Top 7 Consumer Protection Act Cases

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With the growing frauds on the part of sellers whether it’s substandard quality of products/services or misleading advertisements, it is really important that the customers must be aware about their rights and responsibilities. Consumer Protection Act aims to provide speedy relief to such breach of trust or negligence. , Following are ten important cases that hold relevance in case of consumer disputes:

1. Manjeet Singh Vs. National Insurance Company Ltd. & Anr: In this case, the appellant had purchased a second - hand truck under a Hire Purchase agreement. The vehicle was insured by the respondent insurance company. One day when he was driving the truck, a passenger asked him to stop the truck and give him a lift. When he stopped the truck, the passenger brutally assaulted the driver and fled with the vehicle. An FIR was lodged and the respondent finance company was intimated about the theft. However, the insurance company rejected the claim on the ground of breach of terms of the policy. The complainant approached District Consumer Disputes Forum, State Commission and National Commission to compensate him for the loss. All of them had rejected the case. So, finally he approached the Supreme Court.

Judgment: The Supreme Court held that the appellant was not at all in fault. It can be considered as a breach of the policy, but not a fundamental breach to bring the insurance policy to an end and terminate the insurance policy. The two - judge bench of Supreme Court directed the respondent insurance company to pay 75% of the insured amount along with 9% interest p.a. from the date of filing the claim. The court also directed the insurance company to pay sum of Rs. 1, 00, 000 as compensation.

2.  National Insurance Company Ltd. Vs. Hindustan Safety Glass Works Ltd. & Anr.

In this case, the insurance company had refused to compensate the respondent because of damage caused due to heavy rain during a mentioned period. The Insurance Company admittedly denied relief to the insured on the basis of one of the conditions of the policy which stated that National Insurance would not be liable for any loss or damage 12 months after the event of the loss or damage to the insured.  The insured filed a complaint with the National Commission under the provisions of the Consumer Protection Act, 1986.

Judgment: The National Commission held that the claim made by the insured is actionable. It also observed that the goods were insured at the time of incident and he asked for the claim next day. It rejected all the contentions urged by National Insurance and ordered the insurance company to award an amount of Rs. 21, 05,803.89 with interest at 9% per annum.

3. Karnataka Power Transmission Corporation (KPTC) Vs. Ashok Iron Works Private Limited

Ashok Iron Works, a private company which manufactures iron had applied for obtaining electricity from the state’s power generation company - the Karnataka Power Transmission Corporation (hereinafter KTPC) for commencing its iron production. Inspite of paying charges and obtaining confirmation for the supply of 1500 KVA energy in February 1991, the actual supply did not begin until ten months later, in November 1991.  This delay incurred a huge loss for Ashok Iron Works. This company had filed a complaint to the Belgaum Consumer Dispute Forum and later Karnataka High Court. The legal argument by KTPC was that the complaint was not maintainable as the consumer Protection Act 1986 excludes commercial supply of goods. It also made an argument that the company in engaged in manufacturing iron and intended to use it for commercial consumption which is excluded under the Act.  He also said that, the complainant is not a `person’ under Section 2(1)(m) of the Act, 1986.

Judgment: In this case, Supreme Court gave his rulings. The Supreme Court mentioned the General Clause Act that includes a private company within the purview of the definition of a “Person.” It was also held that the supply of electricity by the KPTC to a consumer would be covered under Section 2(1)(o) being ‘service.’ Also, if the electrical energy consumer is not provided to a consumer in time as is agreed upon, then under Section (2)(1)(g), then there can be a case for deficiency in service. Therefore, the clause stating “supply” of goods for commercial purpose would not be applied. The Supreme Court sent this case back to District Forum for retrial on these grounds. 

4. Indian Medical Association Vs. V.P. Shantha and others: A writ petition was filed by the Indian Medical Association seeking Supreme Court to declare that the Consumer Protection Act doesn’t apply to the medical profession. Indian Medical Association validated that medical professionals are governed by a separate Code of Ethics. Thus medical negligence can be dealt with by medical experts in their own jurisdiction; the Consumer Protection Act shouldn’t be applied. The writ petition involved two questions as given below:
  • Whether a medical practitioner can be regarded as rendering ‘service’ under the Consumer Protection Act 1986?
  •  If medical services are rendered free, then would it be considered under the Act?

Judgment: The Court held that District, State and National Consumer Forums can summon experts in the field of medicine, examine evidence and protect the interest of consumers. Doctors and hospitals who render service without any charge would not fall within the ambit of “service”. In a government hospital, where services are provided free of charge - the Consumer Protection Act would not be applied. However, if customers are being provided for free to the poor, then it shall be covered as a service under the act. In case the insurance policy company pays for the treatment on behalf of the customer, then it will be covered under the Act.

5. Sehgal School of Competition Vs. Dalbir Singh: In is one of the landmark consumer protection act cases and judgments. A student was asked to deposit lump sum fees of Rs. 18,734 for coaching of medical entrance examination for the next two years. This amount was deposited by the student in two complete instalments. However, the student realized that the quality of the coaching institute was not upto the mark and therefore sought a refund for the remaining period which was further refused by the coaching institute. The appellant lodged a case against Sehgal School of Competition before National Commission. While Sehgal School of Competition submitted records that showed good results of the institute and alleged that it was wrong to observe that the coaching services are substandard. 
Judgment: National Commission stated that fees once paid shall not be refunded is an unfair trade practice. It quoted UGC guidelines declaring that even if a student has not attended a single class, an amount of ?1000 can get deducted and proportionate charges for hostel fees, etc, and the balance amount could be refunded. State Consumer Forum, mentioned that not just the balance amount of fee, but also a higher compensation for legal costs as well as the pain that the student had to undertake, could be availed in such cases. 
6. Sapient Corporation Employees Provident Fund Trust Vs. HDFC & Ors: It is one of the remarkable consumer protection act cases. This consumer protection act case happened when a wrongful debit happened from a bank account. The complainant trust - Sapient Corporation Employees Provident Fund Trust maintained an account with the respondent HDFC Bank. The bank received instructions from the Employee Provident Fund Organisation (EPFO) that mentioned order of payment of ?1.47 crores against the trust, and that no other payments from the trust’s account be made until EPFO’s liability has not been settled by the trust. However, the trust issued an instruction to the HDFC bank not to debit any amount until further communication as they wanted to seek a stay order. However, in payment of the statutory due to EPFO, the bank, after giving due time, debit the account with an amount of ?1.47 crores. The challenged this transaction as a deficiency in service and demanded the amount debited along with interest, damages, and legal expenses. Trust lodged the complaint against the HDFC before the National Commission on the ground that bank committed default by paying an amount payable as a statutory due.

Judgment: The National Commission dismissed the argument of the complainant saying that bank informed the trust as its customer and gave them due time. So, it cannot be said that EPFO conducted deficiency in services. For this false litigation, the National Commission had imposed a penalty of Rs. 25,000 on the complainant trust to be paid to the HDFC Bank.

7. Delhi Development Authority Vs. D.C. Sharma: In this consumer protection act case, DC Sharma (respondent) a Government servant had paid an initial amount for the allotment of a DDA plot of Rs. 5 Lakhs in 1997. He requested for the extra time to pay instalments as he wanted to avail loan facility from his office. Meanwhile, he realized that the plot allotted to him through a draw of lots has already been allotted to another person two years ago. Due to this negligence of the DDA, the respondent approached the District forum that dismissed this case. Subsequently, the state Consumer forum was approached that passed an order in favor of the respondent.

Judgment: National Commission stated that when the plot was already allotted to someone else back in 1995, then why DDA took no steps in correcting its own error in the allotment. It directed DDA to pay an alternate plot of same kind or pay escalate price of Rs. 30 Lakhs. 

 8. V.N. Shrikhande Vs. Anita Sena Fernandes

The petitioner - Anita Sena, who was a nurse by profession underwent a stone removal surgery from her gall bladder but claimed that she continued to experience pain. After 9 years, it was detected that the reason behind this was that a gauge was left in her abdomen by the surgeon who operated her. This required a second surgery. Therefore, she filed the charges for negligence and compensation of Rs.50 Lakhs was demanded by the petitioner. She filed the case against the doctor for his negligence before Supreme Court.

Judgment: Supreme Court rejected the case on limitation and evidentiary grounds. The court held that when nurse was working in the same hospital where the surgery happened. Then, in the past nine years, why did not she contact the doctor. During the discovery of gauge in the abdomen, appropriate action could have been taken on an immediate basis without requiring the respondent to pay. But she chose to consume pain killers. Her long silence dismissed the complaint and she was entitled to no compensation.

9.  Nizam Institute of Medical Sciences v Prasanth S. Dhananka & Ors

This consumer protect act case arises out of a complaint of medical negligence where a 20-year-old engineering student was admitted to the Nizam Institute of Medical Sciences (NIMS) after he complaint about the acute chest pain. After several tests and x - rays, a tumor was revealed.  Though, it could not be diagnosed whether the tumor was malignant or not, therefore, the patient was advised to undergo surgical removal of the same. After the surgery, the patient developed paralysis. There was a complete loss of control over the lower limbs and other related complications also raised leading to urinary tract infections, bedsores, etc. The family of the patient held NIMS and the State of Andhra Pradesh statutorily liable (being a government hospital) liable for this utmost negligence. Family also claimed that no pre-operative tests conducted, no neurosurgeon was present during operation. Consent was only taken for the tumor excision, but the doctors also removed ribs, tumor mass and destroyed blood vessels leading to condition of paralysis. 

Judgment: Based on the evidence, Supreme Court held that a huge negligence was made out on the part of doctors and the hospital. Hence, the court awarded damages worth Rs. 1 crore to compensate present and prospective medical expenses and suffering of life.


Q1. What is Consumer Protection Act?

Ans. The Consumer Protection Act safeguards and encourages consumers to speak against insufficiency and flaws in goods and services. It also provides easy and fast compensation to consumer grievances. 

Q2. When was Consumer Protection Act passed?

Ans. The Consumer Protection Act was passed in 1986. After amendment, the Consumer Protection Act 2019 came into force. It was passed by the Lok Sabha on July 30, 2019 and Rajya Sabha on August 6, 2019. 

Q3. Who is consumer under Consumer Protection Act?

Ans. ‘Consumer’ is any person who buys goods or avail services for its consumption. It includes any person except for the person avail such goods or services for the purpose of commercial or resale use. 

Q4. Who can file a complaint under Consumer Protection Act?

Ans. A consumer complaint can be filed by one or more consumers, the Central or State Government, any registered voluntary consumer association and legal representative of the consumer. In case, the consumer is minor. Then, the complaint can be filed by his legal guardian or parents.