A Surprising Decision by the National Commission

In a recent decision (II (2014) CPJ 1 (NC)), the National Consumer Commission has ruled that if a person buys two apartments, he must be buying the second one for reselling, that would make the purchase a commercial activity and so if he has any problems with either of the apartments, he can not approach consumer courts. This is quite surprising because it limits the scope of the Consumer Protection Act significantly and is also against the intent of the parliament in enacting the Act.

In the case before the National Commission, one Sunil Gupta had booked two flats from a builder, one for his son and one for his daughter. There was a problem with the delivery of the apartments and Gupta approached the National Commission with a complaint of deficiency in service. The National Commission said that when a consumer has booked more than one unit of residential premises; it amounts to booking of such premises for investment/commercial purpose. Therefore, the Commission said, he was not a consumer under the Consumer Protection Act and his complaint was dismissed.

There are three problems with the National Commission decision. Firstly, it appears that the National Commission has chosen an anti-consumer stand in it order. It calls the statements made by Gupta “namby-pamby” without explanation. When the consumer has stated that the two apartments are for his son and daughter, the Commission seems to disbelieve him and assumes that the apartments have been bought to resell and make profit. The Supreme Court has said on numerous occasions (e.g. III (1993) CPJ 7 (SC)) that consumer courts must lean towards the consumer as much as possible. Consequently, the consumer's averments should be taken on face value unless there is evidence to the contrary.

Secondly, the decision of the National Commission to treat all investments as commercial is not correct. According to Black's law dictionary, an investment is an expenditure which provides revenue. So even a bank deposit is an investment because the interest on the deposit provides revenue. Deposits in post offices, shares, mutual funds are all investments because they all provide revenue. If all these are investments, then they are all “commercial” in nature and hence should be outside the purview of CPA. But the National Commission and the Supreme Court have given innumerable decisions in which these investments have been kept within the ambit of the CPA. Just because it is an investment does not make it “commercial”.

Thirdly, even if Gupta really had intended to resell the apartments, it still does not rule out the applicability of CPA. When the CPA was originally enacted, it permitted any person (or company or society) who had availed of a service to file a complaint before consumer courts if the service was deficient. It was soon discovered that under this provision, large companies were filing complaints which was defeating the very purpose of the Act, which was to provide quick and inexpensive justice to ordinary consumers. So the Act was amended to exclude services availed for a commercial purpose. It is clear that the parliament wanted to exclude only commercial activity on a large scale from the purview of CPA. This is acknowledged in a Supreme Court judgement (II (1995) CPJ 1 (SC)) . The Supreme Court order also quoted the Concise Oxford Dictionary which defines commercial as “pertaining to commerce” and commerce as “financial transactions especially buying and selling of merchandise, on a large scale”. Thus it is obvious that individual consumers are not excluded from consumer courts even when they use the goods or services purchased to make profit. The intent of the law is to exclude only large companies from misusing the consumer court mechanism.

The surprising thing is, the National Commission in the past has almost consistently taken the position that only individuals who purchase goods with the intention of carrying on any activity on a large scale for the purpose of earning a profit are excluded from the purview of CPA. This fact was noted in the Supreme Court judgement. The present decision of the National Commission is contrary to its earlier positions. The lower consumer courts are sure to be confused by this development. It is likely that the consumers will feel the resultant negative effects.

Christopher Mwangovya

Photos from the Grahaka Patrike

 (B.Vaikunth Shenoy) 

Prof.A. Ramalingam and a team of experts (Dr. Rathi Rao, Prof. Shankar Bhat and Prof. Keshav Nireshwalia) visiting Vijayanagar Central Water Storage Reservoir when ots roof collapsed 

(N.S. Lakshminarayana) 

Prof. A. Ramalingam and C.V. Nagaraj of MGP in the environmental summer camp for school children.

( B.Basavaraju) 

Prof. A. Ramalingam distributing "I Will Not Sell Adulterated Tea" display board to a shop owner. Others in the photo, Dr.M.S. Vishweshwara of Bharat Cancer Hospital (3rd from left), Uma Shenoi and Prof. Kalachanne Gowda of MGP (4th and 5th from left) 

MGP's monthly meeting on 11-5-14 focussed on water problems. From left, Bhamy Shenoy and R.Chandra Prakash of MGP, Yoganand and Nandiswar of JUSCO. 

An Important Judgement on Internet Deals

When you buy a product or service from a company located in say, Mumbai, through the internet and there is a defect in the product or deficiency in the service, do you have to file a case before the consumer forum in Mumbai or can you file it before the forum in Mysore? You can file the case before the Mysore forum itself, says a recent judgement from Meghalaya State Consumer Commission (click here).

In the case before the Meghalaya State Commission, an elderly person residing in Shillong booked a flight from Delhi to Jaipur from Deccan Airlines whose head office is in Bengaluru. The booking was done on the internet and the fare paid through credit card. When the person and his wife undertook the journey, the luggage was lost and the they had to undergo a lot of difficulties. 

The consumer filed a case before the District Consumer Forum, Shillong claiming deficiency in service by the airline. The airline objected that the forum did not have territorial jurisdiction to hear the case since, the airline office was in Bengaluru and the flight for which money had been paid was between Delhi and Jaipur. According to Sec. 11 of the Consumer Protection Act, a case can be filed only before the consumer forum of the place in which the opposite party resides or conducts business or the place in which the cause of action arises. The airline argued that the Shillong Forum does not have jurisdiction on any of these counts and that the case could have been filed only in Bengaluru, Delhi or Jaipur. But the forum dismissed this objection saying that the fare (paid through credit card) had been debited at the Shillong branch of Vijaya Bank and so the Shillong forum had territorial jurisdiction to hear the case. It then proceeded to hear the case and awarded a compensation of Rs. 72,000 to the consumer. 

The airline then went in appeal before the Meghalaya State Consumer Commission. It again argued that the forum had no territorial jurisdiction to hear the complaint. So the Commission considered the issue carefully and gave a detailed judgement about the territorial jurisdiction of consumer courts in internet disputes.

The Commission noted that the Consumer Protection Act was enacted in 1986 when internet commerce was not in vogue and so it does not expressly consider issues such as territorial jurisdiction of consumer courts in internet commerce disputes. It said that the territorial jurisdiction of the forum of the place where the cause of action arises is very important in such disputes. 

The Supreme Court has held (AIR 1989 SC 1239) that in contract disputes, a case can be filed in the court in whose territorial jurisdiction, acceptance to the contract was communicated. Courts have routinely held that when an airline issues a ticket to a consumer, the airline and the customer are entering into a contract. So the purchase of a ticket from Air Deccan (which is the source of the present dispute) was equivalent to entering a contract with the airline. In the present case, the contract was entered into and was accepted by sending e-mails. Again according to Sec 11(3) of the Information Technology Act, 2000, an  e-mail  is deemed to be dispatched at the sender's place and received at the addressee's place. Combining all the above, the Commission said that the contract to purchase the airline ticket was accepted at the place of the customer and so he can file the case before his local consumer forum. 

This well-argued judgement is very useful to internet purchasers. Since it allows them to approach their local consumer fora, getting compensation for defective goods becomes much easier.

Dwarkanath Narayan

What Is The Point Of This PA System?

The Traffic Police have installed a loudspeaker on Sayyaji Rao Road next to Ayurveda College. Instructions to motorists are being broadcast non-stop on this loudspeaker which faces the circle.

The question is, with all the traffic noise in this busy circle, can anyone hear what is being said on the loudspeaker? Even if the drivers can hear what is being said, will they pay attention to it or to negotiating the heavy traffic without getting into an accident? 

As it is, the circle is very noisy with horns blaring from dozens of vehicles at any given time. Why are the police increasing the noise pollution with this loudspeaker when there is no tangible benefit? Since the loudspeaker is directed towards the public library, users of the library are also being disturbed by this additional noise.

Vishwas Krishna

MGP Writes to MP on Railway Problems

Mysore Grahakara Parishat has written to the new MP Pratap Simha about the problems faced by railway users in Mysore. A summary of the letter is as follows:

To,

Pratap Simha,

We would like to draw your attention to very sorry state of affairs of South Western Railway services at Mysore. SWR has set up a committee called Divisional Railway Users Consultative Committee to resolve problems faced by the public but it has been of little use. The problems range from exploitative and inadequate parking lots, very unscientific and commuter unfriendly platforms, inadequate trains and dilapidated rakes to total lack of cleanliness in the compartments, unauthorized vendors on the trains peddling unhealthy and overpriced food items, beggars on the trains, unauthorised occupation of reserved seats, gambling in the compartments and eve teasing and the list is very long.

Mysore Grahakara Parishat has provided a common platform for the citizens and the concerned government departments to meet and solve consumer problems. We have organized such meetings for road transport, traffic, water supply, telephony and electricity supply just to name a few. Top officials from these departments have come to our meetings and interacted with the public. But, top officials of SWR either refuse to meet us or participate, or agree to participate and abstain at the last moment with some excuse or the other. Such behaviour indicates that they have no real desire to solve the problems and improve the situation.

We would like to impress upon you the fact that Mysore has not received the attention it deserves on railway issues. Bengaluru-Mysore line doubling and electrification have been limping along for years. Linkage with Satyamangalam-Coimbatore is in limbo. We only hope that you will try to find solution to these issues now that we have our own Railway Minister at the Centre.

MGP would like to meet you and and discuss the problems of the railway commuters of Mysore. We request you to give us a suitable time for such a meeting.

Chandraprakash, President

Campaign to Save the Lung Spaces of Mysore

Dargah in Park

 Temple Park

Debris Dumping in People Park

Mysore is no more a garden city. Instead, it is becoming a concrete jungle. On paper, we have more than 600 parks in the city. But only 120 of them have been developed and can be recognized as parks. Since the land occupied by the parks is extremely valuable real estate, there is tremendous pressure to encroach. The best example of such encroaching is People's Park where one can find a PU college, a tennis club, a temple (See photo) and a dargah (See photo). The authorities seem blind to the progressive encroachment of the park. The park is also being used by the authorities to dump debris (See photo). The government's plan for building a library in People's Park has not fructified only because there is a case pending before the High Court.

The Supreme Court has repeatedly given judgements to prevent the encroachment of parks. The law allows only a structure of less than 30 square meters (323 sq.ft.) in a park and that too for watchmen's quarters. Despite these legal restrictions, our parks are being systematically decimated. The citizens are being forced to protest repeatedly and vigorously to prevent the destruction of parks in the city and to preserve our lung spaces.

Two years ago, on 24-6-2012, Mysore Grahakara Parishat, Mysore Youth Forum, Parisara Samrakshana Samithi and other NGOs held a "teach-in" at People's Park to reflect on how our parks are disappearing, how losing lung space is harmful, and what people can do about it. To continue exerting pressure on the local government, the state government and the elected representatives to stop all encroachments of the park, MGP is again holding a silent protest at People's Park between 10 AM and 12 AM on Saturday, 28-6-14. Some schools will be bringing their students as a practical class in the park to teach them on the need to save parks and on the citizens' responsibility to get involved to solve civic problems in a democracy. Those interested to get more information on saving the park are requested to contact MGP at 2515150 or 9845142770 or 8861096205

Bhamy V. Shenoy and Prof R. Chandra Prakash

Yadavagiri Footpath Destroyed

The Yadavagiri-Bamboo Bazaar Road (Brahmarshi Narayana Guru Road) is part of the Inner Ring Road even though it is quite narrow. The vehicle density on the road is quite high. There are signs which say that heavy vehicles are prohibited, but this restriction is not being enforced. In addition, the road is quite steep and it is a miracle that accidents do not happen more often on this road.

There are no footpaths on the road except on one side of the short stretch in front of Sunanda School. This makes the plight of pedestrians pitiable. Especially since children going to 4-5 schools use the road and there are 3 hostels including one for blind students.

Now someone has dumped debris on the only useful footpath on this road rendering it unusable (See photo). Since some effort has been made to spread the debris, it is possible that MCC itself has dumped the debris here.

Whoever has dumped the debris must have a sadistic bent of mind because they have destroyed the last vestige of a useful footpath on this road. Now God help the children and the blind students.

Dwarkanath Narayan

Sad State of Roads in Mysore

What is obvious in 99% of the roads in Mysore is that the road has no camber (arched surface) and is lower than the shoulders. As a result, rainwater falling not just on the road, but also the shoulders is forced to flow on the road surface itself. This goes against the fundamental principle of road construction which aims at keeping water off the road surface since water is the primary enemy of asphalt. The extra cost involved in giving the road the proper camber and lowering the shoulders can be more than recovered in the increased lifetime of the road. So the Mysore City Corporation and MUDA and PWD should include road camber and trimming of shoulders also in their specifications list.

Added to this, MCC is not cleaning the side drains properly. As a result, the problem of rainwater flowing on the road itself has become even more acute.

C. V. Sreeroopa