Supreme Court Half Yearly Digest 2023 [Consumer Law]

Railways not liable for theft of passenger's belongings - the theft of personal belongings of a Passenger is not “deficiency of service” by Railways. If the passenger is not able to protect his own belongings, the Railways cannot be held responsible. The Supreme court set aside orders passed by Consumer forum whereby Railways was directed to reimburse the stolen amount of cash to the Passenger. Station Superintendent v. Surender Bhola, 2023 LiveLaw (SC) 487

Consumer Law - A pedantic and hyper-technical approach would cause damage to the very concept of consumerism. (Para 23) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527 : 2023 INSC 536

Definition of 'Consumer' includes 'Consumers'; Joint complaint by multiple consumers need not be filed in representative capacity. Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527 : 2023 INSC 536

Consumer Protection Act, 1986 - Commercial enterprises can raise consumer disputes in relation to goods or services unconnected to profit generation. National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Commissions can't decide complaints involving highly disputed facts, criminal or tortious acts. Chairman & Managing Director, City Union Bank Ltd. v. R. Chandramohan, 2023 LiveLaw (SC) 251 : AIR 2023 SC 1762 : 2023 INSC 300

Amend Consumer Protection Rules on appointment process of commission members within 3 months : Supreme Court to Centre, States. In Re: Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India v. Union of India, 2023 LiveLaw (SC) 201

Supreme Court Paves way for lawyers with 10 yrs experience to be considered for consumer commission appointments; upholds striking down of centre's rules. Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371 : 2023 INSC 209

Supreme Court upholds the Bombay High Court judgment which struck down provisions of the Consumer Protection Rules which excluded persons with 10 years professional experience from appointment to State Consumer Commissions and District Consumer Forums - for appointment of President and Members of the State Commission and District Commission, the appointment shall be made on the basis of performance in written test consisting of two papers. Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371 : 2023 INSC 209

Flat owners don't forfeit the right to claim amenities promised by builder by taking possession of apartments. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195 : 2023 INSC 114

Flat owners do not forfeit the right to claim amenities promised by the developer by taking possession of the apartments- Supreme Court disapproves of NCDRC order dismissing homebuyers' claim on the ground that knowingly purchased the apartments. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195 : 2023 INSC 114

Supreme Court's comments on flat-owners' plight - Now-a-days, flat owners seldom purchase flats with liquid cash. Flats are purchased on the basis of finances being advanced by banks and other financial institutions. Once a flat is booked and the prospective flat owner enters into an agreement for loan, instalments fall due to be paid to clear the debt irrespective of whether the flat is ready for being delivered possession. The usual delays that are associated with construction activities result in undue anxiety, stress, and harassment for which many a prospective flat owner, it is common knowledge, even without the project/flat being wholly complete is left with no other option but to take possession. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195 : 2023 INSC 114

Rs. 2 Crore compensation for bad haircut excessive: Supreme Court asks NCDRC to decide model's claim afresh. ITC Ltd. v. Aashna Roy, 2023 LiveLaw (SC) 87 : AIR 2023 SC 827 : (2023) 5 SCC 655 : 2023 INSC 100

Consumer Protection Act, 1986; Section 12(1)(c) – Code of Civil Procedure, 1908; Order 1 Rule 8 - The need for the application of Order I Rule 8 CPC, which speaks of a plaintiff representing the other public as a whole would be required only in a case involving a complaint under Section 12(1)(c) of the 1986 Act. In other words, it does not have any application when similarly placed complainants jointly make a complaint seeking the very same relief. In such a case, there is no question of Order I Rule 8 CPC being complied with as they do not represent the others, particularly when there is no larger public interest involved. Such complainants seek reliefs for themselves and nothing beyond. (Para 17) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527 : 2023 INSC 536

Consumer Protection Act, 1986; Section 2(1)(b)(i) – Definition of 'consumer' includes 'consumers' - Joint complaint by multiple consumers need not be filed in representative capacity. Consumer Protection Act, 1986; Section 13(6) – Code of Civil Procedure, 1908; Order 1 Rule 8 - When a few consumers who have the same interest seeking the same relief file a joint complaint without any larger public interest involved, it need not be filed in a representative capacity. Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527 : 2023 INSC 536

Consumer Protection Act, 2019 - The 2019 Act facilitates the consumers to approach the forums by providing a very flexible procedure. It is meant to encourage consumerism in the country. Any technical approach in construing the provisions against the consumer would go against the very objective behind the enactment. (Para 15) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527 : 2023 INSC 536

Consumer Protection Act, 1986 - Tests to determine if goods or services were purchased or availed for commercial purposes - Two fold tests- (i) whether the goods are purchased for resale or for commercial purpose; or (ii) whether the services are availed for any commercial purpose - If the goods are purchased for resale or for commercial purpose, then such consumer would be excluded from the coverage of the Act, 1986. For example, if a manufacturer who is producing product A, for such production he may be required to purchase articles which may be raw material, then purchase of such articles would be for commercial purpose. As against this, if the same manufacturer purchases a refrigerator, television or air-conditioner for his use at his residence or even for his office has no direct or indirect nexus to generate profits, cannot be held to be for commercial purpose and for afore-stated reason he is qualified to approach the Consumer Forum under the Act, 1986 - Similarly, a hospital which hires services of a medical practitioner, it would be a commercial purpose, but if a person avails such services for his ailment, it would be held to be a noncommercial purpose. (Para 39) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Protection Act, 1986 - The Act, 1986 is a social benefit-oriented legislation and, therefore, the Court has to adopt a constructive liberal approach while construing the provisions of the Act - The provisions of the Act, 1986 thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit-oriented legislation. (Para 21, 24) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Protection Act, 1986 - there is no such exclusion from the definition of the term “consumer” either to a commercial enterprise or to a person who is covered under the expression “person” defined in Section 2(1)(m) of the Act, 1986 merely because it is a commercial enterprise. (Para 36) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Protection Act, 1986 - Whether a commercial enterprise can be held to be a "consumer" in relation to dispute relating to insurance policy availed by it - Held yes in the facts of the case - hiring of insurance policy is clearly an act for indemnifying a risk of loss/damages and there is no element of profit generation - clarifies that it is not a general rule and depends on the facts of the case. (Para 44 to 47) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Protection Act, 1986; Section 2(1)(d) - Taking a wide meaning of the words “for any commercial purpose”, it would mean that the goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose, but in a case where goods purchased or services hired is an activity, which is not directly intended to generate profit, it would not be a commercial purpose. (Para 40) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313 : 2023 INSC 367

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Rule 3 prescribed a minimum professional experience of 20 years for consideration to appointment of members as State Consumer Commissions- Rule 4 prescribed a minimum professional experience of 20 years for consideration to appointment of members as District Consumer Commissions- Rules struck down as violative of the SC judgment in Madras Bar Association judgment which held that lawyers with 10 years of professional experience are eligible for appointment as Tribunal members -the High Court in the impugned judgment and order has rightly observed and held that Rule 3(2)(b), Rule 4(2)(c) and Rule 6(9) of the Rules, 2020 which are contrary to the decisions of this Court in the cases of State of Uttar Pradesh and Others Vs. All Uttar Pradesh Consumer Protection Bar Association; (2017) 1 SCC 444 and the Madras Bar Association Vs. Union of India and Another; (2021) 7 SCC 369 are unconstitutional and arbitrary. (Para 6.4) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371 : 2023 INSC 209

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Rule 6(9) lacks transparency and it confers uncontrolled discretion and excessive power to the Selection Committee. Under Rule 6(9), the Selection Committee is empowered with the uncontrolled discretionary power to determine its procedure to recommend candidates to be appointed as President and Members of the State and District Commission. (Para 6.5) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371 : 2023 INSC 209

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Till the amendments are made in order to do complete justice under A. 142 we direct that in future a person having Bachelor’s degree from a recognised university and who is a person of ability, integrity standing and having special knowledge and professional experience of not less than 10 years in consumer affairs, law, public affairs, administration etc. shall be treated as qualified for appointment as President and member of State and District Commission. We also direct that for appointment the appointment shall be based on the performance in 2 papers. Qualifying marks in the papers shall be 50% and there must be a viva for 50 marks each. (Para 8.2) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371 : 2023 INSC 209

Consumer Protection Act 1986 - Flat-owners' rights - If complaints were to be spurned on the specious ground that the consumers knew what they were purchasing, the object and purpose of the enactment would be defeated-in most cases, the jurisdiction of NCDRC is invoked post-purchase-Any deficiency detected post-purchase opens up an avenue for the aggrieved consumer to seek relief before the consumer for a. (Para 11) Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195 : 2023 INSC 114

Consumer Protection Act 1986 - Supreme Court terms Rs 2 crores compensation awarded by the NCDRC for a bad hair-cut suffered by a model at a 5-star hotel saloon as excessive and disproportionate-quantification of compensation has to be based upon material evidence and not on the mere asking. (Para 13, 15) ITC Ltd. v. Aashna Roy, 2023 LiveLaw (SC) 87 : AIR 2023 SC 827 : (2023) 5 SCC 655 : 2023 INSC 100

Consumer Protection Act, 1986 - Kolkata Municipal Corporation Act - Builder has obligation to seek completion certificate-It is no part of the flat owner’s duty to apply for a completion certificate. (Para 18, 19) Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195 : 2023 INSC 114

Consumer Protection Act, 1986 - The proceedings before the Commission being summary in nature, the complaints involving highly disputed questions of facts or the cases involving tortious acts or criminality like fraud or cheating, could not be decided by the Forum/Commission under the said Act. The “deficiency in service”, as well settled, has to be distinguished from the criminal acts or tortious acts. There could not be any presumption with regard to the wilful fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance in service, as contemplated in Section 2(1)(g) of the Act. The burden of proving the deficiency in service would always be upon the person alleging it. (Para 12) Chairman & Managing Director, City Union Bank Ltd. v. R. Chandramohan, 2023 LiveLaw (SC) 251 : AIR 2023 SC 1762 : 2023 INSC 300

Consumer Protection Rules, 2020 - Supreme Court directs Centre and States to amend the rules in terms of the directions in Secretary, Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 within a period of three months. In Re: Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India v. Union of India, 2023 LiveLaw (SC) 201