LATEST CASE LAWS ON CONUMER PROTECTION ACT

[Mr. M. GOVINDARAJAN]

Introduction

The Consumer Protection Act was enacted to protect the interests of the consumers.  Since its enactment so many complaints have been disposed by the Consumer Forums/Commissions and the consumers are much benefited because of this Act.   The Consumer Protection Act was enacted during the year 1986.  The said Act was repealed and in its place a new Act was enacted during the year 2019 with many changes.  In this article the latest judgments passed by High Courts and Supreme Court recently are discussed.

Complaint filed by ‘Karta’

The senior most male member of the Hindu joint family is usually the Karta or head of the family. Often Karta is called Manager of the joint family, this is when there exists a family business or if it is a trading family, there has to be a manager to take care of the proper functioning and supervision of the business.   Whether the Karta can file a complaint before the Consumer Commission against the deficiency of service rendered to the member of joint family?  The following case law gives the answer to this question:

In ‘JAGANARAYAN LAL VERSUS DOCTOR SMT. GIRIJA TIWARI [2021 (9) TMI 1158 - SUPREME COURT],  a 'karta' of a Joint Hindu Family filed a consumer complaint against a clinic alleging deficiency in service regarding the treatment given to his pregnant sister in law.  The appellant contended in the complaint that he availed the services for consideration on behalf of his sister-in-law as a ‘karta’.  The complaint was dismissed.  On appeal the State Commission dismissed the appeal and also the National Commission.  The appellant filed the present appeal before the Supreme Court against the dismissal order of National Commission.    The Supreme Court observed that a consumer means any person who hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised and includes a beneficiary of services. The brother-in-law of a pregnant woman would not be a beneficiary of any services rendered by the respondent.   There is no allegation that he has paid or promised any consideration for engaging the services of the respondent. The only assertion in the complaint is that he is the ‘Karta’ of a Joint Hindu Family, therefore, he is entitled to file a complaint on account of the alleged deficiency of service by the respondent.   The concept of Joint Hindu Family does not extend to the treatment of a pregnant sister-in-law.   No objection regarding maintainability of complaint was raised either before the State Commission or the National Commission, but such issue of maintainability of the complaint goes to the root of the case and the Supreme Court  found it to be non maintainable on the bare assertions of the complaint alone. Since the complaint itself was not maintainable the present appeal was dismissed by the Supreme Court.

Adjudication of complaint

The provisions of the Consumer Protection Act and the rules made there under provide for the adjudication of complaint filed by a consumer by the Consumer Commission.  There shall not be any deviation from the procedure indicated in the law.

In ‘M/S SYLVANUS PROPERTIES LTD. VERSUS PARESH PRATAP RAI MEHTA  [2021 (9) TMI 1147 - DELHI HIGH COURT] the National Commission, on 30.07.2021 passed an order directing the Chief Executive of the Company against which a consumer complaint was filed, to file an affidavit within 2 weeks and also to be present in person through video conferencing in the next date of hearing.  The respondent company in the complaint has no Chief Executive Officer.  Already the respondent company filed reply to the complaint within the time stipulated.  However an affidavit has been signed by one of the Directors of the respondent company and filed the same with the Commission.   Therefore the petitioner filed the present petition before the High Court against the order of National Commission. 

The High Court observed that the High Court was of the view that there was no occasion for the National Commission to direct filing of an affidavit by the Chief Executive Officer of the petitioner company or to direct the Chief Executive Officer of the petitioner company to be present personally through video conferencing, taking into account that the reply of the complaint has been filed within the stipulated time period. No reasons have been provided for directing filing of an affidavit by the Chief Executive Officer or for directing the Chief Executive Officer to be present in person on the next date of hearing.  The High Court set aside the order of National Commission and directed to proceed to adjudicate the complaint on merits, as per the procedure laid down under the Act and the rules framed there under. The additional affidavit filed by one of the directors of the petitioner company would be taken on record and the National Commission would not insist on the personal appearance of the Chief Executive Officer of the petitioner company.

Complaint on behalf of numerous consumers

In YOGESH AGGARWAL VERSUS M/S. ANEJA CONSULTANCY (A PART OF ANEJA GROUP) & ORS. [2021 (9) TMI 1157 - SUPREME COURT] the appellant challenged the order of National Commission dated 04.01.2010 whereby the appellant was saddled with the liability to pay the amount of certain cheques signed by him along with the interest @ 9% per annum.  The appellant submitted the following-

• The respondent could not have invoked the jurisdiction of National Commission in view of the fact that a complainant in term of section 2(1)(b) of the Consumer Protection Act means either a consumer or any voluntary consumer association registered under the Companies Act or under any other law for the time being in force.
• One or more consumers, where there are numerous consumers having the same interest, can also file a complaint but with the permission of District Forum.
• The complainant before the National Commission is a voluntary consumer association registered under the Companies Act nor under any other law for the time being in force.

The Supreme Court observed that the complaint itself was not maintainable and the appellant is an employee engaged by the sole proprietorship consultancy, there cannot be any personal liability which can be inflicted upon by the appellant by virtue of only being an employee of a sole proprietorship.  The Supreme Court allowed the appeal and set aside the order of National Commission.

Housing project

In IREO GRACE REALTECH PVT. LTD. VERSUS ABHISHEK KHANNA AND ORS. [2021 (9) TMI 1154 - SUPREME COURT] the present batch of appeals have been filed by the Appellant Developer to challenge the judgment passed by the National Commission directing refund of the amounts deposited by the apartment buyers in the project with interest.  The Supreme Court considered the following issues to be decided in this appeal-

• Determination of date from which the 42 months period for handing over possession is to be calculated under clause 13.3, whether it would be from the date of issuance of the Fire NOC as contended by the developer, or, from the date of sanction of the building plans, as contended by the apartment buyers.
• Whether the terms of the Apartment Buyer’s Agreement were one-sided, and the Apartment Buyers would not be bound by the same?
• Whether the provisions of Real Estate (Regulation and Development) Act, 2016 must be given primacy over the Consumer Protection Act, 1986?

Regarding the first issue the Supreme Court held that the computation of the period for handing over possession would be computed from the date of issuance of NoC.  The commitment period of 42 months plus the grace period of 6 months from 27.11.2014, would be 27.11.2018 as being the relevant date for offer of possession.  The aforesaid chronology for obtaining Fire NOC would indicate a delay of approximately 7 months in obtaining the Fire NOC by the Developer.

Regarding the second issue the Supreme Court observed that the clauses reflect the wholly one sided terms of the Apartment Buyer’s  Agreement, which are entirely loaded in favor of the developer and against the allottee  at every step.  The Supreme Court held that the terms of the Apartment Buyer’s Agreement are oppressive and wholly one-sided and would constitute an unfair trade practice under the Consumer Protection Act, 1986.

Regarding the third issue the Supreme Court held that the Consumer Protection Act, 1986 was enacted to protect the interests of consumers and provide a remedy for better protection of the interests of the consumers, including the right to seek redressal against unfair trade practices of unscrupulous exploitation.

Pecuniary jurisdiction

In ‘NEENA ANEJA AND ORS. VERSUS JAI PRAKASH ASSOCIATES LTD.  [2021 (9) TMI 1155 - SUPREME COURT] the appellant filed a complaint before the National Commission for a claim of ₹ 2.19 crores on 18.06.2020.   The National Commission dismissed the appeal on the ground of pecuniary jurisdiction.  The pecuniary jurisdiction of the National Commission has been increased from one crore  to ₹ 10 crores by the new Consumer Protection Act, 2019 which came into force from  20.07.2020.  The appellants filed review petition before the National Commission which was also dismissed.  Therefore the appellant filed the present appeal before the Supreme Court. 

The Supreme Court held that the proceedings instituted before the commencement of the Act of 2019 on 20.07.2020 would continue before the Fora corresponding to those under the Act of 1986 and is not to be transferred in terms if pecuniary jurisdiction set for the fora established under the Act of 2019.  The Supreme Court gave the following directions-

• The impugned judgment and order of the National Commission dated 30.07.2020 and the review order dated 05.10.2020 directing a previously instituted consumer case under the Act of 1986 to be filed before the appropriate forum in terms of the pecuniary limits set under the Act of 2019, shall stand set aside.
• As a consequence of the above, the National Commission shall continue hearing the consumer case instituted by the appellants.
• All proceedings instituted before 20.07.2020 under the Act 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 as explained above and not be transferred in terms of the new pecuniary limits established under the Act of 2019; and
• The respondent shall bear the costs of the appellant quantified at ₹ 2 lakhs which shall be payable within four weeks.