(Supreme Court sets Law) 

The judgments which contributed to develop Consumer Jurisprudence. Consumer jurisprudence is the study of legal principles, judicial decisions, and precepts that protect and regulate the interests of consumers.

1

Bombay High court struck down Rue 6(1) of Rule 2020 of Consumer Protection Act 2019

(Legal issue: Appointment of Presidents & Members in Consumer Commissions )

Dominance of executives over Judicial Person, chairman 

Writ 3680 of 2023; Challenge to Rule 6(1) of the Rules of 2020:

Case Law : 

Dr.Mahendra Bhaskar Limaye & others 

Versus.

1. Union of India, Through its Secretary, Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs, Krushi Bhavan, New Delhi. 
2. State of Maharashtra, Through its Secretary, Food and Civil Supplies and Consumer Affairs, Department/Ministry, Mantralaya, Mumbai-32. 

Writ Petition No. 3680/2023

 High Court of Bombay, Nagpur Bench

(Decided on 20 Oct 2023 )

According to the said provision, the President and the Members of the State Commission and the District Commission can be appointed by the State Government on the recommendation of the Selection Committee. 

The constitution of the Selection Committee consisting of

• Two members from the Executive as the Secretary in-charge of the Consumer Affairs and a nominee of the Chief Secretary of the State, the doctrine of separation of powers is violated. 

• In the light of the law laid down in these decisions, it is the contention of the petitioners that Rule 6(1) of the Rules of 2020 compromises the aspect of primacy to the judiciary in the Selection.

Hence HC HELD –

• Rule 6(1) invalid and the notifications dated 10.04.2023 and 13.06.2023 would not survive. They are accordingly quashed.in the light of earlier decided case by the SC in the matter of Rojer Mathew Versus South Indian Bank Limited & Others [(2020) 6

2

Pecuniary Jurisdiction of Commissions on The Basis of Paid Actual Cost  

Case Law; M/S. Pyaridevi Chabiraj Steels Pvt. Ltd.  V/S National Insurance Company Ltd. & ors Case No. 833 Of 2020 

Decided on: 28 Aug 2020

Law Point -Pecuniary Jurisdiction of National Commission in the light of new provisions in the Act 2019 

Bench -Hon’ble Mr. Justice R.K. Agrawal, President Hon’ble Dr. S.M. Kantikar, Member

Earlier Status: Consideration for Jurisdiction: actual loss, compensation and cost of litigation 

Commission Held: The consideration paid should be the criteria 

While enacting the Act of 2019 the Parliament, was conscious of this fact and to ensure that Consumer should approach the appropriate Consumer Disputes Redressal Commission whether it is District, State or National only the value of the consideration paid should be taken into consideration while determining the pecuniary jurisdiction and not value of the goods or services and compensation, and that is why a specific provision has been made.

3

CCPA has jurisdiction to initiate proceeding Suo moto against enterprise 

Case title:

 Cloudtail India Private Limited. Versus Central Consumer Protection Authority CCPA Appeal No. 4 Of 2022, Decided on 23 Aug 2023) 

 (Against the Order dated 04/11/2022 in Complaint No. J-25/72/2021 of the CCPA DELHI) 

CCPA while rejecting the plea that their product was international standard tested, directs Cloudtail India Private Limited to recall 1033 pressure cookers, sold by the company in the country which were not BIS marked , refunding its price to the consumers, within 45 days and imposed a penalty of Rs.100000/-, for selling the pressure cooker, in violation of Quality Control Order, 2020.

This is the first order of its kind by CCPA after CP Act 2019 enforced  which has been challenged before the apex consumer commission questioning the jurisdiction of CCPA.Since this is the new entity established under the Act 2019 ,this order holds significant importance. 

4

Home Buyer A Financial Creditor

The Supreme Court in the case of Pioneer Urban Land and Infrastructure Limited & Anr v. Union of India & Ors. (Writ Petition (Civil) No. 43 of 2019) (Decided on  9 Aug 2019) has held that the homebuyers from now onwards shall be considered as Financial Creditors under the Insolvency and Bankruptcy Code.

SC Held;

RERA is to be read harmoniously with the Code, as amended by the Amendment Act and in case of a conflict I&B Code will prevail over RERA. Further, the remedies that are given to allottees of flats/apartments are concurrent remedies, and therefore, allottees of flats/apartments are in position to avail remedies given under the Consumer Protection Act, RERA as well as I&B Code. Further, Section 5(8)(f) as it originally appeared in the Code is a residuary provision, which always incorporated within it allottees of flats/apartments. The explanation together with the deeming fiction was added by the Amendment Act to only clarify the position of law.

5

Law on forfeiture of Earnest Money: Real Estate

Legal Issue: How much deduction is reasonable and justifiable if the home buyer cancels the booking amount

Case Law; Goutam Roy V/S Avalon Projects

CC No 1941 of 2018, Decided on 24.01.2023 (NC)

A landmark judgement National Commission (NCDRC)

National commission ordered for forfeiture of 10% of the total sale cost of the property.

The Supreme Court held –

“ A revocation of power of attorney executed between landowners and builder for developing their land would not absolve the landowners from being jointly and severally liable along with the builder in a consumer case for deficiency of service.”

Case Details : Akshay & Anr. V. Aditya & Ors Civil Appeal Nos.3642-3646/2018 

Bench :Bela M. Trivedi J Satish Chandra Sharma J 

 Decided on 29th August, 2024.

Facts of the case:

The appellants who are landowners, and respondent No.2 (builder) Glandstone Mahaveer Infrastructure Pvt. Ltd had entered into a Joint Venture Agreement (JVA) for building flats and selling them subsequently. Appellants(landowners) had also executed an Irrevocable Power of Attorney (IPA) in favour of the respondent No.2(Builder) on July 6, 2013. On the premise of the said IPA, the respondent No.2 (builder) entered into an agreement with complainants /home buyers for the units. on the basis of the said documents 

Subsequently the said power of attorney was revoked by the appellants vide the letter dated 12-8-2014,  In the letter dated 12-8-2014, the appellants had stated to be not liable “Henceforth”, i.e. after the said letter was sent.

 The respondents, complainants filed the complaints before the `State Commission’ under Section 17 of the Consumer Protection Act, 1986 against the present Appellants(landowners ) and Respondent No.2(Builders) seeking the declaration that the present Appellants(Landowners ) and the Respondent No.2 (Builders )were jointly and severally involved in the unfair trade practices and were guilty of deficiency in service, they were jointly and severally liable to complete the activities and construction as per the terms and conditions agreed upon between the parties.

The  `State Commission’ holding Builders and Landowners (the present appellants and Respondent No.2) liable for the completion of the construction of dwelling units as per the agreement with the complainants and passed the following order:-

1. The OP Nos.1,2&3 before the state commission  to provide the possession of the dwelling unit agreed in Agreement to Sell (SA) with each complainant in the span of six months from the date of the receipt of copy of this order
2. The complainants to pay the entire consideration of the dwelling unit as per the stages and the final amount at the time of sale deed and possession as per the agreement.
3. The O.P. No.1 before the state commission   to provide the compensation of Rs.1,00,000/- to each of complainant for physical and mental harassment The O.P.No.1 to provide the cost of Rs.10,000/- to each of the complainant in the span of 30 days from the date of the receipt of copy of this order

The present appellants, preferred the First Appeals before the `NCDRC’, which came to be dismissed by the `NCDRC. NCDRC stated :

“The State Commission concluded that at the time of the agreement between the builder and the complainants, the JVA and IPA were very much operative. It is evident, therefore, that the appellants cannot wash their hands off from the matter, as it would result in grave injustice to the complainants’ consumers.”

Now matter comes before SC for adjudication 

Arguments by Advocate appearing for the appellants 

• That the appellants revoked the IPA granted to respondent no.2(Builder) on August 12, 2014 along with a public notice and hence could not be held liable for the acts done by the respondent no.2.

• That since the appellants were not privy to the agreement between the respondent no.2 and flat buyer/remaining respondents, a complaint against them under the Consumer Protection Act would not be maintainable.

• Advocate representing respondent no.2 had submitted that respondent no.2 was ready to complete the construction work and honour the JVA 

Supreme Court observed that 

“that though allegedly the said power of attorney was revoked by the appellants vide the letter dated 12-8-2014, the JVA has not been revoked so far and the same still continues to be in force”

It is further stated –

“In the letter dated 12-8-2014, the appellants had stated to be not liable “Henceforth”, i.e. after the said letter was sent. The appellants therefore were bound by the acts/deeds of the Respondent No.2 carried out pursuant to the irrevocable Power of Attorney till it was terminated, in accordance with law.”

To sum-up SC held – 

• The Joint Venture Agreement (JVA) between the builder and the landowners remained operative even after the revocation of the power of attorney.
•  It was also held that the expression ‘henceforth’ used in the revocation letter to the builder meant that landowners would be ceased of any liability for builder’s actions that occurs subsequent to the termination
• that would not exclude the landowners’ liability for the agreements that the builder entered into with the buyers before the termination of JVA or revocation of Power of attorney