This project has been an eye opener for me. it's extremely relevant to the modern times and as the future of India we should understand that it's the common mass that runs the country. Consumer protection rights are an important issue in modern days. The law can be effectively used to stop any abuse of the common people especially illiterate masses who don't understand the rules and regulations which is to be followed while buying particular item. it's law, the controller of the entire society which can stop this abuse from taking place. It can place effective standards guiding a product’s genuinity and the proper verification of its price. No extra taxes should be issued according to the seller’s wish. I've proceeded by referring to the books written by Avtar Singh, Venkat Rao and others. it's been a wonderful and educational delight in going about this topic and making a project which is of greatest importance in the present day scenario.
DEFINITION OF CONSUMER
The words “consumer”, “consumed”, “consumption”. Is all cognate. When one is defined, the contents of the definition go into all of them wherever they occur in the same act.
Section 2 of the act wherein ‘consumer’. Is defined. According to him, the definition of the consumer won't take a client who engaged the advocate for professional services.
Consumer means any person who-
–. Buys any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system or deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly promised or under any system of deferred payment when such use is made with the approval of the person. doesn't include a person who obtains such goods for resale or for any commercial purpose
–. Hires or avails of any services for a consideration which has been paid or promised or partly paid or partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for the consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such services are availed of with the approval of the first mentioned person but doesn't include a person who avails of such services for any commercial support
In Black’s Law Dictionary it's to mean:
One who consumes. Individuals who purchase, use, maintain or dispose of products and services. A member of that broad class of people who are influenced by pricing policies, financing practices, quality of goods and services, credit reporting debt collection and other trade practices for which the state and federal consumer laws are enacted.
OBJECTVES OF THE ACT
The act is dedicated, as its preamble shows, to provide for better protection of rights of consumers and for that purpose to make provisions for the establishment of consumer councils and other authorities for settlement of consumer disputes and for other connected matters. In the statement of objects, reasons it's said that and the act seeks to provide speedy and simple redressal to consumer disputes. Quasi judicial body machinery has been set up at the district, state and central levels. These quasi judicial bodies have to observe the principle of natural justice and have been empowered to give relief to a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non compliance of orders given by quasi judicial bodies have also been provided.
The object and purpose of rendering the act is to render simple, inexpensive and speedy remedy to consumers with complaints against defective goods and deficient services and for that quasi judicial machinery has been sought to be set up at the district, state and national levels. These quasi judicial bodies are required to apply the principle of natural justice and have been empowered to give relief of specific nature and appoint wherever necessary, compensation to consumers.
An operational definition of insurance is that it's
–. The benefit provided by a particular kind of indemnity contract, called an insurance policy;
–. That's issued by one of several kinds of legal entities (stock company, mutual company, reciprocal. Lloyd’s syndicate. Example), any of which may be called an ensurer;
–. In which the ensurer promises to pay on behalf of or to indemnify another party, called a policyholder or ensured;
–. That protects the ensured against loss caused by those perils subject to the indemnity in exchange for consideration known as an insurance premium.
The influence of insurance on the law of torts has been significant, both on theoretical level and on practice. Insurance has undermined one of the two main functions of awarding of damages. it's in cast doubt on the value judgments made by the courts in determining which particular test of liability is appropriate in the given circumstances.
Regardless of whether in the particular circumstances the appropriate principle of liability is intention is malice, fault or strict liability, the purpose of common law damages remains the same. The primary purpose of an award of damages is to compensate the victim for his loss, with view to restoring him as near as possible to the position he'd've been in but for the tort of the wrongdoer. But damages have another: by making the wrongdoer responsible for meeting an award of damages, the courts are trying to deter others from committing similar tortuous wrongs.
Insurance vitiates the secondary purpose of damages, at the same time incidentally ensuring that the primary purpose is more often achieved.
It can scarcely be realistically asserted that ensured defendants are deterred by the prospect of losing no-claims bonus or by increasing of premium on renewal of their policies. Once it's conceded that insurance renders compensation for the sole purpose of damages but then the tort action itself becomes vulnerable to attack. There are many ways-some perhaps fairer and administratively cheaper than tort- of compensating a victim for a loss he's suffered.
Prima facie, where a person suffers loss of recognized kind as the result of another’s act, then the latter should've to make good that loss. But for valid reasons, the courts have held that, in certain circumstances, the actor will have to compensate his victim only if he's at fault. The victim’s right to compensation is, therefore curtailed in an attempt to be fair to both the parties. The courts have made a policy decision that, in the circumstances, it's right to reward a defendant who's been careful by protecting him from liability for the consequences of his actions and that, as a corollary the plaintiff must forego his compensation. The policy decision is made on the supposition that the wrongdoer would himself have to pay for the damages but for this protection. It by no means follows that the same decision would be made if there were no risk of the wrongdoer having to provide the compensation.
it's difficult to judge the victim’s right to compensation should be curtailed when that curtailment isn't justified by a corresponding benefit to the wrongdoer. The requirement of fault ceases to play its role as the leveler between the victim’s legitimate expectations and the wrongdoer’s legitimate expectations. Becomes simply a hurdle to the victim’s progress to compensation. If it's accepted that no one can ensure against liability for harm caused by intentionally to another , then similar arguments can be made by the inappropriateness of the victim’s having, in certain circumstances to prove an intention to do him wrong or harm, when it's irrelevant to the wrongdoer whether he'd such an intention or not.
Again the victim’s right to compensation is being curtailed without any corresponding benefit to the wrongdoer.
However, insurance has influenced the law of tort on a much more practical level as well. While the fact of insurance isn't of itself a reason for imposing liability , there can be no doubt that it does add “a little extra tensile strength”. To the chain which a wrongdoer to his responsibilities.
As well it's given new horizon to damages . it's true that traditionally it was considered to inform the court that a defendant was ensured . “those days are long past”. Now it's frequently openly recognized that the defendant would be ensured.
The policy of insurance constitutes a contract of insurance between Life Insurance Corporation or a subsidiary of General Insurance Company of India, as the case may be, such services such has been undertaken to render under the contract of insurance. However as a rule, occasion to render services arise only when ensured surrenders his policy. The policy matures for payment or the ensured dies or any other contingency which gives rise to render service occurs.
Breach of contract of insurance may give rise to a cause of action to file a civil suit. Such breach of contract may itself constitute deficiency in service. As to give a cause of action to file a complaint under the consumer protection act for one such more relieves awardable hereunder.
Section 13(4) of the act vests in a redressal agency powers of the Civil Court, while trying a suit in respect of such matters as examination of witnesses on oath and production of documents. Declining to exercise jurisdiction in a case before it only because it involves examination and cross examination of facts, witnesses and production and consideration of documents would amount to abdication of its jurisdiction.
Such discretion can be exercised only when the gives rise to several issues and necessities taking of voluminous oral and documentary evidence. Otherwise involve complex questions of fact and law which can't be decided in time bound proceedings under the consumer protection act.
MOTOR VEHICLE INSURANCE
Where the sale of a vehicle is complete, the title therein passes to the purchaser notwithstanding that his name hasn't been recorded in the R.C.Book. Such owner is entitled to get his vehicle ensured and also to maintain a claim on the basis of such insurance. The earlier owner, who's lost insurable insurance on the sold vehicle, can't advance a claim on the basis of policy of the said vehicle, earlier taken by him, on the ground that he's still the recorded owner of the said vehicle.
Section 157 of the motor vehicles act is only in respect of third party risks and provides that the certificate of insurance described therein shall be deemed to have been transferred in favor of the person to whom the motor vehicle is being transferred. It doesn't apply to other risks, if any, covered by the policy. If the transferee wants to avail the benefits of other risks covered by it, he's to enter into an agreement thereof with the investor.
FRAUD BY INSURER
If it's established that the discharge voucher was obtained by fraud, misrepresentation, undue influence or coercive bargaining or compelled by circumstances, the authority of the consumer forum may be justified in granting relief. Mere execution of the discharge voucher wouldn't deprive the consumer of his claim in deficiency of service.
DELAY IN SETTLEMENT OF CLAIM
In Sarveshwar Rao v. National Insurance Company Ltd. , it was held that the delay of two or more years in settling the insurance claim would result in inadequacy in the quality, nature and manner of the service which the insurance company has undertaken to render. Amounts to deficiency in service.
In Delkon India Pvt. Ltd. V. The Oriental Insurance Company Ltd. . The National Commission has held that it was a deficiency of service to have delayed the claim by two years on the ground that the final police report wasn't coming.
INTERPRETATION OF TERMS
In Skandia Insurance Company v. Kokilaben Chandravadan , the honorable Supreme Court ruled that the exclusion terms of the insurance must be read with so as to serve the main purpose of the policy, which is to indemnify the damages caused to the vehicle.
CONDUCT OF THE INSURER
In Oriental Insurance Co. Ltd. V. Mayur Restaurant and bar , the conduct of the ensurer was under question. The commission held that deficiency of the service was established on the part of the opposite party on two counts i)delay in settlement of claims and ii) unreasonable and un maintainable reasons for repudiating the claim of the complainant. The compensation with the interest and cost was awarded.
SUICIDE BY THE ASSURED
In Life Insurance Corporation v Dharma Vir Anand, the national commission refused to hold the insurance commission liable as the ensured committed suicide before the expiry of three years from the date of the policy.
BREACH OF TERMS
In B.V.Nagarjuna v Oriental Insurance Company Ltd., the terms of insurance contract permitted the ensured vehicle to carry six passengers at a time but the driver allowed two more persons to get in. It was held that merely adding two more persons without the knowledge of the driver didn't amount to indemnification by the insurance company.
In Jagdish Prakash Dagar v. Life Insurance Corporation , it was held that a nominee under a policy of will be a consumer within the meaning of section 2(1) (d) of the Consumer Protection Act. The commission held that the nominee could legislatively maintain an action against deficiency raised in service by the arbitrary decision of the ensurer.
Repudiation is defined as the renunciation of a contract (which holds a repudiator liable to be sued for breach of contract. Entitles the repudiatee on accepting the repudiation to treat the contract as at an end
This concept of repudiation is needed in the concept of insurance. The concept of repudiation will be dealt hereto a number of times and to provide beneficiary evidence, the definition has been given.
Unilateral repudiation of its liability, under the contact of by the corporation or an insurance company doesn't, by itself oust the jurisdiction of a redressal agency, to go into the sustainability of such repudiation, on facts and in law and to decide and to adjudicate if, in the facts of the case, it amounts to deficiency in service or unfair trade practice. If so, to award to the aggrieved person, such relief or reliefs under Section 14(1) of the said Act as he or she's entitled to. The fact that before such repudiation it obtained a report from a surveyor or surveyors also doesn't oust the jurisdiction of a redressal agents to into the merits of such repudiation. Otherwise in each case the corporation or such company. Deprived the aggrieved person of the cheap and expeditious remedy under the consumer protection act.
Where, however the corporation or the company conducts thorough investigations into the facts which have given rise to claim and other associated facts. Repudiates the claims in good faith after exercise with due care and proper application of mind, the redressal agency should decline to go into the merits of such repudiation and leave the aggrieved person to resort to the regular remedy of a suit in a civil court.
The law doesn't require the corporation or an insurance company to accept every claim good or bad, true or false. It does require the corporation or the company to make a thorough investigation into such claim and to take decisions on it, in good faith, after exercise of due care and proper application of mind and where it does so it renders the service required by it and can't be charged with deficiencies in service, even if, in the ultimate analysis, such decisions is wrong on the facts and in law and the redressal agency would be disinclined to substitute its own judgment in the place of the judgment of the corporation or insurance company.
The question as to whether repudiation of its liability does or doesn't amount to deficiency in service would depend upon the facts of each case.
Where a cheque sent toward a premium is dishonoured by the drawee bank and consequently the policy is canceled or it lapses or the injured dies before the proposal is accepted and contract of insurance results, no claim can be founded in such a policy, which was canceled or has since lapsed. A contract of insurance, which didn't materialize at all. Repudiation of such claim can never amount to deficiency in service.
Insurance agent isn't entitled to collect premium on behalf of the corporation. Where an ensured issues a bearer cheque toward premium and hands it over the insurance agent who encashes it. doesn't deposit the premium with the corporation event till the expiry of the grace period and consequently the policy lapses and meanwhile the ensured also dies, his nominee has to blame himself or herself for the indiscretion of the ensured and can't blame or fault the corporation.
BASIC PRINCIPLES OF INSURANCE
There are some basic principles concerning the topic of Consumer Protection Law and Insurance.
–. Settlement of insurance claim is service, default or negligence therein is deficiency of that service
In the case of Shri Umedilal Agarwal v. United India Assurance Co. Ltd, the National Commission observed as under:
“We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the ensurer to the settle the claim of the ensured within a reasonable time and the prayer for the grant of compensation in respect of such delay won't within the jurisdiction of the redressal forums constituted under the consumer protection act.
The provision of facilities in connection with insurance has been specifically included within the scope of the expression “service”. By the definition of the said word contained in section 2(i) (o) of the act. Our attention was invited by Mr. Malhotra, learned counsel for the insurance company to the decision of the Queen’s Bench in national transit co. ltd. V. customs and central excise commissioners . The observations contained in the said judgment relating to the scope of the expression insurance occurring in the schedule of the enactment referred to therein are of no assistance to all of us in this case because the context in which that expression is used in the English enactment considered in that case is completely different. Having regard to the philosophy of the consumer protection act and its avowed object of providing cheap and speedy redressal to customers affected by the failure on the part of persons providing service for a consideration, we don't find it possible to hold that the settlement of insurance claims won't be covered by the expression insurance occurring in section 2(1)(d).Whenever there is a fault of negligence that'll constitute a deficiency in the service on the part of the insurance company and it'll perfectly open to the concerned aggrieved customer to approach the Redressal Forums under the act seeking appropriate relief.”.
–. L.I.C. Agent has no authority in collecting the premium
The supreme court held that under regulation 8(4) of corporation of India (agents) regulation, 1972 which had acquired the status of corporation agents rules with effect from January 31, 1981, which were also published in the gazette, LIC agents were specifically prohibited from collecting premium on behalf of LIC and that in view thereof an inference of implied authority can't also be raised.
–. Rejection of claim as false after full investigation
The national commission held as follows:
”. From the facts disclosed by the record and particularly averments contained in the consumer affidavit filed by the first respondent it's seen that the insurance company had fully investigated into the claims put forward by the complainant that his claim was rejected. Thus it's not a case where the insurance company didn't take a prompt and immediate option for deciding the claims against the insurance company. Having regards to the facts and circumstances of this case and the nature of the controversy between the parties we consider that this is a matter that should be adjudicated before a civil court where the complainant as well as the respondent will have ample opportunities to examine witnesses at length, take out the commission for local inspections etc. and have an elaborate trial of the case.”.
–. Unilateral reduction in the insurance amount.
The national commission held that the insurance company isn't entitled to make a unilateral reduction of Rs. 4, 29,771 from Rs. 30, 12,549 at which its own surveyor assessed the loss.
–. Mere repudiation doesn't render the complaint not maintainable.
The national commission overruled the objection of the insurance company that merely because the ensurer had totally repudiated its liability in respect of the claim, no proceedings could validly be initiated by the ensured under the consumer protection act.
–. Mere unilateral repudiation doesn't oust the jurisdiction.
The national commission held that merely because the ensurer has repudiated the insurance claim under the policy unilaterally, it's difficult to hold that the various redressal forums constituted under the consumer protection act, 1986 will have no jurisdiction to deal with the matter that if such a contention of the insurance company can get a report from the surveyors, repudiate the claim and oust the jurisdiction of the redressal forums, that the redressal forums are, therefore, bound to see whether or not the repudiation was made in good faith on valid and justifiable grounds that if the surveyor or surveyors choose to submit the wrong report and the insurance company repudiates the claims without applying its mind then the repudiation can't be said to be justified that the report of the surveyor will show that the investigations have been proper, fair and thorough and that it's to be remembered that the surveyors bread comes from the employer.
–. Mere unilateral repudiation no ground to oust jurisdiction.
The national commission repelled the objection and observed as under:
“Ordinarily a remedy is available to a consumer in Civil Court but mere repudiation of claim arising out of policy of insurance under section 45 of the insurance act, 1938, can't take away the jurisdiction of the redressal forum constituted under the act. The avowed object of the act is to provide cheap, speedy and efficacious remedy to the consumers and it's with this object that section 3 of the act lies down as follows:
3. Act not in derogation of the provisions of any other law: –. The provisions of this act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”
The national commission overruled the objection in the view of repudiation of contract of insurance by the corporation. The redressal agencies under the act can't entertain the claim of the ensured and reiterated the law laid down by it in the Divisional Manager, Corporation of India, Andhra Pradesh v. Shri Bhavnam Srinivas Reddy.
–. Removal of ensured goods on attachment no theft.
It was ruled in the stated case that attachment of certain items of ensured Machinery and goods by the bailiff of a civil court, though later found to be illegal and consequent removal didn't amount to theft and or house breaking by force so as to entitle the ensured to prefer a claim under the policy.
–. When repudiation amounts to deficiency and when it doesn't?
The national has held:
In M/s Rajdeep Leasing and Finance and others v. New India Assurance Company Limited and others –
That rejection of the claim by the insurance company after examining and considering the two separate survey reports from qualified surveyors and three legal opinions from different oriental counsels couldn't be said to constitute a deficiency in service so as to give a rise in the cause of action for a complaint under the consumer protection act.
In Oriental Insurance Co. Ltd. V Modern Industries Ltd. , the national commission has held that where the cover note inter alia mentions that the risk is subject to the usual terms and conditions of the standard policy, it's equally the responsibility of the complainant to call for these terms and conditions even if they're not sent by the insurance company, as alleged, to understand the extent of risk covered under the policy and associated aspects.
In Life Insurance Corporation of India v. Dr. Sampooran Singh
The complainant had taken out an insurance policy of 40,000 rupees in 1982. The purpose of payment of estate duty on his only residential house in chandigarh in the event of his death and paid 5 premia. With the abolition of estate duty on one residential house owner in 1985, the policy became inoperative due to the act of the state and not due to any deficiency on the part of the corporation any dispute between the parties as to the amount payable there under can't be construed as deficiency in service on part of the corporation.
In LIC of India v M/s Kanchan Murlidhar Akkalwar
The complainant applied to the opposite party for housing loan. On the advice of the latter, she took two LIC policies, one for Rs. 90000 and the other for Rs. 20000 entered into an agreement for the purchase of the house with the house with the owner on the advice of the opposite party obtained a fire policy for Rs. 2 lakhs. The opposite party advised the complainant to obtain a release deed from the zilla parishad co operative society in respect of the she proposed to purchase with a certificate that the said plot isn't mortgaged therein. The complainant got a certificate from the Maharashtra government that the vendor had re paid the housing loan and interest thereon due to Zilla Parishad Krishi Karmachari Sehakari Gribe Narman Sanstha and that there was nothing outstanding from him toward loan amount or interest. Still the opposite party didn't release the loan. On these facts the national commission by its majority judgment observed that:
“We've carefully gone through the records and heard the counsel. Clause 1 (c) of the loan offer letter clearly states that the advance of the loan is subject to the property being free from encumbrances to the satisfaction of the insurance company and a good and marketable title. At the same time it appears that the respondent-complainant had to go through a number of steps, although necessary, having financial implications and causing mental and physical stress to her and at the end of all of which she was told that no dues certificate given by the maharashtra government in respect of the prospective seller of the property in question, wasn't “release of mortgage”. Certificate that was obtained. The respondent complainant perhaps also had in her mind the case of Mr. Vaishempayam who got the loan under similar circumstances. Thus the evasion petition is disposed of as above.”.
This project topic is increasingly beneficial in the modern times with the consumer protection rights being redressed with due care. it's being advertised in the mass media in our country. The slogan which our consumer is using is: “JAGO GRAHAK JAGO”. The time has come to realize the ideal market situation in which the buyers aren't persuaded or coerced falsely into buying items which are of no use to them at all. Beside the relationship between buyer and seller shouldn't be damaged at any cost. The relationship between the buyer and seller is said to be a fiduciary relationship and the trust between them should remain intact. A time has come in which the customer should get his proper position in the market conditions. he's to have proper knowledge about what's going on in the market and the concerned prices and the supply and the different other practices referred to.
Insurance is a very sensitive issue in the modern times. People are being hoodwinked into signing up in companies which are turning out to be frauds in the true sense of the term. This project has been an eye opener to me and I've come to realize the importance of the consumer protection act and insurance.