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  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.


Did you know that your health information is confidential?

Did you know that your health information is confidential?


Whenever a doctor cannot do good, he must be kept from doing harm.

~ Hippocrates

In August this year, Andhra Pradesh State Consumer Disputes Redressal Commission had warned doctors and hospitals to not share patient information with anyone unless required by a court of law. Warning of legal consequences if they acted contrary to this, the commission had also stated that ‘maintaining confidentiality of a patient’s medical aspects is absolutely necessary and that it is not only part of a doctor’s professional conduct, but also a Constitutional obligation.’ Let’s look at some of the cases that brought this contentious subject into the spotlight.

 Dr Prem Lata, Consumer Awakening

Former Member, CDRF-Delhi

The case in question was against State Bank of India (SBI) wherein the latter had rejected a request of settling a loan against policy claim. The judgement was arrived at on the basis of ‘unethically obtained’ medical information by SBI.

A two-member bench comprising Justice Noushad Ali (president) and P Mutyala Naidu had allowed the claim of G Vijaya Kumari of Vijayawada against SBI Life Insurance Company.  The bench observed: “It is trite to note that of late, almost every doctor/hospital is observing a professional obligation and the mandate of Constitution with impunity. They are sharing medical records of patients routinely with insurance companies, without realising consequences.”

Case Background

G Vijaya Kumari had filed a case against SBI Life Insurance Company as they had rejected her request for settlement of a home loan (from SBI itself) through the insurance claim that was due to her after her husband’s demise. The insurance company had rejected her claim on the basis of investigation wherein they claimed to have found out that the applicant had ‘suppressed material information’ at the time of obtaining the life-insurance policy.

Kumari’s husband Seshagiri Rao had borrowed Rs 22 lakh as housing loan from SBI and covered the loan with the same bank’s insurance policy. He had also mortgaged his property. Later, Rao was diagnosed with cancer and died. Distressed, his wife pleaded with the bank to settle the loan against the insurance claim and return the pledged property papers to her. However, her claim was rejected by the company on the grounds that Rao had not disclosed true facts while buying the insurance policy.

It is interesting to note that the insurance company, despite maintaining in its records that Rao had suppressed material information, had issued a certificate of good health to him and approved the insurance policy.

After thoroughly studying the case and hearing all the parties, the state commission observed that while selling policies the insurance companies did not really care as to whether or not the intending purchaser was eligible for the policy – whether he or she was concealing ‘material information’, as was being contended in this case. Instead, they surpassed basic rules, lured customers through advertising and agents to meet sales targets. When it came to settlement, they would look for every possible excuse to dismiss the same. The bench pointed out that the insurance companies invariably engaged their so-called investigators, who in turn approached doctors/hospitals for records. “These doctors/hospitals are obliging to them as a matter of course. The present case is one such instance,” the bench said.

It its final judgement, the commission not just directed SBI to settle the loan against the policy claim and return the pledged property documents, but also asked the bank to compensate Kumari with one lakh rupees and pay Rs 25,000 towards the cost of litigation. The commission also reprimanded doctors/hospitals for sharing patients’ personal information with commercial establishments and asked them all to adhere to the regulations of Medical Council of India (MCI).

Another Case

An interesting case was decided by the National Consumer Forum in February this year. Life Insurance Corporation of India (LIC) had rejected a claim requested by the kin of PR Sumanagala post his death, on the basis of his medical records and a medical attendant’s certificate.

LIC rejected the claim stating that “the insured was a diabetic patient for the past 15 years and was undergoing irregular treatment.” To justify their claim, the company produced a discharge summary and the treatment records supplied by the Holy Ghost Mission Hospital where Sumanagala had died. They also produced a medical attendant’s certificate that confirmed acute renal failure as secondary cause of death and long-standing diabetes as the primary cause. On the other hand, Sumanagala’s wife continued to insist that her husband was totally healthy when he had taken the policy and that they learnt about his condition only after he was admitted to the hospital.

Interestingly, the company could not produce any evidence – treatment records, doctor’s statement, prescription or diagnosis – that could prove that the insured was getting treatment (even if irregular) for diabetes prior to his admission at the hospital. They could not counter the fact that kidney failure could be due to many reasons and that it was not possible to diagnose the time when kidney deterioration might have started.

All allegations by the insurance company were later proved wrong when the attorney cross-examined the doctor who had signed the medical attendant’s certificate. He accepted that he had not treated the patient and it was recorded that he was diabetic on the basis of symptoms of the patient. He also admitted that kidney failure could be due to many causes other than diabetes – there was no test available to determine the duration of diabetes. In fact, the old health records of Sumanagala that were obtained from a government medical college did not mention anything about him being a diabetes or hypertensive patient.

Announcing the final verdict, the commission reprimanded the insurance company and asked it to settle the claim.

Reiterating the above judgement in another case wherein Life Insurance Corporation had been sued by Dr PS Aggarwal, the Supreme Court had stated: “The onus to prove that there was material concealment of any disease, which directly proved fatal, was on the insurance company. In addition to above, the petitioner was supposed to prove that at the time of taking policy the person who gave the information knew about such a disease and he withheld it with an intention to defraud the insurance company.”

Likewise, in the case of Life Insurance Corporation versus Asha Goel, the National Commission had stated that “the burden of proving that the insured had made false representations or had suppressed material facts is on the Corporation.”

Stating the position of law, the National Commission explained that ‘exclusion clause’ could be applied by the court if insurer could prove the case of ‘pre-existing disease’. For that, the insurer must justify three elements:

(a) the policyholder suppressed facts which were material to disclose;

(b) the suppression must be fraudulently made by the policyholder; and

(c) the policyholder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.

One must note here that Pollock and Mulla’s Indian Contract and Specific Relief Acts states that “any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact.”

Consumers, Be Aware

Although the above judgements and interventions are encouraging and have favoured distressed consumers, one should always be conscious when buying insurance and avoid any possibility of dismissal of insurance claim, by filling in correct details about health, history of illnesses in the family, and occupation and income.

Details of health: Insurance proposers tend to avoid filling in details regarding health conditions fearing that information on any ailment may result in the insurer rejecting the contract or asking for a higher premium. It must be understood that insurance companies do not deny any scope for insurance to those afflicted with specific diseases or health troubles.

History of illnesses in the family: Details of correct age along with health details of family members are important owing to the hereditary nature of certain diseases. Two or more people in the family succumbing to some specific illness that may be genetic in nature or exhibiting suicidal tendencies indicates a higher risk of death of those insured, and hence attract higher premiums.

Occupation and income: The maximum life cover allowed by any insurance company depends on the level of income, thus requiring the insured to provide right details of his/her income. Authenticity of income details may be determined by submission of last pay slip along with the income tax return (ITR) filed. For those employed in risky occupations including aviation, army, police, defence services or mining jobs, giving information about the nature of job is especially important as the underwriting criteria decided by the insurer require an added load to the premium paid.

Taking a life-insurance policy is a way to show your loved ones that you care. Since the process involves underwriting a legal contract, it is necessary that extreme caution is taken while filling out the form. This will ensure timely and complete payment of the claim to the nominee.



Pecuniary Jurisdiction under Consumer Protection Act, 2019

Pecuniary Jurisdiction under Consumer Protection Act, 2019

The National Consumer Disputes Redressal Commission (NCDRC) in M/S Pyaridevi Chabiraj Steels Pvt. Ltd. V. National Insurance Company Ltd. & Ors. [Consumer Case No. 833 of 2020]  held that for determining the pecuniary jurisdiction of the Consumer for a and the value of the goods “paid” as consideration has to be taken and not the value of goods or services “purchased”. It was observed by the court that the case being governed under the Consumer Protection Act, 1986, NCDRC would have jurisdiction in the matter since pecuniary jurisdiction thereunder was determined by taking the “value of the goods or services and compensation”. Meaning thereby that the value of the goods or services as also the compensation would be added to arrive at a conclusion as to whether the National Commission has the jurisdiction or not.  It was further observed by the court that under the new law, the NCDRC has jurisdiction to entertain complaints where the “value of the goods or services paid” as consideration exceeds R. 10,00,00,000.

It was held that, “It appears that the Parliament, while enacting the Act of 2019 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 in Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) providing for the pecuniary jurisdiction of the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission and the National Commission respectively.”

To learn more about the case, get a copy of our digital magazine today!

5 Positive Key Features in Consumer Protection Act, 2019

5 Positive Key Features in Consumer Protection Act, 2019

5 Positive Key Features in Consumer Protection Act, 2019

The old Consumer Protection Act of 1986 has been repealed and replaced lock stock and barrel with the new law passed by the Parliament in 2019. The new law has come into effect from 20th July, 2020 ushering in many new changes. The five positive changes that have replaced the three-decade old Consumer Protection Act 1986 are:

Penalty for misleading advertisement

There have been numerous instances in the past where consumers have been victims of unfair trade practices. This Act addresses the menace of adulteration, by making manufacture, sale, storage of products mixed with adulterants punishable offences. The Act also states punishment for manufacturing for sale or for storing or selling or distributing or importing of spurious goods. A consumer may be imposed with a fine of up to INR 1,000,000 (One million rupees) on a manufacturer or an endorser, for a false or misleading advertisement and imprisonment for up to two years for a false or misleading advertisement

Product Liability

The new Act introduced the key concept of ‘product liability’, wherein action may be brought in against a product manufacturer, product service provider or product seller for any harm caused to the complainant on account of a defective product. It includes the seller who places an item for commercial purposes on the e-commerce platform as well.

Unfair Terms of Contract

For nearly 147 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. However, the new Act classifies six contract terms as ‘unfair’. These cover terms such as

  1.  payment of excessive security deposits;
  2. disproportionate penalty for a breach;
  3. refusal to accept early repayment of debts;
  4. unilateral termination without reasonable cause;
  5. causing consumer detriment by assigning a contract to another party;
  6. one which puts the consumer at a disadvantage.

Widening of Jurisdiction of Consumer Courts

A big relief that this Act gives is the widening of jurisdiction of consumer courts. So, if your residential place is outside your cause of action, you can still file the case in your native place. The new Act raises the jurisdiction of District Consumer Court from existing Rs. twenty lacs to Rs. one crore, while State Commissions enhanced from can go beyond Rs 1 crore and the National Commission to over Rs 10 crores.

Setting up of Mediation Centres

The idea behind setting up of Mediation Centres is that willing parties in a dispute should discuss the dispute with an empanelled Mediator to find a mutually acceptable solution. Mediation Centers would be set up at the Central, State and District levels prescribed by respective state and central governments.

So, with the advent of this new Act, consumers are now the king!

Everything You Need To Know About Maintenance Charges

Everything You Need To Know About Maintenance Charges

Everything You Need To Know About Maintenance Charges

Mrigank Sharma, a first-time home buyer, who invested in a 3BHK flat knew was in for a rude shock when the developer asked for an extra Rs 2.5 lakhs against the original payment plan as part of maintenance charges. Little did he know that to get the complete possession of the flat he had to fufill these formalities.

Sharma’s experience only highlights the fact that property transactions can be tricky, if it is not understood properly.

The homebuyer should not only be cautious about the cost of the property, but also future expenses which the builder can levy. Maintenance charge is one such expense, which can significantly impact the property buying decision of end-users and investors alike, while buying an under-construction or a ready-to-move-in property.

The monthly outgo on maintenance charges can make a big difference to your personal finance and saving money on this can help you accumulate a significant amount in the long-term. This can be particularly useful during challenging times like now, when the world is passing through the Coronavirus pandemic.

What are maintenance charges?

The maintenance fee is an annual fee to be paid by the owners/ tenants for the maintenance, repair, operations, and upkeep of the building. It is the duty of the promoter/ developer to provide essential services like parks, gardens, lobbies, stairs, elevators, fire escapes, community centers, common parking areas, power light, etc, the things that are necessary for the existence, maintenance and safety of the society.

Meaning in context to Real estate

As per Section 11 (4)(g) of the RERA Act, 2016, it is the duty of the promoter, to pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be. The outgoings include payment of local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances etc

Here is a guide for you that will help you understand every small detail about the maintenance charge and you can keep yourself prepared if you are a first-time buyer. Maintenance charge covers the infrastructure and some amenities:

  • Lifts
  • Emergency exits
  • Fire and security
  • Children’s play area
  • Car Parking facilities
  • Cleaning costs of common areas like the lobby and terrace
  • Centrally controlled facilities like water and electricity
  • Diesel generator cost
  • Landscape maintenance charge
  • Sewage treatment cost
  • Amenities like swimming pool
  • Contribution to the sinking fund
  • Non agriculture tax
  • Any other charges

The maintenance charge amount either depends on the individual flat or calculated on the basis of per square feet of the flat.  In the initial few years, this cost is collected by the builder till an association forms. The newly formed association may change the costs or introduce new rules consistently for improvement of maintenance.

Things to keep in mind before booking a property

Check before booking

The homebuyers are required to pay maintenance charges which may vary from project to project. Buyers must check maintenance charges before booking the flat. This should be calculated before you decide to pay the booking amount to the developer. You must know how much you are supposed to pay as maintenance charges when you actually start living in a project.

Calculation of charges

Usually housing societies levy the maintenance charges as per the area of the flat while others fix it on other variables when all the apartment are of the same size in that society. Also, a homebuyer should know the facilities provided under the charge. There are instances when builders charge advance maintenance cost for one or two years at the time of possession. Once you know how the maintenance charges are calculated, you have a basic idea on how much you are supposed to pay. Buyers should agree for only reasonable charges and not any arbitrary demand.

Time to pay

You will be asked to pay maintenance charges at the time of possession. The charges in all societies vary depending on the amenities and location. Some builders may ask you to pay maintenance charges for two years when you take possession but it depends on the builder and the time taken for forming the RWA. Since maintenance charges are applicable from the time a flat is occupied, its basic motive is to fund operations related to upkeep, maintenance, and upgrade of areas which are not directly under any individual’s ownership. RERA’s provisions enjoin upon the developer to see that residents don’t pay ad hoc charges.

Pay after possession is delivered

Some developers ask you to pay maintenance charges along with the electricity meter and other charges due before giving you the keys. You should not pay maintenance charges if project registry has not been made and you do not have an occupancy certificate from the builder. You should only pay the maintenance charge once possession has bee delivered to you.

Resident right and defaults

Once the RWA of your society is formed, you should take part in the process and make sure that the maintenance charges are reasonable. There should be no exception and you should not pay for housing units retained by builders as investment. You can look at the actual amount spent by the builder on maintenance, along with the break-up. It is the residents’ right to be aware of the amount spent by the builder on maintenance and ensure that he is not paying more than required. Till a society is formed, a builder pays for the maintenance and has to keep his books open for scrutiny by the residents.

Are you queries to know more? Then click here for the available legal remedy under RERA and FAQs related to maintenance charges. In the meantime, please visit our legal help desk page for further legal help.

Legal Provisions Under RERA & FAQs On Maintenance Charges: Part II

Legal Provisions Under RERA & FAQs On Maintenance Charges: Part II

The Real Estate (Regulation and Development) Act, 2016 (RERA) makes it compulsory under Section (4)(d), for the developer to be responsible for providing and maintaining the essential services, on reasonable charges, till it is taken over by the association of the allottees.On possession, the builder makes the buyer enter into a maintenance agreement clearly specifying the actual amount and the frequency. RERA has asked the builders to mandatorily specify the maintenance charges in the agreement so that it does not come as a shock to the buyers. Later, the society association can work it out and charge the buyer’s maintenance costs accordingly. After possession, the payment of maintenance charges is the buyer’s responsibility. Until a tenant has been found for the property, the owner has to pay the maintenance charges. Later, the tenant can pay the maintenance charges, given it is mentioned in the owner and tenant agreement.

Points to keep in mind: 

  1. Till the formation of RWA, the promoter is responsible to take care of the maintenance of the society and thereby collect them from the homebuyers. After that, RWA can charge such charges as per its own rules.
  2. They are generally included in the allotment letter, initially issued to the buyer after the booking amount has been paid.
  3. The RERA Act, 2016, has ensured that the residents don’t have to pay any ad-hoc charges as per the own will of the builder.
  4. It should be properly disclosed by the builder at the time of booking, non-disclosure of such charges can hurt the residents on a later stage.
  5. Many State Governments have provided clear guidelines about the maximum amount of maintenance charges that can be charged by the builder through a proper contractual arrangement.
  6. Not all the societies have the same structure of charging them it varies accordingly. Sometimes it is calculated on the basis of the area of the flat.
  7. The frequency of collection of maintenance charges depends on the builder. He may ask for 12 months, 24 months, in advance at the time of possession.
  8. As per the recent circular of the Finance Ministry, the flat owners have to pay GST @ 18% if their monthly contribution to RWA exceeds Rs. 7500.

Today the increase in the demand of the residential and commercial property has given birth to a number of builders and developers who offer or promise special features to attract prospective allottees. The same has also developed a long ending fight between the homebuyers and the builders with respect to the unfair practices used by the builders and the delay in handling over the possession the allottees in which case the ultimate sufferer is the allottee who suffers mentally as well as financially. It’s always better to have a fair idea of the maintenance charges at the time of booking an apartment as they are recurring monthly charges.


  1. Are maintenance charges compulsory?

Yes. Maintenance charges are compulsory in every new apartment. It is an integral part of the contract between the builder and the buyer.  After the buyer pays the booking amount for the apartment, the builder issues an allotment letter by mentioning the maintenance charge. Though the exact amount is not revealed, the builder can help the buyer with an average estimate of the maintenance charge if asked when discussing a potential purchase. The homebuyer can insist the builder to tell average estimate of the maintenance charges if not informed by the builder.

  1. How do I calculate the maintenance charges? 

The structure of the maintenance charge differs from one society to another. The maintenance charges range anywhere between Rs.2 to Rs.25 or even higher depending on the city and locality At the time of possession, the builder may ask you to pay the maintenance charge for 12 or 24 months or till the society is handed over to the RWA. After the RWA takes charge of the society, it decides whether to collect the maintenance charge on a monthly or annual basis. Housekeeping and cleaning, maintaining common areas, usage of equipment and other charges are included in the maintenance. An additional charge for repairing services and upkeep of common facilities like lights in the lobby areas and lift maintenance are divided equally between each flat. While electricity and water charges depend on per flat consumption.

  1. Is maintenance charges same in residential and commercial projects?

No. Generally maintenance charge is higher in commercial properties than residential ones. These maintenance costs can be related to any cost of managing and maintaining the commercial property.

  1. Can developers ask for maintenance charges before handing over the property to the homebuyer?

No. The builder will be responsible for maintenance charges till he hands over the possession to the homebuyer. Once the possession is delivered, society can charge such charges as per its own rules.

  1. Is GST applicable on maintenance charges?

Yes. Flat owners also have to pay GST at 18%, if their monthly contribution to the residents’ welfare association exceeds Rs 7,500, as per the Finance Ministry’s orders.

Written by- Ankur Saha, Head- Legal, VOICE 

Enquire Now

    Enquire Now