INTRODUCTION

Name - Sunny Bhardwaj

Roll – 20/ILB/103

Program – BA.LL.B

YEAR – 2021

Semester – 2ND Semester

Submitted to– Mohit Sir

 Acknowledgment

I would like to express my special thanks of

gratitude to my teacher Mr. Mohir Kumar, who
gave me the opportunity to this wonderful
assignment on the topic “Supreme Court cases
on consumer protection act”, who also helped
me in completing this assignment . I came to
know about so many new things and I am really
thankful to them.

Secondly I would also like to thank my parents

and friends who helped me a lot in finalizing this
assignments within the limited time frame.

SUNNY BHARDWAJ
What is the Consumer Protection Act?

The Consumer Protection Act, implemented in 1986, gives

easy and fast compensation to consumer grievances. It
safeguards and encourages consumers to speak against
insufficiency and flaws in goods and services. If traders and
manufacturers practice any illegal trade, this act protects their
rights as a consumer. The primary motivation of this forum is
to bestow aid to both the parties and eliminate lengthy
lawsuits.
This Protection Act covers all goods and services of all
public, private, or cooperative sectors, except those exempted
by the central government. The act provides a platform for a
consumer where they can file their complaint, and the forum
takes action against the concerned supplier and compensation
is granted to the consumer for the hassle he/she has
encountered.

Consumer Rights and Responsibilities:

The Rights of the Consumer
 Right to Safety- Before buying, a consumer can insist on
the quality and guarantee of the goods. They should
ideally purchase a certified product like ISI or
AGMARK.
 Right to Choose- Consumer should have the right to
choose from a variety of goods and in a competitive
price.
  Right to be informed- The buyers should be informed
with all the necessary details of the product, make
her/him act wise, and change the buying decision.
 Right to Consumer Education- Consumer should be

aware of his/her rights and avoid exploitation. Ignorance

can cost them more.
 Right to be heard- This means the consumer will get

due attention to express their grievances at a suitable

forum.
 Right to seek compensation- The defines that the

consumer has the right to seek redress against unfair and

inhumane practices or exploitation of the consumer.
The Responsibilities of the Consumer
 Responsibility to be aware – A consumer has to be
mindful of the safety and quality of products and services
before purchasing.
 Responsibility to think independently– Consumer
should be well concerned about what they want and need
and therefore make independent choices.
 Responsibility to speak out- Buyer should be fearless to
speak out their grievances and tell traders what they
exactly want
 Responsibility to complain- It is the consumer’s
responsibility to express and file a complaint about their
dissatisfaction with goods or services in a sincere and
fair manner.
 Responsibility to be an Ethical Consumer- They
should be fair and not engage themselves with any
deceptive practice.
Karnataka Power Transmission Corporation (KPTC) Vs.
Ashok Iron Works Private Limited

The case dates back to the last century, when in 1991, Ashok
Iron Works, a private company that manufactures iron applied
for obtaining electricity from the state’s power generation
company – the Karnataka Power Transmission Corporation
(hereinafter KTPC) for commencing its iron production.
However, despite paying charges and obtaining confirmation
for the supply of 1500 KVA energy in February 1991, the
actual supply did not begin until ten months later, in
November 1991. This delay led to incurring of losses by the
private company. This prompted a complaint to the Belgaum
Consumer Dispute Forum and later Karnataka High Court,
under the Consumer Protection Act 1986 for the delay in
supply of electricity.
Following are the legal arguments done by the KPTC:
 Commercial supply not covered under the act- The major
argument relied on by the power generation company
KTPC was that the complaint was not maintainable since
the Consumer Protection Act 1986 excludes commercial
supply of goods. The applicant company was engaged in
manufacturing of iron, and hence, intended to use the
electricity for commercial consumption, which is
excluded under the act.
 A private company is not a consumer-The other
argument by KTPC was that the complaint is not
maintainable because the complainant is not a `person’
under Section 2(1)(m) of the Act, 1986. This section
defines who can be included as a consumer, and because
it didn’t contain “a company incorporated under
Companies Act” – the applicant company is not a
consumer.
On the other hand following are the ruling of the
supreme court:

 “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.

Indian Medical Association v V.P. Shantha and others

The cases arise as a writ petition was filed by the Indian
Medical Association seeking the Supreme Court to declare
that the Consumer Protection Act (hereinafter “Act”) doesn’t
apply to the medical profession.

The Arguments which were made by Indian Medical

Association were following-
Reliance on cases which state that such medical service by a
government healthcare system is not a “service” – It has been
held that the payment of direct or indirect taxes by the public
does not constitute “constitute “consideration” paid for hiring
the services rendered in the Government hospitals. It has also
been held that contribution made by a Government employee
in the Central Government Health Scheme or such other
similar Scheme does not make him a “consumer” within the
meaning of the Act.

Medical professionals are governed by a separate Code of

Medical Ethics :

Medical practitioners are governed by the provisions of the

Indian Medical Council Act, 1956 and the Code of Medical
Ethics made by the Medical Council of India. In the matter of
professional liability, professions differ from other
occupations for the reason that professions operate in spheres
where success cannot be achieved in every case and very
often success or failure depends upon factors beyond the
professional man’s control. Thus, since medical negligence
can be dealt with by medical experts in their own jurisdiction,
the Consumer Protection Act shouldn’t apply.

There is no expert in medical science in the Consumer Courts

The Consumer Protection mechanism provides that there must
be experts in accountancy, law, economics, industry etc, but
doesn’t mention “medical science”, therefore, the act intended
to exclude medical profession from its ambit.

Reasoning of the final verdict given by the court – Medical

professionals are covered under the Consumer Protection 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.

(Dr.) Arvind Shah vs Kamlaben Kushwaha

The case arises as a result of the death of complainant

Kamlaben Kushwaha’s 20-year-old son due to medical
negligence by the petitioner doctor. The mother alleged that
the medicines prescribed had no relation to the ailment –
malaria, whereas the actual cause of death was said to be
pulmonary oedema. The doctor alleged that he did not
diagnose the deceased for malaria, as pathological tests are
necessary to establish that conclusively, and no such report
was made available to him. While the State Commission
found the doctor guilty of medical negligence and awarded a
compensation of 5 lac rupees with interest at 9%, the case was
appealed by the doctor in the National Commission.

The National Commission places reliance on the codes,

ethics and practices of the medical professionals regulatory
bodies and notes that every doctor while treating a patient,
even outpatients, is under a responsibility to record basic
health parameters such as blood pressure, temperature, pulse
rate etc. This is provided under guidelines of the Medical
Council of India as well.
This record must also include brief summary of the
symptoms, past illnesses. This is a primary duty of disclosure
owed by the physician to the patient. Thus, failure to record
such details constitutes medical negligence.
The national commission also highlighted that the doctor is
guilty for deficiency in service, due to his failure to record the
patient’s conditions and issue a medical prescription.
The national commission also notes the denial of the doctor of
having written the prescription served as evidence in the first
place, but later accepts treating the patient. This conduct, in
the language of the commission, does not reflect professional
conduct worthy of a medical practitioner.
Considering the socio-economic conditions in India, it is
necessary to nurture doctor-patient relationships based on
trust. Having a ready prescription also helps the patient
consult another doctor, in case the initially prescribed line of
curative medicine does not work. Similarly, it helps the
medical practitioner establish that due care was taken
according to prescribed standards in the field of medicine.
The Commission noted that while the doctor is indisputably
held guilty of medical negligence by not issuing a proper
prescription, there is no material available on record to
conclusively establish the negligence of the doctor with the
cause of death. The medicines prescribed were not related
to the established cause of death – pulmonary oedema. As a
result, the amount of damages ordered by the State
Commission were reduced by the National Commission to
Rs. 2.5 lacs.
 Poonam Verma Vs. Ashwin Patel

In this case, the respondent doctor, Ashwin Patel, was trained

in homoeopathy for four years and started his private practice.
The appellant Poonam Verma, approached the Supreme court
for compensation for her deceased husband, who was
administered allopathic drugs for viral fever, and later typhoid
fever by the homoeopathy doctor. Her husband passed away
within eight days of the treatment.

The reasoning of the court – Prescription of Allopathic drugs

by a homoeopathy doctor amounts to negligence
– 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.

Sehgal School of Competition Vs Dalbir Singh

In this landmark judgement concerning educational

institutions that dates back to the year 2005, a student was
asked to deposit lump sum fees of ₹18,734 as fees for
coaching for medical entrance examinations for the next two
years. This was deposited by the student in two complete
instalments within the first six months of classes. However,
the student realised later that the quality of the coaching
institute was substandard, and therefore sought a refund for
the remaining period, which was refused by the coaching
institute.

The reasoning of the Commission – Upholding student’s right

to be refunded for remaining classes
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.
 Nizam Institute of Medical Sciences Vs Prasanth S.
Dhananka & Ors

This consumer case arises out of a complaint of medical

negligence where a 20-year-old engineering student was
admitted to the Nizam Institute of Medical Sciences (NIMS)
after he complained of chest pain. Several tests and X rays
were done that revealed a tumor, however, it could not be
ascertained whether the tumor was malignant or not,
therefore, the patient was advised to undergo surgical removal
of the same. After the surgery, the patient developed acute
paraplegia with a complete loss of control over the lower
limbs and some other related complications that led to urinary
tract infections, bedsores, etc. The family of the patient held
NIMS vicariously liable and the State of Andhra Pradesh
statutorily liable (being a government hospital) for the
negligence of the doctors concerned. Allegations were
primarily leveled against a doctor, Dr. P.V. Satyanarayana for
negligence before, during, and after the operation.

In this Arguments which were made by patient’s family are as

follows:

 The father of the patient, since he was an engineering

student, had pleaded with doctors to let him finish his
 education first before undergoing the operation as there
was no emergency or immediate danger to life
 There were no pre-operative tests conducted
 Operating on the tumor that had neurological
implications, there was no neurosurgeon present
 Consent was taken only for the tumor excision,
however, the doctors removed not just the tumor but
also surrounding ribs, tumor mass, and destroyed blood
vessels that led to the condition of paraplegia
(paralysis).

Supreme court verdict- The Court trashed the argument by the

hospital that since the patient was not conscious – implied
consent to operate is assumed to avoid a second additional
operation. The Court looked at various cases of medical
negligence and held that as long as a doctor follows a practice
acceptable to the medical profession, he cannot be held liable
for negligence merely because a better alternative course or
method of treatment was also available. This also includes a
scenario where just because a more skilled doctor would not
have chosen to follow a practice or procedure which the
accused followed. The conduct needs to be judged based on
the day of the operation, and not on trial. However, based on
the evidence, in this case, gross negligence is made out in part
of the doctors.
 V.N.Shrikhande Vs. Anita Sena Fernandes

This consumer case is decided by the Supreme Court of India

on appeal from the orders of the National Consumer Disputes
Redressal Commission. The case involves the petitioner –
Anita Sena, who was a nurse by profession. She underwent a
stone removal surgery from her gall bladder but claimed that
she continued to experience pain. For nine years, she had a
gauge left in her abdomen by the surgeon who operated on
her. This required a second surgery, and sufferance for many
years – therefore, charges for negligence and compensation of
Rs.50 lakhs was demanded by the petitioner.
The Essential question before the court was that whether a
petitioner can still approach the court for a deficiency in
service after nine years and would it be barred by limitation?
The Principles which was applied by the court are follows:
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.

Spring meadows hospital Vs. Harjot Ahluwalia

This landmark case arises out of a complaint against Spring

Meadows Hospital, where the minor child – Harjot Ahluwalia
was admitted by his parents. The child was diagnosed with
typhoid and was injected a solution by a nurse after which his
condition deteriorated. He was shifted to an auto respiratory
ICU at AIIMS, where it was found that due to the injection
administered, his brain got damaged and he would only live in
a vegetative state for life. The parents of the child approached
the court for a case of medical negligence and demanded
compensation, on behalf of the child.

The Essential question before the court were :

 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?

The Arguments which were made by the nurse and the

hospital were that there was no medical negligence as the
nurse was professionally qualified.The solution of the
injection administered was already being given in the oral
form, hence the nurse did not do any test for injection. The
nurse did not exercise independent decision, was only acting
as per directions of the pediatrician.The hospital also argues
that compensation cannot be claimed twice, by both the child
and his parents.The hospital also sought refuge in the fact that
after the child was declared vegetative by AIIMS, they
volunteered to offer medical services without charge to the
parents.

The court while making a case for gross negligence

quashed these arguments and held the hospital responsible, for
the medical college of the nurse had no affiliation, the
injection overdose had led to the child’s brain damage and
there was no resident doctor present.

The reasoning of the court were that 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.

Sapient Corporation Employees Provident Fund

Trust Vs. HDFC & Ors.

This case arises as a result of a complaint of an alleged

wrongful debit from a bank account. The complainant trust –
Sapient Corporation Employees Provident Fund Trust
maintained an account with the respondent HDFC Bank. The
bank received instructions from the Employee Provident Fund
Organisation (EPFO) that mentioned order of payment of
₹1.47 crores against the trust, and that no other payments
from the trust’s account be made until EPFO’s liability is
settled by the trust. The trust, however, issued an instruction
to the bank not to debit any amount until further
communication as they wanted to seek a stay order. However,
in payment of the statutory due to EPFO, the bank, after
giving due time, debit the account with an amount of ₹1.47
crores. The trust has challenged this as a deficiency in service
and demanded the amount debited along with interest,
damages, and legal expenses.

Essential Question before the National Commission

 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?
The Court sayed that – No deficiency in service for
releasing an amount due on court order

No negligence or deficiency in service by HDFC Bank –

The Commission dismissed the argument of the
complainant that without any authority or mandate,
debiting the amount due to EPFO of ₹1.4 crores is a
deficiency in service. An action in compliance with the
direction of a statutory authority such as EPFO cannot be
said to be willful negligence or deficiency in service. The
bank also informed the trust, as its customer, and gave
them due time. Hence, the action is legal and proper.

Frivolous consumer cases are to be penalized – 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.

Delhi Development Authority Vs. D.C. Sharma

In this case, DC Sharma (respondent), a government servant

paid an initial amount for allotment of a plot of ₹ 5 lacs in
1997, by the Delhi Development Authority (hereinafter called
DDA). He requested extra time for the instalment payment as
he wished to avail loan facility from his office. Meanwhile, it
was realised that the plot allotted to him through a draw of
lots had already been allotted to another person, two years
before the draw of lots. Due to this negligence of the DDA,
the respondent approached the District forum, that dismissed
the case. Subsequently, the state Consumer forum was
approached that passed an order in favour of the respondent.

Order of the State Commission

The state commission in its order held the state responsible,
for DDA is a government entity. It directed DDA to allot an
alternative plot of the same kind or pay the escalated price of
₹30 lacs. The DDA relies on a frivolous argument that the
case is liable to be dismissed since the respondent did not pay
the instalment and therefore, his application stood rejected.
Whereas, in reality, the allotted plot number has already been
assigned to someone back in 1995 and the DDA took no steps
to correct its own error in the allotment.

Order of the National Commission

Government departments such as DDA harassing genuine

buyers in technical pleas – The National Commission
criticised the conduct of DDA by stating that Governments
and public authorities should not adopt the practice of relying
upon technical pleas for the purpose of defeating legitimate
claims of citizens and do what is fair and just to the citizens. It
was well within the capacity of the DDA to remedy this error
and take corrective action. On the contrary, it kept the
condoning its own mistake by shifting the blame on the
respondent.

Punitive damages for pursuing a frivolous case – While

upholding the order of the State Commission, The national
commission imposed costs of ₹2 lacs as well as punitive
damages of ₹ 5 lac rupees on the DDA and asked them to
recover the amount from erring officials who pursued the case
for eighteen years. This long delay led to harassment of the
respondent and filing of meritless appeals in various courts.
This has not just added to litigation costs but also wasted time
of several courts as well as the public ex-chequers money.

Om Prakash v. Reliance General Insurance (2017)

In the case, the Appellant insured his truck with the
Respondent. The Appellant’s vehicle was stolen and
consequently, an FIR was also lodged. The theft of the vehicle
had taken place on 23.03.2010, the FIR was lodged on
24.03.2010 and the claim petition with the Respondent
company was filed on 31.03.2010. On lodging the insurance
claim, the Investigator appointed by the
Respondent confirmed the factum of theft and consequently,
the Corporate Claims Manager approved an amount of
Rs.7,85,000/- for the said claim of the appellant.

Thereafter, the Appellant made several requests to the

respondent, seeking speedy processing and disposal of his
insurance claim. However, on non-payment the Appellant
served a legal notice to the Respondent but the Respondent
repudiated the Appellant’s insurance claim citing breach of
condition of terms of Insurance by the Appellant. The
impugned term being- i.e. immediate information to the
Insurer about the loss/theft of the vehicle.

Aggrieved by the aforesaid, the Appellant filed complaint

before the, District Consumer Disputes Redressal Forum
(‘District Forum’), seeking a direction to the respondent-
company for payment of claim amount with an interest @
18% per annum, along with compensation of Rs.1,00,000/-.
However, the District Forum dismissed the complaint of the
appellant. The Appellant met with a similar fate in State
Commission as well as National Commission, wherein his
appeals were dismissed.
In the instant case, the Appellant approached the Supreme
Court against National Commission’s order and
challenged the legality and correctness of the said order.

Bench’s Verdict

The Supreme Court allowed the Appellant’s appeal and made

the following observations:

 That truck-driver, had filed an affidavit before the

District Forum stating that the owner of the truck had
reached the place of occurrence of theft and on lodging
complaint the Police had asked him and the Appellant
to stay with them in order to help them for tracing out
the truck. Thus, the Appellant was busy with the
Rajasthan Police in searching the vehicle and returned
to his village on 30.03.2010.
 The Court in the aforesaid context noted that it is
common knowledge that a person who lost his vehicle
may not straightaway go to the Insurance Company to
claim compensation. At first, he will make efforts to
trace the vehicle. It is true that the owner has to
intimate the insurer immediately after the theft of the
vehicle. However, this condition should not bar
settlement of genuine claims particularly when the
delay in intimation or submission of documents is
due to unavoidable circumstances.
 The Court also observed that an Insurance company
shall reject claim on valid grounds. Rejection of the
claims on purely technical grounds in a mechanical
manner will result in loss of confidence of policy-
holders in the insurance industry. If the reason for
delay in making a claim is satisfactorily explained,
 such a claim cannot be rejected on the ground of delay.
It is also necessary to state here that it would not be
fair and reasonable to reject genuine claims which had
already been verified and found to be correct by the
Investigator.
 The Court also noted that the Consumer Protection
Act, 1986 is a beneficial legislation that deserves
liberal construction. This laudable object should not be
forgotten while considering the claims made under the
Act.
In view of the aforesaid, the Supreme Court held that the
National Commission was not justified in rejecting the claim
of the appellant without considering the explanation for the
delay. The Court also held that the claimant was entitled for a
sum of Rs.50,000/- towards compensation.

The Court directed the Respondent company to pay a sum of

Rs. 8,35,000/- to the Appellant along with interest @ 8% per
annum from the date of filing of the the claim petition till the
date of payment.

Manjeet Singh Vs. National Insurance

Company Ltd. & Anr.

In this recent case, decided by Two-Judge Bench of the

Supreme Court, the Court has further expanded the scope and
ambit of protecting consumers under Insurance claims by
holding that an insurance company cannot reject motor
vehicle claim on the ground that giving lift to passengers
which was later stole by them did not tantamount to
fundamental breach of terms of policy. In this case, the
Appellant had purchased a second-hand truck under a Hire
Purchase agreement. The vehicle was hypothecated in favour
of Respondent finance company. The truck was insured by the
Respondent insurance company.

The cause of action in the case arose when the vehicle was
being driven by one, Sanjay Kumar and some persons gave a
signal to the driver to stop the vehicle. After he stopped, they
requested the driver to give them lift and the driver gave them
lift. After a little while, one of the passengers requested the
driver to stop the truck and thereafter assaulted the driver and
fled away with the vehicle. An FIR was lodged and the
respondent finance company was intimated about the theft.
However, the insurance company rejected the claim on the
ground of breach of terms of the policy.

The aggrieved Complainant approached the District

Consumer Disputes Forum alleging that the insurance
company was liable to compensate him for the loss caused to
him by the theft of truck. However, the Respondent insurance
company submitted that by giving a lift to the passengers, had
violated the terms of the policy and, as such, there was breach
of policy and the insurance company was not liable. The
District Forum also rejected the claim on the ground that the
arbitration proceedings had been initiated by the Respondent
finance company against the complainant and they were at the
final stage.

The appeal filed by the claimant before the State Commission

was rejected and so was the revision filed before the National
Commission. Aggrieved by this, the Appellant in the case
approached the Supreme Court.

Bench’s Verdict
Whether giving lift amounted to breach of terms of
policy? In this context, the Supreme Court observed that the
violation of the condition should be such a fundamental
breach so that the claimant cannot claim any amount
whatsoever. As far as the violation in carrying passengers is
concerned, this has consistently been held not to be a
fundamental breach. The Court made reference to the case
of Lakhmi Chand v. Reliance General Insurance[1],
wherein the Court held that to avoid its liability, the insurance
company must not only establish the defence that the policy
has been breached, but must also show that the breach of the
policy is so fundamental in nature that it brings the
contract to an end.

With reference to the instant case, the Court held that the
appellant was not at fault in giving lift to some passengers.
Carrying such passengers may be a breach of the policy, but it
cannot be said to be such a fundamental breach as to bring the
insurance policy to an end and to terminate the insurance
policy.

Arbitration proceedings by the Respondent finance

company against the complainant were at final stage. In
this context, the Supreme Court held that arbitration
proceedings between the financer and the insurer, relating to
recovery of the loan amount, cannot in any way, negate the
rights of the insured against the insurance company.
The Two-Judge Bench of Supreme Court in view of the
aforesaid circumstances and laws, the Court allowed the
appeal and directed the respondent insurance company to pay
75% of the insured amount along with interest @ 9% p.a.
from the date of filing the claim petition till the deposit of the
amount. The Court also directed the insurance company to
pay sum of Rs.1,00,000/- as compensation.

National Insurance Company Ltd. Vs.

Hindustan Safety Glass Works Ltd. & Anr.

In the case, the Insurance Company refused to compensate the

Respondent on account of damage caused due to heavy rain
during the mentioned period. The Insurance Company
admittedly denied relief to the Insured on account of one of
the conditions in the Policy which stated that National
Insurance would not be liable for any loss or damage 12
months after the event that caused the loss or damage to the
insured unless the claim is the subject matter of a pending
action or arbitration.

The Supreme Court with reference to the case made the

following observations:

 That when a claim is made by the insured that itself is

actionable. There is no question of requiring the
 insured to approach a court of law for adjudication of
the claim. This would lead to encouraging avoidable
litigation which certainly cannot be the intention of the
insurance policies and is in any case not in public
interest.
 That in the case the event that caused the loss or
damage to the insured occurred on 6th August, 1992
when due to heavy incessant rain in Calcutta, the raw
materials, stocks and goods, furniture etc. of the
insured were damaged. On the very next day, the
insured lodged a claim with National Insurance. That
the surveyor appointed by the Insurance Company took
about one year to submit its report. Thus, the National
Insurance itself took more time in surveying or causing
a survey of the loss or damage suffered by the insured.
Surely, this entire delay is attributable to National
Insurance and cannot prejudice the claim of the insured
more particularly when the insured had lodged a claim
well within time.
 That in a dispute concerning a consumer, it is
necessary for the Courts to take a pragmatic view of
the rights of the consumer principally since it is the
consumer who is placed at a disadvantage vis-à-visthe
supplier of services or goods. It is to overcome this
disadvantage that a beneficent legislation in the form
of the Consumer Protection Act was enacted by
Parliament.
 That the provision of limitation in the Act cannot be
strictly construed to disadvantage a consumerin a
case where a supplier of goods or services itself is
instrumental in causing a delay in the settlement of the
consumer’s claim.
 Ambrish Kumar Shukla & 21ors. Vs.
Ferrous Infrastructure Pvt. Ltd. (2016)

In the case, the National Commission while taking up the

issue whether a complaint under Section 12(1)(c) of
the Consumer Protection Act filed on behalf of or for the
benefit of only some of the numerous consumers having a
common interest or a common grievance is maintainable or it
must necessarily be filed on behalf of or for the benefit of all
the consumers having a common interest or a common
grievance against same person?

While deciding the issue the National Commission elucidated

on the object of “class action suit” as under:

 That a suit in terms of order 1 Rule 8 of the Code of

Civil Procedure commonly termed as a class suit is
intended on behalf or for the benefit of all the persons
having a common grievance against the same party and
seeking the same relief not on behalf of or for the
benefit of only some of them.
 A complaint under Section 12(1)(c) of the Consumer
Protection Act can be instituted only by one or more
consumers, as defined in Section 2(1)(d) of the
Consumer Protection Act. Therefore, a group of
Cooperative societies, Firms, Association or other
Society cannot file such a complaint unless such
society etc. itself is a consumer as defined in the
aforesaid provision.
 That more than one complaints under Section 12(1)(c)
of the Consumer Protection Actare not maintainable on
behalf of or for the benefit of consumers having the
same interest i.e. a common grievance and seeking the
same / identical against the same person.
 That in case more than one such complaints have been
instituted, it is only the complaint instituted first under
Section 12(1)(c) of the Consumer Protection Act, with
the requisite permission of the Consumer Forum,
which can continue and the remaining complaints filed
under Section 12(1)(c) of the Consumer Protection
Actare liable to be dismissed with liberty to join in the
complaint instituted first with the requisite permission
of the Consumer Forum.
 That individual complaints instituted before grant of
the requisite permission under Section 12(1)(c) of
the Consumer Protection Actcan continue despite grant
of the said permission but it would be open to such
complainants to withdraw their individual complaints
and join as parties to the complaint instituted in a
representative character. However, once the requisite
permission under Section 12(1)(c) of the Consumer
Protection Act is granted, an individual complaint,
expressing the same grievance will not be maintainable
and the only remedy open to a consumer having the
same grievance is to join as a party to the complaint
instituted in a representative character.
 Indian Machinery Company Vs.
M/s Ansal Housing & Construction Ltd

The seminal issue that arose in the case was that whether
a second complaint to the District Forum under the Consumer
Protection Act is maintainable when the first complaint was
dismissed for default or non-prosecution. In the case, the
National Commission took the view that the second complaint
would not be maintainable.

However, in appeal, the Supreme Court set aside the National

Commission’s order. The Court while arriving at its decision
made reference to the case of New India Assurance Co. Ltd.
Vs. R. Srinivasan[2], wherein it was opined that the rule of
prohibition contained in Order 9 Rule 9(1) CPC cannot be
extended to the proceedings before the District Forum or the
State Commission. The fact that the case was not decided on
merits and was dismissed in default of non-appearance of the
complainant cannot be overlooked and, therefore, it would be
permissible to file a second complaint explaining why the
earlier complaint could not be pursued and was dismissed in
default.

In view of the aforesaid, the Supreme Court considering the

facts and circumstances of the case held that the second
complaint filed by the appellant was maintainable on the facts
of this case.
New India Assurance Co. Ltd. Vs. Hilli
Multipurpose Cold Storage Pvt. Ltd.

In this case, the issue that came up before the Court pertained
to the period within which the opposite party has to give his
version to the District Forum in pursuance of a complaint,
which is admitted under Section 12 of the Consumer
Protection Act . According, to the statutory provision the
opposite party is given 30 days’ time for giving his version
and the said period for filing or giving the version can be
extended by the District Forum, but the extension should not
exceed 15 days. Thus, an upper cap of 45 days has been
imposed by the Act for filing version of the opposite party.

In the case of Dr. J.J. Merchant & Ors. v. Shrinath

Chaturvedi[3], the Supreme Court had held from the
impugned provision under Consumer Protection Act it is
apparent that on receipt of the complaint, the opposite party is
required to be given notice directing him to give his version of
the case within a period of 30 days or such extended period
not exceeding 15 days as may be granted by the District
Forum or the Commission. For having speedy trail, this
legislative mandate of not giving more than 45 days in
submitting the written statement or the version of the case is
required to be adhered to. If this is not adhered to, the
legislative mandate of disposing of the cases within three or
five months would be defeated.

The conflict in the case arose by the judgement of the

Supreme Court in the case of Kailash v. Nankhu & Ors.
[4]. The Respondent in the case while relying on the said case
contended that the said provision with regard to extension of
time beyond a particular limit is directory in nature and that
would not mean that extension of time cannot exceed 15 days.
Hence, it is directory in nature and not mandatory.

V.N.Shrikhande vs Anita Sena

Fernandes

The petitioner alleged negligence by a medical practitioner,

claiming that he left a mass of gauge in her abdomen during a
procedure to remove stones from the gallbladder. However,
the petition was raised nine years after the procedure when the
petitioner underwent a second operation in another hospital.

The Supreme Court recognized that in cases of medical

negligence no straightforward formulae is present to
determine when the cause of action has accrued. The court,
following ‘Discovery Rule’ evolved by the courts in the
United States, stated that in the case where the effect of the
negligence is obvious, the cause of action is deemed to have
arisen at the time of negligence. However, in case the effect of
negligence is dormant, the cause of action arises when the
patient figures out about the negligence with reasonable
diligence. The court noted that the petitioner had been
experiencing pain and discomfort since the time of the
operation for which she continued to take painkillers for nine
years without consulting the doctor. In the light of this and the
fact that she herself was an experienced nurse who can
reasonably be expected to possess more knowledge than a
layman, the court set aside the Commission’s order and
dismissed the complaint.

Spring Meadows Hospital & Anr Vs. Harjol

Ahluwalia

This appeal was filed before the Supreme Court by a hospital

defending the negligence of its nurses and a doctor which
resulted in a minor being in a permanent vegetative state
subsequent to a brain haemorrhage. The issues revolved
around whether the parents of the child, not being the patient
themselves, can ask for compensation for mental agony
caused to them. The court held that the definition of services
in the CPA is wide enough to include both the parents who
pay for the services and the child who is the beneficiary of the
services. The National Commission was found correct in its
approach as it granted compensation to the child for the cost
of equipments and recurring expenses that he would have to
bear owing to his vegetative state, whereas the compensation
provided to the parents was for the agony caused and the
lifetime care that the parents would have to provide.
Delhi Development Authority Vs. D.C. Sharma

In the case of an accidental double allotment of a plot by the

Delhi Development Authority, the State Commission refused
to accept the defence that the plot had not been provided to
the complainant only for his failure to pay the cost. It was
found from the records that the plot had been allocated to
another person. It, therefore, ordered the Delhi Development
Authority to either provide another plot of the same
description to the appellant under the same conditions or pay
the escalated price of the plot.

The National Commission dismissed the revision petition for

lack of infirmity in the State Commission’s judgment and
ordered the payment of five lakhs for indulging in unfair trade
practices and unduly harassing the respondent for more than
eighteen years.
New India Assurance Company Limited Vs.
Abhilash Jewellery [III (2009) CPJ 2 (SC)]

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.
 K. A. Bhandula and Another
Vs.Indraprastha Apollo Hospital and Others [III
(2009) CPJ 164 (NC)]

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.