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Supreme Court Decisions on Consumer Cases
Listed below are landmark supreme court judgments on consumer laws each has
been discussed in details:
# New India Assurance Company Limited v Abhilash Jewellery
# Karnataka Power Transmission Corporation v Ashok Iron Works Private Limited
# HDFC Bank Limited v Balwinder Singh
# Malka Tarannum v Dr. C. P. Gupta
# Arvind Shah (Dr.) v Kamlaben Kushwaha
# Sehgal School of Competition v Dalbir Singh
# Life Insurance Corporation of India v Gowramm
# Narinder Kumar Suneja v R.K. Goel
# Rajasthan Financial Corporation v M.K. Bhoot and Another
# K. A. Bhandula and Another v Indraprastha Apollo Hospital and Others

New India Assurance Company Limited v Abhilash Jewellery [III (2009)

CPJ 2 (SC)]
Date of Decision: 22.01.2009
The complainant/respondent, who had taken a jeweller's block policy, lodged a
claim with the opposite party insurer for loss of gold ornaments. The insurer
repudiated the claim on the ground that the loss occurred when the gold was in the
custody of an apprentice, who was not an employee (because the policy stipulated
that for indemnification of the loss, the property insured had to be "in the custody
of the insured, his partner or his employee"). The National Commission allowed the
complaint holding that an apprentice was an 'employee' since section 2(6) of the
Kerala Shops and Commercial Establishments Act (as well as some other statutes)
defined an 'employee' to include an 'apprentice'. The Supreme Court, however, held
that the word 'employee' in the contract of insurance mentioned had to be given
the meaning in common parlance. The definition in the local Act, including an
'apprentice' in the category of 'employee', was only a 'legal fiction', which is a
concept in law and could not be applied to an insurance contract. The Court,
therefore, allowed the appeal.

Karnataka Power Transmission Corporation v Ashok Iron Works

Private Limited [III (2009) CPJ 5 SC]
Date of Decision: 09.02.2009
The appellant corporation contended that the complaint filed by the respondent
The appellant corporation contended that the complaint filed by the respondent
was not maintainable as (i) a company is not a 'person' under section 2(1)(m) of the
Consumer Protection Act, 1986 (CPA); (ii) the complainant is not a 'consumer' within
section 2(1)(d) of the said Act since it purchased electricity for commercial
production; and (iii) disputes relating to sale and supply of electricity were not
covered under 'service' under section 2(1)(o) of the CPA. The Apex Court rejected the
appellant's contention that a company was excluded from the definition of 'person'.
In this, the Court relied upon the English Court decision in Dilworth v Commissioner
of Stamps [(1899) AC 99] and its own in Reserve Bank of India v Peerless General
Finance and Investment Company Limited. and Others [(1987) 1 SCC 424] and
reiterated that the use of the word 'includes' in a statute often showed the intention
of the Legislature to give an extensive and enlarged meaning to such expressions
though sometimes, the context might suggest that 'includes' was designed to mean
'means.' The setting, context and object of an enactment might provide sufficient
guidance for interpretation. The Court also referred to section 3(42) of General
Clauses Act which defines a 'person' to include a company, etc., and went on to
observe that out of the four categories mentioned in section 2(1)(m) of the CPA, the
third i.e., co-operative society was corporate, which showed that the Legislature
intended to include bodies corporate as well as incorporate.

Thus, the definition of 'person' was inclusive and not exhaustive. When so
construed, 'any person' mentioned in the definition of 'consumer' in section 2(1)(d)
would include a company. On the appellant's second contention, the Court held
that the amendment to the CPA effective from 15 March 2003, excluding services
availed of for commercial purposes, was not applicable to this case since the
controversy related to a prior period. In respect of the appellant's third contention,
the Court held that supply of electricity by the corporation to a consumer was not
sale of goods within section 2(1)(d) of the CPA. For this, the Court relied upon its
decision in Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector and
ETIO and Others [(2007) 5 SCC 447], in which the Court had held that 'supply' of
electricity did not mean 'sale' thereof and a case of supply of electricity was covered
under section 2(1)(d)(ii) (i.e., hiring or availing of any service) as 'service' under
section 2(1)(o) meant service of any description including the provision of facilities
in connection with supply of electrical or other energy. Therefore, a case of
deficiency in service would fall under section 2(1)(g). The Court rejected the
appellant's contention that 'service' in section 2(1)(o) was limited to providing
facilities in connection with electricity.

HDFC Bank Limited v Balwinder Singh [III (2009) CPJ 40 (NC)]

Date of Decision: 16.03.2009
The complaint was of the bank, or its loan recovery agent, employing musclemen to
take forcible repossession of the hypothecated vehicle and thus causing physical
harassment and mental trauma to the complainant. The District Forum allowed the
complaint and directed the bank to pay compensation of Rs. 4 lakh for repossessing
the vehicle in this manner and reselling it to a third party. The State Commission
confirmed the order in appeal. Dealing with the bank's revision petition, the
National Commission expressed shock that the bank had hired musclemen directly
or through its recovery agents to recover the loan/repossess the vehicle. The
Commission also referred to the State Commission's order, which had observed that
the alleged letter produced by the bank purporting to the complainant voluntarily
handing over possession of the vehicle was unreliable and that no notice was given
to the complainant at the stages of repossession and sale of vehicle. In dismissing
the petition, the Commission relied upon its judgment in Citicorp Maruti Finance
Limited v S. Vijayalaxmi [III (2007) CPJ 161 (NC)] where it had strongly deprecated
 j y [ ( ) J ( )] gy p
such practices. The Commission dismissed the petition and awarded Rs.
25,000/- as exemplary costs in this case.

Malka Tarannum v Dr. C. P. Gupta [III (2009) CPJ 49 (NC)]

Date of Decision: 20.04.2009
The District Forum allowed the complaint of the complainant that there was
negligence in applying (the first) plaster cast on the complainant's daughter's
fractured hand, which led to the need to apply the plaster for the second time. In
appeal, the State Commission dismissed the complaint and also held that the
complainant was not a consumer since he was not charged any fee for the
treatment. In revision, the National Commission held that application of the plaster
for the second time did not imply medical negligence on the first occasion since
application of POP slab (also known as temporary cast) was a normal procedure
adopted in the first instance whenever there was swelling at the site of the injury.
Relying on the Supreme Court decision in Jacob Mathew v State of Punjab and
Another [(2005) 6 SCC 1], the Commission observed that the doctor who had applied
the plaster in the first instance was a senior orthopaedic specialist with
considerable experience and the complainant could not dispute his professional
decision on the basis of mere allegations, without any expert evidence. The
Commission also rejected the complainant's husband's contention that he was a
consumer since he was covered by the Supreme Court decision in Laxman
Thamappa Kotgiri v G.M., Central Railway and Others and that receiving free
medical treatment was part of the terms and conditions of his service. It held that
the complainant took no such plea before the Fora below and no evidence was
produced.

Arvind Shah (Dr.) v Kamlaben Kushwaha [III (2009) CPJ 121]

Date of Decision: 30.04.2009
The complainant alleged that her deceased son, aged 20 years and otherwise
healthy, died as a result of medical negligence on the part of the appellant doctor
(original opposite party) who administered wrong treatment. The State Commission
awarded to the complainant a compensation of Rs. 5 lakh with interest and costs. In
appeal, the National Commission, on consideration of the material on record, came
to the conclusion that the two medical prescriptions, which the doctor sought to
deny, could have been written only by him. It also observed that though, in the
appeal, the doctor admitted for the first time to having treated the patient; he did
not produce any prescription on record. More important, the two prescriptions
available on record did not mention any of the patient's complaints/symptoms, the
doctor's clinical observations on examining the patient or his diagnosis of the
ailment. Even the ordinary vital parameters like temperature, blood pressure, pulse
rate, etc., were not noted. The Commission observed that the Medical Council of
India or the State Medical Council, with one of which the doctor had to be
registered to practice modern (allopathic) medicine, required, through their
respective codes of ethics/guidelines/ regulations, to make some minimal record
even for outpatients.

Such a record would ordinarily include a summary of the history of illness and
current complaints/symptoms of the patient and clinical observations of the doctor.
If the doctor considered none of the above as essential, he would need to at least
record a provisional diagnosis of the patient's ailment in the prescription while
advising further diagnostic test(s) or treatment (medicines/injections). This was one
of the primary duties of disclosure owed by a physician of ordinary skills to his
of the primary duties of disclosure owed by a physician of ordinary skills to his
patient. The Commission held that in line with the Apex Court's decision in Samira
Kohli v Dr. Prabha Manchanda [I (2008) CPJ 56 (SC)] regarding need for valid prior
consent of the patient for his treatment by a doctor and the doctor's corresponding
duty of disclosure, it was essential for the doctor to write a prescription with such
necessary details and failure to do so would constitute medical negligence. The
Commission further observed that if a patient found that the doctor's treatment did
not help ease his felt problem and wanted to consult another, a prescription with
such details would be necessary. On the other hand, a prescription meeting these
basic requirements would also assist a doctor in demonstrating that he had treated
his patient with due care, if charged with a wrong/false allegation of negligence by
the patient. While returning a finding of medical negligence against the doctor, the
Commission found that the material on record case was insufficient to attribute the
patient's death directly and wholly to the doctor's negligence. Accordingly, it scaled
down the compensation to Rs. 2.5 lakh along with interest.

Sehgal School of Competition v Dalbir Singh [III (2009) CPJ 33 (NC)]

Date of Decision: 30.04.2009
The complainant sought refund from the opposite party's coaching school after only
one year of the two-year course on the ground that the coaching was not up to the
mark. The District Forum directed refund of the fees and the opposite party's
appeal was dismissed. In revision, the petitioner contended that payment of lump
sum fees for two years was a condition (of the contract) that and no part of the fees
could either be refunded or transferred under any circumstances. The Commission
held that this condition was one sided and biased in favour of the opposite party,
against natural justice and not a fair trade practice. The Commission also rejected
the opposite party's plea that in Homeopathic Medical College and Hospital,
Chandigarh v Miss Gunita Virk [I (1996) CPJ 37 (NC)] it was held that Consumer Fora
did not have jurisdiction to declare any rule in the prospectus of any institution as
unconscionable or illegal. Referring to its recent decision in Nipun Nagar v.
Symbiosis Institute of International Business [I (2009) CPJ 3 (NC)], it observed that
the Commission had held that (under certain circumstances) it was unjust to collect
fees for the total period of the course and dismissed the petition.

Medical Superintendent, St. Gregorious Mission Hospital v Jessy and

Another [III (2009) CPJ 61 (NC)]
Date of Decision: 04.05.2009
The District Forum awarded Rs. 2.75 lakh along with interest to the complainants,
viz., the wife and daughter of the deceased since the opposite party hospital had
been negligent in not providing due care on account whereof the deceased who
was undergoing alcoholic psychosis treatment for de-addiction of drugs, had
committed suicide by hanging in the hospital. In its revision petition, the hospital
contended that it was impossible to provide 24-hour service to look after the affairs
and needs of each patient. The National Commission held that the patient was
allowed to move away on his own from his ward into an empty ward without being
noticed by the nurses and ward boys. The patient hung himself with lungi which
was not noticed by the staff but the co- patients. As per the hospital's own
evaluation, the hospital staff should have taken extra care to deal with such a
patient but the required degree of care was not exhibited. The Commission relied
upon the Supreme Court judgment in M.S. Grewal v Deep Chand Sood [II (2001)
ACC 540 (SC)] and held there was negligence. Relying upon cross-examination of the
Medical Superintendent, the Commission held that the complainant wife was not
instructed to be continuously with her husband as alleged and that the instruction
instructed to be continuously with her husband as alleged and that the instruction
in the Nurses Daily Record, being in a different ink, was a manipulation.

Life Insurance Corporation of India v Gowramm [III (2009) CPJ 25 (NC)]

Date of Decision: 11.05.2009
The petitioner insurer repudiated the life insurance policy in the name of the
respondent's late husband (insured) on the ground of deliberate misstatements
and withholding of correct facts regarding the health of the insured. The lower Fora
rejected the various contentions of the insurer and allowed the complaint. Before
the National Commission, the insurer relied upon the Commission's decision in
L.I.C. of India and Another v Parveen Dhingra [II (2003) CPJ 70 (NC)] and contended
that revival of the policy constituted a new contract between the parties and the
limitation period of two years under section 45 of the Life Insurance Act, 1938 had
to be counted from the date of revival. Therefore, the misstatements and
concealment of facts could be made a ground for repudiation even though same
were not made a ground at the time of initial policy. The Commission referred to
the Supreme Court decision in Mithoolal Nayak v Life Insurance Corporation of
India [AIR 1962 SC 814] where the Court had rejected a similar contention that the
revival of the policy constituted a new contract between the parties and held that
section 45 was clear that the period of two years was to be reckoned from the date
on which the policy was originally effected. The Commission observed that the
decision of Supreme Court had to be preferred and followed.

Narinder Kumar Suneja v R.K. Goel [III (2009) CPJ 35 (NC)]

Date of Decision: 14.05.2009
In revision, the petitioner who was a lawyer claimed that he was entitled to retain
the fee which he took from the respondent since the respondent had executed the
power of attorney/vakalatnama and handed over some papers to the petitioner in
connection with a proposed case to be filed. He claimed having wasted valuable
time when the respondent met and sought expert advice. The National Commission
referred to the order of the State Commission which, in turn, referred to the District
Forum's order holding that the opposite party (petitioner) was not entitled to retain
the fee when he did not perform the duty for which the fee was meant and that a
complaint made by the complainant to the Bar Council related only to misconduct
on the part of its member (i.e., petitioner) whereas the Consumer Fora were
required to determine whether proper service had been rendered or not. The
Commission relied upon D.K. Gandhi v M. Mathias [III (2007) CPJ 337 (NC)] in
holding that deficiency in service by lawyers was covered under the CPA.
Rajasthan Financial Corporation v M.K. Bhoot and Another [III (2009)
CPJ 10 (NC)]
Date of Decision: 18.05.2009
The complainant/respondent participated in an auction conducted by the petitioner
for moveable and immoveable properties. The complainant deposited the requisite
sum/earnest money at the time of making his bid, which bid was then accepted.
Due to non-payment of 25% of the bid amount, the sum/earnest money was
forfeited. The District Forum dismissed the complaint for refund of the earnest
money but the State Commission allowed the appeal. The National Commission
allowed the revision petition holding that no consumer dispute under the CPA could
arise out of a relationship of seller and purchaser in an auction as there was no
arrangement of hiring of services for consideration. The Commission followed a
three member bench decision in Panjim Planning and Development Authority v
Mrs. Rashmi A. Sisat and Others [R.P. No. 258/1992 decided on 10.1.1994 (1986-95
Consumer Vol. 1 pp 8-9] and a four-member bench decision in Tamil Nadu Housing
Board v R. Sivasubramaniyan [1989 Consumer 3587 (NS)] which were cases of
sale/allotment of plots in public auction.

K. A. Bhandula and Another v Indraprastha Apollo Hospital and

Others [III (2009) CPJ 164 (NC)]
Date of Decision: 09.07.2009
Complainant no. 1 (a patient of nasopharyngeal cancer) made various allegations of
medical negligence against the opposite party hospital and consultant doctor. The
National Commission partly allowed the complaint holding first that the hospital
was negligent in not duly preserving the biopsy tissue sample (in formalin) after the
opposite party consultant doctor carried out the biopsy of the nasal tumour of the
complainant. It rejected the hospital's plea of mere 'human error.' In this the
Commission relied on the Supreme Court decision in Savita Garg v. Director,
National Heart Institute [IV (2004) CPJ 40 (SC)]. On the basis of the medical record,
the Commission also held that the consultant doctor had concealed from the
complainant that the aforesaid biopsy had gone awry and pretended that he had
seen the biopsy report and found it in order. Further, the consultant doctor failed to
advise the complainant to undergo a repeat biopsy at the earliest and instead
recorded that there was no evidence of recurrence (of the disease). There was delay
in conducting the second biopsy which led to delay in starting proper treatment
while the cancer progressed. It also found that the consultant doctor had
manipulated the medical records. On its suo motu review of medical literature, the
Commission found that the surgery finally recommended by the opposite party
doctor (consultant) was 'craniofacial resection'. According to the medical literature,
this was a very complex surgery, warranting removal of parts of the base of the skull
and upper parts of the eye sockets and consequent changes in the looks of the
patient.

On the basis of this literature review, the Commission observed that prima facie
this surgery was (perhaps) not called for in the present case, as the surgery actually
performed on the complainant by a specialist surgeon at a Mumbai hospital
established. However, the Commission noted that while the complainant alleged
medical negligence against the consultant doctor in this regard and the latter
vehemently disputed the allegation, neither side produced any medical literature in
support of their respective contentions. Relying on the Apex Court decision in Jacob
Mathew v State of Punjab and Another [III (2005) CPJ 9 (SC)] the Commission thus
 Mathew v State of Punjab and Another [III (2005) CPJ 9 (SC)], the Commission thus
held that to bring home the allegation, it was necessary for the complainant to cite
medical opinion of a cancer specialist in the relevant speciality and in the absence
thereof, benefit had to be given to the doctor. However, applying the ratio of the
Apex Court judgment in Samira Kohli v Dr. Prabha Manchanda and Another [I
(2008) CPJ 56 (SC)], the Commission held that the other allegation that the
consultant doctor did not apply due standards of care expected of a surgeon of
ordinary skills in apprising the complainant fully of the most probable implications
of the recommended surgery (craniofacial resection) and the available alternatives,
was established. Accordingly, the Commission awarded a compensation of Rs. 1
lakh against the hospital and Rs. 2 lakh against the doctor.

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Is the Highest court of appeal in matters related to Consumer Disputes in India, the
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