Law of Torts, MV Act and

Consumer Protection
eSeries
S.19
• The Next module looks at Consumer Protection Act
- Where the consumer pays for a service or purchases some goods, the responsibility
on the seller is immense
- Tort law has established in no uncertain terms that a negligent seller/provider will
have no protection
- The consumer has many preferences in the market and is spoilt for choice; In such a
competitive market, quality rules the day and enterprises charge heavy amounts for
it
- As we saw in the Klaus Mittelbachert case, the more expensive a service/good is, the
higher will be the responsibility of the seller/provider
- While its degree may vary, this does not take away the fact that goods/services of
any price places a responsibility on the seller/provider
- The problem faced by a consumer when faced with deficiency in service or defective
goods is twofold:
(Continued…)
- 1. Legal Fees and 2. Time
- An Ordinary civil case bound by procedure, is a lengthy formality; a
common consumer would shy away from bringing a suit, allowing
the seller/provider an escape
- The Consumer Protection Act aims to solve this problem
- It establishes the relationship between the consumer with the
provider/seller and from thereon builds the issue of
deficiency/defect, allowing the consumer an inexpensive and
speedy solution : We will see in the course of this module on how
valid this statement really is
- The Supreme Court of India has stressed on the importance of the
Act on several occasions
• The Supreme Court in Lucknow Development Authority v. MK Gupta AIR 1994 SC 787 explained the
nature of the Consumer Protection Act thus:

- To begin with the preamble of the Act, which can afford useful assistance to ascertain the legislative
intention, it was enacted, 'to provide for the protection of the interest of consumers'.
- Use of the word 'protection' furnishes key to the minds of makers of the Act.
- Various definitions and provisions which elaborately attempt to achieve this objective have to be
construed in this light without departing from the settled view that a preamble cannot control
otherwise plain meaning of a provision.
- In fact the law meets long felt necessity of protecting the common man from such wrongs for which
the remedy under ordinary law for various reasons has become illusory.
- Various legislations and regulations permitting the State to intervene and protect interest of the
consumers have become a haven for unscrupulous ones and the enforcement machinery either does
not move or it moves ineffectively, inefficiently and for reasons which are not necessary to be stated.

(Continued…)
- The importance of the Act lies in promoting welfare of the
society by enabling the consumer to participate directly in the
market economy.
- It attempts to remove the helplessness of a consumer which he
faces against powerful business, described as, 'a network of
rackets' or a society in which, 'producers have secured power' to
'rob the rest' and the might of public bodies which are
degenerating into store house of inaction where papers do not
move from one desk to another as a matter of duty and
responsibility but for extraneous consideration leaving the
common man helpless, bewildered and shocked.
(Continued…)
- The malady is becoming so rampant, widespread and deep that the society
instead of bothering, complaining and fighting for it, is accepting it as part of life.
The enactment in these unbelievable yet harsh realities appears to be a silver lining,
which may in course of time succeed in checking the routine.
- The Act thus aims to protect the economic interest of a consumer as understood
in commercial sense as a purchaser of goods and in the larger sense of user of
services.
Explaining the common feature and distinction between goods and services, the
Court stated:
- The common characteristics of goods and services are that they are supplied at a
price to cover the costs and generate profit or income for the seller of goods or
provider of services. But the defect in one and deficiency in other may have to be
removed and compensated differently. The former is, normally, capable of being
replaced and repaired whereas the other may be required to be compensated by
award of the just equivalent of the value or damages for loss.
• In Laxmi Engineering Works v. PSG Industrial Institute (1995) 3 SCC 583, the Supreme Court
elaborated on the type of institution the Consumer Forum represents and the nature of
consumer complaint:
- A review of the provisions of the Act discloses that the quasi-judicial bodies/authorities/
agencies created by the Act known as District Forums, State Commissions and the National
Commission are not Courts though invested with some of the powers of a Civil Court.
- They are quasi-judicial Tribunals brought into existence to render inexpensive and speedy
remedies to consumers.
- It is equally clear that these Forums/Commissions were not supposed to supplant but
supplement the existing judicial system.
- The idea was to provide an additional Forum providing inexpensive and speedy resolution of
disputes arising between consumers and suppliers of goods and services.
- The Forum so created is uninhibited by the requirement of Court fee or the formal
procedures of a Court.
- Any consumer can go and file a complaint.
(Continued…)
- Complaint need not necessarily be filed by the complainant himself; any
recognized consumers' association can espouse his cause.
- Where a large number of consumers have a similar complaint, one or
more can file a complaint on behalf of all.
- Even the Central Government and State Governments can act on
his/their behalf.
- The idea was to help the consumers get justice and fair treatment in the
matter of goods and services purchased and availed by them in a market
dominated by large trading and manufacturing bodies.
- Indeed, the entire Act revolves round the consumer and is designed to
protect his interest. 
- The Act provides for "business-to- consumer" disputes and not for
"business-to-business" disputes.
• In Charan Singh v. Healing Touch Hospital and Others (2000) 7 SCC 668, the Supreme
Court went into the manner of decision-making and determination of compensation
before the Forum:
- The Act is one of the benevolent pieces of legislation intended to protect a large
body of consumers from exploitation. 
- It provides for an alternative system of consumer justice by summary trial.
- The authorities under the Act exercise quasi- judicial powers for redressal of
consumer disputes and it is one of the postulates of such a body that it should arrive
at a conclusion based on reason.
- The necessity to provide reasons, howsoever, brief in support of its conclusion by
such a forum, is too obvious to be reiterated and needs no emphasizing.
- Obligation to give reasons not only introduces clarity but it also excludes, or at any
rate minimizes, the chances of arbitrariness and the higher forum can test the
correctness of those reasons.
(Continued…)
- While quantifying damages, Consumer Forums are required to make an attempt
to serve the ends of justice so that compensation is awarded, in an established
case, which not only serves the purpose of recompensing the individual but which
also at the same time, aims to bring about a qualitative change in the attitude of
the service provider.
- Indeed, calculation of damages depends on the facts and circumstances of each
case.
- No hard and fast rule can be laid down for universal application.
- While awarding compensation, a Consumer Forum has to take into account all
relevant factors and assess compensation on the basis of accepted legal
principles, on moderation.
- It is for the consumer forum to grant compensation to the extent it finds it
reasonable, fair and proper in the facts and circumstances of a given case
according to the established judicial standards where the claimant is able to
establish his charge
• The Supreme Court in Patel Roadways Limited v. Birla Yamaha Limited AIR
2000 SC 1461 considered the question whether proceedings before the
Consumer Forum can be called a suit when faced with the issue of
interpreting ‘suit’ under the Carriers Act:
- The term suit is a generic term taking within its sweep all proceedings
initiated by a party for realization of a right vested in him under law.
- The meaning of the term suit also depends on the context of its user which in
turn, amongst other things, depends on the Act or the Rule in which it is
used.
- No doubt the proceeding before the Consumer Forum is ordinarily a
summary proceeding and in an appropriate case where the Forum feels that
the issues raised by the parties are too contentious to be decided in a
summary proceeding it may refer the parties to a civil court.
- A proceeding before the Forum comes within the term suit.