2. Redressal Machinery
3. Important Case Laws
Consumer Protection Act, 1986
Introduction & Definitions
A consumer is a user of goods and services. Any person paying for goods and services which he uses is entitled to expect that the goods and services are of a nature and quality promised to him by the seller.
The earlier principle of "Caveat Emptor" or "let the buyer beware" which was prevalent has given way to the principle of "Consumer is King". The origins of this principle lie in the fact that in today's mass production economy where there is little contact between the producer and consumer, often sellers make exaggerated claims and advertisements which they do not intend to fulfill. This leaves the consumer in a difficult position with very few avenues for redressal. The onset on intense competition also made producers aware of the benefits of customer satisfaction and hence by and large, the principle of " consumer is king" is now accepted.
The need to recognise and enforce the rights of consumers is being understood and several laws have been made for this purpose. In India, we have the Indian Contract Act, the Sale of Goods Act, the Dangerous Drugs Act, the Agricultural Produce (Grading and Marketing) Act, the Indian Standards Institution (Certification Marks) Act, the Prevention of Food Adulteration Act, the Standards of Weights and Measures Act, the Trade and Merchandise Marks Act, etc which to some extent protect consumer interests. However, these laws required the consumer to initiate action by way of a civil suit which involved lengthy legal process proving to be too expensive and time consuming for lay consumers. Therefore, the need for a more simpler and quicker access to redressal to consumer grievances was felt and accordingly, it lead to the legislation of the Consumer Protection Act, 1986.
Objects of the Consumer Protection Act, 1986
The preamble to the Act states that the Act is legislated to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumer's disputes and for matters connected therewith.
The basic rights of consumers as per the Consumer Protection Act (CPA) are
1. the right to be protected against marketing of goods and services which are hazardous to life and property
2. the right to be informed about the quality, quantity, potency, purity, standard and price of goods, or services so as to protect the consumer against unfair trade practices
3. the right to be assured, wherever possible, access to variety of goods and services at competitive prices
4. the right to be heard and be assured that consumers' interests will receive due consideration at appropriate forums
5. the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers
6. the right to consumer education
The CPA extends to the whole of India except the State of Jammu and Kashmir and applies to all goods and services unless otherwise notified by the Central Government.
Definitions of Important Terms
Before studying the provisions of the CPA, it is necessary to understand the terms used in the Act. Let us understand some of the more important definations.
Complainant means :-
1. A consumer; or
2. Any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force; or
3. The Central Government or any State Government, who or which makes a complaint; or
4. One or more consumers where there are numerous consumers having the same interest
Complaint means any allegation in writing made by a complainant that :-
1. an unfair trade practice or a restricted trade practice has been adopted by any trader
2. the goods bought by him or agreed to be bought by him suffer from one more defects
3. the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect
4. the trader has charged for the goods mentioned in the complaint a price excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods.
5. goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force, requiring traders to display information in regard to the contents, manner and effect of use of such goods ;with a view to obtaining any relief provided by law under the CPA.
Consumer means any person who :-
1. 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 (eg hire purchase or installment sales) and includes any other user of such goods when such use is made with the approval of the buyer, but does not include a person who obtains such goods for resale or for any commercial purpose ; or
2. hires or avails of any services 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 services when such services are availed of with the approval of the first mentioned person
For the purposes of this defination "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood by means of self-employment.
Goods means goods as defined in the Sale of Goods Act, 1930. Under that act, goods means every kind of movable property other than actionable claims and money and includes stocks and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
Service is defined to mean service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purverying of news or other information but does not include the rendering of any service free of charge or under a contract of personal service.
Consumer dispute means dispute where the person against whom a complaint has been made, denies or disputes the allegation contained in the complaint.
Restrictive Trade Practice means any trade practice which requires a consumer to buy, hire, or avail of any good or as the case may be, services as a condition precedent for buying, hiring or availing of any other goods or services.
Unfair Trade Practice means unfair trade practice as defined under the Monopolies and Restrictive Trade Practices Act. The MRTP act has defined certain practices to be unfair trade practices.
Defect means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trade in any manner whatsoever in relation to any goods.
Deficiency means any fault, imperfection or shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
Redressal Machinery under the Act
Consumer Protection Councils
The interests of consumers are enforced through various authorities set up under the CPA. The CPA provides for the setting up of the Central Consumer Protection Council, the State Consumer Protection Council and the District Forum
Central Consumer Protection Council
The Central Government has set up the Central Consumer Protection Council which consists of the following members :-
(a) The Minister in charge of Consumer Affairs in the Central Government who is its Chairman, and
(b) Other official and non-official members representing varied interests
The Central council consists of 150 members and its term is 3 years. The Council meets as and when necessary but at least one meeting is held in a year.
State Consumer Protection Council
The State Council consists of :-
(a) The Minister in charge of Consumer Affairs in the State Government who is its Chairman, and
(b) Other official and non-official members representing varied interests
The State Council meets as and when necessary but not less than two meetings must be held every year.
Redressal Machinery under the Act
The CPA provides for a 3 tier approach in resolving consumer disputes. The District Forum has jurisdiction to entertain complaints where the value of goods / services complained against and the compensation claimed is less than Rs. 20 lakhs, the State Commission for claims exceeding Rs. 20 lakhs but not exceeding Rs. 1 crore and the National Commission for claims exceeding Rs. 1 crore.
Under the CPA, the State Government has to set up a district Forum in each district of the State. The Government may establish more than one District Forum in a district if it deems fit. Each District Forum consists of :-
(a) A person who is, or who has been, or is qualified to be, a District Judge who shall be its President
(b) two other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman.
Appointments to the State Commission shall be made by the State Government on the recommendation of a Selection Committee consisting of the President of the State Committee, the Secretary - Law Department of the State and the secretary in charge of Consumer Affairs
A complaint shall be instituted in the District Forum within the local limits of whose jurisdiction -
(a) the opposite party or the defendant actually and voluntarily resides or carries on business or has a branch office or personally works for gain at the time of institution of the complaint; or
(b) any one of the opposite parties (where there are more than one) actually and voluntarily resides or carries on business or has a branch office or personally works for gain, at the time of institution of the complaint provided that the other opposite party/parties acquiescence in such institution or the permission of the Forum is obtained in respect of such opposite parties; or
(c) the cause of action arises, wholly or in part.
The Act provides for the establishment of the State Consumer Disputes Redressal Commission by the State Government in the State by notification. Each State Commission shall consist of:-
(a) a person who is or has been a judge of a High Court appointed by State Government (in consultation with the Chief Justice of the High Court ) who shall be its President;
(b) two other members who shall be persons of ability, integrity, and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom must be a woman.
Every appointment made under this hall be made by the State Government on the recommendation of a Selection Committee consisting of the President of the State Commission, Secretary -Law Department of the State and Secretary in charge of Consumer Affairs in the State.
Every member of the District Forum holds office for 5 years or upto the age of 65 years, whichever is earlier and is not eligilbe for re-appointment. A member may resign by giving notice in writing to the State Government whereupon the vacancy will be filled up by the State Government.
The State Commission can entertain complaints where the value of goods or services and the compensation, if any claimed exceed Rs. 5 lakhs but does not exceed Rs. 20 lakhs;
The State Commission also has the jurisdiction to entertain appeal against the orders of any District Forum within the State
The State Commission also has the power to call for the records and appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State if it appears that such District Forum has exercised any power not vested in it by law or has failed to exercise a power rightfully vested in it by law or has acted illegally or with material irregularity.
The Central Government provides for the establishment of the National Consumer Disputes Redressal Commission The National Commission shall consist of :-
(a) a person who is or has been a judge of the Supreme Court, to be appoint by the Central Government (in consultation with the Chief Justice of India ) who be its President;
(b) four other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman
Appointments shall be by the Central Government on the recommendation of a Selection Committee consisting of a Judge of the Supreme Court to be nominated by the Chief Justice of India, the Secretary in the Department of Legal Affairs and the Secretary in charge of Consumer Affairs in the Government of India.
Every member of the National Commission shall hold office for a term of five years or upto seventy years of age, whichever is earlier and shall not be eligible for reappointment.
The National Commission shall have jurisdiction :-
a. to entertain complaints where the value of the goods or services and the compensation, if any, claimed exceeds rupees twenty lakhs:
b. to entertain appeals against the orders of any State Commission; and
c. to call for the records and pass appropriate orders in any consumer dispute which is pending before, or has been decided by any State Commission where it appears to the National Commission that such Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.
Complaints may be filed with the District Forum by :-
1. the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided
2. any recognised consumer association, whether the consumer to whom goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided, is a member of such association or not
3. one or more consumers, where there are numerous consumers having the same interest with the permission of the District Forum, on behalf of or for the benefit of, all consumers so interested
4. the Central or the State Government.
On receipt of a complaint, a copy of the complaint is to be referred to the opposite party, directing him to give his version of the case within 30 days. This period may be extended by another 15 days. If the opposite party admits the allegations contained in the complaint, the complaint will be decided on the basis of materials on the record. Where the opposite party denies or disputes the allegations or omits or fails to take any action to represent his case within the time provided, the dispute will be settled in the following manner :-
I. In case of dispute relating to any goods : Where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, a sample of the goods shall be obtained from the complainant, sealed and authenticated in the manner prescribed for referring to the appropriate laboratory for the purpose of any analysis or test whichever may be necessary, so as to find out whether such goods suffer from any other defect. The appropriate laboratory' would be required to report its finding to the referring authority, i.e. the District Forum or the State Commission within a period of forty- five days from the receipt of the reference or within such extended period as may be granted by these agencies.
Appropriate laboratory means a laboratory or organisation:-
(i) recognised by the Central Government;
(ii) recognised by a State Government, subject to such guidelines as may be prescribed by the Central Government
(iii) any such laboratory or organisation established by or under any law for the time being in force, which is maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect.
The District Forum / State Commission may require the complainant to deposit with it such amount as may be specified towards payment of fees to the appropriate laboratory for carrying out the tests. On receipt of the report, a copy thereof is to be sent by District Forum/State Commission to the opposite party along with its own remarks.
In case any of the parties disputes the correctness of the methods of analysis/test adopted by the appropriate laboratory, the concerned party will be required to submit his objections in writing in regard to the report. After giving both the parties a reasonable opportunity of being heard and to present their objections, if any, the District Forum/Slate Commission shall pass appropriate orders.
II. In case of dispute relating to goods not requiring testing or analysis or relating to services: Where the opposite party denies or disputes the allegations contained in the complaint within the time given by the District Forum / State Commission, it shall dispose of the complaint on the basis of evidence tendered by the parties. In case of failure by the opposite party to represent his case within the prescribed time, the complaint shall be disposed of on the basis of evidence tendered by the complainant.
Limitation period for filing of complaint
The District Forum, the State Commission, or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. However, where the complainant satisfies the District Forum / State Commission, that he had sufficient cause for not filing the complaint within two years, such complaint may be entertained by it after recording the reasons for condoning the delay.
Powers of the Redressal Agencies
The District Forum, State Commission and the National Commission are vested with the powers of a civil court under the Code of Civil Procedure while trying a suit in respect of the following matters:-
1. the summoning and enforcing attendance of any defendant or witness examining the witness on oath;
2. the discovery and production of any document or other material producible as evidence;
3. the reception of evidence on affidavits:
4. the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source;
5. issuing of any commission for the examination of any witness; and
6. any other matter which may be prescribed.
Under the Consumer Protection Rules, 1987, the District Forum, Commission and the National Commission have the power to require any person :-
(i) To produce before, and allow to be examined by an officer of any authorities, such books of accounts, documents or commodities as may be required and to keep such book, documents etc. under its custody for the purposes of the Act;
(ii) To furnish such information which may be required for the purposes to any officer so specified.
They have the power to :-
(i) To pass written orders authorising any officer to exercise power of entry and search of any premises where these books, papers, commodities, or documents are kept if there is any ground to believe that these may be destroyed, mutilated, altered, falsified or secreted. Such authorised officer may also seize books, papers, documents or commodities if they are required for the purposes of the Act, provided the seizure is communicated to the District Forum / State Commission / National commission within 72 hours. On examination of such documents or commodities, the agency concerned may order the retention thereof or may return it to the party concerned.
(ii) to issue remedial orders to the opposite party.
(iii) to dismiss frivolous and vexatious complaints and to order the complainant to make payment of costs, not exceeding Rs. 10,000 to the opposite party.
Remedies Granted under the Act
The District Forum / State Commission / National Commission may pass one or more of the following orders to grant relief to the aggrieved consumer :-
1. to remove the defects pointed out by the appropriate laboratory from goods in question;
2. to replace the goods with new goods of similar description which shall be free from any defect;
3. to return to the complainant the price, or, as the case may be, the charges paid by the complainant;
4. to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to negligence of the opposite party;
5. to remove the defects or deficiencies in the services in question;
6. to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;
7. not to offer the hazardous goods for sale:
8. to withdraw the hazardous goods from being offered for sale:
9. to provide for adequate costs to parties.
Any person aggrieved by an order made by the Forum may prefer an appeal to the State Commission in the prescribed form and manner. Similarly, any person aggrieved by any original order of the State Commission may prefer an appeal to the National Commission in the prescribed form and manner. Any person aggrieved by any original order of the National Commission may prefer an appeal to the Supreme Court.
All such appeals are to be made within thirty days from the date of the order provided that the concerned Appellate authority may entertain an appeal after the said period of thirty days if it is satisfied that there was sufficient cause for not filling it within that period. The period of 30 days is to be computed from the date of receipt of the order by the appellant.
Where no appeal has been preferred against any of the orders of the authorities, such orders would be final. The District Forum, State Commission or National Commission may enforce respective orders as if it were a decree or order made by a Court and in the event of their inability to execute the same, they may send the order to the Court for execution by it as if it were a Court decree or order.
Failure or omission by a trader or other person against whom a complaint is made or the complainant to comply with any order of the State Commission or the National Commission shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to 3 years, or with fine of not less than Rs. 2,000 but which may to Rs. 10000 or with both.
However, if it is satisfied that the circumstances of any case so requires, then the District Forum or the State Commission or the National Commission may impose a lower fine or a shorter term of imprisonment .
Important Case Laws
Gist of important Consumer Law Cases
1. No compensation for defective machines purchased for manufacturing activities In the case of Abbay Chemicals Pvt. Ltd. v. Kanti Bhai D. Patel , the National Commission held that no compensation could be awarded in respect of defects of a machine worth more than Rs. 10 lakhs, purchased for use in large scale manufacturing activity, since the purchase would be for a commercial purpose and the buyer in such case would not be a consumer under the Consumer Protection Act. Similar decision was given in the case of Synco Textiles Pvt Ltd. v. Greaves Cotton & Co. Ltd.
2. Highly inflated electricity bills and defective electricity meter In the case of Y N Gupta vs DESU , the National Commission considered a complaint regarding the inflated electricity bills served by DESU on the complainant. In this case, DESU did not raise bills in keeping with the cycle normally adopted. It also did not replace the defective meter. However, it slapped the bill for over Rs. 1.06 lacs for a period from 21st December, 1988 to 25th March, 1990. The power connection was also disconnected but restored after making a complaint to the General Manager. The National Commission ruled that it was difficult to envisage a situation where the consumer could have utilised over 1 lakh units of electricity and the expect a poor consumer to pay bills of over a lakh. The National Commission ruled that the bills were casualty prepared. DESU did not have the authority to raise bills upon a defective meter beyond six months under the Electricity Act, 1910. In these circumstances, the National Commission concluded that there was deficiency in services on the part of DESU and awarded a compensation of Rs. 30000 and costs of Rs. 5,000.
3. Government servants not doing any service tor consideration but a statutory function In the case of S.P. Goel v. Collector of Stamps, it was held that a government official does not render any service in the course of doing his statutory duties. Hence, no remedy can be granted under the CPA. In this case, the complainant presented before the Sub-Registrar a document claiming it to be a will for registration. The Sub-registrar did not register the document claiming it to be a deed of conveyance and hence not adequately stamped. He impounded the document and sent it to the Collector of Stamps for action. Despite several notices issued to him by the Collector, the appellant did not appear before him. When the appellant appeared before the Collector he was asked to furnish certain other documents. In the meantime, however, the appellant filed a complaint before the District Forum under the Consumer Protection Act alleging harassment by the Sub-Registrar and Collector and had prayed for compensation being awarded to him.
The District Forum held the view that the appellant having paid registration fees, he shall be treated to have hired the services of the Sub-Registrar and the Collector and since the Collector had not taken any decision as to the nature of the document for about six years, allowed compensation to be paid to the complainant.
On appeal by the Collector, the State Commission, upheld the order of the District Forum and enhanced the compensation to Rs. 5,000.
On the revision petition filed by the Collector, the National Commission held the view that the appellant was not a "consumer" under the CPA. because there was no hiring of services by the complainant for consideration and because a government official doing his duty as functionary of the State under law could not be said to be rendering a service to the complainant. It stated that assuming the Collector was discharging a service, he was doing the same as a functionary of the government under the authority of the statute and for the benefit of the revenue for which he was being paid by the Government and not by the complainant.
The Supreme Court upheld the order of the National Commission on appeal.
4. Maintenance of Guest house - Not for commercial purpose In the case of J.K. Puri Engineers v. Mohan Breweries & Distilleries Ltd, it was held that a guest house maintained for company officials is not for commercial purposes and hence benefit under the CPA can be availed of.: The company maintained a guest house for use of its managing director and other executives. It entered into a contract with the appellants for the installation of a central air-conditioning system. The company alleged that the system installed did not properly, developed snags, and that there was leakage of water from the dusting system. The appellant having failed to make good the defects, the complainant appointed a consultant and obtained from him a report on the working of the system which pointed out a number of defects. The State Commission held that the complainant was a consumer under the CPA and that the air-conditioning system had not been installed for a commercial purpose because the guest house was not maintained for a commercial purpose. The National Commission upheld the decision of the State Commission.
5. Failure to deliver houses by the housing board is deficiency in service. In the case of S.P. Dhavaskar v/s Housing Commissioner, Karnataka Housing Board & Vice Versa, the complainant had made a deposit of Rs. 1.66 lakhs with the Housing Board for a house proposed to be built by the Board. He was told that the construction be completed within two years from March, 1987. In March, 1992 he was informed that the construction was not upto the expected level because of the use of low cost technology and that the houses constructed developed distress and might not long and suggested that the complainant might take back the amount of deposit without interest or opt for a new house in lieu of the house already allotted. The complainant made a claim of Rs. 4.65 lakhs which was rejected. The State Commission held that the act of the Housing Board amounted to a deficiency in service and returning deposit amount without interest was unreasonable and ordered payment of interest at 18% p.a. In appeal, the National Commission upheld the order of the State Commission.
6. Failure to provide basic safeguards in the swimming pool amounted to deficiency in service. In the case of Sashikant Krishnaii Dole v. Shitshan Prasarak Mandali, the National commission held that failure to amount basic safeguards in the swimming pool amounts to deficiency in service. A school owned a swimming pool and offered swimming facilities to the public on payment of a fee. The school conducted winter and summer training camps to train boys in swimming and for this purpose engaged a trainer/coach. The complainants had enrolled their only son for learning swimming under the guidance of the coach. It was alleged that due to the negligence of the coach, the boy drowned and died. The school denied any responsibility on its part. The coach claimed that he had considerable experience in coaching young boys is swimming. When the deceased was found to have been drowned, the coach immediately took him out of the water and removed the water from his stomach and gave him artificial respiration and thereafter took him to a doctor. The doctor advised that the boy be taken to the nearest hospital where the boy died. The State Commission held the school and the coach deficient in rendering service to the deceased. On appeal, the order was upheld by the National Commission.
7. Failure to settle provident fund claim in time amounts to deficiency in service. In the case of Regional Provident Fund Commissioner, Faridabad v. Shiv Kumar Joshi, it was held that failure to settle provident fund dues on time amounts to deficiency in service.
8. Removal of ladder of an aircraft while disembarking by the passenger amounts to deficiency in service. In the case of Station Manager, Indian Airlines v. Dr. Jiteswar Ahir, the National Commission held that removal of ladder while a passenger was disembarking, leading to injury to the passenger amounted to deficiency in service. The complainant after he was seated on the plane, was intimated by announcement that part of his luggage was lying on the ground unidentified. He moved towards the door and finding that the ladder was in place, tried to get down. But before he could get his entire body on the ladder, the ladder was moved as a result of which of which he fell to the ground and sustained injuries. The passenger demanded compensation of Rs. 10 lakhs from the Airline. The Airline was willing to pay Rs. 40000/- which was the maximum amount payable under the Carriage by Air Act, 1972. The State Commission ordered a compensation of Rs. 4 lakhs and Rs. 1 lakh for mental agony and distress plus costs. The order of the State Commission was upheld by the National Commission.
9. Imparting education is not a service. In the case of Chairman, Board of Examinations v. Mohideen Abdul Kader, the complainant, a student who wished to appear in the subject of production technology was denied permission to write that paper by the hall supervisor on the ground that his name appeared against Code No. 2 while the paper fell under Code No. 1. He alleged that he was wrongly restrained and prevented from writing the examination on that day because of the attitude and negligence of the staff and therefore he claimed compensation for the inconvenience caused to him. The National commission in its order stated that a candidate who appeared for an examination could not be regarded as a person who had hired or availed of the services of the university or board for consideration. Therefore he was not a consumer under the Consumer Protection Act and no compensation was awarded.
10. In the case of Poonam Verma v/s Ashwin Patel, it was held that a doctor qualified under the homeopathic system of medicines treats a patient with allopathic medicines, he is guilt of negligence and compensation is due if the patient dies on such account.
11. In the case of Bharathi Knitting Co. v. DHL Worldwide Express Courier Division of Airfreight Limited, it was held that the liability of the courier company in case of delayed delivery of articles was limited to the amount of damages agreed to under the contract. In the case of Devi Engineering Co v/s Union of India, it was held that the Post Office was not liable for wrong delivery of registered postal articles.
12. In the case of Department of Posts & Telegraphs v. Dr. R.C. Saxena, it was held that there is deficieny in service where the Post Office refuses to pay interest on deposits simply by invoking technical rules. In February, 1988 the consumer opened a national savings scheme account in the General Post Office in Lucknow. In March, 1989 he opened a similar account at Chamba (H.P.) depositing Rs. 90,000. On his retirement from service he got both accounts transferred to Kangra. When he wanted to close the account by withdrawing the balance, the post office refused to grant him interest on the Rs.90000 deposited by him in his second account on the ground that under the NSS rules, one person can have only one NSS account. The National Commission held that the opening of the second account was merely an irregularity not amounting to contravention of the rules and that the investor was entitled to interest on the second deposit. 13. In the case of Union of India v/s Nathmal Hansaria, it was held that the railways are liable for deficiency in service when a person passing through the inter connecting passage way between two compartments of a train fell down resulting in death.
14. In the case of Harshad J Shah v/s Life Insurance Corporation of India, it was held that the Life Insurance Corporation could not be held liable for lapse in policy due to non-payment of premium even if the premium was paid on time to the agent of LIC but was not paid by him to the LIC within the prescribed time.
Actionable Claim – ‘Actionable claim’ means a claim to any debt or to any beneficial in movable property not in possession (either actual or constructive) of the claimant. The debt should be other than a debt secured by mortgage of immovable property or pledge of movable property. The claim should be such be such as Civil Court would recognise as affording grounds for relief. Such debt or beneficial interest be existent, accruing, conditional or contingent. [section 3 para 6]. Such transfer of an actionable claim shall be effected only by execution of an instrument is writing. [section 130]. - - One normal example is that receivable from a person is ‘actionable claim’, which can be transferred to another (e.g. one bank may transfer some of its receivables to another).