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Supreme Court Decisions on Consumer Cases
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. and 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 and ETIO and 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 occasion 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 and 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 and 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 and 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 and 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 and Another v Indraprastha Apollo Hospital and 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 and 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 and 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.
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