Landmark Judgement on Consumer

Protection Act,2019

By-
Mokshit
Section-C, Second Semester
13917703820
 What is Consumer Protection Act,2019?
 “An Act to provide for protection of the interests of consumers and for the
said purpose, to establish authorities for timely and effective administration
and settlement of consumers’ disputes and for matters connected therewith
or incidental thereto.”
 A consumer is a person who “buys any goods” and “hires any services” which
shall include both online and offline transactions through electronic means,
teleshopping, direct selling or multi-level marketing.
 The 2019 Act is a much required change in favor of the consumers considering
the current age of digitization. It empowers them with clearly defined rights
and dispute resolution process which will enable them to get their grievance
addressed with a fast track mechanism.
 Landmark Judgements
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: AshokIron 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.