NCDRC grants Rs 2 crore compensation for a wrong haircut

NCDRC grants Rs 2 crore compensation for a wrong haircut

NCDRC grants Rs 2 crore compensation for a wrong haircut

In a significant judgment, the National Consumer Disputes Redressal (NCDRC) has recently awarded Rs 2 crore compensation to a woman who had suffered mental trauma and whose career prospects had been adversely affected due to a bad haircut and hair treatment owing to the negligence of a salon at a 5-star hotel in 2018. The bench took into consideration that the complainant Aashna Roy was a model for hair products and had done modelling assignment for VLCC and Pantene. 

By Ankur Saha

In April 2018, complainant Aashna Roy visited a salon at the Delhi-based hotel a week before an interview and specifically asked for “long flicks covering her face in the front and at the back and four-inch straight hair trim from the bottom”. However, she alleged that the hairdresser did not abide by her instruction and chopped off her entire hair leaving only four inches from the top and barely touching her shoulders. She complained about this to the management of the Salon, who in turn offered her a free hair treatment, which she claimed caused permanent damage due to excess ammonia, which resulted in excessive irritation in her scalp. She brought the incident to the notice of the higher authorities of the hotel but “in vain”.

“Rather, they misbehaved and threatened her to face consequences,” Roy said and knocked on the doors of NCDRC seeking a written apology from the management as well as compensation of Rs 3 crores for harassment, humiliation, and mental trauma. She claimed that she stopped seeing herself in the mirror, avoided social activities, lost her self-confidence due to little hair. She also suffered a loss of income due to a mental breakdown and left her job, which Roy submitted before the commission.

However, the counsel appearing for the hotel chain, submitted that the entire hair of the complainant was not chopped off, they were cut as per her request, and that during the hair treatment no harm was caused to her scalp with the excess ammonia. The counsel submitted that the complainant is not a “Consumer” as no consideration was paid by her for hair cutting as the payment was declined and the hair treatment was also provided to her free of charge. The hotel claimed that Roy filed the complaint with a malafide intention to malign its reputation and goodwill and to extract unreasonably high and exaggerated compensation. 

A bench of president R K Agrawal and member Dr SM Kantikar awarded compensation after noting that women are no doubt cautious about their hair, spend a handsome amount on keeping them in good condition, and are emotionally attached to them. The commission noted that complainant Aashna Roy was a model for hair products because of her long hair and had done modelling for big hair-care brands but due to haircutting against her instructions, she lost her expected assignments and suffered a huge loss which completely changed her lifestyle and shattered her dream to be a top model.

She was also working as a senior management professional and earning a decent income. She underwent severe mental breakdown and trauma due to negligence in cutting her hair and could not concrete her job and finally, she lost her job,” the bench said in an order dated September 21. Apart from this, the hotel is also guilty of medical negligence in hair treatment, the commission said, adding that her scalp was burnt and there is still allergy and itching due to the fault of the staff. 

A bare perusal of the WhatsApp Chat adduced by the complainant reveals that the hotel had admitted the fault on their part and by offering the free hair treatment tried to cover it, the NCDRC added. The complaint was allowed partly and Commission granted compensation of Rs 2,00,00,000 to Roy for the trauma and mental agony she has suffered from.

Click here to read the full judgement

Supreme court enhanced award of compensation and said it cannot go restrictive just because the victim is from poor and rural background

Supreme court enhanced award of compensation and said it cannot go restrictive just because the victim is from poor and rural background

Supreme court enhanced award of compensation and said it cannot go restrictive just because the victim is from poor and rural background

The Supreme Court awarded an additional Rs 10 lakh in a medical negligence case to a lady who was not immediately attended to and was snubbed with the retort that the people from hilly areas make unnecessary noise. The petitioner Shoda Devi had filed the plea before the apex court seeking enhancement of the amount of compensation with reference to the disablement and loss suffered by her due to the negligence of the doctors, which led to the amputation of her right arm above the elbow.

In the instant case, the appellant Shoda Devi, who had been suffering with abdomen pain and menstrual problems, approached Deen Dayal Upadhyay Hospital – a government hospital at Shimla where she was examined by the Doctor. The lady, who was from a very poor and rural background, had suffered the medical negligence leading to amputation of her right arm, at the age of 45. The National Consumer Disputes Redressal Commission, found that it was a case of medical negligence quantified the amount of compensation only at Rs. 2,00,000. The lady approached the Apex court seeking enhancement of compensation.

The Apex court bench observed that, the National Commission, even after appreciating the troubles and trauma as also disablement and disadvantage suffered by the woman, had been too restrictive in award of compensation. It said that the award of compensation cannot go restrictive when the victim is coming from a poor and rural background.

The bench observed ordinarily, the general damages towards pain and suffering as also loss of amenities of life deserve to be considered uniformly for the human beings and the award of compensation cannot go restrictive when the victim is coming from a poor and rural background rather, in a given case like that of the appellant Shoda Devi, due to her disablement and reduced contribution, the amount of compensation ought to be of such level as to provide relief in reasonable monetary terms to Shoda Devi and to her family.

The bench said that granting of reasonability higher amount of compensation in the present case would serve dual purposes. One, to provide some assistance and support to the appellant Shoda Devi against the hardship and disadvantage due to amputation of right arm; and second, to send the message to the professionals that their responsiveness and diligence has to be equi-balanced for all their consumers and all the human beings deserve to be treated with equal respect and sensitivity. The Bench further added that they are impelled to make these observations in the context of an uncomfortable fact indicated on record that when the appellant was writhing in pain, she was not immediately attended at and was snubbed with the retort that ‘the people from hilly areas make unnecessary noise’. Such remarks, obviously, added insult to the injury and were least expected of the professionals on public duties.

The bench said that, given her background, the amount of compensation ought to be of such level as to provide relief in reasonable monetary terms to her and to her family. It then enhanced the compensation by an amount of Rupees Ten Lakhs, over and above the amount awarded by the State Commission and the National Commission.

Homebuyers can seek higher compensation than what is mentioned in agreement for delayed flat: National Commission

Homebuyers can seek higher compensation than what is mentioned in agreement for delayed flat: National Commission

Homebuyers can seek higher compensation than what is mentioned in agreement for delayed flat: National Commission

Recently, the Apex Consumer Court has passed an encouraging order for consumers whereby it held that builders can’t take advantage of the builder-buyer agreement to pay Rs. 5 per sq. feet per month as compensation for delay in handing over flats for unreasonable period. The buyers have the option to seek higher compensation after taking possession of the property or seek refund of the amount paid. The compensation would also be in addition to the refund amount with interest.

The National Commission heard an appeal filed by Emaar MGF challenging an order passed in August, 2016 by the State Commission, Chandigarh. One Govind Paul entered into a builder-buyer agreement with Emaar MGF for a property at Mohali Sector 105 which had to be delivered in three years. When the builder delayed the possession by 20 months, Paul approached the State Commission, Chandigarh. The State Commission in 2016 ordered the builder to refund Rs. 39,88,056/- with interest rate at 15%, along with Rs 3,00,000/-  compensation and Rs 25,000 as litigation cost. Aggrieved with the order of the State Commission, the builder moved to the Apex Consumer Court.

A bench of S.M. Kantikar and Dinesh Singh analysed the applicability and effect of the provisions of the agreement which speaks about time period during which the possession would be delivered and compensation to be paid in case of default from the builder. The Court observed that in case there is some short reasonable delay in offering possession, the builder would pay compensation for such short reasonable delay @ Rs. 5/- per sq. ft. per month of the super area till the date of notice of possession.  And the compensation for delay provided in agreement i.e. Rs. 5/- per sq. ft. p.m. cannot be for an unreasonably protracted period or indefinite, at best it can be for a short period that would appear to be reasonable per se and would be acceptable as such to a reasonable man. The Commission further stated that provision laid down in agreement by builder for compensation for delay implies that the delay could be for any period above 36 months, short or protracted, reasonable or otherwise, and the compensation for delay provided in agreement could be paid indefinitely for any period above 36 months is misconceived.

The National Commission said that the clear reading of the agreement reflects that the possession would be handed over not later than 36 months and for a short reasonable delay beyond 36 months a (somewhat token) compensation would be paid. To say that the possession can be delayed indefinitely or unreasonably and a token compensation for delay can be paid indefinitely or for an unreasonably protracted period is erroneous.  Indefinite or unreasonable delay with token compensation for delay cannot continue as such situation would be absurd.

While disposing off the appeal, the National Commission stated that the compensation prescribed in the agreement, at the rate of Rs. 5 per sq. ft. per month till the date of handing over the possession cannot be for an unreasonably long period of time.

The NCDRC, while stating that the buyer has option of seeking higher compensation or obtaining possession of the unit, enhanced the compensation to Rs. 5,00,000/- over and above the refund apart from increasing refund for the litigation cost to Rs. 50,000/-.

The National Commission concluded by saying that creating yet further harassment, uncertainty and difficulty for the consumer by delaying payments or making reduced payments etc. (if the adjudication is not stayed or quashed or modified by a higher authority / court) will be an unacceptable situation, to be viewed seriously. The harassment, uncertainty and difficulty of the consumer should end promptly and fully, the chapter should close.  Therefore, if the builder delays the adjudicated payments beyond the time stipulated, it would and should attract higher / penal interest and other compensation / costs.

Consumer Complaints Lodged Before 2019 Act Will Continue Before Fora Envisioned As Per 1986 Act: Supreme Court

Consumer Complaints Lodged Before 2019 Act Will Continue Before Fora Envisioned As Per 1986 Act: Supreme Court

Consumer Complaints Lodged Before 2019 Act Will Continue Before Fora Envisioned As Per 1986 Act: Supreme Court

The bench of Justices Dr. DY Chandrachud. and MR Shah held that the proceedings instituted before the commencement of the Consumer Protection Act 2019 on 20 July 2020 would continue before the fora corresponding to those under the Consumer Protection Act 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019. 

The decision was rendered by the Bench on 16th of March, 2020, in a plea against a decision of the National Consumer Disputes Redressal Commission (NCDRC) which had dismissed a case on the ground that after the enforcement of the 2019 Act, its pecuniary jurisdiction stood enhanced from Rs 1 crore to Rs 10 crore. The Apex Court ruled that transferring these complaints as per the pecuniary jurisdiction laid down in the new Act will impact the interests of the consumer and defeat the object of the legislation, which is to protect and promote consumer welfare. 

This significant pronouncement, which settles a widespread confusion prevailing in consumer fora across the country, came in the case Neena Aneja and others vs Jai Prakash Associates Ltd.

The 2019 Act had increased the pecuniary jurisdiction of consumer fora as follows :

District Forum :-Increased to Rs.One Crore from Rs. Twenty Lakhs.

State Commission :- Increased to Rs. Ten Crores from Rs. One Crore.

National Commission :- Above Rs. Ten Crores from Rs.One Crores.

Click here to read the full judgement

Six Positive Changes in New Consumer Protection Law Passed in Lok Sabha – An Analysis by Prof Sri Ram Khanna & Consumer Voice Team

Six Positive Changes in New Consumer Protection Law Passed in Lok Sabha – An Analysis by Prof Sri Ram Khanna & Consumer Voice Team

On Thursday, 20 December 2018 The Consumers Protection Bill, 2018 was passed just before the house was adjourned for the day amid noisy disruptions. It was the first Bill to be introduced in  2018 budget session of Lok Sabha after it passed the legislative deliberations test in the Parliamentary Standing Committee. In 2016 the parliamentary Standing Committee had examined the earlier version of Consumers Protection Bill, 2015 and made its recommendations which have taken over a year to process. The first version of the Bill had been finalized during UPA II.

WHAT ARE THE SIX POSITIVE CHANGES?

The changes in the existing Act of 1986 are mostly positive. We have identified six positive features in the 2018 Bill which seeks to repeal and replace the 1986 Act lock stock and barrel. These include: First setting up of a new Executive Regulatory Authority called Central Consumers Protection Authority (CCPA) specialized to protect consumers. Second, it sets up a Mediation Cell in each consumer Court to mediate on consumer disputes. Thirdly, it widens the geographical jurisdiction of a consumer court to include the home or workplace of the complainant and substantially enhances pecuniary jurisdiction of consumer courts at all three levels. Fourth, it introduces the concept of Unfair terms of Contract which can be nullified by a Consumer Court. Fifth, it introduces punishment to jail and fine for misleading ads and injury from adulteration and spurious goods. Sixth, it introduces the concept of Product liability action widening the jurisdiction of the consumer courts. These positive changes need to be welcomed and appear to be like the warmth of the winter sun on a chilly, cloudy day in North India.

The Six positive issues that constitute the sunshine hiding behind the dark clouds on a winter morning are explained

Setting up of a Central Consumer protection Authority:
The Bill establishes a Consumer Protection Authority to investigate into consumer complaints, issue safety notices for goods and services, and pass orders for recall of goods and against misleading advertisements. It provides teeth to this Bill where the Authority can intervene to protect consumer’s interest in the market place. While the present law has provisions enabling the Central and State Governments to file cases in Consumer Courts, hardly any such cases have been filed in last three decades. This authority will be able to intervene in the market in a wide number of situations which have been elaborated in the BILL. It’s likely to emerge as a Regulatory Body for Consumers Protection.

Setting up of Mediation Centres in Consumer Courts:
A new chapter has been added to the Bill relating to setting up the mechanism for undertaking mediation in consumer disputes. The philosophy is that willing parties to a dispute should discuss the dispute with an empanelled Mediator to find a mutually acceptable solution to the dispute instead of long drawn litigation. Mediation Centres would be set up at the Central, State and District levels prescribed by respective state and central governments. This would enable settlement of disputes by a mediator upon reference by a consumer court.

Widening the jurisdiction of Consumer Courts:
The existing principle of jurisdiction of a District consumer court is the place where the cause of action arose or where the branch of the opposite party is located. This point is settled by the Supreme Court which held in Sonic Surgical (CIVIL APPEAL NO. 1560 OF 2004) that the case should be filed only in the jurisdiction of the branch office where the cause of action arose. The complaint cannot be filed in any branch of the opposite party. The proposed Section 34(1) raises the jurisdiction of District Consumer Court from existing Rs. 20 lacs to Rs. one crore. The proposed Section 34 (2) (d) adds the place where the complainant resides or personally works for gain as another place where the complaint can be filed. This welcome change completely upsets the ratio decendi in the Sonic Surgical case which is frequently being cited by Consumer Courts to oust geographic jurisdiction in cases where the cause of action arose at another place. The pecuniary jurisdiction of the State Commissions has been enhanced from Rs. 20 lacs and it goes up from one crore to Rs 10 crores and that of the National Commission to over Rs 10 crores.

Unfair Terms of Contract:
All contracts in India have been judged on the basis of jurisprudence based on The Indian Contract Act of 1872. For nearly 146 years Indian courts have upheld the validity of all terms of contracts if the contract was validly entered and have refused to judge the reasonableness of terms of contracts once parties have bound themselves to such contracts. The major exception being contracts in which minors were parties or the object of the contract was against public purpose or policy. The Bill classifies six contract terms as ‘unfair’. These cover terms such as (i) payment of excessive security deposits; (ii) disproportionate penalty for a breach; (iii) refusal to accept early repayment of debts; (iv) unilateral termination without reasonable cause; (v) causing consumer detriment by assigning a contract to another party; (vi) one which puts the consumer at a disadvantage. The Parliamentary Standing committee had recommended that the Bill should lay down principles which widen its scope to determine whether contract term is unfair. This would allow terms of contracts other than the specified six to be classified as unfair. The change in the opening para of Section 2(46) does not appear to do justice to this recommendation and could have been better worded to widen it meaningfully. Only State Commissions and National Commission are being empowered to declare such terms of contracts as null and void. This will certainly reverse the current trend of contractual jurisprudence in B to C transactions and is to be welcomed by consumers.

Jail for false and misleading ads, sale of spurious products and adulterated food:
Though the 1986 Act has adequate provisions for action against misleading ads which are deemed to be unfair trade practices, the act has been described as toothless as there was no penalty against such advertisers. The Bill has dropped the earlier proposal to penalize celebrities endorsing misleading ads. Under Section 89 two years jail and fine of Rs. 10 lacs is prescribed for misleading ads. The term of jail and fine are enhanced to five years and Rs. 50 lacs in case of a repeat offence. The Parliamentary Standing Committee had suggested a fine of Rs. 10 lakh or an imprisonment of two years or both, to deter such advertisements. It also suggested that these penalties will be applicable to the persons who endorse the products in the advertisements. The Bill does not have any such provision against the endorsing celebrity. Though the celebrities on their parts may be forced to do due diligence about the features of the product they are promoting. The proposed Section 90 prescribes jail for sale of adulterated food while Section 91 provides for jail for sale of spurious goods.

Product Liability:
A new chapter has been introduced in the Bill to enforce product liability against manufacturers and even make them recall the product from the entire market. The 2015 Bill proposed that in order to enforce product liability, a claimant must establish four kinds of defects in the product, the injury caused from it, and that it belonged to the manufacturer. The claimant must also establish that the manufacturer had knowledge of such a defect. It was argued before the Standing Committee that the conditions to establish a product liability claim are unreasonable. The Parliamentary Standing Committee observed that this puts an undue burden on the consumer, since it would not be possible to claim liability if any one of the conditions are not met. It recommended that the provision be redrafted such that the consumer has to prove any one of the conditions instead of all six of them. The Committee also noted that it was not clear if deficiency in services is covered under the Bill. It recommended that the Bill should also specify conditions for establishing deficiency in services.

SOME DEFICIENCIES REMAIN AS A DARK CLOUD HIDING THE SUNSHINE

However, these welcome changes are being overshadowed by the dark clouds of deleting existing due process sections of establishing consumer court judges that is like hiding warm sunshine on a chilly winter morning. The new Bill has dropped the due process for appointments of consumer court judges which is based on a political consensus contained in CPA, 1986. It’s like a damner on an otherwise welcome bill with six positive additions to the existing Consumer Protection Law. The now missing listing of qualifications, criteria for selections, selection committee composition and terms of office of consumer court judges which are part of the existing law have been dropped and demoted to rule making as delegated legislation. Rules are also law and are made by a Ministry without any open consultation process and notified by Government in the official Gazette. This dropping opens the door for changes that have the potential to introduce arbitrariness, favoritism and selection of unqualified persons close to the ruling dispensation. The unpleasant topping on this cake is the dark cloud dropping the formal role of High Court Chief Justices in mandatory consultation for appointment of judicial officers as heads of State Commissions and Chief Justice of India in appointment of president of National Commission. The existing provisions of Chief justices heading selection committees to pick consumer court judges have also been dropped. This is not welcome particularly because the smallest consumer court will handle cases up to value of Rs one crore in a case.

SUGGESTION FROM CONSUMER VOICEConsumer VOICE suggests retaining the following sections of 1986 act in current bill:

COURTS QUALIFICATION OF MEMBERS SELECTION COMMITTEE COMPOSITION TERM & APPOINTMENT
DISTRICT FORUM       10(1)    10(1)(A)    10 (2)(3)
STATE COMMISSIONS       16(1)    16(1)(A)   16 (2), (3)
NATIONAL COMMISSION       20(1)    20(1) (A)   20(2), (3)

These six positive highlights are going to make this law much stronger, mature and sophisticated as compared to the Bill first passed in 1986 and thrice amended.  One can say that much water has flown down the Yamuna since 1986 when this law was first enacted. The Consumers protection Bill 2018 will replace the old Act of 1986 lock stock and barrel while retaining all essential features but making significant change and additions to make it stronger to protect consumers.

Prof Sri Ram Khanna is managing editor of Consumer Voice and former Dean and head of Commerce, Delhi School of Economics

Also Read: Consumer Protection Bill 2018 | Consumer Protection Act 1986

Indian Consumers: Arise, Awake To Urge Adaption Of Consumer Protection Bill

Indian Consumers: Arise, Awake To Urge Adaption Of Consumer Protection Bill

No need to pay extra for bottled water at cinemas, malls and airports: Ram Vilas Paswan

Packaged Drinking Water

By Bhamy V. Shenoy

Consumer Protection Bill (CPB) 2018 was passed by the Lok Sabha on Dec 20th, 2018. Actually this bill was tabled in 2015. However Rajya Sabha did not pass the bill and the new Parliament has to take this up after the election.

CPB was not at all controversial. All political parties would have been interested to support the long suffering consumers if only they realized that their voters demand from them a robust act to protect their rights. After all all voters are consumers in one way or the other. But it did not happen. New bill had several consumer friendly provisions. It would have established a Central Consumer Protection Authority to protect consumer rights and to look into misleading advertisements, had provisions to fine and ban on celebrities for endorsing misleading advertisements, would have encouraged alternate dispute litigation mechanisms etc.

Consumer Voice, a well known Delhi based consumer protection NGO has started a petition to urge all the political parties to pass the consumer protection bill (CPB 2018) when the new Parliament meets after the election. CV publishes a monthly magazine to inform the consumers of the comparative testing of products and services. Such information is invaluable for consumers and not to be misled by all kinds of ads.

Unless we the citizens show interest, new parliament irrespective of which combination of parties come to rule is unlikely to take this bill on a priority basis. What a shame that even after passage of four long years, we have failed to have a progressive consumer protection act to replace the one of 1986.  This is mostly because of consumer indifference.

Some efforts have been made in the past to get signatures for petition like this, but none achieved the critical mass of at least one lakh signatures ( even one lakh is not much to speak of in a society where crores are active on the social network).

Some may argue what is the use of passing another law when the previous law has not really helped the consumers as expected. Consumer courts established  under previous law have adapted the dysfunctional culture of general courts giving never ending adjournments and has failed to uphold the spirit of giving judgements with no or minimum adjournment in 90 days. This is mostly because we the citizens have failed in our responsibility of putting pressure on the government to implement the law properly. Hopefully the new consumer movement which is now being promoted by some NGOs to push the political parties to adapt a more progressive act may make a difference.

We all talk of how social network plays an important role. Can anything be more important than helping the consumers who face problems every day while buying goods and services either from the public or private sectors? If we the citizens take interest, we should be able to get at least a million signatures to the petition. It will definitely make a difference. Link to sign to petition is at   http://chng.it/LfD68DFn.  Soon after reading the article, do not postpone to sign it. It takes less than a minute. Let us get inspired by Swami Vivekananda’s words, “Arise, awake and stop not till the goal is reached”. Our goal is to get millions to sign the petition to convince all the political leaders to put consumer protection on their manifesto.

Bhamy V. Shenoy is a governing council member of Consumer Voice.

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