case study | Consumer Voice

Delhi high court asks railways to set up a mediation policy after deciding 30 years accident claim

by admin | Jun 22, 2018 | Consumer Rights and Laws

Delhi high court asks railways to set up a mediation policy after deciding 30 years accident claim

INTRODUCTION:

Recently, the Delhi High Court suggested forming a “Litigation Policy” by the Railways to address tortuous claims of compensation filed against it. The Court said that the whole purpose of granting compensation to the victim is defeated if the amount do not become available immediately. Due to lengthy court process and transferring of case from one court to another the justice is delayed prolonged.

FACTS OF THE CASE:

In one of the recent cases, the plaintiff (victim) named Tilak Raj Singh was travelling from Meerut to Ludhiana which proved to be a very long one. An unfortunate incident occurred 30 years ago and since then the victim was running from pillar to post, seeking compensation, after having had his left leg amputated in a train accident.

After the accident had taken place, the victim had approached the District Court at Meerut seeking damages/compensation. However, his case was returned after 12 years for want of jurisdiction by the Meerut District Court. Thereafter, he approached the Railways Claims Tribunal, unfortunately the RCT also dismissed his Petition (case) stating that the incident had taken place after the enactment of the Railways Act, 1989 thus that the case doesn’t fall in the purview of the RCT and the same was to be tried by a Civil Court of competent jurisdiction and not by the RCT.
The suit was then shuttled back to the District Judge, Meerut who declined to accept the case saying that the RCT was not competent to transfer the case to it. Frustrated with the same, the victim then filed suit before the Delhi High Court on 1^st October, 2008 however, a learned Single Judge rejected his case stating the suit was barred by limitation means the time to file the case had expired. Thereafter, the victim challenged this in appeal before the Division Bench of the High Court of Delhi which held that the period during which the suit remained pending before the Civil Judge, Meerut and RCT should be excluded and proceeded to trial.
Due to the increase in the pecuniary jurisdiction of the Delhi High Court, the suit was transferred to the District and Sessions Judge, Patiala House Court where the victim was finally given a compensation of Rs. 6.6 lakhs which was challenged by the Centre before the Delhi High Court.

ANALYSIS AND FINDINGS OF THE COURT:

After perusing the documents on records, the Court said that there is no doubt that the Railways are liable for breach of duty for not providing the standard of care required. The immediate first aid was not provided to the victim and it led to loss of blood and an injury which was life threatening, as is clear from the report of the Doctor who saw the victim at the Muzzafarnagar District Hospital.

The Court observed that as the incident took place prior to the enactment of the Railways Act, and the RCT has already rejected the petition of the victim for compensation, the determination of damages/compensation would be governed by the general law of torts and damages and not by the Railways Act. The Court further analysed the case and stated that the victim has been deprived of any compensation for over 30 years and thus enhanced the compensation amount to Rs. 9 lakhs along with simple interest @ 8% for the entire period from filing of the suit before the District Judge Meerut till date of decree.

CONCLUSION

While concluding, the Court stated that the journey of this litigation has shown that the victim was entangled for the want of jurisdiction both before the Civil Judge Meerut and the RCT. An organisation such as the Railways which is located across the length and breadth of the country should not delay cases of compensation in this manner. The whole purpose of granting compensation is defeated if the amount is not available to the victim immediately.

The Court suggested the Railways to adopt a `Litigation policy’ to deal with cases when tortuous claims for compensation are filed against them. In such cases, compulsory pre-litigation mediation can also be explored to bring about an early settlement. Such a step would reduce the costs for the Railways as also reduce the number of cases filed, and finally ensure timely and efficient payment of compensation. By adopting this practice, the victim will not suffer through the prolonged justice system.

ADVICE FROM VOICE:

Accident is one of the most common incidents which keep happening in Railways due to lack of caution and sometimes lack of negligence. The passengers should know about their rights as to where to claim for compensation etc. to avoid prolonged delay in getting justice. Had the victim in above case filed the claim in competent jurisdiction, there would not have been undue delay in seeking compensation.
Consumer VOICE HelpDesk gives guidance and advice to aggrieved consumer in consumer disputes of a wide range.

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Consumer Interest Protected by National Company Law Appellate Tribunal

by admin | Jun 6, 2018 | Consumer Rights and Laws

Consumer Interest Protected by National Company Law Appellate Tribunal

Gone are those days when builders held all the power, and the buyer were supposed to beg for his or her own property’s possession. India is changing now and the attitude of the National Tribunals is also changing in favor of the buyers. This scenario was highlighted recently by the National Company Law Appellate Tribunal, New Delhi when it ruled that the money owed to a buyer was a debt that needed to be paid by a builder.

The Beginning

The entire ordeal began for the buyer, Nikhil Mehta & Sons when it bought some property from AMR Infrastructure Ltd. and made a hefty down payment. The builder agreed to pay money to the buyer as per a committed “Return plan” and a MoU and an agreement were signed by both the parties with all the vital terms and conditions.

Agreement Violated (Return on Investment Stopped)

As you may have guessed, the builder neither gave possession to the buyer but also stopped making the agreed-upon payments to the buyer. The buyer, Nikhil Mehta, and Sons filed insolvency petition at the NCLT against the builder, AMR Infrastructure Limited for failing to comply with the terms of payment.

When the matter moved to the tribunal, the builder claimed that the money was taken as a loan from the buyer, which was another tactic to ensure that further payments should not be made to the buyer. Builders wanted to deprive Nikhil Mehta & Sons of special status by getting them listed with the case by other flat buyers in the High Court. This was admitted by the NCLT and decision given in favor of the builder. Aggrieved an appeal was filed in the NCLAT drawing the attention how Nikhil Mehta &Sons were different from other buyers.

The Decision

The Appellate Tribunal was convinced that the amount invested by the Appellants was not just a sale transaction but it would come under the meaning of Financial Debts under S-5(8) of IBC. A key reason for this decision was that the buyer had signed an MOU and an agreement in which the buyers were named as the investor.

This decision is iconic because it allows a person or buyer to take help of Insolvency and Bankruptcy Code (IBC) in case the builder/seller fails to honor the agreement and fails to provide assured returns within a stated time frame.

Warning for Consumers

This case also comes with a warning to consumers. When you are investing in a property that comes with assured returns, you should not just trust the word of the builder. Instead, you should sign an agreement and a MoU as they would act as evidence and your shield in case you need to file an insolvency petition in the future.

Packers and Movers are Service Providers : Some cases of Negligence

by admin | May 21, 2018 | Consumer Rights and Laws

Packers and Movers are Service Providers : Some cases of Negligence

When we want to move houses, we would like to ensure our precious items are packed well. We want this transition to be hassle-free. You look for the best professional packers and movers company.Yet, what if things don’t go as planned? What if your belongings get damaged due to the packing company’s negligence while shifting? Is there a remedy available under Consumer Protection Act to get compensated for damages done by the negligent company? This article will showcases some cases of negligence by Packers and Movers.

Most people looking for service providers end up choosing the ones that offer lesser price and have some good reviews (unfortunately, we live in times where even good reviews can be bought – this however is another story).As recipients of a service that is availed of for a fee, consumers are better off knowing their options if faced with any untoward incident. Firstly, it is important to note that any company that engages in shifting, moving, transporting and packing type of service is considered to be a service provider and can be challenged and fined for any deficiency of services under Consumer Protection Act. In India, the movers and packers sector has expanded and hundreds of new companies have entered the space. However, not many of them seem to be delivering what they promise; the number of complaints against them in the consumer forums has also been increasing steadily. The majority of these complaints state that the company did notdeliver what it committed, more so in regard to safe delivery of goods. The cases range from breakage of fragile material, not packing them right, or loss (stolen/lost) of items in transit. Nevertheless, instead of compensating for the damages, many companies have tried challenging the consumer’s complaint and their intent. Some large companies have gone to the extent of dragging a simple case of compensation for a few years, until their appeal got nullified by the National Commission.

The Whole Case

In 2011, National Consumer Disputes Redressal Commission (NCDRC) was approached by Agarwal Packers and Movers Ltd with an appeal to withhold judgements pronounced against them by district and state forums.

The complainant in the case was AlokChaturvedi, who had got his entire house shifted in 2009. Chaturvedi had safely got the entire stuff loaded in one truck and had put his own lock on the door of its container. However, he received his stuff in two different trucks, which meant that the lock had been broken and the goods unloaded and loaded while they were in transit. This aberration would not have bothered him much had the goods been in a proper condition, but most of his crockery, furniture and a few electronics products (costing about Rs 20,000) were damaged, while a few other items including clothes (costing about Rs 23,000) went missing. Chaturvedi informed the company about the damages and the lost items. He was asked by the company to retain all damaged products until their representative assessed them. The entire broken stuff remained scattered in the house for about three month, but the packers never turned up despite several reminders.

Aggrieved, Chaturvedi reached the insurance company to which the goods were insured for the transit period. The insurance company also asked him to retain the broken goods for them to assess. They also informed him that since the insurance was taken by Movers and Packers, and there was no contract with him, the claim-if any-would go to Movers and Packers. Hence, he would have to askfor reimbursement of the same from the transport company.The fact that the damages claim against his products would actually go to the company that did the damages in the first place infuriated Chaturvedi. He decided to file a formal complaint with the consumer forum.

In-between, Movers and Packers offered Rs 13,000 as compensation for the missing items and damages caused to other goods. That was not acceptable to Chaturvedi and he went ahead with his complaint with the district forum.The forum accepted the complaint and pronounced this order: “This complaint is allowed with a direction to pay to the complainant a sum of Rs 43,000 on account of broken and missing items. Ops are also directed to pay to the complainant a sum of Rs 40, 000 as compensation for causing discomfort and Rs 5, 000 as costs of litigation.”

Movers and Packers filed an appeal against the district forum’s order and made these points: a) Agarwal Packers & Movers Pvt. Ltd is an artificial name and has to act through its managing director/ principal officer, and hence the service of summons was to be effected at the registered office of the company, and b) there is no deficiency on the partof Packers and Movers. In support, they cited earlierSupreme Court judgements.

In Ravneet Singh Bagga versus KLM Royal Dutch Airlines and Another (2000), the Supreme Court observed: “The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person who alleges it.”

The State Commission did not agree with Movers and Packers’ appeal and dismissed it. Movers and Packers did not agree with the ruling and took up the matter with the National Commission.They observed the relevant findings of State Commission and stated: “…records show that Movers and Packers was duly served notice through registered post as there is acknowledgement receipt signed by their representative. Despite receiving summons, no one appeared before the forum. Records prove that summons sent out for appearance had been received by its representative Krishan Kumar. Also, the plea of ops that there was no employee with the name of Krishan Kumar is not supported by duly sworn affidavit of any responsible functionary of the company.

“Further, as the Company is situated in Chandigarh and the material booked was delivered at Chandigarh, so the district forum at Chandigarh had the territorial jurisdiction to try and adjudicate upon the dispute under the provisions of Consumer Protection Act.” More so, referring to the Supreme Court judgement cited by the company, the apex court stated: “The rendering of deficient service has to be considered and decided in each case according to the facts of that case, for which no hard and fast rule can be laid down. Inefficiency, lack of due care, absence of bona fides, rashness, haste or omission and the like may be the factors to ascertain the deficiency in rendering the service.

“Courts of law should be careful enough to see through such diabolical plans of the judgement debtor to deny the decree holders the fruits of the decree obtained by them. These types of errors on thepart of the judicial forum only encourage frivolous and cantankerous litigations causing law’s delay and bringing bad name to the judicial system.”

Thus, the National Commission confirmed and upheld the decisions of the district and state forums and directed Packers and Movers to compensate the complainant as per the judgements given.

Note: In April 2016, the Advertising Standards Council of India’s (ASCI) Consumer Complaints Council (CCC) upheld a complaint against Agarwal D2D Packers and Movers. In the advertisement, the company claimed that ’60 percent of the people in the country shift through them’. The claim was not substantiated when questioned by ASCI. Hence the ad was categorised as misleading.

Another Case to Note

Sharmilee Nielsen said she engaged the services of Leo Packers and Movers, Tiruvanmiyur, to transport goods to her new residence at Kottivakkam. While some of the goods were packed by Sharmilee herself, some others were packed by the company staff. The company delivered the goods on August 13, 2011, after charging Rs 78,313. For insurance coverage, the company charged Rs 30,000.

When the goods were delivered at her house in the presence of company personnel, most articles were found damaged beyond restoration. The list of the destroyed goods was provided to the packers company, following which an independent assessor inspected the goods and concluded that the goods were destroyed because of improper handling and jerks during road transit. The worth of damaged goods was assessed at Rs 1.44 lakh. Despite Sharmilee’s request, Leo Packers did not attend the inspection, nor did it settle the claim amount. She then moved the district consumer forum at south Chennai, seeking compensation for damages and deficiency in service.

Denying the arguments, Leo Packers said it had requested Sharmilee to allow special packing of all the goods in an airtight container. As she did not follow the company’s instruction for packing the goods, Leo Packers was not liable to pay damages.A bench of president B Ramalingam and members K Amala and T Paul Rajasekaran said that despite being informed, the company did not inspect the goods to settle the claim. Without assessment, it had offered to pay Rs 20,000 as compensation to Sharmilee; that was a meagre amount. The company did not prove that the goods were loosely packed, nor did it refute that it had transported all the goods. There was no evidence to disprove Sharmilee’s claims, the bench said. It directed the company to pay Rs 1.44 lakh along with 9 percent interest and Rs 5,000 as litigation cost.

Beware of Fakes and Frauds

In July 2016, Delhi Police busted a gang running a fake transport company impersonating a leading packers and movers firm, and arrested four persons who allegedly duped several customers on the pretext of providing low-cost services. The gang used to lure customers offering low rates and then withheld the items unless they paid an inflated bill in the name of various taxes.Around the same time, another gang was arrested from Meerut. This gang was primarily into robberies. They would pose as a mover and packers company, get the entire household/office stuff packed, and run away with a loaded truck.Consumers are advised to do a thorough check of the company’s legal existence and do a reference check before dealing with a new or an unknown entity.

Not Allowed to Board a Flight? The airline could be at fault

by admin | May 17, 2018 | Consumer Rights and Laws

Not Allowed to Board a Flight? The airline could be at fault

In the recent case of Air France versus OP Srivastava & Others (First Appeal No. 310 OF 2008), the National Consumer Disputes Redressal Commission (NCDRC) held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency in service on the part of the airline. Let’s follow the details of the case to understand what to do when it happens and what airline compensation to expect, in addition to what legal options are available to aggrieved passengers.

On 05.11.2002, the complainants, who held senior management positions in the Sahara Group of Companies, had booked their ‘H’ Class confirmed air tickets with Air France through their agent, for travelling to Paris to attend a business meeting. As per their travel itinerary, their departure from Delhi to Paris was on 06.11.2002 and return was on 09.11.2002. Due to change in the schedule of the meeting, at Paris, on 08.11.2002 they requested for change of date of return journey from 09.11.2002 to 10.11.2002. The complainants were issued three ‘K’ Class confirmed tickets from Air France at Delhi, and for this change they were required to pay a differential amount of Rs 10,270 per person.

As it happened, on 10.11.2002 they were not allowed to board Flight No. AF-148 at Charles De’ Gaulle Airport at Paris due to overbooking. The complainants said that they were subjected to humiliation and embarrassment by the staff of Air France. Their tickets were also not endorsed to travel by Air India Flight No. AI-146, departing on the same day. According to the complainants, a valuable 24 hours were lost. They being commercially important persons, (CIP), their every minute was precious for the company; and in their absence, the schedule of meetings got disturbed, resulting in a monetary loss of Rs 5,000,000 to the company as consequential business loss.

Accordingly, the complainants filed a consumer case before the Uttar Pradesh State Commission, praying for direction to Air France to return to them the excess amount charged on tickets with 24 per cent compound interest and a compensation of Rs 5,000,000 for the losses suffered by the company and mental agony undergone by them. Air France, on its part, claimed that as per the accepted practice the passengers were given 300 euros each (equivalent to approximately Rs 53,600) besides free accommodation at a hotel with meals, two telephone vouchers and nine telephone cards for denying boarding. After availing these facilities, the complainants had filed the complaint in order to take undue advantage of the situation.

The UP State Commission allowed the complaint and directed Air France to pay to each of the three complainants a sum of Rs 630,000, totalling 1,890,000, with simple interest @10% p.a., within a period of one month from the date of the order, with a default stipulation of enhanced interest @15% p.a. on the said amount if the same was not paid within the stipulated period. Aggrieved with the said order, the Opposite Party filed an appeal in National Commission.

Air France stated in their appeal before NCDRC that denied boarding is an accepted practice internationally and nationally, and for the same the complainants were sufficiently compensated by being provided with free accommodation and other facilities. The airlines further alleged that the complainants were trying to take “undue advantage of the situation”.

Dismissing the contention of Air France, the National Commission said that the practice of overbooking may be a commercially viable international practice being adopted by all the airlines, probably to ensure that seats in the flights do not go vacant in the event of no-shows by booked passenger(s), but the same cannot be at the altar of the passengers. Not permitting a passenger holding confirmed ticket to board a flight amounted to deficiency of service on the part of the airline, a bench headed by NCDRC President Justice DK Jain said.

The National Commission also said that if a freehand practice of overbooking was approved, it could cause havoc against the interest of the ticketholders as the airlines might invoke the malpractice of overbooking indiscriminately and beyond reasonable dimensions. Instead of taking recourse to this sort of policy, the airlines must impose stringent conditions for the eventuality of cancellation of tickets. To be specific, the airlines may lay down a condition that in the case of a long journey like the one at hand, if a passenger does not report for boarding up to a certain time before departure, his ticket would be cancelled or refund would be permissible to a minimal extent. Refunding of money equivalent to the entire price of the ticket or with minor deductions to a passenger under contemplation of earning profit by overbooking of the tickets to a large number of passengers would create instability, indiscipline and unfair trade practice, the National Commission said.

The NCDRC held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency of service on the part of the airline. The National Commission upheld UP State Commission’s decision, barring the quantum of compensation, and directed the premier French national carrier to pay a compensation of Rs 400,000 each to the three officials of Sahara Group for causing inconvenience and harassment to them by denying boarding on the Paris–Delhi flight in 2002.

Cause of Action

Another hotly contested issue raised by Air France was that the UP State Commission had not proper territorial jurisdiction to entertain the complaint. The NCDRC observed that the cause of action, wholly or in part, arose at Kanpur.

The NCDRC relied on the Supreme Court case Kandimalla Raghavaiah & Co. versus National Insurance Co. Ltd. (2009) 7 SCC 768), where the expression ‘cause of action’ was defined. It was said by the Supreme Court that it is a bundle of essential facts necessary for the plaintiff to prove and obtain a decree but does not comprise evidence necessary to prove such facts. Failure to prove such facts would give the defendant a right to judgement in his favour. Cause of action thus gives occasion for, and forms, the foundation of the suit. The question of territorial jurisdiction must be decided on the facts pleaded in the petition. National Commission relied on another Supreme Court case, Alchemist Ltd. & Anr. versus State Bank of Sikkim and Ors. (2007) 11 SCC 335, where it was said that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless, it must be a part of cause of action, nothing less than that.

After observing the aforesaid judgements, the National Commission agreed with the State Commission finding that a part of the cause of action did arise at Kanpur when the tickets were purchased and, hence, it was vested with territorial jurisdiction to entertain and deal with the complaint. The air tickets were purchased through an agent of Air France based at Kanpur who, on receipt of the consideration towards the cost of the tickets, had created PNR through Amadeus (host system of Air France). Thus, UP State Commission had proper territorial jurisdiction to entertain the matter.

Consumer Voice’s advice to consumers

Passengers aggrieved by the action of an airline denying boarding can approach consumer as well as civil courts to claim damages, in addition to minimum damages prescribed under the DGCA regulations. A passenger who holds a confirmed ticket has full right to board the flight and that should not be denied by the airline. In case of overbooking where a passenger is denied boarding, he/she should get compensation from the airline.

Recently, vide order dated 02.02.2018 (W.P.(C) 12006/2015 & C.M. No. 31848/2015W.P.(C) 12006/2015 & C.M. No. 31848/2015), the High Court of Delhi clarified the compensation and refund procedure in case the passenger is denied boarding even after having a confirmed ticket. The Delhi High Court also said that airlines must pay for denying seats to those with confirmed tickets. A passenger has the right to seek compensation in case of denial to fly due to overbooking, over and above its rules that provide slab-wise refund. DGCA 2010 rules do not put a cap on the compensation that can be demanded from the airline in case of overbooking and a passenger has full right to approach civil and consumer courts for relief.

The union aviation ministry has recommended increasing compensation to up to Rs 20,000 per flyer for deficiencies in airline services such as flight delays and cancellations. The ministry will soon put up the draft for public comments. The airlines are against these suggestions on the ground that domestic airfares in India are among the lowest. The Federation of Indian Airlines has also opposed it, saying that the existing rules and compensation levels already safeguard passenger interests in a fair and adequate manner, and increasing the compensation levels will only result in an increase in costs for airlines.

Consumer Voice supports the recommendation made by the aviation ministry to increase the level of compensation.

Consumers can approach civil and consumer courts too for compensation in case denied boarding: DGCA

by admin | Apr 21, 2018 | Consumer Rights and Laws

Consumers can approach civil and consumer courts too for compensation in case denied boarding: DGCA

The Delhi High Court has confirmed that the Civil Aviation Rules provide an immediate relief as compensation to passengers who are denied boarding. This does not mean that there is a cap on compensation payable and passenger can sue for deficiency in service as well. In its order dated 02.02.2018, the High Court of Delhi clarified the compensation and refund procedure in case the passenger is denied boarding even after confirmed ticket. It also said that airlines must pay for denying seats to those with confirmed tickets.

In 2015, the petitioner had booked his tickets to travel from Delhi to Patna on 12.12.2015 and was due to return on 13.12.2015. He accordingly booked tickets with Air India well in advance on 28.10.2015. The petitioner averred that he reached the airport on time on 12.12.2015 but was denied boarding by Air India on account of overbooking of flights.

The petitioner stated that paragraph 3.2 of Civil Aviation Requirement (herein referred to as CAR) dated 06.08.2010 permitted overbooking of flight, which according to the petitioner cannot be permitted. Paragraph 3.2 provides for airlines to ask for volunteers to give up their seats so as to make seats available for other booked passengers to travel on the flight, in exchange of such benefits/facilities as the airlines, at its own discretion, may wish to offer, provided airports concerned have dedicated check-in facilities/gate areas that make it practical for the airlines to do so. If the boarding is denied to passengers against their will, the airlines shall as soon as practicable compensate them in addition to refund of air ticket. Under the provisions of the CAR, airlines shall be liable to pay compensation to passengers who are denied boarding. However, in order to minimise No Shows, the airlines are allowed to levy appropriate No Show penalties in relation to the fare to be deducted from the fare paid by the passenger.

A plain reading of paragraph 3.2 of CAR indicates that the Director General of Civil Aviation (DGCA) has recognised that certain airlines follow the practice of overbooking flights; however, the same cannot be read to mean that the DGCA has permitted the airlines to do so, and it certainly cannot mean that such practice has the sanction of law as stated by the counsel appearing for DGCA.

The petitioner also contended that the compensation payable to the passengers, who were denied boarding despite holding confirmed bookings, had been restricted by the CAR. He further contended that the DGCA had no power to issue directions restricting the compensation payable to such passengers. He further submitted that the amount of compensation mentioned in CAR indicated only the immediate relief that the airlines were required to provide to the passengers who had been denied boarding. The counsel of Air India also submitted that not permitting the passenger holding confirmed tickets to board a flight would amount to deficiency in service and passenger would have the right to seek compensation/ damages for such deficiency of service.

Thus, DGCA and national carrier Air India told the Delhi High Court that a passenger had the right to seek compensation in case of denial to fly due to overbooking, over and above its rules that provided slab-wise refund. It was added by DGCA that its 2010 rules did not put a cap on the compensation that could be demanded from the airlines in cases of overbooking and a passenger had full right to approach civil and consumer courts for relief.

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