Civil) 253: 2013(4) SCC 252: 2013(8) JT 296: 2013(5) SCALE 373: 2013(3) Supreme 34: 2013(5) SLT 720 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 21 — Enhancement of compensation — Finding of false representation and unfair trade practice, Physical and mental harassment, Entitlement to — Prashant, son of the appellant was given treatment for the problem of epilepsy by Respondnet No. 1 who was passing off Allopathic medicines as Ayurvedic medicines — National Commission by the impugned judgment held that respondent No.1 having made the false representation was guilty of unfair trade practice and quantified the compensation payable by the respondents as Rs. 5,00,000/- and directed respondent No.1 to pay a consolidated sum of Rs.2,50,000/- to the appellant and to deposit the remaining amount in the account of the Consumer Legal Aid of the National Commission — Appeal preferred by the complainant-appellant — Held, National Commission has already held that respondent No.1 was guilty of unfair trade practice and adopted unfair method and deceptive practice by making false statement orally as well as in writing — In view of the finding, both Prashant and appellant suffered physical and mental injury due to the misleading advertisement, unfair trade practice and negligence of the respondents — Appellant and Prashant thus are entitled for an enhanced compensation for the injury suffered by them — Therefore, amount of compensation is enhanced at Rs.15 lakhs for payment in favour of the appellant — Appeal allowed.

(Para 15 & 16)

Bhanwar Kanwar v. R.K. Gupta [Bench Strength 2], Civil Appeal No. 8660/2009 (05/04/2013), 2013(2) SCV(Civil) 253: 2013(4) SCC 252: 2013(8) JT 296: 2013(5) SCALE 373: 2013(3) Supreme 34: 2013(5) SLT 720 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 21 — Compensation — Rejection of claim for, Non-consideration of report of Medical Board, Effect of — Appellant’s father took insurance cover under `Janta Gramin Vyaktigat Durghatna Policy’ in the name of the appellant — Appellant fell down and sustained injuries in the right portion of his head and suffered 100% disability in the right eye — Respondents rejected the claim on the ground that the same was not covered by the policy — State Commission and National Commission dismissed the claim for compensation by assuming that his right eye was afflicted with the disease of Phthisis Bulbi and the same was the cause of loss of vision — Complainant preferred appeal — Held, both the consumer fora did not bother to carefully go through the report of the Medical Board constituted in furtherance of the direction given by the State Commission — In that report, the concerned doctors opined that the loss of vision could have been caused by fall while playing — In their pleadings, respondents had not contested the statement contained in the complaint, which was duly supported by the affidavit of Shri P.D. Chourasia, that while playing outside the residence his child had an accidental fall and the consequential injury to the right eye led to the loss of vision — State Commission and the National Commission committed serious error in completely ignoring the report of the Medical Board which had opined that Phthisis Bulbi can be caused due to injury caused due to fall — Before the State Commission, sufficient evidence was produced by the appellant to prove that he had an accidental fall and as a result of that, right side of his head and the right eye were injured — Therefore, there is no escape from the conclusion that the appellant’s case was covered by the policy issued by respondent No.1 and the State Commission and the National Commission committed serious error by rejecting his claim — Appeal allowed — Respondents to pay compensation to the appellant with interest.

(Para 12, 14 & 15)

Sandeep Kumar Chourasia v. Divisional Manager, New India Insurance Company Ltd. [Bench Strength 2], Civil Appeal No. 2759/2013 (Arising out of SLP (C) No. 25991/2008) (02/04/2013), 2013(2) SCV(Civil) 595: 2013(4) SCC 270: 2013(5) SCALE 103: 2013(2) Supreme 639: 2013(4) SLT 724 [G.S. Singhvi, J.: H.L. Gokhale, J.] <<LAWPACK SUPREME COURT>>
Insurance — Insurance policy — Risk cover of price recovery of foreign export — Failure on part of insured to inform to insurance company about non-payment by importer — Sustainability of claim — Respondent purchased a policy for the purpose of insuring a shipment to foreign buyers — Buyer committed default in making payments towards such policy with respect to the consignment — Insurer rejected claims on the ground that the insured did not ensure compliance with Clause 8 (b) of the insurance agreement, which stipulated the period within which the insurer is to be informed about any default committed by a foreign importer — State Disputes Redressal Commission directed the insurer to make various requisite payments due under different claims, with 9 per cent interest with litigation expenses — Insurer preferred appeals before National Consumer Disputes Redressal Commission, wherein the impugned judgment and order was disputed, stating that it was evident from the said judgment that 11 claims had been rejected and that 5 claims made by the insured were accepted — Both the parties preferred appeals — Held, since insured failed to comply with the requirement of clause 8(b) of the agreement informing the insurer about the non-payment of outstanding dues by the foreign importer within the stipulated time except in two cases, thus, we are of the view that only two claims deserve to be allowed and others are dis-allowed — Consumer Protection Act, 1986 — Sections 19 & 23 — Insurance — Liability of insurer — Failure on the part of insured to comply with stipulated terms in agreement, Effect of.

(Para 13)

Export Credit Guarantee Corporation of India Ltd. v. Garg Sons International [Bench Strength 2], Civil Appeal No. 1557/2004 (17/01/2013), 2013(1) SCV(Civil) 233: 2013(1) SCALE 410: 2013(1) SLT 614: 2014(1) SCC 686 [B.S. Chauhan, J.: V. Gopala Gowda, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 16(1)(a) & 20(1)(a) — National and State Consumer Redressal Commisions — Consultation in the matters of appointment — Discussed.

Ashish Handa, Advocate v. Hon`ble the Chief Justice of High Court of Punjab and Haryana and others, (1996) 3 SCC 145, Ashok Tanwar and another v. State of H.P. and others, (2005) 2 SCC 104 & N. Kannadasan v. Ajoy Khose and others, (2009) 7 SCC 1, Referred.

(Para 54 & 56)

HELD: This Court in Ashish Handa, Advocate v. Hon`ble the Chief Justice of High Court of Punjab and Haryana and others, (1996) 3 SCC 145, held in the matter of appointment of President of the State Commissions and the National Commissions under the Consumer Protection Act, 1986, the consultation with the Chief Justice of the High Court and Chief Justice of India is in the same manner, as indicated by the Supreme Court in Supreme Court Advocates-on-Record Association case (supra) for appointment of High Court and Supreme Court Judges. This Court noticed that the functions discharged by the Commission are primarily the adjudication of consumer disputes and, therefore, a person from the judicial branch is considered to be suitable for the office of the President. The Court noticed the requirement of consultation with the Chief Justice under the proviso to Section 16(1)(a) and Section 20(1)(a) of the Consumer Protection Act, is similar to that in Article 217. Consequently, it was held that principle enunciated in the majority opinion in the Supreme Court Advocates-on-Record Association case (supra) must apply even for initiating the proposal for appointment.

(Para 54)

Judgments discussed above would indicate that the consultation is held to be mandatory if the incumbent to be appointed to the post is either a sitting or a retired judge who has to discharge judicial functions and the orders rendered by them are capable of execution. Consultation, it may be noted, is never meant to be a formality, but meaningful and effective and primacy of opinion is always vested with the High Court or the Chief Justice of the State High Court or the collegium of the Supreme Court or the Chief Justice of India, as the case may be, when a person has to hold a judicial office and discharge functions akin to judicial functions.

(Para 56)

Chandrashekaraiah v. Janekere C. Krishna [Bench Strength 2], Civil Appeal Nos. 197-199/2013 (Arising out of SLP (Civil) Nos. 15658-15660/2012) (11/01/2013), 2013 AIR(SC) 726: 2013(3) SCC 117: 2013(2) JT 65: 2013(1) SCALE 255: 2013(1) Supreme 161: 2013(1) SLT 297 [K.S. Radhakrishnan, J.: Madan B. Lokur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 12 — Medical Negligence — Requirement of expert opinion before recording consumer complaint — Applicability of ratio of Martin F. D`Souza case — Husband of Respondent No. 1 died who was operated upon by doctors, appellant and respondent No. 2 — Respondent No. 1 filed a complaint — Revision petition before State Consumer Disputes Redressal Commission, on the ground that complaint could not have been registered by District Forum without seeking opinion of an expert in terms of the decision of the Supreme Court reported in Martin F. D`Souza Vs. Mohd. Ishfaq, (2009)3 SCC 1 — State Commission rejected the revision petition — Challenged before National Commission — National Commission dismissed the petition by relying upon the subsequent judgment of this Court in V. Kishan Rao Vs. Nikhil Super Speciality Hospital & Anr., (2010)5 SCC 513, wherein this Court has declared that the judgment rendered in Martin F. D`Souza is per incuriam — Preferred SLP — Held, observations in Jacob Mathew were limited only with regard to the prosecution of doctors for the offence under Section 304-A IPC — Judgment rendered by a two-Judge Bench of this Court in the case of Martin F.D`Souza has been correctly declared per incuriam by the judgment in V. Kishan Rao as the law laid down in Martin F.D`Souza was contrary to the law laid down in Jacob Mathew — Hence, conclusions recorded by National Commission does not call for any interference — Appeals are dismissed — Penal Code, 1860 — Section 340-A — Death caused by medical negligence — Rule applicability in civil liability.

Jacob Mathew Vs. State of Punjab & Anr., (2005)6 SCC 1 &V. Kishan Rao Vs. Nikhil Super Speciality Hospital & Anr., (2010)5 SCC 513, Relied on.

Martin F. D`Souza Vs. Mohd. Ishfaq, (2009)3 SCC 1, Distinguished (not applicable in consumer cases).

(Para 9 & 10)

A. Srimannarayana v. Dasari Santakumari [Bench Strength 2], Civil Appeal No. 368/2013 (Arising out of S.L.P (C) No. 26043/2010) (09/01/2013), 2013(1) SCV(Civil) 171: 2013(9) SCC 496: 2013(9) JT 135: 2013(1) SCALE 606: 2013(1) Supreme 797: 2013(1) SLT 597 [Surinder Singh Nijjar, J.: Anil R. Dave, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12, 15 & 27-A — Deficiency in service by non-delivery of flats — Complaint against allowed — Dismissal of appeal before state commission — Revision before National Commission also dismissed — Special lease petition against — Held, finding recorded by District Forum that there was deficiency in service on petitioners part is based on correct analysis of facts and documents and State Commission rightly refused to interfere with the same — Direction given by District Forum for refund of amount deposited by respondent was also correct — No error committed by State and National Commission by applying the same — Cost imposed by National Commission of Rs. 50000/- on respondent also justified — Special leave petition accordingly is dismissed.

(Paras 6 to 10)

Shivalik Vihar Sites Pvt. Ltd. v. Darshan Singh [Bench Strength 2], Petition(s) for Special Leave to Appeal (Civil) No(s). 33470/2012 (10/12/2012), 2013(1) SLT 19 [G.S. Singhvi, J.: Gyan Sudha Misra, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 10(1A) — Appointment of President of District Forum — Time limit for joining — Extension of, permissibility — Period provided for joining of post 45 days — Appointment of respondent nos. 4 to 6 beyond period of 45 days of offer of appointment — Writ petition challenging — Held, respondent nos. 4 to 6 were working as District Judges at relevant time when appointment letters were issued — Extension of period to meet the said exigencies — Since power to extend time was within the domain of respondent-authorities and they had every right to extend the time of meet such exigencies, the extension of period for joining of respondent nos. 4 to 6 justified and needs no interference — Petition to be dismissed.

(Paras 8 to 10)

Prem Lata v. Govt. of NCT Delhi [Bench Strength 2], Special Leave Petition (C) No. 29967/2011 (11/09/2012), 2013(1) SCV(Civil) 566: 2012(9) SCC 490: 2012(9) JT 386: 2012(8) SCALE 589: 2012(6) Supreme 609: 2012(7) SLT 258: 2012 LIC 4437: 2013(1) SLR 299 [Altamas Kabir, J.: J. Chelameswar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2, 14 & 27 — Allotment of flat — Delay in delivery of possession — Permissibility of revision of construction cost — Held, appellant voluntarily sought change in mode of purchase after delay in delivery of possession and unequivocally agreed to pay the cost of Rs. 5,23,232/- — Plea of appellant that cost of flat cannot be more than what was specified in registered sale deed sounds attractive but lacks merit — Having taken advantage of offer made by board to get deed registered at a price less than the actual cost of flat, the appellant cannot turn round and demand refund of Rs. 1,01,314/- — Appeal to be dismissed.

HELD: We have considered the respective arguments/submissions and carefully scanned the record. In our view, the appellant cannot make any grievance against the cost specified in the revised allotment letters issued on 22.1.1999 and 25.1.1999 because he had voluntarily sought change in the mode of purchase and unequivocally agreed to pay the cost i.e. Rs.5,23,232/-. The appellant’s plea that the cost of the flat cannot be more than what was specified in the registered sale deed sounds attractive but lacks merit. A careful reading of letters dated 22.8.1998, 27.11.1998 and 15.5.1999 sent by the appellant to the respondent makes it clear that he had conveyed his unequivocal willingness for registration of the sale deed showing the cost of the flat as Rs.4,31,918/although the actual cost was Rs.5,23,232/-. Having taken advantage of the offer made by the Board to get the deed registered at a price less than the actual cost of the flat, the appellant cannot turn around and demand refund of Rs.1,01,314/-.

The appellant’s grievance against the quantum of compensation awarded by the State Commission also merits rejection because the complaint filed by him was not bona fide.

In the result, the appeal is dismissed.

S. Srinivasa Murthy v. Karnataka Housing Board [Bench Strength 2], Civil Appeal No. 5584/2012(Arising out of SLP (C) No. 12334/2009) (22/08/2012), 2012(4) SCV(Civil) 362: 2013 AIR(SC) 990: 2012(8) SCC 424: 2012(8) JT 256: 2012(7) SCALE 479: 2012(6) Supreme 238 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 226 — Writ — Challenging imposition of penalty by National Commission — Maintainability of — Held, the writ petition against order of National Commission is not maintainable before High Court as a statutory appeal in terms of section 27A(1)(c) lies to this court — Consumer Protection Act, 1986 — Section 27-A(1)(c).

HELD: It is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution of India against the orders passed by the Commission, as a statutory appeal is provided and lies to this Court under the provisions of the Consumer Protection Act, 1986. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain petitions in exercise of its powers under Article 226 of the Constitution of India. Even in the present case, the High Court has not exercise its jurisdiction in accordance with law The case is one of improper exercise of jurisdiction. It is not expected of us to deal with this issue at any greater length as we are dismissing this petition on other grounds.

Cicily Kallarackal v. Vehicle Factory [Bench Strength 2], Special Leave Petition (C) No. 24228-24229/2012 (06/08/2012), 2012(4) SCV(Civil) 49: 2012(8) SCC 524: 2012(7) JT 426: 2012(7) SCALE 328: 2012(8) SLT 585 [B.S. Chauhan, J.: Swatanter Kumar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) — `Service’ — Membership inviting for purchase of developed plots — Included service under Act or not? — Housing and construction activity — Appellant, a private company promotes ventures for development of lands into house-sites and invites intending purchaser to join as members — Sale is not as `as is where is’ basis — Sale price was not for virgin land but also includes development of site and provision of infrastructure — Held, appellant was offering `service’ to respondents within the meaning of the Act for development etc. of plots — Activities of appellant involving offer of plots for sale to its customers with assurance of development of infrastructure amenities, lay out approvals etc. amounts to service under section 2(1)(o), hence amenable to jurisdiction under the Act.

U.T. Chandigarh Administration and Anr. v. Amarjeet Singh and Ors., (2009) 4 SCC 660, Distinguished.

Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243, Relied on.

HELD: High Court was perfectly justified in holding that the activities of the appellant-company in the present case involving offer of plots for sale to its customers/members with an assurance of development of infrastructure/amenities, lay-out approvals etc. was a `service’ within the meaning of clause (o) of Section 2(1) of the Act and would, therefore, be amenable to the jurisdiction of the fora established under the statute. Having regard to the nature of the transaction between the appellant-company and its customers which involved much more than a simple transfer of a piece of immovable property it is clear that the same constituted `service’ within the meaning of the Act. It was not a case where the appellant-company was selling the given property with all advantages and/or disadvantages on “as is where is” basis.

Narne Construction P. Ltd. v. Union of India [Bench Strength 2], Civil Appeal Nos. 4432-4450/2012 (Arising out of S.L.P. (C) Nos. 3499-3517/2011 (10/05/2012), 2012 AIR(SC) 2369: 2012(5) SCC 359: 2012(5) JT 335: 2012(5) SCALE 369: 2012(3) Supreme 632: 2012(3) SLT 669: 2013(29) STR 3 [T.S. Thakur, J.: Gyan Sudha Misra, J.] <<LAWPACK SUPREME COURT>>
M.P. Consumer Protection Rules, 1987 — Rule 6 — Pension for services rendered as President of State Commission — Entitlement of — Respondent, a judge of High Court retired after serving more than 10 years — Subsequent to his retirement, respondent was appointed as President of State Commission and served for 4 years 10 months and 22 days — Claim for pension for services rendered as president of state commission — Two conflicting views expressed by judges constituting the bench on the issue of entitlement for pension — In view of divergence of opinion, matter is placed before Hon’ble Chief Justice for reference to larger bench — Consumer Protection Act, 1986 — Sections 9(b) & 16.

HELD: (as per Hon’be J. R.M. Lodha): State Government has power to issue executive order or administrative instructions with regard to subject/s provided in Section 16(2) of the 1986 Act where the State Rules are silent on any of such subject. There is nothing in Section 30(2) or Section 31 of the 1986 Act that abridges the power of the State Government to issue executive order or administrative instructions with regard to pensionable service of the President and Members of the State Commission, although State Rules have been framed but such Rules are silent on the aspect of the pensionable service. In other words, in the absence of any provision in the State Rules relating to the pensionable service of the President and Members of the State Commission, there is no bar for the State Government in issuing executive order or administrative instructions regarding pensionable service of the President, State Commission.

Insofar as the order dated April 5, 2002 issued by the Government of Madhya Pradesh according sanction for counting the service of the respondent on the post of President, State Commission for pension is concerned, the same being not inconsistent with the statutory provision contained in Section 16(2) and the State Rules, the view of the High Court that the respondent was entitled to pension from the State Government as per the terms and conditions of appointment cannot be faulted. The High Court rightly observed that the respondent was entitled to pension from the State Government insofar as service rendered by him as the President, State Commission was concerned to the extent provided in the order dated April 5, 2002. Obviously such service shall not be clubbed with the service of the respondent as a High Court Judge and shall not be charged to Consolidated Fund of India.

Civil appeal, accordingly, has no merit and is dismissed with no order as to costs.

(as per Hon’ble J. H.L. Gokhale): The first respondent was undoubtedly entitled to receive pension for his tenure of service as a High Court Judge. The question is with respect to payability of pension for the service as the President of the State Commission. It is a matter concerning public finance, and such a grant cannot be made at the instance of the State Government when the rules do not prescribe the same. In the instant case the order according sanction to pension does not prescribe any period for eligibility nor any rate at which the pension is to be paid. This is apart from the fact that as seen from the Calculation Sheet tendered by the first respondent, the subsequent period of his service as the President of the State Commission was sought to be clubbed with the period of his service as a High Court Judge, which is impermissible. Such an order for the benefit of an individual cannot be considered to be a valid one. Any such exception being made by exercising executive power would be violative of Article 14 of the Constitution of India.

In the circumstances the appeal deserves to be allowed and the impugned judgment and order passed by the High Court is required to be set-aside. Accordingly, this Civil Appeal is allowed, the judgment and order of the High Court dated 8.2.2005 in Writ Petition No.13302/2004 is hereby set aside, the said writ petition filed by the first respondent is dismissed though without any order as to costs.

Mr. Amrendra Sharan, learned counsel for the first respondent submitted that in the event this Court is not inclined to hold in favour of the respondent No.1, the payment made so far should not be recovered. He relied upon the judgment of this Court in the case of Yogeshwar Prasad Vs. National Institute of Education Planning and Admn. reported in 2010 (14) SCC 323 wherein this court held in the facts of that case the grant of higher pay scales should not be recovered unless it was a case of misrepresentation or fraud. This judgment in turn referred to an earlier judgment in Sahib Ram Vs. State of Haryana reported in 1995 Supp. (1) SCC 18. In that matter the appellant was held to be not entitled to a salary in the revised scale. However, since the higher pay scale was given to him due to wrong construction of the relevant order by the authority concerned and not on account of any misrepresentation by the employee, the amount paid till the date of order was directed not to be recovered. When this appeal was admitted, stay as prayed by the appellant was declined, but it was made clear that the payment made by the appellant pursuant to the judgment of the High Court will be subject to the decision of appeal. Mr. Mariarputham, learned counsel for the appellant submitted that the appeal is canvassed basically in view of the principle involved. In view thereof, although the appeal is allowed, the additional pension paid to the first respondent as the President of the State Commission till the end of February 2012, will not be recovered from him. However, from March, 2012 onwards the first respondent shall be entitled to receive pension only for the service rendered by him as a High Court Judge.

Accountant General, Madhya Pradesh v. S.K. Dubey [Bench Strength 2], Civil Appeal No. 5322/2005 (29/02/2012), 2012(4) SCC 578: 2012(3) JT 210: 2012(3) SCALE 124: 2012 LIC 1671: 2012(3) SLR 752 [R.M. Lodha, J.: H.L. Gokhale, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Compensation — Against possession of vehicle by Financer — Higher purchase agreement — All three fora concurrently held financier liable for paying compensation to the hirer for taking possession of the vehicle against default payment of installments — Challenged — Held, all three fora committed error — This Court in series of judgments held that owner in hire purchase is financer and hirer is only bailee/trustee of the vehicle — Prima facie we are of the view that the courts below have committed an error in granting compensation to the present petitioner and which appears to be non-sustainable in law — Accordingly issue notice on sustainability of impugned judgment — Meantime petitioner is restrained from any recovery — Hire Purchase Act, 1972 — Sections 18 to 20.

(Para 2 to 4)

Suryapal Singh v. Siddha Vinayak Motors [Bench Strength 2], SLP(C) No. 5302/2012 (21/02/2012), 2012(12) SCC 355 [B.S. Chauhan, J.: Jagdish Singh Khehar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 14 & 17 — Medical negligence — Reduction of compensation since deceased was home maker — Justification — Award of compensation by State Commission — Reduction by National Commission — Justification — Surgery for removal of fibroid from uterus of patient — The MoPS were left in her abdominal cavity — Later on, she died due to scepticemia inside her abdomen — Medical negligence established — Award of Rs. 12,34,414.50 by State Commission — National Commission reduced it to Rs. 8 lacs holding that deceased was merely a home maker and not generating any income by any occupation for gain — Held, the mere fact that deceased was a home maker was not sufficient to deny adequate compensation to appellant in lieu of service rendered by her — Reduction in amount of compensation by National Commission unjustified and to be set aside and that of State commission is restored — Appeal allowed.

Arun Kumar Agrawal v. National Insurance Company Limited, 2010(9) SCC 218, Relied on.

(Paras 11 to 13)

Jaswinder Singh v. Santokh Nursing Home [Bench Strength 2], C.A. Nos. 699-701/2012 (Arising from SLP (C) No. 15638-15640/2010) (16/01/2012), 2012(12) SCC 550: 2012(4) SCALE 170 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(d), 3 & 13 — Complaint — Agriculture — Supply of defective seeds — Allowability of compensation for, justification — Purchase of seeds by respondents who are engaged in agriculture from the appellant, a government company whose function is to arrange for quality seeds — Complaint by respondents alleging that despite taking proper steps, they did not get the yield on account of defective seeds supplied by the appellant — Consumer Forum allowed the complaint — State Commission as well as National Commission upheld the order of District Forum — Held, fora below are justified in allowing the complaint of respondents — Appellants neither produced samples of seeds sold/supplied to respondents nor offered to get it tested in appropriate laboratory — On other hand, report of agricultural experts appointed as commissioners by District Forum reveals that crops failed because of defective seeds — Procedure adopted by the District Forum in no way contrary to Section 13(1)(c) — Appellant cannot seek annulment of well reasoned orders passed by the District Forum as well as State and National Commissions — Impugned order warrants no interference — Appeal dismissed — Seeds Act, 1966 — Sections 6, 7, 9, 10, 11, 14(1)(a)(b), 16, 19, 20 & 21.

Maharashtra Hybrid Seeds Co. Ltd. v. Alavalapati Chandra Reddy, (1998) 6 SCC 738, Relied on.

HELD: We shall now deal with the question whether the District Forum committed a jurisdictional error by awarding compensation to the respondents without complying with the procedure prescribed under Section 13(1)(c). A reading of the plain language of that section shows that the District Forum can call upon the complainant to provide a sample of goods if it is satisfied that the defect in the goods cannot be determined without proper analysis or test. After the sample is obtained, the same is required to be sent to an appropriate laboratory for analysis or test for the purpose of finding out whether the goods suffer from any defect as alleged in the complaint or from any other defect. In some of these cases, the District Forums had appointed agricultural experts as Court Commissioners and directed them to inspect the fields of the respondents and submit report about the status of the crops. In one or two cases the Court appointed Advocate Commissioner with liberty to him to avail the services of agricultural experts for ascertaining the true status of the crops. The reports of the agricultural experts produced before the District Forum unmistakably revealed that the crops had failed because of defective seeds/foundation seeds. After examining the reports the District Forums felt satisfied that the seeds were defective and this is the reason why the complainants were not called upon to provide samples of the seeds for getting the same analysed/tested in an appropriate laboratory. In our view, the procedure adopted by the District Forum was in no way contrary to Section 13(1)(c) of the Consumer Act and the appellant cannot seek annulment of well-reasoned orders passed by three Consumer Forums on the specious ground that the procedure prescribed under Section 13(1)(c) of the Consumer Act had not been followed.

The issue deserves to be considered from another angle. Majority of the farmers in the country remain illiterate throughout their life because they do not have access to the system of education. They have no idea about the Seeds Act and the Rules framed thereunder and other legislations, like, Protection of Plant Varieties and Farmers’ Rights Act, 2011. They mainly rely on the information supplied by the Agricultural Department and Government agencies, like the appellant. Ordinarily, nobody would tell a farmer that after purchasing the seeds for sowing, he should retain a sample thereof so that in the event of loss of crop or less yield on account of defect in the seeds, he may claim compensation from the seller/supplier. In the normal course, a farmer would use the entire quantity of seeds purchased by him for the purpose of sowing and by the time he discovers that the crop has failed because the seeds purchased by him were defective nothing remains with him which could be tested in a laboratory. In some of the cases, the respondents had categorically stated that they had sown the entire quantity of seeds purchased from the appellant. Therefore, it is naove to blame the District Forum for not having called upon the respondents to provide the samples of seeds and send them for analysis or test in the laboratory.

National Seeds Corporation Ltd. v. M. Madhusudhan Reddy [Bench Strength 2], Civil Appeal No. 7543/2004 (16/01/2012), 2012 AIR(SC) 1160: 2012(2) SCC 506: 2012(1) JT 330: 2012(1) SCALE 367: 2012(2) SLT 51 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(d), 3 & 13 — Complaint — Alternative remedy of arbitration — Maintainability of — Complaint by farmers against supply of defective seeds — Respondents were selected by appellant for growing of seeds on its behalf — Foundation seeds were supplied by appellant to respondents at a price with assurance that crop will be purchased by them — Agreement contains arbitration clause — Filing of complaint before Consumer Forum without exhausting remedy of arbitration — Maintainability of complaint — Remedy of arbitration is not the only remedy available to a grower — Respondents can either seek reference to arbitrator or file complaint — Remedy available to respondents in Act is in addition to and not in derogation of provisions of any other law for time being in force — Complaint maintainable — Arbitration and Conciliation Act, 1996 — Sections 5 & 8.

Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243, Fair Air Engineers (P) Ltd. v. N. K. Modi, (1996) 6 SCC 385, Skypay Couriers Limited v. Tata Chemicals Limited, (2000) 5 SCC 294, State of Karnataka v. Vishwabharathi House Building Cooperative Society, (2003) 2 SCC 412, CCI Chambers Cooperative Housing Society Limited v. Development Credit Bank Limited, (2003) 7 SCC 233, Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305, H.N. Shankara Shastry v. Assistant Director of Agriculture, Karnataka, (2004) 6 SCC 230, Trans Mediterranean Airways v. Universal Exports and another, (2011) 10 SCC 316, Relied on.

HELD: Grievance of a farmer/grower who has suffered financially due to loss or failure of crop on account of use of defective seeds sold/supplied by the appellant or by an authorised person is not remedied by prosecuting the seller/supplier of the seeds. Even if such person is found guilty and sentenced to imprisonment, the aggrieved farmer/grower does not get anything. Therefore, the so-called remedy available to an aggrieved farmer/grower to lodge a complaint with the concerned Seed Inspector for prosecution of the seller/supplier of the seed cannot but be treated as illusory and he cannot be denied relief under the Consumer Act on the ground of availability of an alternative remedy.

The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.

National Seeds Corporation Ltd. v. M. Madhusudhan Reddy [Bench Strength 2], Civil Appeal No. 7543/2004 (16/01/2012), 2012 AIR(SC) 1160: 2012(2) SCC 506: 2012(1) JT 330: 2012(1) SCALE 367: 2012(2) SLT 51 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Seeds Act, 1966 — Sections 6, 7, 9, 10, 11, 14(1)(a), (b), 16, 19, 20 & 21 — Supply of defective seeds — Compensation claim — Complaint before Consumer Forum, maintainability — Respondents who are farmers and engaged in agriculture/seed production, purchased seeds from appellant, a Government Company whose function is to arrange for quality seeds — Respondents filed complaints before Consumer Forum alleging that despite taking proper steps for cultivation, they did not get expected yield due to defective seeds, hence claimed compensation — Maintainability of consumer complaint — Seed Act, though a special legislation but totally silent on the issue of payment of compensation for loss of crop due to use of defective seeds supplied by the appellant — No adjudicatory mechanism is provided in the Act for compensation — Nothing in the Seeds Act indicating that provisions of Consumer Act are not available to farmers — Any attempt to exclude farmers from the ambit of Consumer Act will make it vulnerable to an attack of unconstitutionality on the ground of discrimination — Consumer Complaint is maintainable — Consumer Protection Act, 1986 — Sections 2(d), 3 & 13.

HELD: Though, the Seeds Act is a special legislation enacted for ensuring that there is no compromise with the quality of seeds sold to the farmers and others and provisions have been made for imposition of substantive punishment on a person found guilty of violating the provisions relating the quality of the seeds, the legislature has not put in place any adjudicatory mechanism for compensating the farmers/growers of seeds and other similarly situated persons who may suffer loss of crop or who may get insufficient yield due to use of defective seeds sold/supplied by the appellant or any other authorised person. No one can dispute that the agriculturists and horticulturists are the largest consumers of seeds. They suffer loss of crop due to various reasons, one of which is the use of defective/substandard seeds. The Seeds Act is totally silent on the issue of payment of compensation for the loss of crop on account of use of defective seeds supplied by the appellant and others who may obtain certificate under Section 9 of the Seeds Act. A farmer who may suffer loss of crop due to defective seeds can approach the Seed Inspector and make a request for prosecution of the person from whom he purchased the seeds. If found guilty, such person can be imprisoned, but this cannot redeem the loss suffered by the farmer.

In the context of farmers/growers and other consumer of seeds, the Seeds Act is a special legislation insofar as the provisions contained therein ensure that those engaged in agriculture and horticulture get quality seeds and any person who violates the provisions of the Act and/or the Rules is brought before the law and punished. However, there is no provision in that Act and the Rules framed thereunder for compensating the farmers etc. who may suffer adversely due to loss of crop or deficient yield on account of defective seeds supplied by a person authorised to sell the seeds. That apart, there is nothing in the Seeds Act and the Rules which may give an indication that the provisions of the Consumer Act are not available to the farmers who are otherwise covered by the wide definition of `consumer’ under Section 2(d) of the Consumer Act. As a matter of fact, any attempt to exclude the farmers from the ambit of the Consumer Act by implication will make that Act vulnerable to an attack of unconstitutionality on the ground of discrimination and there is no reason why the provisions of the Consumer Act should be so interpreted.

National Seeds Corporation Ltd. v. M. Madhusudhan Reddy [Bench Strength 2], Civil Appeal No. 7543/2004 (16/01/2012), 2012 AIR(SC) 1160: 2012(2) SCC 506: 2012(1) JT 330: 2012(1) SCALE 367: 2012(2) SLT 51 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 226 — Writ — Against order passed by State Consumer Disputes Redressal Commission — Jurisdiction for — Availability of alternate remedy — Consumer complaint by appellant against respondents for exemplary damages to the tune of Rs. 34,50,000/- for harassment caused on account of unsolicited calls received on her mobile phone from various banks/financial institutions — State commission imposed penalty — Aggrieved by the said order, respondents filed a writ — Directions of State Commission set aside by High Court — Held, High Court had no jurisdiction to entertain the writ petition — High Court erred in declaring the directions of State Commission as without jurisdiction, that too by overlooking the availability of statutory remedy of appeal — High Court should not have entertained the writ — Impugned order of High Court set aside — Appeal allowed — Consumer Protection Act, 1986 — Sections 11, 17, 19 & 21.

HELD: The 1986 Act was enacted for better protection of the interests of consumers by making provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes. The object and purpose of enacting the 1986 Act is to provide for simple, inexpensive and speedy remedy to the consumers who have grievance against defective goods and deficient services. This benevolent piece of legislation intended to protect a large body of consumers from exploitation. Prior to the 1986 Act, consumers were required to approach the Civil Court for securing justice for the wrong done to them and it is known fact that decision of the litigation instituted in the Civil Court could take several years. Under the 1986 Act, the consumers are provided with an alternative, efficacious and speedy remedy before consumer forums at district, state and national level.

We also find that the High Court has taken cognizance of the statement made on behalf of the counsel for the petitioners that their clients would challenge Clause (iii) of para 38 of the State Commission’s order by filing an appeal under Section 19 of the Act and the fact that one of the aggrieved parties, namely, American Express Bank Limited has already filed an appeal questioning paragraph 38(iii) of the order of the State commission. After having noticed that some of the petitioners were inclined to avail the remedy of appeal against the particular portion of the order passed by the State Commission. After having noticed that some of the petitioners were inclined to avail the remedy of appeal against the particular portion of the order passed by the State Commission, the High Court should not have entertained the writ petition filed under Article 226 of the Constitution and the miscellaneous petitions filed under Article 227 of the Constitution and directed them to avail remedy of appeal under Section 19 of the 1986 Act.

The appeal is accordingly allowed and the impugned order is set aside.

Nivedita Sharma v. Cellular Operators Assn. of India [Bench Strength 2], C.A. No. 10706/2011 (Arising out of SLP (C) No. 17213/2010) (07/12/2011), 2011(14) SCC 337: 2011(13) SCALE 584 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 23 — Remand of matter to lowest fora — Damage to Monoblock, Pumps in Transit — Liability to pay price of damaged pumps — Entitlement of transporter to receive the damaged pumps — Held, as the District Forum directed the appellant-transporter to pay a particular sum which covered the price of damaged pumps, the appellant was entitled to return of damaged pumps from respondent — Matter remitted to District Forum with direction to issue notice to parties and after taking evidence, if necessary, order the return of damaged pumps to appellant — Appeal allowed.

(Paras 8 & 9)

Nagpur Golden Transport Company v. Nath Traders [Bench Strength 2], Civil Appeal No. 3546/2006 (07/12/2011), 2012 AIR(SC) 357: 2012(1) SCC 555: 2011(14) JT 27: 2011(13) SCALE 356: 2012(1) Supreme 317: 2011(9) SLT 218 [P. Sathasivam, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2, 14 & 21 — Hire purchase agreement — Recovery of vehicles by use of force — Recovery process has to be in accordance with due process of law and not by use of force — View taken in ICICI Bank’s case reiterated — Hire purchase agreement — Default in payment of loan –One time settlement for Rs. 60,000 was also not honoured — Seizure and sale of vehicle — Sale proceeds of Rs. 70,000/- were adjusted towards loan amount and demand made for payment of balance — Complaint filed alleging deficiency in services and claim for damages — Awarding of Rs. 1,50,000/- to respondent by way of damages — State commission affirmed the order and further granted an amount of Rs. 50,000/- towards punitive damages — On revision national commission set aside the granting of punitive damages — Since appellant has already accepted the decision and paid amounts as directed — No further relief be granted to appellant.

ICICI Bank Ltd. vs. Prakash Kaur, 2007(2) SCC 711, Relied on.

(Paras 21, 22, 23 & 24)

Citicorp. Maruti Finance Ltd. v. S. Vijayalaxmi [Bench Strength 3], Civil Appeal No. 9711/2011 (Arising out of SLP (C) No. 19314/2007) (14/11/2011), 2011(5) SCV(Civil) 578: 2012 AIR(SC) 509: 2012(1) SCC 1: 2011(13) JT 382: 2011(12) SCALE 537: 2011(8) SLT 651: 2012(1) JCC 613 [Altamas Kabir, J.: Cyriac Joseph, J.: Surinder Singh Nijjar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Housing — Allotment — Encroachment — Deficiency in service — Allotment of a plot admeasuring 335.50 sq. mtrs. to `CJ’ — Sale of plot by `CJ’ — Subsequent transferees, after 1-1/2 years of sale, filed a complaint in consumer Forum against HUDA alleging deficiency in service as actual area of plot is less than 335.50 sq. mtrs. and plot is subject to encroachment — Direction by consumer forum for allotment of alternate plot — Possession of plot was delivered to original allottee without any encumbrance — Plot subjected to encroachment as original allottee failed to protect the plot — Appellant cannot be blamed for encroachment, if any, made after delivery of possession to original allottee — No provision casting liability on HUDA for redelivery of possession to transfrees — Impugned order directing for allotment of alternative plot, unsustainable — Haryana Urban Development Authority Act, 1977 — Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978.

HELD: In our view, the finding recorded by the District Forum that there was deficiency in service on the appellant’s part is ex facie erroneous and the Sate Commission and the National Commission committed serious error by confirming the direction given by the District Forum for allotment of alternative plot to the respondents. Unfortunately, none of the consumer forums adverted to the fact that possession of the plot was delivered to the original allottee Shri Champat Jain on 27.2.1998 free from all encumbrances and there is no provision in the Haryana Urban Development Authority Act, 1977 and the Regulations for redelivery of possession to the transferees. One can easily visualise that after taking possession of the plot allotted to him, Shri Champat Jain did not take steps to protect the same and by taking advantage of his absence at the site, the people from the neighbouring areas may have opened their doors towards the plot or made some encroachment. However, the appellant cannot be blamed for the encroachment, if any, made after possession of the plot was delivered to the original allottee. The respondents must have executed the sale deed after inspecting the site. If there was any encroachment or the area of the plot was less than the one specified in the allotment/re-allotment letter, they would have immediately lodged a protest with the vendor. However, the fact of the matter is that the respondents did not raise any objection in this regard and by taking shelter of a manipulative report prepared by the Junior Engineer, they filed complaint and succeeded in convincing the District Forum to ordain allotment of an alternative plot.

In our considered opinion, the appellant cannot be held responsible for the encroachment, if any, made after possession of the plot had been delivered to Shri Champat Jain and neither Devender Yadav and Narender Yadav, who purchased the plot from Shri Champat Jain nor the respondents could possibly accuse the appellant of deficiency in service in the matter of allotment of plot on the ground that some people had made encroachment on it.

Haryana Urban Development Authority v. Viresh Sangwan [Bench Strength 2], C.A. No. 9691/2011 (Arising out of SLP (C) No. 33789/2010 (08/11/2011), 2012(1) SCV(Civil) 471: 2012 AIR(SC) 506: 2012(1) SCC 256: 2011(13) JT 287: 2011(12) SCALE 584: 2011(8) SLT 675 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 3 — Remedy under the Act — Scope of — Held, Consumer Protection Act was enacted to provide for better protection of the interests of consumers and for establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith — Provisions contained in the Act are in addition to and not in derogation of the provisions of any other law for the time being enforce — There is no provision in the Act which bars filing of a complaint by a consumer after availing other statutory remedies.

(Para 9)

Dhanbir Singh v. Haryana Urban Development Authority [Bench Strength 2], Civil Appeal No. 8639/2011 (14/10/2011), 2012(5) SLT 35 [G.S. Singhvi, J.: Sudhansu Jyoti Mukhopadhaya, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 3, 2(d), 12, 17 & 21 — Remedy under the Act — After availing departmental remedies — Availability of — Aggrieved by delay in handing over possession of the plot and levy of extension fee by respondent, appellant preferred appeal which was dismissed by the Administrator, HUDA — Filed complaint under the Act — District Forum allowed the complaint and granted compensation — Appeal preferred by the respondent was allowed by the State Commission — Revision filed by the appellant was summarily dismissed by the National Commission with observation that once the appellant had availed the remedy of appeal, then instead of filing the complaint, he should have pursued the alternative remedy — Challenged — Held, impugned order as also the one passed by the State Commission are liable to be set aside because the appeal preferred by the appellant against the order of the District Forum was allowed by the State Commission under a misapprehension that once a consumer avails and exhausts the departmental remedies, he cannot invoke the jurisdiction of any Consumer Forum and the National Commission dismissed the revision by erroneously assuming that the appeal preferred by the appellant against the demand of extension fee was still pending before the Administrator, HUDA — In matters like allotment of plot/land by HUDA and other similar agencies/instrumentalities of the State, whose functioning is governed by the law enacted by State Legislature, departmental remedies are usually available to an aggrieved person — If such person falls within the definition of consumer under Section 2(d) of Act then he can directly file complaint under Sections 12, 17 and 21, as the case may be — He can also avail departmental remedy by filing appeal — Once the appeal is decided and the consumer is aggrieved by the decision of the appellate authority then he can challenge the action/decision of the initial authority as well as the appellate authority by filing a complaint — If the complaint is time barred, the consumer can seek condonation of delay by filing an application under Section 24(A)(2) — Appeal filed by the appellant against the demand of the extension fee had already been rejected by the Administrator, HUDA — Therefore, the National Commission was clearly in error in dismissing the revision only on the ground that the appeal filed by him was pending before the Administrator — The State Commission also committed an error by non suiting the appellant on the ground that he had already availed the remedy of appeal — The dismissal of departmental appeal could hardly be pressed into service by the respondent for facilitating rejection of the appellant’s complaint against the levy of excess extension fee and delayed delivery of possession of the plot and that too of a similar size — Consequently, appeal is allowed.

(Para 8, 9 & 10)

(Paras 6 to 8)

Silversons v. Oriental Insurance Company Ltd. [Bench Strength 2], Civil Appeal No. 1451/2005 (15/09/2011), 2012(12) SCC 522: 2011(7) SLT 422 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Carriage by Air Act, 1972 — Sections 2, 3, 4, 4-A, 5, 6 & 7 — Complaint — Deficiency in service — Jurisdiction of national commission — Complaint against wrong delivery of consignment by an international carrier — Whether national commission under Consumer Protection Act has jurisdiction to entertain and decide a complaint filed by consignor claiming compensation for deficiency in service by carrier? Yes — Protection provided under CP Act, 1986 to consumers is in addition to remedies available under any other statute and does not extinguish remedies under another statute — At relevant point of time, value of subject matter was more than Rs. 20 lakhs, hence, national commission was conferred with the jurisdiction to entertain the complaint — No legal infirmity in National Commission exercising its jurisdiction as the same can be considered `court’ within territory of contracting for the purpose of Rule 29 — No merit in the appeal, hence, dismissed — Consumer Protection Act, 1986 — Sections 3, 12, 23 — Carriage by Air Rules, 1972 — Rules 14, 17, 18, 20, 29, 30 & 33.

HELD: The use of the word “Court” in Rule 29 of the Second Schedule of the CA Act has been borrowed from the Warsaw Convention. We are of the view that the word “Court” has not been used in the strict sense in the Convention as has come to be in our procedural law. The word “Court” has been employed to mean a body that adjudicates a dispute arising under the provisions of the CP Act. The CP Act gives the District Forums, State Forums and National Commission the power to decide disputes of consumers. The jurisdiction, the power and procedure of these Forums are all clearly enumerated by the CP Act. Though, these Forums decide matters after following a summary procedure, their main function is still to decide disputes, which is the main function and purpose of a Court. We are of the view that for the purpose of the CA Act and the Warsaw Convention, the Consumer Forums can fall within the meaning of the expression “Court”.

The consignor, through his agent, has stated that in the airway bill that is handed over to the appellant-carrier, in the consignee box, the name of BBSAE, Madrid is specifically mentioned. If, for any reason, the appellant-carrier was of the view that the name of the consignee is not forthcoming or if the particulars furnished were insufficient for effecting the delivery of the consignment, it was expected from the appellant-carrier to have made enquiries. In our view, at this belated stage, the appellant-carrier cannot shift the burden by contending that it was expected from the consignor and his agent to have furnished the correct and proper particulars of the consignee in the airway bill. The appellant is an air line carrier of high repute and they effect transportation of goods to various parts of the world including Spain and, therefore, it can safely be presumed that the carriers were fully aware of the consignee’s name, which was indicated in the consignee’s box and they should have notified the notified party immediately after the arrival of the consignment. Since, that has not been done, the National Commission was justified in holding that there is deficiency of service on the part of the carrier in not effecting the delivery of goods to the consignee.

We are in total agreement with the conclusion reached by the National Commission. Therefore, we do not see any merit in the contention canvassed by the learned counsel for the appellant-carrier.

We conclude that the National Commission has jurisdiction to decide the dispute between the parties and it is a Court and that there was deficiency in service by the appellant-carrier.

In view of the above discussion, we do not see any merit in this appeal.

Trans Mediterranean Airways v. Universal Exports [Bench Strength 2], Civil Appeal No. 1909/2004 (15/09/2011), 2012(1) SCV(Civil) 93: 2011(10) SCC 316: 2011(10) JT 624: 2011(10) SCALE 524: 2011(7) SLT 339 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21 & 23 — Rejection of claim — Lack of evidence to support claim, Justification for — Original petition filed by appellant dismissed primarily on ground that case sought to be made out by appellant, namely, robbery of the jewellery at gunpoint is not supported by the contents of FIR — Appeal before Supreme Court — Held, finding recorded by National Commission that repudiation of appellant’s claim by respondent Insurance Company was justified, does not suffer from any legal infirmity — Appeal dismissed

(Para 3)

Goel Jewellers v. National Insurance Company Limited [Bench Strength 2], Civil Appeal No. 7460/2011 (09/09/2011), 2011(14) SCC 606 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2, 3 & 4 — Authorised agent — Right of appearance — Appearance of authorised agent before consumer Fora on behalf of the parties — Permissibility — The Act and the Rules have made specific provisions by which agents were permitted to plead and appear on behalf of parties before consumer for a — To interpret it differently would be contrary to legislative intent — View of High Court on permitting of the authorised agent to appear before consumer for a, justified — Advocates Act, 1961 — Sections 29, 32 & 33 — Maharashtra Consumer Protection Rules, 2000 — Rules 1, 6 & 9.

HELD: The agent has been defined both in the Consumer Protection Rules, 1987 and under the Maharashtra Consumer Protection Rules, 2000. The agents have been permitted to appear before the Consumer Forums. The appearance of authorized agents is not inconsistent with section 33 of the Advocates Act, 1961.

The legislature in its wisdom has granted permission to the authorized agents because most of the cases before the Consumer Forums are small cases of relatively poor people where legal intricacies are not involved and great legal skills are not required, which may be handled by the authorized agents.

The other reason is that a large number of litigants may not be able to afford heavy professional fees of trained advocates, therefore, authorized agents have been permitted.

It is the bounden duty and obligation of the Court to carefully discern the legislative intention and articulate the same. In the instant case we are not really called upon to discern legislative intention because there is specific rule defining the agents and the provisions of permitting them to appear before the Consumer Forums. The agents have been permitted to appear to accomplish the main object of the act of disposal of consumers’ complaints expeditiously with no costs or small costs.

In our considered view the High Court was fully justified in observing that the authorised agents do not practise law when they are permitted to appear before the District Forums and the State Commissions.

In the impugned judgment the High Court aptly observed that many statutes, such as, Sales Tax, Income Tax and Competition Act also permit non-advocates to represent the parties before the authorities and those non-advocates cannot be said to practise law. On the same analogy those non-advocates who appear before Consumer fora also cannot be said to practise law. We approve the view taken by the High Court in the impugned judgment.

The legislature has given an option to the parties before the Consumer Forums to either personally appear or be represented by an ‘authorized agent’ or by an advocate, then the court would not be justified in taking away that option or interpreting the statute differently.

The functioning, conduct and behaviour of authorized agents can always be regulated by the Consumer Forums. Advocates are entitled as of right to practise before Consumer Fora but this privilege cannot be claimed as a matter of right by anyone else.

When the legislature has permitted authorized agents to appear on behalf of the complainant, then the courts can’t compel the consumer to engage the services of an advocate.

Many statutes and Acts in India permit non-advocates to represent the parties before the authorities and forums.

In other jurisdictions also, non-advocates are permitted to appear before quasi-judicial fora or subordinate courts. In most of these jurisdictions, specific rules have been framed for the regulation of qualifications, conduct and ethical behaviour of the non-advocates appearing in these fora.

In most jurisdictions, the statutes or court rules impose some form of restrictions on appearances of non-advocate representatives in quasi-judicial fora or subordinate courts. Restrictions on non-advocates agents vary significantly in terms of their specificity, but most forums have rules granting them some discretion in admitting or refusing the appearance of a non-advocate representative.

In order to ensure smooth, consistent, uniform and unvarying functioning of the National Commission, the State Commissions and the District Forums, we deem it appropriate to direct the National Commission to frame comprehensive rules regarding appearances of the agents, representatives, registered organizations and/or non-advocates appearing before the National Commission, the State Commissions and the District Forums governing their qualifications, conduct and ethical behaviour of agents/non-advocates/representatives, registered organizations and/or agents appearing before the consumer forums.

The National Commission may consider following suggestions while framing rules

The Commission may consider non-advocates appearing without accreditation A party may appoint a non-advocate as its representative provided that the representative –

1) is appearing on an individual case basis

2) has a pre-existing relationship with the complainant (e.g., as a relative, neighbour, business associate or personal friend)

3) is not receiving any form of direct or indirect remuneration for appearing before the Forum and files a written declaration to that effect

4) demonstrates to the presiding officer of the Forum that he or she is competent to represent the party.

Accreditation Process

a) The National Commission may consider creating a process through which non-advocates may be accredited to practice as representatives before a Forum.

b) Non-advocates who are accredited through this process shall be allowed to appear before a Forum on a regular basis

c) The accreditation process may consist of –

1) an written examination that tests an applicant’s knowledge of relevant law and ability to make legal presentations and arguments

2) an inspection of the applicant’s educational and professional background

3) an inspection of the applicant’s criminal record

d) the National Commission may prescribe additional requirements for accreditation at its discretion provided that the additional requirements are not arbitrary and do not violate existing law or the Constitution.

Fees

a) A representative who wishes to receive a fee must file a written request before the Forum

b) The presiding officer will decide the amount of the fee, if any, a representative may charge or receive

c) When evaluating a representative’s request for a fee, the presiding officer may consider the following factors :

1) the extent and type of services the representative performed

2) the complexity of the case

3) the level of skill and competence required of the representative in giving the services

4) the amount of time the representative spent on the case; and

5) the ability of the party to pay the fee

d) If a party is seeking monetary damages, its representative may not seek more a fee of more than 20% of the damages

Code of Conduct for representatives

– The National Commission to create a code of conduct which would apply to non-advocates, registered organizations and agents appearing before a Forum.

Disciplinary Powers of a Forum

(a) The presiding officer of a Forum may be given specific power to discipline non-advocates, agents, authorized organizations and representatives for violating the code of conduct or other behaviour that is unfitting in a Forum

(b) In exercising its disciplinary authority, the presiding officer may –

1) revoke a representative’s privilege to appear before the instant case

2) suspend a representative’s privilege to appear before the Forum

3) ban a representative from appearing before the forum

4) impose a monetary fine on the representative

We direct the National Commission to frame

comprehensive Rules as expeditiously as possible, in any event, within three months from the date of communication of this order. The copy of this judgment be sent to the National Commission — .

C. Venkatachalam v. Ajitkumar C. Shah [Bench Strength 3], Civil Appeal No. 868/2003 (29/08/2011), 2011(5) SCV(Civil) 180: 2011(9) SCC 707: 2011(10) JT 207: 2011(9) SCALE 479: 2011(6) Supreme 33 [Dalveer Bhandari, J.: Mukundakam Sharma, J.: Anil R. Dave, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 14 & 23 — Life insurance claim — Denial pleading suppression of material fact relating to his illness — Complaint before District Forum allowed and upheld by State Forum — Reversed by National Commission in revision against — Justification — Held, no tangible evidence produced by respondent to prove suppression of material fact by deceased about his illness, hospitalization and treatment — Reversal of concurrent finding of District and State Forum by National Commission by cryptic order — Impugned order of National Commission therefore unsustainable and to be set aside — Appeal allowed.

(Paras 6 to 9)

P. Vankat Naidu v. Life Insurnce Corporation of India [Bench Strength 2], Civil Appeal No. 7437/2011 (26/08/2011), 2011(7) SLT 454 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 23 — Insurance claim — Permanent blindness due to accident, a ground for — Repudiation of claim by insurer — Complaint before District Forum dismissed — Appeal against allowed by State Forum and same upheld by National Commission — Justification — Held, the National Commission independently examined the matter and agreed with the State Commission that the respondent had suffered blindness due to accident and he was entitled to the insurance amount — No infirmity in concurrent finding of State and National Commissions and same needs no interference — SLP to be dismissed.

(Paras 2 to 4)

Life Insurance Corporation of India v. Hira Lal [Bench Strength 2], Petition for Special Leave to Appeal (Civil) No. 28693/2009 (23/08/2011), 2011(14) SCC 445: 2011(7) SLT 474 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 13(4), 17, 20 & 22 — Ex parte order, setting aside of — Power to recall/review — Complaint made before State Commission claiming compensation alleging deficiency in service — Dismissal of complaint for want of prosecution — Subsequent recall of dismissal order on application of complainant — Power of State Commission to recall its order, challenged — Neither District Forums nor State Commissions were given power to set aside ex-parte orders or power of review — Tribunals being creatures of statues derive their powers from express provisions of statute — Powers which have not been given expressly by the State cannot be exercised — State Commission has no power to recall — Such power is conferred only on National Commission — Impugned order set aside.

Jyotsana Arvind Kumar Shah & Others v. Bombay Hospital Trust, (1999) 4 SCC 325, Approved.

New India Assurance Co. Ltd. v. R. Srinivasan, (2000) 3 SCC 242, Overruled.

HELD: The legislature chose to give the National Commission power to review its ex parte orders. Before amendment, against dismissal of any case by the Commission, the consumer had to rush to this Court. The amendment in Section 22 and introduction of Section 22-A were done for the convenience of the consumers. We have carefully ascertained the legislative intention and interpreted the law accordingly.

In our considered opinion, the decision in Jyotsana’s case laid down the correct law and the view taken in the later decision of this Court in New India Assurance Co. Ltd. is untenable and cannot be sustained.

In view of the legal position, in Civil Appeal No.4307 of 2007, the findings of the National Commission are set aside as far as it has held that the State Commission can review its own orders. After the amendment in Section 22 and introduction of Section 22A in the Act in the year 2002 by which the power of review or recall has vested with the National Commission only. However, we agree with the findings of the National Commission holding that the Complaint No.473 of 1999 be restored to its original number for hearing in accordance with law.

There has been considerable delay in disposal of the complaint. Therefore, we direct the State Commission to dispose of the Complaint No.473 of 1999 [in Civil Appeal No.4307 of 2007] as expeditiously as possible and in any event within three months from the date of the communication of this order — .

Rajeev Hitendra Pathak v. Achyut Kashinath Karekar [Bench Strength 3], Civil Appeal No. 4307/2007 (19/08/2011), 2011(5) SCV(Civil) 1: 2011(9) SCC 541: 2011(9) JT 407: 2011(9) SCALE 287: 2011(8) Supreme 120: 2011(7) SLT 404 [Dalveer Bhandari, J.: Mukundakam Sharma, J.: Anil R. Dave, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 23 — Belated petitions in consumer matters — Effect of — Held, while deciding an application for condonation of delay, Court has to keep in mind that the special period of limitation has been prescribed under the Act, 1986 for filing appeals and revisions in consumer matters and the object of expeditious adjudication of the consumer disputes will get defeated if this Court was to entertain highly belated petitions filed against the orders of the consumer foras — Limitation Act, 1963 — Section 5 — Belated petitions in consumer matters — Effect of.

(Para 5)

Anshul Aggarwal v. New Okhla Industrial Development Authority [Bench Strength 2], SLP (C) …../2011 (CC No. 12439/2011) (09/08/2011), 2011(14) SCC 578 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 136 — Delay in SLP — Unsubstantiated and unsatisfactory explanation for, Effect of — Delay of 233 days in filing of SLP — Explanation offered that within a fortnight of passing of impugned order, petitioner became aware of the same and instructed her counsel to prepare a draft of the case to be filed in this Court, but could not come to India due to unforeseen difficulties to leave Kuwait immediately as per need and demand of counsel — Held, petitioner visited India in between, but then too she could not contact counsel — Petitioner’s assertion that she could not do so because she was suffering from viral fever has not been substantiated by any document — Therefore, no valid ground much less justification for exercise of power to condone delay — Dismissed — Limitation Act, 1963 — Section 5 — Condonation of delay — Plea of suffering from viral fever, Absence of medical documents, Effect of — Consumer Protection Act, 1986 — Section 23 — Delay in appeal — Unsubstantiated explanation for, Effect of.

(Para 4)

Anshul Aggarwal v. New Okhla Industrial Development Authority [Bench Strength 2], SLP (C) …../2011 (CC No. 12439/2011) (09/08/2011), 2011(14) SCC 578 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 13(4) — Complaint — Sovereign immunity — Applicability of — Booking of a consignment with appellant, a foreign Airlines — Delay in delivery of consignment — Deterioration of goods due to delay — Complaint was filed against appellant before State Consumer Commission — Preliminary objection raised as to maintainability of complaint — Appellant claims sovereign immunity — Whether proceedings before Consumer Forums are `suits’ and appellant is thereby entitled to sovereign immunity? No — Section 86 of CPC is inapplicable as special statutes exclude general laws — Appellant cannot claim sovereign immunity for commercial transactions undertaken by it in India — Carriage by Air Act, 1972 — Sections 2, 3 & 7 — Civil Procedure Code, 1908 — Section 86(2).

E.I.C.M. Exports Ltd. v. South Indian Corporation (Agencies) Ltd. and Another, 2009(10) SCALE 22, Overruled.

Patel Roadways Limited v. Birla Yamaha Limited, (2000) 4 SCC 91, Approved.

Economic Transport Organisation, Delhi v. Charan Spinning Mills Private Limited and Another, (2010) 4 SCC 114, Relied on.

HELD: Section 86 of the Code of Civil Procedure is inapplicable to the present case because the older and more general statute has been excluded by more recent special statute, namely, Consumer Protection Act, 1986 and the Carriage by Air Act, 1972. Ethiopian Airlines is not entitled to sovereign immunity in the suit at issue in the present case. Therefore, any other consent of the Central Government is not required to subject the appellant, Ethiopian Airlines, to a suit in an Indian Court.

It is settled principle of statutory interpretation that specific statutes that come later in time trump prior general statutes. Both the Consumer Protection Act, 1986 and the Carriage by Air Act, 1972, which came long after the Code of Civil Procedure, 1908, are more focused and specific statutes and therefore should be held to supersede Section 86 of the Code. This Court in Savita Garg (supra) has clearly laid down that the principle that in fora created by the Consumer Act, the provisions of the Code of Civil Procedure are applicable only to a limited extent, therefore, the provisions of the Code of Civil Procedure have not been made applicable to the proceedings of the National Consumer Forum.

On careful analysis of the American, English and Indian cases, it is abundantly clear that the appellant Ethiopian Airlines must be held accountable for the contractual and commercial activities and obligations that it undertakes in India.

It may be pertinent to mention that the Parliament has recognized this fact while passing the Consumer Protection Act, 1986 and the Carriage by Air Act, 1972. Section 86 was itself, a modification and restriction of the principle of foreign sovereign immunity and thus, by limiting Section 86’s applicability, the Parliament through these incorrect acts, further narrowed a party’s ability to successfully plead foreign sovereign immunity. In the modern era, where there is close interconnection between different countries as far as trade, commerce and business are concerned, the principle of sovereign immunity can no longer be absolute in the way that it much earlier was. Countries who participate in trade, commerce and business with different countries ought to be subjected to normal rules of the market. State owned entities would be able to operate with impunity, the rule of law would be degraded and international trade, commerce and business will come to a grinding halt. Therefore, we have no hesitation in coming to the conclusion that the appellant cannot claim sovereign immunity. The preliminary objection raised by the appellant before the court is devoid of any merit and must be rejected.

Ethiopian Airlines v. Ganesh Narain Saboo [Bench Strength 3], C.A. No. 7037/2004 (09/08/2011), 2011(4) SCV(Civil) 597: 2011 AIR(SC) 3495: 2011(8) SCC 539: 2011(9) JT 243: 2011(8) SCALE 549: 2011(7) SLT 371 [Dalveer Bhandari, J.: Mukundakam Sharma, J.: Anil R. Dave, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(g) — Deficiency in postal service — Claim of interest on deposited amount — Entitlement to — Discontinuance of post office time deposit account — Refund of deposited amount without interest — Complaint before state commission claiming interest on deposited amount — Dismissal upto national commission — Appeal — Held, since the deposit in question relates to post office time deposit account, Rule 17 of 1981 Rules is squarely applicable — Said deposit against notification no. G&SR. 118(E), 119(E), 120(E) which amounted to contravention of post office Rules 1981 — No deficiency in service on part of respondent as scheme was not permissible and discontinued even prior to deposit — Appellant not entitled to any interest on deposited amount — Impugned order justified and needs no interference — Appeal to be dismissed — Post Office Saving Bank General Rules, 1981 — Rules 16 & 17.

HELD: It is the case of the respondents that the Central Government had issued a Notification being No. G & SR 118(E) 119(E) 120(E) as per which no Time Deposit shall be made or accepted on behalf of any institution with effect from 01.04.1995. It is not in dispute that the appellant-Temple had deposited a huge sum of money amounting to Rs.1,40,64,300/-with the Post Master from 05.05.1995 to 16.08.1995. The said deposit was for a period of five years under the Scheme. Though the 3rd Respondent had accepted the amount under the said Scheme and issued a receipt for the same, later it was found that the deposits made on and from 01.04.1995 were against the said Notification which amounted to contravention of the Post Office Savings Bank General Rules, 1981 (in short ‘the Rules’).

Since the deposits in the case on hand relate to Post Office Time Deposit Account, Rule 17 of the Rules is squarely applicable.

It is clear from the above communication that with effect from 01.04.1995 i.e. even prior to the deposits made by the appellant-Temple, investment by institutions under the Scheme was not permissible and in fact discontinued from that date. It is not in dispute that the appellant-Temple is also an institution administered and under the control of the Hindu Religious and Charitable Endowments Department of the State. Vide the above said communication, the Post Master, Palani informed the appellant to close all those accounts since the same was not permissible. The communication dated 01.12.1995 also shows that all such accounts should be closed and the amounts so deposited are to be refunded without interest. In our case, the deposit accounts have been caused to be closed and the amounts deposited have been returned to the depositors without interest. Though the appellant claimed interest and insisted for the same on the ground of deficiency in service on the part of the Post Master, Palani, in view of Rule 17, the respondents are justified in declining to pay interest for the deposited amount since the same was not permissible. In the light of Rule 17 of the Rules, as rightly concluded by the State and the National Commission, it cannot be held that there was deficiency in service on the part of the respondents, 3rd respondent in particular.

It is true that when the appellant deposited a huge amount with the 3rd Respondent from 05.05.1995 to 16.08.1995 under the Scheme for a period of five years, it was but proper on the part of the Post Master to have taken a note of the correct Scheme applicable to the deposit. It was also possible for the Post Master to have ascertained from the records, could have applied the correct Scheme and if the appellant, being an institution, was not eligible to avail the Scheme and advised them properly. Though Mr. S. Aravindh, learned counsel for the appellant requested this Court to direct the 3rd Respondent to pay some reasonable amount for his lapse, inasmuch as such direction would go contrary to the Rules and payment of interest is prohibited for such Scheme in terms of Rule 17, we are not inclined to accept the same. We are conscious of the fact that a substantial amount had been kept with the 3rd Respondent till 03.01.1996 when the said amount was refunded without interest. In the light of the letter dated 01.12.1995 and in view of Rule 17 of the Rules, failure to pay interest cannot be construed as a case of deficiency in service in terms of Section 2(1)(g) of the Consumer Protection Act, 1986. Both the State and the National Commission have concluded that the 3rd Respondent was ignorant of any Notification and because of this ignorance the appellant did not get any interest for the substantial amount. We agree with the factual finding arrived at by the State and the National Commission and in view of the circumstances discussed above, the respondents cannot be fastened for deficiency in service in terms of law or contract and the present appeal is liable to be dismissed

Arulmighu Dhandayudhapaniswamy Thirukoi v. Director General of Post Offices, Department of Posts [Bench Strength 2], Civil Appeal No. 4995/2006 (13/07/2011), 2012(4) SCV(Civil) 10: 2011 AIR(SC) 2604: 2011(13) SCC 220: 2011(8) JT 657: 2011(7) SCALE 466: 2011(5) Supreme 214 [P. Sathasivam, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 23 — Appeal before Supreme Court — Question of fact raised for the first time — Permissibility of — Territorial jurisdiction of J&K State Commission to entertain the dispute raised before the court — Dispute regarding postal services — Plea that cause of action entirely arose in Delhi as parcel for onward transmission to Malaysia was booked at Delhi and no part of transaction took place within jurisdiction of Commission of Srinagar — Held, this is a question of fact and law requiring evidence and was never raised before High Court — Therefore the same is not permissible to be raised for the first time before this court — Appeal to be dismissed.

(Paras 1 to 3)

Superintendent, Foreign Post Office v. Indo Lhasa Curious [Bench Strength 2], Civil Appeal No. 6121/2001 (07/06/2011), 2011(5) SLT 2(1) [B.S. Chauhan, J.: Swatanter Kumar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2, 14 & 21 — Insurance claim — Issuance of policy contrary to proposal of insured? — Rectification of — Justification — Husband of appellant submitted proposal for issue of New Jeevan Akshay-I policy and deposited premium of Rs. 26 lakhs — However, respondent issued New Jeevan Dhara-I Plan — After death of husband, appellant claimed for refund of balance amount — Whether insurer was justified in rectifying the mistake by issuing fresh policy under New Jeevan Akshay-1 plan after death of insured — Held, yes — However, respondent-LIC should not be allowed to take advantage of its mistake and deprive the nominee of deceased of the balance of Rs. 26 lakhs which he had deposited — Directions issued accordingly.

HELD: We have given serious thought to the entire matter. In our view, both the insurer and the insured do not appear to have acted with the due diligence. It is difficult to accept the assertion made on behalf of the appellant that her husband had signed the form, which was filled by the agent of the respondent, without going through the contents thereof. Rather, it can reasonably be presumed that he had done so with full knowledge of the nature and terms of New Jeevan Akhsay-1 policy. We also agree with Shri Kailash Vasdev, learned senior counsel for the respondent that on discovery of the patent mistake committed at the time of issue of policy Annexure 2, which was contrary to the proposal submitted by the deceased, the competent authority was justified in issuing New Jeevan Akshay Plan-1. However, keeping in view the peculiar facts of the case, we are inclined to accept the prayer made by learned counsel for the appellant that the respondent should not be allowed to take advantage of its mistake and deprive the nominee of the deceased of the balance of Rs.26 lakhs which he had deposited on 9.5.2003. In the result, the appeals are disposed of in the following terms:

(i) The impugned order passed by the National Commission is set aside.

(ii) The action of the respondent to cancel New Jeevan Dhara policy and to issue New Jeevan Akshay-1 policy is held to be justified.

(iii) It is declared that the appellant is entitled to get Rs.26,50,000/- from the respondent. This amount represents balance of the premium deposited by the insured and lump sum compensation.

(iv) The appellant shall encash the fixed deposit and pay the balance amount to the Senior Divisional Manager of the Life Insurance Corporation, Jaipur within a period of two months.

Usha Kumari Ranawat v. Senior Divisional Manager, LIC of India [Bench Strength 2], C.A. No. 4832/2011 (Arising out of SLP (C) No. 9485/2009) (12/05/2011), 2012(3) SCV(Civil) 281: 2011(13) SCC 196: 2011(6) SCALE 493 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Non-issuance of M.Sc. certificate by University — Deficiency in service thereby — Complaint for — Non-appearance by university to contest complaint — Complaint allowed directing university to issue certificate and to pay compensation of Rs. 50,000/- — Upheld upto National Commission — Justification — Held, respondent appointed as a teacher which was not possible without producing evidence of his having post graduate degree — Therefore, the appellant’s plea that the respondent had demanded duplicate provisional certificate appears to be plausible and the consumer foras committed serious error by ordering payment of compensation to the respondent by assuming that the appellant had not issued the provisional certificate in the first instance — Impugned order unsustainable and to be set aside — Appeal allowed.

(Paras 5 & 6)

Ranchi University v. Sneh Kumar [Bench Strength 2], Civil Appeal No(S). 3163/2011 (Arising out of SLP (C) No. 3374/2008) (08/04/2011), 2011 AIR(SC) 1824: 2011(4) SCALE 795: 2012(1) SLT 189 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Award of damages — Grant of interest thereon — Scope — Held, though the Act does not contain any provision for grant of interest but interest can still be awarded taking recourse to section 34 of CDC to do complete justice between the parties — Civil Procedure Code, 1908 — Section 34.

(Para 26)

Rubi (Chandra) Dutta v. United India Insurance Co. Ltd. [Bench Strength 2], C.A. No. 2588/2011 (Arising out of SLP(C) No. 19246/2009 (18/03/2011), 2011(4) SCV(Civil) 57: 2011(11) SCC 269: 2011(3) JT 586: 2011(3) SCALE 654: 2011(4) SLT 303 [Dalveer Bhandari, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 21(b) — Insurance claim — Damage of bus in accident covered by insurance policy — Award of damage of Rs. 4 lacs by District Forum — Reduced to Rs. 2,72,517/- by State Commission in appeal — Quashing of order of both forums by National Commission — Justification — Held, no jurisdictional error warranting National Commission to take a different view than what was taken by two forums — Revisional power invoked by National Commission in wrong manner and thus jurisdiction conferred on it u/s 21(b) has been transgressed — No infirmity in appointing driver by owner of bus — Impugned order of National Commission unsustainable and to be set aside — Respondent liable to pay the amount of Rs. 2,72,517/- awarded by State Commission as no further revision there against was preferred by appellant alongwith interest 9% p.a. from date of filing till payment — Appeal allowed.

HELD: In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken, by setting aside the concurrent findings of two fora.

Obviously, it goes without saying that at the time of giving employment to Sirajul Haque, the owner of the bus must have examined the licence issued to him and after satisfaction thereof, he must have been given employment. Nothing more was required to have been done by the Appellant. After all, at the time of giving employment to a driver, owner is required to be satisfied with regard to correctness and genuineness of the licence he was holding. After taking the test, if the owner is satisfied with the driving skills of the driver then, obviously, he may be given an appointment.

In the light of the aforesaid discussion, we are of the considered opinion that the impugned order passed by National Commission cannot be sustained in law. It is necessary to point out that against the order of State Commission, whereby the amount of Rs. 2,72,517/-was awarded, no further Revision was preferred by the Appellant. Thus, in any case the compensation awarded to the Appellant cannot be enhanced beyond what has been pegged down by the State Commission.

The order of National Commission is set aside and quashed. We accordingly, hold that Respondent is liable to pay the aforesaid amount of Rs. 2,72,517/to the Appellant together with interest at the rate of 9% per annum, from the date of filing of the application till it is actually paid. Appeal thus, stands allowed to the aforesaid extent. Respondent to bear the cost of the litigation throughout — Counsels’ fee Rs. 10,000/-.

(Para 23)

Rubi (Chandra) Dutta v. United India Insurance Co. Ltd. [Bench Strength 2], C.A. No. 2588/2011 (Arising out of SLP(C) No. 19246/2009 (18/03/2011), 2011(4) SCV(Civil) 57: 2011(11) SCC 269: 2011(3) JT 586: 2011(3) SCALE 654: 2011(4) SLT 303 [Dalveer Bhandari, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 21(b) — Insurance claim — Repudiation of — Plea of no valid driving licence held by person driving the vehicle damaged in accident — Justification — Issuance of duplicate licence by some RTO admitted by court witness who appeared with relevant record from RTO Office — Duplicate licence duly issued following normal procedure by licensing authority — In view of said admission it cannot be challenged that original licence was fake, forged document — Thus it is established that at relevant time, the driver was holding a valid driving licence to drive the bus — Plea unsustainable and to be rejected.

HELD: We have once again critically gone through the evidence produced by the parties, and the statements made by the authorized officer of the RTO and other material documents filed by the parties. In the light of the admission of the witness, who had appeared with the relevant records from the office of RTO, we have absolutely no doubt in our mind that at the relevant point of time Sirajul Haque was having a valid driving licence. The reasoning behind our opinion is explained hereunder.

No doubt, it is true that the original application of Sirajul Haque bearing No. 676/96 was missing in the Register of Driving Licences but on the strength of other available documents, he was issued a duplicate licence by the same RTO, a fact admitted by the Court witness. After having gone through the copy of the duplicate licence we are further reassured that the same was duly issued following normal procedure by the Licensing Authority.

In view of the aforesaid admission made by him, there remains no doubt that the said duplicate licence was issued by the said office in his favour after checking the previous credentials of the driver. Even if the original application was not available but since the duplicate licence was issued by the same licensing Authority, Murshidabad, it cannot be challenged that the original licence was fake, forged, manufactured or engineered document. This unequivocal admission made by the said witness of RTO fully establishes this fact.

The cumulative effect of the aforesaid facts would clearly establish that at the relevant point of time driver Sirajul Haque was holding a valid driving licence to drive the bus.

Rubi (Chandra) Dutta v. United India Insurance Co. Ltd. [Bench Strength 2], C.A. No. 2588/2011 (Arising out of SLP(C) No. 19246/2009 (18/03/2011), 2011(4) SCV(Civil) 57: 2011(11) SCC 269: 2011(3) JT 586: 2011(3) SCALE 654: 2011(4) SLT 303 [Dalveer Bhandari, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2 & 14 — Marine insurance claim — Repudiation of — Complaint claiming a particular amount — Allowed by National Commission directing appellant to pay a particular amount — Justification — Marine insurance policy in respect of a large bulk ore and oil carrier for purpose of scrapping got damaged — Plea of suppression of material fact taken for the first time in proceeding before national commission is an afterthought — Appellant unable to show any material in support of his submission — The finding and conclusion drawn by National Commission are based on proper appreciation and elaborate consideration of entire material available on record — No merit in appeal and same to be dismissed.

HELD: At all points of time, the contract was sought to be repudiated on the one and only ground that there was no total loss. In this connection, the National Commission examined the complete correspondence that has taken place between the parties prior to filing of the complaint and written statement before the National Commission and found that at no point of time the insurance company took any plea or stand that there was any suppression on the part of the complainant in not disclosing that one engine of the vessel was not functioning. The Commission referred to the evidence led by the appellant insurance Company in which it was specifically admitted that repudiation was only on the ground that the vessel had encountered neither total loss nor a constructive total loss. It is under those circumstances the Commission found that the issue has been raised by the insurance Company for the first time in the proceedings before it only as an afterthought.

We do not wish to refer to other issues raised by the insurance Company before the Commission which were dealt with since the only question that was argued before us in this appeal relates to nondisclosure of the material facts. The learned counsel for the appellant submitted that the respondent complainant suppressed the material fact that one engine of the vessel was not working and therefore, not entitled to any relief. We do not find any merit whatsoever in the submission made by the learned counsel for the appellant. The material available on record which has been taken into consideration by the National Commission clearly demonstrates that the respondent complainant never made any representation that the vessel had two functional engines. On the other hand, addendum No. 2 to MOA expressly speaks about the fact that starboard engine was not working. The MOA that was forwarded included both the addendums and in fact it was one of the reasons for demolishing the vessel. At any rate, as observed by the National Commission, at no point of time the insurance Company took this plea to repudiate the contract. This plea was raised for the first time in the written statement filed in the National Commission as an afterthought.

The learned counsel for the appellant did not show any material available on record in support of her submission. Nor the counsel could point out any material or evidence which has a bearing on the issue that had escaped the attention of the Commission. Thus it is not a case of non-consideration of any evidence available on record by the Commission. The findings and conclusions drawn by the National Commission are based on proper appreciation and elaborate consideration of the entire material available on record. The Commission did not commit any error in appreciating the evidence available on record. The contention urged before us in this appeal is accordingly rejected. No other contention was raised.

For the same reasons, we find no merit in the cross appeal preferred by the respondent complainant.

The appeals are accordingly dismissed.

New India Assurance Co. Ltd. v. Priya Blue Industries Pvt. Ltd. [Bench Strength 2], C.A. No. 3714/2005 with C.A. No. 2116/2006 (09/03/2011), 2011(2) SCV(Civil) 328: 2011(4) SCC 231: 2011(3) JT 452: 2011(3) SCALE 502: 2011(4) SLT 1: 2011(163) CompCas 42 [B. Sudershan Reddy, J.: Surinder Singh Nijjar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2 & 14 — Delay in delivery of vehicle — Increase in excise duty prior to delivery — Liability to pay of — No evidence to show any deliberate intention on part of respondent-dealer to delay delivery of vehicle — In the proforma invoice also it has been indicated that price prevailing on date of billing would apply — Furthermore, in view of section 64-A(1)(a) of Sales of Good Act, it is the liability of petitioner-buyer to pay the extra price and not of liability of respondent-dealer — Petition unsustainable and to be dismissed — Sale of Goods Act, 1930 — Section 64-A(1)(a).

(Paras 10 to 13)

Ravinder Raj v. Competent Motors Co. Pvt. Ltd. [Bench Strength 2], Special Leave Petition (Civil) No(S). 10364/2006 (10/02/2011), 2011(2) SCV(Civil) 707: 2011 AIR(SC) 1061: 2011(11) SCC 547: 2011(2) JT 149: 2011(2) SCALE 446: 2011(2) Supreme 63: 2011(3) SLT 769: 2011(266) ELT 157 [Altamas Kabir, J.: Cyriac Joseph, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 15 — Impleadment of third party in appeal — Right of third party for challenging to — Scope — Held, when a non-party is impleaded as a respondent in an appeal, he can either challenge the impleadment itself or challenge his impleadment, while challenging the final decision in the appeal — The fact that the impleaded non-party filed objections to the complaint during the pendency of the appeal, on the specific direction of the State Commission, will not deny his right to challenge the impleadment.

(Para 14)

Vinod Kumar Thareja v. Alpha Construction [Bench Strength 2], Civil Appeal No. 1493/2011 (Arising out of SLP (C) No. 7283/2010) (08/02/2011), 2012(5) SCV(Civil) 90: 2011 AIR(SC) 996: 2011(11) SCC 453: 2011(2) SCALE 630: 2011(4) SLT 7 [R.V. Raveendran, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 15 — Appeal — Impleadment of appellant, a third party — Order in appeal making him liable — Justification — Held, as the complainant neither impleaded nor sought any relief against appellant, neither State Commission nor National Commission, could make him liable alongwith first respondent — Impugned order unsustainable and to be se aside — Appeal allowed.

(Paras 13 & 15)

Vinod Kumar Thareja v. Alpha Construction [Bench Strength 2], Civil Appeal No. 1493/2011 (Arising out of SLP (C) No. 7283/2010) (08/02/2011), 2012(5) SCV(Civil) 90: 2011 AIR(SC) 996: 2011(11) SCC 453: 2011(2) SCALE 630: 2011(4) SLT 7 [R.V. Raveendran, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 15 — Service provider held liable to a complainant — Appeal against — Remedy if such service provider wants contribution from anyone else — Held, the issue in the appeal and the relief that can be granted in the appeal can be only qua the complainant and not qua some third party — If a service provider who has been made liable to a complainant wants contribution from anyone else, on the ground that such third party had also contributed to the deficiency in service, it is for the service provider to take independent action against such third party, in respect of the liability.

(Para 13)

Vinod Kumar Thareja v. Alpha Construction [Bench Strength 2], Civil Appeal No. 1493/2011 (Arising out of SLP (C) No. 7283/2010) (08/02/2011), 2012(5) SCV(Civil) 90: 2011 AIR(SC) 996: 2011(11) SCC 453: 2011(2) SCALE 630: 2011(4) SLT 7 [R.V. Raveendran, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 15 — Appeal to pass on a part of liability to some third party — Permissibility of — Held, the scheme of the Act does not permit a service provider, who has been made liable to refund the amount paid towards price under the order of the District Forum, to file an appeal and pass on a part of the liability to some third party, on the ground that the contract between them enabled him to do so.

(Para 13)

Vinod Kumar Thareja v. Alpha Construction [Bench Strength 2], Civil Appeal No. 1493/2011 (Arising out of SLP (C) No. 7283/2010) (08/02/2011), 2012(5) SCV(Civil) 90: 2011 AIR(SC) 996: 2011(11) SCC 453: 2011(2) SCALE 630: 2011(4) SLT 7 [R.V. Raveendran, J.: A.K. Patnaik, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Deficiency in service of Bank — Complaint for — Allegation that bank official had withdrawn the amount from account of respondent fabricating the records — Allowed holding the bank liable to reimburse the amount withdrawn — Concurrent finding of three consumer fora in said respect — Admittedly bank has lodged FIR against its Branch Manager and some other officials and same is pending — No evidence to prove the withdrawal of amount without entries in pass books showing withdrawal — Impugned order justified and bank is vicariously liable for wrong doing of its officials — Petition to be dismissed.

HELD: In our opinion, the concurrent finding recorded by the three consumer foras on the issue of the petitioners’ liability to reimburse the respondent do not suffer from any legal infirmity. Admittedly, the bank has lodged first information report against its Branch Manager, Mr. Pawan Kumar and some other officials and the same is pending. It is also not in dispute that the petitioners did not produce any evidence to prove that even though there were no entries in the passbooks showing withdrawal of the amount deposited by the complainant in the savings bank accounts or by way of FDRs, he had, in fact, withdrawn the amount, as reflected in the ledgers maintained by the bank. Therefore, we do not find any valid ground much less justification to interfere with the impugned order. The petitioner is vicariously liable for the wrong doings of its officials/employees which resulted in monetary loss to the respondent and the consumer foras did not commit any error by entertaining and allowing the complaint filed by him and dismissing the appeals and revisions filed by the petitioners. The argument of the learned counsel that the complainants had made manipulations in the passbooks cannot be entertained because no evidence was produced by the bank to prove the factum of manipulations.

In the result the special leave petition is dismissed.

Haryana Gramin Bank v. Madan Lal [Bench Strength 2], SLP (C) No. 304/2011 (31/01/2011), 2011(2) SCALE 417 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 25(a) — Order of State Commission — Execution — Jurisdiction of civil court — Filing of execution petition in civil court for execution of State Commissions order for payment of interest to complainant — Dismissal of petition by civil court for want of jurisdiction — Order of Civil Court is under challenge — Once order of State Commission has attained finality, same has to be executed — Hyper-technicalities should not come in the way of executing the orders — Appeal allowed — Constitution of India — Article 142.

HELD: It is because of these hypertechnicalities that the judiciary in India is getting a bad name. All sorts of objections are raised to linger on the matter as much as possible. There is a first inning in which the dispute often comes up to this Court to secure a final order. Then, the second inning starts to execute the said order in which again all kinds of objections are raised to linger on the matter as much as possible and to avoid execution of the decree. Now the time has come when people of India are fed up and are not going to tolerate such delaying tactics to subvert the operation of the judicial orders.

In the circumstances and exercising our powers under Article 142 of the Constitution of India to do substantial justice between the parties, we allow this appeal, set aside the impugned judgment of the High Court dated 07th April, 2005 and the order of the Additional City Civil Judge, Bangalore dated 20th February, 2002.

H.K.K. Bail v. Cyma Exports Pvt. Ltd. [Bench Strength 2], C.A. No. 4319/2006 (19/01/2011), 2011(1) SCALE 597 [Markandey Katju, J.: Gyan Sudha Misra, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d)(ii) — Consumer — Definition — Purchase of goods for commercial purposes — Agreement between parties for developing certain computer software — That software was to take care of (1) financial accounting, (2) production, (3) marketing, (4) purchase, (5) stores/inventory, (6) fixed assets etc. etc. — Disputes started when payment of appellant not released and respondent started complaining about the working of various modules — Respondent filed consumer complaint against appellant on 26.6.2003 — State Commission dismissed the complaint accepting appellant’s preliminary objection that the respondent was not a consumer — Software in question amounted to sale of goods by the appellant to respondent for commercial purpose — It was nobody’s case that the goods bought and used by respondent and services availed by respondent were exclusively for the purpose of earning respondent’s livelihood by means of self-employment — Whether complaint filed by respondent was maintainable? — Held, no.

HELD: We have gone through the impugned judgment, wherein there is a clear cut finding that the software in question amounted to sale of goods by the appellant to the respondent for commercial purpose and as such the respondent would be excluded for being considered as a ‘consumer’ under Section 2(1)(d)(i) of the Act. However, the National Commission then proceeded to hold that there was a warranty period of one year in the year 2000 and as such since the complaint was filed on 1.8.2000, i.e. prior to the amendment of Section 2(1)(d)(ii) by the Amendment Act, 2002, a person hiring or availing of any services for a consideration was not excluded even though the services were availed for any commercial purpose. In that view, it proceeded to hold that if there was any deficiency in service during the warranty period, the complaint could be maintained before the consumer forum for the said purpose.

In view of the findings of the National Commission that the goods sold by the appellant to the respondent/complainant amounted to ‘goods’ and that such goods were purchased for commercial purpose of earning more profits, there could be no dispute that even the services which were offered had to be for the commercial purpose. Nothing was argued to the contrary. It seems that the whole error has crept in because of the wrong factual observation that the complaint was filed on 1.8.2000. In that view, it has to be held that the complaint itself was not maintainable, firstly, on the count that under Section 2(1)(d)(i), the goods have been purchased for commercial purposes and on the second count that the services were hired or availed of for commercial purposes. The matter does not come even under the Explanation which was introduced on the same day i.e. on 15.3.2003 by way of the amendment by the same Amendment Act, as it is nobody’s case that the goods bought and used by the respondent herein and the services availed by the respondent were exclusively for the purpose of earning the respondent’s livelihood by means of self-employment. In that view, it will have to be held that the complaint itself was not maintainable in toto.

Birla Technologies Ltd. v. Neutral Glass and Allied Industries Ltd. [Bench Strength 2], Civil Appeal No. 10650/2010 (15/12/2010), 2011(1) SCV(Civil) 736: 2011(1) SCC 525: 2010(13) JT 524: 2010(13) SCALE 360: 2010(8) Supreme 613: 2010(9) SLT 396 [V.S. Sirpurkar, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 3 & 14 — Manufacturing defect in purchased diesel vehicle — Complaint before district forum claiming replacement or refund of money paid — Allowed directing respondent to make refund as claimed — State Commission on appeal directed to replace the vehicle with a new vehicle or to refund a sum of Rs. 7,69,187/- — National Commission holding that complainant not able to prove any manufacturing defect, directed respondent to remove the defect, if any in presence of independent technical expert — Justification — Held, order passed by National Commission does not appear to be unreasonable — However, in addition to direction of National commission, it is directed that if the independent technical expert is of opinion that there are inherent manufacturing defects in vehicle, the petitioner will be entitled to refund of price of vehicle and relevant tax with interest and cost as directed by State Commission — SLP disposed of accordingly — Constitution of India — Article 136.

HELD: Having considered the various submissions made on behalf of respective parties, what emerges is the question as to whether the manufacturing company and by extension the dealer/agent was under any compulsion to replace the vehicle itself when the engine of the vehicle from which certain noises were allegedly emanating had been replaced. It has been explained that an engine operating on diesel makes a rattling noise which does not occur in petrol driven engines and that there was really no manufacturing defect in the vehicle as complained of by the purchaser.

In such circumstances, the order passed by the National Commission, impugned in these Special Leave Petitions, does not appear to be unreasonable. For whatever reason, except for a mere 800 kilometers the Petitioner has not used the vehicle after it was delivered and has, on the other hand, made several complaints in an attempt to prove that there were manufacturing defects in the vehicle. The National Commission has taken all these matters into consideration in giving the impugned directions regarding delivery of the vehicle to the Petitioner after having the same properly checked by an independent technical expert who would have to certify that the vehicle was free from any defect when it is delivered.

From the facts as disclosed, it appears that apart from the complaint relating to noise from the engine and the gear box, there was no other major defect which made the vehicle incapable of operation, particularly when the engine was replaced with a new one. However, in addition to the directions given by the National Commission, we direct that if the independent technical expert is of the opinion that there are inherent manufacturing defects in the vehicle, the petitioner will be entitled to refund of the price of the vehicle and the lifetime tax and EMI along with interest @ 12% per annum and costs, as directed by the State Commission.

In such circumstances, the Special Leave Petitions are disposed of with the above directions.

C.N. Anantharam v. Fiat India Ltd. [Bench Strength 2], Special Leave Petition (C) Nos. 21178-21180/2009 (24/11/2010), 2011(1) SCV(Civil) 493: 2011 AIR(SC) 523: 2011(1) SCC 460: 2011(1) JT 202: 2010(12) SCALE 359: 2010(8) Supreme 122: 2010(8) SLT 497 [Altamas Kabir, J.: Cyriac Joseph, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 14(1)(d) & 19 — Deficiency in service — Medical negligence — Remission of matter — Patient admitted in hospital of respondent with complaint of loose motions on 31.10.1994 — Glucose saline administered through the left foot of patient — Same resulted in swelling in toe of left foot and it turned black — Resultantly, patient referred to another doctor, namely “C”, who removed black coloured fluid and discharged the patient after giving him some medicines — However, the patient did not recover and in the morning of 5.11.1994, it was noticed that the left leg of the appellant had become totally black up to the knee — Thereupon, doctor “AB” examined the patient and suspected that he had developed gangrene in his left leg and he advised his admission in BM Hospital — Patient got operated in that hospital and his left leg amputated below the knee — In facts of the case, the State Commission allowed the complaint by holding that the respondent doctor was liable for deficiency in service and to pay compensation to the patient — National Commission did not advert to important aspects taken into consideration by the State Commission and allowed the appeal on the solitary ground that on his cross-examination, doctor “AB” had admitted that there could be ten to twelve other reasons for development of gangrene — Resultantly, impugned order passed by the National Commission set aside and matter remitted for fresh consideration.

HELD: A critical analysis of the order of the State Commission shows that it did not accept the respondent’s version that the appellant had been brought to his hospital in a serious condition and he was suffering from gastro-enteritis, dehydration acidosis and septicemia shock and mal-nutrition and anemia by observing that if that was so, there was no valid reason for the respondent to stop medication and withdraw glucose on 2.11.1994. The State Commission also took serious view of the respondent’s conduct in producing the case papers after a gap of 6 years from the date of filing the complaint and that too, after the appellant’s father and Dr. Ashwin Bhammar had been cross-examined. The State Commission then referred to the statement of Dr. Ashwin Bhamar and opined that in view of his statement, the printed material produced by the respondent cannot be relied for denying relief to the appellant. The State Commission concluded that there was deficiency in service on the part of the respondent and directed him to pay compensation to the appellant. The National Commission did not advert to these important aspects and allowed the appeal on the solitary ground that on his cross-examination, Dr. Ashwin Bhamar had admitted that there could be ten to twelve other reasons for development of gangrene.

The National Commission was duty bound to pay serious attention on the respondent’s failure to produce the case papers for 6 long years and called upon him to explain why the record pertaining to the treatment given to the appellant was held back from the State Commission till the complainant’s evidence was virtually over. The case papers/bed ticket maintained by the hospital of the respondent would have disclosed the line of treatment adopted by him. Why he did not produce those papers along with reply to the complaint or at least before commencement of the evidence of the appellant is inexplicable. By withholding those papers till the completion of the evidence of Dr. Bhamar, the respondent appears to have made an attempt to mislead the State Commission about the steps taken by him for treating the appellant. Equally intriguing was respondent’s failure to file affidavit of Dr. Chudasama to whom he claims to have taken the appellant for treatment. The respondent did try to fill in this lacuna by filing affidavit of Dr. Chudasama before the National Commission. The latter should have enquired as to why he had not filed such affidavit before the State Commission or examined him as a witness before the State Commission. These omissions on the part of the National Commission are extremely serious and have resulted in failure of justice.

For the reasons stated above, the appeal is allowed. The impugned order is set aside and the matter is remanded to the National Commission for fresh disposal of the appeal filed by the respondent.

Marghesh K. Parikh v. Mayur H. Mehta [Bench Strength 2], Civil Appeal No. 9352/2010 (Arising out of SLP (C) No. 19165/2009) (26/10/2010), 2011(1) SCV(Civil) 330: 2011 AIR(SC) 249: 2011(1) SCC 31: 2010(11) JT 453: 2010(11) SCALE 313: 2010(7) SLT 659 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(g) & 24-A(1) — Medical negligence — Cause of action — Relevant date in respect of — Each case needs to be decided on its own facts.

HELD: In cases of medical negligence, no straitjacket formula can be applied for determining as to when the cause of action has accrued to the consumer. Each case is to be decided on its own facts. If the effect of negligence on the doctor’s part or any person associated with him is patent, the cause of action will be deemed to have arisen on the date when the act of negligence was done. If, on the other hand, the effect of negligence is latent, then the cause of action will arise on the date when the patient or his representative-complainant discovers the harm/injury caused due to such act or the date when the patient or his representative-complainant could have, by exercise of reasonable diligence discovered the act constituting negligence.

(Para 17)

HELD: The power conferred upon the consumer forums under Sections 12(3), 18 or 22 to reject the complaint at the stage of admission should not be exercised lightly because the Act has been enacted to provide for better protection of the interest of consumers and the speedy and inexpensive redressal mechanism enshrined therein is in addition to other remedies which may be available to the consumer under the ordinary law of land. Therefore, admission of the complaint filed under the Act should be the rule and dismissal thereof should be an exception.

(Para 14)

HELD: The consumer forums do not have the jurisdiction to entertain a complaint if the same is not filed within 2 years from the date on which the cause of action has arisen. This power is required to be exercised after giving opportunity of hearing to the complainant, who can seek condonation of delay under Section 24A(2) by showing that there was sufficient cause for not filing the complaint within the period prescribed under Section 24A(1).

(Para 14)

HELD: Under Section 12(3), the District Forum is empowered to decide the issue of admissibility of the complaint. The District Forum can either allow the complaint to be proceeded with, which implies that the complaint is admitted or reject the same. Similar power is vested with the State Commission under Section 18 and the National Commission under Section 22.

(Para 19)

V.N. Shrikhande v. Anita Sena Fernandes [Bench Strength 2], Civil Appeal No. 8983/2010 (Arising out of SLP(C) No. 5479/2009) (20/10/2010), 2011(1) SCV(Civil) 166: 2011 AIR(SC) 212: 2011(1) SCC 53: 2010(11) JT 524: 2010(11) SCALE 138: 2010(7) SLT 648 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(g), 12(3), 17, 18, 22 & 24-A(1) — Medical negligence — Cause of action — Date of accrual and applicability of Discovery Rule — Appellant-doctor performed `Open Cholecystectomy’ on 26.11.1993 and discharged the respondent-patient on 30.11.1993 After the surgery, she was having pain in the abdomen off and on for which she took pain killers — But she neither contracted the appellant nor consulted any other doctor for 9 years despite being a nurse — In November 2002, she was operated upon in another hospital — Respondent-patient received Histopathology report from that hospital in November 2002 — Said report revealed that a piece of gauze was left by the appellant in her abdomen during her surgery in 1993 — Material revealed that the respondent, who was a government nurse not explained as to why she kept quite for about 9 years despite pain and agony — Long silence on her part would militate against the bona fides of the respondent’s claim for compensation — Discovery Rule cannot be invoked for recording a finding that the cause of action accrued to her in November, 2002 — Thus, the National Commission held to have wrongly held that cause of action lastly arose to the respondent on 25.10.2002 when the second surgery was performed at some other hospital and the complaint filed by her on 19.10.2004 was within limitation.

Morgan vs. Grace Hospital Inc., 149 W.Va. 783 144 S.E. 2d 156, Referred.

HELD: In the light of the above, it is to be seen whether the cause of action accrued to the respondent on 26.11.1993 i.e. the date on which the appellant performed `Open Cholecystectomy’ and the piece of gauze is said to have been left in her abdomen or in November, 2002 when she received Histopathology report from Lilavati Hospital. If the respondent had not suffered pain, restlessness or any other discomfort till September, 2002, it could reasonably be said that the cause of action accrued to her only on discovery of the pieces of gauze which were found embedded in the mass taken out of her abdomen as a result of surgery performed by Dr. P. Jagannath on 25.10.2002. In that case, the complaint filed by her on 19.10.2004 would have been within limitation. However, the factual matrix of the case tells a different story. In the complaint filed by her, the respondent categorically averred that after discharge from the appellant’s hospital, she suffered pain off and on and it was giving unrest to her at home and at work place; that her sufferings were endless and she had spent sleepless nights and mental strain for almost 9 years.

The respondent was not an ordinary lay person. She was an experienced Nurse and was employed in the Government Hospital. It was the respondent’s case before the State Commission and the National Commission that after the surgery in November, 1993, she was having pain in the abdomen off and on and, on that account, she was restless at home and also at work place and had to take leave including sick leave on various occasions. Therefore, it was reasonably expected of her to have contacted the appellant and apprised him about her pain and agony and sought his advice. That would have been the natural conduct of any other patient. If the respondent had got in touch with the appellant, he would have definitely suggested measures for relieving her from pain and restlessness. If the respondent was not to get relief by medication, the appellant may have suggested her to go for an X-ray or C.T. scan. In the event of discovery of gauze in the respondent’s abdomen, the appellant would have taken appropriate action for extracting the same without requiring the respondent to pay for it. If the measures suggested by the appellant were not to the satisfaction of the respondent and the pain in her abdomen persisted then she could have consulted any other doctor for relief. However, the fact of the matter is that after the surgery, the respondent never informed the appellant that she was having pain in the abdomen, was restless and having sleepless nights. At no point of time she contacted the appellant and sought his advice in the matter. Not only this, she did not consult any other doctor including those who were working in the Government Hospital where she was employed. Any person of ordinary prudence, who may have suffered pain and discomfort after surgery would have consulted the concerned surgeon or any other competent doctor and sought his advice but the respondent did nothing except taking some pain killers. If the respondent had been little diligent, she would have contacted the appellant and informed him about her sufferings. In that event, the appellant may have suggested appropriate medicines or advised her to go for X-ray or C.T. scan. If piece of gauze was found in the abdomen of the respondent, the appellant would have certainly taken remedial measures. The respondent has not explained as to why she kept quite for about 9 years despite pain and agony. The long silence on her part militates against the bona fides of the respondent’s claim for compensation and the Discovery Rule cannot be invoked for recording a finding that the cause of action accrued to her in November, 2002. The National Commission, in our considered view, was clearly wrong when it held that cause of action lastly arose to the respondent on 25.10.2002 when the second surgery was performed at Lilavati Hospital and the complaint filed by her on 19.10.2004 was within limitation.

HELD: Claim of the appellant must fail on the short ground that there was a breach of the afore-extracted special condition incorporated in the cover note. The special condition viz. each and every consignment must be declared before dispatch of goods is clear and admits of no ambiguity. The appellant was obliged to declare each and every consignment before it left the appellant’s factory premises and there is nothing in the policy to suggest that the insured had the liberty to pick and choose the dispatches which they wanted to declare to the insurer, not even at the instance of the consignee, who otherwise is a stranger to the contract between the insurer and the insured. We have no hesitation in rejecting the plea of the appellant that they were required to declare only those dispatches in which they had an insurable interest. It bears repetition that notwithstanding any request by the consignee, the policy of insurance postulated declaration in respect of each and every dispatch by the appellant. Therefore, the fact that purchasers did not want an insurance cover on certain dispatches had no bearing on the obligation of the appellant to declare each and every dispatch under the policy.

Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd. [Bench Strength 2], Civil Appeal No. 1375/2003 (08/10/2010), 2011(1) SCV(Civil) 397: 2010(10) SCC 567: 2010(11) JT 404: 2010(10) SCALE 640: 2010(7) Supreme 83: 2010(8) SLT 375 [D.K. Jain, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 226 — Writ of quo warranto — Appointment of members of State Consumer Disputes Redressal Commission — Quashing of — Respondent no. 1, the General Secretary of a Vayapara Samiti which has nothing to do with the appointment, sought for quashing of appointment of appellant as a member of State Commission — Whether appellant’s appointment is liable to be quashed? No — Name of appellant was recommended by entire body of selection committee consisting of chairman and two members — Respondent no. 1 has nothing to do with appointments — No material on record to show how the appointment of appellant adversely affects members of Samiti — High Court erred in entertaining and allowing the writ — Appeal allowed — Consumer Protection Act, 1986 — Section 16(1A).

HELD: Record of this case shows that just before start of the interview, a cover containing the names of candidates, which was sent from the office of the minister was handed over to the Chairman by Shri K.V. Thomas, who himself was a candidate. The Law Secretary and the Secretary, Food, Civil Supplies and Consumer Affairs Department, who were members of the Selection Committee appear to have been overawed by this development and this must have been the operative reason for their recommending the names of Smt. Valsala Sarangadharan and Shri K.V. Thomas. The Chairman did not toe their line and recommended inclusion of the name of the appellant and exclusion of that of Shri K.V. Thomas. Finally, the names of the appellant and Smt. Valsala Sarangadharan were recommended to the State Government. The minutes containing the recommendation were signed not only by the Chairman of the Selection Committee but also by the other two members.

While deciding Writ Appeal No. 968 of 2007, the Division Bench of the High Court was unduly influenced by the fact that the Chairman of the Selection Committee had initially recorded dissent and at the end of the minutes he separately appended a note suggesting that there was no difference of opinion between him and two members and concluded that name of the appellant was recommended only by the Chairman and not by the members. It appears that attention of the Division Bench was not drawn to the affidavit filed by Smt. Sheela Thomas in Writ Petition No.13058 of 2006 wherein she had categorically averred that a panel of three names including that of the appellant was recommended to the State Government and the difference of opinion was only on the candidature of Shri K.V. Thomas. We have no doubt that if the learned counsel appearing for the parties had properly assisted the Division Bench of the High Court, it may not have recorded the observation that the name of the appellant was recommended only by the Chairman and not by the members. That apart, be that as it may, we are convinced that the name of the appellant had been recommended by entire body of the Selection Committee i.e., the Chairman and the Members. If this was not so, either of the two Members would have, after coming to know of the minutes recorded by the Chairman, lodged a protest or sent communication to the State Government that they had not recommended the name of the appellant and that the minutes recorded by the Chairman did not reflect the actual recommendations. However, the fact of the matter is that neither of them lodged any objection nor sent any communication to the State Government. Therefore, the contrary observations made by the Division Bench in Writ Appeal No.968 of 2007 cannot but be termed as erroneous and the same could not have been relied upon for quashing the appointment of the appellant.

As mentioned above, respondent No.1 had nothing to do with the appointment of the members of the State Commission and who did not place any material on record to show as to how the appointment of the appellant would adversely affect the members of the Samiti. His position was nothing more than that of a meddlesome interloper/busy body and the Division Bench of the High Court gravely erred in entertaining the writ petition filed by him and converting the same into a writ of quo warranto.

(Para 16)

S. Chandramohan Nair v. George Joseph [Bench Strength 2], Civil Appeal No. 8587/2010 (Arising out of S.L.P. (C) No. 33694/2009) (05/10/2010), 2010(12) SCC 687: 2010(11) JT 38: 2010(10) SCALE 507: 2010(7) SLT 227 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(d), (g), (o) & 12 — Consumer — Service — Housing — Complaint in the matter of allotment of plot/flat by statutory authority — Maintainability — Chandigarh Allotment of Land to Cooperative House Building Societies Scheme, 1991 — Scheme provides for allotment of land to cooperative societies for construction of multi-storeyed buildings — Despite payment of earnest money along with interest @ 18% by members, no allotment of land was made — Members sought for refund of earnest money in full along with interest @ 18% — On refusal by appellant board to pay the full earnest money, members filed a complaint before consumer forum — Maintainability of complaint — If land had been allotted to the societies their members would have been actual and real beneficiaries — Hence members of society were certainly covered by the definition `consumer’ — Complaint maintainable.

Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243, Ghaziabad Development Authority v. Balbir Singh, (2004) 5 SCC 65, Relied on.

HELD: Even though no formal contract had been entered into between the Chandigarh Administration and the Board on the one hand and the members of the Societies on the other hand, the former exercised sufficient degree of control over the latter. By making applications for allotment of land, the Societies will be deemed to have hired or availed the services of the Chandigarh Administration and the Board in relation to housing construction as elucidated and explained in M.K. Gupta’s case and Balbir Singh’s case. If the scheme had been faithfully implemented and land had been allotted to the Societies, their members would have been the actual and real beneficiaries. Therefore, they were certainly covered by the definition of `consumer’ under Section 2(d)(ii), the second part of which includes any beneficiary of the services hired or availed for consideration which has been paid or promised or partly paid and partly promised. As a sequel to this, it must be held that the members of the Societies had every right to complain against illegal, arbitrary and unjustified forfeiture of 10% earnest money and non-refund of 18% interest and the District Consumer Forum did not commit any jurisdictional error by entertaining the complaints.

Chandigarh Housing Board v. Avtar Singh [Bench Strength 2], Civil Appeal No. 8203/2010 (Arising out of SLP (C) No. 21740/2007) (22/09/2010), 2011(1) SCV(Civil) 183: 2011 AIR(SC) 130: 2010(12) SCR 96: 2010(10) SCC 194: 2010(10) JT 360: 2010(10) SCALE 106: 2010(7) SLT 60 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(k), 12, 13, 14, 20, 21, 22 & 23 — Revision — Dismissal of — Non-speaking order — Appeal against the dismissal of revision petition by National Commission by way of cryptic order — No reasons were given for the dismissal — National Commission which has the trappings of civil court cannot dismiss the revision by refusing to give any reasons and by just affirming the order of State Commission — Impugned order set aside — Matter remanded.

(Para 15)

Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan [Bench Strength 2], Civil Appeal No. 7472/2010 (Arising out of SLP (Civil) No. 20428/2007) (08/09/2010), 2010(10) SCR 1070: 2010(9) SCC 496: 2010(9) JT 362: 2010(9) JT 590: 2010(9) SCALE 199: 2011(273) ELT 345 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), 2(1)(o) & 14 — General Rules of Examination — Clause 17 r/w Notification dated 16.3.1998 — B.Ed. degree — Entitlement — As per General Rules, candidate pursuing a regular course for an examination in full subjects of University — Could not be simultaneously permitted to appear in another regular course of same University or of another University or Board — This prohibition, therefore, did not allow respondent-student to even apply for admission in B.Ed. correspondence course — Appellant-University was, therefore, absolutely right in withholding this privilege from respondent — Material further revealed that respondent while filling up of her form for B.Ed. course at first instance had not made any disclosure about her pursuit of post-graduate student in Political Science — Under garb of Notification, respondent managed to get her form registered with appellant — On discovery of discrepancy, appellant rightly chose to set it right — Further, respondent as a student was neither a consumer nor was appellant rendering any service — Claim of respondent to award B.Ed. degree could be said to be in nature of a relief praying for a direction to appellant to act contrary to its own rules — Resultantly, orders passed by District Forum and National Commission, directing appellant to issue B.Ed. degree to respondent held to be not sustainable.

HELD: Respondent cannot plead any estoppel either by conduct or against a Statute so as to gain any advantage of the fact that she was allowed to appear in the examination.

On the other hand, the conduct of the respondent was such that even though she had no statutory right or any vested right to pursue her B.Ed. course, the mistake on the part of the appellant to allow her to appear in the examination cannot be by any logic treated to be a conduct of the appellant to confer any such right on the respondent. The rules and regulations cannot be allowed to be defeated merely because the appellant erroneously allowed the respondent to appear in the B.Ed. examination. The records reveal that the respondent did not challenge the cancellation of her results in respect of 1995 examination. The said order attained finality. Respondent straightaway approached the District Forum in the year 2000 for the conferment of B.Ed. degree in pursuance of the examinations conducted under the Notification dated 16.3.1998. This, in the opinion of the court, was a totally misdirected approach and the District Forum fell into error by granting the relief.

The respondent abused the privilege of appearing in the B.Ed. examination though she was not entitled to avail of the benefit of notification dated 16.3.1998.

The respondent as a student is neither a consumer nor is the appellant rendering any service. The claim of the respondent to award B.Ed. degree was almost in the nature of a relief praying for a direction to the appellant to act contrary to its own rules. The National Commission, in our opinion, with the utmost respect to the reasoning given therein did not take into consideration the aforesaid aspect of the matter and thus, arrived at a wrong conclusion. The case decided by this Court in Bihar School Examination Board (supra) clearly lays down the law in this regard with which we find ourselves in full agreement with. Accordingly, the entire exercise of entertaining the complaint by the District Forum and the award of relief which has been approved by the National Commission do not conform to law and we, therefore, set aside the same. We wish to make it clear that the National Commission felt that the respondent had been “harassed” and has also gone to the extent of using the word “torture” against an officer of the appellant. The appellant is an autonomous body and the decision of the appellant and the statutory provisions have to be implemented through its officers. This also includes the implementation of all such measures which have a statutory backing and if they are implemented honestly through a correct interpretation, the same, in our opinion, cannot extend to the degree of torture or harassment. The appellant had to be battle out this litigation upto this Court to establish the very fundamental of the case that the District Forum had no jurisdiction to entertain any such complaint and, in our opinion, they have done so successfully. The appeal is accordingly allowed. The judgment and order of the District Forum and the National Commission are set aside.

Bihar School Examination Board Vs. Suresh Prasad Sinha, (2009) 8 SCC 483, Relied on.

(Para 19)

Maharshi Dayanand University v. Surjeet Kaur [Bench Strength 2], Civil Appeal No. 6807/2008 (19/07/2010), 2010(8) SCR 475: 2010(11) SCC 159: 2010(7) JT 179: 2010(7) SCALE 194: 2010(5) SLT 545 [B.S. Chauhan, J.: Swatanter Kumar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(i)(g) — Deficiency in service — Educational Institution — Admission secured by respondent in BDS college and withdrawn thereafter on account of lack of recognition and other deficiencies — Claim of refund of amount paid and also for compensation — Allowed by State Commission granting refund of Rs. 5,15,000/- with interest @ 12% and compensation of Rs. 6,15,000/- — National Commission upheld the refund but reduced compensation to Rs. 2,50,000 — Justification — Held, the refund of amount paid by respondent with interest @ 12% meets the ends of justice — No reason to award any further amount to respondent — Therefore, direction for payment of compensation of Rs.2,50,000/- by National Commission to be set aside — Appeal allowed.

(Para 9)

Controller, Vinayak Mission Dental College. v. Geetika Khare [Bench Strength 2], C.A. Nos. 5213-5214/2010 (Arising out of SLP (C) Nos. 26485-26486/2009 (09/07/2010), 2010(8) SCR 719: 2010(12) SCC 215: 2010(8) SCALE 101: 2010(6) SLT 14 [Markandey Katju, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(o), 2(g), 14 & 23 — Deficiency in service — Complaint for — Failure of appellant-corporation to release balance loan amount — Complaint allowed by National Commission — Justification — Complainant himself a defaulter right from inception of his dealing with corporation — Non-release of loan amount was not because of any deficiency on part of corporation but due to conduct of complainant — Order passed by Commission unsustainable and to be set aside — Appeal allowed.

HELD: In the background of the factual scenario as emerging from the material on record, we are convinced that there was no shortcoming or inadequacy in the service on the part of the Corporation in performing its duty or discharging its obligations under the loan agreement. The Corporation was constrained not to release the balance installments and recall the loan on account of stated defaults on the part of the complainant himself. Non release of loan amount was not because of any deficiency on the part of the Corporation but due to complainant’s conduct and therefore, the failure of the Corporation to render ‘service’ could not be held to give rise to claim for recovery of any amount under the Act.

Having considered the matter in the light of the correspondence exchanged between the Corporation and the complainant, we have no hesitation in holding that there has not been any deficiency in the service the Corporation was required to provide to the complainant. In our opinion, the Commission was not correct in coming to the aforestated conclusion. We are of the view that the complainant being himself a defaulter right from inception of his dealing with the Corporation, when his cheque in the sum of Rs. 30,000/- got dishonoured, coupled with persistent defaults in discharging his liability to the Corporation towards interest, despite repeated demands, he cannot be permitted to plead at the later stage that he suffered on account of deficiency in service by the Corporation because of non-disbursement of balance installments of loan by them. As was observed by this Court in Jagdamba Oil Mills (supra), while not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. Fairness cannot be a one-way street. Where the borrower has no genuine intention to repay and adopts pretexts and ploys to avoid payment like in the present case, he cannot make the grievance that the Corporation was not acting fairly, even if requisite procedures have been followed.

For the foregoing reasons, we allow the appeal; set aside the order passed by the Commission and dismiss the complaint filed by the complainant. Amount deposited in terms of order dated 19th July, 2004 shall be released to the Corporation on maturity of the fixed deposit. There shall, however, be no order as to costs.

(Para 15)

HELD: The use of the words ‘any’ and ‘potential’ in the context these have been used in clause (o) indicates that the width of the clause is very wide and extends to any or all actual or potential users. The legislature has expanded the meaning of the word further by extending it to every such facilities as are available to a consumer in connection with banking, financing etc.

Managing Director, Maharashtra State Financial Corporation v. Sanjay Shankarsa Mamarde [Bench Strength 2], Civil Appeal No. 7189/2002 (09/07/2010), 2010 AIR(SC) 3534: 2010(8) SCR 358: 2010(7) SCC 489: 2010(6) JT 601: 2010(6) SCALE 692: 2010(5) Supreme 257: 2010(5) SLT 424 [D.K. Jain, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14 — Insurance Act, 1938 — Section 64-UM — Fire insurance claim — Assessment of damage by National Commission — Justification — Quantum of loss suffered by respondent on account of fire commented upon by joint surveyors and Chief Justice Chandrachud and subsequently by National Commission are almost identical barring a few rupees — No reason to differ with view expressed by National Commission in this regard — Discretion of National Commission to award rate of interest also acceptable — Damage assessed by National Commission therefore justified and needs no interference — Appeal dismissed.

HELD: As has been commented upon by the Joint Surveyors and Chief Justice Chandrachud and subsequently by the National Commission, the almost identical amounts, barring a few rupees, arrived at by the Insurance Company and M/s. J. Basheer & Associates speak volumes of the exercise carried out by the latter on a wholly cursory investigation which has quite aptly been described as “tailor-made”. The amount of loss suffered by the Respondent Company on account of the fire has been calculated by the Joint Surveyors on the basis of the amounts mentioned by the Respondent Company and the computer data available in support thereof and also upon cross-checking with the accounts of suppliers and vendors of raw materials to the Respondent Company. We see no reason to differ with the views expressed by the National Commission in this regard. We also accept the discretion exercised by the National Commission regarding the rate of interest awarded from three months after the date of the Award. The submissions made on behalf of the Respondent Company for enhancement of the same is rejected as we are of the view that such exercise of discretion was just and equitable in the absence of any agreement between the parties regarding payment of interest or the quantum thereof.

The appeal is dismissed in terms of the signed judgment placed on the file. There will be no order as to costs.

New India Assurance Co. Ltd. v. Protection Manufacturers Pvt. Ltd. [Bench Strength 2], Civil Appeal No. 312/2006 (08/07/2010), 2010 AIR(SC) 3035: 2010(8) SCR 61: 2010(7) SCC 386: 2010(7) JT 232: 2010(6) SCALE 682: 2010(6) SLT 152 [Altamas Kabir, J.: Cyriac Joseph, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14 — Insurance Act, 1938 — Section 64-UM — Fire insurance claim — Cause of fire — Finding of National Commission that the same was accidental — Justification — View of former chief justice of India obtained by Insurance Company that fire was accidental cannot be ignored being completely independent and unbiased — Theory of arson projected by M/s. J. Basheer & Associates not acceptable being not supported by any material — Thus the view expressed by National Commission justified and to be affirmed.

HELD: Even if the views expressed by the Joint Surveyors, M/s. Asthana and Joshi, on the reports submitted by M/s. J. Basheer & Associates are discounted, although they were appointed by the Insurance Company itself, one cannot ignore the views obtained by the Insurance Company from former Chief Justice, Y.V. Chandrachud, although, an attempt has been made on behalf of the Insurance Company to exclude the said views from consideration or at least to water down the same by taking refuge in Section 45 of the Evidence Act. Such a stand has no legs to stand upon, since the opinion given by Justice Chandrachud was based on an analysis of the materials placed before him by the Insurance Company, including the reports submitted by the Joint Surveyors, M/s. Asthana and Joshi and M/s. J. Basheer & Associates.

The case in hand is quite different, as the views expressed by Justice Chandrachud were not meant to be an opinion within the meaning of Section 45 of the Evidence Act, but an analysis of the reports and the materials provided to His Lordship by the Insurance Company. In fact, the attempt made on behalf of the Appellant Insurance Company to exclude the views expressed by Justice Chandrachud with regard to the cause of fire from the area of consideration does not commend itself to us as the same is a completely independent and unbiased assessment of the events relating to the cause of fire on the basis of the materials made available to His Lordship.

Without any material to support the theory of arson projected by M/s. J. Basheer & Associates and sufficient material to hold otherwise, it would be entirely unjust and inequitable to accept such a theory without any evidence whatsoever in support thereof. Reference can be made in this context to the submission made by the counsel for the Insurance Company before the National Commission and quoted in para 17 above. Accordingly, we endorse the views expressed by the National Commission that the cause of fire was accidental and that the attempt made by M/s. J. Basheer & Associates to show that the fire had been caused by an act of arson, was motivated and intended to benefit the Appellant Insurance Company.

New India Assurance Co. Ltd. v. Protection Manufacturers Pvt. Ltd. [Bench Strength 2], Civil Appeal No. 312/2006 (08/07/2010), 2010 AIR(SC) 3035: 2010(8) SCR 61: 2010(7) SCC 386: 2010(7) JT 232: 2010(6) SCALE 682: 2010(6) SLT 152 [Altamas Kabir, J.: Cyriac Joseph, J.] <<LAWPACK SUPREME COURT>>
Electricity (Supply) Act, 1948 — Sections 49 & 79(j) — Consumer Protection Act, 1986 — Sections 14 & 23 — Electricity connection — Failure to get clubbing of connections — Demand of charge by electricity board — Complaint against dismissed by District Forum — Appeal against allowed by State Commission which was affirmed by National Commission — Justification — Held, as per inspection report there was only one plot but there were two electric connections in name of two different consumers — Demand of electricity board on basis of inspection report — Ambiguity in protest raised by consumers — Matter, therefore, to be remanded to competent authority in Electricity Board to determine and record clear findings afresh as to whether it was a case of clubbing or not in accordance with provisions of law — Appeal disposed of accordingly.

HELD: The report prepared by the officers of the Electricity Board is an act done in discharge of their duties and could not be straight away reflected or disbelieved unless and until there was definite and cogent material on record to arrive at such a finding. It is not disputed before us that if two connections are operating in the same premises, in that event, the concept of clubbing and consequential charges and penalty would be attracted. That being so, and particularly, where a National Commission has not adverted to some discussion on the points raised in the appeal, the policy of the Electricity Board and the regulations cannot be rendered otiose. It is the obligation of every bona fide consumer to comply with the requirements and the regulations in the circular and not to abuse the advantage given under the policy of the Electricity Board. If there is a prima facie record to show that the consumer had attempted to circumvent the circular and with an intention to avoid payment of higher tariff, two connections were being utilized in the garb of different premises, while in fact, it was one and same premises, the penal consequences must follow. The circular issued and the regulations read with the provisions of the Act, clearly contemplate imposition of penalty and such charges with effect from 1st January, 1996. There is no explanation on record as to why the date is effective from 1st January, 1996. Even if taking the said date to be correct then the dues, which can be recovered, are the dues payable to the Electricity Board in accordance with law. The notice dated 2nd July, 2002 (Ext.C/5) was issued on the basis of the inspection report. From the record before us it will be a serious question to be specifically answered by the Competent Forum, as to whether the premises in question are two distinct and different premises or it is one in the same (i.e. only property No. 136 or 136 and 136-A). If these are two independent premises owned by two different persons who are consumers of the Board in their own capacity and there is no intention on their part to use these connections collectively and have not violated their sanctioned load, the consequences in law will be different. But, if there is intention to use both connections and avoid higher tariff, the consequences will be entirely different in that case. The inspection report is a document prepared in exercise of its official duties by the officers of the Corporation. Once an act is done in accordance with law, the presumption is in favour of such act or document and not against the same. Thus, there was specific onus upon the consumer to rebut by leading proper and cogent evidence that the report prepared by the officers was not correct. As already noticed, no objections were filed to the said report except some protest, that too, without stating as to what was the specific protest about, whether the facts recorded in the report were factually incorrect or that the report was received under protest. As is apparent from the reports on record, it bears two signatures of the consumer/consumer’s representatives, one with regard to the preparation of report and other with regard to receiving the copy of the report. The words ‘under protest’ have been recorded at the bottom of the report. This, itself indicates the ambiguity in the protest raised by the consumers.

In the circumstances aforestated, we are of the considered view that the matter requires to be remanded to the Competent Authority in the Electricity Board to determine and record the clear findings afresh as to whether it was a case of clubbing or not in accordance with the provisions and observations afore-referred with liberty to the parties to produce any further documents, if they so desire. The authority shall pass a final order expeditiously. The fate of the notices and consequences thereof shall be subject to the final order that may be passed by the Competent Authority. Parties are at liberty to challenge the order so passed in accordance with law.

The appeals are, therefore, disposed off with the above direction while leaving the parties to bear their own costs.

Punjab State Electricity Board v. Ashwani Kumar [Bench Strength 2], Civil Appeal No. 3505/2007 (08/07/2010), 2010(7) SCR 1158: 2010(7) SCC 569: 2010(8) JT 402: 2010(7) SCALE 70: 2010(5) Supreme 505: 2010(6) SLT 439 [B.S. Chauhan, J.: Swatanter Kumar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 12 — Complaint for correction of date of birth — Allowed directing appellant to carry out necessary correction alongwith awarding compensation — Upheld upto national commission rejecting report of appellant that the very admission of respondent No. 1 was based on fake document — Justification — Failure of consumer forums to consider the issue of maintainability of complaint in correct perspective — Forum also overlooked that despite repeated communications respondent No. 2 did not produce original document including admission register — Impugned orders unsustainable and to be set aside — Direction to District Forum to decide objection to very maintainability of complaint as also issue of limitation — Appeal allowed.

HELD: The impugned order is liable to be set aside because all the consumer forums failed to consider the issue of maintainability of the complaint in a correct perspective. Before the District Forum could go into the issue of correctness of the date of birth recorded in the matriculation certificate of respondent No.1, it ought to have considered whether the so called failure of the appellant to make correction in terms of the prayer made by respondent No.1 amounted to deficiency of service. The District Forum, the State Commission and the National Commission also overlooked that despite repeated communications sent to him, respondent No.2 did not produce the original documents including the admission register so as to enable the appellant to verify the correctness and genuineness of the assertions made by respondent No.1 regarding his correct date of birth. In our view, the District Forum should have taken cognizance of the communications sent by the appellant to respondent No.2 requiring him to produce the original records and called upon him to explain his position in the backdrop of the fact that on the one hand, he was writing letters to the appellant for correcting the date of birth recorded in the matriculation certificate of respondent No.1 and, on the other hand, he resolutely avoided production of the original records. The report of the Deputy Secretary substantially aggravates the suspicion that respondent No.1 and respondent No.2 were hand in gloves in allowing the former to take the supplementary examination on the basis of the documents which belonged to someone else. In the memo of appeal filed against the order of the District Forum, the appellant has made a specific mention of the report of the Deputy Secretary but the State Commission ignored the same. The National Commission brushed aside the report of the Deputy Secretary by describing it as an after thought ignoring that the same was based on a comprehensive analysis and evaluation of the documents made available by the authorities of the concerned schools. We have no doubt that if the National Commission had carefully examined the report, it would have certainly called upon respondent No.1 to explain his position on the issue of obtaining admission on the strength of fake documents and then decided whether the direction given by the District Forum, which was upheld by the State Commission was legally sustainable. Its failure to do so has resulted in miscarriage of justice.

In the result, the appeal is allowed. The impugned order of the National Commission as also the orders passed by the District Forum and State Commission are set aside and the matter is remitted to the District Forum for fresh adjudication of the complaint filed by respondent No.1. The District Forum shall decide the objection raised on behalf of the appellant to the very maintainability of the complaint as also the issue of limitation. The District Forum shall also consider the report of the Deputy Secretary of the Board after giving an opportunity to respondent No.1 to submit his reply in the context of the findings and conclusion recorded therein and then pass appropriate order.

Secretary, Board of Secondary Education, Orissa v. Santosh Kumar Sahoo [Bench Strength 2], Civil Appeal No. 4967/2010 (Arising out of SLP (C) No. 13872/2009) (07/07/2010), 2010 AIR(SC) 3553: 2010(8) SCC 353: 2010(6) JT 459: 2010(6) SCALE 410: 2010(5) Supreme 376: 2010(6) SLT 119 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 227 — Consumer Protection Act, 1986 — Section 21 — Appeal against order of state commission under — Petition under Article 227 of Constitution during pendency of — Allowed — Application for recall of — Dismissal — Justification — Held, dismissal of application without even examining sufficiency of the case shown by appellant for his non-appearance on date of hearing which was not controverted by respondent no. 1 — Order dismissing application for recall of said order therefore unjustified and to be set aside — Matter remitted to High Court for fresh adjudication, taking note of the fact that respondent no. 1 had an effective alternative remedy against order passed by state commission.

(Paras 14 & 15)

Om Prakash Saini v. DCM Ltd. [Bench Strength 2], Civil Appeal Nos. 4902-04/2010 (Arising out of SLP (C) Nos. 26730-26732/2008) (06/07/2010), 2011(4) SCV(Civil) 722: 2010 AIR(SC) 2608: 2010(11) SCC 622: 2010(6) JT 514: 2010(6) SCALE 294: 2010(5) Supreme 737: 2011(1) SLT 547 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 227 — Consumer Protection Act, 1986 — Section 21 — Appeal against order of state commission — Petition under Article 227 of Constitution during pendency of — Entertained by High Court — Justification — Held, during the pendency of the appeal filed by respondent No.1 under Section 21 of the 1986 Act, the learned Single Judge was not at all justified in entertaining the petition filed under Article 227 of the Constitution merely because he thought that the State Commission did not have the jurisdiction to entertain the complaint in view of the scheme sanctioned by the Company Judge under Section 391 read with Sections 392 and 394 of the Companies Act.

(Para 13)

HELD: The 1986 Act was enacted to provide for better protection of the interests of consumers by making provisions for establishment of consumer councils and other authorities for settlement of consumer disputes and adjudication thereof. The 1986 Act is a complete Code unto itself. It defines the various terms like `consumer’, `consumer dispute’, `defect’, `deficiency’, `goods’, `manufacturer’, `restrictive trade practice’, `service’, `unfair trade practice’. It provides for establishment of consumer councils and adjudicatory forums at the District, State and National levels. Any person aggrieved by an order passed by the District Forum can file an appeal before the State Commission. If he is not satisfied with the order of the State Commission, a further remedy is available by way of revision before the National Commission. If the complaint is decided by the State Commission, the aggrieved person can file an appeal before the National Commission. Elaborate procedure has been laid down for filing of the complaints and disposal thereof. Since the 1986 Act is a special statute enacted by the Parliament for better protection of the interest of consumers and a wholesome mechanism has been put in place for adjudication of consumer disputes, the remedy of appeal available to a person aggrieved by an order of the State Commission cannot but be treated as an effective alternative remedy.

Om Prakash Saini v. DCM Ltd. [Bench Strength 2], Civil Appeal Nos. 4902-04/2010 (Arising out of SLP (C) Nos. 26730-26732/2008) (06/07/2010), 2011(4) SCV(Civil) 722: 2010 AIR(SC) 2608: 2010(11) SCC 622: 2010(6) JT 514: 2010(6) SCALE 294: 2010(5) Supreme 737: 2011(1) SLT 547 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14 — Deficiency in service — Privity of contract — Appellant who is engaged in exporting readymade garments, handed over a consignment to respondent no. 3 to reach USA, Newyork before 10.10.94 — Cancellation of order by the intending purchaser as consignment not reached before 10.10.94 and claimed damages — Complaint by appellant before consumer forum claiming deficiency in service — Dismissal of complaint on ground no privity of contract exists between appellant and respondent no. 1 — Whether dismissal of complaint is justified? — Held, no — Master Air Way Bill on record shows that respondent no. 3 was acting in dual capacity i.e. one as shipper and other as agent of respondent no. 1 — High Court failed to consider this vital aspect — Impugned order set aside — Matter remitted back to commission for fresh adjudication — Contract Act, 1872 — Sections 187, 188 & 237 — Carriage by Air Act, 1972 — Section 4 & Schedule II.

HELD: The question for consideration is whether on the evidence obtaining in the instant case, can it be said that respondent No.3 had an express or implied authority to act on behalf of respondent No.1 as their agent? If respondent No.3 had such an authority, then obviously respondent No.1 was bound by the commitment respondent No.3 had made to the appellant.

Having examined the question in the light of the two afore-extracted “air waybills”, which, according to both the contesting parties, are determinative of terms and conditions of contract between them, we are of the opinion that respondent No.3 had an express authority to receive the cargo for and on behalf of respondent No.1. This is manifest from the Master Air Waybill No.055 – 2342 9276 issued and signed by respondent No.3 on the Air Waybill printed by respondent No.1. But for the said authority, respondent No.3 could not use the Air Waybill proforma printed by respondent No.1. Though it is true that in the said Air Waybill the name of the Shipper has been mentioned as that of respondent No.3 but the said Air Waybill has also been signed by respondent No.3 as the agent of the carter – respondent No.1. The other relevant particulars like, the name of the consignee, the number of the House Air Waybill (0841), etc. tally with the House Air Waybill issued by respondent No.3 to the appellant clearly showing the name of the consignor as that of the appellant. From the said documents, it would, appear that respondent No.3 was, in fact, acting in dual capacity – one as a Shipper on behalf of the appellant and the other as an agent of respondent No.1. That being so, respondent No.1 was bound by the acts of their agent, viz. respondent No.3, with all its results. We are of the opinion that while holding that there was no privity of contract between the appellant and respondent No.1 this vital aspect of the matter escaped the attention of the Commission thus, vitiating its order.

Dilawari Exporters v. Alitalia Cargo [Bench Strength 2], Civil Appeal No. 8699/2002 (16/04/2010), 2010 AIR(SC) 2233: 2010(4) SCR 927: 2010(5) SCC 754: 2010(4) JT 75: 2010(3) SCALE 779: 2010(3) Supreme 65: 2010(3) SLT 413 [D.K. Jain, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (c) & 14 — Loan amount — Non-release of balance loan amount — Deficiency in service — Determination of — Non-release of balance loan amount to respondent due to fault on the part of respondent, whether amounts deficiency of service on the part of appellant? — Held, no — Appellant corporation sanctioned a loan of Rs. 18,000/- for machines and Rs. 1,26,000/- as working capital limit to respondent — Respondent repeatedly submitted wrong bills — Appellant had to provide 75% of purchase price, but respondent failed to submit bills of his contribution i.e. 25% despite several opportunities given — Consequently, unavailed loan cancelled — No deficiency of service — Order of National Commission directing appellant to pay compensation of Rs. 1,50,000/- to respondent set aside.

HELD: It is clear that the Act has provided provision for correcting the shortcomings in the service or goods provided by way of awarding compensation or other means specified in the provision above mentioned only when the Consumer Forum comes to the conclusion that there is `deficiency’ in service provided or goods sold. The loss suffered by the respondent for the reason of not being able to start the unit cannot be the basis for awarding the compensation specifically when the respondent was at fault for the non release of the balance loan amount. Therefore, when there is no deficiency found on the part of the appellant-Corporation, it cannot be asked to pay compensation.

Chairman-Cum-Managing Director, Rajasthan Financial Corporation v. Commander S.C. Jain (Retd.) [Bench Strength 2], Civil Appeal No. 2774/2010 (Arising out of SLP(C) No. 16323/2006) (26/03/2010), 2010 AIR(SC) 1604: 2010(3) SCR 836: 2010(4) SCC 107: 2010(3) JT 476: 2010(3) SCALE 350: 2010(2) Supreme 663: 2010(3) SLT 466 [P. Sathasivam, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(g) & 14 — Insurance claim — Violation of conditions of insurance policy as to nature of use of vehicle — Right of insurance company to repudiate claim — Held, no dispute that appellant had taken a comprehensive insurance policy — No dispute that accident took place during subsistence of policy — In such cases, claim to be settled on a non-standard basis — Thus, following guidelines in New India Assurance Co. Ltd. vs. Narayan Prasad Appaprasad Pathak, 2006 CPJ 144(SC), Insurance Company can not repudiate the claim in toto — Direction to Insurance Company to pay a consolidated sum of Rs. 2.5 lakhs to insured.

HELD: In this connection reference may be made to a decision of National Commission in the case of New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak reported in (2006) CPJ 144 (NC). In that case also the question was, whether the insurance company can repudiate the claims in a case where the vehicle carrying passengers and the driver did not have a proper driving licence and met with an accident. While granting claim on non-standard basis the National Commission set out in its judgment the guidelines issued by the insurance company about settling all such non-standard claims. The said guidelines are set out below:-

Sr. No. – Description – Percentage of settlement

(i) – Under declaration of licensed carrying capacity – Deduct 3 years’ difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher.

(ii) – Overloading of vehicles beyond licensed carrying capacity, Pay claims not exceeding 75% of admissible claim.

(iii) – Any other breach of warranty/condition of policy including limitation as to use – Pay upto 75% of admissible claim.

From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where condition of policy including limitation as to use was breached.

In the instant case the entire stand of the insurance company is that claimant has used the vehicle for hire and in the course of that there has been an accident. Following the aforesaid guidelines, this Court is of the opinion that the insurance company cannot repudiate the claim in toto.

For the reasons stated, we cannot affirm the order of the fora below. We direct the respondent insurance company to pay a consolidated sum of Rs.2,50,000/- even though compensation claimed is Rs.5,00,000/-.

United India Insurance Company Limited v. Gian Singh, 2006 CTJ 221(CP), Referred.

(Para 12)

Amalendu Sahoo v. Oriental Insurance Co. Ltd. [Bench Strength 2], Civil Appeal No. 2703/2010 (Arising out of SLP (C) No. 11227/2009) (25/03/2010), 2010 AIR(SC) 2090: 2010(4) SCC 536: 2010(3) JT 218: 2010(3) SCALE 184: 2010(2) Supreme 674: 2010(2) SLT 672 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(g) & 14 — Transaction of goods on Free on Board (FoB) basis — Non-delivery of one Carton out of 121 cartons — Claim of compensation — Liability of insurer and carrier — Award of US $ 1800 against carrier holding the service of carrier as deficient — Justification — Held, in view non-delivery one carton-National Commission justified in holding the service of carrier as deficient — However, award of compensation not justified as it should 666-67 Special Drawing Rights per package or two Special Drawing Rights per kilogram to gross weight of goods lost whichever is higher — Carriage of Goods by Sea Act, 1925 — Section 2 — Marine Insurance Act, 1963 — Sections 3, 7 & 19 — Sale of Goods Act, 1930 — Sections 19 to 26, 39, 46, 47 & 49.

HELD: The National Commission has on appreciation of the material on record come to the conclusion that the consignment meant to be delivered to Pindikas was misdelivered and what was offered to Pindikas did not actually contain miniature paintings meant for the said consignee. That finding is, in our opinion, justified on the material on record from which it is evident that out of 122 cartons 121 cartons were delivered to M/s Natural Selection International while the only remaining carton when checked in the presence of the General Counsulate of India was found to contain steel furniture items. The inference, therefore, is that the carton containing miniature paintings had been misdelivered by the carrier who ought to have taken care to deliver the same to the consignee concerned. The National Commission has rightly rejected the contention that the carton was not properly marked making it difficult for the shipping company to separate the same from other cartons which were meant for M/s Natural Selection International. There is indeed, no room for us to interfere with the findings of the National Commission. The question, however, is whether the National Commission was justified in awarding rupee equivalent of US$ 1800 to the shipper by way of compensation. There are two errors which are evident in the order by the National Commission in that regard. Firstly, the National Commission has instead of going by the number of packages entered in the Bill of Lading gone by the packages mentioned in the packing list. The Bill of Lading was the only document on the basis of which compensation could be determined against the carrier in terms of the provisions of The Indian Carriage of Goods by Sea Act, 1925 and the Schedule thereto.

The second error committed by the National Commission is equally manifest. The Commission appears to have gone by the unamended provisions of Rule 5 in which the amount of compensation was stipulated to be US$ 100 per package. After the amendment to the Schedule in the year 1992 by Act 28 of 1993 the amount of compensation was to be paid in terms of Special Drawing Rights. As noticed above the shipper would be entitled to the compensation of 666.67 Special Drawing Rights per package or two Special Drawing Rights per kilogram according to the gross weight of the goods lost or damaged whichever is higher. The single package meant for Pindikas weighed 200 kgs. The amount of compensation payable by reference to the weight of the package would come to 400 Special Drawing Rights. The amount of compensation, actually payable would, however, be 666.67 Special Drawing Rights being higher of the two amounts.

It was next argued that the shipper would be entitled to the value of the goods misdelivered which according to the shipper was not less than Rs.39,23,225/-. There is no merit in that submission. We say so because compensation by reference to the value of the goods lost or damaged can be claimed only if the nature or the value of such goods has been declared by the shipper before shipment and inserted in the Bill of Lading. Even assuming that the nature and the valuation of the goods had been declared by the shipper before the shipment the requirement of `insertion of the same in the Bill of Lading’ was not satisfied in the present case. The Bill of Lading does not mention either the nature or the value of the goods. That being so, compensation of rupee equivalent of 666.67 Special Drawing Rights was the only amount that could be awarded by the Commission to the shipper. In as much as the Commission awarded US$1800 it committed a mistake that calls for correction.

Contship Container Lines Ltd. v. D.K. Lall [Bench Strength 2], Civil Appeal No. 3245/2005 (16/03/2010), 2010 AIR(SC) 1704: 2010(3) SCR 460: 2010(4) SCC 256: 2010(3) JT 201: 2010(3) SCALE 148: 2010(3) Supreme 355: 2013(297) ELT 321 [Markandey Katju, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(g) & 14 — Insurance claim — Rejection of — Insurance cover envisaged goods being dispatched on CIF basis whereas good in fact were sent on FoB basis — Absence of utmost good faith in exporter toward insurance company — Duty to make a complete disclosure not observed by exporter — Rejection of claim of shipper against insurance company justified — Marine Insurance Act, 1963 — Sections 3, 7 & 19 — Sale of Goods Act, 1930 — Sections 19 to 26, 39, 46, 47 & 49.

HELD: The National Commission has, in the instant case, recorded a clear finding the correctness whereof has not been disputed before us that the insurance cover obtained by the exporter envisaged goods being despatched on CIF basis whereas the goods were, in fact, sent on FOB basis. This was a material departure which breached the duty of utmost good faith cast upon the exporter towards the insurance company. If the proposal for insurance had disclosed that the goods will be sent on FOB basis, the question whether the supplier had any insurable interest in the goods and if he had what premium the company would charge for the same may have assumed importance. Be that as it may, the duty to make a complete disclosure not having been observed by the exporter, the National Commission was justified in holding that the insurance company stood absolved of its liability under the contract and in dismissing the petition qua the said company.

Contship Container Lines Ltd. v. D.K. Lall [Bench Strength 2], Civil Appeal No. 3245/2005 (16/03/2010), 2010 AIR(SC) 1704: 2010(3) SCR 460: 2010(4) SCC 256: 2010(3) JT 201: 2010(3) SCALE 148: 2010(3) Supreme 355: 2013(297) ELT 321 [Markandey Katju, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) 13(4) & 14 — Medical negligence — Expert evidence, necessity of, scope — Death of patient by wrong treatment — Patient was treated for typhoid while widal test conducted for typhoid was found negative — Sufficient material on record to show that there is definite indication of malaria — Thus in such case, expert evidence is not necessary to prove medical negligence — Evidence Act, 1872 — Section 45 — Torts — Medical negligence — Expert evidence, necessity of, scope.

HELD: In the instant case, RW-1 has admitted in his evidence that the patient was not treated for malaria. Of course evidence shows that of the several injections given to the patient, only one was of Lariago. Apart from Lariago, several other injections were also administered on the patient. Lariago may be one injection for treating malaria but the finding of Yashoda Hospital which has been extracted above shows that smear for malarial parasite was positive. There is thus a definite indication of malaria, but so far as Widal test was conducted for Typhoid it was found negative. Even in such a situation the patient was treated for Typhoid and not for malaria and when the condition of the patient worsened critically, she was sent to Yashoda Hospital in a very critical condition with no pulse, no BP and in an unconscious state with pupils dilated. As a result of which the patient had to be put on a ventilator.

We do not think that in this case, expert evidence was necessary to prove medical negligence.

This Court holds that it is not bound by the general direction given in paragraph 106 in D’souza (supra). This Court further holds that in the facts and circumstances of the case expert evidence is not required and District Forum rightly did not ask the appellant to adduce expert evidence. Both State Commission and the National Commission fell into an error by opining to the contrary. This Court is constrained to set aside the orders passed by the State Commission and the National Commission and restores the order passed by the District Forum. The respondent no.1 is directed to pay the appellant the amount granted in his favour by the District Forum within ten weeks from date.

The appeal is thus allowed with costs assessed at Rs.10,000/- to be paid by the respondent No.1 to the appellant within ten weeks.

Indian Medical Association vs. V.P. Shantha & others, (1995) 6 SCC 651, Referred.

HELD: The definition of `service’ under Section 2(1)(o) of the Act has to be understood on broad parameters and it cannot exclude service rendered by a medical practitioner.

A careful reading of the aforesaid principles laid down by this Court in Indian Medical Association (supra) makes the following position clear:-

(a) There may be simple cases of medical negligence where expert evidence is not required.

(b) Those cases should be decided by the Fora under the said Act on the basis of the procedure which has been prescribed under the said Act.

(d) That right of the parties to go to Civil Court is preserved under Section 3 of the Act.

This Court however makes it clear that before the consumer Fora if any of the parties wants to adduce expert evidence, the members of the Fora by applying their mind to the facts and circumstances of the case and the materials on record can allow the parties to adduce such evidence if it is appropriate to do so in the facts of the case. The discretion in this matter is left to the members of Fora especially when retired judges of Supreme Court and High Court are appointed to head National Commission and the State Commission respectively. Therefore, these questions are to be judged on the facts of each case and there cannot be a mechanical or strait jacket approach that each and every case must be referred to experts for evidence. When the Fora finds that expert evidence is required, the Fora must keep in mind that an expert witness in a given case normally discharges two functions. The first duty of the expert is to explain the technical issues as clearly as possible so that it can be understood by a common man. The other function is to assist the Fora in deciding whether the acts or omissions of the medical practitioners or the hospital constitute negligence. In doing so, the expert can throw considerable light on the current state of knowledge in medical science at the time when the patient was treated. In most of the cases the question whether a medical practitioner or the hospital is negligent or not is a mixed question of fact and law and the Fora is not bound in every case to accept the opinion of the expert witness. Although, in many cases the opinion of the expert witness may assist the Fora to decide the controversy one way or the other.

V. Kishan Rao v. Nikhil Super Speciality Hospital [Bench Strength 2], C.A. No. 2641/2010 (Arising out of SLP (C) No. 15084/2009) (08/03/2010), 2010(5) SCR 1: 2010(5) SCC 513: 2010(4) JT 630: 2010(4) SCALE 662: 2010(5) SLT 349 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 13(4) & 14 — Medical negligence — Determination of, expert opinion for, requirement of, scope — Direction for expert opinion by this court in D’Souza’s case, 2009(3) SCC 1 before issuance of notice to doctor — Bindingness of — Held, said direction cannot be treated a binding precedent and must be confined to particular facts of that case as it is contrary to law laid down by larger bench in Indian Medical Association’s case, 1995(6) SCC 651 — Evidence Act, 1872 — Section 45 — Constitution of India — Article 141.

HELD: This Court is constrained to take the view that the general direction given in paragraph 106 in D’souza (supra) cannot be treated as a binding precedent and those directions must be confined to the particular facts of that case.

With great respect to the Bench which decided D’souza (supra) this Court is of the opinion that the directions in D’souza (supra) are contrary to (a) the law laid down in paragraph 37 of Indian Medical Association (supra), (b) and paragraph 19 in Dr. J.J. Merchant (supra), (c) those directions in paragraph 106 of D’souza (supra) equate medical negligence in criminal trial and negligence fastening civil liability whereas the earlier larger Bench in Mathew (supra) elaborately differentiated between the two concepts, (d) Those directions in D’souza (supra) are contrary to the said Act which is the governing statute, (d) those directions are also contrary to the avowed purpose of the Act, which is to provide a speedy and efficacious remedy to the consumer. If those general directions are followed then in many cases the remedy under the said Act will become illusory, (f) those directions run contrary to principle of `Res ipsa loquitur’ which has matured into a rule of law in some cases of medical negligence where negligence is evident and obvious.

Indian Medical Association vs. V.P. Shantha & others, (1995) 6 SCC 651, Referred.

(Para 31)

HELD: Even though Bolam test `has not been uprooted’ it has come under some criticism as has been noted in Jackson & Powell on Professional Negligence (Sweet & Maxwell), Fifth Edition, 2002. The learned authors have noted (See paragraph 7-047 at page 200 in Jackson & Powell) that there is an argument to the effect that Bolam test is inconsistent with the right to life unless the domestic courts construe that the requirement to take reasonable care is equivalent with the requirement of making adequate provision for medical care. In the context of such jurisprudential thinking in England, time has come for this Court also to reconsider the parameters set down in Bolam test as a guide to decide cases on medical negligence and specially in view of Article 21 of our Constitution which encompasses within its guarantee, a right to medical treatment and medical care. In England, Bolam test is now considered merely a `rule of practice or of evidence. It is not a rule of law’ (See paragraph 1.60 in Clinical Negligence by Michael Powers QC, Nigel Harris and Anthony Barton, 4th Edition, Tottel Publishing). However as in the larger Bench of this Court in Jacob Mathew vs. State of Punjab and another, (2005) 6 SCC 1, Chief Justice Lahoti has accepted Bolam test as correctly laying down the standards for judging cases of medical negligence, we follow the same and refuse to depart from it.

V. Kishan Rao v. Nikhil Super Speciality Hospital [Bench Strength 2], C.A. No. 2641/2010 (Arising out of SLP (C) No. 15084/2009) (08/03/2010), 2010(5) SCR 1: 2010(5) SCC 513: 2010(4) JT 630: 2010(4) SCALE 662: 2010(5) SLT 349 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical negligence — Determination of, test for — Held, a doctor is not negligent merely because his conclusion differs from that of other professional men — True test for establishing negligence in diagnosis or treatment on the part of a doctor is whether he has been proved to be guilty of such failure as no doctor of ordinary skill would be guilty of if acting with ordinary care — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14.

Bolam vs. Friern Hospital Management Committee, 1957(2) All England Law Reports 118, Referred.

(Para 18)

V. Kishan Rao v. Nikhil Super Speciality Hospital [Bench Strength 2], C.A. No. 2641/2010 (Arising out of SLP (C) No. 15084/2009) (08/03/2010), 2010(5) SCR 1: 2010(5) SCC 513: 2010(4) JT 630: 2010(4) SCALE 662: 2010(5) SLT 349 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 13(4) & 14 — Medical negligence — Determination of, expert evidence, necessity of, requirement for — Held, before forming an opinion that expert evidence is necessary, the Fora under the Act must come to a conclusion that the case is complicated enough to require the opinion of an expert or that the facts of the case are such that it cannot be resolved by the members of the Fora without the assistance of expert opinion — Evidence Act, 1872 — Section 45 — Torts — Medical negligence — Determination of, expert evidence, necessity of, requirement for.

(Para 13)

V. Kishan Rao v. Nikhil Super Speciality Hospital [Bench Strength 2], C.A. No. 2641/2010 (Arising out of SLP (C) No. 15084/2009) (08/03/2010), 2010(5) SCR 1: 2010(5) SCC 513: 2010(4) JT 630: 2010(4) SCALE 662: 2010(5) SLT 349 [G.S. Singhvi, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(c), (d) & 14(1)(d) — Insurance claim — Payment made by insurer — Complaint for compensation against appellant-carrier — Allowed — Justification — Held, loss of consignment and settlement of claim by insurer by payment established by evidence — Presumption regarding negligence of appellant or its driver not rebutted — District forum therefore justified in allowing the complaint which was affirmed by state and national forum — No reason to interfere in the same — Appeal dismissed — Carriers Act, 1865 — Section 9.

HELD: The loss of consignment by the assured and settlement of claim by the insurer by paying Rs.4,47,436/- is established by evidence. Having regard to the presumption regarding negligence under section 9 of Carriers Act, it was not necessary for the complainants to prove further that the loss/damage was due to the negligence of the appellant or its driver. The presumption regarding negligence was not rebutted. Therefore, the District Forum was justified in allowing the complaint brought by the assured (first respondent) represented by the insurer and the insurer for recovery of Rs.447,436. The said order was affirmed by the State Forum and the National Forum. We find no reason to interfere with the same. The appeal is, therefore, dismissed.

HELD: When the words used are : “we hereby subrogate to you” and not “we hereby transfer or assign in your favour”, having regard to the settled meaning of “subrogate”, the said words could not operate as an absolute assignment, but only as an subrogation. The genesis of the document is subrogation. The inclusion of an assignment is an additional right given to the insurer. The document did not cease to be a subrogation by reason of enlargement of subrogation by granting such additional right. In para 22 of the judgment, this Court negatived the contention that the letter of subrogation and the special power of Attorney should be read together and if so read, the document would be a subrogation. But the special power of attorney when read with the term in the letter of subrogation, “we hereby subrogate to you the same rights as we have in consequence of or arising from the said loss of damage” will certainly show that the document was intended to be a subrogation also and not a mere assignment. With great respect to the learned Judges who decided Oberai, it has to be held that Oberai was not correctly decided, as it held a `subrogation-cum-assignment’ as a mere `assignment’. It ignored the fact that, shorn of the cover and protection of subrogation, the document, if read as a simple assignment would fall foul of section 6(e) of Transfer of Property Act and thus would be unenforceable. But the ultimate decision in Oberai may be correct as the complaint was filed by the insurer, in its own name and on its own behalf making a claim for the entire value of the goods, in excess of what was paid to the assured. Though the assured was belatedly impleaded as a co-complainant, the nature and contents of the complaint was not apparently changed, and continued to be one by the insurer as assignee. On those peculiar facts, the finding that the complaint under the Act by the insurer (who was not a consumer) was not maintainable, was justified.

HELD: If the complaint is filed by the assured (who is the consumer), or by the assured represented by the insurer as its attorney holder, or by the assured and the insurer jointly as complainants, the complaint will be maintainable, if the presence of insurer is explained as being a subrogee. Whether the amount claimed is the total loss or only the amount for which the claim was settled would make no difference for the maintainability of the complaint, so long as the consumer is the complainant (either personally or represented by its attorney holder) or is a co-complainant along with his subrogee. On the other hand, if the assured (who is the consumer) is not the complainant, and the insurer alone files the complaint in its own name, the complaint will not be maintainable, as the insurer is not a `consumer’, nor a person who answers the definition of `complainant’ under the Act. The fact that it seeks to recover from the wrongdoer (service provider) only the amount paid to the assured and not any amount in excess of what was paid to the assured will also not make any difference, if the assured-consignor is not the complainant or co-complainant. The complaint will not be maintainable unless the requirements of the Act are fulfilled. The remedy under the Act being summary in nature, once the consumer is the complainant or is a co-complainant, it will not be necessary for the Consumer Forum to probe the exact nature of relationship between the consumer (assured) and the insurer, in a complaint against the service provider.

(a) The insurer, as subrogee, can file a complaint under the Act either in the name of the assured (as his attorney holder) or in the joint names of the assured and the insurer for recovery of the amount due from the service provider. The insurer may also request the assured to sue the wrong doer (service provider).

(b) Even if the letter of subrogation executed by the assured in favour of the insurer contains in addition to the words of subrogation, any words of assignment, the complaint would be maintainable so long as the complaint is in the name of the assured and insurer figures in the complaint only as an attorney holder or subrogee of the assured.

(c) The insurer cannot in its own name maintain a complaint before a consumer forum under the Act, even if its right is traced to the terms of a Letter of subrogation-cum-assignment executed by the assured.

Economic Transport Organization v. Charan Spinning Mills (P) Ltd. [Bench Strength 5], CA No. 5611/1999 (17/02/2010), 2010(2) SCR 887: 2010(4) SCC 114: 2010(2) JT 271: 2010(2) SCALE 427: 2010(1) Supreme 658: 2010(2) SLT 44 [K.G. Balakrishnan, C.J.: R.V. Raveendran, J.: D.K. Jain, J.: P. Sathasivam, J.: J.M. Panchal, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14 — Medical negligence — Failure to prove, scope — Swelling and breathlessness while climbing stairs on account of blood pressure — Operation of removal of abdominal malignant tumor — Non- giving of treatment for malignancy by way of administering Mitotane on account of having side effects — Body of pancreas damaged during surgery — Death on account of `pyogenic meningitis’ — Medical negligence, determination of — Doctor who performed the operation had reasonable degree of skill and knowledge — According to appellants, the anterior approach adopted at the time of first surgery was not the correct approach and that surgery should have been done by adopting posterior approach for removal of left adrenal tumor — Medical texts speak of both the approaches for adrenaloctomy — Appellant has not been able to support her contention that posterior approach was the only possible and proper approach and respondent no. 3 was negligent in adopting the anterior approach — Apart from the medical literature, Additional Professor at AIIMS and a well-know surgeon stated in unequivocal terms in response to a specific question from the appellant that for malignant tumors, by and large, anterior approach should be adopted — Professor and Head of Department of Gastro-Intestinal Surgery at AIIMS also supported anterior approach and confirmed and reconfirmed adoption of anterior approach in view of inherent advantages of approach — In view of medical literature and evidence of eminent doctors of AIIMS, held, there is no merit in the allegations levelled — No case of medical negligence made out against the respondents — Torts — Medical negligence — Failure to prove, scope.

HELD: While deciding whether the medical professional is guilty of medical negligence following well known principles must be kept in view:

I. Negligence is the breach of a duty exercised by omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.

II. Negligence is an essential ingredient of the offence. The negligence to be established by the prosecution must be culpable or gross and not the negligence merely based upon an error of judgment.

III. The medical professional is expected to bring a reasonable degree of skill and knowledge and must exercise a reasonable degree of care. Neither the very highest nor a very low degree of care and competence judged in the light of the particular circumstances of each case is what the law requires.

IV. A medical practitioner would be liable only where his conduct fell below that of the standards of a reasonably competent practitioner in his field.

V. In the realm of diagnosis and treatment there is scope for genuine difference of opinion and one professional doctor is clearly not negligent merely because his conclusion differs from that of other professional doctor.

VI. The medical professional is often called upon to adopt a procedure which involves higher element of risk, but which he honestly believes as providing greater chances of success for the patient rather than a procedure involving lesser risk but higher chances of failure. Just because a professional looking to the gravity of illness has taken higher element of risk to redeem the patient out of his/her suffering which did not yield the desired result may not amount to negligence.

VII. Negligence cannot be attributed to a doctor so long as he performs his duties with reasonable skill and competence. Merely because the doctor chooses one course of action in preference to the other one available, he would not be liable if the course of action chosen by him was acceptable to the medical profession.

VIII. It would not be conducive to the efficiency of the medical profession if no Doctor could administer medicine without a halter round his neck.

IX. It is our bounden duty and obligation of the civil society to ensure that the medical professionals are not unnecessary harassed or humiliated so that they can perform their professional duties without fear and apprehension.

X. The medical practitioners at times also have to be saved from such a class of complainants who use criminal process as a tool for pressurizing the medical professionals/hospitals particularly private hospitals or clinics for extracting uncalled for compensation. Such malicious proceedings deserve to be discarded against the medical practitioners.

XI. The medical professionals are entitled to get protection so long as they perform their duties with reasonable skill and competence and in the interest of the patients. The interest and welfare of the patients have to be paramount for the medical professionals.

As long as the doctors have performed their duties and exercised an ordinary degree of professional skill and competence, they cannot be held guilty of medical negligence. It is imperative that the doctors must be able to perform their professional duties with free mind.

Kusum Sharma v. Batra Hospital & Medical Research Centre [Bench Strength 2], Civil Appeal No. 1385/2001 (10/02/2010), 2010 AIR(SC) 1050: 2010(2) SCR 685: 2010(3) SCC 480: 2010(2) JT 7: 2010(2) SCALE 267: 2010(1) Supreme 519: 2010(2) SLT 73: 2010(2) SCC(Cr) 1127 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Torts — Negligence — Professional negligence, liability on account of, scope — Professional should be held liable for his act or omission, if negligent, is to make life safer and to eliminate the possibility of recurrence of negligence in future but, at the same time courts have to be extremely careful to ensure that unnecessarily professionals are not harassed and they will not be able to carry out their professional duties without fear — A professional deserves total protection — Sections 88, 92 and 370 of the Indian Penal Code give adequate protection to the professional and particularly medical professionals — Torts — Medical negligence — Liability on account of, protection to doctors, scope of — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14 — Penal Code, 1860 — Sections 88, 92 & 370.

Kusum Sharma v. Batra Hospital & Medical Research Centre [Bench Strength 2], Civil Appeal No. 1385/2001 (10/02/2010), 2010 AIR(SC) 1050: 2010(2) SCR 685: 2010(3) SCC 480: 2010(2) JT 7: 2010(2) SCALE 267: 2010(1) Supreme 519: 2010(2) SLT 73: 2010(2) SCC(Cr) 1127 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21(b), 2(1)(d), (o), (g), 14, 17 & 26 — Banking service — Deficiency of service, sufficient proof of, scope — Revision petition before National Commission — Rejection of — Appeal — Complaint before District Consumer Forum alleging deficiency in service by Bank resulting in withdrawal of amount of Rs. 2,500/- and Rs. 3,50,000/- from account of complainant by misusing lost cheque book and using a cheque lead of newly issued cheque book allowed by District Forum and affirmed by State Forum — Revision before National Commission also dismissed — In absence of any overdraft facility being enjoyed by complainant a cheque of Rs. 3,50,000/- which was in excess of balance amount in account of complainant was honoured by bank — No satisfactory explanation therefore, by bank — Forum below also justified in ignoring expert report in regard to signature on cheque as admittedly the report was not proved by summoning expert — National Commission justified in declining to entertain revision petition — Appeal meritless and to be dismissed with cost of Rs. 10,000/- — Evidence Act, 1872 — Section 45.

Vijaya Bank v. Gurnam Singh [Bench Strength 2], CA No. 1064/2003 (02/12/2009), 2010(13) SCC 775: 2009(14) SCALE 467(2) [D.K. Jain, J.: T.S. Thakur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 23 — Appeal against National Commission — Order against courier in respect of transportation of goods — Justification — Held, as per record, goods reached at destination and carrier informed consignee to take delivery of goods — Consignee returned the document stating that buyer cannot be contacted — Thus, the courier had done whatever was possible to have been done — Impugned order unsustainable and is set aside — Appeal allowed.

(Paras 2 to 5)

Delta Air Lines, Inc. v. Haresh Babubhai Daruwalla [Bench Strength 2], Civil Appeals Nos. 2355-56/2005 (11/11/2009), 2010(14) SCC 775 [Markandey Katju, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 26, 2(1)(g), (o) & 14(1) — Allotment of plot — Encroachment by same authority without notice despite receiving payment, relief to be granted in case of, scope — Allotment of certain plot by Improvement Trust in favour of complainant — Possession of same also taken by complainant after paying allotment price — Subsequently, Trust laid road in said plot without notice to complainant and without resorting to any acquisition proceedings — Contentions raised on part of Trust rejected and complaint allowed — Indulging officers of trust in unnecessary litigation by approaching National Commission and then this Court — Direction against Trust for allotment of an alternative plot with a nominal compensation of Rs.5000/-, held to be a minimum relief — Trust directed to sensitize its officers to serve public rather than justify their dictatorial acts and to avoid such an unnecessary litigation — Service and Labour Law — Misconduct — Indulging officers in unnecessary litigation, effect of — Administrative Law — Dictorial acts by officers — Effect of — Administrative Law — Litigation — Unnecessary litigation by officers, effect of — Land Acquisition Act, 1894 — Section 31(3).

HELD: In this case, what is granted by the State Commission is the minimum relief in the facts and circumstances, that is to direct allotment of an alternative plot with a nominal compensation of Rs.5000/- But instead of remedying the wrong, by complying with the decision of the Consumer fora, the Improvement Trust is trying to brazen out its illegal act by contending that the allottee should have been protested when it illegally laid the road in his plot. It has persisted with its unreasonable and unjust stand by indulging in unnecessary litigation by approaching the National Commission and then this Court. The Trust should sensitise its officers to serve the public rather than justify their dictatorial acts. It should avoid such an unnecessary litigation.

Urban Improvement Trust, Bikaner v. Mohan Lal [Bench Strength 2], SPECIAL LEAVE PETITION (C) 29852/2009 (CC No. 11768) (30/10/2009), 2009(15) SCR 550: 2010(1) SCC 512: 2009(14) JT 355: 2009(13) SCALE 671: 2009(9) SLT 102: 2010(1) SCC(Cr) 818 [R.V. Raveendran, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 2(1)(g) — Limitation for filing complaint — Condonation of, permissibility, scope — Allotment of certain plot by Improvement Trust in favour of complainant — Possession of same also taken by complainant after paying allotment price — Subsequently, Trust laid road in said plot without notice to complainant and without resorting to any acquisition proceedings — Plea raised by Trust that complaint was barred by limitation as it was filed beyond two years from occurrence of cause of action, and respondent did not show sufficient cause for condonation of delay held to be rightly rejected by lower Fora — Case for grant of special leave under Article 136, held to be not made out — Constitution of India — Article 136.

Urban Improvement Trust, Bikaner v. Mohan Lal [Bench Strength 2], SPECIAL LEAVE PETITION (C) 29852/2009 (CC No. 11768) (30/10/2009), 2009(15) SCR 550: 2010(1) SCC 512: 2009(14) JT 355: 2009(13) SCALE 671: 2009(9) SLT 102: 2010(1) SCC(Cr) 818 [R.V. Raveendran, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14 — Deficiency in service — What is — Allotment of certain plot by Improvement Trust in favour of complainant — Possession of same also taken by complainant after paying allotment price — Subsequently, Trust laid road in said plot without notice to complainant and without resorting to any acquisition proceedings — Plea raised by Trust that its action, even if it was an illegal encroachment, did not amount to `deficiency in service’ and therefore complainant could not invoke jurisdiction of forum under CP Act — Complaint held to be rightly rejected by lower Fora — Case for grant of special leave under Article 136, held to be not made out — Constitution of India — Article 136 — Town Planning — Allotment of plot — Encroachment by same authority without notice despite receiving payment, remedy for claiming relief on account of, scope.

Urban Improvement Trust, Bikaner v. Mohan Lal [Bench Strength 2], SPECIAL LEAVE PETITION (C) 29852/2009 (CC No. 11768) (30/10/2009), 2009(15) SCR 550: 2010(1) SCC 512: 2009(14) JT 355: 2009(13) SCALE 671: 2009(9) SLT 102: 2010(1) SCC(Cr) 818 [R.V. Raveendran, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 26, 2(1)(g), (o) & 14 — Plot — Allotment of, encroachment by same authority without notice despite receiving payment, effect of — Deficiency in service — Allotment of certain plot by Improvement Trust in favour of complainant — Possession of same also taken by complainant after paying allotment price — Subsequently, Trust laid road in said plot without notice to complainant and without resorting to any acquisition proceedings — Plea raised by Trust that as complainant was negligent in protecting his possession and did not protest or complain when Trust laid road in his plot, he is not entitled to any relief held to be rightly rejected by lower Fora — Case for grant of special leave under Article 136, held to be not made out — Constitution of India — Article 136 — Town Planning — Allotment of plot — Encroachment by same authority without notice despite receiving payment, effect of — Land Acquisition Act, 1894 — Sections 4, 5-A & 6.

Sonic Surgical v. National Insurance Company Ltd. [Bench Strength 2], CA No. 1560/2004 (20/10/2009), 2009(15) SCR 265: 2010(1) SCC 135: 2009(13) JT 406: 2009(13) SCALE 363: 2009(7) Supreme 101(2): 2009(9) SLT 111 [Markandey Katju, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 17(2)(b) (As amended in 2003) — Territorial jurisdiction — Lack of, scope — Fire broke out in the godown of appellant at Ambala — For claiming compensation, appellant filed a claim petition before Consumer Commission of Union Territory, Chandigarh — Admittedly fire broke out in the godown of appellant at Ambala — Insurance policy was also taken at Ambala and claim for compensation was also made at Ambala — No part of cause of action arose in Chandigarh — Held, Consumer Commission of Union Territory, Chandigarh, have no territorial jurisdiction to entertain the complaint — Even if respondent-insurance company has a branch office at Chandigarh, complaint could not have been filed in Chandigarh under the amended Section 17(2) — Civil Procedure Code, 1908 — Section 20.

HELD: Learned counsel for the appellant submitted that the respondent-insurance company has a branch office at Chandigarh and hence under the amended Section 17(2) the complaint could have been filed in Chandigarh. We regret, we cannot agree with the learned counsel for the appellant. In our opinion, an interpretation has to be given to the amended Section 17(2) (b) of the Act, which does not lead to an absurd consequence. If the contention of the learned counsel for the appellant is accepted, it will mean that even if a cause of action has arisen in Ambala, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where a branch office of the insurance company is situated. We cannot agree with this contention. It will lead to absurd consequences and lead to bench hunting. In our opinion, the expression ‘branch office’ in the amended Section 17(2) would mean the branch office where the cause of action has arisen. No doubt this would be departing from the plain and literal words of Section 17(2)(b) of the Act but such departure is sometimes necessary (as it is in this case) to avoid absurdity. [vide G.P. Singh’s Principles of Statutory Interpretation, Ninth Edition, 2004 P. 79].

In the present case, since the cause of action arose at Ambala, the State Consumer Redressal Commission, Haryana alone will have jurisdiction to entertain the complaint.

Sonic Surgical v. National Insurance Company Ltd. [Bench Strength 2], CA No. 1560/2004 (20/10/2009), 2009(15) SCR 265: 2010(1) SCC 135: 2009(13) JT 406: 2009(13) SCALE 363: 2009(7) Supreme 101(2): 2009(9) SLT 111 [Markandey Katju, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Evidence Act, 1872 — Section 45 — Medical science — Expert evidence for opinion on question of, necessity of, scope — Since medical science is complicated, expert opinion provides deep insight — First and foremost requirement for an expert evidence to be admissible is that it is necessary to hear the expert evidence — Test is that the matter is outside the knowledge and experience of lay person — Thus, there is a need to hear an expert opinion where there is a medical issue to be settled — Scientific question involved is assumed to be not within the court’s knowledge — Hence cases where science involved, is highly specialized and perhaps even esoteric, central role of expert cannot be disputed — Torts — Medical negligence — Determination of, expert evidence, necessity of, scope — Consumer Protection Act, 1986 — Sections 13(4), 2(1)(g) & (o).

Ramesh Chandra Agrawal v. Regency Hospital Ltd. [Bench Strength 2], Civil Appeal No. 5991/2002 (11/09/2009), 2010 AIR(SC) 806: 2009(14) SCR 424: 2009(9) SCC 709: 2009(12) JT 377: 2009(12) SCALE 474: 2009(6) Supreme 535 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 13(4), 14 & 22 — Medical negligence — Proof of, expert evidence, duty of court to call, scope — Natural justice, violation of — Ailments backache and difficulty in walking as a result of progressive weakness on both lower limbs — Allegation of negligence in operation resulting complainant being handicapped due to his legs being rendered useless and loss of control over his bladder movement — Complaint before National Commission — Failure of Assistant Registrar of National Commission to put forward the complete record of said doctor before expert resulting failure to prove case of negligence — Violation of principle of natural justice — Held, it was the duty of National Commission in such circumstances to call for the expert evidence — Held, yes — Torts — Medical negligence — Proof of, expert evidence, duty of court to call, scope — Evidence Act, 1872 — Section 45.

HELD: In the present case, the appellant had filed all the records of the treatment before the Commission. The Assistant Registrar, due to oversight, did not send the original records and X-Ray films to the expert. Thus, it was the Assistant Registrar of the Commission who had failed to perform the duty diligently. Due to the non-availability of vital and important information, the expert was handicapped in giving his opinion on the basis of which the order of the Commission was to be passed. It is very much clear from the report of Dr. A. K. Singh dated 19.8.2000, that he would have been in a better position if certain documents would have been made available to him. The appellant had also filed an application before the Commission dated 17.9.2001, bringing to the notice of the Commission the lack of care shown by the Assistant Registrar, who had failed to forward the records of the treatment to the expert, and had requested to send the records for reconsideration. This application was rejected by the Commission holding that the reconsideration of the expert opinion at this stage is not necessary.

The Commission while rendering its judgment has failed to appreciate that in such cases expert would not be in a position to form a true opinion if all the documents pertaining to the matter, on which the opinion is desired, are made available to him. The Commission on the application made by the appellant should have again directed for the expert opinion after making all the records of the treatment available to the expert. The appellant should not suffer for the negligence of the Assistant Registrar and also when the Commission has itself stated in its judgment that supply of material to Dr. A. K. Singh could have enabled him to give a more complete report.

It is important to note that the appellant had brought to the notice of National Commission, the lack of care shown by the Assistant Registrar, who had failed to forward the records of the treatment to the expert, by filing an application before the Commission dated 17.9.2001. This application was rejected by the Commission holding that the reconsideration of the expert opinion at this stage is not necessary. In our view, the principles of Natural Justice require that a fair opportunity should be given to the complainant to prove his claim based on the report of the expert. Since that opportunity is denied to the appellant, the impugned order passed by National Commission cannot be sustained.

In view of the above discussion, appeal requires to be allowed and, accordingly, it is allowed. The impugned order is set aside. The Registrar of the Commission is directed to forward all the records of the treatment filed by the appellant before the Commission to Dr. A. K. Singh, Neurologist, who is now working at Fortis Hospital, Noida, for his expert opinion within one month from the date of receipt of this order, with a request to give his expert opinion on the basis of the records of the treatment and affidavits filed by both the parties within two months from the date the records are made available to him. After receipt of the expert opinion, the Commission is requested to pass fresh order in accordance with law. No order as to costs.

Ramesh Chandra Agrawal v. Regency Hospital Ltd. [Bench Strength 2], Civil Appeal No. 5991/2002 (11/09/2009), 2010 AIR(SC) 806: 2009(14) SCR 424: 2009(9) SCC 709: 2009(12) JT 377: 2009(12) SCALE 474: 2009(6) Supreme 535 [G.S. Singhvi, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (c), (g), (o), 14(1)(d), 18, 22 & 23 — “Consumer” — Who is not, Examination Board is not a service provider and examinee is not a consumer — When Examination 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 examination conducted by Board, hires or avails of any service from the Board for a consideration — Examination fee paid by the student is not the consideration for availment of any service but charge paid for privilege of participation in examination — Fact that in the course of conduct of examination, or evaluation of answer-scripts, or furnishing of mark-sheets or certificates, there may be some negligence, omission or deficiency, does not convert the Board into a service-provider for a consideration, nor convert examinee into a consumer who can make a complaint under the Act — Complaint under CP Act will not be maintainable against the Examination Board — Education — Examination Board and examinee — Relationship between, nature of — Bihar School Education Board Act, 1986.

HELD: Board is a statutory authority established under the Bihar School Examination Board Act, 1952. The function of the Board is to conduct school examinations. This statutory function involves holding periodical examinations, evaluating the answer scripts, declaring the results and issuing certificates. The process of holding examinations, evaluating answer scripts, declaring results and issuing certificates are different stages of a single statutory non-commercial function. It is not possible to divide this function as partly statutory and partly administrative. When the Examination 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. On the other hand, a candidate who participates in the examination conducted by the Board, is a person who has undergone a course of study and who requests the Board to test him as to whether he has imbibed sufficient knowledge to be fit to be declared as having successfully completed the said course of education; and if so, determine his position or rank or competence vis-a-vis other examinees. The process is not therefore availment of a service by a student, but participation in a general examination conducted by the Board to ascertain whether he is eligible and fit to be considered as having successfully completed the secondary education course. The examination fee paid by the student is not the consideration for availment of any service, but the charge paid for the privilege of participation in the examination.

Any service rendered for a consideration is presumed to be a commercial activity in its broadest sense (including professional activity or quasi-commercial activity). But the Act does not intended to cover discharge of a statutory function of examining whether a candidate is fit to be declared as having successfully completed a course by passing the examination. The fact that in the course of conduct of the examination, or evaluation of answer-scripts, or furnishing of mark-sheets or certificates, there may be some negligence, omission or deficiency, does not convert the Board into a service-provider for a consideration, nor convert the examinee into a consumer who can make a complaint under the Act. We are clearly of the view that the Board is not a `service provider’ and a student who takes an examination is not a `consumer’ and consequently, complaint under the Act will not be maintainable against the Board.

Bihar School Examination Board v. Suresh Prasad Sinha [Bench Strength 2], C.A. No. 3911/2003 (04/09/2009), 2010 AIR(SC) 93: 2009(13) SCR 1239: 2009(8) SCC 483: 2009(11) JT 541: 2009(12) SCALE 228: 2009(6) Supreme 421: 2009(7) SLT 109 [R.V. Raveendran, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (b), (o) & (g) — “Consumer” — Who is and entitlement to file complaint; commercial activities, scope — Held, following category of service-availors will not be consumers: (i) persons who avail any service for any commercial purpose; (ii) persons who avail any free service; and (iii) persons who avail any service under any contract of service — A consumer is entitled to file a complaint under the Act if there is any deficiency in service provided or rendered by the service-provider — Any service rendered for a consideration is presumed to be a commercial activity in its broadest sense including professional activity or quasi-commercial activity — Words and Phrases — Commercial activity.

Chairman, Thiruvalluvar Transport Corporation Vs. Consumer Protection Council (1995) 2 SCC 479, Relied on.

General Manager, Telecom v. M. Krishnan [Bench Strength 2], C.A. No. 7687/2004 (01/09/2009), 2010 AIR(SC) 90: 2009(14) SCR 86: 2009(8) SCC 481: 2009(11) JT 690: 2009(12) JT 267: 2009(12) SCALE 123: 2009(6) Supreme 324: 2009(7) SLT 160 [Markandey Katju, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Insurance — Fire insurance — Claim relating to, maintainability of, scope, duration of fire, question relating to, when not relevant — Word used in the insurance policy is `fire’ and not the `sustained fire’ — Effect of — Held, duration of fire is not relevant for making claim — As long as there is a fire which caused damage claim is maintainable, even if fire is for a fraction of a second — Repudiation of policy on the ground that there was no `sustained fire’ is not justified — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 22.

New India Assurance Company Ltd. v. Zuari Industries Ltd. [Bench Strength 2], C.A. No. 4436/2004 (01/09/2009), 2009(13) SCR 1101: 2009(9) SCC 70: 2009(11) JT 376: 2009(12) SCALE 98: 2009(6) Supreme 290: 2009(7) SLT 122 [Markandey Katju, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Marine Insurance Act, 1963 — Sections 68 & 29 — Amount of claim — Fixation of, weightage to report of Surveyor, scope — When valuation of vessel has been carried out by Surveyour of insurance company who came to the conclusion that value of vessel would be Rs.21,50,000/- then the Insurance Company should not hesitate to pay amount which is legitimately due to complainant — Insurance — Amount of claim — Fixation of, weightage to report of Surveyor, scope — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 22.

Oriental Insurance Company Ltd. v. Ozma Shipping Company [Bench Strength 2], C.A. No. 6289/2001 (25/08/2009), 2009(13) SCR 573: 2009(9) SCC 159: 2009(13) JT 73: 2009(11) SCALE 770: 2009(6) Supreme 298 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Marine Insurance Act, 1963 — Sections 68(1) & 29(3) — Settlement of claim between parties in respect of valued policy — Validity of, scope — Sailing vessel was insured for a sum of Rs.21,50,000/- by its owner — A total premium of Rs.40,832.50 was paid — Before issuing the policy Surveyor appointed by appellant Insurance Company thoroughly inspected the vessel and issued a valuation certificate — Surveyor after inspecting the vessel and considering all the relevant factors, gave a very comprehensive report and certified that the market value of the vessel was Rs. 21,50,000/- — Said vessel sank with the entire cargo — Held, National Commission was fully justified in directing the insurance company to pay the value of the entire vessel Rs.21,50,000/- with interest at the rate of 12% per annum — Submission of insurance company that valuation report of Surveyor of respondent was not correct because value of said vessel was not more than Rs.15 lacs, therefore, respondent No.1 is not entitled to an amount more than Rs.15 lacs, held, not sustainable in these circumstances — Insurance — Insurance claim — Settlement of claim between parties in respect of valued policy, validity of, scope — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 22.

HELD: According to the appellant insurance company the market value of the vessel would decrease year after year and it could not enhance to such an exorbitant figure by mere reconditioning, painting and remodeling. The insurance coverage was obtained for a higher sum insured than the actual cost by deliberately concealing the material facts.

These pleas of the appellant company are totally devoid of any merit when the Surveyor appointed by the insurance company found the value of the vessel as Rs.21,50,000/- and the appellant company accepted the insurance premium on Rs.21,50,000/-. According to the National Commission, as the Surveyor took note of the fact that a major overhauling of the engine and accessories and reconditioning and painting of the Hull had been carried out during 1987, there seems to be no justification from deviating from that figure.

National Commission held that on consideration of the relevant factors the valuation of the vessel was valued as Rs.21,50,000/-. On the basis of the valuation, the insurance premium was paid on the amount of Rs.21,50,000/-. The National Commission also came to the definite finding that the complainant was not guilty of any concealment of facts.

On consideration of the totality of the facts and circumstances, the impugned judgment of the National Commission is absolutely correct and the National Commission was fully justified in directing the insurance company to pay the value of the entire vessel Rs.21,50,000/- with interest at the rate of 12% per annum from 4 th April, 1991.

It may be pertinent to mention that when the valuation of the vessel had been carried out by the Surveyour of the insurance company who came to the conclusion that the value of the vessel would be Rs.21,50,000/- then the Insurance Company should not hesitate to pay the amount which is legitimately due to the complainant particularly when there is no dispute that the entire vessel with cargo insured with the appellant sank while the vessel was sailing from Beypore to Kavarati.

HELD: Under this Section the insurance company cannot go on appointing Surveyors one after another so as to get a tailor made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reason for not accepting the report. Scheme of Section 64-UM particularly, of sub-sections (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor.

Sri Venkateswara Syndicate v. Oriental Insurance Company Ltd. [Bench Strength 2], CA No. 4487/2004 (24/08/2009), 2009(14) SCR 57: 2009(8) SCC 507: 2009(12) JT 63: 2009(11) SCALE 597: 2009(6) Supreme 326: 2010(2) SLT 664 [Markandey Katju, J.: H.L. Dattu, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 12, 14(1)(d), 18, 22 & 23 — Fire insurance policy — Compensation, quantum of, determination of, non-consideration of relevant documents by National as well as State Commission, remand of matter on the ground of, when valid — Fire incident claim under Fire Insurance Policy for a sum of Rs. 10 lakhs — Surveyor of respondent assessed loss of Rs. 1,79,111/- — Release of Rs. 1,29,117/- by Insurance Company as full and final settlement which was accepted by appellant under protest — Refusal to reimburse loss of Rs. 8 lakhs suffered by appellant — Complaint u/s 12 of Act — Award of compensation of Rs. 6,70,883/- with interest @ 12% by District Forum set aside by State Commission — National Commission in revision directed respondent to pay Rs. 50,000/- holding that said amount had been deducted from assessment made by surveyor — Neither state commission nor national commission considered the documents produced by appellant and which had been considered by District Forum while awarding compensation and appellant has been seriously prejudiced on that account — Impugned order of State and National Commission therefore to be set aside — Matter remitted to State Commission to consider appeal in accordance with law after giving opportunity of hearing to parties.

Noor Ali v. National Insurance Co. Ltd. [Bench Strength 2], C.A. No. 5547/2009 (Arising out of SLP(C) No. 887/2009 (17/08/2009), 2009(17) SCC 565: 2009(13) SCALE 78 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Medical Profession — Professional ethics — Compliance of, scope — Death of a patient — Determination of medical negligence — Both the parties belonging to medical profession — Held, it is generally expected that very senior doctors would behave responsibly, and they were entitled to take any defence which is available to them but they should not resort to mudslinging — This being a case where both sides being doctors, fair dealings were expected from them — Consumer Protection Act, 1986 — Section 2(1)(g).

HELD: Standard of duty to care in medical services may also be inferred after factoring in the position and stature of the doctors concerned as also the hospital; the premium stature of services available to the patient certainly raises a legitimate expectation. We are not oblivious that the source of the said doctrine is in administrative law. A little expansion of the said doctrine having regard to an implied nature of service which is to be rendered, in our opinion, would not be quite out of place.

HELD: A patient would feel the deficiency in service having regard to the cumulative effect of negligence of all concerned. Negligence on the part of each of the treating doctors as also the hospital may have been contributing factors to the ultimate death of the patient. But, then in a case of this nature, the court must deal with the consequences the patient faced keeping in view the cumulative effect.

negligent action has been noticed with respect to more than one respondent. A cumulative incidence, therefore, has led to the death of the patient. It is to be noted that doctrine of cumulative effect is not available in criminal law. The complexities involved in the instant case as also differing nature of negligence exercised by various actors, make it very difficult to distil individual extent of negligence with respect to each of the respondent. In such a scenario finding of medical negligence under section 304-A cannot be objectively determined.

HELD: Loss of wife to a husband may always be truly compensated by way of mandatory compensation. How one would do it has been baffling the court for a long time. For compensating a husband for loss of his wife, therefore, courts consider the loss of income to the family. It may not be difficult to do when she had been earning. Even otherwise a wife’s contribution to the family in terms of money can always be worked out. Every housewife makes contribution to his family. It is capable of being measured on monetary terms although emotional aspect of it cannot be. It depends upon her educational qualification, her own upbringing, status, husband’s income, etc.

Malay Kumar Ganguly v. Sukumar Mukherjee [Bench Strength 2], CrA Nos. 1191-1194/2005 (07/08/2009), 2010 AIR(SC) 1162: 2009(13) SCR 1: 2009(9) SCC 221: 2009(10) JT 256: 2009(10) SCALE 675: 2009(6) SLT 164: 2010(2) SCC(Cr) 299 [S.B. Sinha, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14(1)(d) — Medical negligence — Death of patient, liability of doctors and hospital, determination of — Patient came to doctor “M” with case of dermatology — Instead of referring patient to dermatologist, he prescribed steroid namely “Depomedrol” for next 3 days on his assumption that it was a case of “vasculitis” — Dosage prescribed found to be higher dose in case of TEN patient — Further prescription of Depomedrol without diagnosing nature of disease could be said to be a wrongful act on his part — Further, effect of immunosuppression caused due to use of steroids affected immunity of patient and Dr. “M” failed to take note of said consequences — After taking over treatment and detecting TEN, another Dr. “H” ought to have necessarily verified previous prescription that has been given to patient — Although `depomedrol’ was stopped, Dr. “H” did not take any remedial measures against excessive amount of `depomedrol’ — Apart from using the steroids, aggressive supportive therapy that is considered to be rudimentary for TEN patients also not provided by Dr. “H” — Further `vital-signs’ of a patient such as temperature, pulse, intake-output and blood pressure were not monitored — Failure on part of Dr. “H” to ensure certain facts could be said to be an act of negligence — Judgment of National Commission holding that there was no negligence on part of hospital or doctors, held to be not sustainable — Matter remitted for determination of compensation — Torts — Medical negligence — Death of patient, liability of doctors and hospital, determination of — Penal Code, 1860 — Section 304-A.

HELD: When Dr. Mukherjee examined Anuradha, she had rashes all over her body and this being the case of dermatology, he should have referred her to a dermatologist. Instead, he prescribed “Depomedrol” for the next 3 days on his assumption that it was a case of “vasculitis”. The dosage of 120 mg Depomedrol per day is certainly a higher dose in case of a TEN Patient or for that matter any patient suffering from any other bypass of skin disease and the maximum recommended usage by the drug manufacturer has also been exceeded by Dr. Mukherjee. On 11th May, 1998, the further prescription of Depomedrol without diagnosing the nature of the disease is a wrongful act on his part.

According to general practice, long acting steroids are not advisable in any clinical condition, as noticed hereinbefore. However, instead of prescribing to a quick acting steroid, the prescription of a long acting steroid without foreseeing its implications is certainly an act of negligence on his part without exercising any care or caution. As it has been already stated by the Experts who were cross examined and the authorities that have been submitted that the usage of 80-120 mg is not permissible in TEN.

Furthermore, after prescribing a steroid, the effect of immunosuppression caused due to it, ought to have been foreseen. The effect of immunosuppression caused due to the use of steroids has affected the immunity of the patient and Dr. Mukherjee has failed to take note of the said consequences.

After taking over the treatment of the patient and detecting TEN, Dr. Halder ought to have necessarily verified the previous prescription that has been given to the patient. On 12th May, 1998 although `depomedrol’ was stopped, Dr. Halder did not take any remedial measures against the excessive amount of `depomedrol’ that was already stuck in the patient’s body and added more fuel to the fire by prescribing a quick acting steroid `Prednisolone’ at 40mg three times daily, which is an excessive dose, considering the fact that a huge amount of “Depomedrol” has been already accumulated in the body.

Life saving `supportive therapy’ including IV fluids/ electrolyte replacement, dressing of skin wounds and close monitoring of infection is mandatory for proper care of TEN patients. Skin(wound) swap and blood tests also ought to be performed regularly to detect the degree of infection.

Apart from using the steroids, aggressive supportive therapy that is considered to be rudimentary for TEN patients was not provided by Dr. Halder. Further `vital-signs’ of a patient such as temperature, pulse, intake-output and blood pressure were not monitored. All these factors are considered to be the very basic necessary amenities to be provided to any patient, who is critically ill. The failure of Dr. Halder to ensure that these factors are monitored regularly is certainly an act of negligence.

After coming to know that the patient is suffering from TEN, Dr. Abani Roy Chowdhury ought to have ensured that supportive therapy had been given. He had treated the patient along with Dr. Halder and failed to provide any supportive therapy or advise for providing IV fluids or other supplements that is a necessity for the patient who was critically ill.

So far as the judgment of the Commission is concerned, it was clearly wrong in opining that there was no negligence on the part of the hospital or the doctors. We remit the case back to the Commission only for the purpose of determination of quantum of compensation.

HELD: There cannot be, however, by any doubt or dispute that for establishing medical negligence or deficiency in service, the courts would determine the following:

(i) No guarantee is given by any doctor or surgeon that the patient would be cured.

(ii) The doctor, however, must undertake a fair, reasonable and competent degree of skill, which may not be the highest skill.

(iii) Adoption of one of the modes of treatment, if there are many, and treating the patient with due care and caution would not constitute any negligence.

(iv) Failure to act in accordance with the standard, reasonable, competent medical means at the time would not constitute negligence. However, a medical practitioner must exercise the reasonable degree of care and skill and knowledge which he possesses. Failure to use due skill in diagnosis with the result that wrong treatment is given would be negligence.

(v) In a complicated case, the court would be slow in contributing negligence on the part of the doctor, if he is performing his duties to be best of his ability.

HELD: It is noteworthy that standard of proof as also culpability requirements under Section 304 -A of Indian Penal Code stands on an altogether different footing. On comparison of the provisions of Penal Code with the thresholds under the Tort Law or the Consumer Protection Act, a foundational principle that the attributes of care and negligence are not similar under Civil and Criminal branches of Medical Negligence law is borne out. An act which may constitute negligence or even rashness under torts may not amount to same under section 304-A.

HELD: Section 22 of the Consumer Protection Act, 1986 provides that Sections 12, 13 and 14 thereof and the rules made thereunder for disposal of the complaints by the District Forum, shall with such modification as may be considered necessary by the Commission, be applicable to the disposal of disputes by the National Commission. Section 12 of the 1986 Act provides for the manner in which the complaint shall be made. Section 13 prescribes the procedure on admission of the complaint.

Apart from the procedures laid down in Section 12 and 13 as also the Rules made under the Act, the Commission is not bound by any other prescribed procedure. The provisions of the Indian Evidence Act are not applicable. The Commission is merely to comply with the principles of natural justice, save and except the ones laid down under sub-section (4) of Section 13 of the 1986 Act.

The opinions of the experts as contained in the said documents are probably based on the hospital records and other relevant papers. Such opinions have been rendered on the basis of their expertise. They were notarized. The said opinions have been appended to the complaint petition even as documents. Respondents did not question the correctness thereof either before the court or before the Commission. They did not examine any expert to show that said opinions are not correct. The concerned respondents in their depositions before the Commission also did not challenge the correctness or otherwise of the said opinions. Even otherwise the deficiencies pointed out therein are explicit from the records. In view of above, exhibits in question held to be admissible before Consumer Court.

HELD: There is no doubt that the appellant suffered loss of earning firstly due to non-delivery of vehicle and then due to highly belated supply of requisite documents. Moreover, the value of the truck also depreciated resulting in further loss to him. Thus, in our opinion, the amount awarded by National Commission is too meager and deserves to be enhanced.

Taking the totality of the situation as it exists, we are of the opinion that a total amount of Rs. 1,00,000/- payable by respondents jointly or severally to the appellant would subserve the justice. Keeping the circumstances under which appellant was made to run from pillar to post, to get the documents of the truck from the respondents, we are of the opinion that ends of justice would be met if interest at the rate of 6% p.a. from the date of the original application till actual payment of the aforesaid enhanced awarded amount is made by the respondents. We accordingly do so.

Madan Kumar Singh v. Distt. Magistrate, Sultanpur [Bench Strength 2], CA No. 5165/2009 (Arising out of SLP(C) No. 20515/2005) with C.A. No. 5166/2009 (Arising out of SLP(C) No. 11210/2006 (07/08/2009), 2009(12) SCR 1186: 2009(9) SCC 79: 2009(10) JT 380: 2009(10) SCALE 668: 2009(6) Supreme 97: 2009(6) SLT 269 [S.B. Sinha, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Deficiency in service — Scope — Purchase of truck in public auction by complainant — Truck actually handed over to him almost after six months from date of auction in his favour — Further, despite best efforts made by appellant, relevant papers of truck were handed over to him only after six years from date of auction — Delay, sated above remained unexplained — Clear case of deficiency in service held to be made out against respondents.

HELD: The facts mentioned hereinabove would go to show that appellant having been declared as highest bidder had deposited the initial money and next day deposited the balance of the consideration. The truck in question was actually handed over to him almost after six months from the date of auction in his favour. Even after getting delivery of the truck he could not have started plying the same unless he was delivered the relevant papers thereof. There is no dispute, which even otherwise stands proved from the voluminous material available on record that despite best efforts made by the appellant, the relevant papers of the truck were handed over to him only after six years from the date of the auction. No plausible or convincing reasons have been assigned by the respondents for not doing so.

From the narration of the aforesaid facts, it is clearly made out that respondents were at fault in performance of the services which was otherwise required to be performed by them. What more could be the deficiency in service cannot be described. According to us, respondents were certainly imperfect and the same would amount to shortcoming in quality in providing the service to the appellant.

Madan Kumar Singh v. Distt. Magistrate, Sultanpur [Bench Strength 2], CA No. 5165/2009 (Arising out of SLP(C) No. 20515/2005) with C.A. No. 5166/2009 (Arising out of SLP(C) No. 11210/2006 (07/08/2009), 2009(12) SCR 1186: 2009(9) SCC 79: 2009(10) JT 380: 2009(10) SCALE 668: 2009(6) Supreme 97: 2009(6) SLT 269 [S.B. Sinha, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d) Explanation — “Consumer” — Meaning of — Purchase of truck in public auction — Purpose of purchaser found to be earning his livelihood — Nothing available on record to show that truck was purchased for any commercial purpose — Complainant-purchaser held to be a consumer — Words and Phrases — Consumer — Words and Phrases — Commercial purpose — Scope.

HELD: The purchase of the truck by the appellant would be covered under explanation to Section 2(1)(d) of the Act. The appellant had mentioned categorically that he had bought the said truck to be used exclusively by him for the purpose of earning his livelihood, by means of self-employment. Even if he was to employ a driver for running the truck aforesaid, it would not have changed the matter in any case, as even then appellant would have continued to earn his livelihood from it and of course, by means of self-employment. Furthermore, there is nothing on record to show that he wanted to use the truck for any commercial purpose.

Thus, the question No.1 is answered in favour of the appellant that he would be deemed to be a consumer within the definition as contained in Section 2(1)(d) of the Act.

Madan Kumar Singh v. Distt. Magistrate, Sultanpur [Bench Strength 2], CA No. 5165/2009 (Arising out of SLP(C) No. 20515/2005) with C.A. No. 5166/2009 (Arising out of SLP(C) No. 11210/2006 (07/08/2009), 2009(12) SCR 1186: 2009(9) SCC 79: 2009(10) JT 380: 2009(10) SCALE 668: 2009(6) Supreme 97: 2009(6) SLT 269 [S.B. Sinha, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d) — “Consumer” — Scope — Purchase of goods — Involvement of commercial purpose — A reading of definition contained in Section 2(1)(d) makes it clear that Parliament wanted to exclude from scope of definition persons, who obtain goods for resale and also those who purchase goods with a view to use such goods for carrying on any activity for earning — Immediate purpose as distinct from ultimate purpose of purchase, sale in same form or after conversion and a direct nexus with profit or loss would be determinants of character of a transaction-whether it is for a “commercial purpose” or not.

Madan Kumar Singh v. Distt. Magistrate, Sultanpur [Bench Strength 2], CA No. 5165/2009 (Arising out of SLP(C) No. 20515/2005) with C.A. No. 5166/2009 (Arising out of SLP(C) No. 11210/2006 (07/08/2009), 2009(12) SCR 1186: 2009(9) SCC 79: 2009(10) JT 380: 2009(10) SCALE 668: 2009(6) Supreme 97: 2009(6) SLT 269 [S.B. Sinha, J.: Deepak Verma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c) & 24-A — Consumer complaint — Not a ‘suit’ — Non-delivery of consignment — Limitation period for filing consumer complaint — Provisions of Indian Carriage of Goods by Sea Act, 1925 held not applicable to the facts of the case — Section 24-A of the Consumer Protection Act will be applicable — Carriage of Goods by Sea Act, 1925 — Schedule Article III Clause 6 — Civil Procedure Code, 1908 — Section 9.

HELD: Sub-section (2) of Section 24-A, quoted above, clearly mentions that a complaint can be entertained by the District forum, the State Commission or the National Commission, as the case may be, even after the prescribed period of two years if the complainant satisfies that he had sufficient cause for not filing the complaint within such period.

Accordingly, we accept this appeal, set aside the impugned order of the National Commission and remand the matter to the National Commission to decide the complaint afresh in accordance with law by applying Section 24-A of the Consumer Protection Act, 1986 and not the Indian Carriage of Goods by Sea Act, 1925. If the National Commission comes to the conclusion that the complaint had been filed beyond the prescribed period of two years, the National Commission, after hearing both the parties, may condone the delay if it is satisfied that the delay was because of sufficient cause and if it does so it shall decide the case on merits.

E.I.C.M. Exports Ltd. v. South Indian Corpn. (Agencies) Ltd. [Bench Strength 2], CA NO(s). 4290/2003 (21/07/2009), 2009 AIR(SC) 3127: 2009(11) SCR 275: 2009(14) SCC 412: 2009(14) JT 425: 2009(10) SCALE 22 [Markandey Katju, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Carriage of Goods by Sea Act, 1925 — Schedule Article III Clause 6 — Limitation provided under — Applicability of, scope, prvision not appliacable to complaint before consumer forum — Non delivery of goods — Consumer complaint — Whether limitation of one year provided by applying Article III Clause 6 of the schedule of the Indian Carriage of Goods Act, can be held applicable to a complaint filed before consumer forum? — Held, no — Such provision will be applicable in cases where a ‘suit’ is filed — A complaint before consumer forum is not a suit — Consumer Protection Act, 1986 — Sections 24-A, 2(1)(c), (o) & (g) — Civil Procedure Code, 1908 — Section 9 — Words and Phrases — Suit.

HELD: On a plain reading of the aforesaid provision, it is clear that the aforesaid provision will be applicable in the cases where a suit is filed. In the present case, the appellant did not file any suit but filed a complaint before the Consumer Forum.

The word “suit” has a technical meaning which denotes proceedings instituted under Section 9 of the Civil Procedure Code, 1908. All legal proceedings in the country are not suits. There are petitions/complaints/applications before various Tribunals or authorities but they are not suits as per Section 9 of the CPC. In our opinion, a complaint before Consumer Forum is not a suit, and hence, the Indian Carriage of Goods by Sea Act, 1925 is not applicable to the facts of the present case and the Consumer Protection Act, 1986 will only be applicable.

E.I.C.M. Exports Ltd. v. South Indian Corpn. (Agencies) Ltd. [Bench Strength 2], CA NO(s). 4290/2003 (21/07/2009), 2009 AIR(SC) 3127: 2009(11) SCR 275: 2009(14) SCC 412: 2009(14) JT 425: 2009(10) SCALE 22 [Markandey Katju, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12, 15, 19 & 23 — Damage caused to insured truck — Awarding compensation — Fake driving licence, sustainability — Complaint for award of compensation — Dismissal by District Forum in view of fake licence used by driver — Relief granted by State Commission in appeal relying upon the judgment in National Insurance Co. Ltd. vs. Swarna Singh — Confirmed by National Commission — Held, judgment in Swarn Singh case classified in Laxminarayan Dhut case according to which insured cannot claim compensation for damage to his vehicle where licence of driver is fake — Issue raised in this appeal is covered by Laxminarayan Dhut case — Impugned order of State and National Commission is set aside — Appeal allowed.

(Paras 4 to 7)

National Insurance Company Limited v. Saheb Singh [Bench Strength 2], Civil Appeal No. 4539/2009 (20/07/2009), 2010(14) SCC 776 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(r) — Unfair trade practice — What is — Purchase of car — Charging for a catalytic converter, which was neither demanded by complainant nor actually fitted in car would amount to unfair trade practice — Government directives that same price be charged for all cars, whether fitted with converter or not held to be violative of Article 14 of Constitution — Constitution of India — Article 14.

HELD: We are concerned with charging by the appellant for a converter which he has not supplied to the respondent. In our opinion, this is unfair trade practice as defined in Section 2(l)(r) of the Consumer Protection Act.

Mr. Bhasin also submitted that the Central Government had directed that the same price be charged for all cars, whether fitted with a converter or not. No such government directive is on the record of this case, but even if there is such a directive, in our opinion, it will be arbitrary and violative of Article 14 of the Constitution of India.

HELD: Dual fixation of price can only be sustained if it is based on a reasonable classification. In the present case, as already mentioned above, the classification is not reasonable, since a person whose vehicle does not have a catalytic converter should not be made to pay for the same. In this connection, two things may be noted. Firstly, use of the word ‘normally’ indicates that it is not a hard and fast rule. Secondly, in the present case we are not really concerned with adequacy of price. In the present case, the grievance of the complainant was that he was being overcharged for a catalytic converter which he neither demanded nor was it actually fitted in his car purchased from the appellant. In our opinion, the complaint filed by respondent No. 1 is justified as the aforesaid act amounts to an unfair trade practice as defined in Section 2(1)(r) of the Consumer Protection act, 1986.

For the reasons stated above, we find no force in this appeal. It is dismissed accordingly. No order as to the costs.

Maruti Suzuki India Ltd. v. Rajiv Kumar Loomba [Bench Strength 2], CA No. 1841/2003 with CA No. 1842/2003 (15/07/2009), 2010 AIR(SC) 3141: 2009(10) SCR 1013: 2009(15) SCC 195: 2009(9) JT 406: 2009(9) SCALE 549: 2009(5) Supreme 626: 2009(6) SLT 373 [Markandey Katju, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — Limitation — Time barred complaint, scope — Fire insurance claim — Fire in godown took place on 22nd/23rd March, 1988, damaging tobacco stocks hypothecated with Bank in whose account policy had been taken by appellant — Cause of action could be said to have arisen on 22nd/23rd March, 1988 — Complaint, therefore, ought to have been filed within two years from 23rd March 1988 — Complaint being filed by appellant on or after 24th October 1997 can be said to be clearly time barred — Appellant found not depending on claim stated to have been made by Bank with Insurance Company — In facts of case, National Commission rightly came to conclusion that filing of claim by Bank on 14th July, 1988, would not have, in any way, helped appellant — Reply by Insurance Company to legal notice dated 4th January 1996 not resulted in extending period of limitation — Complaint filed on 24th October 1997 without application for condonation of delay rightly dismissed by National commission by holding it as time barred — Insurance — Fire insurance claim — Time barred complaint, scope.

HELD: It is, therefore, clear from the aforenoted correspondence between the appellant and the Insurance Company that cause of action in respect of the special insurance policy arose on 22nd / 23rd March, 1988, when fire in the godown took place damaging the tobacco stocks hypothecated with the Bank in whose account the policy had been taken by the appellant. Thus, the limitation for the purpose of Section 24A of the Act began to run from 23rd March, 1988 and therefore, the complaint before the Commission against the Insurance Company for deficiency in service, whether for non issue of claim forms or for not processing the claim under the policy, ought to have been filed within two years thereof. As noticed above, the complaint was in fact filed on or after 24th October, 1997, which was clearly barred by time. It is pertinent to note that in the complaint before the Commission, though there was an averment that the Bank had not disclosed to the appellant whether any amount had been received by them from the Insurance Company against the claim preferred on 14th July, 1988, but appellant’s categorical stand therein was that it was because of the pendency of the criminal litigation that they could not make a claim in respect of the policy for the loss suffered and time and again they had been requesting the Insurance Company to send the claim forms, which request was not acceded to by the Insurance Company, and it shows that the appellant was not depending on the claim stated to have been made by the Bank with the Insurance Company.

A bare reading of the impugned order shows that all these factual aspects have been duly taken into consideration by the Commission and we are in complete agreement with the finding by the Commission that the filing of claim by the Bank on 14 th July, 1988, would not have, in any way, helped the appellant. On their own showing, for the first time, only on 6th November, 1992 and then again on 26th October, 1995, the appellant had requested the Insurance Company to issue claim form to enable them to prefer a claim which request was declined by the Insurance Company on 21st March, 1996. By no stretch of imagination, it can be said that Insurance Company’s reply dated 21st March, 1996 to the legal notice dated 4th January, 1996, declining to issue the forms for preferring a claim after a lapse of more than four years of the date of fire, resulted in extending the period of limitation for the purpose of Section 24A of the Act. We have no hesitation in holding that the complaint filed on 24th October, 1997 and that too without an application for condonation of delay was manifestly barred by limitation and the Commission was justified in dismissing it on that short ground.

For the foregoing reasons, we do not find any merit in this appeal. It is dismissed accordingly with costs.

Kandimalla Raghavaiah & Co. v. National Insurance Co. [Bench Strength 2], CA No. 4962/2002 (10/07/2009), 2009(10) SCR 870: 2009(7) SCC 768: 2009(9) JT 89: 2009(9) SCALE 480: 2009(5) Supreme 377 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — “Cause of action” — Meaning of — Term “cause of action” is neither defined in Act nor in Code of Civil Procedure, 1908 but is of wide import — It can be said to have different meanings in different contexts, that is when used in context of territorial jurisdiction or limitation or accrual of right to sue — Words and Phrases — Cause of action.

Kandimalla Raghavaiah & Co. v. National Insurance Co. [Bench Strength 2], CA No. 4962/2002 (10/07/2009), 2009(10) SCR 870: 2009(7) SCC 768: 2009(9) JT 89: 2009(9) SCALE 480: 2009(5) Supreme 377 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — Limitation — Delayed complaint, duty of Commission in case of, scope — Provision contained in Section 24A expressly casts a duty on Commission, admitting a complaint, to dismiss a complaint unless complainant satisfies District Forum, State Commission or National Commission, as the case may be, that complainant had sufficient cause for not filing complaint within period of two years from date on which cause of action had arisen.

Kandimalla Raghavaiah & Co. v. National Insurance Co. [Bench Strength 2], CA No. 4962/2002 (10/07/2009), 2009(10) SCR 870: 2009(7) SCC 768: 2009(9) JT 89: 2009(9) SCALE 480: 2009(5) Supreme 377 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(g), (o) & 14(1)(d) — Insurance — Mediclaim policy, repudiation of claim on the ground of misrepresentation, scope — Repudiation of claim on the ground of suppression of material facts in regard to health of insured — Placing reliance by insurer on certificate issued by hospital where insured got his treatment held to be not improper — Insurance — Mediclaim policy — Repudiation of claim on the ground of misrepresentation, scope — Insurance Regulatory and Development Authority (Protection of Policyholders’ Interest) Regulations, 2002 — Regulation 2(1)(d) — Contract Act, 1872 — Sections 18 & 19.

HELD: We do not find any substance in the contention of learned counsel for the appellant that reliance could not be placed on the certificate obtained by the respondent from the hospital, where the insured was treated. Apart from the fact that at no stage the appellant had pleaded that the insured was not treated at Vijaya Health Centre at Chennai, where he ultimately died. It is more than clear from the said certificate that information about the medical history of the deceased must have been supplied by his family members at the time of admission in the hospital, a normal practice in any hospital. Significantly, even the declaration in the proposal form by the proposer authorizes the insurer to seek information from any hospital he had attended or may attend concerning any decease or illness which may affect his health.

HELD: Answers given by the proposer to the two questions were “Sound Health” and “Nil” respectively. It would be beyond anybody’s comprehension that the insured was not aware of the state of his health and the fact that he was suffering from Diabetes as also chronic Renal failure, more so when he was stated to be on regular haemodialysis. There can hardly be any scope for doubt that the information required in the afore-extracted questions was on material facts and answers given to those questions were definitely factors which would have influenced and guided the respondent-Insurance Company to enter into the Contract of Mediclaim Insurance with the insured. It is also pertinent to note that in the claim form the appellant had stated that the deceased was suffering from Chronic Renal Failure and Diabetic Nephropathy from 1st June, 1990, i.e. within three weeks of taking the policy. Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the insured in the proposal form as to the state of his health was palpably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the insured and, therefore, the respondent — Insurer was fully justified in repudiating the insurance contract.

HELD: The upshot of the entire discussion is that in a Contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact”. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance.

HELD: It is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment.

Satwant Kaur Sandhu v. New India Assurance Company Ltd. [Bench Strength 2], CA No. 2776/2002 (10/07/2009), 2009(10) SCR 560: 2009(8) SCC 316: 2009(9) JT 82: 2009(9) SCALE 488: 2009(5) Supreme 523: 2009(6) SLT 338 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g) & 14(1)(d) — Insurance company — Liability of, to pay amount of compensation on account of death in accident, scope — Vehicle accident claim against insurer — Repudiation of claim — Non-holding of effective licence on date of accident — Accident occurred on 29th February, 1992 — Driving licence of deceased driver found to be already expired on 25th October, 1991 — Same not sought to be renewed within 30 days of date of its expiry — It found to be renewed after accident, i.e. on 23rd March, 1992 — In view of proviso to Section 15, deceased driver could not be said to have effective licence on date of accident — Plea that he was not disqualified from holding any effective licence as provided in Section 19 held to be not tenable — Claimant owner of vehicle not only violated condition of policy but also violated Section 5 by entrusting his vehicle to a person who did not hold a valid licence on date of accident — Appellant-insurer held not liable to indemnify claimant for loss suffered by him in accident of insured vehicle — Motor Vehicles Act, 1988 — Sections 3, 5, 15 proviso, 168, 149 & 19.

HELD: In the instant case, as noted above, as per the certificate issued by the licensing authority, the driving licence of the deceased driver had expired on 25th October, 1991 i.e. four months prior to the date of accident on 29th February, 1992 and it was renewed with effect from 23rd March, 1992. It is not the case of the claimant that the driver had applied for renewal of the licence within 30 days of the date of its expiry. On the contrary, it is the specific case of the appellant that the driving licence was renewed only with effect from 23rd March, 1992. From a plain reading of Section 15 of the Act, it is clear that if an application for renewal of licence is made within 30 days of the date of its expiry, the licence continues to be effective and valid without a break as the renewal dates back to the date of its expiry. Whereas, when an application for renewal is filed after more than 30 days after the date of its expiry, proviso to sub-section (1) of Section 15 of the Act, gets attracted and the licence is renewed only with effect from the date of its renewal, meaning thereby that in the interregnum between the date of expiry of the licence and the date of its renewal, there is no effective licence in existence. The provision is clear and admits of no ambiguity. However, the stand of the claimant before the District and State Fora as also before us was that since the deceased driver was holding a valid licence and had not been disqualified from holding an effective licence, the stipulation in the afore-extracted condition was not infringed. In our view, the argument is stated to be rejected. Admittedly, having failed to apply for renewal of the driving licence within 30 days from the date of its expiry in terms of Section 15 of the Act, the licence could not be renewed with effect from the date of its expiry and therefore, between the period from 26th October, 1991 to 22nd March, 1992, the deceased driver had no valid and effective driving licence as contemplated under Section 3 of the Act. We are convinced that during this period, he did not hold at all an effective driving licence, as required in the terms and conditions governing the policy on the date of accident i.e. 29th February, 1992.

As a matter of fact, in view of the clear mandate of Section 3 of the Act, the deceased driver was not even permitted to drive the insured vehicle in a public place. Furthermore, the claimant not only committed breach of the terms of the policy, he also violated the provisions of Section 5 of the Act by entrusting the vehicle to a person who did not hold a valid licence on the date of the accident. Although it was not pleaded by learned counsel for the appellant, but we fail to understand as to how the licence was and could be renewed w.e.f. 23rd March, 1992 after the death of the licence-holder on 29th February, 1992. In our opinion, therefore, the appellant was not liable to indemnify the claimant for the loss suffered by him in the accident of the insured vehicle.

New India Assurance Co. Ltd. v. Suresh Chandra Aggarwal [Bench Strength 2], CA No. 44/2003 (10/07/2009), 2009 AIR(SC) 2987: 2009(10) SCR 885: 2009(15) SCC 761: 2009(9) JT 77: 2009(9) SCALE 449: 2009(5) Supreme 338: 2010(3) SCC(Cr) 992 [D.K. Jain, J.: B. Sudershan Reddy, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14(1)(d) & 23 — Insurance claim — Quantum of, deficiency in account, deduction from gross loss, scope — Deduction of 50% on account of various deficiencies as suggested by surveyor without giving any reasons justifying such deduction from actual assessment of loss, held, improper — Fire in factory — Assessment of loss of stock — Method of discounting by 50 percent, not justified — A fire broke out in factory godowns — Respondent insured submitted a claim for a sum of Rs 81.33 lakhs — Surveyor assessed loss caused to the stock of Rs 62,38,655,76 from which salvage value and thereafter 50% of the amount was deducted for various alleged deficiencies and assessed the loss of Rs 28,64,560.38 — Insurance company approved the claim for an amount of Rs 22,46,536 — Consumer complaint — National Commission directed insurance company to pay deducted amount of Rs 28,64,560 with interest — Appeal against — Respondent insured was permitted to withdraw 25 percent of the amount awarded by the National Commission without furnishing any security — Balance 75 percent amount was also withdrawn by furnishing a bank guarantee — Respondents were prepared to accept deduction of 35 percent from the total claim for alleged deficiencies — Total loss assessed at Rs. 37,23,928.49 — Respondent insured directed to return excess amount as determined.

HELD: A fire broke out in the factory of the respondent on 25.11.1997. Twelve years have passed by and therefore we are of the considered opinion that it would not be worthwhile to remit the matter back to the Commission. The appellant Company accepted the report of the Investigator wherein also the total loss of the stock was shown to be Rs. 61,50,990.15. Some of the aforesaid claims are based upon receipts which were not found to be authentic by the Investigator. The respondents were prepared to accept deduction of 35 per cent from the total claim for the alleged deficiencies. They have also been paid 25 per cent of the amount found due by the Commission over and above what was assessed and paid by the Insurance Company.

In view of the aforesaid factual position and peculiar circumstances of the case we hold that the total loss of stock is Rs. 57,29,120.76 out of which 35 per cent of the amount would stand deducted so the total loss is assessed at Rs. 37,23,928.49. The respondent is also entitled to 10 per cent interest in terms of the order of the Commission on the said amount as no argument was advanced by the appellant on the aforesaid issue.

The respondent has already received the amount which was awarded by the Commission over and above what was paid by the Insurance Company. An amount of 25 per cent was allowed to be withdrawn without security and for the balance amount which was also withdrawn by the Company, they had issued a bank guarantee, which is valid till date.

It is therefore, directed that the Commission shall now recover the excess amount paid to the respondent in terms of this order and return the said excess amount paid/deposited by the Insurance Company within eight weeks from today.

Senior Divisional Manager, O.I. Co. Ltd. v. Target Plywood Industries Ltd. [Bench Strength 2], CA No. 4315/2006 (07/07/2009), 2009(10) SCR 356: 2009(7) SCC 759: 2009(9) JT 42: 2009(9) SCALE 147: 2009(5) Supreme 708 [Mukundakam Sharma, J.: B.S. Chauhan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14(1)(d) & 23 — Insurance — Liability of insurer, extent of — Appellant obtained insurance policy for its diesel generating set along with alternator — Broke down of diesel generating set during subsistence of policy period — Payment of Rs. 25 lakhs by appellants for repairs — Claim for reimbursement — Insurer agreed to reimburse Rs. 8,07,110/- only on basis of surveyor report — Whether insurer to pay full expenses incurred to restore damaged set? — Held, no — Policy not provides for protection against tear and wear that machinery undergone and that insured may choosen to replace — No reason for rejecting surveyors’ report — Refusal to reimburse full claim by insurer justified — Insurance — Liability of insurer — Extent of.

New India Assurance Company Limited v. Pradeep Kumar, 2009(6) Scale 253, Referred.

HELD: We find it difficult to accept the aforestated contention since it overlooks the General Exceptions incorporated in the policy that provide that the insurer shall not be liable under the policy in respect of deterioration of or wearing away or wearing out of machine caused by or naturally resulting from normal use or exposure. In other words, the policy 9 does not provide for protection against wear and tear that the machinery had undergone and that the insured may have chosen to replace. The provision of `sum insured’ viz., the cost of replacement of insured property by new property of the same kind and same capacity is subject to the exception that repair or replacement shall not extend to the machinery or parts which have undergone normal wear and tear due to its use and exposure. In terms of the Machinery Insurance Policy taken by the insured, the insurer is required to reimburse the insured to the extent of moneys spent on repairs or replacement of the machinery to the kind of position that it was before the incident of damage.

HELD: In the Dictionary of Insurance (Second Edn.) by C.Bennett, “under-insurance” is explained thus:
“under-insurance occurs when the amount of insurance is less than the full value of property insured and means that the insured pays a smaller premium than that required as the rate is fixed on the basis of full values being insured. It leads to partial loss claims being scaled down by average (qv.).”

The expression “average” is explained thus:
“In non-marine property insurance if a sum insured is `subject to average’, and the sum insured is less than the value at risk at the time of loss, the claim will be reduced in the same proportion. The measure combats under-insurance.”

As per the invoice, the diesel generating set and the alternator was purchased by the complainant in the year 1997 for Rs.45,25,000/-. The complainant, however, got the insurance cover valuing diesel generating set (Rs.26,00,000/-) and alternator (Rs.9,00,000/-), in all for Rs.35,00,000/-. Apparently, therefore, there is an element of under-insurance. There is merit in the contention of learned counsel for the insurer that the value of the item is always declared by the insured at the time of issuance of the insurance policy while the element of under-insurance is calculated by the insurer at the time of assessment of loss. Although on behalf of the complainant, it was contended that under-insurance, if any, must be calculated at the time of issuance of policy and could not be deducted at the time of assessment of the loss but we find it difficult to accept the same. The policy provides that if the sum insured is less than the amount required to be insured, the insurer will pay only in such proportion as the sum insured bears to the amount insured. In accordance with the said provision in the policy if the surveyor applied the pro-rata formula and deducted 25.71% from the loss so assessed i.e. Rs.3,71,509.50 from the sum payable as under-insurance, such deduction cannot be faulted.

Sikka Papers Limited v. National Insurance Company Ltd. [Bench Strength 2], CA No. 6527/2002 (29/05/2009), 2009 AIR(SC) 2834: 2009(9) SCR 1088: 2009(7) SCC 777: 2009(7) JT 465: 2009(8) SCALE 593: 2009(4) Supreme 733 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14(1)(d) & 21 — Medical negligence — What is, transfusion of mismatched blood group, effect of — Compensation — Awarding of — Hospitalisation of `HK’ on account of 50% burn injuries — Transfusion of B+ blood group to patient `HK’, though her blood group was A+ — Transfusion of mismatched blood group resulted in fall of hemoglobin and deranging of kidney and liver — Condition of patient deteriorated and ultimately `HK’ met with death — Husband and son filed complaint alleging negligence against appellants — Question is whether death of `HK’ occurred due to medical negligence? — Held, yes — Mismatched blood transfusion is an error, a sure instance of medical negligence — Hospitals breach of duty contributed to death of `HK’ — Concurrent findings as to negligence on part of appellants, not suffer from any error of law — Complainants are entitled to compensation — Torts — Medical negligence — What is, transfusion of mismatched blood group, effect of — Penal Code, 1860 — Section 304-A.

HELD: The patient, Harjit Kaur, got burn injuries to the extent of 50% on March 30, 1996. She was initially treated at Daya Nand Medical College and Hospital, Ludhiana for about 20 days. Her condition improved satisfactorily at Daya Nand Medical College and Hospital. She was admitted to PGI, Chandigarh on April 19, 1996. The available material placed before the State Commission shows that at the time of her admission, Smt. Harjit Kaur was taking medicine orally and passing urine; 75% of eschar was removed by May 1, 1996. Her condition had substantially improved at PGI before May 20, 1996 and she had no signs of septicemia. It was only after mismatched blood transfusion B+ on two consecutive days, i.e., 20th and 21st May, 1996, that she became anemic (her hemoglobin level was reduced to 5 per gram) and her kidney and liver were deranged. It is true that her hemoglobin was brought up in few days but her condition otherwise got deteriorated. Although she survived for about 40 days after mismatched blood transfusion but from that it cannot be said that there was no causal link between the mismatched transfusion of blood and her death. Wrong blood transfusion is an error which no hospital/doctor exercising ordinary care would have made. Such an error is not an error of professional judgment but in the very nature of things a sure instance of medical negligence. The hospital’s breach of duty in mismatched blood transfusion contributed to her death, if not wholly, but surely materially. Mismatched blood transfusion to a patient having sustained 50% burns by itself speaks of negligence. Therefore, in the facts and circumstances of the case, it cannot be said that the death of Smt. Harjit Kaur was not caused by the breach of duty on the part of the hospital and its attending staff.

Post Graduate Institute of Medical Education & Research v. Jaspal Singh [Bench Strength 2], CA No. 7950/2002 (29/05/2009), 2009(9) SCR 889: 2009(7) SCC 330: 2009(7) JT 527: 2009(8) SCALE 601: 2010(3) SLT 608: 2009(3) SCC(Cr) 399 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14 & 21 — Medical negligence — Causations, drawing inference of, scope — An inference of causations may be drawn even though positive/scientific proof is lacking when evidence to the contrary is absent — Torts — Medical negligence — Causations, drawing inference of, scope.

Post Graduate Institute of Medical Education & Research v. Jaspal Singh [Bench Strength 2], CA No. 7950/2002 (29/05/2009), 2009(9) SCR 889: 2009(7) SCC 330: 2009(7) JT 527: 2009(8) SCALE 601: 2010(3) SLT 608: 2009(3) SCC(Cr) 399 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14 & 21 — Medical negligence — Burden of proof, on whom lies — In the medical negligence actions, burden is on claimant to prove breach of duty, injury and causation — Torts — Medical negligence — Burden of proof, on whom lies — Evidence Act, 1872 — Sections 101 to 103.

Post Graduate Institute of Medical Education & Research v. Jaspal Singh [Bench Strength 2], CA No. 7950/2002 (29/05/2009), 2009(9) SCR 889: 2009(7) SCC 330: 2009(7) JT 527: 2009(8) SCALE 601: 2010(3) SLT 608: 2009(3) SCC(Cr) 399 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Negligence — Professional negligence, standard of Judging — Standard to be applied for judging, whether the person charged has been negligent or not; would be that of an ordinary person exercising skill in that profession — It is not necessary for every professional to possess the highest level of expertise in that branch which he practices.

Post Graduate Institute of Medical Education & Research v. Jaspal Singh [Bench Strength 2], CA No. 7950/2002 (29/05/2009), 2009(9) SCR 889: 2009(7) SCC 330: 2009(7) JT 527: 2009(8) SCALE 601: 2010(3) SLT 608: 2009(3) SCC(Cr) 399 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Negligence — Professional negligence, liability for, scope — A professional may be held liable for negligence if he was not possessed with requisite stall which he professed to have possessed or did not exercise with reasonable competence in the given case the skill which he did possess — Torts — Negligence — Professional negligence, liability for, scope.

Post Graduate Institute of Medical Education & Research v. Jaspal Singh [Bench Strength 2], CA No. 7950/2002 (29/05/2009), 2009(9) SCR 889: 2009(7) SCC 330: 2009(7) JT 527: 2009(8) SCALE 601: 2010(3) SLT 608: 2009(3) SCC(Cr) 399 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), (c)(iii) & 14 — Medical negligence — Determination of, implied consent for a surgery, what is not — Consent given by complainant for excision biopsy cannot, by inference, be taken as an implied consent for a surgery save in exceptional cases — Torts — Medical negligence — Scope, implied consent for a surgery, what is not — Penal Code, 1860 — Section 304-A — Contract Act, 1872 — Sections 10, 13 & 14.

Samira Kohli vs. Dr. Prabha Manchanda & Anr. (2008) 2 SCC 1, Relied on.

Nizam Institute of Medical Sciences v. Prasanth S. Dhananka [Bench Strength 3], CA No.4119/1999 (14/05/2009), 2009(9) SCR 313: 2009(6) SCC 1: 2009(6) JT 651: 2009(7) SCALE 407: 2009(4) Supreme 165: 2010(3) SLT 734: 2009 CrLJ 3012 [B.N. Agrawal, J.: Harjit Singh Bedi, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), (c)(iii), 14(1)(d), 18, 22 & 23 — Medical negligence — Compensation, quantum of, scope — Failure to complete investigations prior to actual operation — Excision biopsy — Patient, a young boy aged 20 years, engineering student — Immediately after the surgery on 23.10.1990, patient developed acute paraplegia with a complete loss of control over the lower limbs — Prolonged hospitalization — Complainant now employed as IT Engineer, earning a sum of Rs. 28 lakh per annum claiming about 7.50 Crores as compensation — Award of Rs. One crore plus interest @ 6% from 1.3.1999 to the date of payment held justified — Contract Act, 1872 — Section 73 — Torts — Medical negligence — Compensation, quantum of, scope.

HELD: Concededly, the complainant is a highly qualified individual and is gainfully employed as an IT Engineer and as per his statement earning a sum of Rs.28 Lakh per annum though he is, as of today, about 40 years of age. The very nature of his work requires him to travel to different locations but as he is confined to a wheel chair he is unable to do so on his own. His need for a driver cum attendant is, therefore, made out. The complainant has worked out the compensation under this head presuming his working life to be upto the age of 65 years. We feel that a period of 30 years from the date of the Award of the Commission i.e. 16 th February, 1999, rounded off to Ist March, 1999, would be a reasonable length of time. A sum of Rs.2,000/- per month for a period of 30 years (rounded off from 1st of March 1999) needs to be capitalized. We, accordingly, award a sum of Rs.7.2 Lakh under this head. The complainant has also sought a sum of Rs.49,05,800/- towards nursing care etc. as he is unable to perform even his daily ablutions without assistance. He has computed this figure on the basis of the salary of a Nurse at Rs. 4375/- per month for 600 months. We are of the opinion that the amount as claimed is excessive. We, thus grant Rs.4,000/- per month to the appellant for a period of 30 years making a total sum of Rs.14,40,000/-. The complainant has further sought a sum of Rs.46 Lakhs towards physiotherapy etc. at the rate of Rs.4,000/- per month. We reduce the claim from Rs.4,000/- to Rs.3,000/- per month and award this amount for a period of 30 years making a total sum of Rs.10,80,000/- At this stage, it may be pointed out that some of the medical expenses that had been incurred by the complainant have already been defrayed by the employer of the complainant’s father and we are, therefore, disinclined to grant any compensation for the medical expenses already incurred. However, keeping in view the need for continuous medical aid which would involve expensive medicines and other material, and the loss towards future earnings etc., we direct a lump sum payment of Rs.25/-lakhs under each of these two heads making a total of Rs.50 lakhs. In addition, we direct a payment of Rs.10 lakh towards the pain and suffering that the appellant has undergone. The total amount thus computed would work out to Rs.1,00,05,000 (Rs.1 crore 5 thousand) which is rounded off to Rs. One Crore plus interest at 6% from Ist March, 1999 to the date of payment, giving due credit for any compensation which might have already been paid.

The complainant has also claimed a sum of Rs.2 crore to be put in deposit to be utilized by him in case some developments in the medical field make it possible for him to undergo further treatment so as to improve his quality of life. This claim is unjustified and hypothetical and is declined.

HELD: We must emphasize that the Court has to strike a balance between the inflated and unreasonable demands of a victim and the equally untenable claim of the opposite party saying that nothing is payable. Sympathy for the victim does not, and should not, come in the way of making a correct assessment, but if a case is made out, the Court must not be chary of awarding adequate compensation. The “adequate compensation” that we speak of, must to some extent, be a rule of the thumb measure, and as a balance has to be struck, it would be difficult to satisfy all the parties concerned. It must also be borne in mind that life has its pitfalls and is not smooth sailing all along the way (as a claimant would have us believe) as the hiccups that invariably come about cannot be visualized. Life it is said is akin to a ride on a roller coaster where a meteoric rise is often followed by an equally spectacular fall, and the distance between the two (as in this very case) is a minute or a yard. At the same time we often find that a person injured in an accident leaves his family in greater distress, vis-a-vis a family in a case of death. In the latter case, the initial shock gives way to a feeling of resignation and acceptance, and in time, compels the family to move on. The case of an injured and disabled person is, however, more pitiable and the feeling of hurt, helplessness, despair and often destitution enures every day. The support that is needed by a severely handicapped person comes at an enormous price, physical, financial and emotional, not only on the victim but even more so on his family and attendants and the stress saps their energy and destroys their equanimity.

Savita Garg vs. Director, National Heart Institute 2004(8) SCC 56, Relied on.

HELD: It is clear that a mere misjudgment or error in medical treatment by itself would not be decisive of negligence towards the patient and the knowledge of medical practice and procedure available at the time of the operation and not at the date of trial, is relevant. It is also evident that a doctor rendering treatment to a patient is expected to have reasonable competence in his field. (Bolam’s principle). It is the case of the complainant that it is the lack of care and caution and the neglect on the part of the attending doctors, and Dr. Satyanarayana in particular, to make the necessary pre-operative investigations that had led to the complications at the time of the operation and thereafter.

Nizam Institute of Medical Sciences v. Prasanth S. Dhananka [Bench Strength 3], CA No.4119/1999 (14/05/2009), 2009(9) SCR 313: 2009(6) SCC 1: 2009(6) JT 651: 2009(7) SCALE 407: 2009(4) Supreme 165: 2010(3) SLT 734: 2009 CrLJ 3012 [B.N. Agrawal, J.: Harjit Singh Bedi, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), (c)(iii), 14 & 23 — Medical negligence — Failure to complete investigations prior to actual operation, sufficient proof of, scope — Excision biopsy — Incomplete diagnostic procedure — Tumour was not only confined to the thorax but had extended into the posterior mediastinal column as well — No neuro-surgeon associated — Surgery by a cardio thoracic surgeon only — Immediately after the surgery, patient, a young boy aged 20 years developed acute paraplegia with a complete loss of control over the lower limbs — Complaint alleging negligence on the part of surgeon and other attending doctors — Whether National Commission was justified in holding the doctors negligent in diagnosis — Held, yes — Torts — Medical negligence — Failure to complete investigations prior to actual operation, sufficient proof of, scope.

HELD: The first stage would be that of diagnosis. As already observed above, we have carefully and independently evaluated the findings of negligence arrived at by the Commission. The main plea of the complainant is that the pre-operation examinations had revealed a situation which required the intervention of a Neuro Surgeon. The case of Dr. Satyanarayana, however, is that the involvement of the vertebral column had been revealed only after the removal of the tumour. We find this assertion to be incorrect. It may be mentioned that the operation had been performed on 23rd October 1990 but in the pre-operative discharge record dated 19th September 1990 ( Annexure P-29) there is a reference to a mass lesion in the left upper chest with erosion of ribs and vertebrae and no masses anywhere else. This document has to be read in conjunction with Annexure P-27, a discharge record dated 19th May 1991 wherein it was specifically recorded that during the operation on 23rd October 1990 a huge tumour had been noticed in the left hemithorax with the second and third ribs eroded and that the vertebral body was eroded and the tumour mass along with extensions into chest wall and the fourth rib were all excised. These two documents when read together belie Dr. Satyanarayana’s statement in his cross-examination that the erosion had been revealed for the first time after the tumour had been removed. It has been the positive case of the complainant that had an MRI or Myclography test been carried out, the possibility that the surgery was not required could have been revealed.

These observations do undoubtedly justify an excision biopsy but equally support the case of the complainant inasmuch that his case too was that had an MRI been performed, the extent of the tumour and its extension into the spinal cord would have been revealed. We have, therefore, no hesitation in holding that the complete investigations prior to the actual operation had not been carried out.

The record shows that the tumour 4×4 cm in dimension was located on the left upper chest side of the thorax and there had been erosion of the 2nd, 3rd and 4th ribs. The discharge record pertaining to the operation also reveals that there was a one cm size opening in the vertebral body exposing the spinal cord at the thorax level and that the tumour had been excised along with the 4th rib. The record also shows that the tumour was not only confined to the thorax but had extended into the posterior mediastinal column as well, showing that it had some connection with the spinal cord. It is in this background that the complainant has argued that whereas a cardio-thoracic Surgeon was undoubtedly competent to perform the surgery for the excision of the tumour but as the tumour had extended into the posterior mediastinal column containing inter-costal blood vessels and nerves, the involvement of a Neuro Surgeon was essential and as this procedure had not been adopted a case of negligence or indifference on the part of the attending doctors had been proved. It has also been highlighted time and again that the information that the 2nd, 3rd and in particular 4th ribs had eroded was available with the doctors long before the operation and thus the fact the tumour had extended into the mediastinal column was a clear possibility.

It appears to us that Dr. Satyanarayana’s evidence shows a great measure of negligence in the operation. In his affidavit, he has stated that if it had been found that the tumour had penetrated into the spinal column the patient would have been referred to a Neuro Surgeon as well. To our mind, this statement itself when read with the incomplete diagnostic procedures that had been adopted, show that had the necessary tests been performed, the fact that the tumour had penetrated into the vertebral column, would have been revealed. Dr. Satyanarayana further goes on to say that it was not a case of interference with the spinal cord and in justification he has stated that after operation of the tumour had been removed Professor I. Dinaker, had been called in and on examination he had noticed only a bony erosion and no involvement of the spinal cord. We are of the opinion that this half-baked diagnosis at the stage of the operation only after the excision of the tumour does no credit to the Doctor. It is also significant that the operation record dated 23rd October, 1990 shows that the tumour mass had extended into the inter-vertebral foramen and that there was an opening one cm in size in the vertebral body exposing the spinal cord.

A reading of all three texts pointedly refer to the fact that in a case of a tumour in the posterior mediastinal, the possibility of the extension of the tumour into the foramen and the vertebral column must be kept in mind and a neuro surgeon must be associated with the diagnosis and the actual operation.

Nizam Institute of Medical Sciences v. Prasanth S. Dhananka [Bench Strength 3], CA No.4119/1999 (14/05/2009), 2009(9) SCR 313: 2009(6) SCC 1: 2009(6) JT 651: 2009(7) SCALE 407: 2009(4) Supreme 165: 2010(3) SLT 734: 2009 CrLJ 3012 [B.N. Agrawal, J.: Harjit Singh Bedi, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Insurance claim — Death in accident, denial of claim on account of fabricated licence, when valid — Breach of policy condition — Validity of driving licence — Husband of respondent obtained a policy covering risk of accidental death of insured — Death of policy holder in road accident while proceeding on motor cycle — Repudiation of respondents’ claim on the ground that policy holder had licence to drive tractor trailor but not motor cycle with gear and his licence was fabricated — Repudiation of claim, challenge to — Forums below held since insured died during validity of policy in accident, stand that his driving licence was fabricated is of no consequence — Ex B2 certificate issued by transport authorities shows the driving licence as fabricated — No material on record to deny EX. B2 as not an authentic one — Applicability of `Laxmi Narain’s case’ was not considered by forum below — Matter remitted to National Commission for decision afresh — Motor Vehicles Act, 1988 — Sections 3, 168, 149.

National Insurance Co. Ltd. Vs. Laxmi Narain Dhut, 2007(4) SCALE 36, Relied on.

National Insurance Co. Ltd. Vs. Swaran Singh and Ors., (2004) 3 SCC 297, Not applicable.

HELD: The basic issue in the case was whether the deceased had a valid driving licence to drive the vehicle i.e. motor cycle with gear which was involved in the accident. The District Forum, State Commission and National Commission were of the view that since the deceased had a valid insurance policy and there was no dispute that the accident had taken place and the insured died during the validity of said policy, the stand that the driving licence of the deceased was fabricated was of no consequence. It was held that the insurance company had not discharged the burden to prove that the driving licence of the deceased was fabricated. The District Forum observed that no affidavit of the authority who issued the certificate (Ex.B-2) has been filed. The view was endorsed by the State Commission and by the National Commission. Additionally, the National Commission held that the licence produced clearly indicated that the deceased was having licence to drive motor cycle also. This finding cannot be maintained because there was a dispute about the genuineness of the licence failed to show that the deceased had licence to drive motor cycle. Additionally after Exh. B-2 was filed, there was no material brought on record by the complainant to show that the certificate dated 27.2.2006 issued by transport authorities was not authentic. Therefore the question of the insurance company having not discharged the burden, does not arise.

The present case is not a third party case and is a case of contractual liability and therefore Swaran Singh’s case (supra) was not applicable.

In the circumstances we think that it would be appropriate to remit the matter to the National Commission to consider the matter afresh in the light of Laxmi Narain’s case (supra). The National Commission shall permit the parties to place material on record regarding the authenticity or otherwise of the driving licence.

National Insurance Co. Ltd. Vs. Swaran Singh and Ors., (2004) 3 SCC 297, Relied on.

National Insurance Company Limited v. J. Maheshwaramma [Bench Strength 2], C.A. No. 3408/2009 (@ SLP(C) No. 19995/2007 (08/05/2009), 2009(8) SCR 524: 2009(13) SCC 188: 2009(8) SCALE 92: 2010(3) SCC(Cr) 984 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1)(a) — `Who is or has been a judge’ — Construing of — Appointment of appellant as President of State Commission — Justiciability of — Appellant, a practicing advocate of Madras High Court was earlier appointed as an Additional Judge of High Court for 2 years — However, appellant was not made as permanent judge for want of probity and integrity — However, for purpose of medical benefits, appellant was treated as retired judge of High Court — That being so, post of President to State Commission fell vacant — Chief justice of High Court sent a panel of 3 names including the appellant’s name to State Government — Appointment of appellant as chairman — Challenge to — Question is whether expression is `or has been a judge of High Court’ under section 16 include an additional judge who was not reappointed/made permanent for lack of probity and integrity? — Held, no — Retired judge for the purpose of section 16 are those judges who retired without any blemish but not merely a person `who has been a judge’ — If a person has made himself disqualified to hold the post of a judge, the chief justice should not consider his name at all — Collegium found the appellant unfit to continue as judge — Judge whose tenure ended by way of non-extension as a stigma not comes within purview of definition `has been a judge of High Court’ — Appointment of appellant is not valid — Constitution of India — Articles 32, 50, 216, 217, 219, 220, 221, 222, 223 & 224 — Words and Phrases — Who is or has been a judge.

S.P. Gupta v. Union of India, (1981) Supp. SCC 87, Supreme Court Advocates-on-Record Association and others v. Union of India, 1993(4) SCC 441, Ashok Kumar Yadav v. State of Haryana, 1985(4) SCC 417, Re – Special Reference No. 1 of 1998, 1998(7) SCC 739, Ashish Handa v. The Hon’ble the Chief Justice of High Court of Punjab and Haryana and others, 1996(3) SCC 145, Relied on.

HELD: The words “is or has been” refer to the person holding the office of a Judge or who has held the said office. It may be said to have the same meaning so far as eligibility is concerned.

Suitability of a person to be considered for appointment as a Chairman of a State Commission having regard to the provisions contained in Article 217 of the Constitution of India has been assumed by this Court to be available for the eligible persons who are retired Judges which would mean that those Judges who had retired from service without any blemish whatsoever and not merely a person who “has been a judge”.

An Additional Judge holding a tenure post stricto sensu does not retire. It is one thing to say that having regard to the constitutional embargo, he would not hold office after he attains the age of 62 years but it is another thing to say that for all other purposes, he can be equated with a sitting Judge.

The jurisdiction of the consumer courts and particularly that of the State Commission and the National Commission is of great importance. Various complicated questions of law and facts arise for their consideration. It must, save and except for very cogent reasons refuse to entertain a claim application and ask the parties to agitate their grievances before a Civil Court. Indisputably, the functions of the Commission are judicial. The State Commission, as noticed hereinbefore, not only exercises original jurisdiction but also appellate jurisdiction. The guidelines clearly point out as to why, considering the basic feature of the Constitution, namely the independence of the judiciary, a sitting Judge must maintain the high traditions.

An Additional Judge who has not been confirmed, may for the purpose of giving effect to the constitutional provisions be considered to be a former Judge but when it comes to the question of his appointment in the said capacity, in our opinion, it is possible to take somewhat different view having regard to his present status, viz., an advocate or a district judge, as the case may be. He despite being a former Judge is entitled to practice in the same High Court, which other Judges are not permitted to do so. He may appear before the Tribunal and subordinate courts. A person for the aforementioned purpose must answer the test of his being qualified to be a Judge. For the purpose of Section 16 of the Act, he must be equated with a sitting Judge of a High Court. In other words, he could, but for the reasons like reaching the age of superannuation, continue as a Judge.

A Judge must have these basic qualities and, thus, must be found to possess the same. A person found to be lacking these qualities would not be recommended for appointment of a permanent judge.

If a person does not have qualification for continuing to hold the office of the Judge of a High Court, it is difficult to conceive as to how despite such deficiency in qualification, he could be recommended for appointment to a statutory post, the eligibility criteria wherefor is inter alia a former Judge. A Chief Justice of a High Court, thus, before making recommendations for his appointment in terms of Section 16 of the Act must satisfy himself that the recommendee has/had those basic qualities.

While making recommendations the Chief Justice performs a constitutional duty. If while discharging his duty, he finds a former judge to be ineligible, the question of his being considered for appointment would not arise. If such a person cannot be recommended being unfit or ineligible to hold the post, it would not be correct to contend that despite the same he fulfils the eligibility criteria.

Whether the condition `has been a judge’ is not necessary to be construed for the purpose of Article 217 of the Constitution of India, it is required for the purpose of interpreting Section 16 of the Act as to whether he should be recommended for being appointed as a Chairman of the state commission.

If a person has made himself disqualified to hold the post of a judge, the Chief Justice should not consider his name at all. If a duty had been cast on the Chief Justice not to recommend, which is a constitutional duty for all intent and purpose – he must be held to be disqualified.

In this case the collegium have found him unfit to continue as a Judge. We have gone through the records produced before us. We are satisfied that for good and sufficient reasons, he was found not fit to be recommended for appointment as a Permanent Judge. We say no more being wholly unnecessary. An Additional Judge who had not been made permanent, technically, could be appointed as an acting or Additional Judge but then the question which was required to be asked was: should a person who had not been found fit be so appointed? The answer to the aforementioned question clearly would a big emphatic `no’.

We may also place on record that at least in a few decisions, this Court has held that only a sitting or retired Judge is suitable for appointment. In our opinion, the same clearly goes to show that Judge whose tenure ended by way of non extension as a stigma would not come within the purview of the definition of term `has been a Judge of the High Court’. We say so for more than one reason. Section 16(1)(b)(iii) of the Act in relation to appointment of a Member of the Commission lays down inter alia the qualifications of a person of ability, integrity and standing. If in the case of a Member, ability, integrity and standing are essential qualifications, it is difficult to perceive why the same qualification is not required for appointment as Chairman of the Commission within the meaning of clause (a) thereof. The said criteria was not necessary to be expressly stated as the same could be presumed as recommendation in that behalf, to be made by the Chief Justice of a High Court.

N. Kannadasan v. Ajoy Khose [Bench Strength 2], CA No. 7360/2008 (06/05/2009), 2009(7) SCR 668: 2009(7) SCC 1: 2009(7) JT 601: 2009(8) SCALE 351: 2009(5) Supreme 4: 2009(9) SLT 651 [S.B. Sinha, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1)(a) — President of State commission — Appointment of, process of selection, Chief justice has to recommend only one name but not panel of names — Request by State Government to chief justice of High Court to send panel of eligible names of retired High Court judges after his approval — Forwarding a panel of 3 judges by Chief Justice — State Government made a final choice therefrom — Whether process followed is in compliance with section 16? — Held, no — Chief justice has to recommend only one name but not panel of names — State Government has no choice to pick a name from the panel — Recommendation of chief justice alone shall prevail — Method adopted in the instant case is impermissible — Constitution of India — Articles 217, 124, 32 & 50.

A. Pandurangam Rao v. State of Andhra Pradesh and others, AIR 1975 SC 1925, Union of India and Others v. Kali Dass Batish and Another, 2006(1) SCC 779, Relied on.

HELD: We have noticed hereinbefore that the State of Tamil Nadu in its letter dated 30th May, 2008 addressed to the Registrar of the Madras High Court while intimating that a vacancy had arisen in the post of President, State Commission, made a request to him to send a panel of eligible names of retired High Court Judges after approval by Hon’ble the Chief Justice of the High Court of Madras for its consideration therefor.

Pursuant thereto or in furtherance thereof, the Chief Justice only forwarded a panel of three Judges. The Executive Government of the State made a final choice therefrom.

The process of selection in view of the decisions of this Court in Ashish Handa (supra) and Ashok Tanwar (supra) and National Consumer Awareness Group (supra) must be initiated by the High Court itself. Having regard to the fact that the Chief Justice has the primacy as regards recommendations of the name for appointment to the post of Chairman of the State Commission, the method adopted herein, in our considered view, is impermissible in law. For the said purpose only one name must emanate from the Chief Justice ; only one name can be recommended by him and not a panel of names. Having regard to processual mandate required for the purpose of appointment to the post of Chairman, State Commission, the Executive Government of the State cannot have any say whatsoever in the matter. The process for preparation of a panel requested by the Executive Government of the State and accepted by the Chief Justice of the High Court, in our opinion, was impermissible in law. If the State is granted a choice to make an appointment out of a panel, as has been done in the instant case, the primacy of the Chief Justice, as opined by this Court in the aforementioned decisions, would stand eroded. It will bear repetition to state that even for the said purpose the procedure laid down by this Court in Supreme Court Advocates-on-Record Association (supra) as also the Special Reference, for recommendation of the name of the High Court Judge, as contained in Article 217 of the Constitution of India, should be followed. It is accepted at the Bar that by reason of judicial constitutional interpretation of Articles 217 and 124 of the Constitution of India, the procedures laid down thereunder has undergone a drastic change. A recommendation instead and in place of Chief Justice of India must emanate from the Collegium. However, for the purpose of making recommendation in terms of Section 16(1) the opinion of the Chief Justice alone shall prevail.

N. Kannadasan v. Ajoy Khose [Bench Strength 2], CA No. 7360/2008 (06/05/2009), 2009(7) SCR 668: 2009(7) SCC 1: 2009(7) JT 601: 2009(8) SCALE 351: 2009(5) Supreme 4: 2009(9) SLT 651 [S.B. Sinha, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Articles 32 & 226 — Quo warranto — Locus standi to file writ of, scope — Writ petition at the instance of a busy body questioning the appointment of chairman of state commission is maintainable — Consumer Protection Act, 1986 — Section 16(1)(a).

N. Kannadasan v. Ajoy Khose [Bench Strength 2], CA No. 7360/2008 (06/05/2009), 2009(7) SCR 668: 2009(7) SCC 1: 2009(7) JT 601: 2009(8) SCALE 351: 2009(5) Supreme 4: 2009(9) SLT 651 [S.B. Sinha, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1)(a) — President of State commission — Appointment of, relevant material, non-consideration of — Recommendation of Chief Justice to appoint appellant as Chairman — Earlier, appellant was appointed as additional judge — However, appellant’s appointment was not made permanent since collegium not recommended his reappointment for want of probity and integrity — Factum of non-recommendation by collegium was not challenged by appellant — However said fact was not brought to notice of chief justice — Non-consideration of vital information — Had the records were brought to notice of chief justice, he would not have made the recommendations — Consultation process was not fully complied with.

S.P. Gupta v. Union of India, (1981) Supp. SCC 87, Supreme Court Advocates-on-Record Association and others v. Union of India, 1993(4) SCC 441, Re – Special Reference No. 1 of 1998, 1998(7) SCC 739, Ashok Kumar Yadav v. State of Haryana, 1985(4) SCC 417, Ashok Tanwar and another v. State of Himachal Pradesh and others, 2005(2) SCC 104, State of Gujarat v. Sankalchand Khodidas Patel, 1977(4) SCC 590, Relied on.

HELD: Appointment to the post of President of a State Commission must satisfy not only the eligibility criteria of the candidate but also undertaking of the process of consultation.

Indisputably, the decision by the Chief Justice must be an informed one with respect to the post of a Chairman of a State Commission, keeping in view the importance thereof having regard to the fact that the Commission is required to perform judicial functions, both the Chief Justice as also the State Government were required to be duly informed about the person who is going to be appointed. With a view to fulfill the constitutional obligations as to whether he is a fit person, it is absolutely essential that all relevant information should be placed before the consultor as also the consultee. As far as the proviso appended to Section 16 of the Act is concerned, keeping in view the constitutional post held by a Chief Justice, there cannot be an iota of doubt that the recommendations made by him shall carry great weight. Save and except for very cogent reasons, his recommendation must be accepted.

The superior courts must take into consideration as to what is good for the judiciary as an institution and not for the judge himself. An act of balancing between public interest and private interest must be made. Thus, institution as also public interest must be uppermost in the mind of the court. When such factors are to be taken into consideration, the court may not insist upon a proof. It would not delve deep into the allegations. The court must bear in mind the limitations in arriving at a finding in regard to lack of integrity against the person concerned. As has been noticed in S.P. Gupta (supra), the test which must be applied for the purpose of assessing the suitability of a person for appointment as a Judge must be whether the Chief Justice of the High Court or for the matter of that, any other constitutional authority concerned in the appointment is satisfied about the integrity of the person under consideration and, thus, if he does not enjoy good reputation, it would not be possible for the Chief Justice of the High Court to say that he is satisfied about the integrity of such person and in such an event he would be justified in not recommending him for appointment and in fact it would be his duty not to recommend his name.

The consultative process brings within its ambit a heavy duty so as to enable the holder of a high office like Chief Justice to know the same. It must be shown that he had access and in fact was aware of the fact that the appellant had not been made a Permanent Judge. The matter might have been different if such a fact had been taken into consideration. If a decision for the purpose of making a recommendation in terms of proviso appended to Section 16 of the Act necessitates looking into all relevant materials, non-consideration of such a vital fact, in our opinion, cannot be ignored as the opinion is a subjective one and not based on objective criteria. We are more than sure that had the records been brought to his notice, the Chief Justice would not have made the recommendation.

Section 16 of the Act envisages a limitation on the power of both the State as also the Chief Justice in the matter of making an appointment. The facts relevant for such an appointment must be placed before both the statutory authorities. One of such fact is that an Additional Judge, for one reason or the other was found not fit to be made permanent or to be given an extension of his tenure. Indisputably, a person having doubtful integrity should neither be recommended by the High Court nor appointed by the State Government.

Opinion of a Chief Justice by itself may not lead to an administrative decision but it, having regard to his primacy, save and except for cogent reasons, would lead to an appointment. Indisputably, his opinion is final and, thus, for all intent and purport, decisive. The recommendations made, thus, may be arrived at on the basis of his subjective satisfaction, but it must be based on objective criteria. Such subjective satisfaction must be arrived at on consideration of all relevant criteria. When recommendation of a Former Judge of a High Court is made for appointment as Chairman of the State Commission ordinarily a judicial review shall not lie. It is true that recommendation would be as a result of due application of mind. He is required to recommend the name of one of the former Judges of the said Court. All relevant facts leading to formation of an opinion as regards suitability of the person would presumably be known to him. But a Chief Justice coming from outside may not know the former judges of the concerned High Court. He may not consult his brother judges keeping in view the element of confidentiality attached to such recommendation.

It may be true that the statute does not lay down an objective criterion. Such objective criteria cannot also be laid down keeping in view the status of the parties. Such appointment, however, must be made keeping in view the independence of judiciary; as the incumbent of the post would discharge judicial functions of grave importance.

N. Kannadasan v. Ajoy Khose [Bench Strength 2], CA No. 7360/2008 (06/05/2009), 2009(7) SCR 668: 2009(7) SCC 1: 2009(7) JT 601: 2009(8) SCALE 351: 2009(5) Supreme 4: 2009(9) SLT 651 [S.B. Sinha, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g) & 14 — Medical negligence — Determination of, too much suspicion about the negligence of attending doctor, improper — Held, too much suspicion about the negligence of attending Doctors and frequent interference by Courts would be a very dangerous proposition as it would prevent Doctors from taking decisions which could result in complications and in this situation the patient would be the ultimate sufferer — Torts — Medical negligence — Determination of, too much suspicion about the negligence of attending doctor, improper.

C.P. Sreekumar, M.S. (Ortho) v. S. Ramanujam [Bench Strength 2], CA No.6168/2008 (01/05/2009), 2009(7) SCR 272: 2009(7) SCC 130: 2009(6) JT 221: 2009(6) SCALE 613: 2009(4) Supreme 573 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14 & 23 — Medical negligence — What is not — Leg injury in an accident — hemiarthroplasty or internal fixation whether was the proper procedure, determination of — Doctor’s expertise in his field of orthopaedics — X-ray of leg revealed a hairline fracture of neck of right femur — Doctor put respondent’s leg in a plaster of pairs bandage — Simple hairline fracture Garden Type I developed to a more serious Garden Type III fracture due to muscle spasm — Whether hemiarthroplasty or internal fixation was the proper procedure considering patent was 42 years of age? — Held, yes — Divergence of opinion as to the proper procedure to be adopted — Appellant’s decision in choosing hemiarthroplasty in this case was not palpably erroneous or unacceptable so as to dub it as a case professional negligence — Torts — Medical negligence — What is not, leg injury in an accident, hemiarthroplasty or internal fixation whether was the proper procedure, determination of.

HELD: Admittedly the respondent had suffered a simple Garden Type I hairline fracture in the course of the accident on 31st December 1991 and after he had been examined by the appellant on that day, his leg had been immobilized with the help of derotation boots. It is the case of the respondent that when he was taken for an X-ray on 8th January 1992 it was found that the simple Garden I type fracture had developed into a complicated Garden III type fracture, and that this happened on account of rough handling by Elango and the other attendants who were mere labourers whereas it is the case of the appellant that this had occurred due to a muscular spasm. We find from a reading of the order of the Commission that it proceeded on the basis that whatever had been alleged in the complaint by the respondent was in fact the inviolable truth even though it remained unsupported by any evidence. As already observed in Jacob Mathew’s case the onus to prove medical negligence lies largely on the claimant and that this onus can be discharged by leading cogent evidence. A mere averment in a complaint which is denied by the other side can, by no stretch of imagination, be said to be evidence by which the case of the complainant can be said to be proved. It is the obligation of the complainant to provide the facta probanda as well as the facta probantia.

We thus find from the appellant’s reply to the complaint and also in the course of his evidence that the fracture had been displaced on account of muscular spasm and that this point has gone unrebutted as no contrary evidence has been produced. It cannot therefore be said with any certitude that the displacement had occurred on account of the rough handling by Elango and the others on the 8th January 1992.

The question as to whether hemiarthroplasty or internal fixation was the proper procedure in the background that the respondent was 42 years of age at the relevant time, has been hotly debated. It is the case of the appellant that on evaluation of the respondent’s condition he had thought it fit to carry out a hemiarthroplasty whereas it is the case of the respondent that as per the various text books which have been placed on record, this procedure was invariably carried out on a patient who was 60 years of age or above and hemiarthroplasty was thus not the favoured option for him. Mr. Ranjit Kumar has taken us through several passages from various text books, most of which have in fact been produced by the respondent, and it does appear that ordinarily in the case of a patient of less than 60 years of age, hemiarthroplasty is not the preferred option and internal fixation involving the use of a clamp with screws was the more acceptable one.

In the light of the fact that there is some divergence of opinion as to the proper procedure to be adopted, it cannot be said with certainty that the appellant, Dr. Sreekumar was grossly remiss in going in for hemiarthroplasty.

It would, thus, be seen that the appellant’s decision in choosing hemiarthroplasty with respect to a patient of 42 years of age was not so palpably erroneous or unacceptable as to dub it as a case of professional negligence.

Jacob Mathew vs. State of Punjab & Anr. (2005) 6 SCC 1, State of Punjab v. Shiv Ram & Ors. (2005) 7 SCC 1 and Samira Kohli vs. Dr.Prabha Manchanda & Anr., (2008) 2 SCC 1, Relied on.

HELD: The basic principles under which a case of medical negligence as a criminal offence as also a tort has to be evaluated has been succinctly laid down in Jacob Mathew vs. State of Punjab & Anr. (2005) 6 SCC 1. One of the primary arguments raised by the respondent herein is that the appellant Dr. C. P. Sreekumar, though qualified in Orthopedics, did not have the basic skill to carry out a hemiarthroplasty or an internal fixation and for that reason was not competent to perform the procedure. In Jacob Mathew’s case, this Court adopted the test laid down in Bolam vs. Friern Hospital Management Committee (1957) 2 All ER 118 (QBD)

These observations postulate the underlying principle that too much suspicion about the negligence of attending Doctors and frequent interference by Courts would be a very dangerous proposition as it would prevent Doctors from taking decisions which could result in complications and in this situation the patient would be the ultimate sufferer.

C.P. Sreekumar, M.S. (Ortho) v. S. Ramanujam [Bench Strength 2], CA No.6168/2008 (01/05/2009), 2009(7) SCR 272: 2009(7) SCC 130: 2009(6) JT 221: 2009(6) SCALE 613: 2009(4) Supreme 573 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12, 3, 11, 17, 21 & 22 — Consumer complaint — Maintainability of, after availing alternate remedy, determination of — Complainant purchased a shop in an auction in year 1993 and deposited a sum of Rs. 82,000/- — He had further deposited a sum of Rs. 2,07,000/- — Since further payment was not made, appellant authority resumed the plot — Appeal filed before the Administrator of the appellant authority was allowed — An undertaking was filed that the allottee was ready to pay the balance amount as per HUDA policy — Complaint filed before consumer forum for rectifying statement of accounts — District forum directed the appellant Authority to re-calculate the entire amount with simple interest @ 15% p.a. as mentioned in the allotment letter and not with compound interest — Plea of appellant that the National Commission itself has taken view that where an allottee moves appellant authority, or avails remedy available, he cannot thereafter move the consumer forum — National Commission directed to reconsider the matter in the light of what has been decided in Surender Mohan case, 2006(3) CPJ 136(NC) — Precedents — National Commission — Failure of National Commission to consider its earlier contrary view, effect of.

Surinder Mohan v. Municipal Corporation and Anr., 2006(3) CPJ 136(NC), Referred.

HELD: In support of the appeal learned counsel for the appellant authority submitted that the National Commission itself has taken view that where an allottee moves the appellant authority, or avails remedy available he cannot thereafter move the forum and/or State or National Commission under the Act. Reliance is placed on an order passed by the National Commission in Surinder Mohan v. Municipal Corporation and Anr. [III (2006) CPJ 136(NC)]

It is the stand of the appellant that the National Commission has not considered this aspect even though specific plea was raised.

In the circumstances it would be appropriate for the National Commission to re-consider the matter in the light of what has been decided in the case of Surinder Mohan (supra).

Haryana Urban Development Authority v. Satish Hans [Bench Strength 2], CA No./2009 (29/04/2009), 2009(7) SCR 178: 2009(7) SCC 282: 2009(6) JT 220: 2009(6) SCALE 651 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Delay in delivery of possession on account of status quo order, effect, grant of interest without considering factum of status quo order, improper — Allotment of plots — Grant of interest @10% p.a. by National Commission for the delayed delivery — Whether National Commission is justified in granting interest? — Held, no — Delay was on account of status quo order passed by High Court on question of possession of plots — National commission failed to consider the factum of status quo order — Impugned order granting interest set aside — Matter remitted to commission for fresh consideration — Civil Procedure Code, 1908 — Section 34, Order 39 Rules 1 & 2 — Contract Act, 1872 — Section 37.

Punjab Urban Planning & Development Authority v. Daya Singh [Bench Strength 2], Civil Appeal No(s). 4334/2004 (21/04/2009), 2010 AIR(SC) 486: 2009(12) SCC 569: 2009(8) JT 138: 2009(8) SCALE 723 [Tarun Chatterjee, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g) & 14(1)(c) — Housing — Costs of plot, extra charges for corner and best location plot, validity of, determination — Levy of 10% extra charge for corner plot and 5% for best location plot — Challenge to — Demand was authorized in terms and conditions of registration of allotment — Levy of extra charge, valid — Town Planning — Costs of plot — Corner and best location plot, extra costs for, valid.

Estate Manager, Madhya Pradesh Housing Board v. Rajesh Kumar Gupta [Bench Strength 2], C.A. No. 2599/2009 (Arising out of SLP(C) No. 20606/2004 (16/04/2009), 2009(6) SCR 434: 2009(16) SCC 118: 2009(11) JT 276: 2009(8) SCALE 792 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 12 & 21 — Medical negligence — Determination of, contrary conclusion by National Commission in revision to the conclusion recorded by State Commission, remand of matter on the ground of, when valid — Treatment of teeth left midway — Allegations that appellant did not complete the treatment which caused pain and agony to the patient — District Forum awarded compensation of Rs. 25,000 for inconvenience suffered by daughter of complainant during course of treatment of her teeth — In appeal, State Commission held that no opinion of any expert had been produced to hold that appellant was negligent in the treatment — Complainant had not mentioned anywhere that braces were tied up tightly because of which his daughter suffered — However, it was directed that the complainant should be paid Rs. 14,000/- which was the amount purported to have been paid by the complainant to the appellant — Revision petition — National Commission dismissed revision holding that there was concurrent finding that the appellant was negligent — Whether impugned order of the National Commission is sustainable? — Held, no — It was contrary to the conclusion recorded by the State Commission — Supreme Court set aside the impugned order and directed that the revision petition of appellant shall be heard along with revision petition filed by complainant — Torts — Medical negligence — Determination of, contrary conclusion by National Commission in revision to the conclusion recorded by State Commission, remand of matter on the ground of, when valid.

HELD: By the impugned order the National Commission dismissed the revision petition filed by the appellant on the ground that medical negligence was writ large and no interference was called for. It was held that there was concurrent finding that the appellant was negligent in not treating the patient who was to be treated. Revision petition filed by the complainant has been admitted and notice has been issued.

We are of the opinion that, prima facie, the National Commission was not justified in dismissing the revision petition filed by the appellant. Its conclusions that the forums below had recorded concurrent finding about the appellant being negligent and not treating the complainant’s daughter is contrary to the conclusion recorded by the State Commission. That being so, we set aside the impugned order and direct that the revision petition of the appellant shall be heard along with the revision petition filed by the complainant which is numbered as Revision Petition No. 4294/2007. We make it clear that we have not expressed any opinion on the merits of the case.

Anirudh Aggarwal v. Dharam Bir Bhatia [Bench Strength 2], C.A. No. 2770/2009 (Arising out of SLP(C) No. 29120/2008) (15/04/2009), 2009(6) SCR 914: 2009(15) SCC 43: 2009(7) JT 77: 2009(6) SCALE 692 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 13, 18 & 22 — Burden of proof, nature and sufficiency of proof in a proceedings under the Act — Scope of — Held, burden of proof, nature of proof and adequacy thereof depends upon the facts and circumstances of each case.

Ludhiana Improvement Trust v. Shakti Co-Operative House Building Society Ltd. [Bench Strength 2], CA No. 1866/2002 (13/04/2009), 2009(6) SCR 12: 2009(12) SCC 369: 2009(5) JT 425: 2009(5) SCALE 373: 2009(3) Supreme 750 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(r) — Unfair prade practice — Non-delivery of plot, when amount to unfair trade practice — Abandonment of acquisition u/s 56 of the Punjab Town Improvement Act — There was no obligation to allot plots to the societies whose lands had been exempted — Ludhiana Improvement Trust formulated a scheme for which proceedings for acquisition of land were initiated — Lands owned by several co-operative housing societies were also notified — However, on representation of the societies to the trust seeking exemption of their land from acquisition, respondent society was granted exemption — Government issued a notification u/s 56 of the Punjab Town Improvement Act for abandonment of proposal for acquisition of lands belonging to these societies — Out of 151 plots carved out, possession of plot no. 32 was not given to respondent society as the said plot did not belong to the society — Whether non-delivery of plot no. 32 or an alternative plot in lieu thereof amounted to `unfair trade practice’ on the part of improvement trust? — Held, no — Monopolies and Restrictive Trade Practices Act, 1969 — Section 36-A.

HELD: It is manifest from the orders of the State and District Forum that both the fora have proceeded on the assumption that there was an obligation on the part of the appellant to develop and deliver possession of 151 plots, including Plot No. 32, to the respondent. Their presumption was based on letter dated 23rd October, 1990 from appellant to the respondent, communicating delivery of possession of 151 plots which included Plot No. 32 also. They failed to appreciate that on passing of order by the State Government under Section 56 of the Punjab Town Improvement Act, 1922, the acquisition proceedings in respect of respondent’s land stood abandoned and it reverted back to the respondent on fulfilment of certain conditions, enumerated in appellant’s letter dated 23rd October, 1990. It is amply clear that the exemption notification did not contemplate that the appellant trust was to allot plots to the members of the respondent Society, whose land had been exempted from acquisition under the said notification. The only obligation on the appellant was to ensure that the colony of the respondent comes up in consonance with the overall layout plan of the scheme. In furtherance of that object, it seems that the appellant formulated the scheme for development of the land; perhaps developed it and vide letter dated 23rd October, 1990, delivered the plots to the respondent on fulfilling certain conditions including payment of development charges. Apart from the fact that Resolution No. 594, dated 29th August, 1990 stood annulled vide order dated 29th May, 1997 passed by the Department of Local Government, Government of Punjab, the scheme for development was scrapped, no evidence was led by the respondent to show that all the conditions stipulated in letter dated 23rd October, 1990 had been complied with. As a matter of fact, it had been highlighted in the report submitted by the enquiry officer that the appellant was under no obligation to allot plots to the societies whose land had been exempted because after the abandonment of acquisition in terms of Section 56(1) of the Punjab Town Improvement Act, 1922 they had failed to recover full development charges from some of the societies and even the members of the societies also appeared to be bogus. Furthermore, in view of the Civil Suit in respect of the land out of which Plot No. 32 had been carved out having been decreed in favour of the landowner, it was clear that the said piece of land did not belong to the Society, which could be placed at the disposal of the appellant for development and yet, it seems that in connivance with the officials of the appellant, they succeeded in getting it included in their list of allotted plots with an ulterior motive to get a plot in lieu thereof. We are convinced that all these were relevant factors which have been ignored by all the three fora and, therefore, their finding that the non-delivery of Plot No. 32 or an alternative plot in lieu thereof amounted to “unfair trade practice” on the part of the appellant Trust, cannot be sustained. It is evident that even the implication of abandonment of acquisition under Section 56 and the annulment of Resolution No. 594, dated 29th August, 1990 by the State Government have not been taken into consideration by any of the three fora. In our judgment, there is no material on record to return a finding that the appellant had indulged in “unfair trade practice”.

Lakhanpal National Ltd. Vs. M.R.T.P. Commission & Anr., 1989(3) SCC 251, Relied on.

HELD: Prior to the substitution of Clause (r) in sub-Section (1) of Section 2 of the Act with retrospective effect from 18th June, 1993, there was no separate definition of the term “unfair trade practice” and the said term was given the same meaning as in Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (for short “the MRTP Act”). But now after the said amendment, the definition of the term has been specifically provided in Section 2(r), although the definition is practically verbatim reproduction of the definition in Section 36A of the MRTP Act. The basic ingredients of “unfair trade practice” are: (i) it must be a trade practice; (ii) the trade practice must be employed for the purpose of promoting the sale, use or supply of any goods or for the provision of any service; and (iii) the trade practice adopts any unfair method or unfair or deceptive practice including any of the practices enumerated in clauses (1) to (6) of Section 2(r) of the Act. Therefore, any trade practice which is adopted for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, by adopting any unfair method or unfair or deceptive practice has to be treated as “unfair trade practice” for which an action under the provisions of the Act would lie, provided, the complainant is able to establish that he is a consumer within the meaning of Section 2(1)(d) of the Act.

Ludhiana Improvement Trust v. Shakti Co-Operative House Building Society Ltd. [Bench Strength 2], CA No. 1866/2002 (13/04/2009), 2009(6) SCR 12: 2009(12) SCC 369: 2009(5) JT 425: 2009(5) SCALE 373: 2009(3) Supreme 750 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 14(1)(d) & 19 — Insurance claim — Surveyor’s report, weightage to be given to, scope — Approved surveyor’s report may be basis or foundation for settlement of a claim by insurer in respect of loss suffered by insured but surely such report is neither binding upon insurer nor insured — Deficiency in service and compensation — Vehicle accident claim against insurer — Survey reports of two approved surveyors relied upon by insurer revealed that vehicle which fell into khud 300 feet deep below road got extensively damaged — Survey reports revealed satisfaction of surveyors regarding certain damages to vehicle in question — One of surveyors in his survey report also noted that damages were in conformity with description of accident mentioned in claim form and details of damages noted by spot surveyor — Curiously, spot survey report conducted by “M” found to be withheld by insurer — On face of vouchers and bills for parts as well as labour charges submitted by complainant, all three consumer fora accepted claim and did not accept survey reports — Approved surveyor’s report may be basis or foundation for settlement of a claim by insurer in respect of loss suffered by insured but surely such report is neither binding upon insurer nor insured — Amount of compensation and interest awarded by lower fora held to be proper and appeal dismissed with cost of Rs. 15,000/- — Plea not raised before National Commission cannot be raised first time before Supreme Court — Insurance Act, 1938 — Section 64-UM(2) — Constitution of India — Article 136 — New plea — Impermissibility to raise.

HELD: We are unable to accept the contentions of the learned counsel for the insurance company. That the vehicle that was insured with the insurance company met with an accident and fell down into the khud 300 feet deep below the road is not in dispute. The survey reports of Vivek Arora as well as B.B. Garg, upon which reliance has been placed by the insurance company show that the vehicle got extensively damaged in this accident. Its Assembly, Bonnet, Cabin, Tool Box, Body, Chasis, Diesel Tank, Pressure Regulator, Pressure Pipe, Brake Booster, Steering Wheel, Head Lights, Main Leaf LHS Front, Front shockers, Steering Worm, Air Cleaner, Cross Member Rear 2nd, Propeller Shafts, Front Axle, Silencer, Engine Chamber etc. had sustained major damage. The approved surveyors in their reports have recorded their satisfaction that the aforementioned damages to the said vehicle would have occurred in that mishap. Vivek Arora in his survey report also noted that the damages noticed to the said vehicle were in conformity with the description of the accident mentioned in the claim form and details of damages noted by the spot surveyor. Curiously, the spot survey report conducted by Manoj Kumar Aggarwal has been withheld by the insurance company.

On the face of the vouchers and bills for parts as well as labour charges submitted by the complainant, all the three consumer fora accepted the complainant’s claim and did not accept these survey reports. Pertinently, the vehicle was not even 2 year old at the time of accident.

So far as the case in hand is concerned, the claim of the complainant has been accepted by the consumer fora as it was duly supported by original vouchers, bills and receipts. It has been held that the actual expenses incurred by the complainant comes to Rs.1,39,438/- in getting the truck repaired apart from the expenses on account of haulage of truck and carrying it to the workshop. Taking into account actual expenses incurred and the interest that the complainant had to pay to the bank from which the loan was obtained for that amount, the District Forum awarded a sum of Rs.1,58,409/- to the complainant and insurance company was directed to make that payment along with interest at the rate of 12% per annum. At the first blush, we had some doubt whether the interest paid by the complainant to the bank could have been awarded, but on deeper scrutiny we found that no such ground has been set up in the appeal. As a matter of fact, this aspect was not even raised before the National Commission.

The appeal is devoid of any substance. The insurance company would have been well advised in not spending public money unnecessarily on avoidable and wholly frivolous litigation such as this. The appeal has no merit and is liable to be dismissed and is dismissed with costs which we quantify at Rs.15,000/-.

New India Assurance Company Limited v. Pradeep Kumar [Bench Strength 2], CA No. 3253/2002 (09/04/2009), 2009(7) SCC 787: 2009(8) JT 141: 2009(6) SCALE 253: 2009(9) SLT 17 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance claim — Insured cannot claim anything more than what is covered by the insurance policy — Comprehensive floriculture insurance policy for insurance of polyhouses, irrigation system etc. — At the time the policy was taken, polyhouses 1 to 6 were in existence — Proposal form mentioned six poly-houses — A severe storm/cyclone damaged floriculture extensively and substantial damage caused to polyhouses — Insured claiming loss for polyhouses 1 to 6 and nos. 7, 8-A & 8-B — Insurance company settled claim as regards poly-houses 1 to 6 stating that the policy covered those poly-houses — Whether comprehensive floriculture insurance policy issued by the insurance company to the insured covered poly-houses 7, 8-A & 8-B also? — Held, no — Insurance — Insurance claim — Quantum of, insured cannot claim anything more than what is covered by the insurance policy.

General Assurance Society Ltd. Vs. Chandumull Jain and another, AIR 1966 SC 1644, Oriental Insurance Co. Ltd. Vs. Sony Cheriyan, 1999(6) SCC 451, United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, 2004(8) SCC 644, Relied on.

HELD: An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. The four essentials of a contract of insurance are, (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium and (iv) the amount of insurance. Since upon issuance of insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer. The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy.

Document like proposal form is a commercial document and being an integral part of policy, reference to proposal form may not only be appropriate but rather essential. However, the surveyors’ report cannot be taken aid of nor can it furnish the basis for construction of a policy. Such outside aid for construction of insurance policy is impermissible.

A careful consideration of the Proposal Form that sets out the particulars of the components which were to be covered and the inventory of the property insured (Sections I and II), mentioned in the policy leaves no manner of doubt that what was insured was existing poly-houses on the date of the issuance of policy. It is clear from the proposal and the policy. The two documents admit of no ambiguity and it is clear that six poly-houses covering an area of 2.8 hectares was covered by the policy. It may be mentioned that Clauses (C)(ii), (D)(i) and (ii) of the Proposal Form mentions Survey/Gat/Hissa no.163, 158, 157, 156, 148, 149, 147 and 164 and total area 2.6 hectares. It is on this area that six poly-houses were existing on the date the proposal was made and policy issued. These six poly-houses were only covered by the policy.

Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 2080/2002 (01/04/2009), 2009 AIR(SC) 2493: 2009(5) SCR 437: 2009(5) SCC 599: 2009(5) JT 579: 2009(5) SCALE 183: 2009(3) Supreme 226: 2009(4) SLT 35 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g) & 14(1)(d) — Insurance policy — Interpretation of, duty of court — Held, endeavour of court must always be to interpret words in which the contract is expressed by the parties — Court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties — An insurance contract, is a species of commercial transactions — It must be construed like any other contract to its own terms and by itself — Insurance — Insurance policy — Interpretation of, duty of.

Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 2080/2002 (01/04/2009), 2009 AIR(SC) 2493: 2009(5) SCR 437: 2009(5) SCC 599: 2009(5) JT 579: 2009(5) SCALE 183: 2009(3) Supreme 226: 2009(4) SLT 35 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21, 2(1)(g) & 17 — Refusal of National Commission to entertain claim — When improper — Appellant is engaged in the business of putting-up advertisements through hoardings and sky signs — Complaint filed claiming compensation of Rs. 20 lakhs against illegal removal of hoardings by authorities which were insured — Dismissal of complaint by holding no deficiency in service — Appeal — Refusal to entertain the claim by national commission — Whether national commission is justified in doing so? — Held, no — Reasons assigned for refusing to entertain the claim are untenable? — Writ and contempt petition filed by the appellant against authorities has no direct bearing on its claim for award of compensation — Impugned order set aside — Matter remanded to National Commission.

Haabia Advertising India Pvt. Ltd. v. United India Insurance Co. Ltd. [Bench Strength 2], Civil Appeal No. 2008/2009 [Arising out of SLP (C) No. 3946/2008] (30/03/2009), 2009(4) JT 633 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 13, 14 & 18 — Material to be considered by consumer forum — Entire material, necessity to consider, scope — Insurance claim — Repudiation of — Motor accident in which driver died — Claim lodged for damage of vehicle — Repudiation on basis of fraud played by insured — Violation of terms and conditions of insurance policy — Case diary showed that vehicle was being driven by `M’ a driver who did not have a valid driving licence — In post-mortem report it was stated that the vehicle was being driven by `M’ — Relevance of entries in case diary and post-mortem report have not been considered in the proper perspective — Effect of — District Forum and State Commission held not justified in allowing insurance claim — District Forum directed to reconsider the matter — Motor Vehicles Act, 1988 — Sections 149(2)(a)(ii) & 3.

HELD: From a bare perusal of the orders passed by the District Forum, State Commission and the National Commission it is clear that the relevance of the entries in the case diary and the post-mortem report have not been considered in the proper perspective.

In the peculiar facts of the case it would be appropriate for the District Forum to reconsider the matter after taking into account the various documents and materials placed by the parties. Accordingly we set aside the impugned order and remit the matter to the District Forum to adjudicate the matter afresh. Since the matter is pending for long, the District Forum is directed to dispose of the matter within three months from the date of receipt of order after due notice to the parties. We make it clear that we have remitted the matter because of non-consideration of certain materials and documents. But we have not expressed any opinion on the merits of the case.

United Insurance Co. Ltd. v. Sukhdeo Yadav [Bench Strength 2], CA No. 1825/2009 (Arising out of SLP (C) No.13873/2008) (24/03/2009), 2009(4) SCR 1045: 2009(5) SCC 310: 2009(4) JT 418: 2009(4) SCALE 519: 2009(2) SCC(Cr) 671 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14 & 23 — Medical negligence — Indiscriminate prosecution of medical professionals for criminal negligence, effect of — Scope for mis-impressions, misgivings and misplaced allegations against doctors — It is counter-productive and does no service or good to the society — Torts — Medical negligence — Indiscriminate prosecution of medical professionals for criminal negligence, effect of — Penal Code, 1860 — Section 304-A.

HELD: Indiscriminate prosecution of medical professionals for criminal medical negligence is counter-productive and does no service or good to the society. A medical practitioner faced with an emergency ordinarily tries his best to redeem the patient out of his suffering. He does not gain anything by acting with negligence or by omitting to do an act. Obviously, therefore, it will be for the complainant to clearly make out a case of negligence before a medical practitioner is charged with or proceeded against criminally. A surgeon with shaky hands under fear of legal action cannot perform a successful operation and a quivering physician cannot administer the end-dose of medicine to his patient. If the hands be trembling with the dangling fear of facing a criminal prosecution in the event of failure for whatever reason – whether attributable to himself or not, neither can a surgeon successfully wield his life-saving scalpel to perform an essential surgery, nor can a physician successfully administer the life-saving dose of medicine. Discretion being the better part of valour, a medical professional would feel better advised to leave a terminal patient to his own fate in the case of emergency where the chance of success may be 10% (or so), rather than taking the risk of making a last ditch effort towards saving the subject and facing a criminal prosecution if his effort fails. Such timidity forced upon a doctor would be a disservice to the society.

In the case of medical negligence, it has been held that the subject of negligence in the context of medical profession necessarily calls for treatment with a difference. There is a marked tendency to look for a human actor to blame for an untoward event, a tendency which is closely linked with the desire to punish. Things have gone wrong and, therefore, somebody must be found to answer for it. An empirical study would reveal that the background to a mishap is frequently far more complex than may generally be assumed. It can be demonstrated that actual blame for the outcome has to be attributed with great caution. For a medical accident or failure, the responsibility may lie with the medical practitioner, and equally it may not. The inadequacies of the system, the specific circumstances of the case, the nature of human psychology itself and sheer chance may have combined to produce a result in which the doctor’s contribution is either relatively or completely blameless. The human body and its working is nothing less than a highly complex machine. Coupled with the complexities of medical science, the scope for misimpressions, misgivings and misplaced allegations against the operator, i.e. the doctor, cannot be ruled out. One may have notions of best or ideal practice which are different from the reality of how medical practice is carried on or how the doctor functions in real life. The factors of pressing need and limited resources cannot be ruled out from consideration. Dealing with a case of medical negligence needs a deeper understanding of the practical side of medicine. The purpose of holding a professional liable for his act or omission, if negligent, is to make life safer and to eliminate the possibility of recurrence of negligence in future. The human body and medical science, both are too complex to be easily understood. To hold in favour of existence of negligence, associated with the action or inaction of a medical professional, requires an in-depth understanding of the working of a professional as also the nature of the job and of errors committed by chance, which do not necessarily involve the element of culpability.

Ins. Malhotra v. A. Kriplani [Bench Strength 2], CA No. 1386/2001 (24/03/2009), 2009(4) SCR 1062: 2009(4) SCC 705: 2009(4) JT 266: 2009(5) SCALE 87: 2009(4) Supreme 319: 2009(3) SLT 30: 2009(2) SCC(Cr) 561 [Lokeshwar Singh Panta, J.: B. Sudershan Reddy, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14 & 23 — Medical negligence — Standard for judging and burden of proof, scope of — Bolam test — A failure to use special or extraordinary precautions which might have prevented the particular happening cannot be the standard for judging the alleged negligence — It is enough for defendant to show that the standard of care and the skill attained was that of the ordinary competent medical practitioner exercising an ordinary degree of professional skill — it will be for the complainant to clearly make out a case of negligence before a medical practitioner is charged with or proceeded against criminally — Torts — Medical negligence — Standard for judging and burden of proof, scope — Penal Code, 1860 — Section 304-A.

Ins. Malhotra v. A. Kriplani [Bench Strength 2], CA No. 1386/2001 (24/03/2009), 2009(4) SCR 1062: 2009(4) SCC 705: 2009(4) JT 266: 2009(5) SCALE 87: 2009(4) Supreme 319: 2009(3) SLT 30: 2009(2) SCC(Cr) 561 [Lokeshwar Singh Panta, J.: B. Sudershan Reddy, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g)(ii), (o), 14 & 23 — Medical negligence or deficiency in service — What is not — Death of patient due to peritonitis with renal failure — When patient was brought to the Hospital for treatment her health was in very bad condition — Renal failure had already taken place — In the post mortem conducted, it was recorded that `patient was sick since four months by loose motion, vomiting’ — Patient was admitted in the hospital since 14.7.1989 — She was operated on 9.8.1989 and she died on 24.8.1989 — Doctors had informed the patient and her relatives well in time that condition of the patient was critical — Allegations made in the complaint did not make out a case of negligence or deficiency in service on the part of doctors — Whether National Commission was justified in dismissing the complaint? — Held, yes — Torts — Medical negligence — What is not.

HELD: Negligence in the context of the medical profession necessarily calls for a treatment with a difference. To infer rashness or negligence on the part of a professional, in particular a doctor, additional considerations apply. A case of occupational negligence is different from one of professional negligence. A simple lack of care, an error of judgment or an accident, is not proof of negligence on the part of a medical professional. So long as a doctor follows a practice acceptable to the medical profession of that day, he cannot be held liable for negligence merely because a better alternative course or method of treatment was also available or simply because a more skilled doctor would not have chosen to follow or resort to that practice or procedure which the accused followed.

A physician would not assure the patient of full recovery in every case. A surgeon cannot and does not guarantee that the result of surgery would invariably be beneficial, much less to the extent of 100% for the person operated on. The only assurance which such a professional can give or can be understood to have given by implication is that he is possessed of the requisite skill in that branch of profession which he is practising and while undertaking the performance of the task entrusted to him he would be exercising his skill with reasonable competence. This is all what the person approaching the professional can expect. Judged by this standard, the professional may be held liable for negligence on one of two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess. The standard to be applied for judging, whether the person charged has been negligent or not, would be that of an ordinary competent person exercising ordinary skill in that profession. It is not possible for every professional to possess the highest level of expertise or skills in that branch which he practices. A highly skilled professional may be possessed of better qualities, but that cannot be made the basis or the yardstick for judging the performance of the professional proceeded against on indictment of negligence.

On re-examination and re-appraisal of the entire material on record, we find that there was absolutely no difference or divergence of opinion between a team of specialists and experts consisting of Dr. Ramamoothy, Dr. P.H. Joshi and Dr. A. Kriplani at any stage about the method and mode of treatment adopted by doctors-respondents in this case. Doctors had informed the patient and her relatives well in time that condition of Priya Malhotra was critical and kidney transplantation could not be done nearly for one year and also the consequence of the renal failure suffered by the patient. Dr. Vasant S. Sheth had opined that attempt to do laparoscopy had failed in spite of two attempts and it became all the more important to perform laparotomy to get tissue for biopsy and to avoid any further injury that might have occurred due to the attempt at laparoscopy. On opening abdomen of the patient it became clear that the patient had extensive chronic peritonitis plastering the whole intestinal tract and intestines were perforated due to introduction of laparoscopic pressure and cannula. Dr. Vasant S. Sheth performed peritoneal biopsy and sutured six intestinal perforations to start with. The patient was put in I.C.U. and at the initial stages she was doing well but unfortunately on 17.08.1989 i.e. eight days after the operation she developed jaundice probably due to anti-tuberculosis drugs which had to be stopped. The material on record would show that on 20.08.1989, the patient developed a fluid leak from the abdomen due to the leakage of ascites or beginning of fecal fistula. The condition of Priya Malhotra started deteriorating day by day despite best care and attention of specialists in I.C.U. The appellant was kept fully informed about the deteriorating condition of the patient, but the appellant abruptly instructed the doctors to stop haemodialysis treatment to the patient. Because of the persisting demand of the appellant, haemodialysis was stopped which according to the respondents resulted in the untimely death of Priya Malhotra. Exhibit-C which was part of the continuation sheet of treatment of Medical Research Centre of Bombay Hospital placed on record of the Commission would reveal that on 23.08.1989 at 9.00 p.m., the patient was examined and it was also recorded thereon “discussed with relatives and explained the consequences of not draining of pneumothorax and not doing haemodialysis”. The appellant did not permit such treatment and gave in writing “I refused Haemodialysis and Pneumothorax on my risk”.

Both on facts and in law no case is made out by the appellant against the respondents. The allegations made in the complaint do not make out a case of negligence or deficiency in service on the part of the respondents. It is not the case of the appellant that the doctors named in the complaint are not qualified doctors and specialized in their respective fields to treat the patient whom they agreed to treat. All the doctors who treated the patient are skilled and duly qualified specialists in their respective fields and they have tried their best to save the life of Priya Malhotra by joining their hands and heads together and performed their professional duties as a team work. The appellant has not challenged the post mortem report dated 25.08.1989 submitted by J.J. Hospital wherein it has been stated that before Priya Malhotra was admitted to Bombay Hospital, she was sick since four months by loose motion and vomiting.

Ins. Malhotra v. A. Kriplani [Bench Strength 2], CA No. 1386/2001 (24/03/2009), 2009(4) SCR 1062: 2009(4) SCC 705: 2009(4) JT 266: 2009(5) SCALE 87: 2009(4) Supreme 319: 2009(3) SLT 30: 2009(2) SCC(Cr) 561 [Lokeshwar Singh Panta, J.: B. Sudershan Reddy, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — Complaint when barred by limitation — Scope — Proper stage for accrual of cause of action, determination of — Complaint against Bank — Deficiency in returning bills and GR’s of transporters — Complainant carrying on business of manufacturing and supply of engines and pump sets all over India through their dealers and distributors — Complainant sent to the Bank bills amounting to Rs 2,47,154/- drawn on M/s Unique together with GR’s of transporters for collection of payment and remittance of proceeds to the complainant — Bank was instructed to return bills and GR’s if drawee did not retire the bills upto 7-6-1994 — Allegations that despite repeated letters and legal notice, Bank had neither sent the amount nor returned the said bills and GR’s — Vide letter dated 28-3-1995, Bank informed complainant that they had returned the bills and GR’s to complainant’s sales manager — Complainant filed complaint against Bank on 5-5-1997 — Whether complaint filed was liable to be dismissed as barred by limitation? — Held, yes — Cause of action accrued to the complainant on June 7, 1994 when it did not receive the demand draft for Rs. 2,47,154/- nor received the documents.

HELD: Insofar as the present case is concerned, at the first available opportunity in the written statement itself the Bank raised the plea that the complaint was barred by limitation. However, the objection with regard to limitation went unnoticed by all the three fora, namely, District Forum, State Commission and National Commission. Since the question relating to limitation goes to the root of the matter and may render the order illegal, we would now see whether the complaint was filed within time i.e., within two years of accrual of cause of action.

The said letter clearly instructs the Bank to return the documents if not honoured by drawee by June 7, 1994. Obviously, the cause of action accrued to the complainant on June 7, 1994 when it did not receive the demand draft for Rs. 2,47,154/- nor received the documents. The limitation, thus, began to run from June 7, 1994. The complaint ought to have been filed within two years therefrom which in fact was not done as the complaint was filed much thereafter i.e., on May 5, 1997. The complaint was apparently time barred. Learned counsel for the complainant would, however, submit that the complainant sent various letters to the Bank and vide their reply dated March 11, 1997, the Bank asked the complainant to forward a copy of the letter dated May 4, 1996 for necessary action. It was thus contended by the learned counsel for the complainant that complaint filed on May 5, 1997 was within time. We are afraid the letters dated March 15, 1995, May 4, 1996 and March 1, 1997 sent by the complainant to the Bank and the Bank’s reply dated March 11, 1997 are of no help to the complainant. The Bank has not by their reply dated March 11, 1997 acknowledged its liability. The Bank only wanted the complainant to send a copy of the letter dated May 4, 1996 for necessary action. By no stretch of imagination, it can be said that the limitation came to be extended by Bank’s reply dated March 11, 1997. As a matter of fact, the Bank had communicated to the complainant long back vide its letter dated March 28, 1995 that the bills have been returned to B.M. Konar (Sales Manager of the complainant firm) on May 10, 1994 and the matter should be taken up with him (B.M. Konar). The complaint filed on May 5, 1997 is even beyond two years therefrom. There is no application for condonation of delay nor any sufficient cause shown and, therefore, the question of condonation of delay in filing the complaint does not arise.

By way of foot note, we may observe that the learned counsel sought to raise an equitable plea that the bank was under an obligation to protect the interest of the complainant and in this regard placed reliance upon the decision of this Court in Sumatidevi M. Dhanwatay v. Union of India & Ors., 2004(4) SCALE 607. Firstly, the cited judgment has no application to the present fact situation. Secondly, and more importantly, the complaint having been held time barred, this plea is not of much significance.

HELD: It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, `shall not admit a complaint’ occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside.

Haryana Urban Development Authority v. B.K. Sood, (2006) 1 SCC 164, Gannmani Anasuya and Others v. Parvatini Amarendra Chowdhary and Others, (2007) 10 SCC 296, Relied on.

State Bank of India v. B.S. Agricultural Industries [Bench Strength 2], CA No. 2067/2002 (20/03/2009), 2009 AIR(SC) 2210: 2009(4) SCR 762: 2009(5) SCC 121: 2009(4) JT 191: 2009(4) SCALE 467: 2009(2) Supreme 784: 2009(2) SLT 793 [D.K. Jain, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14, 18, 22(b) & 23 — Housing — Allotment of plot, default in payment of installment, liability and rate of interest to be charged, determination of — Lease of sites in public auction — Obligation to provide amenities in the nature of approach road, water supply lines, drainage system etc. — Neither terms and conditions of auction, nor the advertisement relating to auction, nor letter of allotment contained any assurance regarding provisions of any such amenities with reference to sites put up for auction — Whether failure to provide such amenities can be a ground for withholding the premium and rent? — Held, no — National Commission proceeded on erroneous and baseless assumption that there was no obligation to pay the instalments until amenities were provided — Lessee/successful bidder cannot seek reschduling of the instalments of premium or postponement of accrual of the interest payable as per rules — When the instalments are not paid on the due dates, the lessees become liable to pay penal interest at 24% per annum from the due date to date of actual payment (vide clause 4 of General Term & Conditions of Auction and clause 5 of Letter of allotment and Rule 12(3-A) of the Leasehold Rules) — Default interest to be charged at the rates provided in the Rules — Capital of Punjab (Development and Regulation) Act, 1952 — Sections 2(b), (j), 3(1), (2), 4 to 7 & 22 — Chandigarh Leasehold of Sites and Buildings Rules, 1973 — Rule 12(3-A) — Contract Act, 1872 — Section 74 — Town Planning — Allotment of plot — Default in payment of installment, liability and rate of interest to be charged, determination of — Civil Procedure Code, 1908 — Section 34.

HELD: Neither Sections 6 and 7 nor any other provision of the Development Act casts any obligation on the central government to provide amenities to plots sold/leased by public auction. Therefore the assumption that there is a statutory obligation on the part of the Central Government to provide amenities, because the word `amenity’ is defined in the Act is erroneous and baseless. As noticed above, the word `amenity’ is used in the context of two specific matters. The first is that the transferee/occupier of a site should not use the site or leave it in a condition that it will prejudicially affect the amenities in any part of Chandigarh (vide section 6). The second is that central government can levy fees/taxes in respect of any site/building, on the transferee/occupier for the purpose of providing, maintaining or continuing any amenity at Chandigarh. Thus definition of the `amenity’ in the Development Act, does not in any manner cast any obligation on Chandigarh administration with reference to the auction of leasehold rights relating to sites belonging to central government.

The National Commission has proceeded on erroneous and baseless assumptions that there is no obligation to pay the instalments until the amenities were provided and consequently the instalments could be rescheduled so as to begin after the amenities were provided and that interest would start to run only when the lessee takes possession. In view of the conflicting views of the High Court as to whether instalments are payable only after the government provides the basic amenities, the National Commission circumvented the issue. It held that as the appellant herein had however provided all the basic facilities by 1999 and the matter had been pending thereafter before the Consumer fora, the three annual instalments would get postponed and commence only after its decision, that is from 1.5.2005, instead of the instalment schedule specified by the appellants (which commenced in 1997).

Therefore, it is evident that a lessee/successful bidder cannot seek reschduling of the instalments of premium or postponement of accrual of the interest payable as per rules.

The equated instalment includes interest only upto the dates stipulated as due dates. When the instalments are not paid on the due dates, the lessees become liable to pay penal interest at 24% per annum from the due date to date of actual payment (vide clause 4 of General Term & Conditions of Auction and clause 5 of Letter of allotment and Rule 12(3A) of the Leasehold Rules). We may also refer to two decisions of this Court in the context of interest.

Section 7 of the Act empowers the Central Government to levy such fees and taxes as it may consider necessary (which shall be in addition to any fee or tax for the time being leviable under any other law) in respect of any site or building on the transferee or the occupier thereof, for the purpose of providing, maintaining or continuing any amenity at Chandigarh. This provision clearly demonstrates that the providing amenities is not linked to auction of plots on lease basis and the premium paid is not for providing any amenity. The Central Government is required to provide amenities by levying fees and taxes in respect of sites/plots on the transferees/ occupiers thereof. Therefore, it is doubtful whether any proportionate reduction in penal/default interest could be made on the ground of non-provision of amenities. Be that as it may.

The respondents lastly contended that the rate of default interest was only 12% per annum under Rule 12(3A) of the Leasehold Rules as on the date of the auction and therefore clause (4) of the General Terms & Conditions of Sale and clause (5) of the letter of allotment, providing for payment of default interest @ 24% per annum was illegal and unauthorized. This contention is urged for the first time in this court. The appellants countered by contending that the Administrator had by notification, fixed the default interest at 24% per annum. Suffice it to say that the rate of default interest mentioned in Rule 12(3A) as on the date of auction, would alone apply. If Rule 12(3A) was not amended increasing the rate of default interest from 12% P.A. to 24% per annum as on the date of auction, then the rate of interest stipulated in Rule 12(3A) as it stood on the date of auction will apply. The appellants could not charge default interest at a rate higher than what was provided in the said rule. If any higher rate has been charged by way of default interest and it is not corrected, it is open to the lessees to seek relief in accordance with law.
U.T. Chandigarh Administration v. Amarjeet Singh [Bench Strength 2], CA No. 1994/2006 (17/03/2009), 2009 AIR(SC) 1607: 2009(4) SCR 541: 2009(4) SCC 660: 2009(4) JT 135: 2009(3) SCALE 892: 2009(2) Supreme 650: 2009(2) SLT 736 [R.V. Raveendran, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(b), (c), (d), (o), (q), 11, 12, 13, 14, 17, 18, 21, 22 & 23 — “Consumer”, “trader” and “service provider” — Determination of — Public auction for grant of lease of sits — Confirmation of lease in favour of highest bidder, respondents — Complaint filed by respondents alleging failure to provide amenities in regard to the site — Whether maintainable? — Held, no — There is no hiring or availing of services by the person bidding at the auction — Reluctant contract relates to sale or lease of immovable property — With reference to a public auction of existing sites (as contrasted from sites to be `formed’), the purchaser/lessee is not a consumer, the owner is not a `trader’ or `service provider’ and the grievance does not relate to any matter in regard which a complaint can be filed — Transfer of Property Act, 1882 — Sections 105, 5 & 54.

HELD: Where there is a public auction without assuring any specific or particular amenities, and the prospective purchaser/lessee participates in the auction after having an opportunity of examining the site, the bid in the auction is made keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or may not participate in the auction. Once with open eyes, a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided. With reference to a public auction of existing sites (as contrasted from sites to be `formed’), the purchaser/lessee is not a consumer, the owner is not a `trader’ or `service provider’ and the grievance does not relate to any matter in regard which a complaint can be filed. Therefore, any grievance by the purchaser/lessee will not give rise to a complaint or consumer dispute and the fora under the Act will not have jurisdiction to entertain or decide any complaint by the auction purchaser/lessee against the owner holding the auction of sites.

U.T. Chandigarh Administration v. Amarjeet Singh [Bench Strength 2], CA No. 1994/2006 (17/03/2009), 2009 AIR(SC) 1607: 2009(4) SCR 541: 2009(4) SCC 660: 2009(4) JT 135: 2009(3) SCALE 892: 2009(2) Supreme 650: 2009(2) SLT 736 [R.V. Raveendran, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14 — Medi-claim policy — Termination of, validity of, when insurance cover taken by concealment of material facts — Concealment of factum of ailment of kidney — Respondent took a medi-claim policy in January, 1999 — Policy was renewed lastly on 22.1.2002 for a period of one year — Respondent suffering from kidney trouble intimated the same to insurance company — Insurer terminated the policy with effect from 17.2.2002 by invoking clause 5.9 of the policy — Respondent was refunded pro rata premium — Request for renewal of policy rejected — District forum, directed revalidation of policy — Order upheld by the State Commission and also by the National Commission — Insurance cover was taken by concealment of material facts — Effect of clause 5.9 not considered by District Forum, State Commission and the National Commission — Matter remitted to the District Forum to consider the matter afresh.

New India Assurance Co. Ltd. v. Satpal Singh Muchal [Bench Strength 2], CA No. 1616/2009 (Arising out of SLP (C) No.16445/2006) (16/03/2009), 2009(4) SCR 415: 2009(12) SCC 673: 2009(4) JT 85: 2009(3) SCALE 838: 2009(4) SLT 443 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 13 to 15, 19 & 23 — Insurance claim — Entitlement for, determination, remand of matter to District Forum for verification of material, scope — Damage to car in accident — Driving licence of driver, verification of — Dispute as to the person to whom driving license produced was issued — According to insured, it was issued to `SN’ — However, according to the information supplied by investigation of insurance company, the license in question was issued to one `SKM’ — Impugned order of District forum, State Commission and National Commission set aside and matter remitted to the District Forum to verify the necessary data by calling for records from the licensing authority — Motor Vehicles Act, 1988 — Section 149(2)(a)(ii).

National Insurance Co. v. Sajjan Kumar Aggarwalla [Bench Strength 2], CA No. 1384/2009 (Arising out of SLP (C) No. 901/2007) (03/03/2009), 2009(3) SCR 931: 2009(4) SCC 751: 2009(3) JT 288: 2009(3) SCALE 450: 2009(2) Supreme 620: 2009(3) SLT 1: 2009(2) SCC(Cr) 585 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 22-A & 23 — Ex parte order by National Commission — Setting aside of, scope — No dispute over fact that earlier Mr. “S” was appearing and notice had been served on him — Obviously Mr. “S” was to appear when matter was taken up by National Commission — But briefs had been returned by Mr. “S” to appellant-company — Therefore, appellant had no knowledge about listing of the case — No dispute that Mr. “S” had not informed appellant-company about date of hearing because he had returned briefs — In peculiar circumstances, impugned order of National Commission set aside First Appeal restored for disposal on merits afresh.

United India Insurance Co. Ltd. v. Payarelal Nirnajan Lal [Bench Strength 2], CrA No. 1329/2009 (Arising out of S.L.P. (Crl.) No.15947/2006) (27/02/2009), 2009(3) SCR 730: 2009(11) SCC 68: 2009(3) JT 151: 2009(4) SCALE 643 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Medical Council Act, 1956 — Sections 20-A & 3(m) — Medical negligence — Medical ethics, scope — Every doctor should, for his own interest carefully read the Code of Medical Ethics — Medical profession has, to an extent, become commercialized — There are many doctors who depart from their Hippocratic Oath for their selfish ends of making money — However, the entire medical fraternity cannot be blamed or branded as lacking in integrity or competence — Doctors and nursing homes/hospitals need not be unduly worried about performance of their functions — As long as doctors do their duty with reasonable care, they will not be held liable even if their treatment was unsuccessful — Test in fixing negligence is the standard of ordinary skilled doctor exercising and professing to have that special skill — Consumer Protection Act, 1986 — Sections 2(1)(g), 23, 22, 18, 13 & 14 — Penal Code, 1860 — Section 304- A — Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002.

HELD: The courts and Consumer Fora are not experts in medical science, and must not substitute their own views over that of specialists. It is true that the medical profession has to an extent become commercialized and there are many doctors who depart from their Hippocratic oath for their selfish ends of making money. However, the entire medical fraternity cannot be blamed or branded as lacking in integrity or competence just because of some bad apples.

It must be remembered that sometimes despite their best efforts the treatment of a doctor fails. For instance, sometimes despite the best effort of a surgeon, the patient dies. That does not mean that the doctor or the surgeon must be held to be guilty of medical negligence, unless there is some strong evidence to suggest that he is.

The National Commission had sought the assistance of AIIMS to give a report about the allegations of medical negligence against the appellant. AIIMS had appointed Dr. Ghosh to investigate the case and submit a report and Dr. Ghosh submitted a report in favour of appellant. Surprisingly, the Commission has not placed much reliance on the report of Dr. Ghosh, although he is an outstanding ENT specialist of international repute.

We have carefully perused the judgment of the National Commission and we regret that we are unable to concur with the views expressed therein. The Commission, which consists of laymen in the field of medicine, has sought to substitute its own views over that of medical experts, and has practically acted as super-specialists in medicine. Moreover, it has practically brushed aside the evidence of Dr. Ghosh, whose opinion was sought on its own direction, as well as the affidavits of several other doctors (referred to above) who have stated that the appellant acted correctly in the situation he was faced.

HELD: (a) Current practices, infrastructure, paramedical and other staff, hygiene and sterility should be observed strictly. Thus, in Sarwat Ali Khan vs. Prof. R. Gogi and others Original Petition No.181 of 1997, decided on 18.7.2007 by the National Consumer Commission, the facts were that out of 52 cataract operations performed between 26th and 28th September, 1995 in an eye hospital 14 persons lost their vision in the operated eye. An enquiry revealed that in the Operation Theatre two autoclaves were not working properly. This equipment is absolutely necessary to carry out sterilization of instruments, cotton, pads, linen, etc., and the damage occurred because of its absence in working condition. The doctors were held liable.

(b) No prescription should ordinarily be given without actual examination. The tendency to give prescription over the telephone, except in an acute emergency, should be avoided.

(c) A doctor should not merely go by the version of the patient regarding his symptoms, but should also make his own analysis including tests and investigations where necessary.

(d) A doctor should not experiment unless necessary and even then he should ordinarily get a written consent from the patient.

(e) An expert should be consulted in case of any doubt. Thus, in Smt. Indrani Bhattacharjee, Original Petition No.233 of 1996 decided by the National Consumer Commission on 9.8.2007, the patient was diagnosed as having `Mild Lateral Wall Eschemia’. The doctor prescribed medicine for gastro-entiritis, but he expired. It was held that the doctor was negligent as he should have advised consulting a Cardiologist in writing.

(f) Full record of the diagnosis, treatment, etc. should be maintained.

HELD: The standard of care has to be judged in the light of knowledge available at the time of the incident and not at the date of the trial. Also, where the charge of negligence is of failure to use some particular equipment, the charge would fail if the equipment was not generally available at that point of time.

Simply because a patient has not favourably responded to a treatment given by a doctor or a surgery has failed, the doctor cannot be held straightway liable for medical negligence by applying the doctrine of res ipsa loquitur. No sensible professional would intentionally commit an act or omission which would result in harm or injury to the patient since the professional reputation of the professional would be at stake. A single failure may cost him dear in his lapse.

When a patient dies or suffers some mishap, there is a tendency to blame the doctor for this. Things have gone wrong and, therefore, somebody must be punished for it. However, it is well known that even the best professionals, what to say of the average professional, sometimes have failures. A lawyer cannot win every case in his professional career but surely he cannot be penalized for losing a case provided he appeared in it and made his submissions.

To fasten liability in criminal proceedings e.g. under Section 304A IPC the degree of negligence has to be higher than the negligence which is enough to fasten liability in civil proceedings. Thus for civil liability it may be enough for the complainant to prove that the doctor did not exercise reasonable care in accordance with the principles mentioned above, but for convicting a doctor in a criminal case, it must also be proved that this negligence was gross amounting to recklessness.

The professional is one who professes to have some special skill. A professional impliedly assures the person dealing with him (i) that he has the skill which he professes to possess, (ii) that skill shall be exercised with reasonable care and caution.

HELD: While this Court has no sympathy for doctors who are negligent, it must also be said that frivolous complaints against doctors have increased by leaps and bounds in our country particularly after the medical profession was placed within the purview of the Consumer Protection Act.

Many doctors have stopped giving (even as family physicians) Morphia or Pethidine injection even in emergencies despite the fact that from the symptoms the doctor honestly thought that the patient was having a heart attack. This was out of fear that if the patient died the doctor would have to face legal proceedings.

Similarly in cases of head injuries (which are very common in road side accidents in Delhi and other cities) earlier the doctor who was first approached would started giving first aid and apply stitches to stop the bleeding. However, now what is often seen is that doctors out of fear of facing legal proceedings do not give first aid to the patient, and instead tell him to proceed to the hospital by which time the patient may develop other complications.

Hence Courts/Consumer Fora should keep the above factors in mind when deciding cases related to medical negligence, and not take a view which would be in fact a disservice to the public.

We, therefore, direct that whenever a complaint is received against a doctor or hospital by the Consumer Fora (whether District, State or National) or by the Criminal Court then before issuing notice to the doctor or hospital against whom the complaint was made the Consumer Forum or Criminal Court should first refer the matter to a competent doctor or committee of doctors, specialized in the field relating to which the medical negligence is attributed, and only after that doctor or committee reports that there is a prima facie case of medical negligence should notice be then issued to the concerned doctor/hospital. This is necessary to avoid harassment to doctors who may not be ultimately found to be negligent. We further warn the police officials not to arrest or harass doctors unless the facts clearly come within the parameters laid down in Jacob Mathew’s case (supra), otherwise the policemen will themselves have to face legal action.

Martin F. D’Souza v. Mohd. Ishfaq [Bench Strength 2], CA No. 3541/2002 (17/02/2009), 2009 AIR(SC) 2049: 2009(3) SCR 273: 2009(3) SCC 1: 2009(2) JT 486: 2009(2) SCALE 629: 2009(2) Supreme 40: 2009(2) SLT 20: 2009(1) SCC(Cr) 958 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 23, 22, 18, 13 & 14 — Medical negligence — Hearing loss in renal patients, when not a medical negligence — Patient not only suffering from renal failure but he was also suffering from urinary tract infection and also blood infection — Allegations that high dose of Amikacin led to impairment of hearing of the patient — Appellant doctor desperately trying to save life of patient, respondent, which he succeeded in doing — Expert opinion stating that such gross impairment of hearing has perhaps been wrought by a combination of factors — Whether National Commission was justified in holding doctors negligent in treatment? — Held, no — Appellant was not guilty of medical negligence — Torts — Medical negligence — Hearing loss in renal patients, when not a medical negligence — Penal Code, 1860 — Section 304-A.

HELD: In the present case the appellant was faced with an extremely serious situation. Had the appellant been only suffering from renal failure it is possible that a view could be taken that the dose prescribed for the appellant was excessive. However, the respondent was not only suffering from renal failure but he was also suffering from urinary tract infection and also blood infection i.e Septicaemia which is blood poisoning caused by bacteria or a toxin. He had also extremely high urea. In this extremely serious situation, the appellant had naturally to take a drastic measure to attempt to save the life of the respondent. The situation was aggravated by the non-cooperation of the respondent who seems to be of an assertive nature as deposed by the witnesses. Extraordinary situations require extraordinary remedies. Even assuming that such a high dose of Amikacin would ordinarily lead to hearing impairment, the appellant was faced with a situation between the devil and the deep sea. If he chose to save the life of the patient rather than his hearing surely he cannot faulted.

In the present case the blood urea of the respondent was found to be 180 mgs.% whereas normally it should not exceed 10-50 mgs.%. This shows that very serious infection in the kidney of the respondent was taking place which required drastic measures.

The allegation against the appellant is that he gave overdose of the antibiotic. In this connection it may be mentioned that antibiotics are usually given for a minimum of five days, but there is no upper limit to the number of days for which they should continue, and it all depends on the condition of the patient. Giving lesser dose of antibiotic may create other complications because it can cause resistance in the bacteria to the drug, and then it will be more difficult to treat.

As regards the impairment of hearing of the respondent it may be mentioned that there is no known antibiotic drug which has no side effect. Hence merely because there was impairment in the hearing of the respondent that does not mean that the appellant was negligent. The appellant was desperately trying to save the life of the respondent, which he succeeded in doing. Life is surely more important than side effects.

Martin F. D’Souza v. Mohd. Ishfaq [Bench Strength 2], CA No. 3541/2002 (17/02/2009), 2009 AIR(SC) 2049: 2009(3) SCR 273: 2009(3) SCC 1: 2009(2) JT 486: 2009(2) SCALE 629: 2009(2) Supreme 40: 2009(2) SLT 20: 2009(1) SCC(Cr) 958 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 23, 22, 18, 13 & 14 — Medical negligence — Liability on account of, general principles relating to — A medical practitioner is not liable to be held negligent simply because things went wrong from mischance or misadventure or through an error of judgment in choosing one reasonable course of treatment in preference to another — He would be liable only where his conduct fell below that of the standards of a reasonably competent practitioner in his field — Error of judgment may or may not be negligent — It depends on nature of error — Higher the acuteness in an emergency and higher the complication, the more are the chances of error of judgment — Torts — Medical negligence — Liability on account of, general principles relating to — Penal Code, 1860 — Section 304-A.

HELD: A medical practitioner is not liable to be held negligent simply because things went wrong from mischance or misadventure or through an error of judgment in choosing one reasonable course of treatment in preference to another. He would be liable only where his conduct fell below that of the standards of a reasonably competent practitioner in his field. For instance, he would be liable if he leaves a surgical gauze inside the patient after an operation vide Achutrao Haribhau Khodwa & others vs. State of Maharashtra & others, AIR 1996 SC 2377 or operates on the wrong part of the body, and he would be also criminally liable if he operates on someone for removing an organ for illegitimate trade.

There is a tendency to confuse a reasonable person with an error free person. An error of judgment may or may not be negligent. It depends on the nature of the error.

It is not enough to show that there is a body of competent professional opinion which considers that the decision of the accused professional was a wrong decision, provided there also exists a body of professional opinion, equally competent, which supports the decision as reasonable in the circumstances.

The higher the acuteness in an emergency and the higher the complication, the more are the chances of error of judgment. At times, the professional is confronted with making a choice between the devil and the deep sea and has to choose the lesser evil. The doctor is often called upon to adopt a procedure which involves higher element of risk, but which he honestly believes as providing greater chances of success for the patient rather than a procedure involving lesser risk but higher chances of failure.

The basic principle relating to the law of medical negligence is the Bolam Rule which has been quoted above. The test in fixing negligence is the standard of the ordinary skilled doctor exercising and professing to have that special skill, but a doctor need not possess the highest expert skill.

Martin F. D’Souza v. Mohd. Ishfaq [Bench Strength 2], CA No. 3541/2002 (17/02/2009), 2009 AIR(SC) 2049: 2009(3) SCR 273: 2009(3) SCC 1: 2009(2) JT 486: 2009(2) SCALE 629: 2009(2) Supreme 40: 2009(2) SLT 20: 2009(1) SCC(Cr) 958 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(g), (r), (d)(ii), (c)(iii), 14(1)(d), (f), (i), 22 & 23 — Unfair trade practice and deficiency of service — What is; quantum of compensation and costs, scope to grant — Misrepresentation and fraud on behalf of Dental Institute — Admissions for consideration by Dental College which was neither affiliated nor recognized for imparting education — Deficiency in service on part of the Institute — Respondents have lost their two valuable academic years — Respondents held entitled to refund of admission expenses paid by them at the time of admission with interest at the rate of 12% p.a. — Award of Rs. 20,000/- as compensation by National Commission — Appellant institute further directed to additionally pay compensation of Rs. one lakh and cost of litigation at Rs. one lakh to each of the respondents (complainants) — Civil Procedure Code, 1908 — Section 35 — Contract Act, 1872 — Sections 17 & 18 — Education — Admission — Misrepresentation and fraud on behalf of Dental Institute in giving admission for consideration, quantum of compensation and costs, award of, scope — Penal Code, 1860 — Section 415 — Supreme Court Rules, 1966 — Order 20-F — Monopolies and Restrictive Trade Practices Act, 1969 — Sections 36-A & 36-D.

HELD: This is an admitted position that the appellant institute is neither affiliated with the Magadh University nor recognized by the Dental Council of India. In absence of affiliation by the Magadh University and recognized by the Dental Council of India, the appellant institute could not have started admissions in the four years degree course of BDS.

The Commission rightly came to the conclusion that this was a case of total misrepresentation on behalf of the institute which tantamounts to unfair trade practice. The respondents were admitted to the BDS Course for receiving education for consideration by the appellant college which was neither affiliated nor recognized for imparting education. This clearly falls within the purview of deficiency as defined in the Consumer Protection Act.

As far as the cross objections filed by the respondents are concerned, we are of the opinion that the appellant institute by giving totally misleading and false advertisement clearly misled the respondents that the institute is affiliated by the Magadh University and recognized by the Dental Council of India. The respondents have lost their two valuable academic years which would have tremendous impact on their future career. Though the respondents have clearly stated in the affidavit that they had paid capitation fee/donation of Rs. one lakh each and despite repeated requests, receipts were not given, which fact has been denied by the appellant. In view of the disputed question of fact, it is difficult for us to give any specific finding allowing the contention of the respondents and to give direction to refund this amount with interest to them. However, we strongly feel that the appellant institute has played with the career of the students and virtually ruined their career and the respondents have lost two valuable academic years.

On consideration of the totality of the facts and circumstances of the case and in the interest of justice, we deem it appropriate to pass the following directions:

(i) The respondents (complainants) would be entitled to the compensation as directed by the National Consumer Disputes Redressal Commission. In case the amount has been deposited, the respondents would be entitled to withdraw the same.

(ii) We further direct the appellant institute to additionally pay compensation of Rs. one lakh to each of the respondents (complainants).

(iii) We also direct the appellant institute to pay cost of litigation which is quantified at Rs. one lakh to each of the respondents (complainants).

Buddhist Mission Dental College & Hospital v. Bhupesh Khurana [Bench Strength 2], CA No. 1135/2001 (13/02/2009), 2009(2) SCR 275: 2009(4) SCC 473: 2009(2) JT 379: 2009(2) SCALE 685: 2009(2) Supreme 378: 2009(2) SLT 56: 2009(2) SCC(Cr) 510: 2009(3) SLR 557 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 3 — Remedy provided under the Act — Scope — It is in addition to the provisions of any other law for the time being in force.

Karnataka Power Transmission Corporation v. Ashok Iron Works Pvt. Ltd. [Bench Strength 2], CA NO 1879/2003 with CA NO 7784/2002 (09/02/2009), 2009 AIR(SC) 1905: 2009(1) SCR 1109: 2009(3) SCC 240: 2009(2) JT 447: 2009(2) SCALE 337: 2009(1) Supreme 762 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d), (g), (m) & 12 — Electricity — Delay in supply of, consumer complaint claiming damages for, when maintainable — Complaint filed by company for delay in supply of electricity — Maintainability — Complainant, a private company engaged in activity of manufacture of iron products, applied for supply of electrical energy — Company deposited the amount demanded in July, 1992 — However, actual supply of power commenced in November, 1992 — Company filed a consumer complaint claiming damages for delay in supply of electricity — Objection pertaining to maintainability of complaint alleging company was engaged in commercial activity — Whether District Forum was justified in dismissing complaint as not maintainable? — Held, no — Complaint is maintainable — Expression `but does not include a person who avails of such services for any commercial purpose’ inserted in Section 2(1)(d)(ii) by the Act 62 of 2002 — Applicability of, scope — Discussed — Electricity Act, 2003 — Sections 2(15), (70), 42 & 43 — Electricity (Supply) Act, 1948 — Section 49.

HELD: 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. The expression `but does not include a person who avails of such services for any commercial purpose’ inserted in Section 2(1)(d)(ii) by the Act 62 of 2002 is not applicable in the facts and circumstances of the present case since the controversy relates to the period prior to amendment.

In what we have discussed above, the complaint made by the company before the District Forum cannot be said to be not maintainable and we hold, as we must, that complaint is maintainable.

HELD: Under Section 2(1)(o) of the Act, 1986, `service’ means service of any description which is made available to potential users and includes the provision of facilities in connection with supply of electrical or other energy. “Deficiency” under Section 2(1)(g) means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. As indicated in the definition of `service’, the provision of facilities in connection with supply of electrical energy is a service. Supply of electricity by the Board or for that matter KPTC to a consumer would be covered under Section 2(1)(o) being `service’.

HELD: Although title of Section or marginal note speaks of “the sale of electricity by the Board to persons other than licensees” but the marginal note or title of the Section cannot afford any legitimate aid to the construction of Section. Section 49 speaks of supply of electricity to any person not being a licensee upon said terms and conditions as a Board thinks fit and for the purpose of such supply free uniform tariffs. This Court has already held in Southern Petrochemical Industries (supra) that supply does not mean sale. As a matter of fact, the company has brought its case to be covered by Section 2(1)(d)(ii) and not 2(1)(d)(i) as the dispute raised by the company is with regard to non-performance of the services for consideration within time frame. For the purposes of the maintainability of the complaint, therefore, what is important to be seen is whether there is deficiency in service within the meaning of Section 2(1)(d)(ii).

HELD: Section 2(1)(m), is beyond all questions, an interpretation clause, and must have been intended by the Legislature to be taken into account in construing the expression `person’ as it occurs in Section 2(1)(d). While defining `person’ in Section 2(1)(m), the Legislature never intended to exclude a juristic person like company. As a matter of fact, the four categories by way of enumeration mentioned therein is indicative, categories (i), (ii) & (iv) being unincorporate and category (iii) corporate, of its intention to include body corporate as well as body un-incorporate. The definition of `person’ in Section 2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly.

Karnataka Power Transmission Corporation v. Ashok Iron Works Pvt. Ltd. [Bench Strength 2], CA NO 1879/2003 with CA NO 7784/2002 (09/02/2009), 2009 AIR(SC) 1905: 2009(1) SCR 1109: 2009(3) SCC 240: 2009(2) JT 447: 2009(2) SCALE 337: 2009(1) Supreme 762 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), 14, 17 & 21 — Complaint under the Act — Pre-requisites for entertaining, scope — Any fora under the Consumer Protection Act, 1986 before granting any relief to a complainant, should be satisfied that the complaint relates to any of the matters specified in section 2(c) of the Act, and that the complainant has alleged and made out either unfair or restrictive trade practice by a trader, or defects in the goods sold, or any deficiency in a service rendered, or charging of excessive price for the goods sold, or offering of any goods hazardous to life and safety without displaying information regarding contents etc. — If none of these is alleged and made out, the complaint will have to be rejected.

Secretary, Bhubaneswar Development Authority v. Susanta Kumar Mishra [Bench Strength 2], C.A. No. 605/2009 (Arising out of SLP(C) No. 14461/2007) (30/01/2009), 2009(2) SCR 149: 2009(4) SCC 684: 2009(5) JT 189: 2009(3) SCALE 786: 2009(5) SLT 242 [R.V. Raveendran, J.: J.M. Panchal, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14, 17 & 21 — Deficiency in service — What is not — Demand on account of allotment of plot/flat retropectively is not a deficiency of service — Allotment of MIG house — Lease-cum-sale agreement entered between parties on 6-5-1991 — However, as per agreement, respondent was required to pay original allotment price in quarterly instalments with effect form 1.9.1989 — Charging of interest by Development Authority from 1-9-1989 in accordance with clause (6) of the agreement whether amounted to deficiency in service — Held, no — Town Planning — Allotment of plot/flat — Demand of payment, effective date of, demand on account of allotment of plot/flat retropectively is not a deficiency of service.
Secretary, Bhubaneswar Development Authority v. Susanta Kumar Mishra [Bench Strength 2], C.A. No. 605/2009 (Arising out of SLP(C) No. 14461/2007) (30/01/2009), 2009(2) SCR 149: 2009(4) SCC 684: 2009(5) JT 189: 2009(3) SCALE 786: 2009(5) SLT 242 [R.V. Raveendran, J.: J.M. Panchal, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 19 — Repudiation of insurance claim — Complaint for — Limitation — Repudiation was conveyed on 28.7.1994 — Complaint made on 6.8.1994 would be within three months of 28.7.1994, which was final answer and there would be no question of general condition no. 7 of policy coming into play — Impugned order of National Commission justified and needs no interference — Appeal meritless and to be dismissed.

(Paras 2 & 3)

Oriental Insurance Company Limited v. Prem Printing Press [Bench Strength 2], Civil Appeal No. 7398/2002 (28/01/2009), 2010(14) SCC 773 [V.S. Sirpurkar, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o) & 14(1)(d) — Vehicle accident claim against damages — Fundamental breach of policy, finding in respect of, to be supported by reasons — Vehicle found to be driven by person not holding valid driving licence — Though, vehicle in question insured for personal use but was used for commercial use — Finding by State/National Commission that there was no fundamental breach of term of policy being not supported by any reason, held to be not sustainable and set aside — Motor Vehicles Act, 1988 — Sections 147, 149 & 3 — Contract Act, 1872 — Section 73.

National Insurance Company Ltd. v. Meena Aggarwal [Bench Strength 2], CA No. 396/2009 (23/01/2009), 2009(1) SCR 492: 2009(2) SCC 523: 2009(1) JT 612: 2009(2) SCALE 8: 2009(1) Supreme 553: 2009(3) SLT 158 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o) & 14(1)(d) — Vehicle accident claim relating to damages of vehicle — Driver not found holding valid driving licence, effect of — Decision sought to be relied upon by insured-owner given in National Insurance Company v. Kusum Rai 2006(4) SCC 250 being relating to liability of insurer in case of third party would not apply to instant case — Motor Vehicles Act, 1988 — Sections 147, 149 & 3.

National Insurance Company Ltd. v. Meena Aggarwal [Bench Strength 2], CA No. 396/2009 (23/01/2009), 2009(1) SCR 492: 2009(2) SCC 523: 2009(1) JT 612: 2009(2) SCALE 8: 2009(1) Supreme 553: 2009(3) SLT 158 [Arijit Pasayat, J.: A.K. Ganguly, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Insurance — Contract of, interpretation of — Jeweller’s Block Policy — Loss of gold from custody of an apprentice — Relevant clause of policy revealed that property was insured whilst in custody of insured, his partner or his employees — In common parlance, an apprentice being a trainee and not an employee, repudiation of claim held to be justified — Finding by National Commission that an apprentice is an employee in view of Section 2(6) of Kerala Shops and Commercial Establishment Act held to be not proper and set aside — Kerala Shops and Commercial Establishment Act — Section 2(6) — Words and Phrases — Employee — Words and Phrases — Apprentice.

HELD: The National Consumer Disputes Redressal Commission has held that an apprentice is an employee because Section 2(6) of the Kerala Shops and Commercial Establishments Act defines an employee to include an apprentice. The National Commission has also relied on the definition in the Employees State Insurance Act and some other enactments.

We are of the opinion that the view taken by the National Commission is not correct. The present case is covered solely by the contract of insurance. That contract of insurance no doubt uses the word ’employee’, but it does not say that the word ’employee’ in the contract of insurance will have the same meaning as in the Kerala Shops and Commercial Establishments Act.

In the present case, since the word ’employee’ has not been defined in the contract of insurance, we have to give it the meaning which it has in common parlance. In common parlance, an apprentice is a trainee and not an employee. Even if he is given a stipend, that does not mean that there is a relationship of master and servant between the firm and the apprentice. Hence, we cannot agree with the view taken by the National Commission. In our view, the claim before the National Commission was not maintainable.

New India Assurance Co. Ltd. v. Abhilash Jewellery [Bench Strength 2], CA No. 7972/2002 (22/01/2009), 2009 AIR(SC) 1827: 2009(1) SCR 476: 2009(2) SCC 661: 2009(2) JT 110: 2009(2) SCALE 1: 2009(1) Supreme 565 [Markandey Katju, J.: R.M. Lodha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Medical negligence — Compensation, quantum of, scope — Monetary loss suffered by the claimant when furnishes valid basis for award of enhanced compensation — Loss of vision in one eye — Same resulted due to negligence of hospital authorities to maintain hygiene, which led to infection — Appellant-complainant in Government service forced to take pre-mature retirement nine years before date of superannuation — Difference in salary and retirement benefit found to be Rs. 3,900/- per month — Management of hospital directed to pay enhanced compensation of Rs. 4,32,000/- — Cost of treatment also enhanced to Rs. 13,000/- — Appellant-complainant also held entitled to litigation cost of Rs.50,000/- — Torts — Medical negligence — Compensation, quantum of, scope.

HELD: The appellant, who was in government service, was forced to take pre-mature retirement nine years before the date of superannuation apparently because he could not effectively discharge his duties. At the relevant time his salary was Rs.6400/-. On retirement, the appellant was given pension at the rate of Rs.2500/-per month. Thus, the difference in salary and retirement benefit was Rs.3,900/- per month. After taking into consideration the expected increase in salary, the appellant claimed compensation of Rs.4,32,000/- in lieu of the loss of salary. The respondents have not disputed the fact that the appellant had sought voluntary retirement and consequently, he suffered pecuniary loss. The State Commission awarded paltry amount of Rs.40,000/- without even considering the appellant’s plea that he was forced to seek voluntary retirement nine years before the age of superannuation. The National Commission did enhance the compensation to Rs.1,00,000/- but without adverting to the pecuniary loss suffered by the appellant due to pre-mature retirement from service. In our considered view, the monetary loss suffered by the appellant furnishes valid basis for award of enhanced compensation to him.

Accordingly, the appeal is allowed in part with costs, impugned order is modified and the management of Cochin Hospital is directed to pay enhanced compensation of Rs.4,32,000/- to the appellant in addition to enhanced cost of treatment i.e. Rs.13,000/-. The appellant shall get cost of litigation which is assessed at Rs.50,000/-.

A.U. Sukumaran v. N.S.D. Raju [Bench Strength 2], C.A. No. 64/2009 (Arising out of SLP(C) No. 3146/2007 (09/01/2009), 2009(14) SCALE 61: 2010(7) SCALE 173 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Medical negligence — Disability suffered by complainant, permanent disability, scope — Deficiency in service — Loss of vision in one eye resulted due to negligence of hospital authorities to maintain hygiene, which led to infection — Such disability suffered by complainant can be said to be of permanent nature — Torts — Medical negligence — Disability suffered by complainant, permanent disability, scope.

A.U. Sukumaran v. N.S.D. Raju [Bench Strength 2], C.A. No. 64/2009 (Arising out of SLP(C) No. 3146/2007 (09/01/2009), 2009(14) SCALE 61: 2010(7) SCALE 173 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 19, 17, 2(1)(g), (o) & 14(1)(d) — Finality of finding of State Commission in respect of medical negligence — Scope — Deficiency in service — Loss of vision in one eye — Same resulted due to negligence of hospital authorities to maintain hygiene, which led to infection — Finding in respect of by State Commission — Absence of challenge before National Commission — Same will deemed to have become final — Torts — Medical negligence — Finality of finding of State Commission in respect of, scope.

A.U. Sukumaran v. N.S.D. Raju [Bench Strength 2], C.A. No. 64/2009 (Arising out of SLP(C) No. 3146/2007 (09/01/2009), 2009(14) SCALE 61: 2010(7) SCALE 173 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d) & (o) — Consumer and service provider — Determination of — Dismissal of original complaints on the ground that neither complainants were consumers’ nor respondents were `service providers’ under the Act — Point in issue squarely covered by judgement in `Faqir Chand Gulati case’ — Impugned order set aside — Complaints maintainable.

Faqir Chand Gulati vs. Uppal Agencies Private Limited, JT 2008(7) SC 552: 2008(10) SCC 345, Relied on.

Trupti K. Patel v. Rocklines Constructions [Bench Strength 2], CA Nos. …/2009 (D.No.15761/2007) (05/01/2009), 2009(2) JT 112 [B.N. Agrawal, J.: G.S. Singhvi, J.] <<LAWPACK SUPREME COURT>>
Limitation Act, 1963 — Article 44 & Section 3 — Consumer complaint against insurance company — Time barred complaint, scope — Insurance policy prescribing a period shorter than that prescribed by Limitation Act — Contractual provision not hit by section 28 of the Contract Act — Insurance Policy for timber lying in several forest areas — In September, 1988, insured timber washed away on account of heavy rains — Insurance Company repudiated claim on 13.10.1988 on ground that policy had, in fact, been issued for a period of 8 months only starting from 6th November, 1987 and ending on 5.7.1988 — Consumer complaint filed in year 1994 dismissed as time barred — Article 44 of the Limitation Act providing a period of 3 years from the date of disclaimer — Period of 12 months fixed by clause 6(ii) of the policy — Whether could be sustained by virtue of provisions of section 28 of the Contract Act — Held, yes — Complaint filed in April 1994 was beyond time even applying period of 3 years under Article 44 of the Limitation Act — Contract Act, 1872 — Section 28 — Consumer Protection Act, 1986 — Section 24-A.

National Insurance Co. Ltd. Vs. Sujir Ganesh Nayak & Co., 1997(4) SCC 366, Relied on.

HELD: It is clear from the record that the timber had been washed away some time in September 1988 and after prolonged correspondence, the respondent ultimately vide its communication dated 13th October 1988 repudiated the appellant’s claim. It is also clear from the counter affidavit filed by the respondent that the appellant had, vide its letter dated 7th November 1987, asked for insurance cover for a period of 8 months and that the period of one year fixed in the insurance policy was evidently a typographical mistake which had, in any case, been rectified in the records of the company on 17th December 1987, that is long before the flood. The claim of the appellant that the respondent company had, even after the 13th October 1988, impliedly admitted its liability under the policy also appears to be incorrect as the surveyors had been appointed on the persistent demand of the claimant/appellant and the premium taken thereafter was only to make good the deficiency in the premium that had been paid for the policy for the period of eight months. It is, therefore, apparent that as on the date of the flood, there was no insurance policy in existence or any commitment on behalf of the respondent to make the payment under the policy. We, therefore, endorse the argument raised by the respondent that even accepting the case of the appellant at its very best that the period of limitation would be 3 years under Section 44 of the Limitation Act, the complaint would, even then, be beyond time, having been filed in April 1994.

Himachal Pradesh State Forest Company Ltd. v. United India Insurance Co. Ltd. [Bench Strength 2], Civil Appeal No. 6347/2000 (18/12/2008), 2009 AIR(SC) 1407: 2008(17) SCR 1013: 2009(2) SCC 252: 2008(13) JT 66: 2009(1) SCALE 216: 2009(1) Supreme 375 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 13, 18, 22 & 21 — Dismissal of complaint in limine without notice to respondent — When improper — Involvement of disputed questions — Delegation to civil court — Insurance policy — Breach of insurance quote — Appellant filed complaint before commission in respect of losses suffered due to respondent’s negligence and deficiency in service — Dismissal of complaint in limine on ground of involvement of disputed questions and contentions — Order of dismissal is under challenge — Whether commission justified in dismissing the complaint? — Held, no — Neither any notice issued to respondent in the proceedings nor pleadings of respondent — Dismissal of complaint is premature — Commission not justified in rejecting the complaint merely on ground of involvement of complicated nature of facts and law — Impugned order of commission set aside — Complaint restored.

CCI Chambers Coop. HSG. Society Ltd. Vs. Development Credit Bank Ltd., (2003) 7 SCC 233, Relied on.

Synco Industries Vs. State Bank of Bikaner & Jaipur and Others [(2002) 2 SCC 1, Dr. J.J. Merchant and others Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, Referred.

HELD: The Commission ought to have issued notice to the respondent and placed the pleadings on record. When pleadings of both the parties were made available before the Commission, only then the Commission should have formed an opinion as to the nature and scope of enquiry, i.e., whether the facts which arose for decision on the basis of the pleadings of the parties required a detailed and complicated investigation of facts which was incapable of being undertaken in a summary and speedy manner, then only the Commission should have justifiably formed an opinion on the need of relegating the complaint to a civil court. That apart, in view of the admitted fact that the respondent was never served with any notice and not present before the Commission, therefore, it was not known to the Commission, what would be the defence and contentions of the respondent and what questions and disputes would really arise therefrom until and unless both sides place their respective cases before the Commission. At that stage, it is difficult for the Commission also to hold whether the disputed questions and contentions could not be decided by the Commission and the same must be relegated to the Civil Court. Every complaint of the consumer is related to a dispute and will raise disputed questions and contentions. If there was no dispute, then there would be no complaint. Therefore, the ground for rejection of the complaint namely, “it arises disputed questions and contentions” was definitely irrelevant. Therefore, the Commission was not justified in rejecting the complaint only on this ground. In any view of the matter, it is not evident from the order of the Commission that it had considered the nature of disputed questions of fact for which the complainant should be relegated to the Civil Court for decision. In view of our discussions made hereinabove and relying on the principles enunciated by this Court in the aforesaid decisions, we are, therefore, of the view that the Commission was not justified in rejecting the complaint merely by stating that the complicated nature of facts and law did not warrant any decision on its part before even issuing notice to the respondent and directing the filing of his defence, which, in our opinion, cannot be said to be decisive.

The appeal is, therefore, allowed to the extent indicated above. The decision of the commission is set aside. The complaint is sent back to the Commission to be heard afresh in consistent with the observations made above. There will be no order as to costs.

Punj Lloyd Limited v. Corporate Risks India Pvt. Ltd. [Bench Strength 2], CA No. 1026/2007 (11/12/2008), 2008(17) SCR 309: 2009(2) SCC 301: 2008(13) JT 306: 2008(16) SCALE 304: 2009(1) SLT 278: 2009(147) CompCas 203 [Tarun Chatterjee, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Constitution of India — Article 129 — Contempt of order of Supreme Court — No action to be taken on account of undertaking given by contemnor, scope — Conditional stay — Breach of interim orders — Appeal against the order of National Commission whereby respondents 1 to 4 were directed to refund admission expenses along with interest @ 12% p.a. and also Rs. 20,000/- by way of compensation to each of the complainant — Interim stay of order subject to deposit the sums as directed by National Commission within 4 weeks — No deposit of amount made — Undertaking by appellant to deposit the amounts within 9 weeks — Direction issued not to take action against appellant for a week days — Consumer Protection Act, 1986 — Section 23 — Contempt of Courts Act, 1971 — Sections 2(b) & 12.

Buddhist Mission Dental College and Hospital (1) v. Bhupesh Khurana [Bench Strength 2], Civil Appeal No. 1135/2001 (26/11/2008), 2009(4) SCC 484: 2009(2) SCC(Cr) 519 [Dalveer Bhandari, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance claim — Reduction of amount of claim by National Commission, on the grounds that certain stocks and raw material were unfit for human consumption and pilferage by intrudes and staff members, when unsustainable — Three insurance policies were taken by appellant company in respect of building, plant, machinery and raw materials, stock lying in units of company — Insurance claim on the basis of substantial damage due to terrorists attack and setting fire in units by terrorists — Non-payment by Insurance company — Complaint before National Commission — Reduction in claimed amount by National Commission — Held, reduction on the ground that certain stocks and raw material were unfit for human consumption is unsustainable as no fault of appellant in this respect — Plea of pilferage by intrudes and staff members by insurance company also unsustainable for want of any evidence and material in support of — Even no amount was paid by insurance company as per survey conducted by its own surveyor — Complainants got the survey done through their surveyor as Insurance Company did not do anything for a long time and on basis thereof claimed amount — In such circumstances appeal of insurance company unsustainable and to be dismissed — Appeal of complainants justified and to be allowed — Appeals allowed with interest at the rate of 9 percent per annum from the date of filing of complainants before the National Commission, i.e. from the date of payment — Order accordingly — Insurance Act, 1938 — Section 46.

HELD: Having heard the learned counsel for the parties and having gone through the records and proceedings as also the judgment of the National Commission, it is clear that the complainants were able to establish the claims put forward by them. It is not in dispute by and between the parties that the Insurance Policy covered several acts including terrorism and fire. It has come in evidence and has been believed by National Commission that the son of the Managing Director was killed in March, 1990 by terrorist attack. It is in the light of the said incident that the Managing Director had to leave Srinagar and to return to Delhi. It was because of the said incident that the operation of both the units was suspended. Thus, it was not a case wherein the complainants did not undertake the activities which were required to be undertaken by them, but the could not operate the units and carry on business. No fault, therefore, can be found against the complainants for suspending the operation of both the units. The complainants obviously cannot suffer because of non-production in the Mill as well as in the Company. The National Commission was, therefore, not right in reducing any amount on the ground that certain stocks and raw materials were unit for human consumption. It was not intentional or deliberate act on the part of the complainants in stopping production and allowing the stocks and raw materials to get spoiled or damaged and by making them unfit for human consumption. It was because of the militant activities and terrorism that the Company and the Mill could not do business and produce goods. Reduction of amount by the National Commission on that count was, therefore, unjustified and in our opinion, that part of the order requires interference by this Court.

As regards pilferage by intruders and staff members, except ipse dixit on the part of the Insurance Company, no material whatsoever has been placed on record in support of such allegation. The National Commission, in our opinion, was justified in not accepting such bare assertion without any evidence or concrete material in support of such plea. In fact, a finding has been recorded by the National Commission that the godowns were “full” when they were set on fire. `Watch and ward staff’ were protecting the Mill and the Company. There was also a `Police post’ nearby both the units. Further, the report submitted by Mr. Andrasabi as to pilferage was not reliable.

The matter, however, did not end there. Even before us, nothing has been shown from which such an inference could be drawn by a reasonable and prudent man as to pilferage by intruders or staff members. The National Commission, in our judgment, was wholly right in negativing the contention of the Insurance Company that substantial part of stocks and raw materials had been taken away by intruders or staff members. No reduction, therefore, could be allowed on that count.

The National Commission was also right in observing that no payment was made by the Insurance Company even as per the survey conducted by the Surveyor appointed by the Insurance Company. Taking into consideration the entire facts and circumstances, in our opinion, the complainants are entitled to claim compensation towards building, plant, machinery and electricity fittings, raw materials and stocks.

In view of the fact that the appeals filed by the complainants are allowed, the appeals filed by the Insurance Company must necessarily fail. Accordingly, the appeals filed by the Insurance Company are dismissed.

For the foregoing reasons, the appeals filed by the Insurance Company are ordered to be dismissed. The appeals filed by the complainants are required to be allowed to the extent indicated above with interest at the rate of 9 percent per annum from the date of filing of complainants before the National Commission, i.e. from the date of payment. So far as Appeal concerning Policy No. 11319000249 relating to stocks is concerned, the complainants are entitled to get the entire amount of Rs. 37,78,619/- since there is no appeal in respect of the said policy. Canara Bank is not concerned with the said policy. Grindlays Bank has not approached this Court and had supported the complainants before the National Commission. The two appeals of Canara Bank are in regard to two policies, 113190000312 and 113190000313, raw materials policy and plant policy. Both the appeals of Canara Bank are allowed and the Insurance Company is directed to make payment to Canara Bank and not to the complainants in respect of the amount to be paid to the complainants.

Chief Executive Officer & Vice Chairman, Gujarat Maritime Board vs. Haji Daud Haji Harun Abu, 1996(11) SCC 23: 1996(8) Scale 608, Relied on.

HELD: Regarding to appeals filed by Canara Bank, it was submitted that the appeals are not maintainable. The National Commission was, therefore, wholly right in not directing the Insurance Company to pay the claim amount to the Bank. It was also submitted that such claim lodged by the Canara bank was even otherwise not tenable. It was urged that under Section 3 of the Jammu & Kashmir Migrants (Stay of Proceedings) Act, 1997, no such claim could have been lodged by the Bank against the complainants by approaching a Civil Court by filing a suit and no order could have been made or a decree could have been passed by a competent Court in view of the provisions of the said Act. Since no such claim is maintainable in the light of statutory provisions, the Bank cannot by this indirect method, obtain a decree and get it executed which it could not have otherwise got in view of the suspension of such claims. It was, therefore, submitted that both the appeals filed by the Canara Bank are also liable to be dismissed.

In our opinion, therefore, the submission of the learned counsel for the Bank that as soon as a decree is passed or order is made in favour of the complainants, the Bank is entitled to the said amount is well founded. For such a relief, it is not necessary for the Bank to become a plaintiff by filing a suit in a competent Court of law and obtain a decree in its favour. It is true that had it been the position, the provisions of 1997 Act would get attracted and such suit would be stayed and no decree could have been passed by a competent Court in favour of the creditor. But in the light of the statutory provisions in the Insurance Act and in the Transfer of Property Act, the Bank is entitled to the amount directly from the Insurance Company.

Krishna Food & Baking Industry P. Ltd. v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 7515/2001 (07/11/2008), 2009 AIR(SC) 1000: 2008(15) SCR 668: 2008(15) SCC 631: 2008(12) JT 203: 2008(13) SCALE 747: 2009(1) SLT 565 [C.K. Thakker, J.: D.K. Jain, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance claim — Reduction of amount of claim, when improper — Plea of pilferage by intruders and staff members not sustainable without providing sufficient proof by insurance company — Substantial damage caused to building plant, machinery and raw material of insured company due to terrorists attack and setting fire in units by terrorists — Repudiation of claim by Insurance company pleading pilferage by intruders and staff members rejected by National Commission — No material placed on record by insurance company in support of such allegation — A finding has been recorded by the National Commission that the godowns were “full” when they were set on fire — Watch and ward staff were protecting the Mill and the Company — There was also a `Police post’ nearby both the units. Further, the report submitted by Mr. Andrasabi as to pilferage was not reliable — National Commission therefore justified in rejecting the plea of Insurance company — No reduction to be allowed on that count — Insurance Act, 1938 — Section 46.

Krishna Food & Baking Industry P. Ltd. v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 7515/2001 (07/11/2008), 2009 AIR(SC) 1000: 2008(15) SCR 668: 2008(15) SCC 631: 2008(12) JT 203: 2008(13) SCALE 747: 2009(1) SLT 565 [C.K. Thakker, J.: D.K. Jain, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance claim — Reduction of amount of claim by National Commission, when improper — Reduction of amount by National Commission on the ground that certain stocks and raw material were unfit for human consumption — Appellant-Company dealing in manufacturing bread, biscuits, cakes and other bakery items — Terrorists attack and death of son of Managing Director — Insurance claim on the basis of substantial damage caused to building, plant, machinery and raw material of insured-company due to terrorists attack and setting fire in united company by terrorists — Undisputed that insurance policy covered several acts including terrorism and fire — Evidence which was believed by the National Commission that son of Managing Director was killed by terrorist attack — In such circumstances complainants could not operate the units and carry on business — It was not intentional or deliberate act on the part of the complainants in stopping production and allowing the stocks and raw materials to get spoiled or damaged and by making them unfit for human consumption — No fault can be found against complainants for suspending operation of units — Complainants therefore cannot suffer because of non-production in company — Reduction of amount by National Commission on that count therefore unjustified and need interference by this court — Insurance Act, 1938 — Section 46.

HUDA v. Diwan Singh [Bench Strength 2], CA No. 3409/2003 (23/10/2008), 2010(14) SCC 770: 2009(2) SCALE 183 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(d) & (c) — Housing — Delay in delivery of possession of plot, claim of interest by re-allottee on the ground of, when not sustainable — Claimant-respondent, a re-allottee — Plot in question allotted in favour of original allottee in 1990 — Same re-allotted in favour of respondent in April 1998 — When possession of plot offered to him in May 1998, he found that a part of it was used for purposes of road — Thereafter, appellant-authority even offered an alternative plot — Respondent, however, rushed to the District Forum in 1999, hardly within a year of re-allotment — Allegations of inordinate delay, negligence, harassment on part of appellant, in a complaint filed by a re-allottee, within one year of re-allotment, appears to be hollow and without merit — In this factual background, award of interest on deposited amount in favour of respondent held to be not warranted — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Section 37.

Ghaziabad Development Authority v. Balbir Singh 2004(5) SCC 65, Haryana Urban Development Authority v. Darsh Kumar 2005(9) SCC 449 and Bangalore Development Authority v. Syndicate Bank 2007(6) SCC 711, Relied on.

HUDA v. Diwan Singh [Bench Strength 2], CA No. 3409/2003 (23/10/2008), 2010(14) SCC 770: 2009(2) SCALE 183 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(d) & (c) — Housing — Interest, wrong awarding of, effect of, recovery of amount of interest valid — Claimant-allottee — Claim based on delay in delivery of possession — Amount refunded by appellant-Development Authority after forfeiting 10% of total price of plot — Same held to be proper by State Commission and it reduced rate of interest from 18% to 15% per annum — Appellant went in revision before National Commission — In revision claimant did not challenge decision on forfeiture of 10% of total price, but National Commission did not interfere with rate of interest — Order of interest challenged by appellant in appeal before Supreme Court — Supreme Court without disturbing order of refund reduced rate of interest to 10% — Civil Procedure Code, 1908 — Sections 34 & 144.

HUDA v. Anil Kumar [Bench Strength 2], CA No. 2384/2003 (23/10/2008), 2010(14) SCC 778: 2009(2) SCALE 180 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(c) — Housing — Interest, wrong awarding of, effect of, recovery of amount of interest valid — Refund along with interest — Claim by re-allottee based on inordinate delay in delivery of possession of allotted plot — Finding as to refund of amount paid by claimant held to be correct — However, in facts and circumstances, interest awarded at rate of 15% reduced to rate of 10% per annum — Civil Procedure Code, 1908 — Sections 34 &144 — Contract Act, 1872 — Section 37.
HUDA v. Anil Kumar [Bench Strength 2], CA No. 2384/2003 (23/10/2008), 2010(14) SCC 778: 2009(2) SCALE 180 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(d) & (c) — Housing — Delayed delivery of possession of plot, claim of interest on the ground of, when not sustainable — Possession found to be given at old rate — Allottees getting benefit of escalation of price, held not entitled to interest on amounts paid on ground of delay — Decision awarding interest by Courts below, set aside — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Section 37.

HUDA v. Suresh Kumar Makkar [Bench Strength 2], CA No. 2383/2003 (23/10/2008), 2009(2) SCALE 178 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(c) — Housing — Refund along with interest — Delay in delivery of possession — Interest at rate of 18% per annum cannot be granted in all cases irrespective of facts of case.

HUDA v. Suresh Kumar Makkar [Bench Strength 2], CA No. 2383/2003 (23/10/2008), 2009(2) SCALE 178 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(c) — Housing — Interest, wrong awarding of, effect of, recovery of amount of interest valid — Direction for recovery against respondents — Order awarding interest in favour of respondents, re-allottees of certain plots passed by Courts below — Same came to be set aside by Supreme Court — Resulting, appellant held entitled to restitution and permitted to recover back amounts paid to respective respondents — Civil Procedure Code, 1908 — Sections 34 &144 — Contract Act, 1872 — Section 37.

Haryana Urban Development Authority v. Raje Ram [Bench Strength 2], CA No. 2381/2003 (23/10/2008), 2009 AIR(SC) 2030: 2008(16) SCR 601: 2008(17) SCC 407: 2009(2) SCALE 164 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14(1)(d) & (c) — Housing — Delay in delivery of possession of plot, claim of interest on account of, when not sustainable — Claimants, re-allottees — They approached District Forum within short span of time from dates of re-allotment in their favour and even without making payment of full price — Their cases cannot be compared to cases of original allottees who were made to wait for a decade or more for delivery and thus put to mental agony and harassment — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Section 37.

Haryana Urban Development Authority v. Raje Ram [Bench Strength 2], CA No. 2381/2003 (23/10/2008), 2009 AIR(SC) 2030: 2008(16) SCR 601: 2008(17) SCC 407: 2009(2) SCALE 164 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(d) & (c) — Housing — Delay in delivery of possession of plot, interest on account of, award of, when improper — Claimants, re-allottees — They accepted re-allotment in spite of being fully aware about reasons for delay — They were also aware that time for performance was not stipulated as essence of contract and original allottees had accepted delay — They approached District Forum within short span of time from dates of re-allotment in their favour and even without making payment of full price — Award of interest in their favour held to be unjustified — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Section 37.

Haryana Urban Development Authority v. Raje Ram [Bench Strength 2], CA No. 2381/2003 (23/10/2008), 2009 AIR(SC) 2030: 2008(16) SCR 601: 2008(17) SCC 407: 2009(2) SCALE 164 [R.V. Raveendran, J.: Aftab Alam, J.] <<LAWPACK SUPREME COURT>>
Monopolies and Restrictive Trade Practices Act, 1969 — Sections 36-A & 48-C — Unfair trade practice — Distinction with deficiency in service — Holding a person guilty of unfair trade practice cannot be said to be equal to holding a person guilty of providing deficient service — Element of unfair trade practice stands at a higher and onerous platform than deficient service — Consumer Protection Act, 1986 — Sections 2(1)(g) & (o).

KLM Royal Dutch Airlines v. Director General of Investigation and Registration [Bench Strength 2], Civil Appeal No. 815-816/2002 (03/10/2008), 2009 AIR(SC) 938: 2008(14) SCR 245: 2009(1) SCC 230: 2008(11) JT 317: 2008(13) SCALE 514: 2008(8) SLT 426: 2008(146) CompCas 421 [Tarun Chatterjee, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Deficiency in service and negligence — Scope — Airlines — Delayed transportation of goods — Representation as to prompt delivery of goods, not carried out — Effect — OP held liable for deficiency in service — Negligence in providing prompt service or service as expected may also be presumed in case of failure to deliver the goods within a reasonable time at the destination.

HELD: The appellant herein is engaged in the business of transportation of goods by airlines, and therefore, there could be no dispute with regard to the fact that they were providing service when they accept baggages to be carried by air. A representation is also made that the cargo would be delivered at the destination with all promptness. If there is a failure in carrying out the said representation there would be a case of deficiency in their service. Negligence in providing prompt service or service as expected may also be presumed if they fail to deliver the said goods within a reasonable time at the destination.

KLM Royal Dutch Airlines v. Director General of Investigation and Registration [Bench Strength 2], Civil Appeal No. 815-816/2002 (03/10/2008), 2009 AIR(SC) 938: 2008(14) SCR 245: 2009(1) SCC 230: 2008(11) JT 317: 2008(13) SCALE 514: 2008(8) SLT 426: 2008(146) CompCas 421 [Tarun Chatterjee, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Monopolies and Restrictive Trade Practices Act, 1969 — Section 36-A(1), (ii), (iv), (vi) & 2(r) — Unfair trade practice or deficiency of service — Determination of — Airlines — Delayed transportation of consignment on account of loss of some parcels — Complaint appearing only about deficiency of service and whether or not any compensation is to be paid for loss suffered — Subject matter need to be gone into in complaint filed before State Commission under Consumer Protection Act, 1986 — Consumer Protection Act, 1986 — Sections 2(1)(g), 14, 17 & 21.

KLM Royal Dutch Airlines v. Director General of Investigation and Registration [Bench Strength 2], Civil Appeal No. 815-816/2002 (03/10/2008), 2009 AIR(SC) 938: 2008(14) SCR 245: 2009(1) SCC 230: 2008(11) JT 317: 2008(13) SCALE 514: 2008(8) SLT 426: 2008(146) CompCas 421 [Tarun Chatterjee, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Telecommunication — Meter reading — Recording of, duty of Department in respect of, scope — Held, it is obligatory on part of department to record the meters reading fortnightly and if there is a sudden spurt, place the telephone line under observation and depute responsible staff to check whether there was any special reason giving rise to spurts — Telecommunication Departmental Guidelines for Disposing of Excess Billing Complaints — Clauses 4, 5 & 6 — Consumer Protection Act, 1986 — Section 2(1)(o).

Saji Geevarghese v. Accounts Officer (Telephone Revenue) [Bench Strength 2], Civil Appeal No. 5912/2008 (30/09/2008), 2009 AIR(SC) 785: 2008(15) SCR 1: 2009(1) SCC 644: 2008(12) JT 684: 2008(15) SCALE 82: 2008(9) SLT 491 [R.V. Raveendran, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), 14(1)(f), 18, 22 & 23 — Allotment of plot — Cancellation of, refund of amount with interest, right of allottee after, scope — Entire amount refunded by GDA with interest after cancellation of allotment, initially accepted by appellant — However, subsequently appellant returned like amount to GDA — Having accepted amount and encashed same, held, appellant would not be entitled to claim allotment of plot from GDA — Town Planning — Allotment of plot — Cancellation of, refund of amount with interest, right of allottee after, scope.

Manjul Srivastava v. Government of Uttar Pradesh [Bench Strength 2], Civil Appeal Nos. 1758-1759/2002 (29/08/2008), 2008(12) SCR 903: 2008(8) SCC 652: 2008(9) JT 584: 2008(12) SCALE 110: 2008(8) SLT 14 [Tarun Chatterjee, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), 14(1)(c), (d), 18, 22 & 23 — Housing — Interest on refund, rate of — Non-allotment of plot — Interest need to be based on facts and circumstances of each case — Brochure entitling GDA to charge 18% interest in case of non-deposit of entire amount after allotment — Cancellation of reservation of plot made by GDA after 7 years — Entire amount deposited by appellant utilized by GDA for their own purpose till its refund — GDA directed to refund amount at rate of 18% instead of 5% — Town Planning — Allotment of plot — Cancellation of, interest on refund of amount, rate of — Civil Procedure Code, 1908 — Section 34 — Interest Act, 1978 — Section 3.

Alok Shankar Pandey v. Union of India (2007) 3 SCC 545

HELD: A decision of this Court in the case of Alok Shanker Pandey vs. Union of India & Ors. [(2007) 3 SCC 545] may be referred as it was also cited at the Bar. In that decision it has been clearly held that the amount of interest to be awarded for refund of any amount deposited by the candidate would depend upon the facts and circumstances of each case. Such being the state of affairs, we are of the view that the appellant should be allowed to get refund from the GDA the entire sum with interest at the rate of18% not at the rate of 5% as we find that from the brochure itself, it would be clear that in the event, the appellant could not deposit the entire amount after the allotment is made within certain time, 18% interest shall be levied on the appellant. It is an admitted position that the appellant deposited the entire amount as directed by the GDA in the year 1989 and the order of cancellation of reservation of a plot in favour of the appellant was made after more than seven years and, therefore, we must hold that the respondent was liable to pay interest not at the rate of 5% but at the rate of 18%. In the facts of the present case, since the GDA had utilized the entire amount of the appellant for their own purpose till they had refunded the amount to the appellant, we confirm the order of the Commission holding that there was no “unfair trade practice”, but in the facts and circumstances of the present case, we allow these appeals in part and direct the respondent to refund the money already deposited with the GDA with interest at the rate of 18 per cent and not at the rate of 5%.

Manjul Srivastava v. Government of Uttar Pradesh [Bench Strength 2], Civil Appeal Nos. 1758-1759/2002 (29/08/2008), 2008(12) SCR 903: 2008(8) SCC 652: 2008(9) JT 584: 2008(12) SCALE 110: 2008(8) SLT 14 [Tarun Chatterjee, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Motor Vehicles Act, 1988 — Sections 146 & 147 — Vehicle insurance — Accident, quantum of loss, determination of — Loss assessed by surveyor when is on lower side — Purchase of Tata Sumo vehicle by appellant for Rs. 4,30,000/- — Comprehensive insurance policy taken — Renewal of policy from time to time — Accident — Surveyor appointed by respondent declared it as total loss and estimated the loss at Rs. 1,80,000/- — Not satisfied with the same, appellant approached consumer forum — Whether loss assessed by surveyor is on lower side? — Held, yes — Accident took place 7 months after renewal of policy — At the time of renewal value of vehicle estimated at Rs. 3,54,000/- and premium paid accordingly — Within 7 months span, value of vehicle cannot be depreciated from Rs. 3,54,000/- to Rs. 1,80,000/- — However, same depreciation in value of vehicle to be made — Reduction of Rs. 10,000/- as depreciation — Appellant entitled to Rs. 3,44,000/- only with interest — Consumer Protection Act, 1986 — Sections 2(1)(c)(iii), 2(1)(o), (g), 14(1)(d), 18, 22 & 23.

HELD: It is also the admitted position that the vehicle had been declared to be a total loss by the surveyor appointed by the company though the value of the vehicle on total loss basis had been assessed at Rs.1,80,000/- We are, in the circumstances, of the opinion that as the company itself had accepted the value of the vehicle at Rs.3,54,000/- on 13th February, 2002, it could not claim that the value of the vehicle on total loss basis on 10th September, 2002 i.e., on the date of the accident was only Rs.1,80,000/-. It bears reiteration that the cost of the new vehicle was Rs.4,30,000/- and it was insured in that amount on 19th January, 2000 and on the expiry of this policy on 18th January, 2001, was again renewed on 19th January, 2001 on a value of Rs.3,59,000/- and on the further renewal of the policy on 13th February, 2002 the value was reduced by only Rs.5,000/- to Rs.3,54,000/-. We are, therefore, unable to accept the company’s contention that within a span of seven months from 13th February 2002 to the date of the accident, the value of the vehicle had depreciated from Rs.3,54,000/- to Rs.1,80,000/-. It must be borne in mind that Section 146 of the Motors Vehicles Act, 1988 casts an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act and any vehicle driven without taking such a policy invites a punishment under Section 196 thereof. It is therefore, obvious that in the light of this stringent provision and being in a dominant position the insurance companies often act in an unreasonable manner and after having accepted the value of a particular insured good disown that very figure on one pretext or the other when they are called upon to pay compensation. This `take it or leave it’ attitude is clearly unwarranted not only as being bad in law but ethically indefensible. We are also unable to accept the submission that it was for the appellant to produce evidence to prove that the surveyor’s report was on the lower side in the light of the fact that a price had already been put on the vehicle by the company itself at the time of renewal of the policy. We accordingly hold that in these circumstances, the company was bound by the value put on the vehicle while renewing the policy on 13th February, 2002.

The learned counsel for the respondent company has finally submitted that as the vehicle had been insured for Rs.3,54,000/- on 13th February, 2002 and the accident had happened about seven months later (on 10th September, 2002), some depreciation in the value of the vehicle ought to be made and the compensation determined on that basis. We accept this prayer of the learned counsel and keeping in view that about seven months of the policy had expired, order that the value of the vehicle should be reduced by Rs.10,000/-.

We accordingly allow the appeal and direct that the appellant should be paid a sum of Rs.3,44,000/- with interest. in the manner determined by the National Commission. The appellant shall also have his costs which are quantified at Rs.25,000/-.

Dharmendra Goel v. Oriental Insurance Co. Ltd. [Bench Strength 2], Civil Appeal No. 4720/2008 (30/07/2008), 2008(11) SCR 578: 2008(8) SCC 279: 2008(8) JT 464: 2008(10) SCALE 643: 2008(3) SCC(Cr) 483 [Altamas Kabir, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Interest, rate of, on account of default in payment by allottees, scope — Even though a policy may have been adopted by the Development Authority for imposing a deterrent rate of interest on defaults committed by allottees in payment of their dues, such imposition has to be in keeping with the provisions of Section 3 of the Interest Act, 1978 and not in a unreasonable manner — Allotment of plot by HUDA to respondent — Entire amount, initially computed as tentative sale price was fully paid by respondent together with further amounts due to enhanced compensation paid for plot — Appellant on 15.6.2001 additional demand of Rs. 71,800/- by imposing simple interest @ 10%p.a. upto 31.3.1987, 15%p.a. upto 15.1.1998 and compound interest @ 15% p.a. — Respondent paid the demand under protest and challenged the demand as it is above the interest rate stipulated in allotment letter — Condition No.4 of the allotment letter mentions that the total tentative sale price was subject to variation in certain circumstances and that the allottee would have to pay an additional price for the plot as a consequence thereof; it does not mention that interest at the rate of 7 per cent per annum would be payable also in respect of the additional price required to be paid on account of increase of the acquisition cost — Appellant, hence, even in terms of allotment letter, entitled to charge interest on balance dues at a rate different than stipulated in allotment letter — However, such rate of interest should not be fixed arbitrarily — Held, in the instant case, appellant will be entitled to impose simple interest on the basis of the prevailing current rate of interest — Civil Procedure Code, 1908 — Section 34 — Punjab Urban Estates (Development and Regulation) Act, 1964 — Haryana Urban Development Authority Act, 1977 — Interest Act, 1978 — Section 3.

Ghaziabad Development Authority vs. Balbir Singh, 2004(5) SCC 65, Relied on.

HELD: In the instant case, the provision of the allotment letter dated 22.3.1974 appears to have been wrongly interpreted by the Consumer Fora since the stipulated rate of interest only takes into consideration payment of the total tentative sale price while Condition No.4 of the allotment letter mentions that the total tentative sale price was subject to variation in certain circumstances and that the allottee would have to pay an additional price for the plot as a consequence thereof. It does not mention that interest at the rate of 7 per cent per annum would be payable also in respect of the additional price required to be paid on account of increase of the acquisition cost. The said position is further clarified by condition No.8 which also speaks of payment of the total tentative sale price and the rate of interest at 7 per cent per annum on the installments to be paid in respect thereof. There is nothing further in the agreement which provides for the rate of interest to be levied on the additional price on account of the enhancement of the acquisition cost.

On such score we are inclined to agree with the learned counsel for the appellant that the appellant was entitled, even in terms of the allotment letter to charge interest on balance dues at a rate which was different from that stipulated in the allotment letter. At the same time, we are in agreement with the views expressed in Balbir Singh’s case (supra) which gives an indication of the matters which are required to be considered by the Courts while granting interest where there is no mutual understanding or agreement with regard to the rate of interest that could be charged. While we also agree that for unpaid dues the appellant is entitled to charge interest, such an exercise will have to be undertaken within the parameters of circumstances and reason and the rate of interest should not be fixed arbitrarily. In the decisions referred to hereinabove, this Court has sounded a note of caution that rates of interest fixed by the Courts must not be arbitrary and should take into account the current bank rates which in recent years have shown a tendency to slide downwards. In fact, in many of the aforesaid cases, the rate of interest has been reduced substantially.

In the aforesaid circumstances, even though the rate of interest indicated in the allotment letter dated 22.3.1974 may not have application as far as payment of the additional price is concerned, the District Forum has erred on the site of reason and has allowed interest at the rate of 7 per cent per annum upon holding that the demand made by the appellant at the higher rate was contrary to the mutual agreement contained in the allotment letter. In our view, even though a policy may have been adopted by the appellant for imposing a deterrent rate of interest on defaults committed by allottees in payment of their dues, such imposition has to be in keeping with the provisions of Section 3 of the Interest Act, 1978 and not in a unreasonable manner. It may perhaps be even more pragmatic if a condition regarding charging of interest at the prevailing banking rates were included in the allotment letters, having regard to the provisions of sub-section (3) of Section 3 of the said Act.

We, therefore, allow this appeal, set aside the orders dated 10.3.04 passed by the District Forum, Chandigarh in Complaint Case no.591 of 2002, as affirmed by the State Commission, Chandigarh, on 9.7.2004 and the order passed in Revision by the National Commission on 19.11.2004, which is the subject matter of this appeal, and quash the additional demand of Rs.71,800 raised on behalf of the appellant vide Memo No. EO 8682 dated 15.6.2001 and direct that the appellant will be entitled to impose simple interest on the basis of the prevailing current rate of interest for the purpose indicated in para 6 of the complaint filed by the respondent (Complaint Case No.591 of 2002) before the District Forum, Chandigarh. Such a computation is to be completed within a month from the date of receipt of this order. Since, we have been informed at the Bar that the entire amount by way of additional demand has been deposited upon protest, any amount which is in excess of the amount to be computed on the basis of this order, shall be refunded to the respondent within two weeks of such computation.

HUDA v. Prem Kumar Agarwal and another, 2008(1) SCALE 484, Bihar State Housing Board vs. Arun Dakshy, 2005(7) SCC 103, Haryana Urban Development Authority vs. Manoj Kumar, 2005(9) SCC 541, Krishna Bhagya Jala Nigam Limited vs. G. Harischandra Reddy and another, 2007(2) SCC 720, Relied on.

H.U.D.A. v. Raj Singh Rana [Bench Strength 2], Civil Appeal No. 4436/2008 (16/07/2008), 2008 AIR(SC) 3035: 2008(10) SCR 1034: 2009(17) SCC 199: 2008(8) JT 403: 2008(10) SCALE 458: 2008(8) SLT 103 [Altamas Kabir, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Interest on earnest money, scope and rate for grant of — Invitation of application by PUDA in 1989 to acquire HIG houses — Respondents applied for by depositing Rs. 4,000/- — Refund of earnest money to unsuccessful candidates — Respondents not sought for refund — Formulation of another scheme for HIG in 1996 — Applications were again invited — A concession was given to those unsuccessful candidates in 1989 scheme who never sought for deposit, would be considered for allotment by draw of lots — Again respondents remained unsuccessful — Refund of earnest money by PUDA without any interest — Respondents challenged the same before consumer forum — Admittedly, advertisement specified clearly that no interest payable on earnest money — Nothing to show respondents ever asked for refund — Moreover, respondents allowed themselves to be included in draw of lots for second time — However, explanation offered by PUDA for non-refund also not so convincing — Held, it will be inequitable to saddle the appellants only with the responsibility of non-refund of the earnest money between 10th March 1989 and 19th January, 1997 — Appeals allowed in part and direction given that the rate of interest payable by the appellant, as directed by the District Forum and upheld by the State Commission, at the rate of 18% per annum from the date of deposit till the date of actual payment shall stand reduced to 10% for the period in question — In the result, respondents are entitled for interest at 10% p.a. — Punjab Regional and Town Planning and Development Authority Act, 1995 — Section 23 — Punjab Urban Planning and Development Authority Regulations, 1996 — Regulation 8 — Civil Procedure Code, 1908 — Section 34.

S.P. Davaskar vs. Housing Commissioner Karnataka Housing Board, 1977 CCJ 360, George Thomas and Ors. vs. Ghaziabad Development Authority, 1999(1) CPC 183, Not applicable.

HELD: In our view, the single most important aspect of this case is that on the failure of the respondents to ask for refund of the deposited amount within a reasonable time, the same was not refunded to them by PUDA. Not having asked for such refund, the respondents cannot also take advantage of their lapse. If the respondents had succeeded in the second draw of lots, this question, which has been raised on their behalf before the Consumer Forum might never have arisen. In our view, it will be inequitable to saddle the appellants only with the responsibility of non-refund of the earnest money between 10th March 1989 and 19th January, 1997.

We, therefore, allow the appeals in part and direct that the rate of interest payable by the appellant, as directed by the District Forum and upheld by the State Commission, at the rate of 18% per annum from the date of deposit till the date of actual payment shall stand reduced to 10% for the period in question. The cost of litigation granted by the District Forum is also set aside.

Punjab Urban Planning and Development Authority v. Bhupinder Singh [Bench Strength 2], Civil Appeal No. 7727/2002 with Civil Appeal No. 7728, 7730, 7726, 7729,/2002 and C.A. No. 4366/2008 (14/07/2008), 2008(10) SCR 958: 2008(13) SCC 572: 2008(8) JT 568: 2008(10) SCALE 367: 2008(8) SLT 161 [Altamas Kabir, J.: Mukundakam Sharma, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (c), (g), (o), 14(1)(c), (d), 18, 22 & 23 — Housing — Deficiency in service in construction of house, complaint in respect of, when maintainable — Where owner of land entrusted construction to contractor who has a complaint of deficiency in service as to construction, or where purchaser of flat/house has complaint against developer/builder with reference to construction or delivery of amenities, a complaint is maintainable — Held, in the instant case, agreement between the parties is not a joint venture agreement but an agreement for construction of a residential building and delivery of an agreed percentage of the constructed area to the landowners — Consequently, the appellant is a consumer and respondents are `service providers’ and the complaint of the appellant is maintainable.

Sujit Kumar Banerjee v. Rameshwaran [Bench Strength 2], CA No. 7577/2005 (10/07/2008), 2009 AIR(SC) 1188: 2008(10) SCC 366: 2008(7) JT 568: 2008(10) SCALE 52 [R.V. Raveendran, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), (d), (g), (o), 14(1)(c), (d), 18, 22 & 23 — Housing — Deficiency of service, scope, failure of builder to provide completion certificate and C&D forms to land owner, effect — Land owner entered into agreement with builder for construction of apartment and for sharing of constructed area — Land owner filed a complaint seeking delivery of completion certificate and C&D Forms in regard to building — Maintainability of complaint — Obligation on the part of builder to secure a sanctioned plan and construct a building — Builder owes a duty to make necessary application for completion certificate and C&D forms — If builder fails to do so, he will be liable to pay compensation — Complaint, hence, maintainable — Assumption of the State Commission and National Commission that the obligation of the builder was discharged when he merely applied for a completion certificate is incorrect — Contract Act, 1872 — Sections 73 & 37.

HELD: Under the agreement, the builder is required to construct the ground floor in accordance with the sanctioned plan, and specifications and the terms in the agreement and deliver the same to the owner. If the construction is part of a building which in law requires a completion certificate or C&D forms (relating to assessment), the builder is bound to provide the completion certificate or C&D forms. He is also bound to provide amenities and facilities like water, electricity and drainage in terms of the agreement. If the completion certificate and C&D forms are not being issued by the Corporation because the builder has made deviations/violations in construction, it is his duty to rectify those deviations or bring the deviations within permissible limits and secure a completion certificate and C&D forms from MCD. The builder can not say that he has constructed a ground floor and delivered it and therefore fulfilled his obligations. Nor can the builder contend that he is not bound to produce the completion certificate, but only bound to apply for completion certificate. He cannot say that he is not concerned whether the building is in accordance with the sanction plan or not, whether it fulfills the requirements of the municipal bye-laws or not, or whether there are violations or deviations. The builder cannot be permitted to avoid or escape the consequences of his illegal acts. The obligation on the part of the builder to secure a sanctioned plan and construct a building, carries with it an implied obligation to comply with the requirements of municipal and building laws and secure the mandatory permissions/certificates.

The surviving prayer is no doubt only for a direction to the builder to furnish the completion certificate and C&D forms. It is not disputed that a building of this nature requires a completion certificate and building assessment (C&D forms). The completion certificate and C&D forms will not be issued if the building constructed is contrary to the bye-laws and sanctioned plan or if the deviations are beyond the permissible compoundable limits. The agreement clearly contemplates the builder completing the construction and securing completion certificate. The agreement, in fact, refers to the possibility of deviations and provides that if there are deviations, the builder will have to pay the penalties, that is do whatever is necessary to get the same regularized. Even if such a provision for providing completion certificate or payment of penalties is not found in the agreement, the builder cannot escape the liability for securing the completion certificate and providing a copy thereof to the owner if the law requires the builder to obtain completion certificate for such a building.

A prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever that is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage. Therefore, the assumption of the State Commission and National Commission that the obligation of the builder was discharged when he merely applied for a completion certificate is incorrect.

C. Narasimha Rao v. K.R. Neelakandan, I (1994) CPJ 160, Not applicable.

Har Sarup Gupta v. M/s. Kailash Nath & Associates, II (1995) CPJ 275, Referred.

HELD: We may now notice the various terms in the agreement between the appellant and first respondent which militate against the same being a `joint venture’. Firstly, there is a categorical statement in clause 24, that the agreement shall not be deemed to constitute a partnership between the owner and the builder. The land-owner is specifically excluded from management and is barred from interfering with the construction in any manner (vide clause 15) and the Builder has the exclusive right to appoint the Architects, contractors and sub-contractors for the construction (vide clause 16). The Builder is entitled to sell its share of the building as it deemed fit, without reference to the land owner. (vide clauses 7 and 13). The builder undertakes to the landowner that it will construct the building within 12 months from the date of sanction of building plan and deliver the owner’s share to the land owner (vide clauses 9 & 14). The Builder alone is responsible to pay penalties in respect of deviations (vide clause 12) and for payment of compensation under the Workmen’s Compensation Act in case of accident (vide clause 10). Secondly, there is no community of interest or common/joint control in the management, nor sharing of profits and losses. The land owner has no control or participation in the management of the venture. The requirement of each joint venturer being the principal as well as agent of the other party is also significantly absent. We are therefore of the view that such an agreement is not a joint venture, as understood in law.

What then is the nature of the agreement between the appellant and the first respondent? Appellant is the owner of the land. He wants a new house, but is not able to construct a new house for himself either on account of paucity of funds or lack of expertise or resources. He, therefore, enters into an agreement with the builder. He asks the builder to construct a house and give it to him. He says that as he does not have the money to pay for the construction and will therefore permit the builder to construct and own additional floor/s as consideration. He also agrees to transfer an undivided share in the land corresponding to the additional floor/s which falls to the share of the builder. As a result, instead of being the full owner of the land with an old building, he becomes a co-owner of the land with a one-third share in the land and absolute owner of the ground floor of the newly constructed building and agrees that the builder will become the owner of the upper floors with corresponding two-third share in the land. As the cost of the undivided two-third share in the land which the land owner agrees to transfer to the builder, is more than the cost of construction of the ground floor by the builder for the landowner, it is also mutually agreed that the builder will pay the landowner an additional cash consideration of Rs.8 lakhs. The basic underlying purpose of the agreement is the construction of a house or an apartment (ground floor) in accordance with the specifications, by the builder for the owner, the consideration for such construction being the transfer of undivided share in land to the builder and grant of permission to the builder to construct two floors. Such agreement whether called as a `collaboration agreement’ or a `joint-venture agreement’, is not however a `joint-venture’. There is a contract for construction of an apartment or house for the appellant, in accordance with the specifications and in terms of the contract. There is a consideration for such construction, flowing from the landowner to the builder (in the form of sale of an undivided share in the land and permission to construct and own the upper floors). To adjust the value of the extent of land to be transferred, there is also payment of cash consideration by the builder. But the important aspect is the availment of services of the builder by the land-owner for a house construction (construction of owner’s share of the building) for a consideration. To that extent, the land-owner is a consumer, the builder is a service-provider and if there is deficiency in service in regard to construction, the dispute raised by the land owner will be a consumer dispute. We may mention that it makes no difference for this purpose whether the collaboration agreement is for construction and delivery of one apartment or one floor to the owner or whether it is for construction and delivery of multiple apartments or more than one floor to the owner. The principle would be the same and the contract will be considered as one for house construction for consideration. The deciding factor is not the number of apartments deliverable to the land owner, but whether the agreement is in the nature of a joint-venture or whether the agreement is basically for construction of certain area for the land-owner.

We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a civil court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages. On the other hand, where the builder commits breach of his obligations, the owner has two options. He has the right to enforce specific performance and/or claim damages by approaching the civil court. Or he can approach the Forum under Consumer Protection Act, for relief as consumer, against the builder as a service-provider. Section 3 of the Act makes it clear that the remedy available under the Act is in addition to the normal remedy or other remedy that may be available to the complainant.

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.

HELD: A complaint under the Act will be maintainable in the following circumstances :

(a) Where the owner/holder of a land who has entrusted the construction of a house to a contractor, has a complaint of deficiency of service with reference to the construction.

(b) Where the purchaser or intending purchaser of an apartment/flat/house has a complaint against the builder/developer with reference to construction or delivery or amenities.

Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd. [Bench Strength 2], CA No. 3302/2005 (10/07/2008), 2008(10) SCR 697: 2008(10) SCC 345: 2008(7) JT 552: 2008(9) SCALE 768: 2008(12) STR 401 [R.V. Raveendran, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), 3, 11, 17, 21 & 23 — Deficiency in service — Recording of finding of, by consumer forum, requirement for, scope — Marine insurance — Claim of compensation on account of deficiency in service and payment of value of consignment on account of loss — Complainants are manufacturers of Rugs and Durries, carrying on business at Mirzapur, UP — In pursuance of orders placed by Atlanta Rugs Inc., Atlanta, M/s. Hira Lal Ramesh Chand dispatched 17 consignments of rugs and durries and M/s. Ratan Chand Deep Chand dispatched 38 consignments — Consignments were entrusted to M/s Overseas Container Line Inc., a non-vessel owning shipping Agent represented by its Agent Niranjan Shipping Agency (P) Ltd., for transshipment from Mumbai to Atlanta (USA) — Bill of Lading issued by Overseas Container in regard to each of the consignment showed the consignee as “Unto order” and party to be notified as “Atlanta Rugs Inc.” — All the consignments were insured by the consignors, with the New India Assurance Co. Ltd. — Loss of goods — Compensation claimed by the complainant from New India Assurance Co. Ltd. before National Commission — Complainants failed to plead and make out a case of loss in respect of each and every consignment — Commission has referred to the delay of nine months on the part of the Insurer in repudiating the claim, after receiving the surveyor’s Report, and the failure to furnish a copy of the reports to the complainants as deficiency in service but overlooked the facts that the complainants did not lodge any claim in writing; at all events, they did not produce any document showing the lodging of claim; it was on a mere oral intimation, investigation by surveyor was set in motion; contents of the report had already been notified to the complainants by the surveyor in the telexes dated 4.3.1996 and 1.4.1996 — Commission disposed of the matter without examining the terms of policy and obligations undertaken by the insurer — Held, in fact, having regard to the nature of issues involved, this was more appropriately a matter for civil court — Finding of deficiency in service was not warranted in such circumstances on facts — Appeals allowed and order of National Consumer Redressal Commission set aside — Marine Insurance Act, 1963 — Sections 55, 56 & 57 — Civil Procedure Code, 1908 — Section 9.

HELD: We find on a careful consideration that the Commission has not addressed itself to the relevant issues. It is no doubt true that the complainants had booked the consignments showing the consignee as `unto order’ thereby indicating that the goods covered by the Bills of lading should be delivered only to the holder/endorsee of the Bills of Lading. There is also no doubt that the original documents were not cleared/retired by the buyer `Atlanta Rugs Inc.’ and that the original documents were ultimately returned by the foreign correspondent Bank to Punjab National Bank and they are lying with Punjab National Bank. There is also no doubt that the consignments were insured against all risks of loss and damage.

It is unfortunate that the Commission disposed of the matter without examining the terms of the policy and obligations undertaken by the insurer. In fact, having regard to the nature of issues involved, this was more appropriately a matter for civil court. Be that as it may.

Another significant aspect is that the consignments were being continuously sent from August, 1994 to July, 1995 by M/s. Ratan Chand Deep Chand and from March to June, 1995 by M/s. Hira Lal Ramesh Chand without making any effort to ascertain the fate of the earlier consignments. Even when they learnt none of the documents relating to the consignments had been retired by the buyer, they merely gave the oral intimation to the insurer that too on 2.2.1996 about the non-retirement of the documents. No claim was lodged with the insurer in writing. The allegation that orally a claim for `loss of goods’ was made on 2.2.1996 cannot be true as according to complainants themselves till that date they had no knowledge that the consignments had been either lost or wrongfully delivered. In fact the complainant have not produced even a single document making a claim on the insurer on the ground that the goods had been lost or not delivered.

The Commission has referred to the delay of nine months on the part of the Insurer in repudiating the claim, after receiving the surveyor’s Report, and the failure to furnish a copy of the reports to the complainants as deficiency in service. But what is overlooked is that the complainants did not lodge any claim in writing. At all events, they did not produce any document showing the lodging of claim. It was on a mere oral intimation on 2.2.1996, the investigation by surveyor was set in motion. Further the contents of the report had already been notified to the complainants by the surveyor in the telexes dated 4.3.1996 and 1.4.1996. Therefore, the finding of deficiency in service was not warranted.

In this view of the matter, it is unnecessary to consider the counter claim of the respondents 1 to 3 in CA No.4307 of 2003. Nor is it necessary to consider whether such counter claim is maintainable in an appeal under section 23 of the Consumer Protection Act, 1996.

New India Assurance Co. Ltd. v. Hira Lal Ramesh Chand [Bench Strength 3], CA Nos. 4306-4307/2003 (13/06/2008), 2008 AIR(SC) 2620: 2008(9) SCR 1198: 2008(10) SCC 626: 2008(8) JT 535: 2008(9) SCALE 105: 2008(5) SLT 757 [B.N. Agrawal, J.: P.P. Naolekar, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Marine Insurance Act, 1963 — Sections 55, 56 & 57 — Compensation on account of deficiency of service and payment of value of consignment on account of loss — Transshipment and delivery of goods, responsibility of, on whom lies — Deficiency in service, determination — Complainants are manufacturers of Rugs and Durries, carrying on business at Mirzapur, UP — In pursuance of orders placed by Atlanta Rugs Inc., Atlanta, M/s. Hira Lal Ramesh Chand dispatched 17 consignments of rugs and durries and M/s. Ratan Chand Deep Chand dispatched 38 consignments — Consignments were entrusted to M/s Overseas Container Line Inc., a non-vessel owning shipping Agent represented by its Agent Niranjan Shipping Agency (P) Ltd., for transshipment from Mumbai to Atlanta (USA) — Bill of Lading issued by Overseas Container in regard to each of the consignment showed the consignee as “Unto order” and party to be notified as “Atlanta Rugs Inc.” — All the consignments were insured by the consignors, with the New India Assurance Co. Ltd. — Loss of goods — Question as to who was responsible for transshipment and delivery — Held, when the contract for carriage was between complainants and Overseas Containers and when the Bills of Lading issued by the Overseas Container showed that the consignments were deliverable to the order of the complainants, necessarily Overseas Containers were expected to take delivery of the consignment at Atlanta from the shipping line which actually transported the consignments and then deliver it to the holder of the documents of title who seeks delivery — Consumer Protection Act, 1986 — Sections 2(1)(g) & 21.

HELD: Admittedly Overseas Containers was only a non-vessel owning common carrier (NVOCC) and not the actual shipping line. Necessarily therefore Overseas Container had to entrust the consignment to an actual shipping line for transportation and the Master Bill of Lading given by the shipping line would show the Overseas Containers as the consignee entitled to receive the delivery. The very fact that the Master Bill of Lading is not given to the consignors/complainants and the fact that the complainants did not demand for the same shows that they did not intend to apply for delivery directly from the shipping line that carried the consignments but only intended that delivery should be from Overseas Containers which had issued the Bill of lading. As the contract for carriage was between complainants and Overseas Containers and as the Bills of Lading issued by the Overseas Container showed that the consignments were deliverable to the order of the complainants, necessarily Overseas Containers were expected to take delivery of the consignment at Atlanta from the shipping line which actually transported the consignments and then deliver it to the holder of the documents of title who seeks delivery. If that is so, the Overseas Containers were entitled to take delivery from the shipping line which transported the consignment and there was nothing collusive, clandestine or irregular about delivery of consignments being taken by Overseas Containers from the shipping line, as it had entrusted the consignment to the shipping line for transportation.

HELD: But there is no such averment or evidence that the consignments were lost or damaged. Nor is there any averment that the holder of the documents of title applied for delivery of the consignments, and was denied or refused delivery on account of non-availability of the consignments either due to pilferage, loss or misdelivery. When there is no allegation or proof of Sun Trust Bank having applied for delivery and refusal of delivery, it is inconceivable how the complainants can maintain a claim against the insurer.

The complainants have failed to plead and make out a case of loss, in respect of each and every consignment, either during transit or within 60 days of the consignments being discharged from the ship at Atlanta Port. They merely proceed the assumption that the Insurer is liable when the documents are not retired by the buyer, which, to say the least, is untenable. As there is no averment or proof that the consignor or the foreign correspondent Bank holding the documents of title or any person authorized by the said Bank applied for delivery within 60 days of the goods being discharged, and as there is no averment or proof that the consignments were lost or wrongly delivered within the said period of 60 days, the liability and responsibility of the insurer under the policy of insurance came to an end with reference to each of those consignments. Consequently the claim of the complainants against the insurer is liable to be rejected.

New India Assurance Co. Ltd. v. Hira Lal Ramesh Chand [Bench Strength 3], CA Nos. 4306-4307/2003 (13/06/2008), 2008 AIR(SC) 2620: 2008(9) SCR 1198: 2008(10) SCC 626: 2008(8) JT 535: 2008(9) SCALE 105: 2008(5) SLT 757 [B.N. Agrawal, J.: P.P. Naolekar, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Marine Insurance Act, 1963 — Sections 3, 4, 57, 55, 56, 3, 4, 2(d) & (e) — Loss or non-delivery of consignment — What is not — Failure of buyer to make payment and take delivery is not a `loss’ of consignment which is covered by the Insurance Policy — Complainant should make out a case of actual `loss’ of the consignment covered by the contract of insurance or non-delivery of the consignment, that is refusal to meet a demand for delivery — In the instant case, case of the complainant as put forth in the complaint and reiterated in the affidavit is that they have dispatched the consignment to Atlanta, that the consignments were insured against all risks; that the buyer did not retire the documents by making payment; that they do not know what happens to the consignments and that therefore the Insurer ought to have paid them the value of the consignment and failure to do so amounted to deficiency in service as contemplated under the Consumer Protection Act, 1986 — Held, these are not allegations or proof of loss or non-delivery sufficient to foist any liability on the insurer — Consumer Protection Act, 1986 — Sections 2(1)(g) & 21.

Dwarkadish Chits Pvt. Ltd. and Anr. vs. Sanju Ram Aggarwal, FA No. 590 of 1992, decided on 13th January, 1995, Relied on.

K. Sagar, M.D., Kiran Chit Fund Musheerabad v. A. Bal Reddy [Bench Strength 2], CA No. 1498/2005 (11/06/2008), 2008 AIR(SC) 2568: 2008(9) SCR 1129: 2008(7) SCC 166: 2008(9) SCALE 348 [Arijit Pasayat, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations, 2002 — Regulations 6, 2(1)(e), 7(1)(m) & 11(4) — Medi-claim policy — Renewal of, refusal of, unless disease diagnosed excluded, when improper — Only because the insured has started suffering from a disease, same would not mean that the said disease shall be excluded — If insured has made some claim in each year, insurance company should not refuse to renew insurance policies only for that reason — Respondents obtained medi-claim policy from appellants — Renewal of policy from time to time — Respondents were diagnosed with specified disease at certain point of time — Despite of the same, policy renewed — Subsequent refusal to renew the policy unless disease excluded, held, improper — Action on the part of appellant highly arbitrary — Appellant being a `State’ within the meaning of article 12, expected to act fairly — Renewal of policy, though not automatic but respondents entitled for fair treatment — Renewal of policy cannot be placed at par with case of first contract — No interference warranted with direction of High Court to renew mediclaim policy — Appeal dismissed — Insurance — Medi claim policy — Renewal of, refusal of, unless disease diagnosed excluded, when improper — Insurance Act, 1938 — Sections 64-UC, 64-VB, 114-A & 114(2)(c) — General Insurance Business (Nationalisation) Act, 1972 — Sections 10-A, 19(2), (3) & 24-A — Life Insurance Corporation Act, 1956 — Insurance Regulatory and Development Authority Act, 1999 — Sections 14 & 26 — Insurance Rules, 1939 — Rule 11 — Constitution of India — Articles 47, 19(6), 12, 136 & 14 — Consumer Protection Act, 1986 — Section 2(1)(g) & (o) — Legal Services Authorities Act, 1987 — Section 22(b) & (c) (As amended in 2002).

Peacock Plywood Plywood (P) Ltd. v. Oriental Insurance Co. Ltd., (2006) 12 SCC 673 paragraphs 57 at page 691, Life Insurance Corporation of India v. Consumer Education and Research Centre, (1995) 5 SCC 482, D. Nataraja Mudaliar v. The State Transport Authority of India, Madras, AIR 1979 SC 114, New Indian Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya & Anr., (2006) 5 SCC 192, Pradeep Kumar Jain v. Citi Bank, (1999) 6 SCC 361, Depot Supdt., H.P. Corporation Ltd. v. Kolhapur Agricultural Market Committee, (2007) 6 SCC 159, Carna Foods Ltd. v. Eagle Star Insurance Company, 1997(2) ILRM 193, A (FC) & Ors. (FC) v. Secretary of State for the Home Department, 2004 UKHL 56, Hardesh Ores (P) Ltd. v. Hede & Co., (2007) 5 SCC 614, Divisional Forest Officer v. Bishwanath Tea Co. Ltd., (1981) 3 SCC 246, Referred.

HELD: Each of the aforementioned cases clearly shows that the action on the part of the authorities of the appellant was highly arbitrary. Respondents though were not entitled to automatic renewal, but indisputably, they were entitled to be treated fairly. We have noticed hereinbefore some of the clauses contained in the prospectus as also the insurance policy.

When an exclusion clause is resorted to, the terms thereof must be given effect to. What was necessary is a pre-existing disease when the cover was inspected for the first time. Only because the insured had started suffering from a disease, the same would not mean that the said disease shall be excluded. If the insured had made some claim in each year, the insurance company should not refuse to renew insurance policies only for that reason. The words `incepts for the first time’ as contained in clause 4.1 as also the words `continuous and without break’ if the renewal premium is paid in time, must be kept in mind as also the reasons for cancellation as contained in clause 7(1)(n) thereof.

Keeping in view the terms and conditions of the prospectus and the insurance policy, the parties are not required to go into all the formalities. The very fact that the policy contemplates terms for renewal, subject of course to payment of requisite premium, the same cannot be placed at par with a case of first contract.

Having regard to the fact situation obtaining in each case, we are not inclined to exercise our discretionary jurisdiction under Article 136 of the Constitution of India. Before parting with this case, however, we would like to observe that keeping in view the role played by the insurance companies, it is essential that the Regulatory Authority must lay down clear guidelines by way of regulations or otherwise. No doubt, the regulations would be applicable to all the players in the field. The duties and functions of the Regulatory Authority, however, are to see that the service provider must render their services keeping in view the nature thereof. It will be appropriate if the Central Government or the General Insurance Companies also issue requisite circulars.

Appellants before us being subsidiaries to General Insurance Corporation cannot ignore the statutory provisions. They are bound by the directions issued by the Central Government.

We would request the IRDA to consider the matter in depth and undertake a scrutiny of such claims so that in the event it is found that the insurance companies are taking recourse to arbitrary methodologies in the matter of entering into contracts of insurance or renewal thereof, appropriate steps in that behalf may be taken.

These appeals are dismissed with costs. Counsel’s fee assessed at Rs.25,000/- (Rupees twenty five thousand only) in each case.

United India Insurance Company Limited v. Manubhai Dharmasinhbhai Gajera [Bench Strength 2], Civil Appeal Nos.4113-4115, 4116/2008 (Arising out of SLP(C) No. 9876-9878/2008) (16/05/2008), 2009 AIR(SC) 446: 2008(9) SCR 778: 2008(10) SCC 404: 2008(5) JT 457: 2008(7) SCALE 377: 2008(5) SLT 9 [S.B. Sinha, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Insurance — Theft of insured vehicle — Nature of use of vehicle in case of, consideration of, impermissibility — In case of theft of vehicle, nature of use of the vehicle cannot be looked into and the Insurance Company cannot repudiate the claim on that basis — Theft of vehicle owned and insured by respondent — Claim under policy repudiated solely on the ground that vehicle though insured for personal use but used as taxi, thereby violated policy conditions — Repudiation of claim whether justified? — Held, no — In cases of theft of vehicle breach of condition, not germane — Insurance company not justified in repudiating the claim in toto — No interference warranted with order of state commission whereby 75% of claim allowed on non- standard basis when respondent has not filed any appeal against the said order — Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance Act, 1938 — Section 46 — Motor Vehicles Act, 1988 — Section 149.

National Insurance Co. Ltd. v. Kusum Rai & Others, (2006) 4 SCC 250, Jitendra Kumar v. Oriental Insurance Co. Ltd. & Another, (2003) 6 SCC 420, National Insurance Co. Ltd. v. Swaran Singh & Others, (2004) 3 SCC 297, Referred.

United India Insurance Co. Ltd. v. Gian Singh, 2006 CTJ 221 (CP) (NCDRC), Track Way Securities & Finance Pvt. Ltd. v. National Insurance Co. & Others, Appeal No.1463 of 2004, decided on 23.3.2006, Relied on.

HELD: In the case in hand, the vehicle has been snatched or stolen. In the case of theft of vehicle breach of condition is not germane. The appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non-standard basis. The Insurance Company cannot repudiate the claim in toto in case of loss of vehicle due to theft.

In the facts and circumstances of the case, the real question is whether, according to the contract between the respondent and the appellant, the respondent is required to be indemnified by the appellant. On the basis of the settled legal position, the view taken by the State Commission cannot be faulted and the National Commission has correctly upheld the said order of the State Commission.

The State Commission has allowed only 75% claim of the respondent on non-standard basis. We are not deciding whether the State Commission was justified in allowing the claim of the respondent on non-standard basis because the respondent has not filed any appeal against the said order. The said order of the State Commission was upheld by the National Commission.

In our considered view, no interference is called for. This appeal is accordingly disposed of. In the facts and circumstances of the case, the parties are directed to bear their own costs.

National Insurance Co. Ltd. v. Nitin Khandelwal [Bench Strength 2], CA No. 3409/2008 (08/05/2008), 2008(7) SCR 1047: 2008(11) SCC 259: 2008(7) SCALE 351: 2009(1) SCC(Cr) 127 [Tarun Chatterjee, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (o), (g), 14 & 17 — Banking service — Deficiency in — Grant of compensation and cost by national commission — Appeal against by complainant — Plea of inadequacy of compensation for total amount of loss incurred by it — Held, the national commission could have awarded compensation only for deficiency of service only — For recovery of total amount of loss, it is open for appellant-complainant to file a civil suit before appropriate court which has already been filed — No reason to interfere with the impugned judgment — Appeal to be dismissed.

Citi Bank N.A. v. Geekay Agropack Private Limited [Bench Strength 2], Civil Appeal No. 2971/2008 (24/04/2008), 2008(15) SCC 102 [A.K. Mathur, J.: Altamas Kabir, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d)(ii), (1)(o), 1(4), 14, 17, 21 & 23 — “Consumer” — Meaning of, member of Employees’ Provident Fund and Family Pension Scheme is a consumer — Respondent was a worker in Cashew Factory owned and managed by the Kerala State Cashew Development Corporation Limited and according to her she retired from service on attaining 60 years of age — She was a member of the Employees’ Provident Fund and Family Pension Scheme, 1971 and was making contribution to the Scheme — Held, since this was not a case of rendering of free service or rendering of service under a contract of personal service so as to bring the relationship between the appellant and respondent within the concept of ‘master and servant’ — Respondent comes squarely within the definition of ‘consumer’ within the meaning of Section 2(1)(d)(ii), inasmuch as, by becoming a member of the Employees’ Family Pension Scheme, 1971, and contributing to the same, she was availing of the services rendered by the appellant for implementation of the Scheme — Employees’ Provident Fund and Family Pension Scheme, 1971 — Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 — Section 7-A — Words and Phrases — Consumer — Words and Phrases — Master and servant.

Regional Provident Fund Commissioner vs. Shiv Kumar Joshi, 2000(1) SCC 98, Relied on.

Regional Provident Fund Commissioner v. Bhavani [Bench Strength 2], Civil Appeal No. 6447/2001 (22/04/2008), 2008 AIR(SC) 2957: 2008(6) SCR 767: 2008(7) SCC 111: 2008(6) JT 56: 2008(6) SCALE 773: 2008(2) LLJ 1079: 2008 LIC 3565: 2008(5) SLR 430 [Altamas Kabir, J.: V.S. Sirpurkar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(d), 18 & 22 — Compensation — Pre-requisites for grant of, scope — Compensation can be granted only in terms of Section 14(1)(d) where consumer has suffered loss and injury due to negligence of the opposite party.

HELD : It is to be noted that there was no prayer for any compensation. There was no allegation that the complainant had suffered any loss. Compensation can be granted only in terms of Section 14(1)(d) of the Act. Clause (d) contemplates award of compensation to the consumer for any loss or injury suffered due to negligence of the opposite party. In the present case there was no allegation or material placed on record to show negligence.
Interestingly, there was no allegation or finding of loss or injury caused to the respondent on account of the advertisement issued in 1999. The complainant himself had stated that he was smoking cigarettes for the last two decades. Therefore, the impugned advertisement cannot be said to have affected the complainant and/or caused any loss to him to warrant grant of compensation.
Godfrey Phillips India Ltd. v. Ajay Kumar [Bench Strength 2], Civil Appeal No. 2339/2008 (With Civil Appeal 2340/2008 @ SLP (C) No.5051/2007) (01/04/2008), 2008 AIR(SC) 1828: 2008(5) SCR 937: 2008(4) SCC 504: 2008(4) JT 647: 2008(6) SCALE 38: 2008(2) Supreme 851: 2008(4) SLT 62 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), 2(1)(b)(ii), (iv), 13(6), 18, 21, 22, 14(1)(d) & 14(hc) — Unfair trade practice — Complaint for, locus standi to file in the nature of PIL, scope — Complaint by individual by way of PIL, when not maintainable — Advertisement for cigarettes showing of packet of cigarettes with brand name stating that Red and White’s smoken are one of a kind and also showing smiling face of an actor holding a cigarette — Complaint by respondent alleging unfair Trade practice — Order by National Commission with certain direction — Respondent was not representing a “Voluntary Consumer Association” registered under the Companies Act, 1956 or under any other law for the time being in force and was not entitled to file a complaint about unfair trade practice to represent other consumers — Further, the complainant had not moved any application or obtained any permission under Section 13(6) and/or no such permission was granted — In the circumstances, it was not permissible for the complainant to represent others — Thus after having recorded that the complaint in that manner was not entertainable, National Commission could not have passed the impugned order — Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 — Section 5(1) & (2) — Civil Procedure Code, 1908 — Order 1 Rule 8.

Godfrey Phillips India Ltd. v. Ajay Kumar [Bench Strength 2], Civil Appeal No. 2339/2008 (With Civil Appeal 2340/2008 @ SLP (C) No.5051/2007) (01/04/2008), 2008 AIR(SC) 1828: 2008(5) SCR 937: 2008(4) SCC 504: 2008(4) JT 647: 2008(6) SCALE 38: 2008(2) Supreme 851: 2008(4) SLT 62 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(As stood prior to 15.3.2003), 18, 22, 2(1)(c)(i) & 14(hc) — Cigarettes — Advertisement in newspaper and magazines for, complaint on account of, direction for compensation, discontinuation of advertisement and issuance of corrective advertisement, validity of, determination — Allegation of unfair trade practices — Direction by National Commission to discontinue forthwith the unfair trade practices prohibiting to publish any such advertisement, to issue corrective advertisement and to pay compensation to respondent — Held, direction (i) was given without any material or evidence — So far as direction (ii) is concerned Section 5(1) and (2) of Cigarettes Act, 2003 clearly prohibited issuance of any advertisement in relation to cigarettes, therefore corrective advertisement should not be directed — Further there was no prayer for any compensation nor any allegation of loss or injury, third direction also not sustainable — Order of National Commission therefore indefensible and to be set aside — Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 — Section 5(1) & (2).

HELD: As rightly contended by learned counsel for the appellant direction (i) was given without any material or evidence whatsoever and there was not even a suggestion/pleading that the advertisement was of Akshay Kumar or that he could perform certain stunts without duplicates. There was not even an allegation that the statutory warning was detracted from. When such serious allegation which was required to be established was not even specifically pleaded and when nothing specific was indicated in the complaint, the Commission should not have given the direction on pure surmises. In this context, decision of the Privy Council in Bharat Dharma Syndicate v. Harish Chandra, AIR 1937 PC 146 and of this Court in The Union of India v. Pandurang Kashinath More, AIR 1962 SC 630 are relevant. So far as direction No.(ii) is concerned it is to be noted that Section 5(1) and Section 5(2) of the Advertisement Act clearly prohibited issuance of any advertisement in relation to cigarettes. Therefore, the corrective advertisement as directed by the National Commission could not have been given. Further, the power for giving such direction was introduced under Section 14 of the Act w.e.f. 15.3.2003. In view of the aforesaid, direction No.(ii) cannot be sustained.

So far as direction No.(iii) is concerned, it is to be noted that there was no prayer for any compensation. There was no allegation that the complainant had suffered any loss. Compensation can be granted only in terms of Section 14(1)(d) of the Act. Clause (d) contemplates award of compensation to the consumer for any loss or injury suffered due to negligence of the opposite party. In the present case there was no allegation or material placed on record to show negligence.

Interestingly, there was no allegation or finding of loss or injury caused to the respondent on account of the advertisement issued in 1999. The complainant himself had stated that he was smoking cigarettes for the last two decades. Therefore, the impugned advertisement cannot be said to have affected the complainant and/or caused any loss to him to warrant grant of compensation.

Looked at from any angle, the orders of the National Commission are indefensible and are set aside. The appeals are allowed with no order as to costs.

Godfrey Phillips India Ltd. v. Ajay Kumar [Bench Strength 2], Civil Appeal No. 2339/2008 (With Civil Appeal 2340/2008 @ SLP (C) No.5051/2007) (01/04/2008), 2008 AIR(SC) 1828: 2008(5) SCR 937: 2008(4) SCC 504: 2008(4) JT 647: 2008(6) SCALE 38: 2008(2) Supreme 851: 2008(4) SLT 62 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14, 15, 2(1)(o), (g), 24 & 25 — Implementation of order of consumer forum — Reversal of order by higher forum after, when improper — Allotment of plot — Delivery of possession — Direction of District Forum for allotment of alternative plot and for refund of balance amount — Pursuant to said direction, plot allotted, possession delivered and balance amount refunded — Setting aside of said order by State Commission without considering the fact of implementation of direction — State Commission not justified in reversing the order — Impugned order set aside — Appeal allowed — Town Planning — Allotment of plot — Direction for allotment of alternative allotment, implementation of order of consumer forum, reversal of order by higher forum after, when improper — Practice and Procedure — Reversal of order — Of court by higher forum, after implementation of same, impermissibility.

Chaman Lal v. H.U.D.A. [Bench Strength 1], Appeal(C) No. 2186/2008 (28/03/2008), 2008(3) Supreme 128 [B.N. Agrawal, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (o), (g), 14, 17, 21 & 23 — Banking service — Deficiency in service, liability of mini Bank, scope — Liability of appellant-bank an apex body — Appellant-bank is an apex body and respondent No. 2 the Co- op. Mini Bank carries on its banking activities thereunder — Saving/fixed deposit accounts opened by respondents with Mini Bank and after using service of bank for some time moved for withdrawal of money — Request for withdrawal rejected on the ground that there was no balance standing in their account — Petition before District Forum by respondents allowed holding Mini Bank liable for deficiency of service — State Commission in appeal upheld the finding regarding deficiency of service qua respondents and also held liable the appellant-Bank to the extent of Rs. 10,000/- as appellant-Bank had guaranteed repayment to that extent — Revision petition of appellant before National Commission dismissed — No answer to the plea raised by appellant that liability upto Rs. 10,000/- not to arise as Mini Bank not a part of coffers card scheme requiring certain formalities as a pre-requisite for its applicability — Thus the assertions made by appellants are admitted and Mini Bank had not opted to become a member of scheme which could have fastened a liability on appellant-Bank — Impugned order therefore unsustainable and to be set aside and that of District forum to be restored.

HELD: The learned counsel for the appellant Bank has raised only one argument during the course of the hearing. He has pointed out that before the Bank could be foisted with the liability to guarantee the repayment up to Rs.10,000/-, it was incumbent for the Mini Bank to have become a part of the Coffers Card Scheme which required the completion of certain formalities provided in the Scheme, as a pre-requisite for its applicability. It has been brought to our notice that clause 12 of the scheme provided that in order to become a part and parcel thereof an application had to be filed in form No.4 and the Mini Bank could only become part of the scheme after the formal approval had been granted by the competent authority and (it has been submitted) that as the Mini Bank had not made any request for being covered by the scheme, the question of the Bank being made liable up to Rs.10,000/- did not arise. It has also been highlighted as per the clauses of the scheme that the FDR issued thereunder was required to be embossed with the words that it was guaranteed up to Rs.10,000/- by the Bank and this too having not been done, there was no justification in fastening any liability on the Bank.

We have considered the arguments raised by the learned counsel for the appellant in the background of the fact that the respondents though served notice, did not put in appearance on the date of arguments. However several days after the judgment had been reserved, written submissions have been filed which we have perused and taken into consideration. We however find that there is no answer to the issues raised by the appellant’s counsel. We therefore take it that assertions made by the learned counsel are admitted and that the Mini Bank had not opted to become a member of the Scheme which could have fastened a liability on the Bank. We accordingly allow the appeal, set aside the order of the National Commission dated 25th July, 2005 and that of the State Commission dated 14th August, 2003 and restore that of the District Forum.

Ganga Nagar Central Co-op. Bank Ltd. v. Pushpa Rani [Bench Strength 2], CA No. 1879/2008 (10/03/2008), 2008 AIR(SC) 1908: 2008(5) SCC 55: 2008(3) JT 570: 2008(3) SCALE 626: 2008(3) SLT 311: 2008(146) CompCas 363 [Tarun Chatterjee, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance — Further claim after execution of discharge voucher, when sustainable — Respondent obtained shop keeper Insurance Policy — Destruction of stock due to fire accident — Respondent at the first instance accepted the loss assessed by Insurance Company at Rs. 2,72,301/- as full and final settlement — Respondent, thereafter lodged a complaint claiming Rs. 9 lacs as total loss and discharge voucher was obtained under coercion — Whether complaint maintainable? Held, yes — Filing of complaint, not barred, but complainant to prove that discharge was obtained by coercion — Adjudication is required on the issue of coercion — Matter hence remitted to District Forum — Contract Act, 1872 — Section 15.

United India Insurance. v. Ajmer Singh Cotton & General Mills and Ors., 1999(6) SCC 400, Relied on.

HELD: Filing of a complaint is, therefore, not barred; but it has to be proved that agreement to accept a particular amount was on account of coercion. In the instant case, this relevant factor has not been considered specifically by the District Forum, State Commission and the National Commission. Though plea of coercion was taken by claimant-respondent, same was refuted by the appellant. There is no dispute that the discharge voucher had been signed by the respondent. There has to be an adjudication as to whether the discharge voucher was signed voluntarily or under coercion. We remit the matter to the District Forum for fresh consideration. It would do well to dispose of the matter as early as practicable, preferably by the end of September, 2008.

National Insurance Company Ltd. v. Sehtia Shoes [Bench Strength 2], CA No. 1602/2008 (26/02/2008), 2008(3) SCR 451: 2008(5) SCC 400: 2008(3) JT 301: 2008(3) SCALE 135: 2008(2) SLT 453 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Insurance — Further claim after settlement — After executing discharge voucher and acceptance of insurance claim, sustainable — Mere execution of discharge voucher and acceptance of insurance claim not estop insured from making further claim — Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23.

National Insurance Company Ltd. v. Sehtia Shoes [Bench Strength 2], CA No. 1602/2008 (26/02/2008), 2008(3) SCR 451: 2008(5) SCC 400: 2008(3) JT 301: 2008(3) SCALE 135: 2008(2) SLT 453 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 21(6) — Revision before National Commission — Dismissal of — Propriety of — Held, revision was admitted only on point of payment of easy monthly installments and rate of interest — Question regarding liability to make payment is still open before National Commission — Impugned order unsustainable and to be set aside — Matter remitted to National Commission for fresh hearing and disposal.

(Paras 4 to 6)

Sundaram Automobiles v. C.N. Anantharam [Bench Strength 2], Civil Appeal No.1556/2008 (22/02/2008), 2010(13) SCC 721 [Altamas Kabir, J.: J.M. Panchal, J.] <<LAWPACK SUPREME COURT>>
Insurance Act, 1938 — Section 64-VB — Repudiation of claim on the ground of non-payment of annual premium within time — When proper — Policy taken by respondent on 28.3.1994 — Non-payment of annual premium payable on or before 28.3.1995 — Death of insured on 1.7.1995 — Issuance of a cheque on 27.6.1995 by one `PCT’ for payment of said premium along with late fee after death of insured — Payment was not made within the grace period — Repudiation of claim by appellant-corporation pleading the lapse of policy due to non-payment of premium in time and its being inoperative after one month — Cheque was admittedly received after death of assured — As per condition-3 of policy the discontinued policy can be revived during life time of assured and only after the same is approved by corporation — Section 64-VB also not applicable in case of appellant-corporation — Thus repudiation of claim of claimant by corporation justified — Life Insurance Corporation Act, 1956 — Section 43 — Consumer Protection Act, 1986 — Sections 2(1)(o), 14, 17, 21 & 23.

HELD: The grace period is one month and therefore the State Commission was not justified in holding that the payment was made within the grace period. Condition 3 relates to revival of discontinued policy. A bare reading of the condition shows that it can be revived during the life time of the assured. In the instant case the cheque was admittedly received after the death of the assured. Further the revival takes effect only after the same is approved by the Corporation and is specifically communicated to the life insured. In the present case this is not the situation.

Section 43 of the Act enumerates the various Sections of Insurance Act which have application to the Act and Section 64-VB is not one of them. That being so also the National Commission was not justified in its conclusion about the applicability of that provision.

Looked at from any angle the orders passed by the District Forum, the State Forum and National Commission cannot be maintained and are set aside.

Life Insurance Corporation of India v. Jaya Chandel [Bench Strength 2], Civil Appeal No.1089/2008 (07/02/2008), 2008 AIR(SC) 1310: 2008(2) SCR 559: 2008(3) SCC 382: 2008(2) JT 250: 2008(2) SCALE 279: 2008(1) Supreme 715: 2008(2) SLT 388 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Motor Vehicles Act, 1988 — Sections 50, 155, 156, 160, 146 & 147 — Liability of insurance company — Scope, vehicle is the subject matter of insurance and not any person — Claim of compensation for damage caused to vehicle — Purchase of vehicle by respondent; due registration was made by RTO; insurance company was duly informed about the transfer — Upholding decision of State Commission about deletion of award of compensation by National Commission — No dispute that it is the vehicle which is the subject matter of insurance — No dispute that vehicle had been transferred in the name of complainant — Therefore, it is clear that national commission disposed of revision without considering the relevant factors — Order of national commission to be set aside — Appeal allowed — Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23.

United India Insurance Co. Ltd. v. Ram Prakash Raturi [Bench Strength 2], Civil Appeal No. 550/2008 (21/01/2008), 2008(1) SCR 976: 2008(3) SCC 355: 2008(1) JT 650: 2008(1) SCALE 567: 2008(2) SCC(Cr) 39 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Interest — Rate of — Allotment of alternative plot by development authority for no fault of allottee — Rate of interest granted by consumer forum — Grant of interest at rate 18% p.a. by consumer forum — In view of current rate of interest respondent would be entitled to interest at rate of 12% — Order accordingly — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Sections 37 & 73.

Ghaziabad Development Authority vs. Balbir Singh, 2004(5) SCC 65, Referred.

H.U.D.A. v. Prem Kumar Agarwal [Bench Strength 2], Civil Appeal No. 469/2008 (17/01/2008), 2008(1) SCR 807: 2008(17) SCC 607: 2008(1) JT 590: 2008(1) SCALE 484: 2008(1) Supreme 345: 2008(2) SLT 79 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical negligence — Performing particular operation without consent of patient in good faith for the benefit of patient, compensation, quantum of, effect — False invention of a case, determination — Abdominal hysterectomy and Bilateral Salpingo-oopherectomy performed by respondent-doctor — As per material and evidence on record appellant admitted only for diagnostic laparoscopy — No consent by appellant for AH-BSO — Unauthorised removal of uterus and ovaries by doctor performing AH-BSO — Evidence showing that respondent having found evidence of endometriosis, proceeded on the basis that removal of uterus and ovaries was beneficial to the health of the appellant having regard to the age of the appellant and condition of appellant to provide a permanent cure to her ailment, though not authorized to do so — Held, since appellant was already 44 years old having serious menstrual problems, respondent performed AH-BSO thinking a permanent relief to be provided thereby, interest of justice would be served if respondent is denied entire fee charged for surgery and in addition pay Rs. 25,000/- to appellant as compensation with interest @10% from the date of order of Commission till date of payment — Order accordingly — Medical negligence — Compensation — Quantum of, performing particular operation without consent of patient in good faith for the benefit of patient, effect — Consumer Protection Act, 1986 — Sections 2(1)(c)(iii), (g), (o), 23, 22, 18, 13 & 14 — Medical Council Act, 1956 — Section 33 — Code of Medical Ethics, 1972 — Clause 13 — General Medical Council of UK.

Samira Kohli v. Prabha Manchanda [Bench Strength 3], Civil Appeal No. 1949/2004 (16/01/2008), 2008 AIR(SC) 1385: 2008(1) SCR 719: 2008(2) SCC 1: 2008(1) JT 399: 2008(1) SCALE 442: 2008(1) Supreme 191: 2008(2) SLT 25 [B.N. Agrawal, J.: P.P. Naolekar, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) (As amended in 1993) — “Service” — Inclusion of Housing construction in definition of, scope — Housing construction has been included in definition of “service” by CP (Amendment) Act, 1993.

Tamil Nadu Housing Board v. Sea Shore Apartments Owners Welfare Association [Bench Strength 2], Civil Appeal No. 7907-7913/2003 (09/01/2008), 2008 AIR(SC) 1151: 2008(1) SCR 370: 2008(3) SCC 21: 2008(1) JT 318: 2008(1) SCALE 201: 2008(1) Supreme 100: 2008(1) SLT 570 [C.K. Thakker, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Costs of flat — Enhancement of, setting aside of, by State and National Commission in summary manner, when improper — Promissory estoppel, applicability of, scope — Acquisition of 28 acres of land by appellant-Board for development of area — Proposal of construction of flats in the area — Issuance of advertisement inviting application for registration under Housing Scheme — Provisional allotment made after conducting draw of lots — Tentative price fixed — Parties then entered into agreement that ultimate cost of total construction of flat was subject to outcome of award of compensation in land acquisition proceedings — Subsequently, final cost fixed and additional amounts demanded — Demand for additional amount due to enhancement price of flat challenged by filing a complaint — State as well as National Commission holding that there was deficiency in service — Held, it was obligatory for state/national commission to consider whether controversy raised as to price fixation was justiciable especially when board took a plea that there was increase in plinth area, ground area and payment of enhanced compensation to land owners — By agreeing to pay enhanced amount and by paying such amount and taking possession of flat, allottees were estopped from raising voice against additional demand — Neither state nor national commission decided the question whether parties can go behind a concluded contract or not — In the result, impugned orders set aside and matter remitted back to state commission for fresh decision on merits — Town Planning — Costs of flat — Enhancement of, setting aside of, by State and National Commission in summary manner, when improper — Land Acquisition Act, 1894 — Sections 12, 18 & 23 — Contract Act, 1872 — Sections 7, 10 & 37 — Evidence Act, 1872 — Section 115 — T.N. State Housing Board Act, 1961.

Gujarat Housing Board v. Akhil Bhartiya Grahak Panchayat & Ors., (1996) 1 CPJ 103, Gujarat Housing Board v. Datania Amritlal Fulchand & Ors., (1993) 3 CPJ 351, Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243, Premji Bhai Parmar & Ors. v. Delhi Development Authority & Anr., (1980) 2 SCC 129, Bareilly Development Authority v. Ajai Pal Singh, (1989) 2 SCC 116, Chief Administrator, PUDA v. Shabnam Virk, (2006) 4 SCC 74, Referred.

HELD: In our considered opinion, the State Commission as well as National Commission ought to have considered all these aspects. Even if they were of the view that after the amendment of the Act in 1993 and in the light of inclusion of housing construction within the meaning of service in clause (o) of Section 2(1), the Commission had jurisdiction to deal with and decide disputes relating to deficiency in service under the Act which included the issues raised, it was obligatory on them to consider whether the controversy raised in the proceedings with regard to fixation of price would be justiciable on the facts and in the circumstances of the case, particularly in the light of the contentions raised by the Board that there was increase in plinth area, ground area and payment of enhanced compensation to land owners. They were also required to consider that the Board does not have land of its own and the land was acquired under the Land Acquisition Act by paying compensation as determined in accordance with the provisions of that law. The Commissions also could not ignore the fact that when the advertisement was issued for the purpose of registration of intending purchasers of flats, they were clearly intimated that the price shown was merely a tentative price . Again, when the scheme was altered the intending purchasers were informed that the price was tentative and they would have to pay price finally determined by the Board. They consented and entered into an agreement by giving an undertaking that they would pay the price determined by the Board. When the question of giving possession of flats came up, the Board informed them to pay the remaining amount so that possession could be delivered to them. They made such payment and obtained possession. It was, therefore, contended by the Board that the allottees were estopped from raising the contention that additional amount could not have been recovered from them. It was open to the allottees not to pay the additional amount demanded by the Board and not to take possession. By agreeing to pay the amount and by paying such amount and taking possession, now they want to go behind the concluded contract between the parties. In our considered opinion, all these questions were required to be gone into by the State Commission as also by the National Commission. The orders passed by both the Fora are, therefore, liable to be set aside.

For the foregoing reasons, all the appeals are allowed. The order passed by the State Commission and confirmed by the National Commission is set aside. All the complaints are remitted to the State Commission to decide them in accordance with law after hearing the parties. On the facts and in the circumstances of the case, there shall be no order as to costs. Amount if any, deposited by the appellant-Board in this Court may be refunded to the Board with accrued interest thereon. Since the original complaints were filed in 1995, the State Commission will give priority to the cases and decide them as expeditiously as possible preferably before June 30, 2008.

HELD: It is the case of the Insurance Company that the vehicle of the complainant which met with an accident was a ‘transport vehicle’. It was submitted that the insured vehicle was a ‘goods carriage’ and was thus a ‘transport vehicle’. The vehicle was driven by Ram Narain, who was authorized to drive Light Motor Vehicle and not a transport vehicle. Since the driver had no licence to drive transport vehicle in absence of necessary endorsement in his licence to that effect, he could not have driven Tata 709 and when that vehicle met with an accident, Insurance Company could not be made liable to pay compensation.

Now, let us consider both these points. As far as vehicle is concerned, it is clear from the record that it was Tata 709, registration No.RJ-20G-2828. The permit in respect of the said vehicle is on record issued by the Transport Authority, Kota. From the registration, it is clear that it was registered as a truck, a goods carrier and was described as public carrier. Load carrying capacity was shown to be 4100.00 Kgs. The permit was valid up to November 11, 2002.

The District Forum held that the documents clearly mentioned that the vehicle was a ‘goods carriage’ as defined in Section 2(14) covered by the category of ‘transport vehicle’ under Section 2(47) of the Act. The State Commission held that since the gross weight of the vehicle was only 6800 Kgs and did not exceed permissible limits (7500 Kgs) nor it was carrying goods at the time of accident, it was a Light Motor Vehicle. For coming to that conclusion, the State Commission relied upon Ashok Gangadhar.

In our considered view, the State Commission was wrong in reversing the finding recorded by the District Forum. So far as Ashok Gangadhar is concerned, we will deal with the said decision little later but from the documentary evidence on record and particularly, from the permit issued by the Transport Authority, it is amply clear that the vehicle was a ‘goods carrier’ [Section 2(14)]. If it is so, obviously, it was a ‘transport vehicle’ falling under clause (47) of Section 2 of the Act. The District Forum was, therefore, right in considering the question of liability of the Insurance Company on the basis that Tata 709 which met with an accident was ‘transport vehicle’.

The argument of the Insurance Company is that at the time of accident, Ram Narain had no valid and effective licence to drive Tata 709. Indisputably, Ram Narain was having a licence to drive Light Motor Vehicle. The learned counsel for the Insurance Company, referring to various provisions of the Act submitted that if a person is having licence to drive Light Motor Vehicle, he cannot drive a transport vehicle unless his driving licence specifically entitles him so to do (Section 3). Clauses (14), (21), (28) and (47) of Section 2 make it clear that if a vehicle is ‘Light Motor Vehicle’, but falls under the category of Transport Vehicle, the driving licence has to be duly endorsed under Section 3 of the Act. If it is not done, a person holding driving licence to ply Light Motor Vehicle cannot ply transport vehicle. It is not in dispute that in the instant case, Ram Narain was having licence to drive Light Motor Vehicle. The licence was not endorsed as required and hence, he could not have driven Tata 709 in absence of requisite endorsement and Insurance Company could not be held liable.

We find considerable force in the submission of the learned counsel for the Insurance Company. We also find that the District Forum considered the question in its proper perspective and held that the vehicle driven by Ram Narain was covered by the category of transport vehicle under Clause (47) of Section 2 of the Act. Section 3, therefore, required the driver to have an endorsement which would entitle him to ply such vehicle. It is not even the case of the complainant that there was such endorsement and Ram Narain was allowed to ply transport vehicle. On the contrary, the case of the complainant was that it was Mohd. Julfikar who was driving the vehicle. To us, therefore, the District Forum was right in holding that Ram Narain could not have driven the vehicle in question.

In the present case, all the facts were before the District Forum. It considered the assertion of the complainant and defence of the Insurance Company in the light of the relevant documentary evidence and held that it was established that the vehicle which met with an accident was a ‘transport vehicle’. Ram Narain was having a licence to drive Light Motor Vehicle only and there was no endorsement as required by Section 3 of the Act read with Rule 16 of the Rules and Form No.6. In view of necessary documents on record, the Insurance Company was right in submitting that Ashok Gangadhar does not apply to the case on hand and the Insurance Company was not liable.

The matter can be looked from another angle also. Section 14 referred to above, provides for currency of licence to drive motor vehicles. Sub-section (2) thereof expressly enacts that a driving licence issued or renewed under the Act shall, “in the case of a licence to drive a transport vehicle, be effective for a period of three years”. It also states that “in the case of any other licence, if the person obtaining the licence, either originally or on renewal thereof, had not attained the age of fifty years on the date of issue or, as the case may be, renewal thereof, be effective for a period of twenty years from the date of such issue or renewal”.

In the present case, the licence was renewed on November 17, 1995 upto November 16, 2015 i.e. for a period of twenty years. From this fact also, it is clear that the licence was in respect of ‘a motor vehicle other than the transport vehicle’.

For the aforesaid reasons, in our opinion, the conclusion arrived at by the District Forum cannot be said to be faulty and it was right in holding that on the basis of the evidence adduced by the Insurance Company, the complainant was not entitled to claim any compensation from the Insurance Company and Insurance Company cannot be held liable. The decision could not have been interfered with by the State Commission or by the National Commission and hence the orders of the State Commission and National Commission are liable to be set aside by restoring the order passed by the District Forum, we do accordingly.

The appeal is, therefore, allowed. The orders passed by the State Commission and National Commission are set aside and the order passed by the District Forum is restored.

New India Assurance Co. Ltd. v. Prabhu Lal [Bench Strength 2], Civil Appeal No. 5539/2007 WITH C.A. No. 5540/2007 @ SLP(C) No. 17794/2004 C.A. No. 5541/2007 @ SLP(C) No. 7618/2005 (30/11/2007), 2008 AIR(SC) 614: 2007(12) SCR 724: 2008(1) SCC 696: 2007(13) JT 246: 2007(13) SCALE 588: 2007(8) Supreme 343: 2007(9) SLT 841: 2008(1) SCC(Cr) 308 [C.K. Thakker, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance — Liability of insurance company on account of loss to vehicle due to accident — Right on the part of the Insurance Company not to pay the amount of insurance, scope — Discussed — Motor Vehicles Act, 1988 — Sections 147 & 149.

HELD: Different considerations would arise in a case of this nature, as the consumer forum established under the Consumer Protection Act, 1986 was concerned only with a question as to whether there was deficiency of service on the part of the appellant or not. A right on the part of the Insurance Company not to pay the amount of insurance would depend upon the facts and circumstances of each case. It in certain situation may be bound to pay the claim made by the third party; if the same is filed before a forum created under the Motor Vehicles Act. But defence may be held to be justified before a different forum where the question raised is required to be considered in a different manner.

United India Insurance Co. Ltd v. Davinder Singh [Bench Strength 2], Civil Appeal No. 4883/2007 (12/10/2007), 2008 AIR(SC) 329: 2007(11) SCR 337: 2007(8) SCC 698: 2007(12) SCALE 359: 2007(9) SLT 235: 2007(3) SCC(Cr) 664: 2007(4) ACC 705 [S.B. Sinha, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance — Liability of insurance company on account of loss to vehicle due to accident, fake driving licence, no liability to pay damages despite renewal of — Complainant, the owner of vehicle got insured his vehicle for one year — Vehicle met with accident during currency of policy — Claim for damages sustained to vehicle — Denial of claim on the ground that driving licence of driver found forged — Whether renewal of a licence granted to driver which was originally found to be forged confer any liability on insurer? — Held, no — Where original licence was fake one renewal cannot cure the inherent fatality — Grant of Rs. 1,23,412/- towards damages, unsustainable — No deficiency in service — Complainant not entitled for damages — Motor Vehicles Act, 1988 — Sections 149, 147, 2(10), 3 & 15.

National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700, The Oriental Insurance Company Limited v. Meena Variyal and Ors., 2007(5) SCALE 269, Relied on.

Oriental Insurance Co. Ltd. v. Brij Mohan and Ors., 2007(7) SCALE 753, Referred.

National Insurance Co. Ltd. v. Swaran Singh and Others, (2004) 3 SCC 297, Distinguished.

United India Insurance Co. Ltd v. Davinder Singh [Bench Strength 2], Civil Appeal No. 4883/2007 (12/10/2007), 2008 AIR(SC) 329: 2007(11) SCR 337: 2007(8) SCC 698: 2007(12) SCALE 359: 2007(9) SLT 235: 2007(3) SCC(Cr) 664: 2007(4) ACC 705 [S.B. Sinha, J.: Harjit Singh Bedi, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d), (c), (g), (i), (o), 11, 17 & 21 — “Consumer” — Who is, determination — Question whether the beneficial consumer jurisdiction extends to determination of tortuous acts and liability arising therefrom by the Consumer Forum — Complaint against discontinuance of electricity supply without notice — Award of compensation by District Forum — Challenge to — Stand of appellant that definition of “consumer” u/s 2(o) not covers a consumer of electricity — National Commission has not addressed the question as to whether consumer of electricity is covered by the definition of `Consumer’ as defined in Section 2(o) — Impugned order set aside — Matter remitted back — Electricity Act, 2003 — Sections 126 & 145.

Haryana State Electricity Board vs. Mam Chand, 2006(4) SCC 649, Referred.

Accounts Officer, Jharkhand State Electricity Board v. Anwar Ali [Bench Strength 2], CA No. 4734/2007 (09/10/2007), 2008 AIR(SC) 164: 2007(10) SCR 905: 2007(11) SCC 753: 2007(11) JT 639: 2007(12) SCALE 37: 2007(7) Supreme 551: 2007(8) SLT 679 [Arijit Pasayat, J.: P. Sathasivam, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance claim — Reliance on report of surveyor by National Commission without being produced such report either before District forum or State forum, improper — Filing of 3 complaints before District Forum claiming Rs. 1,71,65/-, 4,16,115/- and 1,90,417.50 for the loss caused — District Forum ordered to pay claim amount of Rs. 1,71,675/- with 18% cumulative interest and compensation of Rs. 50,000/- — Order of District Forum was affirmed by State Commission — National Commission however, allowed the revision filed by OPs by solely relying on surveyor report — However, said surveyed report neither produced before District Forum nor State Commission but for first time before National Commission — National Commission acted illegally and with material irregularity in passing impugned order — Matter remitted back to District Forum — Marine Insurance Act, 1963.

HELD: Direction for payment made by the National Commission was solely on the report of the surveyor which was not produced either before the District Forum of the State Commission or even before the National Commission. It was also not disputed before by the learned counsel for the Insurance Company that the surveyor report on the basis of which the aforesaid directions for payment had been made by the National Commission was not produced before the District Forum or before the State Commission nor it was produced before National Commission. This being the admitted position, in our view, National Commission had acted illegally and with material irregularity in passing the impugned order by relying on the report of the surveyor which was not even produced or admitted into evidence before any of the Forums mentioned above.

Accordingly, we set aside the orders of the National Commission and also of the State Commission and the District Forum and remit the case back to the District Forum for fresh decision, after permitting the Insurance Company to submit the report of the surveyor before the District Forum. Before the District Forum, the report of the surveyor should be submitted by the National Insurance Company within four weeks from the date of supply of a copy of this order and after admitting the same report the District Forum shall proceed with the case and dispose of the same within two months from the date of admitting the report of the surveyor into evidence. It is needless to say that the District Forum should now decide the matter after giving opportunity of hearing to either of the parties. The appeal is, therefore, allowed.

Mahijam Vanaspati Ltd. v. National Insurance Co. Ltd. [Bench Strength 2], CA No. 4469/2007 (24/09/2007), 2007(11) SCALE 605 [Tarun Chatterjee, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 18 & 22-A (As inserted in 2003) — Ex parte order — Power of State Commission to restore, existence of, contradictory view — Dismissal of complaint for default — State commissions power to restore — Divergent views expressed by coordinate benches on the question whether State Commission has power to recall ex parte order — Hence, matter referred to larger bench to consider the issue.

New India Assurance Co. Ltd. v. R. Srinivasan, 2000(3) SCC 242, Jyotsana Arvindkumar Shah and Ors. v. Bombay Hospital Trust, 1999(4) SCC 325, Referred.

HELD: In the latter case i.e. New India Assurance’s case (supra) reference was not made to the earlier decision in Jyotsana’s case (supra). Further the effect of the amendment to the Act in 2003 whereby Section 22(A) was introduced has the effect of conferment of power of restoration on National Commission, but not to the State Commission. In view of the divergence of views expressed by coordinate Benches, we refer the matter to a larger Bench to consider the question whether the State Commission has the power to recall the ex parte order. Records be placed before the Hon’ble Chief Justice of India for appropriate orders.

Rajeev Hitendra Pathan v. Achyut Kashinath Karekar [Bench Strength 2], Civil Appeal No. 4307/2007 (17/09/2007), 2007(9) SCR 1057: 2007(7) SCC 667: 2007(11) JT 145: 2007(11) SCALE 166 [Arijit Pasayat, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14 — Interest — Rate of interest granted by District Forum — Enhancement by National Commission — Justification — Rate of interest @10% granted by District Forum confirmed in appeal enhanced to 18% by National Commission in revision filed by appellant — No revision filed by respondent — No challenge by respondent to order passed by District Forum — Therefore, National Commission not justified in enhancing the interest — Impugned order unjustified and to be set aside — Appeal allowed.

Haryana Urban Development Authority v. Omwati Sharma [Bench Strength 2], IAs Nos. 3-4 in and Civil Appeal No. 3948/2003 (06/08/2007), 2008(15) SCC 298 [B.N. Agrawal, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
Marine Insurance Act, 1963 — Section 4 — Mixed sea and land risk — Coverage of, scope — Claimant engaged in import of sugar and other items — A marine insurance policy was taken for import of 12,000 metric tones of crystal sugar from China to Calcutta, India Port for which a premium of Rs.13,57,450/- was paid — Goods safely reached Calcutta port — As transportation of bags could not be made from dock area, sugar bags temporarily stored in T-sheds — Destruction of entire stock as fire broke out — Repudiation of claim on the ground that policy covers risk of transit but not storage — Whether repudiation of claim justified? — Held, no — At first, good were covered from port China to Calcutta thereafter as extended coverage was sought goods are covered till they reach destination in any part of India — In view of the extended coverage insurer cannot defeat claim of claimant — Consumer Protection Act, 1986 — Section 2(1)(g).

Bayview Motors Ltd. v. Mitsui Marine & Fire Insurance Co. Ltd. & Ors., [2003] 1 Lloyd’s Law Reports 131, John Martin of London Ltd. v. Russel, [1960] 1 Lloyd’s Law Reports 554, Provash Chandra Dalui & Anr. v. Biswanath Banerjee & Anr., 1989 Supp.(1) SCC 487, Life Insurance Corporation of India vs. Raj Kumar Rajgarhia & Anr., (1999) 3 SCC 465, United India Insurance Co. Ltd. vs. Pushpalaya Printers, (2004) 3 SCC 694, Oriental Insurance Co. Ltd. v. Sony Cheriyan, (1999) 6 SCC 451, M/s. Peacock Plywood Pvt. Ltd. v. The Oriental Insurance Co. Ltd., JT 2007 (1) SC 191, Polymat India (P) Ltd. & Anr. v. National Insurance Co. Ltd. & Ors., (2005) 9 SCC 174, General Assurance Society Ltd. v. Chandumull Jain & Anr., [1966] 3 S.C.R. 500, John Martin of London Ltd. v. Russell, [1960] Vol.I Q.B. (Com.Cr.) 554, Referred.

HELD: Goods were first covered from port in China, destination in Calcutta port and thereafter extended coverage was sought and in that it was extended to any part of the Republic of India. If these two terms of the policy are read in conjunction then it clearly transpires that the goods are covered till they reach the destination in any part of India. If the extended cover would not be given the policy would extend to Calcutta port. If extended coverage is read, which clearly stipulates that this extension is covered on same terms and conditions of the original policy then it could mean that the policy has been covered till the goods reach the consignee in any part of the country in India. In fact, the extended coverage was only meant for the goods to be covered till they reach destination either by rail or road in any part of the country. If this extended coverage is not interpreted to mean that goods should reach the destination in any part of India, then the extended coverage on payment of higher premium would be meaningless. The coverage was sought because the final destination of the goods was not at Calcutta port. When the coverage was extended on same terms and conditions that would mean that the goods were covered till the same reached in any part of the country in India. In the present case, the goods reached the Calcutta Port and they were taken to different sheds. But unfortunately, the goods were destroyed by fire at Calcutta port itself. Therefore, we are of the view that since the goods were covered from Calcutta port till the same reach its destination and they were lying on storage, that would cover the goods by the extended policy and the insurer cannot defeat the claim of the claimant that the goods once reached the destination at Calcutta the policy stood discharged. The contention of Mr. Mehra that the extended coverage does not cover the goods in transit till they reach any part of the country is not correct because the transit infers storage also till it reaches its destination. The damage on the rail or road would also include that in transit the goods are to be kept in transit shed, the policy would cover that also. If this interpretation is not given then the extended coverage would be of no use. Looking to the expression used in the background of the intention of the parties, it clearly transpires that once the goods were insured, then till they reach any part of the country shall be covered by the extended coverage. Therefore, the contention of Mr. Mehra cannot be accepted.

United India Insurance Co. Ltd. v. Great Eastern Shipping Co. Ltd. [Bench Strength 2], CA No. 2319/2004 (16/07/2007), 2007 AIR(SC) 2556: 2007(8) SCR 350: 2007(7) SCC 101: 2007(9) JT 264: 2007(9) SCALE 248: 2007(5) Supreme 201: 2007(7) SLT 182 [A.K. Mathur, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(d), 2(1)(g), (o) & 23 — Housing — Deficiency in service, compensation, quantum of, scope — Allotment of plot to complainant for setting-up cold storage plant — Appellant addressed letter to stall construction activity in view of stay obtained by erstwhile land owner — Possession of plot forcibly taken away from complainant in view of stay order — Subsequently, challenge made by erstwhile landlord allowed by leaving the complainant high and dry — Cancellation of loan granted to complainant as there was no implementation of project — Again, complainant approached `Board’ for allotment of another vacant plot — Subsequent allotment also went into litigation without any fault of complainant — On account of protracted litigation, loans granted to complainant stood cancelled — Aggrieved by the same, complaint filed alleging deficiency in service — Award of Rs. 3 lakhs as compensation by National Commission — Challenge to — Considering peculiar circumstances of case, Rs. 1 lakh awarded as compensation.

Karnataka Industrial Areas Dev. Board. v. Nandi Cold Storage P. Ltd. [Bench Strength 3], IA No. 1 in Civil Appeal No. 5542/2004 (11/07/2007), 2007 AIR(SC) 2694: 2007(8) SCR 270: 2007(10) SCC 481: 2007(9) JT 320: 2007(9) SCALE 138: 2007(7) SLT 56: 2007(6) SRJ 545 [Arijit Pasayat, J.: P.K. Balasubramanyan, J.: D.K. Jain, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 9, 10(3) & 16(2) — Salaries and allowances of Members and Judges of Consumer Forums and number of District Forums to be operated in the State — Judicial review, whether permissible, contradictory view, matter referred to another bench — Present appeal arises out of a writ filed in High Court against inflated bills issued by Electricity Board — As District Consumer Forum in `Chamali’ was not working due to expiry of term of its members, writ petitioner approached High Court — By the impugned judgement, High Court, apart from observations on merits, issued certain directions in respect of number of District Forums to be operated in the State, fixation of salaries etc. — Whether course adopted by High Court justified? — Though Presiding Judges agreed on the point that court can request the Central and State Governments to consider desirability of fixing appropriate salaries and allowances for fora but Hon’ble Justice S.B. Sinha differed with other observations made by justice Katju — In view of difference of opinion, matter referred to another Bench.

Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, All India Judges’ Association and Others v. Union of India and Others, (1993) 4 SCC 288: AIR 1993 SC 2493, All India Judges’ Association and Others v. Union of India and Others, (2002) 4 SCC 247, Dr. J.J. Merchant and Others v. Shrinath Chaturvedi, (2002) 6 SCC 635, Supreme Court Advocates-On-Record Association and Others v. Union of India and Another, (1993) 4 SCC 441, Vishaka v. State of Rajasthan, (1997) 6 SCC 241, Vineet Narain and Others v. Union of India and Another, (1998) 1 SCC 226, Ajay Gandhi and Another v. B. Singh and Others, (2004) 2 SCC 120, Union of India v. S.B. Vohra, (2004) 2 SCC 150, People’s Union For Civil Liberties v. Union of India, 2006(13) SCALE 399, Union of India Vs. Association for Democratic Reforms & Anr., AIR 2002 SC 2112, Supreme Court Employees Welfare Association Vs. Union of India & Ors., AIR 1990 SC 334, Supreme Court Employees Welfare Association Vs. Union of India & Ors., AIR 1990 SC 334, Asif Hameed & Ors. Vs. State of Jammu and Kashmir & Ors., AIR 1989 SC 1899, Veerappa Pillai, Proprietor, Sathi Vihar Bus Service Porayar, Tanjore District, Madras vs. Raman and Raman Ltd. Kumbakonam, Tanjore District and others, AIR 1952 SC 192, State of U.P. vs. Section Officer Brotherhood and Anr., 2004 (8) SCC 286, U.P. State Road Transport Corporation and Anr. vs. Mohd. Ismail and others, 1991(3) SCC 239, State of U.P. and Anr. vs. Raja Ram Jaiswal and Anr., 1985(2) SCC 131, Union of India Vs. Prakash P. Hinduja, AIR 2003 SC 2612, Union of India Vs. Association for Democratic Reforms & Anr., AIR 2002 SC 2112, Lochner vs. New York, 198 US 45 (1905), Griswold vs. Connecticut, 381 U.S. 479, Referred.

Union of India & Anr. vs. Deoki Nandan Aggarwal, AIR 1992 SC 96, M.H. Qureshi vs. State of Bihar, 1959 SCR 629, Relied on.

HELD: (Per Katju, J.): In the present case there are clear statutory provisions in Sections 10(3) and 16(2) of the Consumer Protection Act which prescribe that it is the State Government which alone can fix the salaries and allowances and conditions of service of the members of the State and District Consumer Fora. How then can the court fix them?

If we issue the direction as prayed for by learned Additional Solicitor General in this case, we would be issuing a direction which would be wholly illegal being contrary to Section 10(3) and Section 16(2) of the Consumer Protection Act. This Court is subordinate to the law and not above the law.

When it is said “Be you howsoever so high, the law is above you” this dictum applies even to the Supreme Court, since the law is above the Supreme Court and the Supreme Court is not above the law. The Judges of the Supreme Court and High Court should have the modesty and humility to realize this.

In the garb of affirmative action or judicial activism this Court cannot amend the law as that would be a naked usurpation of legislative power. This Court must exercise judicial restraint in this connection.

Court cannot amend the Consumer Protection Act by issuing directions contrary to the clear provisions of the Act nor can the High Court do so.

The High Court apart from directing that there should be five Consumer Fora in U.P. has also directed that the Presiding Officer of a Bench will be a retired High Court Judge who would enjoy the same facilities and amenities as enjoyed by a sitting High Court Judge. This again is contrary to the provisions of the Act. Section 16(2) of the Act (which we have quoted above) clearly states that the salaries, allowances and conditions of service of the members of the State Commission shall be such as may be prescribed by the State Government. Hence it was not open to the High Court to practically amend Section 16(2) by its judicial verdict and prescribe the salaries or conditions of service of the members of the State Commission. Such salaries or conditions of service can only be prescribed by the State Government and not by the High Court as is clear from Section 16(2).

(Per Sinha, J.): I regret to express my inability to agree with Brother Katju, J. in regard to the criticisms of various orders passed in this case itself by other Benches. I am of the opinion that it is wholly inappropriate to do so. One Bench of this Court, it is trite, does not sit in appeal over the other Bench particularly when it is a coordinate Bench. It is equally inappropriate for us to express total disagreement in the same matter as also in similar matters with the directions and observations made by the larger Bench. Doctrine of judicial restraint, in my opinion, applies even in this realm. We should not forget other doctrines which are equally developed viz., Judicial Discipline and Respect for the Brother Judges.

I would, therefore, while concurring with the conclusion of my learned Brother Katju, J. for whose learning and erudition, I have the highest respect, differ with all his reasonings in support thereof.

All India Judges’ Association & Ors. Vs. Union of India & Ors., 1993(4) SCC 288, Municipal Corporation of Delhi Vs. Gurnam Kaur, (1989) 1 SCC 101, State of U.P. & Anr. Vs. Synthetics & Chemicals Ltd. & Anr., (1991) 4 SCC 139, Arnit Das Vs. State of Bihar, (2000) 5 SCC 488, A-One Granites Vs. State of U.P. & Ors., (2001) 3 SCC 537, Divisional Controller, KSRTC Vs. Mahadeva Shetty & Anr., (2003) 7 SCC 197, State of Punjab & Anr. Vs. Devans Modern Breweries Ltd. & Anr., (2004) 11 SCC 26, Referred.

State of Uttar Pradesh v. Jeet S. Bisht [Bench Strength 2], CA No. 2740/2007 (Arising out of S.L.P.(C) No. 6928/1999) with W.P.(C) No. 164/2002 (18/05/2007), 2007(7) SCR 705: 2007(6) SCC 586: 2007(8) JT 59: 2007(8) SCALE 35: 2007(4) Supreme 359 [S.B. Sinha, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Delay in delivery of possession, damages and compensation on account of, claim of, proof for, requirement of, scope, non-production of documentary evidence despite availability, effect — Entitlement of respondent to compensation to make good the loss caused to him on account of the delay in delivery — Loss is the rental income which the houses would have fetched if they had been delivered earlier from the agreed due date to the date of actual delivery of possession — Respondent did not produce any document to show that it paid Rs.3,000/- per month per house for similar houses between 1991 and 1997 nor did it produce any evidence to show that Rs.3000/- was the prevailing rent for similar houses — It is not the case of the Respondent that documentary evidence for payment of rent was not available — Where documentary evidence was available, but not produced, obviously a mere statement in the affidavit cannot be the basis for award of damages — Town Planning — Allotment of plot or flat — Damages and compensation on account of, claim of, proof for, requirement of, scope, non-production of documentary evidence despite availability, effect — Contract Act, 1872 — Sections 37 & 73.

HELD: During the pendency of the complaint before the commission, BDA delivered one HIG house on 21.1.1997 and remaining 10 HIG houses on 12.3.1997. The Respondent thus secured the main relief sought in the complaint. What remained was the claim for interest and compensation.

The brochure relating to the BDA scheme did not mention any specific date for delivery of possession of the houses.

Bangalore Development Authority v. Syndicate Bank [Bench Strength 2], Civil Appeal No. 5462/2002 (17/05/2007), 2007 AIR(SC) 2198: 2007(7) SCR 47: 2007(6) SCC 711: 2007(8) JT 106: 2007(8) SCALE 200: 2008(1) SLT 761 [P.K. Balasubramanyan, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Delay in delivery of possession, entitlement to interest, rate and scope to grant — Mere delay in delivery of possession not automatically amounts to deficiency in service — Where grievance is one of delay in delivery of possession, and Development Authority delivers the house during the pendency of complaint at the agreed price, and such delivery is accepted by allottee-complainant, question of awarding any interest on the price paid by him from the date of deposit to date of delivery of possession, does not arise — Allottee who had the benefit of appreciation of price of the house, is not entitled to interest on the price paid — Uniform award of interest @18% per annum in all cases, not proper — Town Planning — Allotment of plot or flat — Delay in delivery of possession, entitlement to interest on account of, scope — Contract Act, 1872 — Sections 37 & 73 — Civil Procedure Code, 1908 — Section 34.

Ghaziabad Development Authority vs. Balbir Singh, 2004(5) SCC 65, Followed.

HELD: While deciding whether the allottee is entitled to any relief and in moulding the relief, the following among other relevant factors should be considered : (i) whether the layout is developed on ‘no profit no loss’ basis, or with commercial or profit motive; (ii) whether there is any assurance or commitment in regard to date of delivery of possession; (iii) whether there were any justifiable reasons for the delay or failure to deliver possession; (iv) whether the complainant has alleged and proved that there has been any negligence, shortcoming or inadequacy on the part of the developing authority or its officials in the performance of the functions or obligations in regard to delivery; and (v) whether the allottee has been subjected to avoidable harassment and mental agony.

HELD: Where the allotment relates to a flat/house and construction is incomplete or not in accordance with the agreed specifications, when it is delivered, the allottee will be entitled to compensation equivalent to the cost of completing the building or rectifying the defects.

Bangalore Development Authority v. Syndicate Bank [Bench Strength 2], Civil Appeal No. 5462/2002 (17/05/2007), 2007 AIR(SC) 2198: 2007(7) SCR 47: 2007(6) SCC 711: 2007(8) JT 106: 2007(8) SCALE 200: 2008(1) SLT 761 [P.K. Balasubramanyan, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Non-execution of title deed despite granting possession and receiving full payment, claim of compensation on the ground of, sustainable — Where full payment is made and possession is delivered, but title deed is not executed without any justifiable cause, the allottee may be awarded compensation, for harassment and mental agony, in addition to appropriate direction for execution and delivery of title deed — Town Planning — Allotment of flat or plot — Non-execution of title deed despite granting possession and receiving full payment, claim of compensation on the ground of, sustainable — Contract Act, 1872 — Sections 37 & 73.

Bangalore Development Authority v. Syndicate Bank [Bench Strength 2], Civil Appeal No. 5462/2002 (17/05/2007), 2007 AIR(SC) 2198: 2007(7) SCR 47: 2007(6) SCC 711: 2007(8) JT 106: 2007(8) SCALE 200: 2008(1) SLT 761 [P.K. Balasubramanyan, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(c), (d), 18, 22 & 23 — Housing — Non-delivery of possession in time despite full payment, offer of alternative site, effect of, on award of compensation and interest — Where an alternative site is offered or delivered (at the agreed price) in view of its inability to deliver the earlier allotted plot/flat/house, or where the delay in delivering possession of the allotted plot/flat/house is for justifiable reasons, ordinarily the allottee will not be entitled to any interest or compensation because the buyer has the benefit of appreciation in value — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Sections 37 & 73.

HELD: Where the development authority having received the full price, does not deliver possession of the allotted plot/flat/house within the time stipulated or within a reasonable time, or where the allotment is cancelled or possession is refused without any justifiable cause, the allottee is entitled for refund of the amount paid, with reasonable interest thereon from the date of payment to date of refund. In addition, the allottee may also be entitled to compensation, as may be decided with reference to the facts of each case.

HELD: It can be seen that any claim arising out of and within the purview of the Employees’ Insurance Court is expressly barred by virtue of sub-section (3) to be adjudicated upon by a civil court, but there is no such express bar for the consumer forum to exercise the jurisdiction even if the subject matter of the claim or dispute falls within clauses (a) to (g) of sub-section (1) of Section 75 or where the jurisdiction to adjudicate upon the claim is vested with the Employees’ Insurance Court under clauses (a) to (f) of sub-section (2) of Section 75 if it is a consumer’s dispute falling under the CP Act.

Having considered all these aspects, we are of the view that the appellant is a consumer within the ambit of Section 2(1)(d) of the Consumer Protection Act, 1986 and the medical service rendered in the ESI hospital/dispensary by the respondent Corporation falls within the ambit of Section 2(1)(o) of the Consumer Protection Act and, therefore, the consumer forum has jurisdiction to adjudicate upon the case of the appellant. We further hold that the jurisdiction of the consumer forum is not ousted by virtue of sub-section (1) or (2) or (3) of Section 75 of the Employees’ State Insurance Act, 1948.

Kishore Lal v. Chairman, Employees State Insurance Corporation [Bench Strength 3], Civil Appeal No. 4965/2000 (08/05/2007), 2007 AIR(SC) 1819: 2007(6) SCR 139: 2007(4) SCC 579: 2007(6) JT 541: 2007(6) SCALE 660: 2007(4) Supreme 775: 2007(7) SRJ 369: 2007(3) LLJ 181: 2007(114) FLR 219 [B.N. Agrawal, J.: P.P. Naolekar, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 11, 17 & 21 — Jurisdiction of Consumer Forum — Construction of, scope — Held, the jurisdiction of a consumer forum has to be construed liberally so as to bring many cases under it for their speedy disposal — Jurisdiction of the consumer forum should not and would not be curtailed unless there is an express provision prohibiting the consumer forum to take up the matter which falls within the jurisdiction of civil court or any other forum as established under some enactment — Interpretation of Statutes — Consumer Protection Act, 1986, Sections 11, 17 & 21.

Kishore Lal v. Chairman, Employees State Insurance Corporation [Bench Strength 3], Civil Appeal No. 4965/2000 (08/05/2007), 2007 AIR(SC) 1819: 2007(6) SCR 139: 2007(4) SCC 579: 2007(6) JT 541: 2007(6) SCALE 660: 2007(4) Supreme 775: 2007(7) SRJ 369: 2007(3) LLJ 181: 2007(114) FLR 219 [B.N. Agrawal, J.: P.P. Naolekar, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) — “Service” — Scope and ambit of, transaction with State or its instrumentalities, effect — Whether the service provided by ESI hospital/dispensary falls within the ambit of service defined u/s 2(1)(o) of CP Act — Held, yes — Employees’ State Insurance Act, 1948 — Sections 38 to 40, 46, 74, 75, 56 & 59.

HELD: The service rendered by the medical practitioners of hospitals/nursing homes run by the ESI Corporation cannot be regarded as a service rendered free of charge. The person availing of such service under an insurance scheme of medical care, whereunder the charges for consultation, diagnosis and medical treatment are borne by the insurer, such service would fall within the ambit of `service’ as defined in Section 2(1)(o) of the CP Act. We are of the opinion that the service provided by the ESI hospital/dispensary falls within the ambit of `service’ as defined in Section 2(1)(o) of the CP Act. ESI scheme is an insurance scheme and it contributes for the service rendered by the ESI hospitals/dispensaries, of medical care in its hospitals/dispensaries, and as such service given in the ESI hospitals/dispensaries to a member of the Scheme or his family cannot be treated as gratuitous.

Kishore Lal v. Chairman, Employees State Insurance Corporation [Bench Strength 3], Civil Appeal No. 4965/2000 (08/05/2007), 2007 AIR(SC) 1819: 2007(6) SCR 139: 2007(4) SCC 579: 2007(6) JT 541: 2007(6) SCALE 660: 2007(4) Supreme 775: 2007(7) SRJ 369: 2007(3) LLJ 181: 2007(114) FLR 219 [B.N. Agrawal, J.: P.P. Naolekar, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) — “Service” — Meaning and scope — Term `service’ unambiguously indicates in the definition that the definition is not restrictive and includes within its ambit such services as well which are specified therein. However, a service hired or availed, which does not cost anything or can be said free of charge, or under a contract of personal service, is not included within the meaning of `service’ for the purposes of the CP Act.

Kishore Lal v. Chairman, Employees State Insurance Corporation [Bench Strength 3], Civil Appeal No. 4965/2000 (08/05/2007), 2007 AIR(SC) 1819: 2007(6) SCR 139: 2007(4) SCC 579: 2007(6) JT 541: 2007(6) SCALE 660: 2007(4) Supreme 775: 2007(7) SRJ 369: 2007(3) LLJ 181: 2007(114) FLR 219 [B.N. Agrawal, J.: P.P. Naolekar, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d) — “Consumer” — Definition of — Definition of `consumer’ in the CP Act is apparently wide enough and encompasses within its fold not only the goods but also the services, bought or hired, for consideration — Such consideration may be paid or promised or partly paid or partly promised under any system of deferred payment and includes any beneficiary of such person other than the person who hires the service for consideration.

Kishore Lal v. Chairman, Employees State Insurance Corporation [Bench Strength 3], Civil Appeal No. 4965/2000 (08/05/2007), 2007 AIR(SC) 1819: 2007(6) SCR 139: 2007(4) SCC 579: 2007(6) JT 541: 2007(6) SCALE 660: 2007(4) Supreme 775: 2007(7) SRJ 369: 2007(3) LLJ 181: 2007(114) FLR 219 [B.N. Agrawal, J.: P.P. Naolekar, J.: Dalveer Bhandari, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 18, 13 & 22 — Opportunity of hearing by State Commission — Necessity to grant — Dismissal of complaint by District Forum allowed by State Commission without giving opportunity of hearing — Held, impugned order passed without affording opportunity to appellant is unjustified and therefore to be set aside — Matter to be remanded to state commission to decide afresh by giving opportunity of hearing to parties.

DRS Transport (P) Ltd. v. R.P. Singh [Bench Strength 2], CA No. 2376/2007 (07/05/2007), 2007(5) SCC 718 [B.N. Agrawal, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 17 & 11 — Jurisdiction of State Commission and District Consumer Form — Scope — Returning of complaint by State Commission to District Forum on the ground of claim being exaggerated — Amount claimed by the complainant is Rs. 68,51,321/- which was within the jurisdiction of State Commission and beyond jurisdiction of District Forum — Therefore returning of complaint by State Commission to District Forum unjustified and to be set aside.

Sudha Jain v. Chief Manager [Bench Strength 2], CA No. 2375/2007 (07/05/2007), 2007(5) SCC 717 [B.N. Agrawal, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
Motor Vehicles Act, 1988 — Sections 147, 149, 166 & 168 — Claim relating to own damage claims — Adjudicating authority for, determination — Such a claim cannot be adjudicated by the Tribunal — But it has to be decided by another forum i.e. forum created under Consumer Protection Act, 1986 — Consumer Protection Act, 1986 — Sections 14(1)(d), 17 & 21.

National Insurance Co. Ltd. v. Laxmi Narain Dhut [Bench Strength 2], Civil Appeal No. 1140/2007 (With Civil Appeal No. 1141, 1142, 1143, 1144, 1145, 1146, 1147, 1148, 1149, 1150, 1151/2007) (02/03/2007), 2007 AIR(SC) 1563: 2007(3) SCR 579: 2007(3) SCC 700: 2007(4) JT 169: 2007(4) SCALE 36: 2007(2) Supreme 721: 2007(4) SLT 102: 2007(7) SRJ 351: 2007(2) SCC(Cr) 142: 2007(136) CompCas 678 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 11, 14(1)(d), 17, 18, 21 & 22 — Contract for carriage — Non-delivery of goods, claim on account of, sustainable even in case of refusal of consignee to pay freight charges — Mere non-payment of freight charges would not make the service free of charge — Carriers Act, 1865 — Section 10.

HELD: Where the contract for transportation is for a consideration (freight charge), the mere fact that such consideration is not paid, would not make the service ‘free of charge’. There is difference between contract without consideration, and contract for consideration, which is not paid. If there is non-payment of the freight lawfully due, the carrier may sue for the charges, or withhold the consignment and call upon the owner/consignor/consignee to pay the freight charges and take delivery, or on failure to pay the freight charges, even sell the goods with due notice to recover its dues, where such right is available. But where the common carrier has misplaced or lost the goods and, therefore, not in a position to deliver the goods, it obviously cannot demand the freight charges, nor contend that non-payment of freight charges exonerates it from liability for the loss or non-delivery. When the carrier informs that the consignment is not traced and is under the process of being traced, obviously the owner/consignor/consignee cannot be expected to pay the freight charges. In the circumstances, the third point is also answered against the appellant.

Patel Roadways Ltd. v. Birla Yamaha Ltd., 2000(4) SCC 91, Relied.

Transport Corporation of India Ltd. v. Veljan Hydrair Ltd. [Bench Strength 2], Civil Appeal No. 3096/2005 (22/02/2007), 2007(2) SCR 1082: 2007(3) SCC 142: 2007(4) JT 8: 2007(3) SCALE 423: 2007(3) Supreme 372: 2007(5) SRJ 219 [Tarun Chatterjee, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — Limitation period for filing complaint — When starts — Contract for carriage of goods — Complaint against carrier for non-delivery of goods — Plea, complaint barred by limitation as filed after 2 years unsustainable — Cause of action for filing complaint starts when carrier informed the consignee that it was in the process of locating goods and requested consignee to wait — Complaint filed within 2 years from date of accrual of cause of action — Civil Procedure Code, 1908 — Order 7 Rule 1(e) — Limitation Act, 1963 — Sections 5 & 3.

HELD: In this case, the consignment was entrusted to the appellant on 10.5.1996. On 8.11.1996, the respondent instructed the appellant to re-book the consignment. On 8.8.1998, 13.10.1998, 7.11.1998 and 8.12.1998, the respondent demanded delivery. By letters dated 15.12.1998, 21.6.1999 and 3.7.1999, the appellant assured the respondent that it was in the process of locating the goods and requested the respondent to wait and assured that it will inform about the status. Thereafter the appellant did not inform the status. The complaint has been filed within two years from the date of receipt of the said letter dated 3.7.1999 and is in time. In fact in view of the request of the appellant to the respondent to wait till the consignment was traced, the limitation for an action would not start to run until there was a communication from the appellant either informing about the loss or expressing its inability to deliver or refusal to deliver, or until the respondent makes a demand for delivery or payment of value of the consignment after waiting for a reasonable period and there is non-compliance. Therefore, the complaint is not barred under section 24A of CP Act.

Transport Corporation of India Ltd. v. Veljan Hydrair Ltd. [Bench Strength 2], Civil Appeal No. 3096/2005 (22/02/2007), 2007(2) SCR 1082: 2007(3) SCC 142: 2007(4) JT 8: 2007(3) SCALE 423: 2007(3) Supreme 372: 2007(5) SRJ 219 [Tarun Chatterjee, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — “Cause of action” — Scope — Contract for carriage of goods — In the context of limitation with reference to a contract for carriage of goods, the date of cause of action may refer to the date on which the goods are entrusted, date of issue of consignment note, the date stipulated for delivery, the date of delivery, the date of refusal to deliver, the date of intimation of carrier’s request to wait for delivery as the goods are being traced, the date of intimation of loss of goods, or the date of acknowledgement of liability — Carriers Act, 1865 — Section 5 — Civil Procedure Code, 1908 — Order 7 Rule 1(e) — Limitation Act, 1963 — Sections 5 & 3.

Transport Corporation of India Ltd. v. Veljan Hydrair Ltd. [Bench Strength 2], Civil Appeal No. 3096/2005 (22/02/2007), 2007(2) SCR 1082: 2007(3) SCC 142: 2007(4) JT 8: 2007(3) SCALE 423: 2007(3) Supreme 372: 2007(5) SRJ 219 [Tarun Chatterjee, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
J. & K. Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Liability of insurance company — Exclusion clause, applicability of, determination — Theft in jewellery shop — Jeweller Block Policy — Theft of 140 gms of jewellery worth Rs. 63,000/- in the business premises of respondent whether covered by exclusion clause under the policy? — Held, no — Theft admittedly made by a customer — Word ‘Customer’ in clause 8(c) of policy must be read ejusdem generis — Customer who committed theft, being an unknown person, no occasion for respondent to entrust jewellery to him — Insurer liable to make good the loss sustained by respondent — Insurance — Exclusion clause — Applicability of, scope — Consumer Protection Act, 1986 — Sections 2(1)(g), (o) & 14(1)(d) — Penal Code, 1860 — Section 378.

State of Gujarat vs. Jaswant Lal Natha Lal, 1968(2) SCR 408, Superintendent and Remembrance of Legal Affairs, W.B. vs. S.K. Roy, AIR 1974 SC 794, Ram Narayan Popli etc. vs. Central Bureau of Investigation etc., 2003(3) SCC 641, Referred.

National Insurance Company Ltd. v. Ishar Das Madan Lal [Bench Strength 2], Civil Appeal No. 6113/2000 (20/02/2007), 2007(2) SCR 1014: 2007(4) SCC 105: 2007(4) JT 21: 2007(3) SCALE 336: 2007(2) Supreme 766: 2007(3) SLT 133: 2007(5) SRJ 172: 2007(2) JCC 1082: 2007(136) CompCas 320: 2007(1) ACC 717 [S.B. Sinha, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 13, 14, 17, 18, 21, 22 & 23 — Burden of proof — When lies on the consumer, possession of office, non-delivery of, despite making full payment, plea of, unsustainable, proof available of making only part payment — Agreement to sale and purchase of office room — Complaint by respondent alleging non-handing over the possession inspite of full payment — District forum found that respondent had not paid entire consideration and passed an order giving liberty to respondent to pay remaining consideration and to obtain possession — State commission holding full payment, modified decision of District forum and directed appellant to hand over possession — Revision before National Commission dismissed — Part payment made through cheque established but remaining payment by way of cash not proved — No evidence to show payment in cash — Impugned order of State and National Commission to be set aside — Order of District forum to be restored — Evidence Act, 1872 — Sections 91, 92 & 102.

HELD: The case set up in evidence was completely at variance with the case in the complaint. There was no evidence to show that the consideration was to be Rs.9,00,000/-, especially, in the light of the recitals in the registered agreement. There was also no document to show the payment of Rs.4,00,000/- by way of cash. Hence, this was no evidence to show that the balance amount due under the agreement after the admitted payment of Rs.5,00,000/- was paid. The affidavit produced before the State Forum and the evidence of the colleague of the respondent is clearly inadmissible and insufficient to prove any such payment. Thus, the case set up by the respondent in his evidence was not established. It is in that situation that the District Forum taking note of the payment of Rs.5,00,000/- and the failure of the respondent to encash the cheque for Rs.5,00,000/- that was returned by the company, ordered the complainant to pay the balance amount due under the transaction as evidenced by the written instrument and take delivery of the premises in question and in the alternative gave him the option to take back the sum of Rs.5,00,000/- with interest. Neither the State Commission, nor the National Commission has given any sustainable reason for differing from the conclusion of the District Forum. A mere suspicion that builders in the country are prone to take a part of the sale amount in cash, is no ground to accept the story of payment of Rs.4,00,000/- especially when such a payment had not even been set up in the complaint before the District Forum. Not only that, there was no independent evidence to support the payment of such a sum of Rs.4,00,000/- except the ipse dixit of the respondent. The affidavit of the bank employee filed in the State Commission cannot certainly be accepted as evidence of such a payment. Payment of such a sum had clearly been denied by the company. The respondent had, therefore, to prove such a payment. His case that the purchase price was Rs.9,00,000/-, itself stands discredited by the recitals in the agreement dated 27.7.1997 in which the purchase price was recited as Rs.7,75,000/-. Not only that the respondent did not have a receipt for evidencing the payment of Rs.4,00,000/- and if the amount was paid on 5.7.1997 or 8.7.1997, as claimed by him, he would certainly have ensured that the payment was acknowledged in the agreement for sale executed on 27.7.1997. The agreement for sale actually speaks of his obligation to pay the balance to make up Rs.7,75,000/- after acknowledging receipt of Rs.5,00,000/-. The respondent is not a layman. He is a practising advocate. According to him, he specialises in documentation. He cannot, therefore, plead ignorance about the existence of the recital in the agreement. He cannot plead ignorance of its implications.

We were taken through the entire material. The respondent who appeared in person, brought to our notice the evidence in extenso. At the end of it all, we find that we cannot agree either with the State Commission or with the National Commission. Actually, the District Forum had been indulgent to the respondent in giving him the relief it did. Suffice it to say, we find it impossible to sustain the decision of the National Commission.

Hence, we allow this appeal. We set aside the decision of the National Commission and that of the State Commission. We restore the decision of the District Forum.

Bhandari Construction Company v. Narayan Gopal Upadhye [Bench Strength 2], Civil Appeal No. 866/2007 (20/02/2007), 2007 AIR(SC) 1441: 2007(2) SCR 924: 2007(3) SCC 163: 2007(3) SCALE 386: 2007(3) Supreme 467: 2007(3) SLT 627: 2007(5) SRJ 232 [B.P. Singh, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Monopolies and Restrictive Trade Practices Act, 1969 — Section 12-B — Housing — Failure to allot flat, interest on refund, rate of and entitlement for — Non-delivery of possession despite payment of demanded amount — Defence of respondent that full payment of Rs. 6,64,000/- not paid — Amount of Rs. 6,64,000/- worked out by respondent only in the year 1998 whereas last installment was paid in 1995 — Thereafter, no demand for balance amount made — No explanation for either not demanding the remaining amount or handing over possession of flat — Commission rightly granted 12% interest on the amounts so refunded — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Sections 37 & 73 — Consumer Protection Act, 1986 — Sections 2(1)(g), 14(1)(d), 18 & 22(1).

Renusagar Power Co. Ltd. Vs. General Electric Co., 1994 Supp.(1) SCC 644, Referred.

HELD: We are of the opinion that the grant of interest of 12% per annum is appropriate in the facts of this particular case. However, we are also of the opinion that since interest was not granted to the appellant along with the principal amount the respondent should then in addition to the interest at the rate of 12% per annum also pay to appellant interest at the same rate on the aforesaid interest from the date of payment of installments by the appellant to the respondent till the date of refund on this amount, and the entire amount mentioned above must be paid to the appellant within two months from the date of this judgment.

HELD: A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.

Alok Shanker Pandey v. Union of India [Bench Strength 2], Civil Appeal No. 1598/2005 (15/02/2007), 2007 AIR(SC) 1198: 2007(2) SCR 737: 2007(3) SCC 545: 2007(4) JT 248: 2007(3) SCALE 190: 2007(2) Supreme 249: 2007(3) SLT 27: 2007(4) SRJ 271: 2007(136) CompCas 258 [S.B. Sinha, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 18 — Bank loan — Recovery of, petition for, infructuous petition — Direction by State Consumer Forum to release security to appellant — Said order stayed by High Court — Appeal against — Money deposited by guarantor in compliance of earlier order of this court with first respondent — Deposit of Rs. 54,22,237/- by appellant in addition to sum of Rs. 89,96,636 deposited by guarantor in full and final settlement of bank dues — Nothing further survive for bank to pursue the writ petition, therefore IDBI is directed to withdraw said writ petition — Appellant also directed to withdraw the case filed by them before State Consumer Forum — Appeal disposed of accordingly — Constitution of India — Article 226.

L.P. Shashi Kumar v. Industrial Development Bank of India Ltd. [Bench Strength 2], Civil Appeal No. 644/2007 (08/02/2007), 2008 AIR(SC) 644: 2007(2) SCR 379: 2007(12) SCC 129: 2007(2) SCALE 599: 2007(2) Supreme 736: 2007(2) SLT 595 [AR. Lakshmanan, J.: Altamas Kabir, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d), 18, 22 & 23 — Insurance policy — Repudiation of claim, when improper — Respondent obtained fire policy for its building and stock which also covers risk of flood — Collapse of building on account of flood water entering into premises — Repudiation of claim on the ground that building collapsed due to structural defect caused by subsidence which was not covered by policy — Admittedly, incident took place, during coverage of policy — Clause 8 of policy which deals with exclusions, not covers subsidence — When insurance company itself certified that building has a first class construction, it cannot say that building collapse due to structural defect — Moreover, building is in existence for more than 12 years — Repudiation of claim, in such circumstances, unjustified — Contract Act, 1872 — Section 37.

HELD: A perusal of the aforesaid clause would clearly show that there is no exclusion clause for subsidence. Clause 8(b) only talks of typhoon, storm, cyclone, tempest, hurricane, tornado, flood and inundation. None of the events mentioned above includes subsidence. We fail to understand from where the surveyor has brought the expression “subsidence” although clause 8 which specifically talks about exclusions, does not mention anything like subsidence. The policy is covered for flood and inundation for which the claimant is covered by paying extra premium, therefore, now to say that the policy has not covered subsidence, which is not a clause in the present policy cannot be sustained. Therefore, on the basis of this ground, repudiation of the claim of the claimant by the appellant does not appear to be justified. Had this been the clause, that if damage is caused on account of sinking and caving of the building i.e. subsidence then perhaps this would have come to the rescue of the company but since in the exclusion clause there is no mention of subsidence, therefore, this ground taken by the appellant-company and by the surveyor to defeat the claim, is absolutely unwarranted.

Now, coming to the next question of collapse of the building on account of poor construction of column no.3 of the building, there also the submission appears to be not justified. In fact, the Company has certified that this building has a first class construction. Normally when the company insures any factory, then their Officers and the Engineers used to inspect the building to find out whether there is any defect in the construction or the construction is of poor quality. In the present case, the company certified that it is a first class construction, then for some defect which has not been noticed by the company, no benefit could be given to the company for such defect. More so, in the present case, as pointed out that because of defective structure i.e. column No.3, the building has collapsed but the question is what aggravated or accentuated this, factory is in place for more than 12 years & it is on account of flood water entering in factory that has caused this damage. So called defect was aggravated on account of flooding of the water in the premises of the factory, if the flood water had not entered into the factory, perhaps the construction which stood good for 12 years, would have lasted long. The cause of the damage to the column No.3 of the building was flood water. Therefore, the company cannot escape the liability to compensate the claimant for collapse of the building on account of floods. As a result of above discussion, we are of opinion that the view taken by the National Consumer Disputes Redressal Commission is correct and is fully justified and there is no ground to interfere with the order. As such, the appeal is dismissed. There would be no order as to costs.

United India Insurance Co. Ltd. v. Kiran Combers and Spinners [Bench Strength 2], CA No. 9128/2003 (08/12/2006), 2007 AIR(SC) 393: 2006(Supp-10) SCR 402: 2007(1) SCC 368: 2006(13) SCALE 371: 2007(135) CompCas 192 [G.P. Mathur, J.: A.K. Mathur, J.] <<LAWPACK SUPREME COURT>>
Electricity Act, 1910 — Section 26(6) — Meter — Tampering of, demand for, reference to Electrical Inspector, impermissibility — Demand raised for alleged tampering with the meter — Tampering with meter is the case which is not covered by section 26(6) — As such District Forum, State Commission and National Commission were not justified in referring the matter in term of section 26(6) — Order passed by these authorities are quashed — Appeal allowed — Consumer Protection Act, 1986 — Sections 14, 18 & 22 — Electricity Rules, 1956 — Rule 57.

HELD: The basic stand of the respondent as complainant was that prior to the inspection, on 02.07.2000 there was a sparking in the C.T. Box installed at his factory premises and the complainant immediately informed the appellant and requested for rectification of the defect. The complainant had also given a letter dated 2.7.2000 to the department in this behalf and since the meter was defective the appellant should have rectified the meter. Instead of doing that, the demand was raised for alleged tampering with the meter. With reference to the inspection report it was averred that the seals were found intact and, therefore, there was no question of any tampering. It was, therefore, prayed that reference should be made to the Electrical Inspector for action in terms of Section 26(6) of the Indian Electricity Act, 1910 (in short ‘the Act’). It was further submitted that notice was to be given before raising of demand. This was stated to be in line with principles of natural justice and statutory prescriptions. The said prayer was rejected by the present appellant taking the stand that in case of tampering there was no question of any reference to the Electrical Inspector. The District Forum found substance in the complaint filed by the respondent and held that the demand was illegal and instead reference ought to have been made in terms of Section 26(6) of the Act.

Though strong reliance was placed by learned counsel for the respondent on a decision in M.P.E.B. & Ors. vs. Smt. Basantibai (AIR 1988 SC 71) more particularly, paragraph 13 thereof, a bare reading of the decision shows that the same did not relate to a case of tampering and, therefore, has no application to the present case.

Above being the position, the District Forum, State Commission and the Commission were not justified in holding that a reference in terms of Section 26(6) of the Act was called for. The orders passed by these authorities are quashed.

The appeal is allowed but without any order as to costs.

Sub Divisional Officer (P), UHBVNL v. Dharam Pal [Bench Strength 2], CA No. 4979/2006 (15/11/2006), 2007 AIR(SC) 1214: 2006(Supp-8) SCR 1175: 2006(12) SCC 222: 2006(12) SCALE 465: 2006(9) SLT 332: 2007(2) SRJ 158 [Arijit Pasayat, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 22, 18, 21, 14, 2(1)(g) & (o) — Banking service — Theft of gold ornaments pledged with bank, return value of ornament, cryptic order passed by State and National Commission, remand of matter on the ground of — Resolution passed in a meeting that each person pledging ornament to be paid at rate of Rs. 410/- per gram, the prevailing market rate at the time of theft without any interest on jewel loans — Complaint seeking direction to bank to pay entire amount with interest and to pay present market rate of Rs. 573/- per gram alongwith making charges allowed by District Forum and upheld by State Commission and National Commission — All borrowers except respondent have accepted the rate arrived at consensually at the meeting — No other complaint except one under consideration — Cryptic order by both the commission without discussing various stand taken by appellant — Impugned order to be set aside — Matter to be remitted for fresh consideration.

HELD: We find that all through stand of the appellant-Bank has been that all the borrowers except the respondent have accepted the rate arrived at consensually at the meeting. The complainant did not dispute that such a decision had been taken. It is not clear as to whether the complainant had attended the meeting which was convened and where all the borrowers were given the chance to participate. The decision in the meeting undisputedly was to the effect that the value of gold on the date of theft was to be paid. It appears that there was no other complaint except the one under consideration. Both the State Commission and the National Commission passed cryptic orders and did not discuss even the various stands taken by the appellant. It was open to the State Commission and the National Commission to consider the stand relating to acceptance of rate fixed at the meeting and its effect on the complainant’s claim. But, that has not been done. We, therefore, set aside the order of the National Commission and remit the matter to it for fresh consideration for the purpose of considering the effect of the decision taken on 17.1.2004 where about 400 similarly situated borrowers had accepted the rate. We make it clear that we have not expressed any opinion on the merits of the case.

Raythara Sahakari Bank Ltd. v. Chandrakala R. Das [Bench Strength 2], CA No. 4724/2006 (08/11/2006), 2006(Supp-8) SCR 751: 2007(1) SCC 191: 2006(11) SCALE 574: 2007(2) Supreme 394: 2006(8) SLT 358: 2007(2) SRJ 451: 2006(134) CompCas 538 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14, 18, 22 & 23 — Insurance claim — Complaint for, maintainability of, effect of execution of discharge voucher — Mere execution of discharge voucher would not always deprive the consumer from preferring claim unless it is shown by consumer that discharge voucher had been obtained from him by respondent fraudulently or by exercise of undue influence or by misrepresentation or the like.

United India Insurance vs. Ajmer Singh Cotton & General Mills, 1999(6) SCC 400, Referred.

HELD: In the present case, the claim of the complainant was finally settled by a letter dated 8.4.1994 and the payment was made on 8.6.1994, which was accepted by the respondent without any qualifications. It cannot, therefore, be said that the payment was made belatedly. The important date to be decided in such circumstances is the date on which the quantum of compensation and to whom it should be paid is finally decided and not from the dates on which the correspondences ensued between the parties.

In the facts and circumstances, aforestated, we are of the view, that the claim was finally settled by a letter dated 8.4.1994 and the payment was made on 8.6.1994, and therefore, there was no delay in making the payment which would warrant the award of interest on delayed payment. The view taken by the Commission was, therefore, erroneous. The Order dated 8th September, 2004 of the Commission is set aside. The appeal is allowed.

HELD: In the letter aforesaid, it is stated that they have no objection to settle the claim in favour of M/s Nipha Exports Private Ltd., and advised to address the correspondence direct to them in future. It is his contention that there is no explanation whatsoever by the appellant for withholding the payment from 17.3.1991 to 8.4.1994, the date on which the matter was settled. In view of the circumstances, as recited above, we are unable to accept this contention. From the letter dated 17.3.1991, it is clear that it was not the settlement of the claim but it was a no objection certificate that the claim may be settled in favour of the respondent and advise that all future correspondence be addressed to them directly. Therefore, it cannot be said that the final settlement was arrived at by the aforesaid letter.

National Insurance Company Ltd. v. Nipha Exports Pvt. Ltd. [Bench Strength 2], CA No. 619/2005 (29/09/2006), 2006(Supp-6) SCR 719: 2006(8) SCC 156: 2006(12) JT 369: 2006(9) SCALE 678: 2006(7) SLT 423: 2006(7) SCJ 740: 2006(10) SRJ 443: 2006(133) CompCas 899 [H.K. Sema, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), 13, 14, 18 & 22 — Insurance claim — Burden of proof, duty of parties, failure of insurance company to disprove claim with evidence — Destruction and damage of showroom and the stocks therein by fire and riot — Appellant took insurance coverage for all stock in trade of textile items and garments — Riots in the city — Rioters set fire to stock — Claim for insurance — Failure of insurance company to settle the claim — Complaint filed by appellant resulted in dismissal — Appeal — Nothing on record to show the stock in trade was removed by appellants — Unrest in the city not in dispute — Apart from claiming that goods in show room had been looted, appellants, not in a position to supply any further evidence — Held, Appellants had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy and it was for the insurance company to disprove such claim with evidence, if any — Insurance company, despite the report of the investigator, failed to establish that the claim of the appellants was not justified and was not covered by the policy of insurance — Insurance company directed to pay to the appellants the balance amount of Rs.97,83,827/- together with interest at the rate of 9% per annum from the date of the claim till payment.

HELD: That there was communal unrest in the city of Coimbatore on the date in question is not denied. That the mob attacked and set fire to the showroom of the appellants is also an established fact. That the showroom was attacked by a frenzied mob, which set fire to the elevated ground floor of the showroom and indulged in looting, is also established. At exactly what point of time the mob may have entered into the two basement levels is difficult to determine in the prevailing circumstances and it is quite possible that the looting had taken place before the police and the fire fighting personnel arrived at the site.

There is nothing on record to indicate that the stock in trade had been removed from basement levels in anticipation of any such rioting. On the other hand, the bank has clearly supported the case of the appellants by informing the insurance company that the stock insured was for Rs. 2 crores and the average stock at any point of time in the insured premises was more than Rs. 2 crores and the bank requested the insurance company to re-consider the claim of the appellant-firm.

Although, M/s. Vasu Associates were engaged on a suspicion that the appellants had themselves transported part of the goods from the showroom, there is no real evidence in support thereof.

In our view, the appellants had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy and it was for the insurance company to disprove such claim with evidence, if any. In our view, the insurance company, despite the report of the investigator, failed to establish that the claim of the appellants was not justified and was not covered by the policy of insurance.

Inasmuch as, the insurance company was within its rights to cause an inquiry into the incident and it approved the appellants’ claim of Rs.1,02,38,738/- based on the report of the investigator, we are unable to agree with the submission made on behalf of the appellants that apart from the actual claim, the appellants are also entitled to payment of compensation towards hardship, mental agony and harassment.

We, therefore, allow the appeal and direct the respondent-insurance company to pay to the appellants the balance amount of Rs.97,83,827/- together with interest at the rate of 9% per annum from the date of the claim till payment. Such payment is to be made within a month from date.

Shobika Attire v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 2066/2006 (15/09/2006), 2006 AIR(SC) 3261: 2006(Supp-6) SCR 266: 2006(8) SCC 35: 2006(12) JT 98: 2006(9) SCALE 293: 2006(8) Supreme 461: 2006(8) SCJ 354: 2006(10) SRJ 306: 2006(133) CompCas 662: 2006(9) SCJD 17 [AR. Lakshmanan, J.: Altamas Kabir, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12, 14, 17 & 21 — Disputed question of facts — No jurisdiction of State Commission to adjudicate — Nature of the proceedings before the Commission as noted above, are essentially in summary nature — Insurance — Repudiation of claim — Wife of complainant obtained a Janata Personal Accident Policy for Rs. 5 lakhs — Death of insured in accident by drowning in well — Claim for insured amount — Repudiation of claim on the ground of misdeclarations made in proposal form — Though, the commission accepted the wrong declaration of nature of occupation of person insured but granted the relief — Commission not justified in doing so.

HELD: The nature of the proceedings before the Commission as noted above, are essentially in summary nature. The factual position was required to be established by documents. Commission was required to examine whether in view of the disputed facts it would exercise the jurisdiction. The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate Court of Law and not by the Commission.

Oriental Insurance Company Ltd. v. Munimahesh Patel [Bench Strength 2], CA No. 4091/2006 (12/09/2006), 2006(Supp-6) SCR 30: 2006(7) SCC 655: 2006(12) JT 32: 2006(9) SCALE 167: 2006(7) Supreme 156: 2006(6) SLT 436: 2006(7) SCJ 225: 2006(10) SRJ 28: 2006(134) CompCas 103: 2006(9) SCJD 189 [Arijit Pasayat, J.: Lokeshwar Singh Panta, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(d)(ii), (o) & (g) — Banking service — Deficiency in, dispute in respect of foreign exchange deposited in FCNR account, non-consideration of rate of exchange and appropriate date of fixation of rate of exchange by State and National Commission while granting decree in favour of consumer, improper — In an action to recover an amount payable in a foreign currency, five dates compete for selection by the court as the proper date for fixing the rate of exchange at which the foreign currency amount has to be converted into the currency of the country in which the action has been commenced and decided — Agencies under the Consumer Protection Act should also keep in mind the economic situation of the country — Respondent, a NRI had placed with the appellant bank US $ 5000 in FCNR Account for 63 months at 9% p.a. interest — Appellant confirmed the deposit — Deposit was to mature on 17.11.1984 — In June 1984 intimation was given to the appellant to reinvest the entire amount in FCNR account on maturity for a further period of six year at 13% p.a. — Respondent alleged that in September, 1990 he had requested bank to reinvest the entire amount for a further period of 3 years — Bank stated that no outstanding amount was in his FCNR account — Record reflect that the said deposit was prematurely withdrawn on 22.11.1979 — Respondent denied the fact of premature withdrawal — Complaint filed before State Commission — Decree passed in favour of respondent by State as well as National Commission — Present appeal challenge the decree of commission — Only two points appear to have been argued by the bank before National Commission i.e. question of premature withdrawal and limitation — However, the claim of the respondent for money decree with interest at the rate of 18% p.a. till realization appears to be on the higher side and inflative — Rate of exchange which is indicative of price and which constantly vary from time to time has not been examined — Neither State Commission nor the National Commission has examined this question regarding selection of the appropriate date, appropriate rate of exchange on that particular date as also the rate of interest which the appellant was required to pay — For this limited purpose alone, court partly allowed the appeal and remit the matter to the state commission to pass the decree in favour of respondent in accordance with law indicated above — Foreign Exchange Regulation Act, 1973 — Section 8.

HELD: Only two points appear to have been argued by the bank before the National Commission, viz., question of premature withdrawal and limitation. However, the claim of the respondent for money decree with interest at the rate of 18% p.a. till realization appears to be on the higher side and inflative. The rate of exchange, which is indicative of price and which constantly varies from time to time, has not been examined. This is apart from awarding of the rate of interest at 18% p.a. which itself is on the higher side. In the case of Forasol v. Oil and Natural Gas Commission [AIR 1984 SC 241] this court observed that in an action to recover an amount payable in a foreign currency, five dates compete for selection by the court as the proper date for fixing the rate of exchange at which the foreign currency amount has to be converted into the currency of the country in which the action has been commenced and decided. These dates are – the date on which the amount became due and payable; the date of the commencement of the action; the date of the decree; the date when the court orders execution to issue; and the date when the decretal amount is paid or realized. The court has to select a date which puts the plaintiff in the same position in which he would have been, had the defendant discharged his obligation when he ought to have done, bearing in mind that the rate of exchange is a fluctuating factor. To select the date when the amount became due, the court has to act in a just, fair and equitable manner because in a case where the rate of exchange has gone up, the opponent escapes by paying a lesser sum than what he was bound to and thus he gains by default while in the converse case where the rate of exchange has gone against the opponent, the opponent would be subjected to a greater burden than what it should be. Apart from the judgment of the Supreme Court in Forasol (supra), we may observe that in such cases, the Agencies under the Consumer Protection Act, 1986 should also keep in mind the economic situation of the country. Encashment of dollar denominated deposits have certain economic implications. In the present case, none of these factors have been considered by the State Commission. In cases of this type, the burden is on the complainant to show the rate of exchange prevalent on the aforestated dates in order to assist the court to arrive at the indicative prices. This has not been done in the present case. Neither the State Commission nor the National Commission has examined this question regarding selection of the appropriate date, the appropriate rate of exchange on that particular date as also the rate of interest which the appellant was required to pay.

For this limited purpose alone, we partly allow the appeal and remit the matter to the State Commission to pass the decree in favour of the respondent herein in accordance with law indicated above. On all other factual findings, we are in agreement with the impugned decision. This appeal is partly allowed with no order as to costs.

Standard Chartered Bank Ltd. v. B.N. Raman [Bench Strength 2], CA No. 2982/2006 (14/07/2006), 2006 AIR(SC) 2810: 2006(Supp-3) SCR 558: 2006(5) SCC 727: 2006(6) JT 368: 2006(7) SCALE 108: 2006(5) Supreme 561: 2006(5) SLT 400: 2006(8) SRJ 204: 2006(132) CompCas 558: 2006(7) SCJD 494 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(d)(ii), (o) & (g) — “Consumer” — Customers of Bank, held, are “consumers” — Bank render service/facility to its customers or even non-customers — They render facilities/services such as remittance, accepting deposits, providing for lockers, facility for discounting of cheques, collection of cheques, issue of bank drafts etc. — Such customers are consumer within the meaning of section 2(1)(d)(ii) — Banking Law — Customers of Bank — Are consumers.

Standard Chartered Bank Ltd. v. B.N. Raman [Bench Strength 2], CA No. 2982/2006 (14/07/2006), 2006 AIR(SC) 2810: 2006(Supp-3) SCR 558: 2006(5) SCC 727: 2006(6) JT 368: 2006(7) SCALE 108: 2006(5) Supreme 561: 2006(5) SLT 400: 2006(8) SRJ 204: 2006(132) CompCas 558: 2006(7) SCJD 494 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 9, 11, 17 & 21 — National Commission; State Commission and District Forum — Functions of, nature and scope of — Act provides for formation of National Commission; State Commission and District Forum — These are remedial agencies — Their functions are quasi judicial — Purpose of these agencies is to decide consumer disputes.

Standard Chartered Bank Ltd. v. B.N. Raman [Bench Strength 2], CA No. 2982/2006 (14/07/2006), 2006 AIR(SC) 2810: 2006(Supp-3) SCR 558: 2006(5) SCC 727: 2006(6) JT 368: 2006(7) SCALE 108: 2006(5) Supreme 561: 2006(5) SLT 400: 2006(8) SRJ 204: 2006(132) CompCas 558: 2006(7) SCJD 494 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Advocates Act, 1961 — Section 33 — “A law for the time being in force” — What is — By virtue of said section on Advocate alone to be entitled to practice before any court or before any authority except as otherwise provided in the Act or in any other law for the time being in force — Whether the Consumer Protection Act, r/w the Rules would be “a law for the time being in force”? — Held, yes — Words and Phrases — A law for the time being in force — Consumer Protection Rules, 1987 — Consumer Protection Act, 1986.

R.D. Nagpal v. Vijay Dutt [Bench Strength 2], CA No. 2531/2006 (08/05/2006), 2011(12) SCC 498: 2006(4) SLT 649 [Ruma Pal, J.: Markandey Katju, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), 14, 18 & 22 — Liability of insurer — Interest on Lapsed Life Insurance Policy, no liability of insurance company to pay — Payment made by LIC by reducing sum payable by treating it as paid-up policy — Liability to pay interest in regard to premiums paid — `K’ obtained a policy for Rs. 5 lakhs under `Money Back Policy Scheme’ for 20 years — Payment of premiums made till 4.6.94 — `K’ opted for revival in August by paying arrears till 4.6.96 with interest — Policy again lapsed from 4.3.97 due to non-payment — Death of `K’ — Widow of K claimed for payment — LIC paid Rs. 1,13,750 as paid up value of policy as per condition 4 of policy — Whether in case of lapsed life insurance policy, the LIC while paying reduced sum payable by treating it as a paid up policy, liable to pay interest in regard to premiums paid from respective dates of payment of premiums to date of settlement — Contract in question not provides for payment of interest on premiums paid — Courts cannot rewrite, contracts and direct payment contrary to terms of contract — Insurance — Interest on Lapsed Life Insurance Policy — No liability of insurance company to pay — Insurance Act, 1938 — Section 46 — Interest Act, 1978 — Sections 3 & 4 — Civil Procedure Code, 1908 — Section 34.

Harshad J. Shah vs. L.I.C. of India, 1997(5) SCC 64, Not applicable.

Satinder Singh vs. Umrao Singh etc., AIR 1961 SC 908, Hirachand Kothari (D) by LRs. vs. State of Rajasthan & Anr., 1985 Supp. SCC 17, Bengal Nagpur Railway Co. Ltd. vs. Rultanji Ramji, AIR 1938 PC 67, Referred.

HELD: At the outset, what would be noticed, is that the amount that is paid by LIC in regard to a lapsed policy, is not “refund of the premiums paid on various dates”, but a reduced lump sum (calculated as per condition no. 4 of the policy) instead of the assured sum. When what is paid by LIC is not refund of premiums, the question of treating the amount paid by LIC as refund of premiums paid and then directing payment of interest thereon from the respective dates of payment of premium does not arise. That would amount to treating the premiums paid in respect of a policy which lapsed by default, as fixed deposits repayable with a hefty rate of interest. Surely, the intention is not to reward defaulting policy holders.

In this case, the contract, that is the insurance policy, provides that if the premium is not paid (after regularly) paying premiums for a period of three full years), the policy shall subsist only as a paid up policy for a reduced sum (calculated as per Table given in Condition No. (4) of the policy) payable on the date of maturity or at the prior death of the life assured. It does not provide for payment of interest on the premiums paid. In fact, the operative portion of the policy specifically provides that no interest will be paid.

Payment of interest on the premium amounts, from the respective dates of remittance of premiums, is alien to the concept of life Insurance. In this case, the assured died on 5.12.1997 prior to the date of maturity. Therefore the reduced sum as a paid up policy became due and payable without any interest on 5.12.1997. The claim was settled by payment of Rs. 113,750/- on 26.3.1998, within three months from the date of intimation of death. Therefore, under the contract, no interest is payable by LIC.

Life Insurance Corporation of India v. S. Sindhu [Bench Strength 2], C.A. No. 4492/2000 (04/05/2006), 2006(2) R.A.J. 588: 2006 AIR(SC) 2366: 2006(Supp-1) SCR 854: 2006(5) SCC 258: 2006(5) JT 484: 2006(5) SCALE 375(2): 2006(4) Supreme 141: 2006(7) SLT 557: 2006(5) SCJ 726: 2006(6) SRJ 484: 2006(131) CompCas 373 [B.N. Srikrishna, J.: R.V. Raveendran, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 3, 2(1)(o), 12, 11, 14, 17 & 21 — Electricity matters — Jurisdiction of consumer forum to decide — Disputed and complicated questions of fact and law relating to Electricity Act — Respondent having small power electric connection — On inspection of premises, seals of meter found broken — Issuance of notice to respondent by calling him to deposit Rs. 10,150/- — No dispute raised by respondent who requested for deposit of amount in 2 instalments — Latter, respondent filed a complaint before the `Forum’ against illegal disconnection — Forum allowed the complaint — Appeal filed before state commission — In the appeal, electricity board disputed the jurisdiction of Forums to decide matters falling under technical subjects such as Electricity Act, 2003 — State Commission dismissed the appeal by a non-speaking order — Revision filed before National Commission also resulted in dismissal — Contentions raised by Board requires deeper consideration — Appeal allowed — Matter remitted to state commission for fresh disposal — Electricity Act, 2003 — Sections 126, 135 & 145.

HELD: In our view, the contentions advanced on behalf of the Nigam require deeper consideration by the State Commission. None of the above points have been discussed by the State Commission in this case. Disputes of this nature are repeatedly arising before this court. At this stage, we do not wish to express any opinion. In our opinion, for the foregoing reasons the civil appeal filed by the Nigam deserves to be allowed and is hereby allowed.

We accordingly direct the State Commission to decide the matter on facts of this case in the light of the provisions of the Electricity Act, 2003 read with the rules framed thereunder.

The impugned orders passed by the State Commission and National Commission are hereby set aside and the matter is remitted to the State Commission for fresh disposal of the complaint in accordance with law and on the points formulated hereinabove.

Haryana State Electricity Board v. Mam Chand [Bench Strength 2], CA No. 2325/2006 (28/04/2006), 2006(4) SCC 649: 2006(5) JT 198: 2006(4) SCALE 652: 2006(4) Supreme 443: 2006(3) SLT 649: 2006(4) SCJ 496: 2006(6) SRJ 280: 2006(5) SCJD 405 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 20(2) — Remuneration and other perks of members of National Commission — Fixation of, by court — Service and Labour Law — Remuneration — Of members of National Commission, determination — Service and Labour Law — Allowance — Of members of National Commission, determination.

HELD: We are of the opinion that w.e.f. 1-4-2006 the remuneration and other perks of the members of the National Commission should be as under:

(1) A sum of Rs. 23,000/- per month would be paid to the Members by way of honorarium. However, it would be open to any of the Member to give an option to get his remuneration paid at the last pay drawn, if he is a Retd. High Court Judge and a Retd. Secretary to the Government of India, upon deduction of pension.

(2) A sum of Rs. 8,000/- per month shall be paid by way of House Rent Allowance, if the Member is not provided with any government accommodation.

(3) Conveyance allowance shall be paid at the rate of Rs. 10,000/- per month, if no Chauffeur driven government vehicle is provided in which event 150 litres of petrol shall be supplied or the price therefor shall be paid.

(4) The Members shall be entitled to 1000 free calls including STD and ISD for the telephone installed at his residence. The Members shall be entitled to casual leave for 15 days per year.

The Lady Members who may be appointed as a Member of the National Commission and who have not held any office of profit earlier may be appointed on the pay scale of Rs. 24050-26,000/- p.m.; all other benefits remaining the same.

State of Uttar Pradesh v. Jeet S. Bisht [Bench Strength 2], IA No. 11, 15 in SLP(C) No. 6928/199 (20/04/2006), 2006(7) SCALE 133 [S.B. Sinha, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
J. & K. Consumer Protection Act, 1986 — Section 17 — Manufacturing defect in car purchased from dealer — Relief to consumer — Replacement of vehicle or repay of the amount of sale price claimed by respondent-complainant allowed by state commission and upheld by High Court — No agreement to replace the engine system — No dispute that when appellant asked the vehicle to be brought for removing the defect, respondent had not done so — Warranty condition clearly refers to replacement of defective part and not of the car — This is not a case of silence of contract of sale as to warranty — High Court therefore not justified in directing replacement of vehicle or repay the amount of sale price — Direction to replace defective part and to pay a consolidated sum of Rs. 50,000/- to respondent for cost of travel to Karnal wrongly advised by appellant and cost of litigation — Consumer Protection Act, 1986 — Sections 14(1)(a), (d), 18, 22 & 23.

HELD: The Commission and the High Court have relied on so called admission of the appellant in para 3 of the objections filed before the Commission. In various documents, more particularly letter dated 19.2.1997 written by respondent no.1 to the appellant, it is clearly stated that appellant had indicated that downing of the engine was necessary to trace the problem. There was no agreement to replace the engine system. Additionally, it is not disputed by learned counsel for the respondent no.1 that when appellant had asked the vehicle to be brought for the aforesaid purpose the respondent no.1 had not done so. To infer that there was any manufacturing defect in the said background is without any foundation.

What is relevant in the case at hand is that the warranty conditions were specially stated. This is not a case of silence of a contract of sale as to warranty. Therefore, the High Court was not justified in directing replacement of the vehicle.

In line with what has been stated in the aforesaid case, we direct as follows:-

1. On respondent no.1 taking the vehicle in question to the authorized service centre of the appellant at Jammu within three weeks, the defective part that is clutches assembly shall be replaced. Respondent no.1 shall not be required to pay any charge for the replacement.

2. In addition, respondent no.1 shall be entitled to receive a consolidated sum of Rs.50,000/- (rupees fifty thousand only) from the appellant for cost of travel to Karnal which admittedly was wrongly advised by the appellant, for the inconvenience caused to respondent no.1 on account of the acts of the appellant and the respondent no.2 and the cost of litigation.

Maruti Udyog Ltd. v. Susheel Kumar Gabgotra [Bench Strength 2], CA No. 3734/2000 (29/03/2006), 2006 AIR(SC) 1586: 2006(3) SCR 603: 2006(4) SCC 644: 2006(4) JT 113: 2006(3) SCALE 611: 2006(3) Supreme 210: 2006(3) SCJ 664: 2006(5) SRJ 207: 2006(5) SCJD 424 [Arijit Pasayat, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21, 18, 22, 2(1)(o) & 14(1)(c) — Flats — Fixation of price of, increased price, charging of, when proper — Allotment of flats — Tentative price fixed in advertisement inviting applications for — Price escalation at the time of issue of allotment letter — Reduction of price to cost as advertised by order of National Commission — Justification — In condition of advertisement inviting application, it is clearly specified that price quoted is purely tentative and based on present cost of construction and likely to be revised on higher side by the time houses are completed — Respondent herself accepted in undertaking to abide by all terms and conditions of allotment letter in which the figure as demanded has been reflected — Nothing in quoted clauses to show that increase was possible only when there was an increase in cost of construction — National Commission clearly in error in reducing the price — Appeal against allowed — Housing — Costs of flats — Increased price, charging of, when proper — Punjab Regional and Town Planning and Development Authority Act, 1995 — Price of flats — Fixation of, increased price, charging of, when proper.

HELD: It is to be noted that the respondent herself had accepted in the undertaking that she accepted the allotment of the house and undertook to abide by all the terms and conditions of the allotment letter. It is not in dispute that in the allotment letter the figure as demanded has been reflected. That being so the respondent was liable to pay the amount as stipulated in the allotment letter.

As there is no dispute that the respondent had in fact filed an affidavit clearly indicating that she undertook to abide by all the terms and conditions of the allotment letter, the amount indicated in the allotment letter was the amount in respect of the allotment of the house. We find nothing in the quoted clause to show that the increase was possible only when there was an increase in the cost of construction. The clause quoted above does not reflect any such intention of the parties.

Above being the position the National Commission was clearly in error granting relief to the respondent. The appeals are allowed. No costs.

Chief Administrator Puda v. Shabnam Virk [Bench Strength 2], CA Nos. 3967-3968/2004 (23/03/2006), 2006 AIR(SC) 1758: 2006(3) SCR 221: 2006(4) SCC 74: 2006(3) JT 563: 2006(3) SCALE 347: 2006(3) Supreme 44: 2006(3) SCJ 720: 2006(4) SRJ 414: 2006(5) SCJD 491 [Arijit Pasayat, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 27 (As prior to its amendment in 2003) — Constitutional validity of — Determination — Plea that forum created under the Act clothed with blanket power to pass orders including order of civil imprisonment, as section 27 does not prescribe any procedure for trial — Proviso to section 27 held by High Court to be unconstitutional and liable to be struck down — Later on said proviso by Amendment Act, 2002 has been omitted and sub-section (2) has been introduced providing to forums, the power of a Judicial Magistrate of first class for trial of offences under the Act — Amendment made effective w.e.f. 15.3.2003 as a result of which, the controversy has become academic — Appeal disposed of accordingly — Constitution of India — Articles 226, 20 & 21.

State of Karnataka v. Parmjit Singh [Bench Strength 2], CA No. 3482/2000 (02/03/2006), 2006 AIR(SC) 1408: 2006(2) SCR 873: 2006(4) SCC 49: 2006(3) JT 386: 2006(3) SCALE 163: 2006(2) Supreme 543: 2006(3) SLT 116: 2006(3) SCJ 176: 2006(4) SRJ 532: 2006(4) SCJD 226 [Arijit Pasayat, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g) & 14 — Deficiency of service — Scope, liability despite expiration of warranty period — EPABX Telephone System Supplied by appellant to respondent — Malfunctioning of — Direction for refund of full cost of said system by commission — One year warranty period in terms of contract of sale between parties — Defect in system pointed out by respondent started within period of warranty — Certain breach of contract of supply are admitted — Appellant had all along been aware that system not functioning properly — Statement of appellant itself that despite expiry of period of warranty it had been attending to complaint as and when made by respondent which were of serious nature — Held, in such circumstances and conduct of appellant warranty period stood extended — Appellant cannot contend that in view of fact that period of warranty expired, it had no liability therefore — Impugned judgment of commission justified and need no interference — Contract Act, 1872 — Section 37 — Sale of Goods Act, 1930 — Section 12.

HELD: The defects in the system pointed out by the respondent in the instant case started within the period of warranty. As noticed hereinbefore, certain breaches of contract of supply are admitted.

The Appellant had all along been aware that the system installed by it had not been functioning properly. On its own showing, it had been attending to the complaints made by the Respondent relating to the functioning of the system. It has categorically been stated by the Appellant itself that despite expiry of the period of warranty it had been attending to the complaints as and when made by the respondent which were of serious nature

From the aforementioned conduct of the Appellant itself, it may be inferred that it voluntarily undertook to meet the requirements of the Respondent relating to mal-functioning etc. of the said system despite expiry of the period of warranty. For all intent and purport, the period of warranty, thus, stood extended. As the defects in the system including manufacturing defects, if any, were found not only during the period of warranty but also during the extended period, and as the Appellant itself undertook to attend to the complaints received in that behalf, in our opinion, it is too late for it now to contend that in view of the fact that the period of contract or warranty expired, it had no liability therefor.

By reason of its own conduct, the Appellant made representation to the Respondent that despite expiry of period of warranty, maintenance of the system to the Respondent’s satisfaction was its contractual obligation. The contract in view of such representation on the part of the Respondent does not come to an end. The contract, if looked in the light of the surrounding circumstances evidently pointed to the intention of the parties and as gathered from the contract itself that the representation of the Appellant should have been treated as warranty for an expended period. Even in a case where the goods are accepted, it is well known, the buyer will have a remedy for damages for the breach of it.

In view of our findings aforementioned and keeping in view the fact that the State Commission and National Commission cannot be said to have acted without jurisdiction, we are of the opinion that no case has been made out for interference with the impugned judgment. The appeal is accordingly dismissed.

Indochem Electronic v. Additional Collector of Customs [Bench Strength 2], CA No. 1273/2006 (24/02/2006), 2006(2) SCR 584: 2006(3) SCC 721: 2006(3) JT 174: 2006(2) SCALE 565: 2006(2) Supreme 331: 2006(2) SLT 658: 2006(3) SCJ 724: 2006(206) ELT 23: 2006(4) SCJD 553 [S.B. Sinha, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14 & 3 — Power of Commission — Scope, effect of breach of stipulation of warranty u/s 12(3) of Sales of Goods Act — Although in terms of section 12(3) no rights accrues to purchaser to reject the goods on breach of stipulation of warranty, the same would not mean that the extent of damage cannot be equivalent to the price of goods inasmuch as such a power has specifically been conferred upon the Commission — Sale of Goods Act, 1930 — Section 12(3).

Indochem Electronic v. Additional Collector of Customs [Bench Strength 2], CA No. 1273/2006 (24/02/2006), 2006(2) SCR 584: 2006(3) SCC 721: 2006(3) JT 174: 2006(2) SCALE 565: 2006(2) Supreme 331: 2006(2) SLT 658: 2006(3) SCJ 724: 2006(206) ELT 23: 2006(4) SCJD 553 [S.B. Sinha, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 14 — Power of forum — Scope — By virtue of section 14 the forum is empowered to issue an order to opposite party directing him to do one or more of the things satisfied therein including — To replace the goods with new goods of similar description which shall be free from any defect — To return to complainant the price or the charges paid by complainant.

Indochem Electronic v. Additional Collector of Customs [Bench Strength 2], CA No. 1273/2006 (24/02/2006), 2006(2) SCR 584: 2006(3) SCC 721: 2006(3) JT 174: 2006(2) SCALE 565: 2006(2) Supreme 331: 2006(2) SLT 658: 2006(3) SCJ 724: 2006(206) ELT 23: 2006(4) SCJD 553 [S.B. Sinha, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Scope and object — Said Act was enacted inter alia to provide for better protection of the interest of the consumers — Provisions of said Act are in addition to and not in derogation of the provision of any other law — Said Act has a wide reach and the commission has jurisdiction even in cases of service rendered by statutory and public authorities.

Ghaziabad Development Authority vs. Balbir Singh, 2004(5) SCC 65, Referred.

Indochem Electronic v. Additional Collector of Customs [Bench Strength 2], CA No. 1273/2006 (24/02/2006), 2006(2) SCR 584: 2006(3) SCC 721: 2006(3) JT 174: 2006(2) SCALE 565: 2006(2) Supreme 331: 2006(2) SLT 658: 2006(3) SCJ 724: 2006(206) ELT 23: 2006(4) SCJD 553 [S.B. Sinha, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 7 & 9(b) — Construction of buildings for Chairman of State Consumer Commission — Allotment of land for — State of U.P. — Direction given that as agreed to earlier an area of 10,000 sq. mts. of land should be allotted for the purpose of construction of buildings for the Chairman of State Consumer Commission — Four weeks further time granted for identification of an appropriate site and report the same to court.

State of Uttar Pradesh v. Jeet S. Bisht [Bench Strength 2], IA No. 8, 11, 15 in SLP(C) No. 6928/1999 (24/01/2006), 2006(7) SCALE 130 [S.B. Sinha, J.: P.P. Naolekar, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 13, 14, 3, 18 & 22 — Proceedings before Commission — Nature of — Applicability of provision of CPC — Held, the proceedings before the commission are not akin to that of a suit, though some of the provisions of CPC are pressed into service as a part of fair procedure while adjudicating the matter.

Tara Chand Jain v. Sir Ganga Ram Hospital [Bench Strength 2], CA No. 6930/1999 (15/12/2005), 2005(Supp-5) SCR 812: 2005(13) SCC 648: 2006(1) JT 349: 2006(1) SCALE 296: 2006(1) Supreme 309: 2006(1) SLT 433: 2006(1) SCJ 452 [Arijit Pasayat, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(g), 23, 22, 18, 13 & 14 — Medical negligence — Claim for compensation on ground of, failure of complainant to establish negligence — Appellant having urinary trouble undergone prostate operation in respondent-hospital — Plea that after discharge he suffered many miseries including problem of continuous urine flow as a result of cut of Sphincter during operation due to negligence of doctor performing operation — Dismissal of complaint by National Commission — Justification — Not a case where commission has not referred to material on record — Failure of complainant to establish allegation of negligence — Failure of appellant to establish that Sphincter was cut during operation — No infirmity in finding recorded by commission to warrant interference.

HELD: It is not a case where the Commission has not referred to the materials on record. On the contrary, on a perusal of the materials placed, the Commission has come to a conclusion that the complainant has failed to establish the allegations of negligence. The proceedings before the Commission are not akin to that of a Suit, though, some of the provisions of the Code of Civil Procedure, 1908 (in short ‘the CPC’) are pressed into service as a part of a fair procedure while adjudicating the matter. The findings recorded by the Commission to the effect that the complainant had failed to establish its allegations of negligence, do not suffer from any infirmity to warrant interference. The pivotal documents i.e. those written by Dr. Ajit Saxena do not in any way substantiate the appellant’s case. They do not establish, as rightly observed by the Commission that the incontinence of appellant was due to cut of sphincter muscle during operation performed by respondent No.2. In the order document (prescription of Dr. B. Rautray) the words “due to sphincter damage” was admittedly scored out by the Doctor. The appeal fails and is dismissed.

Tara Chand Jain v. Sir Ganga Ram Hospital [Bench Strength 2], CA No. 6930/1999 (15/12/2005), 2005(Supp-5) SCR 812: 2005(13) SCC 648: 2006(1) JT 349: 2006(1) SCALE 296: 2006(1) Supreme 309: 2006(1) SLT 433: 2006(1) SCJ 452 [Arijit Pasayat, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 22, 2(1)(g), 14(1)(d) & 18 — Compensation — Award of, by National Commission on incorrect factual basis, unsustainable — Allotment of booth sites to respondent by appellant — Non-payment of instalment as required to be paid by respondent — Issuance of demand notice — Complaint claiming removal of deficiencies in booth and compensation for loss caused by bhatties — National commission proceeded on incorrect factual basis that the bhatties had been removed during pendency of appeal before it — Finding was contrary to records as according to complaint itself, the offending bhatties had already removed in 1994, three years before the complaint was filed by respondent — Further there was no basis for commission to award Rs. 2 lacs to respondent by way of compensation — Decision awarding compensation unjustified and to be set aside.

Haryana Urban Development Authority v. B.K. Sood [Bench Strength 2], CA No. 6572/2005 (26/10/2005), 2006(1) SCC 164: 2005(9) JT 503: 2005(9) SCALE 124: 2005(7) Supreme 467: 2005(8) SLT 146: 2005(8) SCJ 120: 2005(10) SRJ 400: 2006(2) SCJD 406 [Ruma Pal, J.: AR. Lakshmanan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 2(1)(c) — Limitation period for filing complaint — Time barred complaint, delayed complaint without prayer for condonation of delay — Allotment of booth site to respondent by appellant-HUDA — Non- payment of instalments as required to be paid by respondent — Issuance of notice demanding payment — Complaint by respondent claiming removal of certain deficiencies in booth and compensation for damage and a direction to set aside demand notice — Cause of action arose as per respondent, when possession was received of booth site and it was found that an area less than area as advertised was given which happened in 1987 — Bhatties alleged to have caused loss and damage, had been installed before 1989 and removed in 1994 — Complaint before State Commission in 1997 — There was even no prayer in complaint for condoning delay — Claim clearly barred by limitation as the two years period prescribed by section 24-A of Act had expired much before the complaint admitted by State Commission — Decision of National Commission directing appellant to pay compensation to be set aside.

HELD: Section 24-A of the Consumer Protection Act, 1986 (referred to as the Act hereafter) expressly cast a duty on the Commission admitting a complaint, to dismiss a complaint unless the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that the complainant had sufficient cause for not filing the complaint within the period of two years from the date on which the cause of action had arisen.

The Section debars any fora set up under Act, admitting a complaint unless the complaint is filed within two years from the date of which the cause of action has arisen. Neither the National Commission nor the State Commission had considered the preliminary objections raised by the appellant that the claim of the respondent was barred by time. According to the complaint filed by the respondent, the cause of action arose when, according to the respondent, possession was received of the booth site and it was allegedly found that an area less than the area advertised had been given. This happened in January, 1987. Furthermore, the bhatties which were alleged to have caused loss and damage to the respondent, as stated in the complaint, had been installed before 1989 and removed in 1994. The complaint before the State Commission was filed by the respondent in 1997, ten years after the taking of possession, eight years after the cause of alleged damage commenced and three years after that cause ceased. There was not even any prayer by the respondent in his complaint for condoning the delay.

Therefore, the claim of the respondent on the basis of the allegations contained in the complaint, was clearly barred by limitation as the two year period prescribed by Section 24A of the Act had expired much before the complaint was admitted by the State Commission. This finding is sufficient for allowing the appeal.

Himachal Pradesh Housing & Urban Development Authority v. Shyam Singh Negi [Bench Strength 2], CA No. 6044/2005 (30/09/2005), 2006(9) SCC 224 [B.N. Agrawal, J.: A.K. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 9, 10 & 16 — Vacancies in State Commission and District Forums in different states — Filling up of — Vacancies not filled up for a long time — Issue notice to concerned states to ascertain facts as to why the vacancies not filled up — Proposal for enhancement of honorarium and other perks of Members of National Commission.

HELD: Prima facie, we are of the opinion that so far as the Members who have earlier held office as a Judge or under the government are concerned, the formula for payment of honorarium calculated on the basis of last pay drawn minus pension is very reasonable and commonly accepted formula and there should not be any difficulty in accepting the same for fixing the honorarium of such Members. For such Members as belong to the category other than the one mentioned above, a reasonable amount of honorarium and perks may be fixed.

State of Uttar Pradesh v. Jeet S. Bisht [Bench Strength 3], IA Nos. 8, 11, 15 in SLP(C) No. 6928/1999 (27/09/2005), 2005(9) SCALE 425: 2005(8) SLT 875 [R.C. Lahoti, C.J.: G.P. Mathur, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14, 17, 21, 2(1)(g) & 23 — Jurisdiction of consumer forums — Determination, finding of facts, interference in, by Supreme Court, impermissibility — Loss to Unit Holders by fraud intercepting cheques sent to them by post towards maturity amount and withdrawing monies by opening new account in name of payees of cheques — Various complaints before various consumer forums — Jurisdiction of consumer forums to adjudicate the matter — Plea that there was no deficiency of service as there was no negligence on the part of appellant-UTI and thus abovesaid matter not to fall within the jurisdiction of Consumer Forum — All the forums have on facts held that there was an obligation on appellants to send the money and that there was negligence — Since these are questions of facts and not to be interfered by this Court — Constitution of India — Article 136 — Questions of facts — Interference in, impermissibility — Unit Trust of India Act, 1963 — Sections 20, 21 & 3.

Unit Trust of India v. Ravinder Kumar Shukla [Bench Strength 2], CA No. 1619/2005 (19/09/2005), 2005 AIR(SC) 3528: 2005(Supp-3) SCR 281: 2005(7) SCC 428: 2005(12) JT 345: 2005(7) SCALE 364: 2005(6) Supreme 362: 2005(7) SLT 104: 2005(7) SCJ 280: 2005(10) SRJ 438: 2005(127) CompCas 559 [S.N. Variava, J.: AR. Lakshmanan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(g), (o), 14, 18 & 22 — Unit Trust of India — Payment of maturity amount by, through post, loss to unit holders on account of not getting the cheques due to negligence of UTI, liability of UTI or Post Office, determination — Fraud by intercepting cheques sent to unit holder by post towards maturity amount and withdrawing monies by opening new accounts in name of payees of cheques — Non-receiving of cheques by 1600 unit holders of the value of approximately Rs. 3 crores 35 lakhs — Large number of complaints in various District Forums — Consumer Forums held that appellants are bound to pay the amount to unit holders — No proof of any contract that amount to be sent by post or no proof that any request had been made by any of payee that amount be sent by post — Held, mere posting would not amount to payment to unit holders — In such circumstances, the post office to continue to act as agent of appellant and thus the loss is of appellant and is to be borne by it — Consumer forums justified in holding appellants liable to pay amount to unit holders — Unit Trust of India Act, 1963 — Sections 20, 21 & 3 — Contract Act, 1872 — Sections 50(d), 184 & 182.

Commissioner of Income Tax, Bombay v. Ogale Glass Works Ltd., 1955(1) SCR 185, Referred.

HELD: The law is that in the absence of any contract or request from the payee, mere posting would not amount to payment. In cases where there is no contract or request, either express or implied, the post office would continue to act as the agent of the drawer. In that case the loss is of the drawer.

We, therefore, asked Mr. Bhat whether in any of the matters there was any proof of any contract that the amounts could be sent by post or any proof that any request had been made by any of the payees that the amount be sent by post. Mr. Bhat was also asked whether there was any proof of any practice from which it can be implied that the payee had requested/consented to have the cheques sent by post. Time was taken from this Court on two occasions in order to ascertain whether in any of the matters any such proof had been filed. After making inquiries and taking inspections of the papers from the lower Forums, Mr. Bhat very fairly stated that there was no proof in any of these matters.

All the Forums have on facts held that there was an obligation to send the amounts and that there was negligence. These are questions of facts. We see no reason to interfere on questions of facts.

New India Assurance Co. Ltd. v. Sudhanshu Mohan Satpathy [Bench Strength 2], CA No. 5778/2005 (16/09/2005), 2005(13) SCC 123 [S.N. Variava, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Monopolies and Restrictive Trade Practices Act, 1969 — Section 12-B — Interest — Rate of — Housing — Allotment of flat — Stay of construction — Non-delivery of possession, deficiency of service, determination — Appellant-authority continued to accept instalments even after stay of construction by court — No intimation given by appellant to depositors as to stoppage of construction due to court order — No steps taken by appellant to enquire about depositor’s intentions as to return of monies — No reason why appellants not offered to return money — In such circumstances, moneys should be returned with interest @ 18% p.a. — Housing — Allotment of flat — Failure of, despite accepting installments, interest on refunded amount — Consumer Protection Act, 1986 — Sections 2(1)(g), 14(1)(d), 18 & 22(1) — Civil Procedure Code, 1908 — Section 34.

HELD: We see no substance in the submission that there was no deficiency of service. There is no reason why the appellants continued to accept the instalments even after the Allahabad High Court stayed construction. To be noted that the last instalment was paid and received on 30-12-1991 i.e. after the stay had been granted by the Allahabad High Court. If, as claimed, there was a stay and they thus could not construct and deliver possession, the appellants should have immediately written to all the allottees, from whom they had taken the monies inquiring whether they wanted their monies to be returned as the appellants would not be in a position to deliver possession for a long period of time. Admittedly, the appellants have not written any such letter nor returned the monies. Even after the stay was vacated and in 1994 they were ready to allot, they should have returned monies of allottees who did not consent to the increased price. Admittedly they received no reply from the respondent. There is no reason why they did not offer to return the monies. The appellants have used the respondent’s money. It is therefore fair that the monies should be returned with interest. This Court has already held, in the abovementioned case, that in such cases interest should be @ 18% p.a.

We, therefore, see no substance in this appeal. The same stands dismissed with no order as to costs.

The amount is to be refunded with interest at 18% p.a. within a period of six weeks from today. If the amounts are not paid within the said period, the interest will be @ 24% p.a.

Ghaziabad Development Authority v. Soma Devi [Bench Strength 3], CA No. 3905/1999 (31/08/2005), 2005(13) SCC 459 [S.N. Variava, J.: C.K. Thakker, J.: Tarun Chatterjee, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical negligence — Liability of doctor, absence of proof of, effect, compensation already paid not to be recovered — Unwanted pregnancy and unwanted child due to failure of sterilization operation — Liability of doctor performing operation and vicarious liability of State — Suit for damages decreed against State on the principle of vicarious liability — Absence of proof of negligence of doctor performing operation for failure of operation — Doctor cannot be held liable to pay compensation — Then the question of State being held vicariously liable also not to arise — Decree therefore cannot be upheld and liable to be set aside — However, any amount paid by State not to be liable to be refunded by way of restitution as the plaintiffs in all cases are poor persons — Payment already made to be treated by State as ex gratia payment — Torts — Vicarious liability — Scope — Torts — Compensation — No proof of negligence, effect, compensation already paid not to be recovered — Medical Termination of Pregnancy Act, 1971 — Section 3 — Contract Act, 1872 — Section 37 — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

HELD: The doctor can be held liable only in cases where the failure of the operation is attributable to his negligence and not otherwise. Several textbooks on medical negligence have recognized the percentage of failure of the sterilization operation due to natural causes to be varying between 0.3% to 7% depending on the techniques or method chosen for performing the surgery out of the several prevalent and acceptable ones in medical science. The fallopian tubes which are cut and sealed may reunite and the woman may conceive though the surgery was performed by a proficient doctor successfully by adopting a technique recognized by medical science. Thus, the pregnancy can be for reasons de hors and negligence of the surgeon. In the absence of proof of negligence, the surgeon cannot be held liable to pay compensation. Then the question of the State being held vicariously liable also would not arise. The decrees cannot, therefore, be upheld.

However, the learned counsel for the appellant-State stated at the very outset that the plaintiffs in all these cases are poor persons and the State was not interested in depriving the decree-holders of the payment made in satisfaction of the decrees but the State was certainly interested in having the question of law settled. The stand taken by the appellant-State has been that in spite of the decrees under appeal having been set aside, any payment already made thereunder would be treated by the State as ex gratia payment.

The judgments and decrees under appeals are set aside. All the suits filed by the plaintiffs-respondents are dismissed. There will be no order as to costs throughout. However, any amount paid by the appellant-State to the plaintiffs-decree holders shall not be liable to be refunded by way of restitution.

State of Haryana v. Raj Rani [Bench Strength 3], CA No. 2743/2002 (29/08/2005), 2005 AIR(SC) 3279: 2005(Supp-2) SCR 1027: 2005(7) SCC 22: 2005(8) JT 56: 2005(7) SCALE 1: 2005(6) Supreme 56: 2005(6) SLT 527: 2005(6) SCJ 546: 2005(8) SRJ 364 [R.C. Lahoti, C.J.: G.P. Mathur, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical negligence — Liability of doctor, requirement for holding — Child birth in spite of a sterilization operation — Liability of doctor performing operation — Doctor can be held liable only in cases where the failure of operation is attributable to his negligence and not otherwise, as the pregnancy can be for reasons de hors any negligence of the surgeon — Medical Termination of Pregnancy Act, 1971 — Section 3 — Contract Act, 1872 — Section 37 — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

State of Punjab vs. Shiv Ram, CA 5128/2002, Decided on 25.8.2005, Referred.

State of Haryana v. Raj Rani [Bench Strength 3], CA No. 2743/2002 (29/08/2005), 2005 AIR(SC) 3279: 2005(Supp-2) SCR 1027: 2005(7) SCC 22: 2005(8) JT 56: 2005(7) SCALE 1: 2005(6) Supreme 56: 2005(6) SLT 527: 2005(6) SCJ 546: 2005(8) SRJ 364 [R.C. Lahoti, C.J.: G.P. Mathur, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Words and Phrases — Negligence — Meaning of — Negligence is the breach of a duty caused by omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do or doing something which a prudent and reasonable man would not do — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

State of Punjab v. Shiv Ram [Bench Strength 3], CA No. 5128/2002 (25/08/2005), 2005 AIR(SC) 3280: 2005(Supp-2) SCR 991: 2005(7) SCC 1: 2005(7) JT 606: 2005(6) SCALE 770: 2005(6) Supreme 58: 2005(6) SLT 498: 2005(6) SCJ 525: 2005(8) SRJ 249 [R.C. Lahoti, C.J.: C.K. Thakker, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical Negligence — Failure of sterilization operation, cause of, determination of, procedure of — Cause of failure leading to logical inference of negligence on the part of operating surgeon — Cause of failure may be obtained from Laparoscopic inspection of uterine tubes or by X-Ray examination or by pathological examination of material removed at a subsequent operation of re-sterilization — Discrepancy between operation noted and result of X-ray films in respect of number of rings or clips or nylon sutures used for occlusion of tubes will lead to logical inference of negligence on the part of gynecologist in case of failure of sterilization operation — Medical Termination of Pregnancy Act, 1971 — Section 3 — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

Law of Medical Negligence and compensation by R.K. Bag, 2nd Edn., Referred.

State of Punjab v. Shiv Ram [Bench Strength 3], CA No. 5128/2002 (25/08/2005), 2005 AIR(SC) 3280: 2005(Supp-2) SCR 991: 2005(7) SCC 1: 2005(7) JT 606: 2005(6) SCALE 770: 2005(6) Supreme 58: 2005(6) SLT 498: 2005(6) SCJ 525: 2005(8) SRJ 249 [R.C. Lahoti, C.J.: C.K. Thakker, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Medical Termination of Pregnancy Act, 1971 — Section 3(2) — Medical negligence — Compensation, requirement to claim, failure due to natural cause would not provide any ground for claim — Failure of sterilization operation — Women undergoing said operation became pregnant and delivered a child — Suit for damages or compensation — Liability of operating Surgeon or his employer — Determination — No allegation that operating surgeon not competent to perform the surgery — Neither the case of plaintiff nor finding of court below that operating surgeon was negligent in performing surgery — Not a case where surgeon performing surgery has committed breach of any duty cast on her as a surgeon — Pure and simple case of sterilization operation having failed though duty performed — Failure due to natural cause would not provide any ground for claim — No liability of operating surgeon or his employer for compensation on account of unwanted pregnancy or unwanted child — Decree for compensation passed by Court below unsustainable and to be set aside — Consumer Protection Act, 1986 — Section 2(1)(g) & (o) — Torts — Medical negligence — Damages or compensation, requirement to claim — Contract Act, 1872 — Section 37.

HELD: The plaintiffs have not alleged that the lady surgeon who performed the sterilization operation was not competent to perform the surgery and yet ventured into doing it. It is neither the case of the plaintiffs, nor has any finding been arrived at by any of the courts below that the lady surgeon was negligent in performing the surgery. The present one is not a case where the surgeon who performed the surgery has committed breach of any duty cast on her as a surgeon. The surgery was performed by a technique known and recognized by medical science. It is a pure and simple case of sterilization operation having failed though duly performed. The learned Additional Advocate General has also very fairly not disputed the vicarious liability of the State, if only its employee doctor is found to have performed the surgery negligently and if the unwanted pregnancy thereafter is attributable to such negligent act or omission on the part of the employee doctor of the State.

We are, therefore, clearly of the opinion that merely because a woman having undergone a sterilization operation became pregnant and delivered a child, the operating surgeon or his employer cannot be held liable for compensation on account of unwanted pregnancy or unwanted child. The claim in tort can be sustained only if there was negligence on the part of the surgeon in performing the surgery. The proof of negligence shall have to satisfy Bolam’s test. So also, the surgeon cannot be held liable in contract unless the plaintiff alleges and proves that the surgeon had assured 100 % exclusion of pregnancy after the surgery and was only on the basis of such assurance that the plaintiff was persuaded to undergo surgery. As noted in various decisions which we have referred to hereinabove, ordinarily a surgeon does not offer such guarantee.

The cause of action for claiming compensation in cases of failed sterilization operation arises on account of negligence of the surgeon and not on account of child birth. Failure due to natural causes would not provide any ground for claim. It is for the woman who has conceived the child to go or not to go for medical termination of pregnancy. Having gathered the knowledge of conception in spite of having undergone sterilization operation, if the couple opts for bearing the child, it ceases to be an unwanted child. Compensation for maintenance and upbringing of such a child cannot be claimed.

For the foregoing reasons, we are of the opinion that the judgments and the decrees passed by the High Court and courts below cannot be sustained. The trial court has proceeded to pass a decree of damages in favour of the plaintiffs-respondents solely on the ground that in spite of the plaintiff-respondent No.2 having undergone a sterilization operation, she became pregnant. No finding has been arrived at that will hold the operating surgeon or its employer – the State, liable for damages either in contract or in tort. The error committed by the trial court, though pointed out to the first appellate court and the High Court, has been overlooked. The appeal has, therefore, to be allowed and the judgment and decree under appeal have to be set aside.

State of Punjab v. Shiv Ram [Bench Strength 3], CA No. 5128/2002 (25/08/2005), 2005 AIR(SC) 3280: 2005(Supp-2) SCR 991: 2005(7) SCC 1: 2005(7) JT 606: 2005(6) SCALE 770: 2005(6) Supreme 58: 2005(6) SLT 498: 2005(6) SCJ 525: 2005(8) SRJ 249 [R.C. Lahoti, C.J.: C.K. Thakker, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Bihar State Housing Board (Management and Disposal of Housing Estate) Regulations, 1983 — Regulation 45 — Interest — Rate of, award of interest contrary to as provided in relevant statute, unsustainable — Earnest money deposited by respondent for allotment of MIG House — As per Regulation Interest @ 5% payable on amount of earnest money — As per draw of lottery respondent could not be allotted a house — Refund of amount of earnest money without any interest to respondent by appellant-Board — Commission on complaint directed appellant to refund the amount of earnest money with 18% interest — Held, interest payable under Regulation being regulated by statute, the commission should not have travelled beyond the pale of statutory Regulation — Impugned order unsustainable and to be set aside — Respondent entitled to interest @ 5% as envisaged under Regulation 45 — Award of compensation of Rs. 5000/- also to be set aside — Housing — Interest — Rate of, on the amount of earnest money, interest more than as provided in relevant statute, impermissible — Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d) & 23.

HELD: Learned counsel for the appellant contended and in our opinion rightly, that the Commission should not have travelled beyond the interest regulated by the statutory regulation, which fixed at 5% and awarding 18% interest dehors the Regulation 45 of the said Regulation. In the instant case, in the Regulation itself namely Regulation 45 provides that the simple interest @ 5% will be payable on the money so deposited. The Regulation being self-contained and the interest payable under the Regulation being regulated by the statute under Regulation 45 of the Bihar State Housing Board Regulation, the Commission should not have travelled beyond the pale of statutory Regulation, apart from awarding interest @ 18% at the flat rate being deprecated by this Court in Balbir Singh (supra).

For the reasons aforestated, the impugned orders are not sustainable in law and they are being quashed and set-aside. The respondent is entitled to interest @ 5% as envisaged under the Regulation 45. The Award of compensation of Rs. 5000/- is also set-aside. The appeal is allowed.

Bihar State Housing Board v. Arun Dakshy [Bench Strength 2], CA No. 7225/2002 (23/08/2005), 2005 AIR(SC) 3483: 2005(Supp-2) SCR 819: 2005(7) SCC 103: 2005(12) JT 19: 2005(6) SCALE 667: 2005(5) Supreme 729: 2005(6) SLT 381: 2005(7) SCJ 6: 2005(8) SRJ 266 [Arijit Pasayat, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(o), (g), 14(1)(d) & 23 — Housing — Non-delivery of housing plot despite receiving full payment, effect, interest or plot to be allotted and not the both — Grant of interest by way of damage and compensation by District Forum, State and National Commission — Grievance of appellant that Commission failed to direct GDA either to hand over the allotted plot or in alternate allot a plot in subsequent scheme at original cost — Contention not tenable as appellant is not permitted to say that he is entitled both the best of the world — As the interest @ 18% is granted by way of damage and compensation for non-allotment of plot of land, grievance of appellant unsustainable — Housing — Interest or allotment — Entitlement for, non-delivery of housing plot despite receiving full payment, effect, interest or plot to be allotted and not the both — Civil Procedure Code, 1908 — Section 34.

HELD: In our view, therefore, having regard the facts and circumstances of the case in hand are squarely covered by the decision of this Court in Balbir Singh (supra). In this view of the matter, we are of the view that nothing remains to be considered further, though we deprecate the conduct of concerned authority, as already pointed out.

For the reasons aforestated, the appeal stands dismissed with no order as to costs.

In the case of Ghaziabad Development Authority vs. Balbir Singh, (2004) 5 SCC 65 facts of this case have also been considered elaborately by this Court (in para 12 at page 82 SCC) justifying the grant of interest @ 18% per annum by way of damages and compensation.

In the given facts and circumstances of the case, as recited above, we are clearly of the view that the grant of interest @ 18% per annum was justified in the present case also.

Brij Pal Sharma v. Ghaziabad Development Authority [Bench Strength 2], CA No. 5122/2005 (18/08/2005), 2005 AIR(SC) 4282: 2005(Supp-2) SCR 768: 2005(7) SCC 106: 2005(12) JT 21: 2005(6) SCALE 613: 2005(5) Supreme 722: 2005(6) SLT 365: 2005(6) SCJ 67: 2005(8) SRJ 268 [Arijit Pasayat, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Electricity Act, 1910 — Sections 22 & 24 — State Electricity Board — Performance of functions by — Circulars known as sales manual and abridged condition of supply — Failure by Board to supply electrical energy to a large number of agriculturists — Board being found guilty of deficiency in service by District forum was directed to give connection to respondents within specified period and also to pay compensation — National Commission directed to release connections to all applicants by 31.3.2004 and also to pay interest @ 12% p.a. on deposited security amount and compensation of Rs. 10,000/- each to them — Justification — Obligation and statutory requirement in terms of regulations and its own circulars not complied with by Board — Further for any internal matter between State and Board, the prospective consumers not to suffer therefore — No fault in judgment of National Commission — However, as all connections has been given to respondents within period 31.3.2004, appellant in the interest of justice to be directed to pay interest @ 9% p.a. and compensation of Rs. 5000/- in each — Electricity (Supply) Act, 1948 — Sections 5, 26, 48 & 79(j) — Consumer Protection Act, 1986 — Sections 2(g), (o) & 21 — Punjab State Electricity Board Sales Regulations, 1999 — Regulations 24.6 & 24.8.

HELD: The Board is a statutory authority. It is a ‘State’ within the meaning of Article 12 of the Constitution of India. As a State, the Board is expected to discharge its statutory functions within a reasonable time having regard to the fact that it undertakes an important public utility service. Its actions besides being governed by the Electricity (Supply) Act and the regulations framed thereunder, it must also fulfill the test of reasonableness as envisioned under Article 14 of the Constitution of India.

We find from the records that the persons had applied for grant of electrical connection as far back in 1986 and the Board had asked then to deposit the security amount only sometimes in the year 1999. The complaints were filed as despite expiry of the prescribed period, no electrical connection was given. If the Board was serious to implement its own circular, it was obligatory on its part to draw a blue-print so as to enable it to make supply of electrical energy to the consumers in order of seniority of application upon procuring the requisite materials therefor. It failed and/ or neglected to do so. It was also under an obligation to notify the persons concerned stating the reasons why such supply could not be made during the period specified in the administrative circular and/or regulations. The Board does not say that the said requirements were complied with.

It is also idle to contend that the Board was cash-starved owing to any faulty decision on the part of the State. If it suffered losses owing to any direction issued by the State pursuant to any policy decision adopted by it, the same being an internal matter between the State and the Board, the prospective consumers cannot suffer therefor.

In this case, apparently, the Board was not in a position to supply electrical energy to the consumers within a reasonable time from the date of issuance of the demand notice. It not only failed to supply electrical energy to the 71 complainants who were before the National Commission but even failed to supply electrical energy to those who had applied much prior thereto. Before the State Commission and the National Commission, the primal contention of the Board was that the claimants- Respondents could not have been given a march over others who had filed applications prior to them. The National Commission rightly did not find fault with such contention but secured the presence of the Chief Engineer of the Board only for the purpose of ascertaining as to how soon supply of electrical energy could be ensured to all concerned including the claimants-Respondents.

Faced with the orders passed by the District Forums and State Commission and having regard to its own stand taken before the National Commission, the Chief Engineer gave an undertaking that all such connections would be given by 31st March, 2004. From the aforementioned conduct of the authorities of the Board, we have no doubt in our mind had the claimants-Respondents not knocked the doors of the forum under the Consumer Protection Act, they might not have even obtained electrical connection for years to come.

In the premises aforementioned, the Commission, in our opinion, has rightly found that the Board having not made itself ready to supply electrical energy to the agriculturists unjustly enriched itself with the money deposited by the complainants without rendering any service in return. It is evident that the Board wanted to fill its coffer with the amount of the security deposits and other deposits made by the prospective buyers of electricity. It has also not been denied that relying on or on the basis of the representations made by the Board in terms of its circular letters and/or regulations, the prospective consumers also spent a huge amount on construction of kotha and making themselves ready for getting the electrical connection.

We do not, therefore, find any fault in the judgments of the National Commission. However, before us a statement has been made that all connections have been given to the claimants-Respondents within the period of aforementioned 31.3.2004.

Keeping in view the said fact as also the peculiar facts and circumstances of this case, we are of the opinion that the interest of justice shall be sub-served if the directions issued by the National Commission is modified to the extent that in stead and place of interest at the rate of 12% per annum, the Appellants are directed to pay interest at the rate of 9% per annum and in stead of compensation at the rate of Rs. 10,000/- in each, compensation of Rs. 5000/- in each is directed to be awarded.

Punjab State Electricity Board Ltd. v. Zora Singh [Bench Strength 2], CA Nos. 4910-4981/2005 (11/08/2005), 2006 AIR(SC) 182: 2005(Supp-2) SCR 524: 2005(6) SCC 776: 2005(7) JT 258: 2005(6) SCALE 457: 2005(5) Supreme 660: 2005(6) SLT 243: 2005(6) SCJ 197: 2005(7) SRJ 326 [Ashok Bhan, J.: S.B. Sinha, J.] <<LAWPACK SUPREME COURT>>
Monopolies and Restrictive Trade Practices Act, 1969 — Section 12-B — Housing — Allotment of plot, failure, rate of interest on refunded amount — Non-delivery of possession despite payment of consideration of Rs. 4,20,020/- — MRTP Commission directed for refund of Rs. 4,20,020/- with 18% interest — Plea of appellant that as respondent not accepted the offer of possession, liability to pay interest not arises — However, no evidence on record to show completion of development work and plot being ready for possession — Respondent entitled to interest @ 18% p.a. from date of deposit till date of payment — Respondent would also be entitled to the amount of Rs. 10,000 towards mental agony and pain as awarded by the Commission as well as the cost of Rs. 5000 awarded by the Commission — Appellant directed to pay the interest amount within six weeks from today, failing which it would be liable to pay further interest at the rate of 12% per annum on the amount of interest due till actual payment — Housing — Allotment of plot — Failure, rate of interest on refunded amount — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Section 37 — Consumer Protection Act, 1986 — Sections 14(1)(d), 18 & 23.

Ghaziabad Development Authority vs. Balbir Singh, 2004(5) SCC 65, Ghaziabad Development Authority vs. Balbir Singh, 2005(9) SCC 573, Referred.

Ghaziabad Development Authority v. Hardev Kumar Sehgal [Bench Strength 2], CA No. 2489/1998 (10/08/2005), 2005(13) SCC 155 [Ashok Bhan, J.: S.B. Sinha, J.] <<LAWPACK SUPREME COURT>>
Criminal Law — Medical negligence — Consideration to be kept in mind by a forum while trying the issue of — These are — (i) That legal and disciplinary procedure should be properly founded on firm, moral and scientific grounds — (ii) that patients will be better served if the real cause of harm are properly identified and appropriately acted upon — (iii) that many incidents involve a contribution from more than one person and the tendency is to blame the last identifiable element in chain of causation – the person holding the `smoking gun’ — Criminal Law — Medical negligence — Consideration to be kept in mind by a forum while trying the issue of — Penal Code, 1860 — Sections 304-A, 88 & 92 — Torts — Medical negligence — Consideration to be kept in mind by a forum while trying the issue of — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

Jacob Mathew v. State of Punjab [Bench Strength 3], CrA Nos. 144-145/2004 (05/08/2005), 2005 AIR(SC) 3180: 2005(Supp-2) SCR 307: 2005(6) SCC 1: 2005(6) JT 584: 2005(6) SCALE 130: 2005(5) Supreme 297: 2005(6) SLT 1: 2005(5) SCJ 601: 2005(8) SRJ 50: 2005 CrLJ 3710: 2005(3) Crimes 63(SC): 2005(2) JCC 1242: 2005(3) RecentCR 836: 2005(6) CRJ 339 [R.C. Lahoti, C.J.: G.P. Mathur, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Torts — Medical negligence — Evidence for existence of — A mere deviation from normal professional practice is not necessarily evidence of negligence — A mere accident is also not evidence of negligence — An error of judgment on part of professional also is not negligence per se — A medical practitioner cannot be held negligent merely because he choose to follow one procedure and not another and result was a failure — Consumer Protection Act, 1986 — Section 2(1)(g) & (o) — Criminal Law — Negligence — Evidence for existence of — Penal Code, 1860 — Section 304-A.

Jacob Mathew v. State of Punjab [Bench Strength 3], CrA Nos. 144-145/2004 (05/08/2005), 2005 AIR(SC) 3180: 2005(Supp-2) SCR 307: 2005(6) SCC 1: 2005(6) JT 584: 2005(6) SCALE 130: 2005(5) Supreme 297: 2005(6) SLT 1: 2005(5) SCJ 601: 2005(8) SRJ 50: 2005 CrLJ 3710: 2005(3) Crimes 63(SC): 2005(2) JCC 1242: 2005(3) RecentCR 836: 2005(6) CRJ 339 [R.C. Lahoti, C.J.: G.P. Mathur, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Insurance — Life Insurance Policy — Premium for, proper time to make payment of — As per condition-2 of policy payment of premium due had to be made within a grace period of one month — Thus if such payment is made within said period, the policy would be treated as valid but if premium is not paid before expiry of date of grace, policy would lapse and cannot be said to be valid — Consumer Protection Act, 1986 — Sections 12 & 2(1)(o).

Life Insurance Corporation of India v. Mani Ram [Bench Strength 3], CA No. 4806/2005 (05/08/2005), 2005 AIR(SC) 3349: 2005(Supp-2) SCR 342: 2005(6) SCC 274: 2005(7) JT 240: 2005(6) SCALE 124: 2005(5) Supreme 737: 2005(6) SLT 210: 2005(6) SCJ 378: 2005(7) SRJ 548: 2005(126) CompCas 905 [R.C. Lahoti, C.J.: C.K. Thakker, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 12 & 2(1)(o) — Insurance policy — Operative period of, default in payment of premium, lapse of policy, determination — Insurance claim — Liability of Insurance Company — Policy lapsed on account of non-payment of premium within grace period — Life insurance policy for Rs. 50,000/- on 21.8.1995 on which premium was paid — Policy was back dated on request of insured to 28.4.1995 and thus next premium due and payable after one year on 28.4.1996 — Premium not paid on 28.4.1996 nor within grace period of one month — Death of deceased on 2.8.1996 — District forum held that since deceased was assured on 21.8.1995, next premium became due on 21.8.1996 and thus insurance company is liable as policy not to be said to be lapsed — When policy back dated on request of insured itself and according to which next premium due became payable on 28.4.1996, it cannot be contended that the next premium is payable on 21.8.1996 — Since no premium was paid on 28.4.1996 or within grace period, policy lapsed on 28.5.1996 — Insurance company not liable to claim — Order passed by fora below unjustified and liable to be set aside — Insurance — Liability of Insurance Company — Policy lapsed on account of non-payment of premium within grace period, effect.

HELD: It is abundantly clear that payment of premium due had to be made within a grace period of one month. If such payment was made within the said period, the policy would be treated as valid and the assured would be paid the amount to which he was entitled after deducting the premium amount. But it was also made clear that if the premium was not paid before the expiry of the days of grace, the policy would lapse. As we have already observed hereinabove, the material date was not the date of deposit/payment of premium amount which was August 21, 1995, but the date of policy which was April 28, 1995. Since it was yearly, the payment was due on April 28, 1996, but the assured was entitled to grace period of one month up to May 28, 1996. Neither the premium was paid on April 28, 1996 nor on May 28, 1996. As per condition No. 2, policy lapsed on May 28, 1996. In the eye of law, there was no subsisting policy, on August 2, 1996. Insurance Company was, therefore, wholly justified in rejecting the claim of the complainant and no exception can be taken against such a decision.

In the instant case, Condition 2 expressly provided the period during which the payment was to be made. It also in no uncertain terms stated that if premium was not paid before the expiry of grace period, the policy would lapse. In our view, the ratio in Dharam Vir Anand would support the Insurance Company rather than the complainant. If all the terms and conditions of the policy (contract between the parties) have to be kept in mind and given effect to, acceptance of argument on behalf of the complainant would make the last part of Condition 2 redundant, otiose and inoperative; and a court of law cannot construe a document in the manner suggested by the counsel for the complainant. As the premium was due on April 28, 1996 and was not paid till May 28, 1996, the policy lapsed. The Fora below hence, committed an error of law in allowing the complaint of the respondent herein and the orders are liable to be set aside.

For the reasons stated above, the appeal deserves to be allowed and is accordingly allowed. The orders passed by all the three Commissions are hereby set aside.

South Sydney District Rugby League Football Club Ltd. vs. News Ltd. and Others [177 ALR 611], Referred.

HELD: Having induced the employer to act as a model employer and discharge its social obligations vis-a-vis its employees it may not be permissible for a ‘State’ within the meaning of Article 12 of the Constitution to contend at this belated stage that in the event of default on the part of the employer, it may get itself discharged from its contractual obligations in such a cavalier manner.

The Scheme clearly provides that in the event of cessation of employment the concerned employee if continues his employment under a new employer, the former employer has to inform the Corporation thereabout. Furthermore, upon retirement or in situations other than taking up of any job with any other employer, the employee would be entitled to continue with the policy but therefor, he will have to pay a higher premium. Even at that stage, the Corporation would have a duty to inform the employee concerned towards his right. Even in case of non-payment of premium for any reason whatsoever, in view of the object the Scheme seeks to achieve, it was the duty of the insurer to inform the employee about the consequences of non-receipt of such premium from the employer. The Corporation has failed or neglected to do so. In that view of the matter, we do not find any reason to take a different view.

In terms of the Scheme, significantly the employee for all transactions was required to contact his employer only. In view of our findings aforementioned, the Corporation, thus, cannot be permitted to take a different stand so as to make the employee suffer the consequences emanating from the default on the part of the employer. If for some reasons, the employer is unable to pay the salary to the employees, as for example, its financial constraints, the employee may be held to have a legitimate expectation to the effect that his employer would at least comply with its solemn obligations. Such obligations having been undertaken to be performed by the employer at the behest of the Corporation as its agent having the implied authority therefor, the Corporation cannot be permitted to take advantage of its own wrong as also the wrong of its agent. In any event, the employer was obligated to inform the employee that for some reason, he is not in a position to perform his obligation whereupon the latter could have paid the premium directly to the Appellant herein.

Chairman, Life Insurance Corporation v. Rajiv Kumar Bhasker [Bench Strength 2], CA No. 6028/2002 (28/07/2005), 2005 AIR(SC) 3087: 2005(Supp-1) SCR 867: 2005(6) SCC 188: 2005(6) JT 416: 2005(5) SCALE 668: 2005(5) Supreme 649: 2005(5) SLT 567: 2005(5) SCJ 688: 2005(7) SRJ 186: 2005(126) CompCas 809 [Ashok Bhan, J.: S.B. Sinha, J.] <<LAWPACK SUPREME COURT>>
Life Insurance Corporation of India (Agents) Regulations, 1972 — Regulations 4, 3(b) & 5 — Life insurance Policy for salaried class employee under salary saving scheme — Role of third party i.e., employer — Whether the principle that when a contract of insurance entered into by and between insurer and insured, no third party would have any role to play, applicable to? — Held, no — Scheme clearly and unequivocally demonstrates that not only the contract of insurance was entered into by and between employee and insurer through the employer but even the terms and condition of policy to be performed only through employer — Contract Act, 1872 — Sections 37, 226 & 233 — Life Insurance Corporation Act, 1956 — Sections 6 & 49 — Consumer Protection Act, 1986 — Section 2(1)(g) & (o).

HELD: In a plain and simple contract of insurance either the Corporation or the agent, on the one hand, and the insured, on the other, is liable to comply with their respective obligations thereunder. In other words, when a contract of insurance is entered into by and between the insurer and the insured no third party would have any role to play, but the said principle would not apply in a case of this nature. In a scheme of this nature, the employers were to make all endeavours to improve the service conditions of the employees and discharge its social obligations towards them. So far as the employees are concerned, they could not approach the insurer directly, and, thus, for all intent and purport they were to treat their employers as ‘agents’ of the Corporation. The Scheme clearly and unequivocally demonstrates that not only the contract of insurance was entered into by and between the employee and the insurer through the employer but even the terms and conditions of the policy were to be performed only through the employer.

Chairman, Life Insurance Corporation v. Rajiv Kumar Bhasker [Bench Strength 2], CA No. 6028/2002 (28/07/2005), 2005 AIR(SC) 3087: 2005(Supp-1) SCR 867: 2005(6) SCC 188: 2005(6) JT 416: 2005(5) SCALE 668: 2005(5) Supreme 649: 2005(5) SLT 567: 2005(5) SCJ 688: 2005(7) SRJ 186: 2005(126) CompCas 809 [Ashok Bhan, J.: S.B. Sinha, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21, 13, 18, 22 & 2(1)(o) — Insurance claim for loss caused by fire — Fraud on insurance company, determination, report of private investigator in respect of, consideration of — Whether cannot be looked into in the light of section 64-UM to establish that claim was a fraud on the insurance company? — Held, no — Section 64-UM cannot stand in way of insurance company in establishing fraud on insurance company — Insurance Act, 1938 — Section 64-UM.

National Insurance Co. Ltd. v. Harjeet Rice Mills [Bench Strength 2], CA No. 2431/2000 (25/07/2005), 2005(Supp-1) SCR 794: 2005(6) SCC 45: 2005(6) JT 372: 2005(5) SCALE 606: 2005(5) Supreme 206: 2005(5) SLT 503: 2005(5) SCJ 515: 2005(7) SRJ 124: 2005(126) CompCas 804 [R.C. Lahoti, C.J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21, 13, 18, 22 & 2(1)(o) — Insurance claim for loss caused by fire in godown — Proper enquiry before deciding to accept surveyor’s report, necessity of — Fraud on insurance — Claim of respondent allowed by State Commission directing insurance company to pay a particular sum — Confirmed by High Court — No opportunity given to appellant to prove the investigation report for establishing fraud on insurance company — Discrepancy in capacity of godown and possibility that what was lost was only or mainly paddy husk warrants, a proper enquiry before deciding to accept surveyor’s report — Decision of State Commission and High Court unjustified and liable to be set aside — Matter to be remitted back to State Commission for a fresh enquiry and decision — Insurance Act, 1938 — Section 64-UM.

HELD: We are of the view that the State Commission should have given an opportunity to the appellant before us to prove the investigation report. Section 64UM of the Insurance Act cannot stand in the way of the insurance company in establishing that the claim was a fraud on the company, or that it was a case of deliberately causing a fire so as to lay the foundation for an insurance claim. Similarly, the Commission did not apply its mind to the aspect highlighted that the first police investigation was reported to be perfunctory and a fresh, proper investigation had been recommended. Similarly, the discrepancy in the capacity of the godown and the possibility that what was lost was only or mainly paddy husk, should have persuaded the Commission to make a proper enquiry before deciding to accept the Surveyor’s report in this case. The High Court, in our view, has failed to exercise its appellate jurisdiction properly. It failed to see that it had the duty as the Appellate Authority to satisfy itself that no fraud was involved and that the claim was genuine and sustainable. We are of the view that adequate prima facie material was available to warrant a proper enquiry on that question. In this situation, we are satisfied that interference is called for in this appeal.

We are satisfied that the proper course to adopt is to set aside the decisions of the High Court and the State Commission and to remand the claim for a fresh enquiry and decision by the Commission.

National Insurance Co. Ltd. v. Harjeet Rice Mills [Bench Strength 2], CA No. 2431/2000 (25/07/2005), 2005(Supp-1) SCR 794: 2005(6) SCC 45: 2005(6) JT 372: 2005(5) SCALE 606: 2005(5) Supreme 206: 2005(5) SLT 503: 2005(5) SCJ 515: 2005(7) SRJ 124: 2005(126) CompCas 804 [R.C. Lahoti, C.J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Evidence Act, 1872 — Sections 31 & 58 — Admission of fact — Proof of, nature and scope — Insurance — Liability of insurance company — Damage suffered by car of insured — Insurance claim for, objected by insurer on ground that damage not covered by policy as loss caused due to storm resulting in fall of branch of tree on car — Claim allowed upto National Commission holding that damage to vehicle on account of falling of tree covered under policy — In first information about accident and even in claim petition, a clear statement that because of heavy storm a road side tree fell down on car — Only on producing a certificate of meteorological authorities stating that there was no storm on relevant day, it was pleaded by complainant that in fact there was no storm — Said document neither exhibited nor cleared by whom it was given — Nobody examined in this behalf — To outweigh earlier admission such material has to be of clinching nature — Since said aspect not considered by National Commission, matter to be remitted back to National Commission to hear afresh — Civil Procedure Code, 1908 — Order 12 Rule 6 — Consumer Protection Act, 1986 — Sections 2(1)(o), (c), 14 & 21.

HELD: On the one hand the statements made by the complainant’s brother and the claim petition and on the other in a letter purported to have been written by the Meteorological authorities were pressed into service by the parties. It was rightly noted by the President of the District Forum in his minority order that the document was not exhibited and it was not clear as to who was the person who had given the certificate, and his authority to issue such a certificate. It is also not clear from the record as to whether the document in question was exhibited before the District Forum and if so, by whom. The complainant’s brother had admitted before the District Forum that he had heard about the storm from a Khalasi. The said Khalasi was also not examined. Prima facie therefore, at the first available instance the scenario as projected by the complainant’s brother was that the branch had fallen off because of a storm. On the other hand exists the so called letter-certificate purported to have been issued by the Meteorological authorities. It cannot be lost sight of that nobody was examined by the complainant about the subsequent version that there was no storm. Admission is the best piece of evidence against the persons making admission. As was observed by this Court in Avadh Kishore Das v. Ram Gopal and Ors. (AIR 1979 SC 861) in the backdrop of Section 31 of Indian Evidence Act, 1872 (in short the `Evidence Act’) it is true that evidentiary admissions are not conclusive proof of the facts admitted and may be explained or shown to be wrong; but they do raise an estoppel and shift the burden of proof placing it on the person making the admission or his representative-in-interest. Unless shown or explained to be wrong, they are an efficacious proof of the facts admitted. As observed by Phipson in his Law of Evidence (1963 Edition, Para 678) as the weight of an admission depends on the circumstances under which it was made, these circumstances may always be proved to impeach or enhance its credibility. The effect of admission is that it shifts the onus on the person admitting the fact on the principle that what a party himself admits to be true may reasonably be presumed to be so, and until the presumption is rebutted, the fact admitted must be taken to be established. An admission is the best evidence that an opposing party can rely upon, and though not conclusive is decisive of matter, unless successfully withdrawn or proved erroneous.

Contemporaneous documents clearly show that the complainant right from the beginning had accepted the position that the branch had got knocked off the tree because of storm. If he wanted to explain the admission, the onus was on him to adduce material to show the contrary. Such material has to be of clinching nature so as to outweigh the admission. The National Commission did not consider these aspects. The State Commission’s approach was also not in the correct direction. In the aforesaid background it would be in the interest of justice to remit the matter to the National Commission for hearing the matter afresh. It shall permit the parties to place such evidence in support of their respective stands if they want to adduce such evidence. We make it clear that we have not expressed any opinion on either of the respective stands. The appeal is accordingly disposed of with no order as to costs.

Divisional Manager, United India Insurance Co. Ltd. v. Samir Chandra Chaudhary [Bench Strength 2], CA No. 3663/2005 (14/07/2005), 2005(Supp-1) SCR 613: 2005(5) SCC 784: 2005(6) JT 289: 2005(5) SCALE 470: 2005(5) Supreme 63: 2005(5) SLT 442: 2005(5) SCJ 149: 2005(8) SRJ 86 [Arijit Pasayat, J.: S.H. Kapadia, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21, 22, 11, & 17 — Cross examination in trial of complaint before National Commission — Whether permissible, determination — Order of Commission that complaint to be tried by itself and it was not necessary to drive complainant to need of filing a civil suit — Plea of deprival of right to cross examine the deponents in view of practice direction of the commission — Submission of complainant that he has no objection to opposite party conducting a full fledged cross-examination of deponents — Direction of court accordingly — However, the commission in such circumstances would be at liberty whether it would like to conduct the trial before itself or refer the parties to the civil court — Civil Procedure Code, 1908 — Section 9.

Development Credit Bank Ltd. v. CCI Chambers Co-op. Housing Society Ltd. [Bench Strength 3], CA No. 2667/2005 (09/05/2005), 2005(11) SCC 447 [R.C. Lahoti, C.J.: D.M. Dharmadhikari, J.: G.P. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1-A), (1)(a) & (b) (As amended w.e.f. 2003) — Appointment of Chairman of State Commission — Procedure — Plea of Union of India to use section 16(1-A) in appointment of chairman — Section 16(1-A) provides that every appointment shall be made by State Government on recommendation of selection committee consisting of 2 secretaries of law department and consumer affairs and Chairman — Selection of Chairman, who is or has been a judge of High Court by 2 secretaries of Government, not acceptable — Such interpretation of section 16(1-A) is erosive of judicial independence.

HELD: This conclusion of ours is driven home by the proviso to sub-section (1A). This proviso is intended to take care of a contingency where there exists a President of the State Commission, who is unable to Chair the Selection Committee meeting because of absence or other similar reasons. It is only in such a situation, that the State Government may request the Chief Justice of the High Court to nominate a sitting Judge to act as Chairman of the Selection Committee. If the argument of the learned counsel for the Union of India and the construction canvassed by him is admitted, it would mean that even where the President of the State Commission is appointed for the first time, the procedure would be that he would be appointed by a Committee of which two Secretaries would be members. That would be obviously destructive of judicial independence.

The learned counsel, alternatively, argued that the scheme contemplated by sub-section (1A) is quite workable even in a situation where there exists already a President, but the question arises of his re-appointment which would make him unable to act as Chairman of the Selection Committee. In such cases, a sitting Judge of the High Court could be nominated by the Chief Justice of the High Court to as a Chairman. Even this argument does not commend itself to us. A literal reading of sub-section (1A) may prima facie suggest that appointments under clauses (a) and (b) of sub-section (1) are also governed by the procedure contemplated therein, under sub-section (1A), but as rightly held by the High Court the two sub-sections have to be harmoniously construed. The procedure contemplated under sub-section (1A) can apply only in respect of appointment of members falling within the contemplation of clause (b) of sub-section (1) of Section 16. In our view, the High Court has given adequate and justifiable reasons for this interpretation with which we agree. The interpretation given by the circular and the view taken by the Union of India in the matter of Section 16(1A), is incorrect and we hold that the procedure contemplated therein applies only to the appointments made under clause (b) of sub-section (1) of Section 16.

State of Haryana v. National Consumer Awareness Group [Bench Strength 2], CA Nos. 3044-3045/2005 (04/05/2005), 2005 AIR(SC) 2356: 2005(3) SCR 1158: 2005(5) SCC 284: 2005(5) JT 151: 2005(4) SCALE 624: 2005(4) Supreme 70: 2006(4) SLT 556: 2005(4) SCJ 769 [K.G. Balakrishnan, J.: B.N. Srikrishna, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1)(a) — “Consultation with Chief Justice of High Court” — Scope — Appointment of Chairman of State Commission — `Consultation with Chief Justice of High Court” within the meaning of section 16(1)(a) is not to be equated with `consultation’ contemplated under Article 217 of Constitution for appointment of a High Court judge — Constitution of India — Article 217.

Supreme Court Advocates-on-Record Assn. (1993) 4 SCC 441, Relied on.

State of Haryana v. National Consumer Awareness Group [Bench Strength 2], CA Nos. 3044-3045/2005 (04/05/2005), 2005 AIR(SC) 2356: 2005(3) SCR 1158: 2005(5) SCC 284: 2005(5) JT 151: 2005(4) SCALE 624: 2005(4) Supreme 70: 2006(4) SLT 556: 2005(4) SCJ 769 [K.G. Balakrishnan, J.: B.N. Srikrishna, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16(1)(a) — Appointment of Chairman of State Commission — Initiation of proposal for, power of — Consultation with Chief Justice before making appointment of Chairman — Question who should initiate proposal for appointment to be made under section 16(1)(a), is settled in “Ashish Handa” case — Chief Justice of High Court should initiate process in the matter of appointment of a judge, sitting or retired, as President of State Commission — Service and Labour Law — Appointment — Initiation of proposal for, power of.

Ashish Handa v. Hon’ble the Chief Justice H.C. of Punjab & Haryana and others, 1996(3) SCC 145, Relied on.

HELD: The manner of initiation of proposal has remained same throughout and it is not open for us to take a different view of the matter. Learned counsel attempted to pursuade us to refer the matter to a larger Bench. We decline to do so as the law is quite settled; it is binding on us and we agree with it. Thus, the manner of initiation of proposal for a consultation with the Chief Justice under Section 16(1)(a) of the Act must take place in the manner as laid down by the judgment of this Court in Ashish Handa’ case (supra).

State of Haryana v. National Consumer Awareness Group [Bench Strength 2], CA Nos. 3044-3045/2005 (04/05/2005), 2005 AIR(SC) 2356: 2005(3) SCR 1158: 2005(5) SCC 284: 2005(5) JT 151: 2005(4) SCALE 624: 2005(4) Supreme 70: 2006(4) SLT 556: 2005(4) SCJ 769 [K.G. Balakrishnan, J.: B.N. Srikrishna, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(d), 18, 22 & 23 — Allotment of plot — Inability of delivering possession to allottee, relief to be given in such a case — Allotment of plot to respondent by development authority — Development Authority has not been able to deliver possession to allottee — Whether direction for delivery of possession in favour of respondent allottee to be given — Held, no — Only direction that can be given is to refund the allottee, the amount deposited by him with interest from the date of deposit till refund — Housing — Allotment of plot — Inability of delivering possession to allottee, relief to be given in such a case.

Ghaziabad Development Authority v. Devendra Sharma [Bench Strength 2], CA No. 7396/2002 (20/04/2005), 2005(11) SCC 529 [B.N. Agrawal, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14, 18, 2(1)(o), 22 & 23 — Liability of insurance company for policy taken out by insured — Determination of — Claim of damage on ground of medical negligence allowed by District forum and confirmed by State and National Commission — Liability of insurance company for policy taken out by insured thereafter — No denial of liability under insurance policy by Insurance Company — Insurance company readily conceded that matter is covered by insurance policy taken out by appellant in respect of claim of medical negligence — Insurance company therefore liable to identify the appellant to extent of its liability under insurance policy — Insurance Act, 1938 — Section 46 — Contract Act, 1872 — Section 125.

Javed Alam v. Inderjit Kaur [Bench Strength 2], CA No. 2655/2005 (18/04/2005), 2005(11) SCC 550 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Electricity Act, 1910 — Section 26(6) — Remedy u/s 26(6) or Consumer Protection Act — Instead of moving the District Forum, held, application u/s 26(6) for referring the matter to the Electrical Inspector is the appropriate remedy — Impugned orders set aside and complaint filed by the respondent dismissed, granting liberty to file an application u/s 26(6) — Consumer Protection Act, 1986 — Section 11.

SDO, Electricity v. B.S. Lobana [Bench Strength 2], CA No. 2491/2005 (08/04/2005), 2005(6) SCC 280: 2005(7) SCALE 131(1): 2005(6) SLT 673 [B.N. Agrawal, J.: P.K. Balasubramanyan, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 21 & 17 — Pecuniary jurisdiction of National Commission and State Commission — Amendment therein, nature of — On account of amendment, pecuniary jurisdiction below one crore is in the State Commission — Request for transfer of case from National Commission to State Commission rejected by National Commission holding that the said amendment was prospective in operation and stating that detailed reason for that view would be recorded subsequently — Report of parties that they are not aware of any separate order passed by National Commission recording its detailed reason for holding amendment as prospective — Matter remanded to National Commission to take a fresh decision on pecuniary jurisdiction in matter of complaint filed by appellant before it, recording detailed reason for its view.

South Field Paints & Chemicals (P) Ltd. v. New India Assurance Co. Ltd. [Bench Strength 2], CA No. 1842/2005 (18/03/2005), 2005(10) SCC 628 [D.M. Dharmadhikari, J.: B.N. Srikrishna, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 14(1)(d), 18 & 22(1) — Housing — Delay in delivery of possession, interest, rate of — Consent given by transferee in an affidavit to receive interest @ 10% — Plea of transferee that he was pressurised to receive to make such statement and withdraw the execution proceedings as otherwise possession was not being given to him — Held, bodies, like a Development Authority, should point out to private parties with whom they deal what their rights are as per the judgment of Court — As per the judgment of this Court, the party is entitled to 12% interest — Appellants instead of pointing out the correct position to the party take advantage by getting parties to agree to accept a lower rate of interest — Payment directed to be made at the rate of 12% per annum after two years from the date of deposit — Such payment to be made with four weeks from today — If the payment is not made within four weeks then the appellants will pay interest at the rate of 18% from the date of each deposit till payment — Housing — Possession — Delay in delivery of possession, interest, rate of — Administrative Law — Exercise of power — Duty of administrative bodies — Civil Procedure Code, 1908 — Section 34 — Contract Act, 1872 — Sections 73, 14, 19 & 37.

HUDA v. Kapoor Yadav [Bench Strength 2], CA No. 1701/2005 (11/03/2005), 2005(10) SCC 561 [S.N. Variava, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Supreme Court Rules, 1966 — Order 15 Rule 5-A & Order 20-A to 20-F — Appeal to Supreme Court — Summary dismissal of, improper — Election petition by appellant, a candidate lost in election challenging election of returned candidate dismissed by High Court — Appeal to Supreme Court — Supreme Court inclined to list the appeal for purpose of hearing on admission — Resisted by appellant pleading that appeal being statutory first appeal need not to be listed for the purpose of hearing on admission relying on Rule 5-A of Order 15 — Justification — Rule 5-A has been inserted in Part II of Order 15 dealing with appeals on certificate by High Court and not applicable in this case as there are separate provision in Supreme Court Rules dealing with appeals to be listed for hearing on admission — Submission of appellant suffers from fallacy and has no merit — Appeal to be placed for preliminary hearing on admission — Representation of the People Act, 1951 — Sections 116-A & 116-C — Monopolies and Restrictive Trade Practices Act, 1969 — Section 55 — Customs Act, 1962 — Section 130-E(b) — Central Excise Act, 1944 — Section 35-L — Terrorist Affected Areas (Special Courts) Act, 1984 — Section 14 — Terrorist and Disruptive Activities (Prevention) Act, 1985 — Section 16 — Terrorist and Disruptive Activities (Prevention) Act, 1987 — Section 17 — Consumer Protection Act, 1986 — Section 23.
HELD: In our opinion, the submission suffers from a fallacy. Rule 5A relied on by Shri Jain is not applicable here as it finds mention in Part II, Order XV of the Rules.

This rule 5A has been inserted in Part II of Order XV dealing with appeals on certificate by High Court. Rule 5A cannot be interpreted as dealing with all types of statutory appeals filed before this Court. On the contrary, we find that there are separate provisions contained in the Supreme Court Rules dealing with statutory appeals viz. Order XX-A Appeals under Section 55 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), Order XX-B Appeals under clause (b) of Section 130-E of the Customs Act, 1962 (52 of 1962) and Section 35-L of the Central Excise and Salt Act, 1944 (1 of 1944), Order XX-C Appeals under Section 14 of the Terrorist Affected Areas (Special Courts) Act, 1984, Order XX-D Appeals under Section 16 of the Terrorist and Disruptive Activities (Prevention) Act, 1985, Order XX-E Appeals under Section 17 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 and Order XX-F Appeals under Section 23 of the Consumer Protection Act, 1986 (68 of 1986). It is noticeable that the appeals dealt with by Order XX-A, XX-B and XX-F are required, on being registered, to be listed before the Court for hearing ex-parte whereupon the appeal can be dismissed summarily. So is the case of the special leave petitions including those in criminal proceedings and criminal appeals. In Chapters XX-C, XX-D and XX-E, there is a specific provision for the petition of appeal being registered and numbered as soon as found in order whereafter the Registry itself shall issue notice of lodgement of appeal to the respondents. If only Rules had been framed governing the procedure for hearing of appeals under Section 116A of the Act, the Court could have made a specific provision for either the Registry issuing notice of lodgement of appeal to the respondents without hearing ex-parte or for the appeal being placed for preliminary hearing. In M/s. Golcha Investments (P) Ltd. case (supra), the observations contained in para 7 are based on the inference drawn by this Court on reading of the Bombay High Court Rules that excepting the appeals which were specifically provided for being placed for admission in the Court, others were not to be placed for admission. The submission made by the learned counsel for the appellant has, therefore, no merit.

The submission forcefully urged by the learned counsel for the appellant is rejected. Let the appeal be placed for preliminary hearing (i.e. hearing on admission) before the Court.

Bolin Chetia v. Jagdish Bhuyan [Bench Strength 2], CA No. 7376/2003 (11/03/2005), 2005 AIR(SC) 1872: 2005(2) SCR 692: 2005(6) SCC 81: 2005(3) JT 267: 2005(3) SCALE 156: 2005(2) Supreme 540: 2005(3) SLT 182: 2005(5) SCJ 78: 2005(4) SRJ 329 [R.C. Lahoti, C.J.: G.P. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 2(1)(c), 13(1)(c), 17, 21 & 27 — Complaint — Fit case for quashing of — Germination of purchased seeds of wheat by respondent not upto standard but very much poor — Complaint against appellant and some other concerned society — As per Expert Committee constituted by appellant, variation in condition of crop was not and could not be attributed to quality of seeds but to other factors — Contention of respondent that the word “not” in the report of Expert Committee was inserted unauthorisedly unsustainable as it was present in certified copy also — Complaint allowed holding appellant liable for compensation, held, liable to be dismissed — Order passed by consumer forums to be set aside.

HELD: Having considered the rival contentions of the parties, in our opinion, all the appeals deserve to be allowed and the orders passed by the District Forum, confirmed by the State Commission and the National Commission deserve to be set aside. From the record it is abundantly clear that the appellant had constituted an Expert Committee. The said committee had undertaken the exercise of inspection of seeds sold to farmers. It conducted field inspection and detailed report had been prepared. The Committee observed that crop condition varied from `satisfactory to excellent’. It further observed that the reason for variation was other than the quality of seeds.

What was contended before the National Commission was that the word `not’ was not found in the report of the Expert Committee but it was inserted unauthorisedly. The learned counsel for the appellant stated that the word `not’ was very much there in the report and in the certified copy also, it was present. Hence, it could not be said that it was inserted subsequently. But even otherwise, looking to the report as a whole, we are satisfied that there was no unauthorised insertion of the word `not’ in the report. Reading the report in its entirety, it is clear that the Expert Committee was satisfied that variation in the condition of crop was not and could not be attributed to quality of seeds but to other factors. Even the earlier part referred to by us makes the position clear. Hence, the contention that the word `not’ was inserted either to favour the Corporation or to cause prejudice to farmers cannot be accepted. We are, therefore, of the opinion that the National Commission was not right in observing that at the most, the report could be said to be ambiguous. In our view, it was neither ambiguous nor vague but was clear, definite and specific. In no uncertain terms, it stated that variation in the condition of crop could not be attributed to quality of seeds but to other factors.

In the light of the report of Expert Committee, the complaint was liable to be dismissed and the Commissions committed an error of law and of jurisdiction in allowing it.

For the foregoing reasons, in our opinion, the appeal deserves to be allowed and is hereby allowed. The orders passed by District Forum, State Commission and National Commission are hereby set aside and the complaint is ordered to be dismissed.

Haryana Seeds Development Corporation Ltd. v. Sadhu [Bench Strength 2], CA No. 1308/2005 (18/02/2005), 2005 AIR(SC) 2023: 2005(2) SCR 181: 2005(3) SCC 198: 2005(2) JT 592: 2005(2) SCALE 270: 2005(2) Supreme 169: 2005(2) SLT 569: 2005(2) SCJ 267: 2005(4) SRJ 112 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A, 11, 14, 17, 21 & 2(1)(c)(iii) & (g)– Complaint — Limitation, period of — Respondent suffered a fracture of his hand — Treated and bandaged by appellant a disqualified doctor — Respondent being in acute discomfort was ultimately taken to other doctors where it was stated that by this time damage to respondent’s hand was permanent — Complaint four years after examination by appellant rejected by District Forum — Grant of compensation of Rs. 1,75,000 by State Commission — Confirmed by National Commission — Evidence linking permanent damage to respondent’s hand with appellant appears to be somewhat tenuous in view of complaint after four years even if it were assumed that cause of action was a continuing one — However, in view of the fact that appellant not entitled to practice at all, court disposed of the matter by directing appellant to pay a sum of Rs. 80,000 to respondent in full and final settlement of claim.

Mohammed Suleman Ansari (D.M.S.) v. Shankar Bhandari [Bench Strength 2], CA Nos. 1273/2005 (14/02/2005), 2005(12) SCC 430: 2005(3) SCALE 522: 2005(5) SLT 183 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 18, 14 & 22 — Order of State Commission — Against whom to be applicable, determination — Liability of appellant under State Commission’s order was conditional upon negligence being established against Respondent 2 — Executing Court not accepting plea of non-operation of order of State Commission — Appellant then filed appeal before National Commission along with delay condonation application — Held, order of State Commission not operative against appellant in such circumstances — However, appellant should have technically, at least, filed a separate appeal against the order of State Commission — Civil Procedure Code, 1908 — Order 41 Rule 4.

National Securities Depository Ltd. v. Vimal Mittal [Bench Strength 2], CA No. 1040/2005 (07/02/2005), 2005(13) SCC 97 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 24-A — Delay in filing appeal — Condonation of, sufficient cause for, determination — Complaint against delay in conversion of shares — Plea of complainant that belated conversion caused loss — State Commission directed the appellant to indemnify the complainant for delay and negligence of respondent no. 2-Bank — Against the said order, Bank preferred appeal wherein, National Commission granted stay of State Commission’s order — No appeal preferred by appellant as its liability depends on the finding of negligence of Bank — Complainant initiated execution proceedings against appellant — Appellant resisted the execution proceedings on ground its liability depends on the finding to be arrived at by National Commission on negligence of Bank — Executing Court rejected the plea on ground no stay order against appellant — Appellant then filed appeal before National Commission along with delay condonation application — Delay of 358 days in filing appeal — National Commission rejected the appeal on the ground that no sufficient cause shown for delay in filing appeal — Held, National Commission ought to have condoned the delay — Liability of appellant depends on finding regarding negligence of respondent no. 2-Bank — Since the negligence of Bank is subject-matter of pending appeal, question of State Commission’s order being operative against appellant, not arise — Appeals allowed and set aside the impugned decision of the National Commission subject to the appellant’s paying an amount of Rs. 5000 in each appeal by way of costs — Depositories Act, 1996 — Section 16 — Limitation Act, 1963 — Section 5 — Civil Procedure Code, 1908 — Section 35-B.

Narhari vs. Sankar, AIR 1953 SC 419, Referred & Relied on.

HELD: We are of the view that the National Commission should have condoned the delay having regard to the fact that the liability of the appellant under the State Commission’s order was conditional upon negligence being established against Respondent 2. Since that issue was the subject-matter of the pending appeal, there was no question of the State Commission’s order being operative against the appellant. If indeed Section 16(2) was to be the subject-matter of decision in the pending appeal, the National Commission could not have rendered such decision an academic exercise by refusing to entertain the appeal of the appellant. It is true that Respondent 2 and the appellant are two separate entities. However, they represent but one interest, namely, the liability of Respondent 2 for negligence. It was, therefore, only in the fitness of things that the delay should have been condoned and the appellant’s appeal admitted. We find some support for this conclusion in the decision of this Court in Narhari v. Shankar. Nevertheless, Respondent 1 is correct in contending that the appellant should have technically, at least, filed a separate appeal. In that view of the matter, we allow these appeals and set aside the impugned decision of the National Commission subject to the appellant’s paying an amount of Rs. 5000 in each appeal by way of costs.

National Securities Depository Ltd. v. Vimal Mittal [Bench Strength 2], CA No. 1040/2005 (07/02/2005), 2005(13) SCC 97 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 15 — Condonation of delay in filing appeal — Refusal of, improper — Delay of 57 days — Refusal by state commission to condone confirmed by National Commission — Held, a small delay like such should have been condoned — Order of State and National Commission to be set aside State commission directed to dispose of appeal on its merits as expeditiously as possible and within a period of three months in any case.

Milk Specialities Ltd. v. Rajiv Singh [Bench Strength 2], CA No. 905/2005 (04/02/2005), 2005(11) SCC 402 [S.N. Variava, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 17(a)(ii) & 21(b) — Appeal — Procedure of disposal of, entitlement of hearing on merits by a reasoned order — Purchase of plot by respondent in public auction — Filing of complaint before District Forum, claiming alternative plot on ground of unsuitability — District Forum directed the appellant to allot alternative site and to pay Rs.1,000/- as costs — Appeal to state commission — State commission affirmed the order of forum by merely waiving the costs imposed on appeal — Appellant herein preferred revision to National Commission which was disposed of with observation that only question raised by the appellant was interest on delayed payment of installments — Grievance of appellant is that the appeal should be decided on merits — Appellant entitled to a hearing on merits by a reasoned order — Accordingly, orders of National Commission and State Commission are set-aside — Matter remanded back to State Commission for disposal on merits.

Haryana Urban Development Authority v. Janak Raj Batra [Bench Strength 2], CA No. 1087-88/2005 (04/02/2005), 2005(9) SCC 260 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 23 — Appeal to Supreme Court — Adverse remarks by National Commission, expunction of — Appellant filed complaint before National Commission for loss of vision allegedly resulting from laser surgery in eye — Compliant rejected by commission by holding that evidence adduced by complainant did not support his case — Commission also held that appellant had failed to produce any expert evidence or medical literature in his support — Commission dismissed complaint with cost by observing that appellant had made “a false and uncorroborated statement in complaint” — Held, merely because complainant is unable to prove his case, does not mean that he has come forward with a false case — Language used by commission deprecated and its remarks expunged — Requirement of payment of cost deleted — Lacuna in evidence of complainant, fulfilling of, permissibility — Held, no permission can be granted at this stage when no such permission sought before National Commission and period of nine years has gone since the date of operation — Constitution of India — Article 136 — Adverse remarks — Expunction of — Civil Procedure Code, 1908 — Order 41 Rule 27.

K.S. Bhatia v. Jeevan Hospital [Bench Strength 2], CA No. 1853/2004 (24/01/2005), 2005(12) SCC 356 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 24-A & 19 — Appeal to National Commission — Condonation of delay in filing, on payment of cost, fit case for — Appeal to National Commission — Delay of 70 days — National commission refused to condone the delay and dismissed appeal — Held, delay is not so inordinate that it could not be condoned with direction to pay costs — Order set aside — Matter restored to National Commission — Costs of Rs. 5000 imposed — Civil Procedure Code, 1908 — Section 35-B — Constitution of India — Article 136.

New India Assurance Co. Ltd. v. Tata Refractories Ltd. [Bench Strength 2], CA No. 550/2005 (17/01/2005), 2005(12) SCC 442 [S.N. Variava, J.: H.K. Sema, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Sections 9, 10 & 16 — Consumer Fora in State of U.P. — Selection and appointment — Court denied to issue a positive direction to appoint such persons who were recommended for appointment on applications invited by reference to a cut-off date of the year 2003 in view of the delay that has already taken place — However, direction given that process of selection and appointment to be initiated afresh by inviting fresh applications for all such vacancies as they existed on 31st December, 2004 and to conclude the process of selection and appointment within a period of four months.

State of Uttar Pradesh v. Jeet S. Bisht [Bench Strength 2], IA Nos. 8, 12-13 & … in SLP(C) nO. 6928/1999 (17/01/2005), 2005(1) SCALE 620(1): 2005(2) SLT 384 [R.C. Lahoti, C.J.: G.P. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(g) & (o) — “Deficiency in service” — What is not — Statutory obligation of Development authority under relevant Acts and the Regulations are not acts and omissions constituting “deficiency of service” within the meaning of Consumer Act — Demand of “Compensation fee” and “extension fee” by HUDA from respondent/complainant — Quashed by District forum and state commission — National commission having held that it has no jurisdiction to go into correctness of demand made by HUDA, held, ought to have set aside the orders of District forum and state commission — Therefore order of District forum and state commission is to be set aside to the extent of quashing of demand of “compensation fee” and “extension fee” — However, respondent/complainant may resort to any other appropriate remedy for questioning the aforesaid demands if they are not in accordance with law — Housing — Compensation fee and extension fee — Demand of, challenge to, remedy of.

HELD: After perusing the order of the National Commission and hearing learned counsel for the parties we find that the National Commission has held that the statutory obligations of HUDA and plot-holder under the provisions of the HUDA Act and the Regulations are not acts or omissions constituting “deficiency in service” within the meaning of the Consumer Protection Act.

On the National Commission’s own reasoning and the interpretation of provisions of law with which we agree, this appeal deserves to be allowed. In our opinion, the National Commission having held that it has no jurisdiction to go into the correctness of the demands made by HUDA ought to have set aside the orders of the District Forum and the State Commission setting aside the demand of “composition fee” and “extension fee”. We, therefore, allow this appeal upholding the order of the National Commission. We set aside the order of the District Forum and the State Commission to the extent of quashing the demand of “composition fee” of Rs. 53,808 and “extension fee” of Rs. 6300.

We, however, make it clear that the respondent complainant may resort to any other appropriate remedy for questioning the aforesaid demand if they are not in accordance with law.

HUDA v. Sunita [Bench Strength 2], Arising out of SLP (C) No. 11319/2003 (14/01/2005), 2005(2) SCC 479 [D.M. Dharmadhikari, J.: B.N. Srikrishna, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) & (d) — “Free service” — What is not, transaction with State or its instrumentalities, effect — Medical negligence — Complaint under the CP Act by appellant, a Railway employee — Ground that his wife negligently treated in a Railway Hospital resulting into death — State Commission coming to conclusion that Hospital set up to treat Railway employees and predominant component of Railway Hospital was free service to Railway employee which was upheld by National Commission — Medical treatment in said hospital is given to employees as part of condition of their services and Hospital is run and subsidized by employer, it would not amount to free service and would constitute service for purpose of Act — Complaint maintainable — Impugned order set aside and matter remanded back to National Commission for decision on merit — Torts — Medical negligence — Claim of compensation on the ground of, when sustainable, “free service”, what is not — Words and Phrases — Free service.

Indian Medical Association vs. V.P. Shantha, 1995(6) SCC 651, Followed.

HELD: There is no dispute that the Hospital in question has been set up for the purpose of granting medical treatment to the Railway employees and their dependents. Apart from the nominal charges which are taken from such an employee, this facility is part of the service conditions of the Railway employees. V.P. Shantha’s case has made a distinction between non-Governmental hospital/nursing home where no charge whatsoever was made from any person availing of the service and all patients are given free service (vide para 55(6) at page 681) and services rendered at Government Hospital/Health Center/Dispensary where no charge whatsoever is made from any person availing of the services and all patients are given free service (vide para 55(9)) on the hand and service rendered to an employee and his family members by a medical practitioner or a hospital/nursing home which are given as part of the conditions of service to the employee and where the employer bears expenses of the medical treatment of the employee and his family members, [paragraph 55(12)] on the other. In the first two circumstances, it would not be free service within the definition of the Sec. 2(1)(o) of the Act. In the third circumstance it would be.?

Since it is not in dispute that the medical treatment in the said Hospital is given to employees like the appellant and his family members is part of the conditions of service of the appellant and that the Hospital is run and subsidised by the appellants employer, namely, the Union of India, the appellant’s case would fall within the parameters laid down in paragraph 55(12) of the judgment in V.P. Shanta’s case and not within the parameters of either para 55(6) or para 55(9) of the said case.

It is true that the decision in State of Orissa vs. Divisional Manager LIC & Anr. (Supra) relied upon by the learned counsel for the respondents appears to hold to the contrary. However, since the decision is that of a smaller Bench and the decision in V.P. Shantha’s case was rendered by a larger Bench, we are of the opinion that it is open to this Court to follow the larger Bench which we will accordingly do.

The appeal is allowed and the impugned order is set aside. The matter is remanded back to the National Commission for decision on merits.

Laxman Thamappa Kotgiri v. G.M. Central Railway [Bench Strength 2], CA No. 171/2004 (06/01/2005), 2007(4) SCC 596: 2005(1) SCALE 600: 2005(2) SLT 387 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 2(1)(o) — “Free service” — Service rendered as part of terms and conditions of service — Whether it would not amount to free service and constitute service for purpose of Consumer Protection Act? — Held, yes — Words and Phrases — Free service.

Indian Medical Association v. V.P. Shantha, 1995(6) SCC 651, Followed.

Laxman Thamappa Kotgiri v. G.M. Central Railway [Bench Strength 2], CA No. 171/2004 (06/01/2005), 2007(4) SCC 596: 2005(1) SCALE 600: 2005(2) SLT 387 [Ruma Pal, J.: C.K. Thakker, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16 — President of State Commission — Appointment of, Acting Chief Justice has also same power u/s 16 as Chief Justice — Plea that consultation under section 16 should be with Chief Justice of High Court and not with acting Chief Justice, not acceptable — When Article 223 of Constitution confers powers on Acting Chief Justice to discharge functions of Chief Justice without any limitation or rider it cannot be accepted that Acting Chief Justice cannot perform duties expected to be performed by him u/s 16 — Constitution of India — Article 223.

Aruna Roy v. Union of India, AIR 2002 SC 3176, Referred.

Ashish Handa, Advocate v. Hon’ble the Chief Justice of High Court of Punjab & Haryana, 1996(3) JT SC 248, Bishal Chand Jain v. Chattur Sen, AIR 1967 All. 506, Distinguished.

HELD: Appointment of one or the other Judges of a High Court as acting Chief Justice is meant to carry on the work of the High Court and the judiciary in the State. May be sometimes appointment of Chief Justice to a High Court may take some time for various reasons and consequently acting Chief Justice continues to work for longer period, but that itself does not take away the powers conferred by the Constitution on a Judge to act as Chief Justice to perform the duties of the Chief Justice. Normally the senior most puisne Judge is appointed as acting Chief Justice. Such puisne Judge is expected to act appropriately in discharging the duties of the office of Chief Justice. It is rule of prudence that the acting Chief Justice may not take major decisions which otherwise could have been taken by the Chief Justice or which decisions could wait for a Chief Justice. Assuming that some decisions taken by an acting Chief Justice are required to be modified or corrected, that can be done either on administrative side or on the judicial side by the High Court or by this Court including the Chief Justice of India, as the case may be. In some cases if appointment of Chief Justice of a High Court takes longer time and the acting Chief Justices cannot discharge the duties of the office of the Chief Justice the work of the High Court or the State judiciary or for the matter wherever the opinion of Chief Justice is required like the one under Section 16 of the Act, it will result in anomalous position leading to paralyzing the working or may be sometimes creating a deadlock. When Article 223 of the Constitution in specific terms confers powers on acting Chief Justice to discharge the functions of the office of Chief Justice without any limitation or rider, it cannot be accepted that an acting Chief Justice cannot perform the duties expected to be performed by him under Section 16 of the Act. Consultation with acting Chief Justice under Section 16 of the Act is to be taken as consultation with the Chief Justice of a High Court. Powers conferred under Article 223 of the Constitution on an acting Chief Justice to perform the duties of the Chief Justice is available for the purpose of Section 16 of the Act. We may hasten to add that it is not the case of the petitioner in High Court that the Chief Justice of the High Court was going to be appointed shortly or the matter of appointment of President of the State Commission was such, which on the facts and in the circumstances of the case, did not call for an immediate decision by Acting Chief Justice and could have waited for the appointment of the Chief Justice of the High Court. In other words, no statutory provision can stand in the way of constitutional provision in case of conflict between them.

Ashok Tanwar v. State of Himachal Pradesh [Bench Strength 5], CA No. 8248/2004 (17/12/2004), 2005 AIR(SC) 614: 2004(Supp-6) SCR 1065: 2005(2) SCC 104: 2004(10) SCALE 535: 2005(2) Supreme 103: 2004(7) SLT 656: 2005(4) SCJ 671: 2005(2) SRJ 264: 2005(5) SLR 75 [R.C. Lahoti, C.J.: Shivaraj V. Patil, J.: K.G. Balakrishnan, J.: B.N. Srikrishna, J.: G.P. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16 — President of State Commission — Appointment of, consultation with Chief Justice of High Court, scope — Writ of quo warranto filed against appointment of R3 as President of State Commission — Dismissal of writ — Filing of appeal — Plea that since recommendation to appoint R3 was made by Acting Chief Justice without consulting 2 senior most judges, High Court ought to have quashed the appointment, held, unsustainable — Consultation under Article 217 of Constitution can not be read in same way as contemplated under section 16 of the Act — Hence, insistence on consultation by Chief Justice of High Court with his 2 senior most colleagues for the purpose of section 16 is unwarranted — Constitution of India — Article 217.

HELD: The meaning of the word ‘consultation’ must be given in the context of an enactment. If the argument that the consultation process in regard to appointment of a Judge or retired Judge of High Court to the State Commission under Section 16 must be in the same manner as required under Article 217 of the Constitution, it will lead to anomalous situation. Under Article 217(1) of the Constitution, consultation contemplated with constitutional functionaries mentioned therein is for the purpose of appointment of a Judge of a High Court and not for appointment of a person as the President of the State Commission under Section 16 of the Act. If the consultation to be made for appointment of a person as President of the State Commission, as required under Section 16 of the Act, is to be similar as under Article 217 of the Constitution, then, even in case of appointment of a retired Judge as President of the State Commission, such consultation has to be made with all constitutional functionaries, which does not stand to reason. Hence, obviously for appointment of a person as President of the State Commission consultation as required under Article 217 of the Constitution as against the requirement stated in Section 16 of the Act is not necessary. If that be so not only opinion of two senior most Judges of the High Court should be obtained but also the consultation should be made with other constitutional functionaries as contemplated under Article 217 of the Constitution including the Chief Justice of India.

A person to be appointed as President of the State Commission has to be necessarily a sitting or a retired Judge of a High Court and not that any person can be appointed as President of the State Commission. This being the position, it does not stand to the reason as to why again in respect of a sitting or retired Judge of a High Court the whole process contemplated under Article 217 of the Constitution must be resorted to. To put in clear terms so as to remove any doubt we state that in the matter of appointment of a sitting or retired Judge of a High Court as President of the State Commission process must be initiated by the Chief Justice under Section 16 of the Act and ‘consultation’ contemplated in the said Section is `consultation’ only with the Chief Justice of the High Court and not with the collegium.

Ashok Tanwar v. State of Himachal Pradesh [Bench Strength 5], CA No. 8248/2004 (17/12/2004), 2005 AIR(SC) 614: 2004(Supp-6) SCR 1065: 2005(2) SCC 104: 2004(10) SCALE 535: 2005(2) Supreme 103: 2004(7) SLT 656: 2005(4) SCJ 671: 2005(2) SRJ 264: 2005(5) SLR 75 [R.C. Lahoti, C.J.: Shivaraj V. Patil, J.: K.G. Balakrishnan, J.: B.N. Srikrishna, J.: G.P. Mathur, J.] <<LAWPACK SUPREME COURT>>
Consumer Protection Act, 1986 — Section 16 — President of State Commission — Appointment of, consultation with Chief Justice of High Court, nature of — Process of consultation envisaged u/s 16 can neither be equated to constitutional requirement of consultation under Article 217 of Constitution in relation to appointment of a judge of a High Court nor can it be placed on same pedestal — Constitution of India — Article 217.

R.C. Poudyal v. Union of India, 1994 Supp.(1) SCC 324, Referred.

HELD: Consultation by the Chief Justice of the High Court with two senior most Judges in selecting a suitable candidate for appointment as a Judge is for the purpose of selecting the best person to the high office of a Judge of the High Court as a constitutional functionary. Consultation with the Chief Ju

Entry Filed under: Admin

Consumer Protection Act, 1986 — Section 2(1)(o) — Deficiency in service by Statutory Boards and Development Authorities

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