PPT ON THE CONSUMER PROTECTION ACT, 2019.pptx

Here's an important sections and judgement on the Consumer Protection Act, 2019

1. THE CONSUMER PROTECTION ACT, 2019 1

2. Index Definitions Consumer Protection Councils Central Consumer Protection Authority (Central Authority) Consumer Dispute Redressal Commission Mediation Product Liability Offences, Penalties, Punishments & Compounding Important Judgements 2

3. Provision Consumer Protection Act 1986 Consumer Protection Act,2019 Regulator No separate Regulator CCPA is formed Consumer Court Complaint could be filed in a consumer court where seller’s office is located Complaint can be filed in a consumer court where the complainant resides or works Product Liability No provision Consumer can seek compensation for harm caused by a product or service Pecuniary Jurisdiction District up to 20 Lakh State 20 LPA- 1 Crore National more than 1 Crore District: Up to 1 Crore State: Up to 10 Crores National: Above 10 Crores After 2022 Amendment District: Up to 50 Lakhs State: Up to 2 Crores National: Above 2 Crores Mediation Cells No legal provision Court can refer settlement through mediation 3

4. The Act further states that every complaint concerning consumer dispute shall be disposed of as expeditiously as possible. A complaint filed under this Act shall be decided within the period of three months from the date of receipt of notice by the opposite party in the cases the complaint does not require analysis or testing of the goods and services and within a period of 5 months, if it requires analysis or testing of the goods and services. The Consumer Protection Act, 2019 also facilitates the consumers to file complaints online. In this regard, the Central Government has set up the  E- Daakhil Portal , which provides a convenient, speedy and inexpensive facility to the consumers all over India so that they are able to approach the relevant consumer forums in case of any dispute arises. The Act lays down the scope for e-commerce and direct selling . Court can refer settlement through mediation 4

5. Liabilities of E-commerce entities Section 2(16) of the act defines e-commerce as : " e-commerce" means buying or selling of goods or services including digital products over digital or electronic network. The Draft Rules define an “e-commerce entity” as an entity, in India or abroad, which conducts e-commerce business either through: Inventory-based model- where the entity owns the inventory and sells it to consumer directly, or 2 . Marketplace model, where entity acts as a technology platform facilitating transactions between buyers and sellers . As per the rules the liabilities of the entities include duties such as not to influence the prices of product as stated by the seller, not to adopt unfair methods to influence consumer decisions, fix the terms of the contract between the entity and the seller or service provider, to record counterfeit products by sellers and of deceptive products, ensure that advertisements for marketing of goods and services are consistent with their actual characteristics and usage conditions and to specify warranty and safety information of the goods and services listed for sale. Liabilities of sellers include having a written contract with the e-commerce entity, providing mandatory safety and warranty and shelf life information, and bearing responsible for warranty or guarantee obligations of goods and services sold. 5

6. Duties of E-Commerce entities According to draft rule 2(c) the entity should be incorporated under the Companies Act, 1956 or the Companies Act, 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in Section 2 (v) (iii) of FEMA 1999   It has become mandatory to provide details of : Legal name of the company, Geographical addresses of the headquarters and offices, Name and details of the website, All contact details like e-mail address, fax, landline, and mobile numbers of customer care, and Contact details like e-mail address, fax, landline, and mobile numbers of grievance officer.   The entity should fix terms of contract with the seller relating to return, refund, exchange, warranty/guarantee, delivery, mode of payments, grievance redressal mechanism etc. to enable consumers to make informed decisions.   To ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such of goods or services.   To ensure that personal information of customers is protected, and that such data collection and storage and use comply with provisions of the Information Technology (Amendment) Act, 2008 6

7. Celebrity Endorsement and Punishment The Act fixes liability on endorsers considering that there have been numerous instances in the recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. Going forward, the endorser needs to take the onus, and exercise due diligence, to verify the veracity of the claims made in the advertisement to refute liability  claims Punishment Under the CPA, the endorsers can be met with financial penalties as well as face the risk of getting prohibited from making endorsement of any product or service for up to one year, which may extend up to three years for every subsequent contravention. 7

8. Consumer Protection Councils 8

9. CENTRAL CONSUMER PROTECTION AUTHORITY “CENTRAL AUTHORITY” 9

10. Constitution of Central Authority Section 10 The Central Government shall establish Central Consumer Protection Authority to be known as “CENTRAL AUTHORITY” Central Authority to regulate matters related to Violation of rights of consumers, Unfair Trade Practice False or Misleading Advertisement which are prejudicial to the interest of public and consumers Promote, Protect and enforce the rights of Consumer as a class

11. Complaints to Central Authority & Power of District Collector Section 16 & 17 Complaint relating to violation of consumer Rights or unfair trade practice or false/misleading advertisement may be made either in writing or in electronic mode to any one of the authorities The District Collector The Commissioner of Regional Office The Central Authority The Collector shall inquire or investigate complaints within his jurisdiction and submit his report to the Central Authority or to the Commissioner of a regional office as the case may be. 11

12. Investigation by Central Authority Section 15 & 22 The Central Authority shall conduct investigation with the help of its INVESTIGATION WING . Investigation Wing shall be headed by Director General. Additional Director General, Director, Joint Director, Deputy Director and Assistant Directors may be appointed subject to the general control, supervision and direction of the Director-General. Director General shall submit its inquiries/investigations to the Central Authority. Investigating officer shall have powers relating to Search & Seizure as per provisions of Cr. P. C. 1973. ( Section 22 ) The District Collector of each district is also an investigating officer. 12

13. Powers and functions of Central Authority Section 18 Protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act; Prevent unfair trade practices and ensure that no person engages himself in unfair trade practices; Ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made thereunder ; Ensure that no person takes part in the publication of any advertisement which is false or misleading. inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either s uo moto or on a complaint received or on the directions from the Central Government; file complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act; intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices. review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation; recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights; undertake and promote research in the field of consumer rights. 13

14. Powers and functions of Central Authority Section 19 Power of Central Authority to refer matters for investigation or to other regulator : Direct the Director General or the District Collector to investigate the matters on information or compliant or direction from Central Govt. or of its own motion. Refer the matter to Regulator established under any other law for proper action e.g. FSSAI, Drug Control, TRAI, IRDA etc 14

15. Powers against false or misleading advertisements Section 21 Central Authority may by order issue directions to the concerned traders or manufacturer or advertiser or publisher to discontinue such advertisement or to modify the same Central Authority may by order impose a penalty against false or misleading advertisements against a manufacturer or against an endorser or against a publisher which may extend to Rs 10 Lakhs and for subsequent offence a penalty up to Rs 50 Lakhs. Prohibit the endorser from making of endorsement of any product or service for a period which may extend to one year and for subsequent contravention, such prohibition may extend upto 3 years . 15

16. Appeal against Central Authority Section 24 An appeal against the order of Central Authority may be filed before National Commission within a period of 30 days from the date of receipt of the order. 16

17. Consumer Disputes Redressal Commission Section 28, 42 & 53 17

18. DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION “DISTRICT COMMISSION” 18

19. Jurisdiction of District Commission Section 34 Value of goods or services paid as consideration doesn’t exceed Rs . 50 Lakhs . A complaint shall be instituted in a District Commission within the local limits of whose jurisdiction,— ( a ) the opposite party or all opposite parties, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain ; (b) any of the opposite parties, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case the permission of the District Commission is given ; ( c ) the cause of action, wholly or in part, arises; or ( D ) The Complainant resides or personally works for gain . 19

20. Who can file Case before District Commission Section 35 A Consumer Any Recognised Consumer Association on behalf of any consumer; who is a member of such association or not; however, the association should be registered. One or more consumer on behalf of all consumers so interested with the permission of the District Commission. The Central Government or The Central Authority or The State Government. 20

21. How a Complaint is filed Section 35 A Complaint may be filed In Writing Electronically Every complaint shall be accompanied with such fee and payable through Electronic mode as suggested or by Indian Postal Order/ Crossed Demand Draft from Nationalized Bank in favour of President of the District Commission/ the Registrar of the State Commission/National Commission. 21

22. Powers of District Commission Section 38 The Complaint shall be disposed off within 3 Months or maximum 5 Months. It may pass an interim order as is just and proper. the District Commission shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 w.r.t. summoning, documents and evidence etc. Every proceeding before the District Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, and the District Commission shall be deemed to be a criminal court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 . (offences related to Contempt, insult, interruption of Court and offences related to documents). 22

23. Findings of District Commission Section 39 To remove or replace the defect of the goods. To return to the Compliant the price and the charges along with interest. Compensation for loss or injury due to negligence Punitive damages in special circumstances Compensation under Product Liability Action To remove defects in goods or deficiencies in services To withdraw, cease manufacture and not to offer hazardous and unsafe goods and desist from doing so in future 23

24. Findings of District Commission Section 39 to discontinue the unfair trade practice or restrictive trade practice and not to repeat them ; to issue corrective advertisement to neutralise the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement; to cease and desist from issuing any misleading advertisement . to pay such sum as may be determined by it, if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently : Provided that the minimum amount of sum so payable shall not be less than twenty-five per cent. of the value of such defective goods sold or service provided, as the case may be, to such consumers; 24

25. Review & Appeal against order of District Commission Section 40 & 41 The District Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order . An order made by the District Commission may be challenged before State Commission within a period of forty-five days from the date of the order provided the appellant has deposited 50% of awarded amount No appeal shall lie from any order passed pursuant to a settlement by mediation . 25

26. STATE CONSUMER DISPUTES REDRESSAL COMMISSION “STATE COMMISSION” 26

27. Jurisdiction of State Commission Section 47 (1) complaints where the value of the goods or services paid as consideration , exceeds rupees fifty lakhs, but does not exceed rupees two crore : complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed two crore rupees ; appeals against the orders of any District Commission within the State ; and to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State , where it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. 27

28. Jurisdiction of State Commission Section 47(4) A complaint shall be instituted in a State Commission within the local limits of whose jurisdiction,— ( a ) the opposite party or all opposite parties, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain ; (b) any of the opposite parties, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case the permission of the District Commission is given ; ( c ) the cause of action, wholly or in part, arises; or ( d ) THE COMPLAINANT RESIDES OR PERSONALLY WORKS FOR GAIN. 28

29. Review & Appeal against order of State Commission Section 50 & 51 The State Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order . An order made by the State Commission may be challenged before National Commission within a period of thrity from the date of the order provided the appellant has deposited 50% of awarded amount No appeal shall lie unless the case involves a substantial question of law . 29

30. NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION “NATIONAL COMMISSION” 30

31. Jurisdiction of National Commission complaints where the value of the goods or services paid as consideration , exceeds rupees two crore : complaints against unfair contracts, where the value of goods or services paid as consideration exceeds two crore rupees ; appeals against the orders of any State Commission ; Appeal against the order of Central Authority; and to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission, where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. 31

32. Power to review and set aside ex parte order Section 60 & 61 The National Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order . Where an order is passed by the National Commission ex parte , the aggrieved party may make an application to the Commission for setting aside such order . 32

33. Power to Transfer of cases Section 48 & 62 State Commission: On the application of the complainant or of its own motion, the State Commission may , at any stage of the proceeding, transfer any complaint pending before a District Commission to another District Commission within the State if the interest of justice so requires. National Commission: On the application of the complainant or of its own motion, the National Commission may , at any stage of the proceeding, in the interest of justice, transfer any complaint pending before the District Commission of one State to a District Commission of another State or before one State Commission to another State Commission . 33

34. Appeal against order of National Commission Section 50 & 51 An order made by the National Commission may be challenged before The Supreme Court within a period of thirty days from the date of the order provided the appellant has deposited 50% of awarded amount. 34

35. Limitation Period for filling Complaints Section 69 a complaint may be filed within two years from the date on which the cause of action has arisen. Notwithstanding anything contained in sub-section ( 1 ), a complaint may be entertained after the period specified in sub-section ( 1 ), if the complainant satisfies that he had sufficient cause for not filing the complaint within such period: Provided that no such complaint shall be entertained unless the District Commission or the State Commission or the National Commission, as the case may be, records its reasons for condoning such delay . 35

36. Enforcement of Orders Consumer Commissions Section 71 Every order made by a District Commission, State Commission or the National Commission shall be enforced by it in the same manner as if it were a decree made by a Court in a suit before it and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure , 1908 shall, as far as may be, applicable , subject to the modification that every reference therein to the decree shall be construed as reference to the order made under this Act. ORDER XXI Execution of Decrees and Orders 36

37. Penalty for Non-compliance of Orders of Consumer Commissions Section 72 ( 1 ) Whoever fails to comply with any order made by the District Commission or the State Commission or the National Commission, shall be punishable with imprisonment from one month to three years, or with fine from Rs . 25,000/- to Rs . 1,00,000 or with both . The Commissions shall be deemed to be a Judicial Magistrate of first class and shall have the power of a Judicial Magistrate of first class for the trial of offences under sub-section ( 1 ). The offences under sub-section ( 1 ) shall be tried summarily by the Commissions. 37

38. Appeal against the order of Penalty for Non-compliance Section 73 an appeal shall lie, both on facts and on law from— ( a ) the order made by the District Commission to the State Commission; ( b ) the order made by the State Commission to the National Commission; and ( c ) the order made by the National Commission to the Supreme Court . no appeal shall lie before any court, from any order of a District Commission or a State Commission or the National Commission, as the case may be . Every appeal under this section shall be preferred within a period of thirty days from the date of order of a District Commission or a State Commission or the National Commission , as the case may be: 38

39. DISPUTE RESOLUTION BY MEDIATION 39

40. Establishment of Consumer Mediation Cell Section 37 & 74 Subject to consent of Parties, the matters may be referred for settlement by Mediation The State Government shall establish, a consumer mediation cell to be attached to each of the District Commissions and the State Commissions . The Central Government shall establish, by notification, a consumer mediation cell to be attached to the National Commission and each of the regional Benches. A consumer mediation cell shall consist of such persons as may be prescribed. 40

41. Procedure and settlement through Mediation Section 79, 80 & 81 The mediation shall be held in the consumer mediation cell attached to the District Commission, the State Commission or the National Commission. The mediator so nominated shall conduct mediation within such time and in such manner as may be specified by regulations. Pursuant to mediation, if an agreement is reached, the terms of such agreement shall be reduced to writing and signed by the parties. The mediator shall prepare a settlement report and forward the signed agreement along with such report to the concerned Commission . The District Commission or the State Commission or the National Commission, shall, within 7 days of the receipt of the settlement report, pass suitable order recording such settlement and dispose off the matter . 41

42. PRODUCT LIABILITY 42

43. PRODUCT LIABILITY Section 82 & 83 Applicability – A claim for COMPENSATION may be filed against Product Manufacturer Product Service Provider Product Seller Action for Product Liability A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product . 43

44. PRODUCT LIABILITY OF MANUFACTURER Section 84 A product manufacturer shall be liable in a product liability action, if— the product contains a manufacturing defect; or the product is defective in design; or there is a deviation from manufacturing specifications; or the product does not conform to the express warranty; or the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage . A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product. 44

45. LIABILITY OF SERVICE PROVIDER Section 85 A product service provider shall be liable in a product liability action, if— the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature or manner of performance which is required to be provided by or under any law for the time being in force, or pursuant to any contract or otherwise; or there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or the service provider did not issue adequate instructions or warnings to prevent any harm; or the service did not conform to express warranty or the terms and conditions of the contract. 45

46. Liability of Product Seller Section 86 A product seller who is not a product manufacturer shall be liable in a product liability action, if— he has exercised substantial control over the designing, testing, manufacturing , packaging or labelling of a product that caused harm; or he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order , if any, passed or to be passed cannot be enforced against him; or he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product and such failure was the proximate cause of the harm. 46

47. OFFENCE, PENALTIES, PUNISHMENTS & COMPOUNDING 47

48. OFFENCES & PENALTIES Section 88 & 89 & 92 Whoever , fails to comply with any direction of the Central Authority under sections 20 and 21, shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to twenty lakh rupees, or with both . Any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees. No cognizance shall be taken by a competent court of any offence mentioned above except on a complaint filed by the Central Authority or any officer authorised by it in this behalf. 48

49. Punishment for adding adulterant in product Section 90 When there is no injury - with imprisonment for a term which may extend to six months and with fine which may extend to one lakh rupees ; Bailable Causing Injury Not Amounting To Grievous Hurt – with imprisonment for a term which may extend to one year and with fine which may extend to three lakh rupees ; Bailable Causing Grievous Hurt - Imprisonment up to seven years and with fine which may extend to five lakh rupees ; Non- Bailable Death of a consumer - Imprisonment from 7 Years up to imprisonment for life and with fine which shall not be less than ten lakh rupees . Non-Bailable License may be suspended for 2 years on first offence and may be cancelled on subsequent offence. "adulterant" means any material including extraneous matter which is employed or used for making a product unsafe 49

50. Punishment for dealing in Spurious Goods Section 91 Spurious Goods: Goods which are falsely claimed to be genuine. Causing Injury Not Amounting To Grievous Hurt – with imprisonment for a term which may extend to one year and with fine which may extend to three lakh rupees; Bailable Causing Grievous Hurt - Imprisonment up to seven years and with fine which may extend to five lakh rupees; Non- Bailable Death of a consumer - Imprisonment from 7 Years upto imprisonment for life and with fine which shall not be less than ten lakh rupees . Non-Bailable License may be suspended for 2 years on first offence and may be cancelled on subsequent offence. 50

51. Punishment for Vexatious Search & Seizure Section 93 The Director General or any other officer, exercising powers under section 22, who knows that there are no reasonable grounds for so doing, and yet— ( a ) searches, or causes to be searched any premises; or ( b ) seizes any record, register or other document or article, shall , for every such offence, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees or with both. 51

52. Compounding of Offences Section 96 Offences under Section 88 & 89 may be impounded on payment of such amount with the permission of the Court either before or after the institution of the prosecution. Only one offence may be compounded in a period of 3 Years. After 3 Years new offence will be treated as FIRST offence. The effect of compounding shall be deemed to an acquittal. 52

53. Important Judgements Related to CPA,2019 53

54. Brigade Enterprises Ltd. v. Anil Kumar Virmani T he Supreme Court held that a “joint complaint” preferred by a few consumers, but not in a representative capacity, was maintainable under Section 35(1)(a) of the 2019 Act. Supreme Court Expands the Scope of Section 35(1)(a) of Consumer Protection Act, 2019: More than one Consumer can File a Joint Complaint . Although Brigade Enterprises provides for the entertainment of joint complaints under Section 35(1)(a), it fails to lay down the method of computation for the purposes of determining pecuniary jurisdiction. Finally, a three-Member Bench of the NCDRC settled the position of law in Akshay Kumar v. Adani Brahma Synergy (P) Ltd. by holding that for the purposes of meeting pecuniary jurisdiction, the total consideration paid by all the complainants has to exceed Rs 2 crores. In observing so, reliance was placed upon its earlier decision in Ambrish Kumar Shukla, which stated that the value of the goods purchased or the services hired and the compensation claimed by each complainant would be immaterial; the total value of the goods purchased or the services hired by all complainants and the compensation claimed by all of them shall be considered to determine pecuniary jurisdiction. However, it is to be borne in mind that prior to the enactment of the 2019 Act, pecuniary jurisdiction in joint complaints was computed by the value of the goods purchased or the services hired, and the compensation claimed by all the complainants. Nonetheless, the NCDRC upheld the principle to apply to the total value of paid consideration for joint complaint under the 2019 Act.

55. Veena Khanna v. Ansal Properties & Industries Ltd, NCDRC ( 2007) In this  case , the complainant offered to purchase a flat from the respondent which the respondent agreed to deliver on 1.6.1999 through a letter. However, the flat was not constructed within the specified date and hence it was not delivered. For such deficiency in services, the complainant demanded the refund of the deposited amount with interest at the rate of 18% pa which was refused by the opposite party.  The National Commission observed that due to delays in construction and delivery of possession it is quite difficult for a consumer to purchase a flat at market price. The National Commission stated that it is the duty of the State Commission to direct the builders to deliver the possession of the flat as soon as it is completed and the complainant should be awarded suitable compensation for the delay in construction. The complainant just claimed the refund amount before the State Commission, but the case was pending before the commission for five years and during that time there was a tremendous rise in the market prices of the immovable property. The National Commission further stated that it was the duty of the State Commission to direct the respondents to deliver the possession of the flat or any other flat of equivalent size to the complainant with appropriate compensation, due to the delay in delivering the possession within the specified time . 55

56. Imperia Structures Ltd v Anil Patni & Another (Civil Appeal No. 3581-3590 of 2020) The case before the Supreme Court stemmed from an appeal from an NCDRC ruling regarding a collection of complaints filed by homebuyers. Due to the builder’s delay in handing over ownership of the flats, the homeowners filed complaints under the Consumer Protection Act. These objections were made barely a week before the project was registered with the relevant RERA regulator, in this case the Haryana Real Estate Regulatory Authority (Haryana Authority ). The builder (the Appellant before the Supreme Court) contested the NCDRC’s jurisdiction, claiming that the flats had been reserved for business uses and that the homebuyers (the Respondents before the Supreme Court) were not “consumers” as defined under the CP Act. The Appellant made no mention of the project being registered under RERA before the NCDRC. The NCDRC granted the Respondents’ complaint and, in an order dated September 12, 2018, ordered a return of the homebuyers’ money, plus interest and fees. The project registration letter issued by the Haryana Authority was submitted when the Appellant filed his appeal with the Supreme Court. An decision dated 17 January 2019 issued by the Haryana Authority in response to an RERA complaint made by another homebuyer in relation to this project was also presented, in which the Haryana Authority instructed payment rather than return of money to be paid. 56

57. On November 2, 2020, the Supreme Court dismissed an appeal against an order issued by the National Consumer Dispute Resolution Council in which the NCDRC’s jurisdiction to hear the complaint was challenged due to the registration under the Real Estate Regulation Act (RERA ). The Supreme Court held that the remedies available under the Consumer Protection Act, 2019 are additional remedies over and above all other remedies available, including those made available under any special legislation, and that the existence of an alternative remedy is not a bar to the Consumer Protection Act, 2019 being considered . The Apex court imposed a penalty of ₹25,000 on the complainant trust that would be paid to the HDFC Bank, for this false litigation. 57

58.  VP Shanta v/s Indian Medical Association A writ petition was filed by the Indian Medical Association seeking Supreme Court to declare that the Consumer Protection Act doesn’t apply to the medical profession. Indian Medical Association validated that medical professionals are governed by a separate Code of Ethics. Thus medical negligence can be dealt with by medical experts in their own jurisdiction; the Consumer Protection Act shouldn’t be applied. The writ petition involved two questions as given below : Whether a medical practitioner can be regarded as rendering ‘service’ under the Consumer Protection Act 1986? If medical services are rendered free, then would it be considered under the Act? 58

59. Judgement The Court held that District, State and National Consumer Forums can summon experts in the field of medicine, examine evidence and protect the interest of consumers . Doctors and hospitals who render service without any charge 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 be applied. However , if customers are being provided for free to the poor, then it shall be covered as a service under the act . In case the insurance policy company pays for the treatment on behalf of the customer, then it will be covered under the Act. 59

60. Ram Mangal Sanskrutik Bhavan VS Aanand Dattatray Koli (Aug 2018 ) Facts : 1. The booking amounts were deposited as mentioned in the tabular form in the impugned judgment  and  order. 2. A cash/credit memo dated 25/08/2015 was issued in the sum of  Rs.16,000/for  marriage hall  decoration . 3.  Receipt No.013  dated 25/08/2015 was issued in the sum of Rs.16,000/- by  Ram  Mangal  Sanskrutik   Bhavan  for Swapna Mangal Dinning Hall. 4. The complainant informed the respondent through a letter that the marriage was cancelled due to  domestic  reasons and requested a refund of the amount paid in the sum of Rs.85,000/-. 5. The State Commission, Andhra Pradesh observed in the appeal that there was no deficiency in  service  on the part of the opponent. 6. In the case of  P.C.Murugesan  vs.  C.Padmavathi , the State Commission, Chennai held that the  opponent  was entitled to detain 15% of the booking amount and directed them to pay the balance with interest @12% p.a. from the date of cancellation of booking. 7. The opponent did not refund the amount. 60

61. J udgement In the facts and circumstances of the case, the court held that the opponent is entitled to detain 15% of the amount advanced by way of deposits and must refund 85% of the amount to the complainant  together  with interest @ 9% p.a.  The court set aside the clause no.4 of the award which grants  compensation for mental harassment of the complainant. The  appeal is partly allowed. The impugned judgment and order is modified to allow the opponent to  retain  or detain 15% of the amount advanced by the  complainant. The  appeal is disposed of accordingly. 61

62. Titan Industries Ltd vs Union Of India on 16 September, 2015 It is the case of the petitioners that they are manufacturers and dealers in watches and watch  components . The watches are sold under the brand name or trade mark "Titan" and are marketed through  various retail  dealers appointed by them. The petitioner, manufactures and sells numerous models of watches  and these  watches which are kept for sale at their retail outlets are to be displayed in an open and unpacked  form  to provide a wider choice to the customers and facilitate their decision as to the choice of the model. For this purpose the watches are put in some sort of covering which may be either a glass case or a  plastic box  or card board box or in any appropriate form to ensure their protection. There is no specific type of  boxes  or covering for a particular type of watch. Purporting to act under the provisions of the Act, the respondents had wrongfully effected seizure of  the watches  and threatened to take criminal action. An interim order was passed by this Court on  10 th   October,1994  and the petition was admitted restraining the respondents, from taking any action in furtherance  of the  impugned action/seizure. 62

63. The Apex Court took the view, that the retailer also could be prosecuted and the High Court  was  wrong in quashing the prosecution against the respondents. In that case the petition filed was for a declaration that the Rules do not apply to watches  manufactured  and marketed by the 1st petitioner and to quash the proceedings. The contention was that it was the manufacturer alone who was liable and not the Distributor. We may now refer to Rule 2(1) of the Rules, which defines pre-packed commodity. The package must be in units suitable for sale, whether wholesale or retail. From a reading of the Rule, what emerges is that the  pre packed  commodity must be placed in a package of whatever nature without the purchaser  being  present. In our opinion the explanation cannot defeat the main Rule itself. The Legislature in  its wisdom , therefore, had included goods in a packaged form, which otherwise would not fall  within  the definition of pre-packed commodity. If the intention of the Legislature or the Rule-making Authority was to include every commodity which was packed then there would have been no need to provide for the explanation. 63

64. Judgement The learned Judge followed the judgment of the Madras High Court in Philips India Ltd. v. Union of  India  2002 (1) Mad LW (Cri) 211 and held that the Rule applies to commodities which are incapable  of  sale in any manner other than in a packaged form and that the law in question has no application to packages which are packed only for the convenience of the customers for the purpose of safe transportation and for protection during storage and handling. We have rejected that contention. The Rule, therefore, along with the explanation aims to include only those  Prepacked  commodities which by the very nature are required to be packed before they are sold. The package is only meant for the purpose of safety and/or to keep away dirt or dust. Therefore, considering the Rule and the explanation a watch cannot  be said  to be a pre-packed commodity. Once we so hold, the petition as filed would have to be allowed. 64

65. NEW INDIA ASSURANCE CO. LTD. VS HILLI MULTIPURPOSE COLD STORAGE PVT. LTD. Facts : The Consumer Protection Act was enacted to provide for the expeditious disposal of consumer disputes and for the protection and benefit of the consumer.  The  Act specifies that no proceedings complying with the laid  down procedure  shall be questioned in any court on the ground of  non-compliance  with the principles of  natural justice.  Additionally ,  the Act  states that a complaint must be filed within  two  years from the date on which  the cause   of action has   arisen . When  there is a question of raising a  presumption of  service, a 30-day notice is required. 65

66. Judgement The Court held that the time limit for filing a response to a complaint under the Consumer  Protection Act  is mandatory and not directory. The Court emphasized the need for expeditious disposal of  consumer  disputes and stated that any other interpretation would defeat the purpose of the Act. The Court also  clarified  that the commencing point of the limitation of 30 days under Section 13 of the Act cannot be  mere  service of notice without the service of the copy of the complaint. 66

67. M/S EMAAR MGF LAND LIMITED & ANR. V. AFTAB SINGH Facts of the Case A couple of petitions were filed by people who had booked residential villas, flats, or plots in Gurgaon or Mohali which were projects of a builder. The petitioners had signed a Buyer's Agreement. The buyer's agreements consisted of an arbitration clause. The buyer had promised to deliver possession of the villas, plots and flats on a certain date but had failed to do so. The petitioners filed a case at respective Consumer Forums. They sought directions to the builder to deliver possession and pay compensation for the delay. The builder filed a set of applications under Section 8 of the Arbitration and Conciliation Act, 1996 and prayed that the disputes must be resolved via Arbitration due to the presence of an Arbitration clause in the Buyer's Agreement signed between the builder and the buyers . Issues of the Case : After the 2015 Amendment, does the newly inserted Section 8(1) of the Arbitration and Conciliation Act mandate the National Consumer Dispute Redressal Commission ( N.C.D.R.C . ) constituted under the Consumer Act? 67

68. Judgement National Consumer Dispute Redressal Commission (N. C. D. R. C.)'s Judgement Before the Amendment, it was determined that Consumer Forums were not bound to hear disputes on Arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. It was observed that Section 2(3) of the Arbitration and Conciliation Act, 1996 recognizes schemes under other legislations that make disputes non- arbitrable . The Consumer Forum stated that as per the overall structure of the consumer forum act and precedents set, the newly inserted Section 8 (1) of the Arbitration and Conciliation Act, 1996 cannot be construed as a mandate to the Consumer Forums to refer the parties to Arbitration as per the terms of the Arbitration Agreement signed between the parties. Aggrieved by the judgment, an appeal was filed to the Supreme Court . Supreme Court's Judgement The Hon'ble Apex Court upheld N. D. C. R. C.'s judgment and stated that an Arbitration Clause in a Buyer's Agreement doesn't circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to the newly inserted Section 8(1) of the Arbitration and Conciliation Act in the 2015 Amendment. 68

69. Ambrish Kumar Shukla & 21 Ors . vs Ferrous Infrastructure Pvt. Ltd Facts : The  complainants have filed a complaint against the opposite party seeking the  issuance of an "occupation certificate" and the delivery of possession of  the flats allotted  to them. The complainants claim that the flats should be handed over in a complete and satisfactory condition, adhering to the specified  specifications, upon  receipt of the remaining balance consideration . Issue: The  main issue to be determined in this case is whether the opposite party is  obligated  to obtain the " occupa-tion  certificate" and deliver possession of  the flats to the complainants within a specified time frame. 69

70. Court order and Compensation Court order : The court hereby orders the opposite party to obtain the "occupation certificate" and hand over possession of the flats to the complainants within four months from the date of this judgment.  The  possession should be complete in all respects and in accordance with the specified specifications. The opposite party is also directed to receive the balance consideration before handing over possession . Compensation : Furthermore, at the time of offering possession, the opposite party is required to pay delay compensation to the complainants in the form of interest at a rate of 6% per annum on their deposit.  This  compensation is to be calculated from the due date of possession as per their agreement  until  the date of the offer of possession. 70

71. Spice jet Limited v. Ranju Aery The Complainant Ranju Aery booked air tickets online, through the website Yatra.com for her and her family members travel from Kolkata to New Delhi on 30.06.2015 from the Opposite Party (OP) Airlines M/s. Spicejet Ltd. An amount of Rs . 70,900/- was paid by the Complainant through her debit card. The Complainant and his family members when reached the airport at Kolkata at 1.30 p.m. to board the flight of the OP Airlines from Kolkata to New Delhi scheduled for 20.40 hours, they were shocked to know that the said flight of the OP Airlines had been cancelled. The OP Airlines did not provide any alternative arrangement to the Complainant and her family for travel to New Delhi. The Complainant was, therefore, forced to buy tickets for another flight, operated by the Jet Airways from Kolkata to Mumbai, with connecting flight to New Delhi, departing at 20.40 hours from Kolkata. The Complainant spent an amount of Rs . 80,885/- for five tickets for the said journey. The Complainant alleged that the OPs did not refund the fare charged from them for the cancelled flight, neither had they provided another alternative flight. The Complainant filed the consumer complaint in question, seeking directions to the OPs to refund the ticket amount of Rs . 20,000/- along with interest @ 12% per annum for the cancelled flight. They also sought directions to the OPs to pay the additional amount of Rs . 80,885/- paid by them for the alternative flight. The Complainant also demanded Rs . 1.5 lakhs as compensation for mental harassment and Rs . 22,000/- as litigation charges. 71

72. The District Forum passed an ex-parte against the OP Airlines directing the OP Airlines to refund an amount of Rs . 80,885/- to the Complainant after deducting the airfare between Kolkata to New Delhi for the cancelled flight, along with interest @ 9% per annum from the date of cancellation of the flight till realisation. They also directed the OP Airlines to pay an amount of Rs . 1.25 lakhs as compensation for harassment and Rs . 10,000/- as litigation cost. The airline appealed against the order challenging the jurisdiction to pass the order as the principal place of the business of the company is Gurugram . The airline company relied on Section 11 of the Consumer Protection Act which states that a consumer complaint can be instituted by the consumer within the local limits of where the defendant resides or carries on business or where the cause of action arises. Issue :  Should an online consumer be allowed to sue anywhere? Decision: NCDRC did not accept contention of the airline company and held the company guilty of deficiency of service for cancelling the flight without any reason. On appeal to Supreme Court , Supreme Court ruled out that consumers opting for online purchase of products through websites can file a consumer complaint before any consumer court for deficiency in services. 72

73. Star India (P) Ltd., v. Society of Catalysts & Anr KBC had a segment meant for the home audience titled as Har Seat Hot Seat in which the home audiences could answer a general knowledge question asked during the show by calling through their MTNL/BSNL landlines or SMS through their Airtel connection at the applicable tariff. The winner was randomly selected by the computer from amongst the participants with the right answer announced as per the terms and condition was awarded the prize money of Rs . 2,00,000/-. The consumer complaint filed before the NCDRC alleging inter alia, that in conducting the Har Seat Hot Seat contest a ‘general Impression’ was given by Star that the participation to the contest was free I.e. the prize money for the contest was being given by Star, whereas in fact the prize money was allegedly being paid out of the collections by Star from the SMS and Calls being made by the participants. It was contended that this practice amounted to an unfair trade practice as per the consumer protection act. Star, on the other hand, had contented that no evidence/ documentary proof was produced by the society or sample survey allegedly conducted by them was of no avail. Further, “Sponsorship” of Kaun Banega Crorepati or its Har Seat Hot Seat component is not an “unfair trade practice” within the meaning of Section 2(1)(r)(3)(a) of the Consumer Protection Act, 1986. The Consumer Protection Act does not declare genuine sponsorships as an “unfair trade practice”. It was also contended that Star is the organizer of KBC and Har Seat Hot Seat participation for which is free of charge. Star has not recovered any charge from the participants of KBC or Har Seat Hot Seat. Merely because prizes are being distributed by Star from sponsorships received from its sponsors, such as Airtel, it does not constitute an unfair trade practice under Section 2(1) (r) (3) (a) or Section 2(1) (r) (3) (b) of the Consumer Protection Act. 73

74. In 2008, the NCDRC in its Order held that Star and Airtel did not disclose the source of the prize money and created an apparent impression that the prize money emanated from them whereas in fact the prize money was paid from the collections obtained by Star and Airtel from SMS received from the participants. This practice amounted to an unfair trade practice and accordingly, Star and Airtel have burdened with punitive damages of Rs . 1 crore and legal costs of Rs . 50,000/-. Thereafter, Star India and Airtel had filed their respective appeals before the Supreme Court. The Supreme Court had stayed the operation of the Order of NCDRC on 21.11.2008 Issue: Whether the contest Kaun Banega Crorepati (“KBC”) and the contest Har Seat Hot Seat was an unfair trade practice under the Consumer Protection Act, 1986? 74

75. Decision The Supreme Court allowed the appeals filed by Star India and Bharti Airtel and set aside the Order of the NCDRC and held that “there is no other cogent material on record upon which the National Commission could have placed reliance to render the finding of ‘unfair trade practice’ under Section 2(1)(r)(3) (a) of the 1986 Act”, “we find that the Complainant has clearly failed to discharge the burden to prove that the prize money was paid out of SMS revenue, and its averments on this aspect appear to be based on pure conjecture and surmise. We are of the view that there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue, and the finding of the commission of an “unfair trade practice” rendered by the National Commission on this basis is liable to be set aside”, 75

76. General Manager, Telecom v. M. Krishnan and Another This was a Special Appeal filed to the Supreme Court. The dispute in this case was regarding non-payment of telephone bill for the telephone connection provided to the first Respondent and for the said non-payment of the bill the telephone connection was disconnected. Aggrieved against the said disconnection, the first Respondent filed a complaint before the District Consumer Disputes Redressal Forum, Kozhikode. the Consumer Forum allowed the complaint and directed the Appellant herein to re-connect the telephone connection to the first Respondent and pay compensation to him. The Appellant filed a writ petition before the Kerala High Court challenging the jurisdiction of the consumer forum, which was dismissed. The Writ Appeal was then dismissed by a Full Bench of the Kerala High Court. The Supreme Court held that when there is a special remedy provided in Section 7-B of the Indian Telegraph Act, 1885 regarding disputes in respect of telephone bills, then the remedy under the Consumer Protection Act, 1986 is by implication barred. Rule 413 of the Telegraph Rules provides that all services relating to telephone are subject to Telegraph Rules. A telephone connection can be disconnected by the Telegraph Authority for default of payment under Rule 443 of the Rules. 76

77. Decision The Supreme Court further held that the special law viz. the Telegraph Act will override the general law that is the Consumer Protection Act. The Court agreed with the decision in which stated that the National Commission has no jurisdiction to adjudicate upon claims for compensation arising out of motor vehicles accidents. Thus, the appeal was allowed and the order and judgment of the High Court was set aside. 77

78. Francis Vadakkam v. A. One Medicals and Ors D2 is the manufacturer of a hair growth cream. D3 is the actor Anoop Menon, the brand ambassador for the cream. D3 featured in ads released by D2 where it was claimed that with the use of the cream, hair will grow three fold in 6 weeks. The Complainant said that he was influenced by these ads and twice purchased the cream from D1's store. He used it for 7 weeks but his hair did not grow. The Complainant approached the District Commission claiming ₹500k for loss, injury and mental agony. The Submissions The Complainant said he had no reasons to disbelieve the claims made in the ads by D2 and D3. D2 said the cream's effect is scientifically proven but it was clearly stated that the cream works differently from person to person, so results can vary. D3 said he did not use the cream himself and had not done anything which directly influenced the Complainant to buy and use the cream. The ad story was created solely by D2 and the ads which allegedly influenced the Complainant were released without his consent as his contract with D2 had expired. 78

79. Decision The Commission found that the Complainant was influenced by the ads to purchase the cream. He used the cream as per the directions in the ads but saw no follicle improvement. Although D2 had said that the effectiveness of the cream might vary from person to person, this was in a packaging insert which was complex and in any event not possible to read without a magnifying glass. The Commission came down heavily on D3 as he had attested to the effectiveness of the cream in the ads even though his case was that he had never used the cream. The Commission criticised the practice of brand ambassadors promoting products without even trying the product themselves. The Commission found a deficiency in service and directed D2 to pay ₹10,000 to the Complainant. D3 was prohibited from acting as a brand ambassador without first being assured of the quality of products he promotes, and he was directed to pay ₹10,000 to the Complainant. D1 was ordered to pay ₹3,000 in legal costs. 79

80. THANK YOU 80