An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.
Short title, extent, commencement and application:
1. (1) This Act may be called the Consumer Protection Act, 2019.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It came into force on 20th July 2020
(4) Save as otherwise expressly provided by the Central Government, by notification, this Act shall apply to all goods and services.
- INEQUITABLE AGREEMENT
Tarun Kumar Ghai Vs Malibu Estate Pvt Ltd, NCDRC, 2008, CPJ 309
My builder forced me to pay ‘Penal interest’. But he does not pay any compensation for delayed completion. What to do?
As per the agreement, if the Builder abandons the whole or part of the scheme, the builder’s liability is limited only to refund of the Amount paid by the allottee without interest or compensation. On the other hand, if the allottee has delayed in paying instalments, he is liable to pay 20% interest and all amount due.
This agreement is inequitable.
Relief: Builders to pay interest on the deposited amount at par with the bank loan interest.
- DELAY IN DELIVERY OF POSSESSION
Veena Khanna Vs Ansal Properties & Industries Ltd, NCDRC, 2007, CPJ 185
My builder does not complete the house. My bank interest increases because of his delay. How to get rid off?
If the builder fails to deliver the possession on time, they are liable to pay interest rate on the deposited amount equivalent with the interest of bank loan obtained by the purchaser.
- DON’T PAY MORE THAN 30% INTEREST ON CREDIT CARDS
Awaz& others Vs RBI & Others, 2007, NCDR (CCNo.51/2007)
My credit card provider charges me 45% of compound interest. Is there any way to get relief from this trap?
Charging of interest in excess of 30% shall be considered unfairly high rate of interest. If such rate is charged from the credit card holders by the banks for the failure to make full payment on due date are paying minimum amount due would amount to unfair trade practices.
- IMPPSITION OF PENALTY FOR FRIVOLOUS CONSUMER CLAIMS
Sapient Corporation Employees Provident Fund Trust v HDFC & Ors.
Whether the bank committed any default by paying an amount payable as a statutory due decided by a judicial order? Can a bank be held guilty for deficiency in service for paying a rightful due?
Court – No deficiency in service for releasing an amount due on court order.
As per Section 26 of the Consumer Act, any consumer fora under the act has the power to dismiss a complaint made frivolously or one that is vexatious or unnecessary.
Further, the court notices that the trust has already won the appeal from EPFO orders at the Appellate stage, whereby they would receive the entire amount with interest. Therefore, the case is without any merit and no remedy is made.
For this false litigation, the court imposed a penalty of ₹25,000 on the complainant trust that would be paid to the HDFC Bank.
- BOTH PARENTS AND MINOR CAN CLAIM FOR COMPENSATION UNDER THE CONSUMER PROTECTION ACT
Spring meadows hospital v. Harjot Ahluwalia
Can parents of the child, being the consumer, approach the court for availing compensation? Can the court award compensation to the parents for mental agony?
Definition of consumer wide enough to cover the beneficiary: When a young child is taken to a hospital by his/her parents and the child is treated by the doctor, the parents would come within the definition of the consumer having hired the services, and the young child would also become a “consumer” under the inclusive definition.
Compensation can justifiably be claimed by both parents as well as the child: The court states that the child is justified in seeking compensation for the recurring medical expenses, equipment, etc, for the vegetative state he is rendered in.
The parents are also, as beneficiaries entitled to seek compensation for the pain, acute mental agony and lifelong care that they’d be required to give to the child. As a result, the court upheld the compensation of Rs.17.5 lakhs awarded by the National Commission, which was also the highest amount ever awarded until the case was decided in 1997.
- DISCOVERY RULE FOR MEDICAL NEGLIGENCE
V.N.Shrikhande v. Anita Sena Fernandes
Whether a petitioner can still approach the court for a deficiency in service after nine years and would it be barred by limitation?
When can a court accept the consumer case – The court lists that the matter must satisfy certain essentials. The petitioner should fall within the definition of ‘consumer’ as defined in the act and there must be a ‘defect’ or ‘deficiency in service’, and the complaint should have been filed within the prescribed period of limitation, only then it can direct that the complaint may be proceeded with.
The Discovery Rule of limitation – Limitation is a legal concept that puts a restriction on one’s ability to approach the court after a period of delay. This has been introduced to keep a check on frivolous cases, and act as a disincentive for people have not been mindful of enforcing their rights.
It also insulates defendants from defending very old claims. In medical cases, the court states the regular limitation period under the act must not apply.
It refers to an American case, where a surgical sponge left behind in a patient’s body was discovered after ten long and painful years. It held that where a foreign object has negligently been left in the patient’s body, the limitation period will not begin to run until the patient could have reasonably discovered the malpractice.
- EDUCATIONAL INSTITUTES MUST REFUND ANY EXTRA FEES PAID
Sehgal School of Competition v Dalbir Singh
Can a student seek a refund of fees paid to a coaching class for the remaining period of classes that are yet to be held? In case of a refusal to refund fee, can a claim for mental agony for pressing legal charges to be sought?
Clauses prohibiting refund of fees are unfair – The Commission notes that educational institutes or coaching centre that charge a lump sum fees for the whole duration or should refund the fees if service is deficient in the quality of coaching etc.
Any clause saying that fees once paid shall not be refunded is unconscionable and unfair and therefore not enforceable. This view was maintained by District and State Forums as well as in appeal by the National Commission.
Quashing respondent’s argument on the reservation of seat – The respondent coaching centre argued before the commission that the student had withdrawn voluntarily and, therefore, there exists no deficiency of service.
They submitted records that showed good results of the institute and alleged that it was wrong to observe that their coaching was not up to the mark. To justify taking the entire fees of two years lump sump, it was stated that the conditions imposed by the coaching required non-transferability of the seat, and therefore no refund of the fee was possible under any circumstance.
The court dismissed this argument and further quoted UGC guidelines that mention that even if a student has not attended even a single class, an amount of ₹1000 may be deducted and proportionate charges for hostel fees, etc, and the balance amount has to be refunded in its entirety. On blocking of the seat, the Commission advised that a reserve list of candidates may be maintained, and waitlisted candidates may be given the opportunity to apply for the seat.
Additional compensation – In the order by State Consumer Forum, it was mentioned that not just the balance amount of fee, but also a higher compensation for legal costs as well as the pain that the student had to undertake, could be availed in such cases.
- MEDICAL SERVICES MUST BE RENDERED IN ACCORDANCE WITH THE LAW
Poonam Verma v. Ashwin Patel
Whether the appellant’s husband is a consumer, who can avail damages for negligence in service? Whether the conduct of the respondent doctor is negligent, and there is a breach of duty of care? Determining the amount of damages to the deceased’s wife.
– Deceased was a consumer of medical services – The Court relied on the reasoning in the classic case Indian Medical Association v. BP Shantha, and held that the Consumer Protection Act is applicable to medical professionals, including hospitals and private practitioners. Thus, the deceased was a “consumer” of the medical services.
Determinants of negligent conduct by a doctor – The Court relied on a case to hold that a doctor, when consulted by a patient, owes him certain duties, namely, (a) a duty of care in deciding whether to undertake the case; (b) a duty of care in deciding what treatment to give; and (c) a duty of care in the administration of that treatment. A breach of any of these duties gives a cause of action for negligence to the patient.
The National Consumer Forum held that the doctor was negligent in administering strong antibiotics to Pramod Verma initially for the treatment of Viral Fever and subsequently for Typhoid Fever without confirming the diagnosis by Blood Test or Urine Examination.
Registration to practice bars Homeopathy practitioners from Allopathy – The Court placed reliance on provisions of the Indian Medical Council Act, 1956 and Maharashtra Medical Council Act, which state that a person cannot practice medicine in any state unless he possesses requisite qualification and is enrolled as a Medical Practitioner. The definition of medical practitioner does not include Ayurveda, Unani, Homeopathy, or Biochemic System of medicines.
Further, the certificate of registration issued to such homeopathy practitioners states that it entitles them to practice in “Homeopathy Only”.
Thus, in accordance with established legal cases, rules of medical negligence, evidence in the form of prescriptions, the court reiterated the principle – Sic Utere tuo ut alienum non loedas– a person is held liable at law for the consequences of his negligence and held the doctor guilty of active negligence.
Compensation and Costs – The Court decided a compensation of ₹ 3 lacs while considering the last drawn salary of the deceased and the number of dependents.
Legal costs in the case were also reimbursed, and the Court directed the Medical Council of India to initiate appropriate proceedings against the action of the homeopathy doctor.
- MEDICAL SERVICES FALL WITHIN THE SCOPE OF CONSUMER PROTECTION ACT
Indian Medical Association v V.P. Shantha and others
Whether a medical practitioner can be regarded as rendering ‘service’ under the Consumer Protection Act, 1986? If a medical service is rendered for free, will it be covered under the Act?
The medical practitioner and a patient carries within it a certain degree of mutual confidence and trust and, therefore, the services rendered by the medical practitioner can be regarded as services of personal nature, but it is not a contract (such as that between a buyer and seller) and hence, the exclusionary word “contract of personal service” would not apply. Thus, the receiver of the medical help is a consumer.
The Court held that District, State and National Consumer Fora can summon experts in the field of medicine, examine evidence and generally act to protect the interest of consumers. Thus, there is no legal bar or deficiency in examining medical profession cases by consumer courts.
Doctors and hospitals who render service without any charge whatsoever to every person availing the service would not fall within the ambit of “service”.
In a government hospital, where services are provided free of charge – the Consumer Protection act would not apply. If however, there are paying customers and well as service being provided for free to the poor, it shall be covered as a service under the act.
If the insurance policy company pays for the treatment, it is on behalf of the customer, and hence, it will be covered under the Act.
- CORPORATE BODIES CAN BE SUED UNDER THE CONSUMER PROTECTION ACT
Karnataka Power Transmission Corporation (KPTC) v Ashok Iron Works Private Limited
“Includes – is an inclusive definition” – Supreme Court relied on the ruling in Dilworth v. Commissioner of Stamps, where Lord Watson said that the word “include” is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; It may be equivalent to “mean and include”.
The court also relied on other acts such as the General Clauses Act that includes a private company within the purview of the definition of a “person”. Hence, Ashok Iron Works Private Company was held to be a person.
Supply doesn’t mean sale – The Supreme Court relied on another case – Southern Petrochemical Industries, where it was held that supply is not equivalent to a sale.
Therefore, the supply of electricity by the KPTC to a consumer would be covered under Section 2(1)(o) being `service’ and if the supply of electrical energy to a consumer is not provided in time as is agreed upon, then under Section (2)(1)(g), there may be a case for deficiency in service. Thus, the clause stating “supply” of goods for commercial purpose would not apply.
Thus, the court allowed the complaint on the two grounds that the applicant – Ashok Iron Works Private Limited, can sue as a person, and that supply of electricity, if found deficient can be a fit ground for claiming compensation. The Supreme Court sent the case back to District Forum for retrial on these grounds.