The Consumer Protection Act 1986 Duly Amended 2019

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1.

The Consumer Protection Act 1986 duly amended 2019

The Consumer Protection Act, 1986 was enacted to provide for better protection of the interests
of consumers and for the purpose of making provision for establishment of consumer protection
councils and other authorities for the settlement of consumer disputes, etc. Although, the
working of the consumer dispute redressal agencies has served the purpose to a considerable
extent under the said Act, the disposal of cases has not been fast due to various constraints.

Consumer markets for goods and services have undergone drastic transformation since the
enactment of the Consumer Protection Act in 1986. The modern marketplace contains a
plethora of products and services. The emergence of global supply chains rises in international
trade and the rapid development of e-commerce have led to new delivery systems for goods
and services and have provided new options and opportunities for consumers. Equally, this has
rendered the consumer vulnerable to new forms of unfair trade and unethical business
practices. Misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-
commerce pose new challenges to consumer protection and will require appropriate and swift
executive interventions to prevent consumer detriment.

Therefore, it became inevitable to amend the Act to address the myriad and constantly
emerging vulnerabilities of the consumers. In view of this, the Consumer Protection Bill, 2018,
was introduced in Lok Sabha on the 5.01.2018 and was passed by that House on 20.12.2018.
While the bill was pending consideration in the Rajya Sabha, the 16th Lok Sabha was dissolved,
and the bill lapsed. Hence, the Consumer Protection Bill 2019 was introduced in the 17th Lok
Sabha.

With the Lok Sabha passing the Consumer Protection Bill 2019 on 30.07.2019 after due
consideration and discussion, the Rajya Sabha has also passed the same through a voice vote
and the present bill will thus replace the Consumer Protection Act, 1986.

The bill was piloted by the Union Minister for Consumer Affairs, Food and Public Distribution,
Shri Ram Vilas Paswan on 8th July 2019 who opined that the said bill aims at protecting the
interests of consumers by establishing authorities for timely and effective administration and
settlement of consumers' dispute.

Keeping pace with changing times and new legislations aimed at protecting the interests en
masse, the present bill has successfully broadened the scope of various provisions, including
persons who can file a consumer complaint to also include class action. This would better
protect the rights and interests of the consumers who are not legally equipped to fight for their
rights.

2. Comparative Analysis of Consumer Protection Act, 1986


and Consumer Protection Act, 2019

BASIS Consumer Protection Act, 1986 Consumer Protection Act, 2019

Ambit of Law Online Transactions and All merchandise and enterprises


Teleshopping were previously bought/benefited through all methods
not mentioned. of exchanges (web based, mail order
shopping, and so forth.) for which
thought was paid are incorporated.
Free and individual administrations
are prohibited.

Unfair trade Incorporates six sorts of such The New Act added three new
practices (Defined as practices, for example, practices that may be termed as
deceptive practices assembling of fake “Unfair Trade Practice”. They are:
to promote the sale, merchandise, allowing i. failure to issue a bill or receipt to the
use or supply of a deal/gracefully of products that consumer;
goods or service) do not follow the guidelines ii. refusal to accept goods returned
recommended by the within 30 days by the consumer:
Competent Authority, iii. disclosure of personal information
misdirecting promotions, and given in confidence, unless required
so on. by law or in public interest.
Contests/lotteries may be notified as
not falling under the ambit of unfair
trade practices.

Product Liability No Provision A Product Liability guarantee might be


made by the Consumer against the
maker, specialist co-op and
additionally the merchant.

Unfair Contracts No Provision “Unfair Contract” is defined as a


contract which causes significant
change in the rights of a consumer.
The New Act lays down 6 terms of
contract which may be held as unfair
to the consumer.
Central Protection Central Protection Councils, Central Protection Councils,
Councils established at the district, established at the district, state, and
state, and national level, national level, protect and promote
protect and promote the rights the rights of consumers.
of consumers.

E-Commerce No Provision The New Act defines direct selling, E-


Commerce, and Electronic Service
Provider, which brings them under the
purview of Consumer Laws.
Furthermore, the Central Government
is empowered to prescribe Rules for
Regulating E-Commerce entities.
However, the Rules have not yet been
notified.

Regulator No Provision The New Act has established the


Central Consumer Protection
Authority (CCPA), which has the sole
purpose of promoting, protecting, and
enforcing the rights of consumers as a
class.
The CCPA is empowered to issue
safety notices, pass orders to recall
goods, take steps to prevent unfair
practices, reimburse purchase price
paid and impose penalties for false
and misleading advertisements.

Pecuniary District Commission: Up to Rs. District Commission: Up to Rs. 1


Jurisdiction of 20 lakhs; State Crore; State
Commissions Commission: Between Rs. 20 Commission: Between  Rs. 1 Crore and
lakh and up to Rs. 1 up to  Rs. 10 Crore; National
crore; National Commission: Above Rs. 10 Crore.
Commission: Above Rs. 1 crore.

Composition of District Commission: Headed District Commission: Headed by a


Commissions by current or former District president and at least two
Judge and two members. State members. State Commission: Headed
Commission: Headed by a by a president and at least four
current or former High Court members. National
Judge and at least two Commission: Headed by a president
members. National and at least four members.
Commission: Headed by a
current or former Supreme
Court Judge and at least four
members.

Appointment A Selection Committee, which There is no provision for a Selection


comprises a Judicial Member Committee in the New Act. It states
and other Officials, that the Central Government shall
recommended Members on the appoint Members through
Commissions. Notification.

Alternate Dispute No Provision The New Act has mandated that


Redressal Mediation Cells be attached to the
Mechanism District, State, and National
Commissions.

Penalties Non-compliance of the Orders As per the New Act, non-compliance


of the Commissions may lead of the Orders of the Commission may
to imprisonment between one lead to imprisonment up to three
month and three years or fine years, or a fine not less than Rs.
between Rs. 2,000 and Rs. 25,000 extendable to Rs. 1 Lakh, or
10,000, or both. both.

Limitation Period for The limitation period for filling The New Act has increased the
filing Appeal an Appeal to State Commission limitation period from 30 days to 45
is 30 days. days while additionally empowering
the Commission to condone delay in
appropriate cases.

Change in deposit The Appellant had to deposit As per the New Act, the Appellant
amount to file an the amount ordered by the shall deposit 50% of the decretal
Appeal before the District Commission before amount ordered by the District
State Commission filing Appeal before the State Commission before filing an Appeal
Commission, up to a maximum before the State Commission.
of Rs. 25,000/-.

Appeal to National Appeal to National Commission A second appeal to the NCDRC has
Commission been provided U/s 51(3) only if there
is a substantial question of law
involved in the matter.

Power of Revision Yes Power of revision can still be exercised


by the National Commission under
Section 58(1)(b) of the New Act and by
the State Commission under Section
47(1)(b) of the New Act

Power of Review Power of review has been given Power of review has been conferred
only to National Commission to District Commission, State
under Section 22. Commission and National Commission
under Sections 40, 50 and 60 of the
New Act, respectively.

3. Definition of Consumer Protection Act

Under section 2(7) of the Act, it is stated that consumer is anyone who:

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment, when such use is made with the approval
of such person, but does not include a person who obtains such goods for resale or for any
commercial purpose; or

(ii) hires or avails of any service for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes any
beneficiary of such service other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of the first-mentioned
person, but does not include a person who avails of such service for any commercial purpose.

If you have bought any goods or hired any service whatsoever for any consideration or with a
promise to pay consideration or with an arrangement which allows you to pay in instalment
(think: EMI), or are using goods or availing services hired by someone else but with their
permission, then you are a consumer of the good or service

4. Privity of Contract

Privity is a doctrine of contract law that says contracts are only binding on the parties to a
contract and that no third party can enforce the contract or be sued under it. Lack of privity
exists when parties have no contractual obligation to one another, thereby eliminating
obligations, liabilities, and access to certain rights.

The practice, however, with the rise of consumerism, has been at variance with the law. Most of
the consumer goods are bought for the entire family. To not recognize this fact would make the
law incongruous. Consistent with this, the CPA recognizes all the users of goods or service,
provided there is no commercial transaction among them, as consumers.

5. Compensation

The new act allows consumers to get an increased amount as compensation from errant sellers,
while the punishment for the latter instances has also been made more stringent. The
compensation amount is higher to the point that the consumer even can receive up to Rs 1 lakh
in case they are sold an adulterated or spurious product. The seller may also be sentenced to up
to six months of jail. However, this compensation is only in the case where the consumer has
not been damaged by the product.

In case they are directly or indirectly harmed by the product sold, the consumer can even
receive up to Rs 5 lakh as compensation, and the jail term for the seller could extend up to
seven years. If the consumer dies, the compensation could range up to Rs 10 lakh and the seller
could be sentenced to a life imprisonment term.

In case of a subsequent offense, the fine may extend to Rs 50 lakh and imprisonment of up to
five years.

6. Composition of Nation, State and District Forum

Particulars District Forum State Commission National Commission

Composition 1 President and at least 1 President and at least 4 1 President and at least 4
2 members members members

7. Pecuniary Jurisdiction of Nation, State and District Forum

District Forum State Commission National Commission


Earlier: UPTO 20 Lakhs Earlier: 20 Lakhs- 1 CR Earlier: Above 1 CR
Now: UPTO 1 CR Now:  1 CR- 10 CR Now: Above 10 CR

8. Mode & procedure of filing complaints

1. A Consumer Complaint can be made either in a written manner or in electronic mode to the
District Collector, the Commissioner of regional office or the Central Authority. In the case of
violation of consumer rights, a complainant can approach the District Forum, State Commission,
or the National Commission. Also, if the complainant is not satisfied with the order passed by a
Consumer Court, he can file an appeal in the higher Court.

2. The first step before filing a consumer complaint is to determine the territorial and pecuniary
jurisdiction of the complaint. A consumer complaint can be filed in the District Forum if the
claims for goods and services does not exceed Rs 1 Crore. For claims where the value of goods
and services is between Rs. 1 Crore to 10 Crore, the complaint can be filed in the State
Commission whereas if the value of goods and services exceeds Rs 10 Crore, a consumer
complaint can be filed in the National Commission.

3. The next step requires serving a legal or personal notice to the opposite party. After this, a
complainant can file a complaint in the respective consumer redressal forum. The procedure for
filing a consumer complaint is similar for all the District Forums, State Commissions and National
Commissions.

9. Penalties

Penalties for non-compliance of orders

District/State/National Commission Central Authority


Imprisonment from 1 month to 3 years Imprisonment up to 6 months

Fine from Rs. 25,000/- to Rs. 1,00,000 /- Fine up to Rs. 20,00,000/-

Or Both Or Both

Punishment (Products Containing Adulterant)

Does not result in injury Imprisonment: Up to 6 months

Fine: Up to Rs. 1,00,000/-

Injury not amounting to grievous hurt Imprisonment: Up to 1 Year

Fine: Up to Rs. 3,00,000/-

Injury resulting in grievous hurt Imprisonment: Up to 7 years

Fine: Up to Rs. 5,00,000/-

Death of Consumer Imprisonment: 7 years to life

Fine: Up to Rs. 10,00,000/-

Punishment (Spurious Goods)

Injury not amounting to grievous hurt Imprisonment: 1 year

Fine: Up to Rs. 3,00,000/-

Injury resulting in grievous hurt Imprisonment: 7 years

Fine: Up to Rs. 5,00,000/-

Death of Consumer Imprisonment: 7 years to life

Fine: Up to Rs. 10,00,000/-

10. Cases Under Consumer Protection Act


Case – 1 Springs Meadows Hospital Vs. Harjol Ahluwalia 1998(2) SCALE 456 (SC)

Civil Appeal No. 7708 of 1997 With Civil Appeal No. 7858 of 1997

Decided On, 25 March 1998

At, Supreme Court of India

By, THE HONOURABLE MR. JUSTICE S. SAGHIR AHMAD & THE HONOURABLE MR. JUSTICE G.B.
PATTANAIK

Arun Khosla, Mr. K. Nijhawan, Mr. S. Rajappa, Mr. Sanjiv Sharma, Mr. Ashok K. Gupta, and H.D.
Shourie, Advocate for Caveator in person, for appearing parties.

Case History

It is a landmark judgment given by Supreme court of India in 1998; The case decision was given
by NCDRC (National Consumer Disputes Redressal Commission) first; which was then challenged
in the Hon’ble Supreme Court with a question of law consists; whether the case comes under
the Consumer Protection Act,1986; and whether both the Petitioner comes under the definition
of Consumer in Consumer Protection Act, 1986. The case was of medical negligence. Here the
question arises, whether a medical negligence case will come under the Consumer Protection
Act,1986 or not?

Facts

A Complaint Petition was filed by minor Harjot Ahluwalia through his parents Mrs. Harpreet
Ahluwalia and Mr. Kamaljit Singh Ahluwalia before the Commission stating that the minor was
being treated at a Nursing Home in Noida. As there was no improvement in his health minor was
brought to M/s. Spring Meadows Hospital which is the appellant in the later challenging case.

In the hospital, the patient was examined by the Senior Consultant Pediatrician, Dr. Promila
Bhutani and on her advice the patient was admitted as an in-patient in the hospital. The doctor
made the diagnosis that the patient was suffering from typhoid; and intimated the parents that
medicines have been prescribed for the treatment of typhoid fever.

On the 30th of December 1993 at 9.00 a.m. Miss Bina Matthew, nurse of the hospital asked the
father of the minor patient to get the injection; – In Lariago – to be administered intravenously
to the minor patient. Whereupon the nurse injected the same to the minor patient. The patient,
immediately on being injected collapsed while still in the lap of his mother.
it was further alleged that before giving the injection the nurse had not made any sensitive test
to find out; whether there would be any adverse reaction on the patient. Seeing the minor child
collapse the parents immediately called for help and the Resident Doctor Dr. Dhananjay
attended the patient. Said Dr. Dhananjay told the parents that the child had suffered a cardiac
arrest; and then by manually pumping the chest, the Doctor attempted to revive the heartbeat.
The hospital authorities then summoned an Anesthetist, Dr. Anil Mehta who arrived within half
an hour; and then started a procedure of manual respiration by applying the oxygen cylinder
and manual Respirator.

In the meantime, Dr. Promila Bhutani also reached the hospital and the minor child was kept on
a device called manual Respirator. Though there was no improvement in the condition of the
child. During treatment as the minor’s platelet count fell; a blood transfusion was given but still,
no improvement could be seen. Dr. Mehta: therefore, intimated the parents that the hospital
does not have the necessary facilities to manage the minor child; and he should be shifted to an
intensive Care Unit equipped with an Auto Respirator.

Consumer Protection Act

On the advice of Dr. Mehta, the parents admitted the child in the Pediatric Intensive Care Unit of
the All-India Institute of Medical Science. In the Institute the doctors examined the minor child
thoroughly; and informed the parents that the child is critical; and even if he would survive; he
would live only in a vegetative state as irreparable damage had been caused to his brain; and
there was no chance of revival of the damaged parts. The minor was then thereafter discharged
after informing the parents; that no useful purpose would be served by keeping the minor child
there.

Dr. Anil Mehta as well as Dr. Naresh Juneja, Chief Administrator of Spring Meadows Hospital,
however, offered to admit the minor child at their hospital; and to do whatever was possible to
stabilize the condition of the child and accordingly the minor child was again admitted to the
hospital.

Because of negligence and deficiency on the part of the hospital authorities suffered irreparable
damages and could survive only as a mere vegetative and accordingly claimed compensation to
the tune of Rs. 28 lakhs.

Issues

The minor child is the patient who was admitted into the hospital for treatment can the parents
of the child be held to be consumers; so, as to claim compensation under the provisions of the
Consumer Protection Act?
Is the commission under the Act is entitled to award compensation to the parents for mental
agony in view of the powers of the commission under Section 14 of the Act?

Even if the child, as well as the parents of the child; would come under the definition of the
‘consumer’ under Section 2(1) (d) of the Act; whether compensation can be awarded in favor of
both the consumers; and compensation can be awarded only to the beneficiary of the services
rendered; who in the present case would be a child who was admitted into the hospital?

Reasoning

The United Nations had passed a resolution in April 1985 indicating certain guidelines; under
which the Government could make law for better protection of the interest of the consumers.
Such laws were necessary more in the developing countries to protect the consumers from
hazards to their health; and safety and make them available speedier and cheaper redress.

Whitehouse v Jordan and another, [1981] 1 ALL ER 267 "The true position is that an error of
judgment may, or may not, be negligent; it depends on the nature of the error. If it is one that
would not have been made by a reasonably competent professional man profession to have the
standard and type of skill that the defendant holds himself out as having, and acting with
ordinary care, then it is negligence. If, on the other hand, it is an error that such a man, acting
with ordinary care, might have made, then it is not negligence."

Gross medical mistakes will always result in a finding of negligence. The use of wrong drugs or
wrong gas during anesthetic will frequently lead to the imposition of liability; and in some
situations, even the principle of Res Ipas loquitur can be applied.

The definition clause is wide enough to include not only the person who hires the services; but
also, the beneficiary of such services which beneficiary is other than the person who hires the
services; the conclusion is irresistible that both the parents of the child as well as the child
would be a consumer within the meaning of Section 2(1)(d)(ii) of the Act.

the Commission is entitled to award compensation for any loss or injury suffered by the
consumer; due to the negligence of the person whose services had been hired; and that being
the position it would be open for the Commission to award compensation to the minor child
who has suffered an injury and not the parents. In other words, the learned counsel urged that;
clause (d) of Section 14 may not be interpreted enabling the Commission to award
compensation both to the minor child and his parents.

Conclusion

The National Consumer Disputes Redressal Commission held that since the resident doctor and
nurse were employees of the appellant hospital; the latter was Liable and awarded
compensation of Rs. 12.51 Lakh to the child and of Rs.5 lakh to the parents for acute mental
agony.

Hon’ble Supreme Court dismissed the appeal with costs of Rs. 5,000.

Case – 2 Helen Wallia vs Cathay Pacific Airways Ltd. on 11 December 2001


ORDER D.P. Wadhwa, J. (President)

1. Complaining loss of one baggage complaint seeking damages amounting to Rs. 24,63,885/-
(US$ 54753) with interest @ 18% per annum from date of loss.

2. Complainant was travelling with another person from San Francisco to Hongkong. Both in al
had four bags when they checked in at San Francisco. It is stated that though the tags were
given for three bags only on insistence of the complainant fourth tag was also given. When the
flight arrived at Hongkong only three bags could be traced. Fourth of which the tag was given
later belonged to the complainant, could not be traced. She lodged complaint at Hongkong with
the opposite party and at Mumbai in India. Correspondence that ensued between the parties,
opposite party offered in all US$ 640. In one of their replies, the opposite party relied as under:

"Our immediate concern is to settle your claim. As stated in our passenger ticket airlines liability
for checked baggage is limited to 20 USD per kilo unless a higher value is declared in advance
and additional charges are paid prior to the commencement of carriage. For passengers
travelling on the transpacific route, Canada and USA, the maximum weight of each piece of
checked baggage is 32 Kilos. This, therefore, allows us to settle your claim for USD 640. We do
try to settle all baggage claims in a manner that will result in mutual satisfaction as we are a
service industry and customer satisfaction is all important."

3. It was a transpacific flight where the maximum weight of 32 Kgs. was allowed. Thus,
multiplying this with US$ 20 per Kg., the amount of US$ 640 was offered which was declined by
the complainant. This led to filing of the complaint. If we examine the provisions of Carriage by
Air Act, 1972, there is a limit placed on the liability of the carrier where damages can be
awarded @ US$ 20 per Kg. of the weight of the lost baggage. This limit would not apply if it were
done with the intent to cause damage or recklessly and with knowledge that damage would
probably result. There is no such plea despite assertion by the learned counsel for the
complainant that the baggage of the complainant was lost intentionally by the opposite party.
We do not find any merit in this complaint. It is dismissed.
Case – 3 BISWANATH DAS Vs. BIJOY SINHA ROY AND ORS

In this case the Supreme Court laid down the guidelines for speedy disposal of the consumer
dispute and the use to Alternative Dispute Mechanism mode for disposal of consumer dispute
matters. The Apex Court also emphasized on Section 89 of Civil Procedure Code, 1908 and
clarified that the said provision is applicable to Civil Court but the Consumer Forum cannot be
excluded from the applicability of Sec 89 of Civil Procedure Code, 1908.

JUDGEMENT

1.This order will govern the disposal of FA Nos. 462 of 2005, 463 of 2005 and 44 of 2006 which
arise out of the same order dated 19.9.1995 of Consumer Disputes Redressal Commission West
Bengal, Calcutta.

2. In nutshell, the facts giving rise to these appeals are these. Mrs. Bani Sinha Roy w/o Bijoy
Sinha Roy, appellant in FA No. 44 of 2006 (complainant) developed some menstrual problem
sometime in the month of June 1993. She consulted the family physician Dr. Pran Shankar Saha
who advised her to consult Dr. Biswanath Das, appellant in FA No. 462 of 2005 (OP No. 1),
Gynecologist. She visited Dr. Das who after physical checkup advised her to have
ultrasonographic test of the pelvis and some pathological tests. As advised by Dr. Das, Mrs. Bani
Sinha Roy got the USG test done which revealed multiple fibroids of varying sizes in uterus. On
perusal of that report on 22.6.1993, Dr. Das advised her to undergo Hysterectomy. After a lapse
of about 5 months Mrs. Bani Sinha Roy again visited Dr. Das with the complaint of severe
bleeding. Dr. Das advised for emergency Hysterectomy and he arranged for operation at
Ashutosh Nursing Home. Mrs. Bani Sinha Roy was suffering from high blood pressure and her
hemoglobin was around 7 gm% which indicated that she was severe anemic. For increasing
hemoglobin, Dr. Das advised Zectofer and Tetvac injections. Mrs. Bani Sinha Roy was admitted in
the said Nursing Home on 30.11.1993 to undergo Hysterectomy on 1.12.1993. On 1.12.1993,
the operation started around 8.45 a.m., but Mrs. Bani Sinha Roy did not regain consciousness
even after lapse of about 1 1/2 hours of the completion of operation. Nursing Home did not
have the Intensive Care Unit. Dr. Debasis Sarkar, OP No. 3 booked a bed at Repose Nursing
Home and Mrs. Bani Sinha Roy was shifted there at about 2.15 p.m. Even after treatment at
Repose Nursing Home, she did not regain consciousness. Since day -to -day medical expense at
the said Nursing Home was going beyond the means of the complainant, she was transferred to
SSKM Hospital on 6.12.1993 where she eventually expired on 27.1.1994. Thereafter, alleging
negligence complaint was filed which was contested by filing separate written versions by the
opposite parties.
3. Complaint was dismissed by the State Commission by the order dated 18.8.2003. On FA No.
754 of 2003 being filed by the complainant, the appeal was allowed, and case was remanded to
the State Commission for being decided after allowing the report of Dr. Apurba Nandy being
proved and Dr. Sagarmony Basu being cross examined vide order dated 6.10.2004 by this
Commission. In terms of the impugned order, the complaint was allowed holding OP Nos. 1 and
2 negligent in performing Hysterectomy of the deceased without controlling her high blood
pressure and increasing the level of hemoglobin. OP No. 1 was directed to pay compensation of
Rs. 3,00,000 while OP No. 2 the compensation of Rs. 2,00,000 to the complainant. Complaint
against OP Nos. 3 and 4 was dismissed. Appeal No. 462 of 2005 has been filed by OP No. 1 while
Appeal No. 463 of 2005 by OP No. 2 to set aside the impugned order. In FA No. 44 of 2006, the
complainant seeks enhancement of compensation. We have heard the parties' learned Counsel.
Written submissions have also been filed by them. On internal page No. 13 of the impugned
order, the State Commission observed that the blood pressure of the deceased preceding the
day of operation which was 30.11.1993, was 220/110. On internal page No. 15, the State
Commission noted that even on the morning of 1.12.1993, before operation the blood pressure
was within the range of 220/110. Observations made towards the end on internal page 14 of the
order which are material, are reproduced below: The OPs are relying upon the evidence of their
expert Dr. S.M. Basu who has supported their action, but he should not be taken as an authority
who can proclaim the last word on such a subject. Moreover, his evidence is clear to show that
what he says, he says based on authority and he has also made a reference to such books, but
unfortunately the citations made from such authorities are only generalizations which cannot
and do not appear to cover the context or the perspective of the present case - -the special
features of the patient which were distinguishing.

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