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May 09,2024 New Delhi: The Delhi High Court has asked NBCC to refund over 76 lakh along with interest to a homebuyer after it failed to deliver possession of his flat, bought it 2012, and also awarded compensation of Rs 5 lakh for causing “extreme mental agony”. Justice Subramonium Prasad, while allowing the homebuyer’s petition against NBCC, observed that purchasing a house is one of the most significant investments an individual or a family makes in their lifetime, and it often involves years of savings, meticulous planning and emotional investment, and therefore compensating wronged homebuyers is not just a matter of rectifying past injustices but also about deterring future misconduct. The petitioner, a retired government employee, said he purchased the flat in ‘NBCC Green View Apartments’, a project launched in 2012 for Gurugram, but in spite of paying the entire sale price of over Rs 76 lakh in 2017, the unit was never handed over to him. In the order passed on May 8, the court observed that the petitioner has been deprived of his money for the last 10 years and “structurally defective houses” have been constructed, leaving him in a complete lurch, and NBCC should be “dealt with severely” for reluctance to pay interest on the amount and ensuring the petitioner’s rehabilitation. Taking judicial notice of geometric progression of price of land in the national capital region, the court said the “pittance” offered by NBCC to only return the principal amount was not an offer in the eyes of law and a rent allowance of Rs.12.50/- per sq. ft. for six months was not an adequate compensation. “This court is, therefore, inclined to allow the instant writ petition directing the respondent/NBCC to return the entire amount of money paid by the Petitioners within a period of six weeks from today along with interest @ 12% from 30.01.2021 till today. In view of the fact that the petitioner has been forced to shift accommodation and fend for himself in the last seven years and has been put to extreme mental agony, this court is inclined to direct the NBCC to pay a sum of Rs. 5 lakh to the petitioner,” the court ordered. “This is a classic case of extreme hardships suffered by a home buyer who has been made to run from pillar to post after having spent his entire life savings… Respondent has been exceedingly unfair in treating the home buyers in this manner,” the court observed. NBCC accused the petitioner of “forum shopping”, stating he has already approached the fora under the RERA Act and the Consumer Protection Act, and therefore the petition should not be entertained by the high court. The court said in the present case, the act of approaching various fora stemmed from “desperation” rather than any strategy. The behaviour, it added, arises out of a sense of frustration, helplessness and lack of legal knowledge. “In the present case, the petitioner entered into the agreement way back in the year 2012. In five years, the petitioner has pumped in over Rs 76 lakh. A ‘No Dues Certificate’ has been given to the petitioner. Structural defects have been found out in the construction after certain persons started occupying the flats. Petitioners and several other persons have been left in lurch and have been forced to knock the doors of various forums,” the court said. “Such a person faces financial crunch to ensure proper education to his children and such a situation he has no other option but to knock on the doors of various forums hoping to get relief and in such a situation the contention of the State that the person is guilty of forum shopping cannot be accepted at all,” it added. The court further said that when builders fail to deliver what was promised, they shatter the trust and financial security of homebuyers and put them in a situation where they may face immense stress, anxiety, uncertainty and ultimately be forced to navigate legal channels for seeking recourse. “The emotional toll of living in limbo, uncertain about the future of their investment and the stability of their living arrangements cannot be understated. Compensating wronged homebuyers is not just a matter of rectifying past injustices but also about deterring future misconduct,” the court observed. Source: Economic TImes

April 19,2024 The Central Consumer Protection Authority has asked the Food Safety and Standards Authority to investigate claims that baby cereal products sold by Swiss food-processing conglomerate Nestlé in India contain added sugar, PTI reported on Friday. The development comes after an investigation by the Public Eye and the International Baby Food Action Network found that Nestlé was selling products with added sugar to low-income countries. Experts maintain that sugar should not be added to foods fed to babies and young children because it is unnecessary and addictive. However, infant cereals and formulas sold in the European market, including Switzerland, Germany, France and the United Kingdom, did not have any added sugar, the investigation found. Public Eye is a Swiss non-governmental organisation campaigning for fair globalisation and the International Baby Food Action Network is a network of public interest groups working to reduce morbidity and mortality among infants and young children globally. In response to the report, Consumer Affairs Secretary and Central Consumer Protection Authority chief Nidhi Khare told PTI that she had written to the Food Safety and Standards Authority “to take cognisance of the report on Nestlé’s baby product”. The National Commission for Protection of Child Rights has also issued a notice to the Food Safety and Standards Authority about the report. According to the Public Eye and the International Baby Food Action Network report, all 15 Cerelac baby cereal products sold by Nestlé in India contain on average nearly three grams of added sugar per serving. In South Africa too, all Cerelac baby cereals contain four grams or more of added sugar per serving and in Brazil, six out of eight such products sold by Nestlé contain an average of three grams of sugar per serving, they found. On the other hand, infant cereals and formulas sold in the European market did not contain added sugar. In a statement shared with a Nestlé India spokesperson said that the company’s “products manufactured in India are in full and strict compliance with CODEX standards [a commission established by the World Heath Organization and the Food and Agriculture Organization] and local specifications [as required] pertaining to the requirements all nutrients including added sugars”. The company added: “Over the past 5 years, we have already reduced added sugars by up to 30%, depending on the variant. We regularly review our portfolio and continue to innovate and reformulate our products to further reduce the level of added sugars, without compromising on nutrition, quality, safety, and taste.” The report by the two organisations also showed that Cerelac wheat-based cereals, meant for consumption by six-month-old babies, contained over two grams of added sugar per serving in India, six grams in Brazil and over five grams in Ethiopia. The same product being sold in Germany and the United Kingdom did not contain any added sugar. Source: Scroll.in

May 06,2024 In a recent ruling, the Supreme Court has held the District Cooperative Bank in Varanasi accountable for service lapses, affirming its vicarious liability for the actions of its employees . The apex court directed the bank to compensate a man with Rs 25,000 nearly three decades after he was wrongly denied access to his fixed deposit. A bench comprising Justices P S Narasimha and Aravind Kumar upheld the decision of the district consumer forum from 1997, which had initially granted compensation to the aggrieved individual. The National Consumer Disputes Redressal Commission’s (NCDRC) contrary ruling was overturned by the apex court. The case revolves around the non-release of fixed deposit receipts totaling Rs 1,60,000 by the District Cooperative Bank in Varanasi. The petitioner alleged that the bank had unlawfully prevented him from withdrawing his funds. The district consumer forum, upon review, ordered the bank to refund the amount along with 15% interest, and an additional Rs 25,000 in damages. The Supreme Court, in its judgment, emphasized, “It is seen from the record that the district forum was satisfied that the appellant had, in fact, handed over Rs 1,60,000 to the bank’s officials. This is evidenced from the bank’s ledger.” The court noted the establishment of an inquiry committee that recommended criminal proceedings against certain officials, which the bank had duly pursued. Additionally, it acknowledged the periodic renewal of fixed deposit receipts, thereby affirming the bank’s vicarious liability for its employees’ actions. Source: Economic TImes

May 09,2024 The Consumer Disputes Redressal Commission in Chandigarh has fined the homestay marketplace Airbnb and one of its hosts ₹10,000 after a six-month-old child was accidentally injured while the property was being cleaned. The Commission President Pawanjit Singh and members Surjeet Kaur and Suresh Kumar Sardana noted an email exchange between the complainants and Airbnb, where Airbnb and the caretaker admitted to the incident and apologised. The emails from the accused clearly admit the incident on March 6, 2022, when the complainant’s six-month-old daughter, wrapped in a blanket, fell while the room was being cleaned by the caretaker, and the accused also apologised, the May 2 order stated. The commission directed both Airbnb and the property caretaker to pay ₹5,000 to the complainant as compensation, along with an additional ₹5,000 for litigation costs. The development comes after the bench heard a complaint from the child’s mother. Source: CNBCTV

May 09,2024 Difficulty in collating information cannot be the grounds for denying details sought under the Right to Information Act, the Delhi High Court has observed. In a judgment on May 2, Justice Subramonium Prasad said that a public authority cannot justify denying any information to an applicant under the Act by claiming that the details were not available in a single place and that would take time to collate it. “Efforts have to be made by the department to collate the information and then give it to the respondent,” the court held. Prasad observed that the objective of the Right to Information Act was to ensure transparency in the functioning of government departments and that this mandate cannot be obstructed by state governments. The judgment came on a petition filed by the Delhi government against an order of the Central Information Commission. The commission had asked the state government to provide information under the Act to applicant Prabhjot Singh Dhillon regarding actions taken by the education department against government teachers for conducting private tuitions. The Delhi government told the High Court that it could not provide such information for unaided schools as it they did not fall within its jurisdiction, reported Bar and Bench. It also said that private unaided schools do not fall under the purview of the Right to Information Act. The state said that the vigilance arm of the Department of Education had not issued any directions to maintain data on cases of misconduct by government teachers. The High Court rejected the state’s petition. Prasad remarked that information regarding actions taken against teachers of aided schools would be available with the department, though not in one place, and could be provided to Dhillon. “[The Delhi School Education Rules, 1973] stipulates that if a School intends to take a major penalty against a teacher then the approval of the Director of Education is necessary and without such an approval any action of major penalty cannot be imposed on the teacher,” the court held. “Therefore, information related to teachers of private unaided schools can be collated from the records of major punishment imposed by such schools.” Source: Scroll.in

Apr 30,2024 As Supreme Court intensifies its focus on companies against misleading advertisements, amendment to strengthen the Drug and Magic Remedies (Objectionable Advertisements) Act, 1954 have been in stuck with the Union Health Ministry since February 2020, reported ToI. In response to an RTI application seeking the status of the amendment, the ministry responded last month that the matter was still “pending”. The Ministry had formed the committee through an order back on December 10, 2019. It included representatives from Ayush Ministry, Consumer Affairs department, Information and Broadcasting Ministry and a few state drug controllers. The draft amendment bill was made public for comments on February 3, 2020, just when Covid struck. The committee that drafted the amendment bill had recommended the DMR(OA) (Amendment) Bill 2020 “in order to giving the sharper teeth (sic) and to keep pace with the changing time and technology”. The main changes proposed were to enhance punishment and to increase the number of conditions for which ads for drugs claiming to diagnose, cure, mitigate, treat, or prevent would be prohibited from 54 to 78. The penalty was to increase from “imprisonment which may extend to six months or with fine, or with both” for first conviction to “imprisonment which may extend to two years and fine up to ten lakh rupees”. For subsequent convictions, penalty under DMRA is “imprisonment which may extend to one year, or with fine, or with both”. The amendment proposed to increase it to imprisonment up to five years and fine up to fifty lakh rupees. All comments received were compiled by the CDSCO (Central Drugs Standard Control Organisation) and sent it to the ministry by the end of June 2020. A draft cabinet note was put up before the health minister in November 2020 and a slide presentation on the draft was made by the CDSCO on the request of the ministry. The next month, it was suggested that the draft be circulated among all states as they would be the ones to implement it. The file circulated some more till Covid put a stop to it. It was next picked up in September 2022 when it was decided that a meeting ought to be held with the drug controller general of India on the matter. From the RTI reply recently, it appears that there has been no progress after that. The DMRA amendment was initiated on the recommendation of a Parliamentary standing committee, whose report tabled in March 2018 stated that “it is the need of the hour to strictly monitor and regulate the misleading advertisements for promoting the sale of AYUSH medicine”. Unlike the Drugs and Cosmetics Act, 1940, DMRA brings within its ambit medicines of all systems including Ayurvedic drugs. This is why many of the complaints against Patanjali’s drugs were filed under DMRA as they claimed to cure/treat diseases listed under the DMRA. “Despite the parliament committee’s recommendation to enact a strong law to prevent misleading and illegal ads, it is clear from the file noting that I obtained through RTI, that there is no file movement since 2022. I complained to the Prime Minister’s office and even after direction from the PMO, they are sitting on it,” said Dr Babu, an ophthalmologist and RTI activist, who has filed several complaints against Patanjali ads for violating DMRA. Source: Economic Times

May 06,2024 Regardless of whether you have purchased a flat, bungalow, or a house, you have the right to file a case if you have any grievances where you feel that the RERA Act may have been violated. The Real Estate Regulatory Authority (RERA) Act was enacted for this very purpose — to solve home buyers ‘ grievances and promote a healthy real estate market in India. It is important to consider that in some situations, taking legal action through civil court may be the best course of action or the only option available. So, the question is how you should decide which way to move. We tell you how to choose. As per an ANAROCK report (released in December 2023), which cited data from the Ministry of Housing & Urban Affairs (MoHUA), 1,16,300 cases of homebuyers’ disputes since 2016 till November 28, 2023, have been resolved by RERA courts across India. One of the criteria for filing a case under RERA is that the respective home/flat/bungalow etc., must be registered under the RERA Act. Registration under the RERA Act is mandatory for every real estate project with more than eight apartments or a size of more than 500 square metres. “Complaints can be filed by home buyers under Section 31 of the Real Estate (Regulation and Development) Act, 2016, either with the Real Estate Regulatory Authority or the adjudicating officer. Cases can be against promoters, allottees and/or real estate agents for any violation or contravention of the provisions mentioned under the RERA Act such as delay in possession, demand for advance payment above 10% without execution and registration of agreement for sale, structural defects and others,” says Heena Chheda, Partner, Economic Laws Practice, a law firm. Chheda says that the RERA Adjudicating Officer is empowered to determine the compensation payable in matters pertaining to Sections 12, 14, 18 and 19 of the RERA Act. “The RERA Authority is empowered to adjudicate the dispute pertaining to the violation or contravention of the provisions of the RERA Act or the rules and regulations made thereunder,” she says. “During the pre-RERA period, the industry was often seen as less transparent, with buyers frequently facing delays in project deliveries and discrepancies with amenities as promised and those that were finally delivered. Post-RERA, the industry has seen significant improvements in transparency and accountability. RERA has played a crucial role in formalizing the real estate sector while also promoting fairness and transparency in real estate deals. This has not only benefited buyers but has also provided genuine developers a level playing field,” says Prashant Sharma, President, National Real Estate Development Council (NAREDCO) Maharashtra. Legal experts say that aggrieved home buyers file a case in RERA first and then approach the RERA Appellate Tribunal and then the high court and then ultimately the Supreme Court if their dispute is not solved. “As per Section 79 of the RERA Act, Civil Courts shall not have any jurisdiction to entertain any suit or proceeding concerning matters that the Real Estate Regulatory Authority (RERA), adjudicating officer or Appellate Tribunal is empowered to determine under the RERA Act,” says Shabala Shinde, Partner, Grant Thornton Bharat, a tax and business consultancy firm. The RERA Act provisions are applicable in addition to existing legal Acts, which means all other Acts can be made applicable while deciding a case under the RERA Act. “The intention is to avoid duplication of legal processes and ensure consistency in resolving real estate related disputes. However, Section 88 does specify that provisions of the RERA Act shall apply in addition to and not in derogation of other applicable laws,” says Shinde. Source: Economic Times

May 04,2024 The Consumer Protection Act, 2019 safeguards consumers’ rights and covers all goods and services of all public, private, or cooperative sectors, except those exempted by the central government. This Act provides consumers with a platform for grievance redressal and compensation. As per the Act, individuals who feel wronged after purchasing goods or services can seek help from consumer commissions to resolve their issues. “Any person who has purchased goods or availed any services for its personal use could file a case in the consumer forum if the goods so purchased are defective, or the services suffer from any deficiency or shortcoming,” says Abhay Pratap Singh, Partner, GnS Legal, a law firm. “Consumer should not tolerate the inconvenience or wrong done to them and file appropriate complaints to ensure the same is not repeated by the unscrupulous traders to them and others in the society,” says Vijay Kumar Makyam, a distinguished lawyer who is currently serving as a member of District Consumer Redressal Commission, Medak at Sangareddy. “A prescribed fee is required to be paid depending on the consideration paid by the consumer. Moreover, ensure that the complaint is filed within two years from the date the cause of action arose. Additionally, don’t forget to serve a personal or legal notice to the opposite party before filing the case,” says Subramanium. Another application needs to be filed if the consumer commission’s order is not complied with. “If the final order is not complied with in time, file an application seeking execution,” says Subramanium. “Most times consumers neglect to file a complaint as they are occupied with their regular work and do not take time to fight the menace against corporate giants; however, the Government has built a consumer-friendly environment and they have called these dispute settlement platforms/Commissions instead of Calling them as Courts (to ensure the Consumer are not deterred with lengthy procedures of regular Courts); At these commissions, summary proceedings will be taking place for expedited justice,” says Makyam. Source: Economic Times

May 07,2024 It is imperative for celebrities and public figures to act responsibly while endorsing a as advertisers and endorsers are equally responsible for issuing misleading advertisements, the Supreme Court said on Tuesday. Clamping down on misleading advertisements, the apex court directed that before an advertisement is permitted to be issued, a self-declaration be obtained from the advertisers on the line of the Cable Television Networks Rules, 1994. Rule 7 of the 1994 rules deals with advertisement code and stipulates that advertisements carried in the cable service shall be designed to be in conformity with the laws and should not offend morality, decency and religious susceptibilities of the subscribers. “We are of the opinion that advertisers, advertising agencies and endorsers are equally responsible for issuing false and misleading advertisements,” a bench of Justices Hima Kohli and Ahsanuddin Amanullah said. “Endorsements by celebrities, influencers and public figures go a long way in promoting products and it is imperative for them to act with responsibility while endorsing any product in the course of advertisement and taking responsibility for the same…,” the bench observed. The top court said the ministries concerned need to set up a specific procedure which will encourage consumers to lodge complaints regarding misleading advertisements and the complaints be taken to their logical conclusion. It said self-declarations by advertisers shall be uploaded on the ‘Broadcast Seva’ portal which runs under the aegis of the Ministry of Information and Broadcasting Regarding advertisements in the print media, the bench said the ministry shall create a portal within four weeks and advertisers shall file self-declaration before issuing any advertisements. The bench said the proof of filing self-declaration has to be made available by the advertiser to the broadcaster or publisher. It also asked the health ministry to file an affidavit regarding complaints received from 2018 onwards by the Food Safety and Standards Authority of India on misleading advertisements concerning food products and also details of action taken or proposed to be taken on them. The bench referred to the Central Consumer Protection Authority guidelines including those related to children-targeted advertisements and duties of the manufacturer, service provider, advertiser and advertising agency. It also perused the affidavits filed by the ministries of Ayush, consumer affairs and information and broadcasting. Source: Economic Times

The Supreme Court observed that a consumer complaint filed by a company is maintainable. The court rejected the contention that the word ‘company’ is not covered within the definition of ‘person’ under Section 2(1)(m) of the Consumer Protection Act, 1986. The Court observed thus in an appeal under Section 67 of 2019 Act preferred by Kozyflex Mattresses Private Limited (KMPL) against the final order of the National Consumer Disputes Redressal Commission (NCDRC) by which it rejected the consumer case against the SBI General Insurance Company Limited. The two-Judge Bench comprising Justice B.R. Gavai and Justice Sandeep Mehta noted that the Consumer Protection Act of 2019, has brought a body corporate within the definition of ‘person’, and said: “This by itself indicates that the legislature realized the incongruity in the unamended provision and has rectified the anomaly by including the word ‘company’ in the definition of ‘person’.Hence, the first preliminary objection raised by learned counsel for the respondent regarding ‘company’ not being covered by the definition of ‘person’ under Act of 1986 has no legs to stand and deserves to be rejected.” Advocate Krishna Kumar Singh represented the appellant while Advocate D. Vardhrajan represented the respondents. In this case, the appellant company (insured) prayed for the direction to the insurance company (insurer) to indemnify it for the loss caused by fire in the insured premises being the manufacturing unit of the insured. The insured was engaged in the business of manufacture and sale of coir foam mattresses, pillows, cushions, and other coir by-products. It obtained a ‘Standard Fire and Special Perils Policy (Material Damage)’ and by an endorsement, the sum insured for stock was further enhanced. It was claimed that a massive fire incident took place in the manufacturing unit of the insured and an immediate action by way of informing the police and fire service station was taken and fire tenders were sent to the spot. The insured submitted an insurance claim for a sum of Rs. 3.31 crores i.e. Rs. 40,11,152/- for building, Rs.1,08,47,435/- for plant and machinery and Rs.1,87,72,489/- for stock. The insured made a representation to the Grievance Redressal Manager against the repudiation of its claim and the same did not meet the desired result, upon which the insured filed a complaint before the National Commission. The complaint was dismissed as withdrawn with the liberty to file a fresh complaint and thereafter, the subject complaint was filed, alleging deficiency in service on the part of the insurer. The National Commission upheld the repudiation letter, rejecting the complaint and hence, the insured approached the Apex Court. The Supreme Court in view of the facts and circumstances of the case noted, “The insured-appellant has taken a pertinent plea in the instant civil appeal that the copies of the surveyor’s report and the investigators’ report were not provided timely and thus, the insured-appellant did not get proper opportunity to rebut the same. This pertinent plea taken by the insured-appellant in the memo of appeal has not been specifically refuted and only a formal denial was offered in the counter-affidavit filed by the insurer-respondent.” The Court further said that the ends of justice require that the insured should have been provided proper opportunity to file its rebuttal/objections to the affidavit/reports submitted by the insurer before the National Commission and consequently, the complaint should be reconsidered on merits after providing such opportunity to the appellant. “… the appellant shall be permitted to file its rebuttal/rejoinder affidavit before the National Commission limited to the contents of the reports referred to supra. Thereafter, the matter shall be reheard and decided on merits afresh”, it directed. Accordingly, the Apex Court disposed of the appeal, set aside the impugned order, and remitted the matter to National Commission for considering and deciding the complaint afresh. Cause Title- M/s. Kozyflex Mattresses Private Limited v. SBI General Insurance Company Limited and Anr. (Neutral Citation: 2024 INSC 234) Appearance:Appellant: Advocate Krishna Kumar Singh, AOR Sravan Kumar Karanam, Advocates Tayade Pranali Gowardhan, Mamatha Ralla, Rudroji Rakesh Kumar, and Shaik Sohil Akthar.Respondents: Advocates D. Vardhrajan, Rajat Khattry, Shagun Ruhil, and AOR Abhay Kumar. Source: Verdictum