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Supreme Court Decisions on
Consumer Cases
Listed below are landmark supreme court
judgments on consumer laws each has been discussed in details:
# New India Assurance Company Limited v Abhilash Jewellery
# Karnataka Power Transmission Corporation v Ashok Iron Works Private
Limited
# HDFC Bank Limited v Balwinder Singh
# Malka Tarannum v Dr. C. P. Gupta
# Arvind Shah (Dr.) v Kamlaben Kushwaha
# Sehgal School of Competition v Dalbir Singh
# Life Insurance Corporation of India v Gowramm
# Narinder Kumar Suneja v R.K. Goel
# Rajasthan Financial Corporation v M.K. Bhoot & Another
# K. A. Bhandula & Another v Indraprastha Apollo Hospital & Others
New India Assurance Company
Limited v Abhilash Jewellery [III (2009) CPJ 2
(SC)]
Date of Decision: 22.01.2009
The complainant/respondent, who had taken a jeweller's block policy,
lodged a claim with the opposite party insurer for loss of gold ornaments.
The insurer repudiated the claim on the ground that the loss occurred when
the gold was in the custody of an apprentice, who was not an employee
(because the policy stipulated that for indemnification of the loss, the
property insured had to be "in the custody of the insured, his partner or
his employee"). The National Commission allowed the complaint holding that
an apprentice was an 'employee' since section 2(6) of the Kerala Shops and
Commercial Establishments Act (as well as some other statutes) defined an
'employee' to include an 'apprentice'. The Supreme Court, however, held
that the word 'employee' in the contract of insurance mentioned had to be
given the meaning in common parlance. The definition in the local Act,
including an 'apprentice' in the category of 'employee', was only a 'legal
fiction', which is a concept in law and could not be applied to an
insurance contract. The Court, therefore, allowed the appeal.
Karnataka Power Transmission Corporation v Ashok Iron Works Private
Limited [III (2009) CPJ 5 SC]
Date of Decision: 09.02.2009
The appellant corporation contended that the complaint filed by the
respondent was not maintainable as (i) a company is not a 'person' under
section 2(1)(m) of the Consumer Protection Act, 1986 (CPA); (ii) the
complainant is not a 'consumer' within section 2(1)(d) of the said Act
since it purchased electricity for commercial production; and (iii)
disputes relating to sale and supply of electricity were not covered under
'service' under section 2(1)(o) of the CPA. The Apex Court rejected the
appellant's contention that a company was excluded from the definition of
'person'. In this, the Court relied upon the English Court decision in
Dilworth v Commissioner of Stamps [(1899) AC 99] and its own in Reserve
Bank of India v Peerless General Finance and Investment Company Limited. &
Others [(1987) 1 SCC 424] and reiterated that the use of the word
'includes' in a statute often showed the intention of the Legislature to
give an extensive and enlarged meaning to such expressions though
sometimes, the context might suggest that 'includes' was designed to mean
'means.' The setting, context and object of an enactment might provide
sufficient guidance for interpretation. The Court also referred to section
3(42) of General Clauses Act which defines a 'person' to include a
company, etc., and went on to observe that out of the four categories
mentioned in section 2(1)(m) of the CPA, the third i.e., co-operative
society was corporate, which showed that the Legislature intended to
include bodies corporate as well as incorporate.
Thus, the definition of 'person' was inclusive and not exhaustive. When so
construed, 'any person' mentioned in the definition of 'consumer' in
section 2(1)(d) would include a company. On the appellant's second
contention, the Court held that the amendment to the CPA effective from 15
March 2003, excluding services availed of for commercial purposes, was not
applicable to this case since the controversy related to a prior period.
In respect of the appellant's third contention, the Court held that supply
of electricity by the corporation to a consumer was not sale of goods
within section 2(1)(d) of the CPA. For this, the Court relied upon its
decision in Southern Petrochemical Industries Co. Ltd. v. Electricity
Inspector & ETIO & Others [(2007) 5 SCC 447], in which the Court had held
that 'supply' of electricity did not mean 'sale' thereof and a case of
supply of electricity was covered under section 2(1)(d)(ii) (i.e., hiring
or availing of any service) as 'service' under section 2(1)(o) meant
service of any description including the provision of facilities in
connection with supply of electrical or other energy. Therefore, a case of
deficiency in service would fall under section 2(1)(g). The Court rejected
the appellant's contention that 'service' in section 2(1)(o) was limited
to providing facilities in connection with electricity.
HDFC Bank Limited v Balwinder Singh [III (2009) CPJ 40 (NC)]
Date of Decision: 16.03.2009
The complaint was of the bank, or its loan recovery agent, employing
musclemen to take forcible repossession of the hypothecated vehicle and
thus causing physical harassment and mental trauma to the complainant. The
District Forum allowed the complaint and directed the bank to pay
compensation of Rs. 4 lakh for repossessing the vehicle in this manner and
reselling it to a third party. The State Commission confirmed the order in
appeal. Dealing with the bank's revision petition, the National Commission
expressed shock that the bank had hired musclemen directly or through its
recovery agents to recover the loan/repossess the vehicle. The Commission
also referred to the State Commission's order, which had observed that the
alleged letter produced by the bank purporting to the complainant
voluntarily handing over possession of the vehicle was unreliable and that
no notice was given to the complainant at the stages of repossession and
sale of vehicle. In dismissing the petition, the Commission relied upon
its judgment in Citicorp Maruti Finance Limited v S. Vijayalaxmi [III
(2007) CPJ 161 (NC)] where it had strongly deprecated such practices. The
Commission dismissed the petition and awarded Rs.
25,000/- as exemplary costs in this case.
Malka Tarannum v Dr. C. P. Gupta [III (2009) CPJ 49 (NC)]
Date of Decision: 20.04.2009
The District Forum allowed the complaint of the complainant that there was
negligence in applying (the first) plaster cast on the complainant's
daughter's fractured hand, which led to the need to apply the plaster for
the second time. In appeal, the State Commission dismissed the complaint
and also held that the complainant was not a consumer since he was not
charged any fee for the treatment. In revision, the National Commission
held that application of the plaster for the second time did not imply
medical negligence on the first occassion since application of POP slab
(also known as temporary cast) was a normal procedure adopted in the first
instance whenever there was swelling at the site of the injury. Relying on
the Supreme Court decision in Jacob Mathew v State of Punjab and Another
[(2005) 6 SCC 1], the Commission observed that the doctor who had applied
the plaster in the first instance was a senior orthopaedic specialist with
considerable experience and the complainant could not dispute his
professional decision on the basis of mere allegations, without any expert
evidence. The Commission also rejected the complainant's husband's
contention that he was a consumer since he was covered by the Supreme
Court decision in Laxman Thamappa Kotgiri v G.M., Central Railway & Others
and that receiving free medical treatment was part of the terms and
conditions of his service. It held that the complainant took no such plea
before the Fora below and no evidence was produced.
Arvind Shah (Dr.) v Kamlaben Kushwaha [III (2009) CPJ 121]
Date of Decision: 30.04.2009
The complainant alleged that her deceased son, aged 20 years and otherwise
healthy, died as a result of medical negligence on the part of the
appellant doctor (original opposite party) who administered wrong
treatment. The State Commission awarded to the complainant a compensation
of Rs. 5 lakh with interest and costs. In appeal, the National Commission,
on consideration of the material on record, came to the conclusion that
the two medical prescriptions, which the doctor sought to deny, could have
been written only by him. It also observed that though, in the appeal, the
doctor admitted for the first time to having treated the patient; he did
not produce any prescription on record. More important, the two
prescriptions available on record did not mention any of the patient's
complaints/symptoms, the doctor's clinical observations on examining the
patient or his diagnosis of the ailment. Even the ordinary vital
parameters like temperature, blood pressure, pulse rate, etc., were not
noted. The Commission observed that the Medical Council of India or the
State Medical Council, with one of which the doctor had to be registered
to practice modern (allopathic) medicine, required, through their
respective codes of ethics/guidelines/ regulations, to make some minimal
record even for outpatients. Such a record would ordinarily include a
summary of the history of illness and current complaints/symptoms of the
patient and clinical observations of the doctor. If the doctor considered
none of the above as essential, he would need to at least record a
provisional diagnosis of the patient's ailment in the prescription while
advising further diagnostic test(s) or treatment (medicines/injections).
This was one of the primary duties of disclosure owed by a physician of
ordinary skills to his patient. The Commission held that in line with the
Apex Court's decision in Samira Kohli v Dr. Prabha Manchanda [I (2008) CPJ
56 (SC)] regarding need for valid prior consent of the patient for his
treatment by a doctor and the doctor's corresponding duty of disclosure,
it was essential for the doctor to write a prescription with such
necessary details and failure to do so would constitute medical
negligence. The Commission further observed that if a patient found that
the doctor's treatment did not help ease his felt problem and wanted to
consult another, a prescription with such details would be necessary. On
the other hand, a prescription meeting these basic requirements would also
assist a doctor in demonstrating that he had treated his patient with due
care, if charged with a wrong/false allegation of negligence by the
patient. While returning a finding of medical negligence against the
doctor, the Commission found that the material on record case was
insufficient to attribute the patient's death directly and wholly to the
doctor's negligence. Accordingly, it scaled down the compensation to Rs.
2.5 lakh along with interest.
Sehgal School of Competition v Dalbir Singh [III (2009) CPJ 33
(NC)]
Date of Decision: 30.04.2009
The complainant sought refund from the opposite party's coaching school
after only one year of the two-year course on the ground that the coaching
was not up to the mark. The District Forum directed refund of the fees and
the opposite party's appeal was dismissed. In revision, the petitioner
contended that payment of lump sum fees for two years was a condition (of
the contract) that and no part of the fees could either be refunded or
transferred under any circumstances. The Commission held that this
condition was one sided and biased in favour of the opposite party,
against natural justice and not a fair trade practice. The Commission also
rejected the opposite party's plea that in Homeopathic Medical College &
Hospital, Chandigarh v Miss Gunita Virk [I (1996) CPJ 37 (NC)] it was held
that Consumer Fora did not have jurisdiction to declare any rule in the
prospectus of any institution as unconscionable or illegal. Referring to
its recent decision in Nipun Nagar v. Symbiosis Institute of International
Business [I (2009) CPJ 3 (NC)], it observed that the Commission had held
that (under certain circumstances) it was unjust to collect fees for the
total period of the course and dismissed the petition.
Medical Superintendent, St. Gregorious Mission Hospital v Jessy &
Another [III (2009) CPJ 61 (NC)]
Date of Decision: 04.05.2009
The District Forum awarded Rs. 2.75 lakh along with interest to the
complainants, viz., the wife and daughter of the deceased since the
opposite party hospital had been negligent in not providing due care on
account whereof the deceased who was undergoing alcoholic psychosis
treatment for de-addiction of drugs, had committed suicide by hanging in
the hospital. In its revision petition, the hospital contended that it was
impossible to provide 24-hour service to look after the affairs and needs
of each patient. The National Commission held that the patient was allowed
to move away on his own from his ward into an empty ward without being
noticed by the nurses and ward boys. The patient hung himself with lungi
which was not noticed by the staff but the co- patients. As per the
hospital's own evaluation, the hospital staff should have taken extra care
to deal with such a patient but the required degree of care was not
exhibited. The Commission relied upon the Supreme Court judgment in M.S.
Grewal v Deep Chand Sood [II (2001) ACC 540 (SC)] and held there was
negligence. Relying upon cross-examination of the Medical Superintendent,
the Commission held that the complainant wife was not instructed to be
continuously with her husband as alleged and that the instruction in the
Nurses Daily Record, being in a different ink, was a manipulation.
Life Insurance Corporation of India v Gowramm [III (2009) CPJ 25
(NC)]
Date of Decision: 11.05.2009
The petitioner insurer repudiated the life insurance policy in the name of
the respondent's late husband (insured) on the ground of deliberate
misstatements and withholding of correct facts regarding the health of the
insured. The lower Fora rejected the various contentions of the insurer
and allowed the complaint. Before the National Commission, the insurer
relied upon the Commission's decision in L.I.C. of India and Another v
Parveen Dhingra [II (2003) CPJ 70 (NC)] and contended that revival of the
policy constituted a new contract between the parties and the limitation
period of two years under section 45 of the Life Insurance Act, 1938 had
to be counted from the date of revival. Therefore, the misstatements and
concealment of facts could be made a ground for repudiation even though
same were not made a ground at the time of initial policy. The Commission
referred to the Supreme Court decision in Mithoolal Nayak v Life Insurance
Corporation of India [AIR 1962 SC 814] where the Court had rejected a
similar contention that the revival of the policy constituted a new
contract between the parties and held that section 45 was clear that the
period of two years was to be reckoned from the date on which the policy
was originally effected. The Commission observed that the decision of
Supreme Court had to be preferred and followed.
Narinder Kumar Suneja v R.K. Goel [III (2009) CPJ 35 (NC)]
Date of Decision: 14.05.2009
In revision, the petitioner who was a lawyer claimed that he was entitled
to retain the fee which he took from the respondent since the respondent
had executed the power of attorney/vakalatnama and handed over some papers
to the petitioner in connection with a proposed case to be filed. He
claimed having wasted valuable time when the respondent met and sought
expert advice. The National Commission referred to the order of the State
Commission which, in turn, referred to the District Forum's order holding
that the opposite party (petitioner) was not entitled to retain the fee
when he did not perform the duty for which the fee was meant and that a
complaint made by the complainant to the Bar Council related only to
misconduct on the part of its member (i.e., petitioner) whereas the
Consumer Fora were required to determine whether proper service had been
rendered or not. The Commission relied upon D.K. Gandhi v M. Mathias [III
(2007) CPJ 337 (NC)] in holding that deficiency in service by lawyers was
covered under the CPA.
`
Rajasthan Financial Corporation v M.K. Bhoot & Another [III (2009)
CPJ 10 (NC)]
Date of Decision: 18.05.2009
The complainant/respondent participated in an auction conducted by the
petitioner for moveable and immoveable properties. The complainant
deposited the requisite sum/earnest money at the time of making his bid,
which bid was then accepted. Due to non-payment of 25% of the bid amount,
the sum/earnest money was forfeited. The District Forum dismissed the
complaint for refund of the earnest money but the State Commission allowed
the appeal. The National Commission allowed the revision petition holding
that no consumer dispute under the CPA could arise out of a relationship
of seller and purchaser in an auction as there was no arrangement of
hiring of services for consideration. The Commission followed a three
member bench decision in Panjim Planning and Development Authority v Mrs.
Rashmi A. Sisat and Others [R.P. No. 258/1992 decided on 10.1.1994
(1986-95 Consumer Vol. 1 pp 8-9] and a four-member bench decision in Tamil
Nadu Housing Board v R. Sivasubramaniyan [1989 Consumer 3587 (NS)] which
were cases of sale/allotment of plots in public auction.
K. A. Bhandula & Another v Indraprastha Apollo Hospital & Others
[III (2009) CPJ 164 (NC)]
Date of Decision: 09.07.2009
Complainant no. 1 (a patient of nasopharyngeal cancer) made various
allegations of medical negligence against the opposite party hospital and
consultant doctor. The National Commission partly allowed the complaint
holding first that the hospital was negligent in not duly preserving the
biopsy tissue sample (in formalin) after the opposite party consultant
doctor carried out the biopsy of the nasal tumour of the complainant. It
rejected the hospital's plea of mere 'human error.' In this the Commission
relied on the Supreme Court decision in Savita Garg v. Director, National
Heart Institute [IV (2004) CPJ 40 (SC)]. On the basis of the medical
record, the Commission also held that the consultant doctor had concealed
from the complainant that the aforesaid biopsy had gone awry and pretended
that he had seen the biopsy report and found it in order. Further, the
consultant doctor failed to advise the complainant to undergo a repeat
biopsy at the earliest and instead recorded that there was no evidence of
recurrence (of the disease). There was delay in conducting the second
biopsy which led to delay in starting proper treatment while the cancer
progressed. It also found that the consultant doctor had manipulated the
medical records. On its suo motu review of medical literature, the
Commission found that the surgery finally recommended by the opposite
party doctor (consultant) was 'craniofacial resection'. According to the
medical literature, this was a very complex surgery, warranting removal of
parts of the base of the skull and upper parts of the eye sockets and
consequent changes in the looks of the patient. On the basis of this
literature review, the Commission observed that prima facie this surgery
was (perhaps) not called for in the present case, as the surgery actually
performed on the complainant by a specialist surgeon at a Mumbai hospital
established. However, the Commission noted that while the complainant
alleged medical negligence against the consultant doctor in this regard
and the latter vehemently disputed the allegation, neither side produced
any medical literature in support of their respective contentions. Relying
on the Apex Court decision in Jacob Mathew v State of Punjab & Another
[III (2005) CPJ 9 (SC)], the Commission thus held that to bring home the
allegation, it was necessary for the complainant to cite medical opinion
of a cancer specialist in the relevant speciality and in the absence
thereof, benefit had to be given to the doctor. However, applying the
ratio of the Apex Court judgment in Samira Kohli v Dr. Prabha Manchanda &
Another [I (2008) CPJ 56 (SC)], the Commission held that the other
allegation that the consultant doctor did not apply due standards of care
expected of a surgeon of ordinary skills in apprising the complainant
fully of the most probable implications of the recommended surgery
(craniofacial resection) and the available alternatives, was established.
Accordingly, the Commission awarded a compensation of Rs. 1 lakh against
the hospital and Rs. 2 lakh against the doctor. |
