Unauthorised use of Electricity’s defined by Supreme Court

by cv | Mar 12, 2023 | Legal

Unauthorised use of Electricity’s defined by Supreme Court

Delegated legislation should not travel beyond the purview of the parent act. If it does, it is ultra vires and cannot be given any effect. Rules or regulations cannot be made to supplant the provisions of the enabling act but to supplement it.

Dr Prem Lata

The SC ruled that Regulation 153(15) of the Code 2014 is invalid because it violates Section 126 of the Electricity Act 2003. The SC noted that there is a thin line between a rule and a regulation, and that if the delegate authority’s power to create such rules or regulations is upheld, ultra vires may result and delegated legislation may be in conflict with the Parent Act’s provisions.

Kerala State Electricity Board vs. Thomas Joseph Alias Thomas (SC) 16 Dec 2022

A long pending issue before the Hon’ble Supreme court was finally settled with a landmark judgement in the matter of U.P. Power Corporation Ltd & others vs Anis Ahmad & others in 2013 along with eight more cases of similar nature.

The issues before the court were-

Whether consumer complaints made against electricity boards can be brought before the consumer courts established under the Consumer Protection Act.
Whether the consumer forums have the jurisdiction to entertain a complaint filed by a consumer or a person against assessment made for unauthorized use of electricity under section 126 of the Electricity Act 2003 or action taken by billing with penal rates under sec. 135 to 140 of the Electricity Act 2003.

Supreme Court in its final verdict held as hereunder stated

In case of any inconsistency between the Electricity Act 2003 and the Consumer Protection Act 1986, the provisions of Consumer Protection Act will prevail with regard to the matters of services defined under Section 2(1) (o) or complaint under Section 2(1) (c) of the Consumer Protection Act 1986.
A complaint against the assessment made for unauthorized use of electricity under Section 126 of the Electricity Act or action taken by billing with penal rates under Section 135 to 140 cannot be challenged before the consumer courts established under Consumer Protection Act.
The Electricity Act 2003 and Consumer Protection Act runs parallel for giving redressal to consumers who fall within the definition of consumer and complainant under the Consumer Protection Act under sections 2(1 )(c)&(d) of the act .

According to the aforementioned ruling, complaints against assessments made under Section 126 of the Electricity Act or actions taken under Sections 135 to 140 are categorically prohibited in all situations, but if a service provider has charged a price that is higher than the price set by any law, it is open to challenge before the consumer court. This means that a consumer can file a complaint before the forum for excessive billing even if he has not been charged with using electricity without authorization or the like.

But there is twist and turn in the latest Judgment by SC on the issue of unauthorised consumption of electricity in case of Kerala State Electricity Board V/S Thomas Joseph Alias Thomas 2022 (SC) decided on 16 December 2022. The Supreme Court held that the consumption of electricity in excess of the connected load/contracted load would amount to ‘unauthorised use of electricity’ under explanation (b) to Section 126(6) of the Electricity Act, 2003 and also declared Regulation 153(15) of the Kerala Electricity Supply Code, 2014 as invalid for being inconsistent with the provision of Section 126 of Electricity Act 2003.

Facts Leading to Dispute

An appeal was filed by Kerala State Electricity Board against the Kerala HC judgment which had held that ‘unauthorised additional load’ in the same premises and under the same tariff shall not be reckoned as ‘unauthorised use of electricity’.

In its appeal, the KSEB cited a decision by a three-judge panel in the case of Executive Engineer, Southern Electricity Supply Company of Orissa Limited and Another vs. Sri Seetaram Rice Mill (2012) 2 SCC 108, which determined that cases of excess load consumption other than the connected load would fall under Explanation (b) (iv) to Section 126. The bench summed up the guidelines established in the aforementioned ruling with reference to this instance.

(1) The provisions of Section 126, read with Section 127 of the Act 2003 become a Code in themselves. It specifically provides the method of computation of the amount that a consumer would be liable to pay for excessive consumption of electricity and for the manner of conducting assessment proceeding. Section 126 of the Act 2003 has been enacted with a purpose to achieve i.e., to put an implied restriction on such unauthorised consumption of electricity.
(2) The purpose of Section 126 of the Act 2003 is to provide safeguards to check the misuse of powers by unscrupulous elements. The provisions of Section 126 of the Act 2003 are self-explanatory. They are intended to cover 46 situations, other than, the situations specifically covered under Section 135 of the Act 2003. In such circumstances, the Court should adopt an interpretation which should help in attaining the legislative intent.
(3) The purpose sought to be achieved with the aid of the provisions of Section 126 of the Act 2003 is to ensure stoppage of misuse/unauthorised use of the electricity as well as to ensure prevention of revenue loss.
(4) The overdrawal of electricity is prejudicial to the public at large, as it is likely to throw out of gear the entire supply system, undermining its efficiency, efficacy and even-increasing voltage fluctuations.
(5) The expression ‘unauthorised use of electricity’ means as it appears in Section 126 of the Act 2003. It is an expression of wider connotation and principle construed purposively in contrast to contextual interpretation, while keeping in mind the object and purpose of the Act 2003.

The bench, therefore, observed:

“In view of para 72 of Seetaram Rice Mill (supra) referred to above, the High Court could be said to have erred in coming to the conclusion that the consumer cannot be charged twice the energy charges if the consumer uses in excess of the sanctioned/connected load in the very same premises and for the very same purpose, which do not involve any change in the tariff. Para 87(2) in Seetaram Rice Mill (supra) categorically holds that consumption in cases of the connected load would fall in Explanation (b) (iv) to Section 126 of the Act 2003.”

Statutory Provision in the Act

As per explanation (b) to Section 126(6), the “unauthorised use of electricity” means the usage of electricity─ (i) by any artificial means; or (ii) by a means not authorised by the concerned person or authority or licensee; or (iii) through a tampered meter; or (iv) for the purpose other than for which the usage of electricity was authorised; or (v) for the premises or areas other than those for which the supply of electricity was authorised.

However Regulation 153(15) of Supply Code 2014 provides that an unauthorised additional load in the same premises and under the same tariff shall not be reckoned as ‘unauthorised use of electricity’ except in cases of consumers billed on the basis of connected load. On Regulation 153(15), the bench observed that a delegated legislation should not travel beyond the purview of the parent Act and if it does it is ultra vires and cannot be given any effect. It observed:

“If we have to set right the impugned judgment and order of the High Court and bring in tune with the principles embodied in the decision of this Court in the case of Seetaram Rice Mill then we have no other option but to declare that Regulation 153(15) of the Code 2014 framed by the Commission is inconsistent with Section 126 of the Act 2003. If the Regulation 153(15) is to be given effect, then the same would frustrate the very object of Section 126 of the Act 2003. The High Court in its impugned judgment says that Regulation 153(15) does not lead to any loss of revenue. The stance of the Commission also is that there is no loss of revenue if the Regulation 153(15) is permitted to be operated. However, we are of the view that it is not just the question of loss of revenue. At the cost of repetition, we emphasis on the fact that overdrawal of electricity is prejudicial to the public at large as it may throw out of gear the entire supply system, undermining its efficiency, efficacy and even-increasing voltage fluctuations.”

In light of the foregoing considerations and the most recent Supreme Court ruling, the following principle is established:

Cases of excess load consumption other than the connected load would amount to ‘Unauthorised use of Electricity’.
Delegated legislation should not travel beyond the purview of the parent act. If it does, it is ultra vires and cannot be given any effect. Rules or regulation cannot be made to supplant the provisions of the enabling act but to supplement it.
Regulation 153(15) of the Code 2014 to be invalid, being inconsistent with the provisions of Section 126 of the Electricity Act 2003.

A few sections of Electricity Act dealing with the subject

Sec 175 of Electricity Act and section 3 of CP Act – both these acts are additional remedy and not in derogation to other laws.
Sec-173,174 &175 of the act have overriding effect qua provisions of any other law (The Atomic Energy Act 1962 and Railways Act 1989) except that of the provisions of CP Act 1986.
Sec 42(8), this provision of the Electricity Act provides that the remedies provided under these provisions are without prejudice to the rights of consumers which they may have apart from these provisions.
Sec 45 bars the jurisdiction of civil courts and other authority but not the Consumer forums constituted under quasi-judicial system.

U.P. Power Corporation Ltd.& others V/s Anis Ahmad & others SC 2013

Important Judgments of the Year 2022 (PART-2)

by admin | Feb 6, 2023 | Legal

Important Judgments of the Year 2022 (PART-2)

We are presenting to you the top 10 judgements of the year 2022. This is the second part. This part has five summarised judgements. To read the full case and judgments, please subscribe to our buying guide for the details. You can find it in ‘Top 10 Judgements-2022’.

Dr Prem Lata, Legal Head VOICE

6. Case: Bharmaputra Biochem Private Limited Vs New India Assurance Company & Anr.

Civil Appeal No. 6943 of 2021/ Decided February 21, 2022

Head Note-The matter cannot be left unresolved because an unnecessary party was added. An unneeded party may be struck down by the court.

The National Consumer Disputes Redressal Commission issued an order on September 27, 2021, by which the complaint was returned unadjudicated for the reason that the surveyor was an unnecessary party in the insurance claim dispute. These facts served as the basis for the appeal before the SC. The claimant or appellant was granted the right to submit a new complaint within 30 days. The insurance company was to be the “sole opposite party for pursuing reparation” while being granted freedom.

7. Amit Katyal Vs Meera Ahuja & others

Civil appeal No. 3778 of 2020/ Decided March 03, 2022

Head Note- Corporate Insolvency Resolution Process (CIRP) proceedings against a builder can be withdrawn if parties settle the issue

In the case of Amit Katyal Vs Meera Ahuja & others, home buyers in the housing project Krrish Provence Estate at Gurgaon had gone against Jasmine Buildmart Pvt. and invoked Section 7 of IBC 2016 before the Adjudicating Authority/NCLT.

But later, the original applicants filed IA No. 18679 of 2022 under Article 142 of the Indian Constitution and Rules 11 and 12 of the National Company Law Tribunal Rules, 2016, requesting permission to end the CIRP proceedings upon receiving payment of Rs. 3, 36, 02,000/- plus applicable interest from the money the appellant had deposited in the registry of this court.

8. Case: Mahaveer Stone Crushing Co Vs Tata Motors Ltd

Civil appeal No 6730 of 2010/ Decided on March 24, 2022

Head Note-Selling Repainted & Repaired vehicles, deficiency of services

Complaint before District Forum Gurgaon under CP Act 1986

That new vehicle was purchased on 10.2.1999
When taken to workshop after five months of purchase, it was observed that vehicle had an accident and was repainted and claimed relief for replacement.
Dealer as well as manufacturer were made parties. Expert on 27.1.2000 confirmed the fact. District forum ordered for replacement with cost of litigation.

9. Experion Developers Pvt. Ltd. Vs Sushma Ashok Shiroor

Civil Appeal No. 6044 of 2019 with Civil Appeal No. 7149 of 2019/ Decided on April 07, 2022

Head Note- SC allowed three fold choices to the home buyer, not been given possession of dwelling within stipulated time

In a case resolved on April 7, 2022, the SC adopts a very lenient stance in favour of homebuyers who put their hard-earned money into a developer’s project but did not receive possession by the deadline.

10. Medicos Legal Action Group Vs Union of India|

SLP (Civil) 19374/2021/Decided on April 22, 2022

Head Note –Speech during Parliament debate is of little relevance

SC Re-affirms its stand on Healthcare service under Consumer law

An organization “Medicos Legal Action Group” had filed a writ petition before the High Court of Bombay as Public Interest Litigation No. 58 of 2021 and prayed before the court to declare that services performed by healthcare service providers are not included within the purview of the Consumer Protection Act 2019.

Comparative Advertisement and Trade mark Law

by admin | Feb 6, 2023 | Legal

Comparative Advertisement and Trade mark Law

A comparative advertisement would always involve the statement that the goods of the advertiser are better in some aspects than that of the competitor. But there is line that an advertiser cannot cross. He cannot disparage or defame the goods of his competitor. It is permissible for an advertiser to advertise and highlight features of his product but the message must clearly be to highlight the superior features of his product while ensuring that the product of his competitor is not disparaged or defamed.

Dr Prem Lata, Legal Head VOICE

Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. (SC)

An appeal had been filed by Reckitt Benckiser (India) Pvt. Ltd against Hindustan Unilever Limited before the double bench (Coram Hon’ble Mr. Justice Vibhu Bakhru Hon’ble Mr. Justice Amit Mahajan) against the judgment delivered on by single judge of HC of Delhi on 09.11.2021 in the suit bearing 340/2021. Reckitt is aggrieved that the learned Single Judge has rejected its prayer for restraining the ‘HUL’ from broadcasting a TV Commercial (TVC-I’) which according to Reckitt was disparaging its product sold under the trademark ‘HARPIC’, during the pendency of the suit.

High court of Delhi now delivered Judgment on 26.09.2022 in the appeal case FAO (OS) (COMM) 149/2021 and CM Nos. 42068/2021, 42069/2021, 42070/2021 & 42071/2021.

The basic question before the Hon’ble High Court was

“Whether the prima facie view of the learned Single Judge HOLDING that the impugned TVC-1 does not disparage Reckitt’s products or infringes Reckitt’s trademark is correct as per law”.

Facts leading to dispute

Reckitt Benckiser India Private Limited is a company engaged in the manufacturing, packaging, sale and distribution of various fast moving consumer goods such as healthcare products including antiseptic liquid, toilet care products, surface care products, pharmaceuticals, insecticides and food products. It manufactures of a well-known toilet cleaner under the trade mark ‘HARPIC’ in India. Originally it was launched in England in 1920 and subsequently it is being sold in over 47 countries worldwide.

Reckitt states that on 15.03.1979, it registered the word mark ‘HARPIC’ (Application No. 347055) under Class 3. Reckitt also obtained registration for the shape of their bottle used for packaging Harpic branded products in India

HUL is engaged in the business of fast moving consumer goods, primarily of manufacturing, marketing and/or selling of various consumer products, including food and refreshments, cosmetics, toiletries, floor cleaners, toilet cleaners, toilet soaps, washing soaps and detergents. HUL also manufactures and markets a toilet cleaner, which is sold under the trademark ‘DOMEX’.

The dispute arises due to certain advertisements launched by HUL for its product Domex. HUL claims that its product is superior in fighting bad odour in comparison to Reckitt’s product Harpic. Reckitt has instituted the present action, as it claims that HUL’s advertisement campaign disparages and denigrates its product Harpic.

Reckitt has filed the said suit, seeking a decree of permanent injunction restraining HUL from telecasting, broadcasting and publishing five advertisements.

The learned Single Judge restrained HUL from publishing or broadcasting four of the impugned advertisements (one published in print and three available for viewing on the YouTube Channel) but declined Reckitt’s prayer for interim injunction, restraining HUL from publishing ban HUL from broadcasting the impugned TVC-1. The court did not accept that the impugned TVC-1 indicated a prima facie case of disparagement.

The present appeal is confined to the decision of the learned Single Judge to decline Reckitt’s request to interdict the impugned TVC-1.

Allegation by Appellant

The clear message of the advertisement is that Harpic is ineffective as a toilet cleaner; it is ineffective to combat bad odour.It referred the following cases

Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. (167 (2010) DLT 278 (DB) and Colgate Palmolive Company & Anr. v. Hindustan Unilever Ltd. (2014) 206 DLT 329.

“Although puffery and hyperbole to promote one’s product is permissible, it is not open for any person to denigrate or disparage the goods of another. “

As per the above case it is impermissible for any advertiser to make any untruthful statement in its advertisement. And, the impugned advertisements were untruthful.

He also referred to the decision of the Madras High Court in Gillet India Ltd. v. Reckitt Benckiser (India) Pvt. Ltd. (2018 SCC OnLine Mad. 1126) and contended that in a suit for disparagement, it would be necessary that the disparaging advertisements be restrained, as pecuniary compensation at a later stage would be insufficient to compensate the loss suffered and damage caused due to disparagement.

Counter Reply by HUL

The above allegations were countered by the contesting party HUL. They also referred to the decisions of Court in Colgate Palmolive Company & Anr. v. Hindustan Lever Ltd. as well as Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. and contended that the law relating to disparagement is well settled. The Appellate Court in Wander Ltd. And Anr. v. Antox India P. Ltd (1990 Supp. SCC 727) contended that

“It is impermissible to interfere with the discretion exercised by the learned Single Judge unless it is shown that the discretion was exercised arbitrarily, capriciously or perversely.”

He submitted that in the present case, the learned Single Judge had rightly applied the law and declined the interim injunction as, in his view, the impugned TVC-1, viewed as a whole, did not disparage and denigrate Reckitt’s product.

High Court Conclusion with Reasons

Tata Press Limited v. Mahanagar Telephone Nigam Limited, the Supreme Court authoritatively held that commercial speech is a part of the freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution of India.

The Court also accepted, in unambiguous terms, that advertisements were a part of commercial speech. It is, thus, necessary that fair amount of latitude be available to advertisers. This has also been emphasized in the case of Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd. Above referred. However, such protection cannot be extended to misrepresentation or where the advertisements fall foul of the validly enacted law.

US Supreme Court in Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, whereby the Court had held that “untruthful speech, commercial or otherwise, has never been protected for its own sake.” and that it saw no obstacle for a State to deal effectively when the commercial speech is “deceptive or misleading”.

Observation and order by the double bench of High Court

In view of the above decided judgments, the court observed as hereunder

We have visually seen the advertisement and find HUL has clearly crossed the line. It not only claims that its products are better than Reckitt’s but it also, prima facie, disparages Reckitt’s product.
The TVC-1 not only projects a message that Domex fights odour for a longer period of time, it also sends a clear message that Harpic does not address the problem of foul smell that emanates from toilets.
It also sends the message that whoever chooses Harpic would have to live with their toilets smelling foul. This is a message that disparages Reckitt’s product and, in our view, cannot be permitted.

Hence By an order dated 01.12.2021 passed by this Court, HUL was restrained from airing the impugned TVC-1. We make the said order absolute. The same shall continue till disposal of the suit.

However none of the observations or views expressed should be construed as final or dispositive of the Reckitt’s claim in the suit. (VIBHU BAKHRU, J)

Referred Cases by Court

PepsiCo. Inc. And Ors. vs Hindustan Coca Cola Ltd. had restated the principles

(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.

(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?

(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.

Reckitt and Colman India Ltd. vs M.P. Ramchandran and Anr. In that decision the court set out the following propositions:

a) A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.

(b) He can also say that his goods are better than his competitor’s, even though such statement is untrue.

(c) For the purpose of saying that his goods are the best in the world or his goods are better than his competitors’, he can even compare the advantages of his goods over the goods of others.

(d) He however, cannot, while saying that his goods are better than his competitors’, say that his competitors’ goods are bad. If he says so, he really slanders the goods of his competitors. In other words, he defames his competitors and their goods, which is not permissible.

(e) If there is no defamation to the goods or to the manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.

De Beers Abrasive Products Ltd. and Others v. International General Electric Co. of New York Ltd. and Another

“The statement: “My goods are better than X’s” is only a more dramatic presentation of what is implicit in the statement: “My goods are the best in the world.” Accordingly, I do not think such a statement would be actionable. At the other end of the scale, if what is said is: “My goods are better than X’s, because X’s are absolute rubbish.” then it is established by dicta of Lord Shand in the House of Lords in White v. Mellin [1895] A.C. 154, 171, which were accepted by Mr. Walton as stating the law, the statement would be actionable.”

It is open for a person to claim that he is the best seller in the world or a best seller in the street but it is not open for him to denigrate the services of another.

Guiding principles set by SC through various judgments in a comparative advertisement

An advertisement is commercial speech and is protected by Article 19(1) (a) of the Constitution.
An advertisement must not be false, misleading, unfair or deceptive.
There would be some grey representations of fact but can be permitted only to this extent as glorifying one’s product & protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.

Important Judgments of the Year 2022 (PART-1)

by cv | Jan 14, 2023 | Legal

Important Judgments of the Year 2022 (PART-1)

We are presenting to you the top 10 judgements of the year 2022. This is the first part and the second part will be presented in the upcoming issue. This part has five summarised judgements. To read the full case and judgments, please subscribe to our buying guide for the details. You can find it in ‘Top 10 Judgements-2022’.

Dr. Prem Lata, Legal Head VOICE

1. Samruddhi Co-operative Housing Society Ltd vs Mumbai Mahalaxmi Construction Pvt.Ltd. (SC)

Civil Appeal No 4000 of 2019/ Decided on January 11, 2022

Head Note: Consumers must receive compensation for the resulting liability if they fail to obtain the occupation certificate.

Appeal arising against the order from NCDRC and was decided on 11^th of Jan 2022.

It’s a common grievance of home buyers that builder fails to complete the construction work including amenities as per plan and agreed terms. With the result, occupancy certificate is not issued by the concerned authorities. In some cases home buyers take possession under compelling circumstances with incomplete work and occupancy certificate still remains a problem. Here is a unique case decided by the Hon’ble Supreme Court on 11^th January 2022 which gives a new dimension to the issue of fixing liability of developer when occupancy certificate is not provided to home buyers.

2. Sunil Kumar Maity V/s State Bank of India and Anr. SC

Civil appeal 432 of 2022/ Decided on 21^th Jan 2022

Head Note – Concept of Revisional Power to Consumer Commissions

SC made a very strong comment against the order of NCDRC and explained the concept of Revisional Power to the courts.

3. Jaina Construction Company vs The Oriental Insurance Company Limited & Anr

Civil Appeal No. 1069 of 2022/ Decided on 11.02.2022

Head Note -Insurance Company cannot repudiate claim merely on the ground of delayed information when FIR had been lodged

The vehicle of the complainant (the insured) which was insured with Insurance Company was robbed. The next day, an FIR was registered by him. Accused were arrested and challan filed. Thereafter, the complainant lodged the insurance claim. The same was repudiated on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft.

4. ECGC Limited vs Mokul Shriram Epc Jv

Civil Appeal No. 1842 of 2021/ Decided on February 15, 2022

Head Note – Condition of payment of the amount for filing appeal shall be governed by the act under which complaint was filed.

Consumer Protection Act, 2019 – Section 67 Proviso – Onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act. The question now being examined here is as to whether the present appeal would be governed under the Consumer Protection Act, 2019 [For short, the ‘2019 Act’] or under the erstwhile 1986 Act.

5. Case Title Vodafone Idea Cellular Ltd. vs Ajay Kumar Agarwal

Case No Civil Appeal No 923 of 2017/ Decided on 16th Feb 2022

Head Note -1) Existence of an Arbitral clause under the Indian Telegraph Act, 1885, will not oust the jurisdiction of the consumer forum

2) Consumer Protection Act is a specific act and not a general act

3) Telecom services are the subject matter of Consumer Protection Act

It was a historic day when, on February 16, 2022, the Hon’ble Apex Court ruled in Vodafone Idea Cellular Ltd. v. Ajay Kumar Agarwal, Civil Appeal No. 923 of 2017 (Arising out of SLP (C) No. 28615 of 2016), that the Consumer Protection Act is a specific act and not a general act. The three-judge panel, made up of Justices DY Chandrachud, Surya Kant, and Vikram Nath, added that the Indian Telegraph Act of 1885’s arbitration clause will not nullify the authority of the consumer forum.

Professionals’ Ethical Values Fail Miserably

by admin | Dec 9, 2022 | Legal

Professionals’ Ethical Values Fail Miserably

The Indian Medical Council has expressed its disapproval of doctors’ ethical behaviour. The Ethics Committee of MCI found one doctor to have committed medical malpractice and issued a strong warning to be more cautious during the process as well as to be more vigilant in treating and monitoring his patients both during and after the operation. When evaluating claims for compensation for medical negligence, the Supreme Court noted that the conclusions of the Medical Council of India’s report on doctors’ professional conduct were pertinent. The Court further noted that the issue of negligent intent does not arise when damages for professional negligence are sought.

Dr Prem Lata, Legal Head VOICE

Case: Harnek Singh vs Gurmit Singh (SC) CA 4126-4127/2022 | 18 May 2022

The complainants in Harnek Singh v. Gurmit Singh case filed a petition with the State Consumer Disputes Redressal Commission seeking monetary damages in the amount of Rs. 62, 85,160 from the hospital, the doctors, and the surgeons for negligence and a lack of services. The opposing parties were ordered to pay Rs. 15, 44,000 in total (jointly and severally) as well as Rs. 10,000 in costs. The National Consumer Disputes Redressal Commission accepted the opposing parties’ appeal and overturned the SCDRC’s ruling that the complainants had not established negligence.

While the proceedings were pending before the SCDRC, the complainants had also made a complaint to the Punjab State Medical Council against the professional misconduct of the doctors/surgeons/hospitals. As this complaint got summarily disposed of, they filed appeals before the Medical Council of India. The Ethics Committee of MCI held one doctor medically negligent and issued a strict warning to be more careful during the procedure and to be more diligent in treating and monitoring his patients during and after the operation.

The complainants/appellants argued before the Apex Court in their appeal that the NCDRC made its ruling without considering the MCI finding. The SC bench said, with reference to the information in the MCI report, that the MCI’s assessment of and conclusions regarding the respondent’s professional behaviour are highly relevant. It observed- “The above-referred findings of the MCI on the conduct of Respondent 1 leave no doubt in our mind that this is certainly a case of medical negligence leading to deficiency in his services. We are of the opinion that the NCDRC has committed an error in reversing the findings of the SCDRC and not adverting to the evidence on record including the report of the MCI. The decision of the NCDRC deserves to be set aside and we hold that the complainants have made out a case of medical negligence against Respondents 1 and 2 and are entitled to seek compensation on the ground of deficiency of service.”

As a result, the court ordered the respondents to compensate the complainants with a total payment of Rs. 25, 00,000, along with interest calculated at 6% annually from the date of the SCDRC judgement.

Medical Professionals Collaborate with Insurance Firms to deny legitimate Claims

Consumer forums have observed that doctors on the insurance firms’ panel are deviating from their areas of competence and providing legal opinions rather than medical ones. When deciding whether to treat a claim as a case of a pre-existing disease or not, insurance companies consult the medical opinions of the doctors on their panel. These opinions are based on the panel doctors’ experience in the relevant field, their examination of the case history, the medications prescribed, and some independent research from reputable sources. Instead of offering a medical opinion, they are interpreting the pre-existing condition or exclusion clause in the law.

In one such instance, Dr. Satya Paul v. National Insurance Co. Ltd., the complainant’s claim was denied on the grounds that his pre-existing condition made him subject to the provisions of clause 4.3 of the insurance policy’s conditions. After reading the mediclaim policy’s terms and conditions, the Consumer Forum came to the conclusion that clause 4.3 applies in situations when an illness already exists. The insurance provider in this case repeatedly referred to the clause, claiming that the treatment was received within the first year of the contract, but they never explained how the condition was pre-existing. The Consumer Forum pinpointed the opinion of doctors on panel of the insurance company which the court found was just not medical opinion but legal opinion as well. Dr Batra`s report states as hereunder – “Diagnosis immature senile cataract, left-right. Mrs Sharma in this case has undergone cataract surgery within first year of the policy. Such treatment is specifically excluded vide exclusion clause 4.3 of the policy Hence this claim is not admissible as per the terms of the policy”.

Further Dr Rajesh Chhabra has also given medical opinion as under – “This case in which the patient was admitted in the hospital with IMSC for phacoemulsification was justified for hospitalization. But since policy of the claimant is in the first year, so according to the terms and conditions of mediclaim policy, this comes under exclusion clause, so case should be closed as no claim. All other papers in the file are in order and are of diagnosed disease.”

Both the doctors have nowhere said that this disease was pre-existing They have not mentioned about any previous history or any report from any doctor, from any hospital or referred to any medicines taken by the patient for the said disease before undergoing for the operation of the diagnosed disease. Without establishing the disease pre-existing, this clause is not applicable at all. Apart from this, it is noted by the consumer forums that the doctors on panel are instead of giving medical opinion, are giving legal interpretation to the clauses which is actually to be done by the department concerned. This is the quasi-judiciary function to be done by either the legal department or personnel and administrative department and doctors on panel are in no way authorized to touch this area. It is the company to see whether the claim is tenable or not while interpreting the rules. Here it is seen that doctors are making legal opinions and interpreting the terms and taking the decisions also which doctors on panel are not supposed to do. Doctors are to give their professional/medical opinion about the disease, about the diagnosis, about the medicines taken, about the history of the ailment on the bases of their experience in the medical line. Both the doctors have done nothing on their part and virtually decided the claim not tenable though they have no authority to do so. It was the observation of the forum that the words were put into their mouths and they have tried to authenticate the decision by a professional opinion. A suggestion has been made for the doctors on panel by the Consumer forum to limit their opinion to their role and maintain the grace of the noble profession.

Regular Claim Rejection by Insurance Companies

During the last two decades, it has been observed that almost each and every mediclaim has been turned down on one or the other pretext by the insurance companies except a few in which the claimant managed to get the claim by offering bribe to the dealing man. The claim is invariably rejected on the plea of pre-existing disease and for concealment of fact at the time of filling up the prescribed form. This has also been seen by the consumer forums that the questionnaires of the said form are framed in such a manner that there cannot be any straight answer. At times, such forms are filled up by the agents of the insurance company who aims at bringing more and more cases/clients and they assure the insured to relax for everything and thousands of people are made to believe that they are totally secured once they have opted for mediclaim policy. In this process, whatever information has been given by the insurer, at the time of settling the claim, it is said to be untrue by the insurance company and the claim is rejected for giving the wrong statement and concealment of fact.

At the time of admission, the patient is typically asked a number of questions regarding his health. He typically responds informally, and the hospital records his response in the discharge report. This is the patient’s assertion, not the hospital’s conclusion based on test results. The medical professionals’ diagnoses and recommended treatments are the actual findings. Insurance firms exploit such allegations to their advantage when denying legitimate claims. When information is provided, a claim is made against any sickness that is alleged to have already existed. If there is cough and cold at any point of time, it is considered lungs problem pre-existing judging it the symptoms for the said disease. Uneasiness in breathing for any simple reason becomes heart ailment. If the hospital states in the patient’s discharge statement that they have had any problems for the past year or two, then even a minor ache is related to a serious illness, without keeping any records of the tests, diagnosis, or other diagnostic procedures, etc.

In response, the Apex Court declared in its ruling that “Such summary from the hospital cannot be accepted as cogent proof for declaring the ailment pre-existing unless shown by medical tests or medicines used in the past for the aforementioned disease having knowledge of the same.”

In Asha Rani Goal v. National Insurance Company, a case from 2002, the Supreme Court flatly refused to accept a declaration obtained from the patient at the time of admission as genuine proof of a pre-existing condition.

Repainted car sold as New- does Court hold it as manufacturing defect?

by admin | Nov 19, 2022 | Legal

Repainted car sold as New- does Court hold it as manufacturing defect?

It is a case where the car was painted to match the original colour before being handed to the complainant. It was not stated in the report that the car was old or involved in an accident prior to repainting. Instead, it is a case of typical scratches that were bound to appear during the vehicle’s trailer transportation from the factory to the agency, according to state commission Haryana Panchkula. SC affirms that there was no manufacturing flaw in this instance.

Dr Prem Lata Legal Head VOICE

Case: Mahaveer Stone Crushing Co vs Tata Motors Ltd (SC)

Issue: Repainted & Repaired vehicle sold-Whether it is manufacturing defect

Facts of the Case

The complainant purchased the new vehicle on 10.2.1999. After about five months there was an occasion that he took the vehicle to a workshop for service when it was observed that vehicle had an accident and was repainted. Complainant came before the consumer forum, filed complaint before District Forum Gurgaon under CP Act 1986 and claimed relief for re-placement of the vehicle. Dealer as well manufacturer were made parties. Expert made report on 27.1.2000 confirmed the fact. District forum ordered replacement with cost of litigation included.

Matter came before the State Commission in appeal and the State commission observed that there was no manufacturing defect in the vehicle neither it was involved in an accident. There were normal scratches while transporting from factory to agency but no manufacturing defect found which could entitle the complainant for replacement of vehicle. Hence sum of 50000/- was granted to complainant as compensation. This order was against Tata motors Ltd, the manufacturer.

National commission confirmed the order. SC ordered for Inspection which was done on 15.06.2003 through court.

SC observed

Vehicle found repaired from left side, right side and back.
Found repainted 80% and 20% had original paint.
Paint work done was discoloured and turned yellow.
Left front door was not working/the key supplied were not matching the slot of lock.

The Supreme Court observed that a manufacturing problem actually affects a procedural or technical feature of the vehicle. Although no manufacturing flaw could be found, the new vehicle is physically damaged in this state. As a result, compensation in the amount of Rs. 1,600,000 was given rather than a replacement.

Old Model Car Sold against New Booking

However, we have another case wherein it is apparent on the face of it that an old model car was sold as a new one, and the consumer now wanted a replacement.

Rajiv Shukla vs Gold Crush Sales & Services

Facts leading to dispute are that it is a case of one Rajiv Shukla who booked the Vehicle Tata Sumo Victa GX TC car by paying booking amount to M/s Gold Crush Sales and Services. A receipt was also issued for payment on the same day. Thereafter, he paid Rs 5, 30,000. However, the vehicle was delivered only a year after the booking. Rajiv Shukla found that he had been delivered an old model of 2005 which had already run 1000/- km prior to delivery of the vehicle to him. On investigation, it was revealed that the said car was used as Demo Test Drive Vehicle prior to delivery to Rajiv Shukla. Complainant lodged an FIR with police for fraud on the part of dealer but the matter could not be settled. The complainant filed a complaint before the District Forum with the prayers to replace aforesaid used car Tata Sumo Victa GX TC Model No 2005 with new car /vehicle to him.

The District Forum allowed the complaint and directed Gold Crush Sales & Services to take back the delivered vehicle and deliver a new one to the complainant against the previously deposited amount. The District Forum also awarded a sum of Rs.5, 000/ towards the mental agony besides a sum of Rs.2500/ towards litigation costs. The District Forum also found that the delivered car was a used car and was being used as a “Demo Test Drive Vehicle”.

The order passed by the District Forum was confirmed by the State Commission. The National Commission while exercising the revisional jurisdiction, has set aside the findings of facts recorded by the District Forum as well as the State Commission and directed to pay compensation in the sum of Rs.1 lakh to be paid to the complainant.

Matter comes to SC in Appeal

Supreme Court observed that the National Commission has materially erred in upsetting the findings of facts recorded by the District Forum and the State Commission, and held that the car delivered was a used car. It was further observed that the National Commission in exercise of the revisional jurisdiction under Section 21 of the Consumer Protection Act, 1986 could not have interfered with the evidence taken on record by lower commissions.

SC Order

Once the complainant paid the full sale consideration for a new car, the duty was cast upon the dealer to supply the new car which was booked and if not done so, it would tantamount to dishonesty and unfair trade practice.

Conclusion

There is a difference between a defective and an old car. In the case of Mahaveer Stone Crushing Co. vs Tata Motors Ltd (SC), the court observed that cars bear defect due to scratches in the process of transportation whereas in the case cited above in Rajiv Shukla it is proved through cogent evidence that an old car used as Demo Test Drive Car was sold as a new one.

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