Q n A Legal Desk

by | Aug 26, 2023 | Legal

Q n A Legal Desk

1. Anil Ramchanra Panat from Pune 

Question: Whether it is right in making Branch Manager and MD of Unity Small Finance Bank Ltd a party to the dispute before  the Consumer Commission in their individual capacity?

Answer: In cases of suits/claims/complaints filed by the corporate, authorities or units, they are to be filed through name and person authorized by the authority. The order if passed for compliance ,some live person is to be made responsible through whom case is filed or contested. 

Relevant Case Law  H.K. Singla vs. Avtar Singh Saini & Ors. Decided On 14th December 2018

H.K. Singla vs. Avtar Singh Saini & Ors. Decided On 14th December 2018 who had filed a complaint against secretary Chandigarh State Bank of Patiala Employees Co-operative USE Thrift & Credit Society, claiming maturity amount along with interest on his deposit with the Society

Supreme Court as the case H.K. Singla Vs. Avtar Singh Saini & Ors.[Civil Appeal No. 11969 of 2018 Decided On 14th December 2018 

  1. District court in its order fixed the liability of secretary, Chandigarh State Bank of Patiala Employees Co-operative USE Thrift & Credit Society, to repay the deposited amount with interest to the complainant but did not make secretary liable in his individual capacity. Hence he could not be imprisoned under section 27 of the act in the absence of he made party by name or on behalf of society fixing personal liability.

2. Ramprakash Tiwari from Jabalpur 

Question :Whether nursing home can refuse medical information of patient to him?

Answer: Mandatory and bound to provide all information related medical treatment,status and other related issues 

Case Law Jothi against State ,Department of Health and Family Welfare & others

Writ Petition filed under Article 226 of the Constitution of India filed by one Jothi against State ,Department of Health and Family Welfare & others Represented by the Secretary, before The Madurai Bench Of Madras High Court Decided On decided on 31.07.2023 praying to issue a Writ of Mandamus, directing the respondents1 to 4 to take appropriate action upon the respondents for their negligent act incurring death to a new born child of the petitioner

While deciding the allegation of not providing information to patient ,Court held :

“When a patient enters a government hospital, he or she is examined first. The symptoms are recorded. The condition is noted.Scan or X-ray is taken. A diagnosis is made. Treatment is prescribed.Medicines (if available!!) are given. Every stage will have to be contemporaneously and accurately recorded. In the case of inpatients, discharge summary should contain all the relevant particulars. We have moved into the digital age. It should therefore not be difficult to store all the information in the digital mode. A patient is entitled to be furnished all the relevant records pertaining to his or her treatment.This right can be effectuated only if the information is stored digitally.Proper maintenance of record is an integral part of the medicalservices.

3. Sachin Kumar Singh Siliguri 

Question: Negligence by School (Sri Sri Academy) son Krishna Singh  got injured while dancing in the academy run by Ravi Shankar Vidya Mandir Foundation. The watchman took him to third floor rest room dragging him physically. I got call 2 hrs later after the incident and they took more 3 hrs for arranging a vehicle for the nursing home. Owner of the school earlier said he will share me video of the incident but later refused stating that staff of IT department went on leave for 7 days. I brought my son to Max Super speciality hospital Delhi and s still in ICU under treatment. Can I file case against the school? My son is suffering from traumatic Condition Trasverse Myelities with GBS.

Answer : You can file case of deficiency in services against school for delaying information which caused more damage than it could be if brought immediately. Painful thing that he was not attended with care and left to mercy of god by sending to rest room. 

Merit of the case depends on the fact whether diagnosed disease was pre-existing, known or not known to you.

Student is a consumer as per Supreme court three judges Bench in the case of Osmania Islamic Academy v / s State of Karnataka, three judges bench comprising Justice V N Khare, Justice S N Variyavaha and Chief Justice K G Blaakrishnana pronounced a detailed order on 14.8.2003 held that education is a service by discussing every aspect covered by the educational institute in providing education to the students.

Following this order, again there was Supreme Court ruling in the year 2009 in the matter of Bhupesh Khurana v Buddha Dental College & hospital Judgment dated on 13 February, 2009 Civil Appeal No.1135 of 2001  holding college unfair for their misleading information about the college. 

SC again in Civil Appeal No 3504 of 2020 (Manu Solanki and Others vs Vinayaka Mission University), the issue as to whether education is a service within the Consumer Protection Act, is pending before the Supreme Court.

A bench of Justices D Y Chandrachud, Indu Malhotra and Indira Banerjee ,  Civil Appeal No 3504 of 2020 (Manu Solanki and Others vs Vinayaka Mission University), has admitted an appeal filed by Manu Solanki and other students of a medical course against Vinayaka Mission University at Salem in Tamil Nadu, alleging deficiency in services.
“Since there are divergent views of this Court bearing on the subject as to whether an educational institution or University would be subject to the provisions of the Consumer Protection Act 1986, the appeal would require admission. Admit,” 

4. Ghasiram Bag Noupada ,Odisha 

Question: Can I go to the Consumer forum against Government Hospital along with private hospital?

Answer: You are a consumer under consumer protection act if paid money for the services hired. Government hospitals generally give free services but in case they are having some private rooms or charging from some but have not charged from you ,you become a consumer.

V.Shantha V/S Indian medical association 1995 SC set the criteria –

  • Private Hospitals. Private Nursing homes are service providers when they charge from patient and you are a consumer 
  • Charitable clinics /hospital also are run by some persons other than you  donating funds ,hence are service providers and you are a consumer 
  • When your fee is paid by your employer or insurance but not by you, you are a consumer 
  • When Govt hospital run with the funds of govt and doctors are employees, you are not a consumer .
  • When Govt. hospital is run by Govt but some private arrangement separately done and services are given by charging fee ,you are a consumer even when you have not paid any thing  

Dr Hema, Dr Sulekha Dr Sethunath v/s S.Jayan & Others .11(2016) CPJ 306 NC National Commission has held that complainant do not fall within purview of consumer under Consumer Protection Act. Here was the question of making payment for the services hired and a Government hospital SAT Hospital not charging from the patients ,hence are not rendering services to the consumers under Consumer Protection Act. In this case, Sat Hospital is a Govt. Hospital, who had not charged from the patient and had not been charging from any other patient for the treatment .A Child Patient was brought to the causality on 11.10.2000, was kept in ICU. After one week from admission, surgery was conducted at the left hand and ultimately resulted into amputation of a portion of left forearm. It was alleged that post operation care was not given to the child as the child developed gangrene due to the negligence of the doctors .

Joint complaint & Class action are not the same, but both are accepted: Re-confirms SC

Joint complaint & Class action are not the same, but both are accepted: Re-confirms SC

by | Aug 19, 2023 | Legal

Joint complaint & Class action are not the same, but both are accepted: Re-confirms SC

According to the Supreme Court’s order, the necessity of applying Order I Rule 8 of the Code of Civil Procedure, 1908 arises only in cases where a plaintiff represents the general public, specifically in complaints filed under Section 12(1)(c) of the 1986 Act. This rule does not apply when complainants in a similar position collectively file a complaint seeking identical relief. In such cases, there is no requirement to comply with Order I Rule 8 CPC since these complainants do not represent others, especially when there is no broader public interest involved. These complainants are seeking relief for themselves and nothing more.

Dr Prem Lata, Legal Head VOICE

  • Case title: Alpha G184 Owners Association V/S M/S Magnum International Trading Company Pvt. Ltd.
  • A. No.-004718 / 2022
  • Hon’ble Mr. Justice J.K. Maheshwari, Hon’ble Mr. Justice M.M. Sundresh
  • Decided 15 May 2023

Factual background

A construction company, against whom home buyers filed a consumer complaint before the National Commission due to the non-completion of a project within the promised timeframe, has once again sparked controversy. The builder argued that the current complaint is not valid for two reasons.

  • Complaint is not filed in the capacity of representation by someone under Order I Rule 8 of the Code of Civil Procedure, 1908 where public interest is involved.
  • Complaint of the association was not maintainable because the registration of the association of allottees did not conform with the Haryana Registration and Regulation of Societies Act, by-laws 2012 (HRRS Act).

The builder submitted an affidavit to the national commission, informing them that the matter mentioned in the writ petition is currently awaiting a decision from the High Court of Haryana. As a result, the national commission postponed the proceedings sine die.

Here is an appeal against the order of National commission.   

SC after going through the details observed:

“The need for the application of Order I Rule 8 of the Code of Civil Procedure, 1908 (hereinafter referred to as “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.”

Court further held “a pedantic and hyper-technical approach would cause damage to the very concept of consumerism”.

On the second point of eligibility of association to file complaint Court noted

“That the issue of registration and byelaws of the association had no relevance in the proceedings before the Commission in light of the fact that individual affidavits were filed, the complaint would fall under Section 12(1)(a) (Manner in which complaint shall be made by a consumer) of the 1986 Act and that there was no need to go into the issue of whether the case would come under Section 12(1)(b) of the 1986 Act (Manner in which complaint shall be made by a consumer association.

“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,” the Court observed.

The Apex Court directed the National Commission to expeditiously hear the matters on merits.

Earlier cases

The Class Action debate emerged during the Amrapali Sapphire Developers versus Amrapali Sapphire Flat Buyers Welfare Association case in 2019. In this case, 43 consumers collectively filed consumer complaints before the National Commission against Amrapali builders. The Flat Buyers Welfare Association had lodged the complaint in May 2016, citing a delay in the builder delivering possession of their flats. The builders contested the complaint by raising the following arguments.

  • Number of consumers cannot file cases together.
  • The pecuniary jurisdiction of Commission should be considered based on amount involved in each case separately.
  • RWA cannot be a complainant on behalf of residents.
  • The Supreme Court(SC) announced on that flat owners can now join hands and directly approach the National Consumer Disputes Redressal Commission (NCDRC) against real estate developers for delay in handing over possession of their flats. Thereafter ‘Class Action’ theory was specifically brought in Consumer Protection Act 2019.

In this connection, the judgment referred to Brigade Enterprises Ltd. v. Anil Kumar Virmani (2021), which held that consumers having similar interests can file a joint complaint and that they need not file in a representative capacity.

Reference was also made to the recent decision National Insurance Co. Ltd. v. Harsolia Motors And Ors. 2023 (SC) 313, which advocated against adopting a technical approach in interpreting Consumer Protection Act

Important Class Action Case after new act 2019: Vikrant Singh Malik & 25 Ors.Versus Supertech Limited & 2 Ors (Through its M.D.)

Following the enactment of a new act, the Supreme Court delivered a significant judgment on August 24, 2020 (SC) in a specific case, providing a comprehensive explanation of the Class Action theory. This landmark judgment is regarded as a guiding precedent for future cases involving Class Action. The case before the esteemed National Commission involved Vikrant Singh Malik & 25 Others versus Supertech Limited & 2 Others (Through its Managing Director), with the consumer case number 1290 of 2015.

The matter at hand revolved around the question of whether a complaint filed by 26 consumers who shared a common interest against the same builder in a housing matter could be accepted by the highest commission, considering that each complainant had a different status regarding their respective flats. All 26 consumers jointly submitted a complaint along with an application seeking permission to file a collective complaint. The filing of a joint complaint was based on the invocation of Section 2(1) (c) in conjunction with 2(1) (b) (IV) of the Act 86.

National Commission made two major observations:

  1. That there was variation of facts of each homebuyer about the allotment of their flat such as –
  • Apartment Distinct
  • Date of Buyer agreement different
  • Date of execution of agreement different
  • Price of flat different
  • Area of flat different
  1. Frame of complaint, nature of pleadings and relief sought is not fit to be called ‘class action’.  
  • Only seeks to highlight the grievance of 26 complaints whereas some other consumers having same grievance had settled the matter with builder.
  • Complaint does not possess the character of representative for all having the common interest which is the essential element of section 2(i)(c) and then could refer to section 13(6).

NCDRC dismissed the complaint in entirety, giving liberty to the complainants to file individual complaints before the appropriate forum. Matter now comes before the Supreme Court.

Supreme Court observes-

  • A complaint filed by all the consumers with the relief for the benefit of all consumers is maintainable.
  • Regarding factually different cost, size, booking date and price variation, Supreme court refers to full bench order in the matter of Ambrish Kumar Shukla v/s Ferrous Infrastructure Pvt. Ltd (2017) NC wherein the issue was explained in detail by giving example.

If a developer has sold 100 flats in a project out of which 25 are three-bedroom flats, 25 are two-bedroom flats and 50 are one-bedroom flats and failed to deliver timely possession, all the allotees irrespective of size shall have common grievance against the builder. Hence a complaint filed by all the consumers with the relief for the benefit of all consumers is maintainable under section 2(1) (c) of the act. Hence, Complainants could file a joint complaint if there is an element of sameness of the interest.

  • Complaint needs to be modified to make it Class Acton

The complaint lacks the collective representation of all the consumers involved. Furthermore, the facts indicate that some of the homebuyers have already resolved their issues with the builder and taken possession of their properties. Consequently, the complaint in its current form is not admissible and needs to be modified. Considering that the objective of the act is to protect consumer welfare, the National Commission for Dispute Resolution (NCDRC) can reconsider its decision to dismiss the complaint entirely, especially when the common interest among the complainants is clearly evident. Additionally, the issue can be examined since the advocate representing the complainants has requested permission to amend the complaint.

 Hence law laid down by Supreme Court for “Class Action” character as a consumer complaint thus stands as hereunder-

  • There should be an element of sameness of the interest and with common interest of all the consumers joining together.
  • The complaint should be represented by one leading case for protection of interest & benefit of all the consumers.
  • Factually different cost, size, booking date and price variation will not affect the character of “class action” against the same party with the same objective held by the Supreme Court.
  • The content of the complaint must also not be a single party centric. It should speak for all the consumers.

The Supreme Court has remanded the complaint back to the National Commission for Dispute Resolution (NCDRC) to reconsider its decision of dismissing the complaint entirely. This demonstrates that the court adopts a highly flexible approach, favouring consumers based on the specific facts and circumstances of each individual case.

An error in procedure makes an order Null & Void

An error in procedure makes an order Null & Void

by | Jul 30, 2023 | Legal, resources

An error in procedure makes an order Null & Void

Uttar Pradesh State Consumer Forum reversed an order made by the Gautam Buddha Nagar District Consumer Forum, which had sentenced Ritu Maheshwari, the Chief Executive Officer (CEO) of the Greater Noida Industrial Development Authority (GNIDA), to one month in prison. Maheshwari was found guilty of not complying with a directive issued by the National Consumer Disputes Redressal Commission in 2014.

Observation;

It was observed by State Commission that District Commission’s order “defective” because it failed to give GNIDA an opportunity to present its side of the case. Consumer Commissions to follow the provisions of the Code of Criminal Procedure (CrPC) when exercising powers under Section 27 of the Consumer Protection Act. I.e. issue notice, after notice bailable warrants, non-boilable warrants and then declaring absconding &punishment

Case title: Greater Noida Industrial Development Authority vs Mahesh Mitra

Appeal Execution Application No. AEA/1/2023

Decided on 24 June 2023

Other similar case of resulting into dismissal of complaint:

It’s the most painful thing for a consumer who wins the case after putting all efforts, energy and time and it becomes null and void due to an error in understanding the real person who is to be punished. It happened with a complainant in the matter of H.K. Singla vs. Avtar Singh Saini & Ors.Decided On 14th December 2018 who had filed a complaint against secretary Chandigarh State Bank of Patiala Employees Co-operative USE Thrift & Credit Society, claiming maturity amount along with interest on his deposit with the Society

As per the practice under law, in cases of suits/claims/complaints filed by the corporate, authorities or units, they are to be filed through name and person authorized by the authority under the document of power of attorney to sign the documents etc. Further it needs to be supported by resolution passed in an individual’s favour to deal with specific case by virtue of holding power of attorney from the authority.

Facts:

  1. District consumer court passed an order in favour of consumer directing the society to pay the maturity amount with interest @10% per annum along with compensation to the tune of rupees ten thousand to the complainant
  2. Since society had gone in liquidation ,they went in appeal before the state commission .State commission Chandigarh dismissed the appeal finding no error in the district consumer forum order &order is to be complied
  3. Now complainants comes back to the consumer forum for execution of the order under section 27 of the act .and District forum in the absence of payment of decrial amount, orders two years imprisonment and rupees 5000/- fine .
  4. Aggrieved by this order, respondent again goes to the State commission for staying the order of imprisonment. State commission passed an interim order staying the operation of order of imprisonment subject to payment of decrial amount within eight weeks.
  5. Defendants failed to comply this order also and they filed appeal against the order of State commission before the National commission .National commission confirmed all the orders of lower courts below dated 08.11.2012 passed in First Appeal Nos.652/12; 653/12; 654-656/12; 657/12 It was held by the National Commission that district forum rightly ordered for imprisonment under section 27 of the act for non-compliance of its order, State commission rightly gave an opportunity to the opposite party to pay the decrial amount within specific period and conditionally stayed the operation of imprisonment. With this observation, National Commission dismissed the appeal holding all orders passed by the lower commissions correct
  6. Supreme Court as the case H.K. Singla Vs. Avtar Singh Saini & Ors.[Civil Appeal No. 11969 of 2018 Decided On 14th December 2018
  7. District court in its order fixed the liability of secretary, Chandigarh State Bank of Patiala Employees Co-operative USE Thrift & Credit Society, to repay the deposited amount with interest to the complainant but did not make secretary liable in his individual capacity. Hence he could not be imprisoned under section 27 of the act in the absence of he made party by name or on behalf of society fixing personal liability.
  8. State commission while staying the order of imprisonment in 2013 with condition to pay the decrial amount did nothing to correct the error though this interim order continued from time to time. It was the State commission to decide there and then as to whether any order for jail can be passed against the society for non –compliance of the order
  9. National commission also did not interfere in the order passed below but did not specify whom to send to jail under section 27 of the act
  10. Under the circumstances Supreme Court suspended the order of the district forum to the extent of imprisonment of secretary of the society
  11. This is also observed that society has gone in liquidation and liquidator has been appointed, complainant is given liberty to take necessary steps to recover the decrial amount as ordered by the district court in accordance with law

Related

Flipkart not liable as intermediary for any inaction by a vendor/seller

Flipkart not liable as intermediary for any inaction by a vendor/seller

by | Jul 30, 2023 | Legal, resources

Flipkart not liable as intermediary for any inaction by a vendor/seller

(Question of Applicability of Product Liability Claus in CP Act 2019)

A writ petition filed by Flipkart, Allahabad High Court seeking quashing of the First Information Report (FIR) for offences under Sections 406, 420, 467, 468, 471, 474 and 474-A of the Penal Code, 1860 (IPC)

Issue in the case

The issue of the case is whether an intermediary as defined under Section 2(1) (w) of the IT Act, 2000 would be liable for any action or inaction by a party or a vendor/seller making use of the facilities provided by the intermediary in terms of buyers/sellers terms of use of the company.

The division bench of Suneet Kumar and Syed Waiz Mian, JJ. while quashing the FIR, has observed that an intermediary is not liable for any third-party information, data or communication link made available or posted by it, as long as it complies with Sections 79(2) or 79(3) of the Information and Technology Act, 2000 (‘IT Act’),

Flipkart is an intermediary providing merely access to sellers/buyers and has exercised ‘due diligence’ under Section 79(2) (c) IT Act, 2000, thus, it is exempted from any liability under the IT Act

Facts of the case;

  1. In this case, the respondent alleged that he ordered a laptop from Flipkart, but it was having processor of brand ‘A.M.D’ instead of brand ‘Intel’, thus, the delivery of the product was not as per the specifications for which order was placed. Thus, aggrieved, the respondent registered a complaint with Flipkart regarding the alleged discrepancy of the product. The complaint was taken up by Flipkart as per their Dispute Redressal Policy, with the seller, but he declined to replace or refund the consideration of the product, stating that the product was dispatched as per specifications purchased by the respondent.
  2. Customer lodged a complaint /FIR against Flipkart. Flipkart approached High court with request to quash FIR on the ground that it is an e-commerce platform that provides access to buyers and sellers through their website, where they meet and interact to execute purchase and sale transactions, subject to terms and condition as set out in the buyers/sellers terms and Flipkart is not a party to or in control of any such transaction between its users.
  3. The Court observed that Section 79 is a safe harbour provision. Further, internet intermediaries give access to host, disseminate and index content, sell-buy products and services originated by third parties on the internet that includes e-commerce intermediaries where the platforms do not take title of the goods being sold.
  4. 2008 amendment introduced Chapter XII to the IT Act, 2000, which ceased the liability of an intermediary, if it satisfied certain requirements as detailed in Section 79 of IT Act, 2000. The Court observed that Flipkart does not follow inventory-based model of e-commerce, where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly, thus it comes within the meaning and definition of ‘intermediary’ under Section 2(1) (w) of the IT Act, 2000, and would be entitled to the exemption from liability in terms of Section 79 IT Act, 2000, if the requirements are met.
  5. Further, it cannot be expected that the provider of the online marketplace is aware of all the products sold on its website, but such provider must put in place a robust system to inform all sellers on its platform of their responsibilities and obligations under applicable laws in order to discharge its role and obligation as an intermediary, and if the same is violated by the seller, then he can be proceeded against, but not the intermediary.
  6. The Court also observed that as per the Consumer Protection (E-Commerce) Rules, 2020, Flipkart would come within the meaning of a marketplace e-commerce website, thereby affording it the above exemption so long as the requirements under Section 79 are met. Thus, as Flipkart has complied with the requirements of Sections 79(2) and 79(3) I.T Act, as well as, the Information Technology (Intermediaries Guidelines) Rules, 2011, thus it is exempted from any liability under Section 79 IT Act, 2000, as no violation can ever be attributed or made out against the directors or officers of the intermediary,

[Flipkart Internet Private Limited v. State of UP, 2022 SCC Online All 706, decided on 17.10.2022…

Another Similar  case ;

Intermediary entitled to claim protection u section 79 it act for criminal-liability unless active role is disclosed Delhi high court quashes fir against flipkart/

Decided on 19/08/2022

FIR by Managing Director of Sanash Impex Pvt. Ltd

Question of applicability of Product Liability clause under CP Act 2019

Does the above case affect Product Liability clause in CP Act 2019? Let’s understand the provision of the Act

Section .84. Of Consumer Protection Act 2019

(1) A product manufacturer shall be liable in a product liability action, if—

(a) the product contains a manufacturing defect; or

(b) the product is defective in design; or

(c) there is a deviation from manufacturing specifications; or

(d) the product does not conform to the express warranty; or

(e) the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage

Section 86. Of CP Act 2019

A product seller who is not a product manufacturer shall be liable in a product

liability action, if—

(a) he has exercised substantial control over the designing, testing,

manufacturing, packaging or labelling of a product that caused harm; or

(b) he has altered or modified the product and such alteration or modification

was the substantial factor in causing the harm; or

(c) 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

(d) 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
From the above clauses, flip kart comes under sub clause (d) of section 86 which says ‘liability in product liability action’ meaning thereby he can be made party, liable to disclose whereabouts of seller and can also take responsibility to receive and send notice on their behalf.

Status of Flipkart as E-Commerce entity

E-Commerce Entity defined under new Law

“e-commerce entity” means any person (whether natural or juridical) who owns, operates or manages a digital or electronic facility or platform for electronic commerce,

 Inventory e-commerce entity -When the seller decides to list its product on an inventory e-commerce entity’s platform, it authorizes the entity to assume ownership and control of the goods for the purposes of delivery to the consumer. An inventory e-commerce entity, thus, assumes control over the goods only after the seller so authorizes it for the purpose of effecting Examples of such e-commerce entities include eBay, OLX, Naaptol, etc

 Marketplace e-commerce entity: an e-commerce entity which provides an electronic platform to facilitate transactions between buyers and sellers traditionally, marketplace e-commerce worked on zero inventory models. The e-commerce entity acts as a mere facilitator of transactions and exchange of information between buyer and seller. Examples of such entities include Amazon and Flipkart

Conclusion;

As discussed in the case before Allahabad High Court also, flipkart is not liable as manufacture and above order does not contravene the provisions of CP Act2019

Fundamental principal is that criminal case and civil case are dealt on different parameters. The above case is about quashing of FIR, hence otherwise also cannot be compared with civil remedy.

Dr Prem Lata

Related
Insurance company cannot object about treatment to the patient, its doctor to decide

Insurance company cannot object about treatment to the patient, its doctor to decide

by | Jul 30, 2023 | Legal, resources

Insurance company cannot object about treatment to the patient, its doctor to decide

National commission has recently decided two cases on insurance wherein question before the commission was to decide whether the case falls under pre-existing disease and concealment of material facts at the time of taking policy. In both the cases facts are different and order of the commission also not the same. In the matter of Life Insurance Corporation of India v/s Fathima @Anthonimal &others case, commission observed that deceased Vidal Sagayanandin obtained two insurance policies issued on 28.9.95 and 28.9.96, both for sum assured one lac. He died on18.7.98 and a claim against policies was raised by his wife Fathima which was rejected on the plea of concealment of facts following doctors notes dated. 931.10.91 at hospital Tenon at Paris as hereunder-

‘ he was hospitalized in august 1991 for pain in the epigastrium.He had already similar pain in July 1990 and in June 1991.Alcohal consumption was the probable cause of pancreases as he continued to drink until few months 5 to 6 pegs per day and minimum I liter of wine every day’

On the basis of this report, commission made the observation that material facts were not revealed to the insurance company before taking policies .Hence rejection of claim was found justified

This order was passed on 27.1.2016. In the above matter of Life Insurance corporation of India v/s Fathima @anthonimal &others 11(2016) CPJ 49 NC.

 But the same commission had different view in the matter of United India Insurance Co. Ltd versus Milli Dutta & others 11(20160CPJ 244 NC decided on 8.9.2015 wherein commission found exclusion clause not applicable because there was no evidence that complainant was having problem in her knee before 48 months of knee replacement .Problem was detected only after ex-ray and after taking first mediclaim policy .Hence insurance company was deficient in services for rejecting the claim

Material fact is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms In the matter of Life Insurance Corporation of India vs. Smt.G.M.Channabasamma (1991) (1) SCC 357 , the court held that  fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non- disclosure of the facts which the party privately knows.

On the other hand Supreme Court in the matter of P.C. Chacko and others V/S Chairman LIC of India also observed

‘Misstatement by itself is not material for repudiation of the policy unless the same is material in nature …proposal can be repudiated if a fraudulent act is discovered’

In this connection we may notice the decision of this Court in Mithoolal Nayak Vs. Life Insurance Corporation of India (AIR 1962 SC 814), and further followed by number of Supreme court judgement recently in civil appeal no. 4186-87/1988 Life insurance corporation of India v/s Smt. Asha Goel and others 111 (2012) CPJ 5 SC in which the position of law was stated that three conditions must fulfil for application of exclusion clause and for bringing the case under pre-existing disease. Second part of Section 45 is:

(a) The statement must be on a material matter or must suppress facts which were material to disclose;

(b) The suppression must be fraudulently made by the policy holder; and

(c) The policy holder 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.

Mulla’s Indian Contract and Specific Relief Acts `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

Most of the people are totally unaware of the symptoms of the disease they suffer till it is diagnosed and some medicines referred to be taken. Under such situations, they cannot be held liable as held by Supreme Court in number of cases earlier also.

The insurance companies are repudiating even genuine mediclaims taking advantage of their exclusion clause. In yet another recent case New India Insurance Company V Anand Gourana reported in CTJ 2010 the Madhya Pradesh State Commission rejected the plea of insurance company that the charges incurred at hospital or nursing home primarily for diagnosis, X-ray or laboratory examination are not reimbursable.

 In the recent past, insurance companies short listed some of the hospitals from their panel and objected to their prescribing a number of laboratory tests, and recommending costly treatments and operations which insurance companies thought could be avoided. Subsequently insurance companies stopped cashless facilities in some of these private hospitals. But there was sharp retaliation to such move, and courts through various judgments warned the insurance companies not to step into the shoe of doctors.

Insurance companies short listed some of the hospitals from their panel and objected to their prescribing a number of laboratory tests, and recommending costly treatments and operations which insurance companies thought could be avoided. Subsequently insurance companies stopped cashless facilities in some of these private hospitals. But there was sharp retaliation to such move, and courts through various judgments warned the insurance companies not to step into the shoe of doctors. Maharashtra State Consumer Dispute Redressed Commission has shown insurance firms their place, directing that it is the doctor and not the insurer who can decide whether a case requires emergency medical attention or not. It is further stated that “insurance company’s officers are not experts who can decide whether a particular case is of medical emergency or not.”

“It is the doctors who decide what treatment is required to be given. Once the insured has paid the agreed amount of premium, insurance company is bound to meet the expenses “held in Shamim Khan V New India insurance company, Maharashtra State Consumer Dispute Redressed Commission, 2000.

[Facts of the case; – Shamim Khan, the plaintiff who was working as a school teacher in Saudi Arabia suffered unbearable stomach pain when he visited India in July 2000, which led to severe bleeding. Khan was admitted to Bombay hospital where emergency surgery was conducted. Claim for total expenditure of Rs 41,158 was rejected on the plea that there was no emergency to undergo operation. Doctor’s certificate was then produced to prove the emergency in the case.

Apart from directing the claim of the consumer to be paid, court also fined the insurer Rs 5000 for rejecting the claim. The order came at a time when insurance companies are desperately trying to avoid passing claims and reimbursing expenses, borne by the insured under mediclaim policies. It is surely a big relief to the consumers at this juncture. ]

A study of medical trade practices in Mumbai sponsored by World Health Organization reveals the unethical and illegal trade practices of doctors and drug companies. Pharmaceutical companies sponsor Continuous Medical Education [CME] camps, where they develop personal bonds with the doctors, which they further strengthen with sponsored cocktail parties and then overseas trips. The net result of such favour ultimately burdens the patients admitted in the hospitals who are prescribed drugs from specific companies that may be much costlier than other brands available outside.

IRDA. Guidelines 6th January, 2011

Some companies started enhancing their premium amount for senior citizens with a view that after certain age, their medical expenses do increase. But now this controversy is also settled and IRDA on 6th January2011 has asked insurance companies to refrain from charging policy holders the premium amount which is outside the range filed with IRDA.

This change in the attitude is surely the result of various judgements pronounced by the courts in favour of consumers

Dr Prem Lata

RERA: Emerging as a Powerful Law in Real Estate

RERA: Emerging as a Powerful Law in Real Estate

by | Jul 8, 2023 | Legal, resources

RERA: Emerging as a Powerful Law in Real Estate

The news of 101 builders facing arrest warrants due to their failure to comply with RERA- Real Estate (Regulation and Development) Act orders has sparked significant discussions. Among them, Superteck builders are included and have been arrested for not adhering to the recovery order outlined in Section 40 of the RERA Act 2016. This event serves as a powerful message to the real estate industry, highlighting the growing authority of RERA.

Dr Prem Lata, Legal Head VOICE 

A notable incident in the realm of builder affairs has attracted attention, as the developer failed to repay the loan obtained for the entire project, leading the bank to obtain an order for the property’s auction. However, on the complaint of registered homebuyers to RERA, the auction order issued under the SARFAESI Act was halted by the RERA Rajasthan High Court. This unconventional development resulted in a conflict between the stay orders of RERA and the recovery proceedings initiated by the bank under SARFAESI. The matter eventually reached the Supreme Court, which ruled that the bank had assumed the role of the promoter and therefore, as an assignee, the bank cannot compromise the interests of homebuyers by executing an order that goes against their best interests.

In this landmark judgment, the divisional bench of the Rajasthan High Court also established that complaints against banks can be filed with the Real Estate Regulatory Authority (RERA) in cases where lending banks have taken possession of a project as a secured creditor following the promoter’s default in loan repayment.

Important Case Law

  • M/S. Newtech Promoters and Developers Pvt. Ltd.Versus State Of Up & Ors.
  • Civil Appeal No(S). 6753 Of 2021 (Arising Out of SLP (Civil) No(S). 3426 of 2021)
  • Judgment Date 11 Nov 2021

Following this thought-provoking ruling, numerous questions emerged that sparked debates. To address these inquiries pertaining to the real estate industry, it is necessary to examine the case of M/S. Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors., Civil Appeal No(S). 6753 Of 2021 (Arising out of SLP (Civil) No(S). 3426 of 2021), Judgment Date 11 Nov 2021. This case extensively delves into every aspect of the RERA Act and the CP Act 2019, providing intricate details for further clarification.

Legal points

  1. Whether the Act 2016 is retrospective or retroactive in its nature?
  2. Whether the authority has jurisdiction to direct return/refund of the amount to the allottee under section 18 of the Act or the jurisdiction exclusively lies with the adjudicating officer under Section 71 of the Act?
  3. Whether Section 81 of the Act authorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the Act?
  4. Whether the authority has power to issue recovery certificate for recovery of the principal amount under Section 40(1) of the Act?

 SC holds

Issue -1 Retrospective application of the Act

Concerning the retroactive application of the provisions of the Act 2016 in relation to ongoing projects, the Court determined that the Parliament, after thorough deliberation, deemed it essential to enact a central legislation in the best interest of effective consumer protection, uniformity, and standardization of business practices and transactions in the real estate sector. This legislation aims to ensure heightened accountability towards all stakeholders involved.

Issue -2 Jurisdiction of authority to direct return/refund of the amount to the allottee under Sections 12, 14, 18 and 19 of the Act

In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. The right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed. However, question of compensation is to be determined by judicial tribunal.

Referred case Imperia Structures Ltd. Vs.  Anil Patni and Another held that Section 18 confers an unqualified right upon an allottee to get refund of the amount deposited with the promoter and interest at the prescribed rate, if the promoter fails to complete or is unable to give possession of an apartment as per the date specified in the home buyer’s agreement

Issue-3 Regarding delegation of power to single Member

  • The Authority shall consist of a Chairperson and not less than two whole time members to be appointed by the appropriate Government.
  • The Authority shall meet at such places and times, and shall follow such rules of procedure in regard to the transaction of business at its meetings (including quorum at such meetings), as may be specified by the regulations made by the Authority.
  • If the Chairperson for any reason, is unable to attend a meeting of the Authority, any other member chosen by the members present amongst themselves at the meeting, shall preside at the meeting.

In the present case, the authority made a special order on 5th December 2018, delegating its power to a single member for addressing complaints filed under Section 31 of the Act. As for the refund of the amount with interest, it should not be regarded as a strictly mechanical procedure. If the authority has delegated its power to the chairperson, who in turn delegates it to a single member under Section 81 of the Act, such delegation cannot be deemed contrary to the provisions of the Act.

Issue 4– Whether the authority has the power to issue recovery certificates for recovery of the principal amount under Section 40(1) of the Act?

Recovery of interest or penalty or compensation and enforcement of order, etc.—

  1. If a promoter, allottee, or real estate agent fails to make payment of any interest, penalty, or compensation imposed on them by the adjudicating officer, the Regulatory Authority, or the Appellate Authority under this Act or the associated rules and regulations, such amounts shall be recoverable from the respective promoter, allottee, or real estate agent. The recovery process shall be carried out in accordance with the prescribed procedure, treating the outstanding amounts as arrears of land revenue.
  2. If an adjudicating officer, the Regulatory Authority, or the Appellate Tribunal issues an order or instructs an individual to perform a certain action or refrain from doing so, as empowered by this Act or the associated rules and regulations, any failure to comply with such order or direction by any person shall be enforced according to the prescribed procedure.

Under Section 40(1) of the Act, the principal sum along with the accrued interest has been consolidated into a single amount that is to be recovered as arrears of land revenue. This case, which represents a landmark judgment of the year 2021, has effectively resolved all the pertinent issues concerning the real estate act, as determined by the Supreme Court.

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