Pecuniary Jurisdiction under Consumer Protection Act, 2019

Pecuniary Jurisdiction under Consumer Protection Act, 2019

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

It was held that, “It appears that the Parliament, while enacting the Act of 2019 was conscious of this fact and to ensure that Consumer should approach the appropriate Consumer Disputes Redressal Commission whether it is District, State or National only the value of the consideration paid should be taken into consideration while determining the pecuniary jurisdiction and not value of the goods or services and compensation, and that is why a specific provision has been made in Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) providing for the pecuniary jurisdiction of the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission and the National Commission respectively.”

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Flat Owners’ Association That Are Formed Due to Mandate of Law Cannot File a Consumer Complaint: Supreme Court

The Supreme Court in its verdict held that an association which consists of members of flat owners in a building, registered compulsorily under the provisions of Karnataka Apartment Ownership Act, 1972, cannot be said to be a voluntary organisation. Therefore it cannot file a complaint under the Consumer Protection Act against any deficiency in goods or services under the welfare legislation.This order came when two judge bench was considering an appeal against the National Commission order which rejected the complaint filed by the Association on the ground that it has no locus standi to file the complaint since neither it is a ‘consumer’ nor it is a ‘recognised consumer association’ within the meaning of Section 12 of the Act.

A bench of Justices Mohan M Shantanagoudar and R Subhash Reddy passed their judgement while dismissing a civil appeal filed by Sobha Hibiscus Condominium against Managing Director of M/s Sobha Developers Ltd. They explained the term voluntary consumer association as a body formed by a group of persons coming together, of their own will and without any pressure or influence from anyone and without being mandated by any other provisions of law.

In the instant case, the complainant is a statutory body under the provisions of Karnataka Apartment Ownership Act. It consists of members, who are the owners of an apartment called “Shoba Hibiscus”. The Apex Court said that it is clear from the objects of the said Act that it was enacted with a view to provide for the ownership of an individual apartment in a building to make such apartment heritable and transferable property. Once the apartments are registered under this Act, the owners, among other rights, would also get an undivided interest in the common areas and facilities of the apartment complex.

However, the mandatory provision of the law for registration of the flat owners’ association takes away its voluntariness, precluding it to invoke the consumer law. Going through the provisions of the Consumer Protection Act, the court said the statute made it clear that any recognised consumer association could file a complaint but such a group had to be of voluntary nature, registered under the Companies Act, 1956 or any other law.

The Supreme Court said that a voluntary consumer association is a body formed by a group of persons coming together, of their own will and without any pressure or influence from anyone and without being mandated by any other provisions of law.

In the said instance therefore the association formed by the members of the “Shoba Hibiscus” cannot be recognised as a consumer association because it has come into existence pursuant to a declaration which is required to be made compulsorily under the provisions of 1972 Act. Since it is not a ‘consumer’ or a ‘recognised consumer association’ within the meaning of Section 12 of the Act, it cannot file a complaint.

Written by: Ankur Saha, Head- Legal, VOICE

Case Study: Consumer can’t claim compensation if the “Necessary Parties” are not included in the Consumer Court Case

Case Study: Consumer can’t claim compensation if the “Necessary Parties” are not included in the Consumer Court Case

Before filing their case at the consumer court, consumers should get the facts very clear and include all necessary/proper parties in the complaint to avoid dismissal of the same. Non-inclusion of necessary/proper parties can turn out be grounds for dismissal of the complaint even if all others facts are proven. It is absolutely necessary for a complainant to implead any party that is responsible for the cause of action.

You May Be Deprived of Any Relief for Non-Inclusion of Necessary Parties

A necessary party is a person in whose absence no effective decree can be passed by the court. If a necessary party is not impleaded, the suit itself is liable to be dismissed. The National Commission in the matter of Jet Airways (India) Limited versus Ethelwad O. Mendes (First Appeal No. 432 of 2012), vide its order dated 12.02.2018, allowed the appeal against the order of the State Commission filed by the respondent/complainant at the State Commission under Complaint No. 06/2010 against the appellant/ opposite party Jet Airways (India) Limited.

Let’s retrace the case.

The respondent/complainant had purchased air tickets from an agent, M/s Trade Wings Limited, for himself and his family (four persons) to travel to Toronto, Canada, from Mumbai via London-Heathrow. The tickets were for a Jet Airways flight, having arrangements for code-sharing with Air Canada. The journeys were to be happen between 10.05.2008 and 15.06.2008. On reaching Toronto by Air Canada, the said family discovered that their baggage had not yet arrived. This caused much inconvenience and they also had to incur costs in purchasing toiletries, etc.

The airline agreed to give them a mere US$ 100 and that too would be handed over only at the address in India. The respondent/complainant alleged that during the three days it took for the baggage to be delivered to them, they were unable to go anywhere and enjoy their holidays because they did not have any change of clothes. On the return journey on 31.05.2008, as stated by the respondent/complainant, the Air Canada flight was to depart at 0800 hours from Toronto for London. They were given boarding passes without seat numbers at Toronto Airport. When they reached the embarkment gate after going through the security checks, they were told that the said flight of Air Canada was overbooked and they could not be accommodated in the same. They were made to travel by a Lufthansa flight to Heathrow, London, via Frankfurt on the next date, 01.06.2008, and that too in the evening at 18:00 hours. They were given some vouchers for refreshments, etc., but the same was found to be inadequate. As the flight was changed, they could not reach London according to schedule, disturbing the arrangements made for pick-up. They had to hire two taxis to reach Nottingham. In addition, when their flight reached Heathrow Airport at London, they found that two pieces of their luggage had not arrived. The said luggage was delivered to them at Nottingham after a delay of 36 hours, causing great harassment/inconvenience to them.

On reaching India, the respondent/complainant filed a complaint before the State Commission against Jet Airways, from whom the air ticket had been purchased. The appellant/opposite party stated that the complaint was barred by limitation under Section 24A of Consumer Protection Act, 1986. The complainant was debarred under Section 30 (1) of Chapter III, Liability of the Carrier, IInd Schedule of Carriage, by Air Act, 1972, to make any claim for damages after two years from the date of travel. The State Commission, by its order dated 14.06.2012, allowed the complaint partly. The respondent/complainant was held entitled to a sum of 635.47 Canadian dollars (to be paid in equivalent Indian rupees as on the date of payment), as well as Rs 3,000 by way of pecuniary losses and Rs 2 lakh by way of non-pecuniary losses, in terms of Section (14) (1) (d) of Consumer Protection Act, 1986. The respondent/complainant was also held entitled to a sum of Rs 5,000 by way of cost of the complaint. The State Commission further directed that the amount shall be paid to the respondent/complainant within a period of four weeks and in case it was not paid, the same shall carry interest at the rate of 7% until it was paid. Aggrieved by the order of the State Commission, Jet Airways (India) Limited filed an appeal before the National Consumer Disputes Redressal Commission (NCDRC).

The main issue to consider before the National Commission was this: whether under the code sharing arrangement Jet Airways could be held accountable for any deficiency in service on the part of the participating airlines, which in this case were Air Canada and Lufthansa. In this regard, the National Commission referred to a document titled ‘Worldwide Slot Guidelines’, 8th Edition, English Version, effective from 1 January 2017, published by the International Air Transport Association (IATA). In clause 8.14, titled ‘Shared Operations’, this is stated: ‘The operating airline is responsible for all usage and performance requirements.’ From the above provision, an impression was gathered that the operating airlines – Air Canada and Lufthansa – where the alleged deficiency in service took place were responsible for the usage and performance requirements. In any case, for taking a just decision with regard to the consumer complaint at hand, it was absolutely necessary that the versions of the operating airlines should be on record, so that a rational assessment about their deficiency in service, if any, could be made.

So it was that the National Commission held that Air Canada and Lufthansa were necessary parties in the case and it was necessary to obtain their versions before taking any decision. The consumer complaint in its present form was dismissed. At the same time, liberty was given to the respondent/complainant to file a fresh complaint, if he desired to do so, by impleading the other airlines as necessary parties. There was no order as to costs. Had the complainant known, it would have been easy for him to implead Air Canada and Lufthansa as opposite parties in the original complaint. Of course he still has the option to file a fresh case but that will take considerable time and it may turn out to be an indefinite wait for a verdict.

In its order dated 02.02.2018 (WP [0C] 12006/2015 & CM No. 31848/2015 WP [C] 12006/2015 & CM No. 31848/2015), the High Court of Delhi has confirmed that the Civil Aviation Rules provide an immediate relief as compensation to domestic passengers who are denied boarding. DGCA 2010 Rules does not put a cap on the compensation that can be demanded from the airline in cases of overbooking. A passenger has full right to approach civil and consumer courts for relief. Domestic as well as international airlines are responsible for deficiency in service and can be sued in Indian consumer courts.

Earlier, in the case of Air France versus O.P. Srivastava & Others (First Appeal No. 310 of 2008), NCDRC held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency in service on the part of the airline. It directed the premier French national carrier to pay a compensation of Rs 400,000 each to three officials of the Sahara Group on the grounds of causing them inconvenience and harassment by denying boarding on a Paris–Delhi flight in 2002.