Category: Consumer Law and Cases

Reply to plaint must be filed in 45 days

The Consumer Protection Act stipulates that a party against whom a complaint is made must file its reply within 30 days of receipt of the notice, or within an extended period not exceeding 15 days. As there were conflicting judgments about this clause being mandatory or directory, it was referred to a Constitution Bench of the Supreme Court.

The court considered the objects and reasons for enacting the Consumer Protection Act, which mention the Act was for providing speedy and simple redressal for consumer disputes by setting up a quasi-judicial mechanism for better protection of consumers. It also considered the provisions of the Act which stipulate that the complaint would have to be decided ex parte if no reply is filed to contest it.

The court noted that the legislative intent was to get the dispute expeditiously resolved, by proceeding ex parte if no reply was filed. Also,

Regulation 10 of the Consumer Protection Regulations provides for grant of shorter period to file a reply, while there is no provision for grant of additional time.

The court observed the legislature had vested the consumer fora with the discretionary power to accept appeals filed beyond the limitation period; however, for replies to a complaint, discretion was limited to an extension of 15 days only. So a proceeding could not be challenged simply because adhering to the statutory period may cause hardship or might violate the principles of natural justice.

The SC also observed that legal provisions have to be strictly followed to achieve the objective of speedy and simple justice. It pointed out that it was well settled that law would prevail over equity. So the court concluded that the provision of the CPA was mandatory, and the fora could not grant any extension beyond 15 days.

The court observed that the law provided that the starting point for computing the period to file the reply as the date when notice was received by the party. Since it would not be possible to file a reply unless the complaint is served along with the notice, the court held that the date of notice must be interpreted to mean the date of service of notice along with a copy of the complaint. Any grievance about non-receipt of the complaint with the notice must be raised on the very first date, and not thereafter.

By its order of March 4, the Supreme Court held it was mandatory to file a reply within 45 days (30 + 15 days extension), after which the complaint would be proceeded ex parte.

Jehangir B Gai
ePaper, The Times of India, Bombay, March 09, 2020, Page 6:
https://www.pressreader.com/india/the-times-of-india-mumbai-edition/20200309/281840055724933 

(The author is a consumer activist and has won the Govt.of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist@outlook.in)

The ‘landmark’ Calcutta Club verdict changes GST norms for clubs

The Supreme Court has said that service tax need not be charged by clubs for services to its members. The same should hold true for the GST, which replaced service tax

Under tax laws, every now and then, a decision is delivered which gets the “landmark” prefix. Names such as BC Srinivasa Shetty, Bacha F Guzdar and the Azadi Bachao Andolan became familiar because of landmark judgments. The features of landmark decisions are that they resolve an issue in a critical area of the law which has been litigated for ages, are decisive judgments and are invariably given by the Supreme Court.

Recently, the Supreme Court pronounced a landmark judgment under service tax laws in the Calcutta Club case. The decision was that clubs are not entitled to charge, collect and pay service tax on any services made to members. The rationale for the decision was that if there are no members, there is no club and vice-versa. A few years earlier, the Jharkhand High Court gave a similar ruling in a case involving the Ranchi Club.

The Supreme Court followed its earlier decision on the same topic in the case of CTO versus Young Men’s Indian Association, (1970) 1 SCC 462. The necessity for the Supreme Court to rule on this matter arose because of the insertion of Clause (e) in Article 366 (29-A) in the Constitution of India through the 46th Amendment. This clause stated that tax on purchase or sale of goods includes a tax on the supply of goods by any unincorporated association or body of persons to a member for cash, deferred payment or another valuable consideration.

The Supreme Court needed to decide whether the doctrine of mutuality has been done away with by Article 366 (29-A) (e), and whether the ratio of Young Men’s Indian Association would continue to operate even after the 46th Amendment.

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Rules to be notified under the Consumer Protection Act, 2019- comments from Stakeholders on the draft rules

Government of India

Ministry of Consumer Affairs, Food & Public Distribution

(Department of Consumer Affairs)

Krishi Bhawan, New Delhi

The 11th November, 2019

Subject: Rules to be notified under the Consumer Protection Act, 2019- comments from Stakeholders on the draft rules-reg.

The Consumer Protection Act, 2019 was published in the official gazette on 09th August, 2019 for general information. Rules on various topics are required to be notified under the new Act. The Department now proposes to notify the following rules under the Act, the drafts of which are available at the given link:-

Sl. No. Title View / Download
1. Consumer Protection (Central Consumer Protection Council) Rules, 2019  Download
2. Central Consumer Protection Authority (Selection and Term of Office of Chief Commissioner and other Commissioners) Rules, 2019  Download
3. Consumer Protection ( Consumer Disputes Redressal Commissions) Rules, 2019  Download
4. Consumer Protection (Mediation) Rules, 2019  Download
5. Consumer Protection (e-Commerce) Rules , 2019 Download
6. Consumer Protection (Direct Selling) Rules, 2019 Download
7. Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of  office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2019 Download
8. Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and DistrictCommission) Model Rules, 2019 Download

Views/comments/suggestions are invited from the stakeholders on the above mentioned draft Rules latest by 02nd December, 2019.The views/comments/suggestions may be sent by email on dscpu-ca[at]nic[dot]in or to Deputy Secretary (CPU), Department of Consumer Affairs, Room No. 461, Krishi Bhawan, New Delhi-110001.

(G.C. Rout)

Deputy Secretary to the Govt. of India

Telefax: 011-23389936
Email: dscpu-ca[at]nic[dot]in

 

https://consumeraffairs.nic.in/draft-rule

Consumer Protection Act 2019: Enhancing Consumer Rights

The 2019 Consumer Protection Act brings about fundamental changes to the existing 1986 legislation. But it also envisages a Central Consumer Protection Authority and vests too much power and control in this authority without proposing adequate administrative safeguards.

Mid-August, the Consumer Protection Act, 2019 (2019 Act) received Presidential assent and came into effect. Notably, the 2019 Act, repeals the previous consumer protection legislation which had been in effect since 1986 (1986 Act). This prior legislation had been amended from time-to-time to bring it in accordance with changes brought about by economic liberalisation, globalisation of markets and digitalisation of products and services. However, its practical implementation was far from fulfilling its desired objective of being a socio-economic legislation which sought “to provide for better protection of the interests of consumers.” While using the same phrase in its preamble, the 2019 Act, has substantially enhanced the scope of protection afforded to consumers, by bringing within its purview advertising claims, endorsements and product liability, all of which play a fundamental role in altering consumer behavior and retail trends in the 21st century.

New Additions

The definition of “consumer” under the 2019 Act includes those who make purchases online. Endorsement of goods and services, normally done by celebrities, are also covered within the ambit of the 2019 Act. In fact, an additional onus has been placed on endorsers, apart from manufacturers and service providers, to prevent false or misleading advertisements. In contrast to the 1986 Act, the definition of “goods” has been amended to include “food” as defined in the Food Safety and Standards Act, 2006. This would also bring the meteorically rising number of food delivery platforms within the fold of the 2019 Act.

Interestingly, “telecom” has been added to the definition of “services” to bring telecom service providers within the purview of the 2019 Act. But surprisingly, such inclusion has not been worded as “telecommunication service” defined under the Telecom Regulatory Authority of India Act, which would have included internet, cellular and data services.

A significant addition to the 2019 Act is the introduction of “product liability” whereby manufacturers and sellers of products or services have been made responsible to compensate for any harm caused to a consumer by defective products, manufactured or sold, or for deficiency in services. Another newly introduced concept is that of “unfair contracts” aimed to protect consumers from unilaterally skewed and unreasonable contracts which lean in favour of manufacturers or service providers.

The definition of “unfair trade practices” has been enlarged to include electronic advertising which is misleading, as well as refusing to take back or withdraw defective goods, or to withdraw or discontinue deficient services, and to refund the consideration within the period stipulated or in the absence of such stipulation, within a period of thirty days. It is now also an offence if any personal information, given in confidence and gathered in the course of a transaction, gets disclosed.

All these changes signify an attempt to create more transparency in the marketplace, through legislative protection, with a view to ensure that consumer interests are above all else.

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Bank transfers ₹48k to wrong account, held guilty for ‘careless’ transaction

Holding Canara Bank guilty of carrying out a careless real-time gross settlement (RTGS) transfer through which Rs. 48,000 was sent to the wrong account, the state consumer commission recently said it cannot solely depend on the account number and transfer amounts without cross-checking names of the beneficiary, branch and city where the branch is.

Pradeep Tripathi, from Parel, found that the money he wanted transferred to the account of a business supplier in Chandigarh was sent to the account of an unknown person in Hyderabad. The bank was recently ordered to refund the amount along with a compensation of around Rs32,000.

A district forum had ruled in Tripathi’s favour in June 2018. But the bank moved an appeal before Maharashtra State Consumer Disputes Redressal Commission.

The commission upheld the district forum order. “The forum rightly held that the correct account number was written by the complainant (Tripathi) on the RTGS transfer slip but opponent (Canara Bank) did not verify before making the transfer and had done it carelessly, and transferred the amount to a different account. The forum correctly held that the complainant was not responsible for the mistake by the bank and it was guilty and responsible for the deficiency in service,” the state commission said.

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Tripathi told the commission that after he realised his money was wrongly transferred, he informed the bank, and told it to credit the amount back in his account, but it was not done. Tripathi said he moved the district forum in 2015 after his efforts for a favourable solution from the banking ombudsman failed.

The bank claimed Tripathi provided the wrong account number, which was clear from the RTGS slip. But the state commission said it had gone through the main copy of the slip and found that the number ‘6’ in the account number seemed to have been corrected as ‘8’ by overwriting. It observed that there was no initial or authentication for the correction.


“In normal case, the bank never accepts such overwriting without any initial or authentication. Therefore, the overwriting or correction is done subsequently, and not by the complainant,” the commission said.

It said this was obvious from the acknowledgement slip given to Tripathi with the bank stamp and seal, which showed the wrong account number without any correction or overwriting.

Patient can seek refund if clinic is shifted

Chain clinics usually open branches throughout the city on premises taken on lease. If a clinic is shifted, can the patient be compelled to continue treatment at another branch or would the patient have the right to demand a refund? This unique case was recently decided by the Maharashtra State Commission.
 
Metropolis Healthcare Ltd, having its main office at Worli, had set up a chain of clinics. In 2011, Aziz Ahmed Jadwet took his children Maryam and Kauser to the Mantralaya centre for orthodontic treatment.
 
After consulting Dr. Neesu, Jadwet was advised to deposit Rs 41,000 for Maryam and Rs 36,000 for Kauser, which he did.
 
Meanwhile, the Mantralaya centre shut down. On making inquiries, Aziz was told Dr Neesu would treat the children at the Goregaon centre. Since this was inconvenient, Aziz sought a refund, but his request was rejected.
 
Aziz filed a complaint before the Central Mumbai District Forum, which held Metropolis guilty of deficiency in service and ordered it to refund the deposit along with 9% interest from November 24, 2015 onward along with Rs 10,000 compensation and Rs 10,000 litigation costs.
 
Metropolis appealed against this order. Jadwet, who appeared in person, argued the distance between the two centres was about 35 km, and it would be inconvenient for his school going children to travel to Goregaon. The Maharashtra State Commission concurred with Jadwet. It agreed with the District Forum’s view that the failure to refund money constituted a deficiency in service.
 
By its order (March 5), delivered by justice A P Bhangale along with Dr. S K Kakade, the State Commission upheld the Forum’s order and dismissed the appeal with further Rs 5,000 cost payable by Metropolis to Jadwet Impact:A patient cannot be compelled to travel long distances to a clinic. If the change in location is inconvenient, a demand for refund is justified.
 
Jehangir B Gai
ePaper, The Times of India, Bombay, Monday, April 8, 2019, Page 8:
(The author is a consumer activist and has won the Govt. of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist  @outlook.in )