Consumer Law in India in 2019

Highlights of the provisions of Consumer Protection Act, 2019:

1. District forum is renamed as District Commission

2. The Opposite Party needs to deposit 50% of the amount ordered by District Commission before filing appeal before State Commission, earlier the ceiling was of maximum of Rs. 25,000/-, which has been removed.

3. The limitation period for filing of appeal to State Commission is increased from 30 days to 45 days, while retaining power to condone the delay.

4. State Commission shall have a minimum of 1 President and 4 Members

5. The original pecuniary jurisdiction of District Commission shall be uptil Rs. 1 Crore, State Commission from 1 Cr – 10 Cr. And NCDRC to be more than Rs. 10 crore

6. Now complainant can also institute the complaint within the territorial jurisdiction of the Commission where the complainant resides or personally works for gain besides what was provided earlier Continue reading “Consumer Law in India in 2019”


Revisional jurisdiction of National Consumer Commission

Dismissal of complaint itself in Revision by Complainant:

Can National Commission dismiss a complaint on a ground which was not raised by the opposite party alone?

Please note that except Limitation Act, no law enjoins a court to reject a claim on its own. In an adversary litigation, objection has to be pleaded by one party and responded by the other party.  Following this principles, the Supreme Court set aside order of National Consumer Dispute Redressal Commission with following observations:

5. At the outset, we may notice that this was not a defence raised by the respondent either before the District Forum or before the State Commission. In fact, the respondent had not even challenged the order of the State Commission. In our view, the National Commission, in a revision petition filed by the complainant praying for increase of compensation and payment of interest, could not have dismissed the petition itself. We, therefore, set aside the order of the National Commission.

Continue reading “Revisional jurisdiction of National Consumer Commission”

Sovereign Immunity in Commercial Matters?

Scope of Sovereign Immunity:

Business or commercial activities carried out by one Country in the territory of another country ordinarily not entitled to plead sovereign immunity.

Principle of sovereign Immunity

There is no agreed principle except this: that each State ought to have proper respect for the dignity and independence of other States. Beyond that principle there is no common ground. It is left to each State to apply the principle in its own way, and each has applied it differently. Some have adopted a rule of absolute immunity which, if carried to its logical extreme, is in danger of becoming an instrument of injustice. Others have adopted a rule of immunity for public acts but not for private acts, which has turned out to be a most elusive test. All admit exceptions. There is no uniform practice. There is no uniform rule. So there is no help there.
Continue reading “Sovereign Immunity in Commercial Matters?”

How to determine pecuniary jurisdiction of Consumer Forum and Commissions

National Commission for Consumer

Inclusion of amount of compensation and interest in the claim:

In 2003 following averment in the Complaint as prayer came up for consideration before a 3 member bench of National Commission:

“It is, therefore, respectfully prayed that the complaint be allowed and the opposite parties be directed to pay the claim to the tune of Rs. 18,33,000/- plus interest @ 18% from the date of claim till its realization. Also the suitable damages caused to the complainant be ordered to be paid to the complainant.”

A three member bench of National Commission concluded:

Bare reading of the prayer made would show that the interest claimed by appellant pertains to the period up to the date of filing complaint, pendente lite and future. Rate and the period for which interest has to be allowed, is within the discretion of State Commission and the stage for exercise of such a discretion would be the time when the complaint is finally disposed of. Thus, the State Commission had acted erroneously in adding to the amount of Rs. 18,33,000/- the interest at the rate of 18% per annum thereon till date of filing of complaint for the purpose of determination of pecuniary jurisdiction before reaching the said stage. Order under appeal, therefore, deserves to be set aside. However, in view of change in pecuniary jurisdiction w.e.f. 15.3.2003, the complaint is now to be dealt with by the District Forum instead of State Commission.

[Source: Shahbad Cooperative Sugar Mills Ltd. vs. National Insuranc Co. Ltd., 2003 (2)CPJ 81 (National Commission)] (3 Bench comprising of K G Member, R Rao, B Taimni)

However in 2016 without referring to the aforesaid case another 3 member bench of National Commission held (in Ambrish Kumar Shukla vs. Ferrus Infrastructure) that compensation and interest shall be included in determining the jurisdiction. It was held:

It is the value of the goods or services, as the case may be, and not the value or cost of removing the deficiency in the service which is to be considered for the purpose of determining the pecuniary jurisdiction.

The interest has to be taken into account for the purpose of determining the pecuniary jurisdiction of a Consumer Forum.

The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint, to determine the pecuniary jurisdiction of a Consumer Forum.

In a complaint instituted under Section 12(1)(c) of the Consumer Protection Act, the pecuniary jurisdiction is to be determined on the basis of aggregate of the value of the goods purchased or the services hired or availed by all the consumers on whose behalf or for whose benefit the complaint is instituted and the total compensation claimed in respect of such consumers.

A complaint under Section 12(1)(c) of the Consumer Protection Act can be instituted only by one or more consumers, as defined in Section 2(1)(d) of the Consumer Protection Act. Therefore, a group of Cooperative societies, Firms, Association or other Society cannot file such a complaint unless such society etc. itself is a consumer as defined in the aforesaid provision.

Ambrish Kumar Shukla vs. Ferrous Infrastructure Pvt. Ltd. decided on 07.10.2016 in CC  97/2016

Conflict of Opinion:

Thus there exists two judgments, both by the National Commission with same number of members and both on one subject, but both at variance inasmuch as the one pronounced earlier (Surjit Singh Jhandwal supra), holds that interest is not to be included in claimed amount while determining pecuniary jurisdiction, while the one pronounced later (Ambrish Shukla supra), holds that the interest has to be included for this purpose.

Even though National Commission is not a court of record, for subordinate Forums and State Commission it is difficult follow the conundrum.

Apparent agency between Doctor and MCO

Relationship between Doctor, MCO and Patient:

The relation of appearance and reality is a fundamental question of philosophy.

Medical negligence by Doctor:

Petitioner Wilhelmina Bradford suffered a significant injury to her foot resulting in its partial amputation because of the negligence of Dr. Steven Bennett, a podiatrist whom she had chosen for her treatment. She was able to see Dr. Bennett because he participated as a specialty care provider in the network of Respondent Jai Medical Systems Managed Care Organization, Inc. (“Jai MCO”), an entity that contracts with physicians, hospitals, pharmacies, and other providers to provide health care services to individuals and families enrolled in the State Medicaid program. Dr. Bennett was not an employee or agent of Jai MCO. But Ms. Bradford sought to hold Jai MCO liable for Dr. Bennett’s negligence on a theory of apparent agency – essentially, that Jai MCO created the appearance that Dr. Bennett was its employee and that she reasonably relied on that appearance.

What is Medical Care Orgnisation (MCO)?

Different organizations are designed to provide health care benefits while containing costs. An MCO’s cost containment policies, and the amount of control the MCO exercises over its members’ health care decisions, may vary according to the type and structure of the MCO. There are many different types of MCOs, the most common being health maintenance organizations (“HMOs”) and preferred provider organizations (“PPOs”).
An HMO typically contains costs by paying a provider a fixed prepaid amount for each member – sometimes referred to as a “capitation” payment – regardless of the services rendered by the provider. It may restrict members to a defined list of providers – sometimes called a “network” – from which the members may seek care financed by the HMO. It may require members to select a primary care provider from that network for basic care, and require that members obtain a referral from that physician for other services such as hospitalization and consultation with specialists. The HMO’s relationship with the physicians who serve its members can take a variety of contractual forms, including direct employment.
Jai MCO was an MCO similar in structure and operation to an HMO. ……Jai MCO does not employ its own health care providers; rather, it enters into contracts with physician groups, pharmacies, hospitals, and others to participate in its network and to provide health care services to its members. The health care providers that participate in its network are not precluded from belonging to other networks. Under Jai MCO’s plan, a member selects a primary care provider – a physician who attends to most of the member’s health care needs – from Jai MCO’s network. If the member needs specialty care, the member accesses those services by obtaining a referral from the primary care provider to one of the more than 3,000 specialists.

Doctrine of Apparent Agency :

Apparent agency is an equitable doctrine, whereby a principal is held responsible for the acts of another because the principal, by its words or conduct, has represented that an agency relationship existed between the apparent principal and its apparent agent.

The doctrine of apparent agency has both subjective and objective elements: a plaintiff must show that the plaintiff subjectively believed that an employment or agency relationship existed between the apparent principal and the apparent agent, and that the plaintiff relied on that belief in seeking medical care from the apparent agent. But the plaintiff must also show that the apparent principal created or contributed to the appearance of the agency relationship and that the plaintiff’s subjective belief was “justifiable” or “reasonable” under the circumstances – an objective test.

Apparent agency between Doctor and MCO:

The doctrine of apparent agency can be expressed in three elements:

1. Did the apparent principal create, or acquiesce in, the appearance that an agency relationship existed?

2. Did the plaintiff believe that an agency relationship existed and rely on that belief in seeking the services of the apparent agent?

3. Were the plaintiff’s belief and reliance reasonable?

Decision of US Supreme Court:

Ms. Bradford testified that she believed that Dr. Bennett was an employee of Jai MCO for two reasons – first, she had previously seen him at Eutaw Medical Center, one of the medical centers operated by Seunarine P.A., and second, she believed that Jai MCO employed the physicians, including Dr. Bennett, who accepted her Jai MCO card – i.e., who were in Jai MCO’s network. Although Jai MCO introduced evidence suggesting that her sighting of Dr. Bennett at the Eutaw Medical Center was inaccurate, a jury could accept her version and reasonably conclude that Ms. Bradford believed that Dr. Bennett was an employee of Jai MCO and relied on that belief in seeking treatment. Thus, she presented sufficient evidence to satisfy the subjective element of apparent agency.

The only representations by Jai MCO concerning its relationship with Dr. Bennett that appear in the record are the listing of Dr. Bennett in the provider directory, the referral forms that permitted Ms. Bradford to see Dr. Bennett through Jai MCO under the Medicaid program, and some general passages concerning providers in the member handbook.  It does not identify any of these providers as an agent or employee of Jai MCO.

Finally, the circumstances of Dr. Bennett’s treatment of Ms. Bradford – which did not involve representations by Jai MCO – did not suggest that the MCO had an agency relationship with the podiatrist. The initial examination of Ms. Bradford’s foot and the post-surgery follow-up visits took place at Dr. Bennett’s private office at Penn North Foot Care. The surgery was performed at Bon Secours Hospital, which is not part of Jai MCO’s network. These there was insufficient evidence to create a question for the jury because Ms. Bradford’s reliance was not justifiable given the actual representations made by Jai MCO concerning its relationship with Dr. Bennett and the other circumstances of this case.
When a court makes reference to “common knowledge” in this context, it is essentially taking judicial notice of decisive facts without supporting its conclusion in the evidentiary record or by reference to any authoritative source. Cf. Maryland Rule 5-201(b) (facts subject to judicial notice). We should do so only when the “common knowledge” is so well accepted that there is no possibility that a person of ordinary intelligence and education would come to a different conclusion. In this regard, it is not clear that the details of health care finance are “common knowledge” even to well-educated members of our society.

[Source: Jai Medical v. Bradford (Maryland Supreme Court USA)]

Critical Analysis of the Jai Medical v. Bradford:

This judgement discloses that if right questions are not raised right answers can not be found. Why principle of apparent agency was invoked in this manner, is not clear. If a patient goes to a doctor for treatment, doctor does charge a fee. It is strange that court did not follow the common sense principle of ‘follow the money’ trail. The simple question was:

Weather the Doctor who operated upon the patient was acting in his personal capacity or on behalf of Jai MCO?

This question could only be answered by showing the trail of money which flowed to the Doctor. Who paid the Doctor? If the patient paid then it was personal contract between the Doctor and Patient but if Jai Medical paid the Doctor then obviously the Doctor was acting as an agent of Jai Medical. However the judges did not ask right question and justice was denied to a poor widow who was also saddled with cost.

Needless to add, the evidence of payment between Jai Medial and Dr. Bennett was a fact which was in personal knowledge of these two parties and plaintiff can not be saddled with burden of proving such fact. If these parties did not come clear of this fact, court should have drawn an adverse inference in terms of Morris v. Union Pacific R. R., 373 F.3d 896, 900 (8th Cir.2004).

Further if the right questions were not asked in the trial, the Supreme Court should have remanded the case for rehearing rather than jumping to a conclusion on question which obtruded the real issue.


Summary suit for post paid mobile phone bill.

Summary suit filed on the basis of phone bill:

Itemized phone bill or printout:

The itemized computer generated hard copy is nothing but a human/readable averment of electronic document or data. The validity of computer record has to be decided from various angels and processing at every stage. The human interference or manual feeding or input of data just cannot be overlooked. The computer is nothing but a creation of human intellectual. The computer programme that generates the record/document without further manual or human interference like mathematical calculations, like processing itemized bill. Unless specifically challenged and disputed, the documents so generated just cannot be overlooked, and need to be treated as correct and genuine and unless proved contrary by bringing material on record. “The computer” of the Plaintiff cannot be stated to be a “Personal Computer”, as, the use of mobile services, national or international, have been recorded automatically at various stages. The printouts are nothing but hard copy from the Manstream computer, based upon the data. There is no challenge to the Plaintiff’s computer system. It is well recognized and convenient mode of recording data and the material for further mathematical calculation based upon the agreed terms and tariff plan. There is no further material or evidence and/or even averments to challenge such permissible recording mode of service based upon the actual use by the Defendant. The vague challenge is only of tariff rate. In the present case, in view of the binding agreement and the conditions, the defence of no knowledge of rate is apparently afterthought, sham, bogus and unacceptable.

Itemized bills/ printouts are authenticated documents and reliable to accept the case of the Plaintiff with regard to the usage of Mobile services by the Plaintiff and the mathematical calculation of the charges so derived at, based upon the agreed tariff plan, as per the binding contract. This falls within the concept of the acknowledgment or receipt of liability and data. The Summary Suit as filed, therefore, maintainable and so also the Summons for Judgment.

Possibility of computer fraud:

The computer is invention of human being. The risk and danger of such system cannot be denied. The possibility of defaults in softwares and hardwares is always there. So also because of in carrying out resources apart from manual possible interference in the computer system and data like other system the computer is also suffers because of internal as well as outer problems and vireses. I am inclined to observe that the computer evidence is not infallible. If the case is made out of manipulation, interpolation and corruption in reproduction and if the party able to show the computer defaults or failures in any part of technical or organizational characters and of related aspect of any stage from the manual feeding upto the production of physical record or document and even the defaults and mistakes in mathematical and calculation, then it needs to be decided taking into consideration its cumulative effect on ultimate printouts/ documents from such computer.

When there is no challenge to the Plaintiff’s computer equipment, program, government policies, procedure for use of the equipment, data based and reproduction of its hard copy through printout bills.

Vague assertions:

The aspect of TRAI rules and regulations on such service provider and the governing law also a relevant factor to accept the case of the Plaintiff. There is nothing on record to challenge that the Plaintiff has used unstandard equipment and entries or the input though to some extent and/or some stage human related, was not in the regular course of business. There is nothing to show that such printout or procedure is impermissible as wrong method or mechanism have been used to generate printouts or itemized bills. Mere allegations of challenge to the authenticity and the calculation for want of knowledge about the direct plan is not sufficient to treat untrustworthy and unreliable. There is no challenge to the authenticity, integrity and reliability of the modes, stature, control and proceedings of the form of transmission of the data. 26 There is no serious dispute with regard to the itemized bill and the way and the procedure by which it is generated, as it is within the purview and ambit and as per the provisions of law and directions of TRAI. As per the agreement, the Defendant is bound to pay for services rendered by the Plaintiff on billing statement as raised. The Suit so filed therefore, is based upon the contract between the parties. Itemized bill therefore, in my view need to be considered as acceptance of liability and/or acknowledgment of the amount due and payable as elaborated in the Full Bench Judgment of this Court Jyotsna K. Valia Vs. T.S. Parekh & Co., 2007(4) Mh.L.J. 517.

Compliance of section 65-B of Evidence Act not required?:

In view of the above undisputed position on record, with regard to the computerised bills and as the plaintiff has not filed supporting affidavit as required under Section 65-B of the Evidence Act, still I am inclined to rely upon those computerised printouts which are admissible and as permissible to treat as supporting documents to pass and/or grant summons for judgment as prayed.

[Source: Vodafone Essar Ltd vs Raju Sud, (Bom). (per Anoop V.Mohta, J.)]

Thus a post paid mobile phone bill is a contract and summery suit on the basis of mobile phone bill is maintainable.

Note: The above decision appears to be a result of rather desperate reasoning. It simply ignores the principle of burden of proof. Not only the principle but also waives the procedure of proof of computer generated printouts which is laid down in section 65-B of Evidence Act.