Development of Consumer Jurisprudence in India

(Supreme Court sets Law)

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

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

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

Dominance of executives over Judicial Person, chairman

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

Case Law :

Dr.Mahendra Bhaskar Limaye & others

Versus.

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

Writ Petition No. 3680/2023

High Court of Bombay, Nagpur Bench

(Decided on 20 Oct 2023 )

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

The constitution of the Selection Committee consisting of

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

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

Hence HC HELD –

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

2 Pecuniary Jurisdiction of Commissions on The Basis of Paid Actual Cost

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

Decided on: 28 Aug 2020

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

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

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

Commission Held: The consideration paid should be the criteria

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

3 CCPA has jurisdiction to initiate proceeding Suo moto against enterprise

Case title:

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

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

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

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

4 Home Buyer A Financial Creditor

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

NCLAT in the case of Nikhil Mehta and Sons (HUF) v. AMR Infrastructure Ltd. held that

“The amount raised by developer from allottees under assured return scheme had the effect of “commercial effect of a borrowing”. Further, the amount so raised by developer was shown as “commitment charges” under the head “Financial Cost” in the annual return, which made it clear for the NCLAT to consider such allottees as “Financial Creditor” within the meaning of Section 5(7) of I&B Code.”

SC Held;

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

5 Law on forfeiture of Earnest Money: Real Estate

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

Case Law; Goutam Roy V/S Avalon Projects

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

A landmark judgement National Commission (NCDRC)

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