The consumer protection law and the Consumer Protection Bill 2018 provide for punitive damages (see the proviso to section 14(d) of the CPA), but punitive damages are rarely awarded; instead there is commonly an award made for ‘mental agony and suffering’ (see Jose Philip Mampillil v Premier Automobiles Ltd, AIR 2004 SC 1529), which may cover non-compensatory damages that derive from inconvenience caused to the complainant. Such damages may be said to cover psychological injury but are usually quite conservative (from the point of view of the tortfeasor) and can even be seen as ‘reasonable’ in most cases. Most of the consumer courts thus award quick relief without excessive trial procedures while maintaining a relatively low scale of damages, which covers actual loss or damage and a reasonable amount towards mental agony and suffering. Although the Act does not allow for punitive damages, the question of whether punitive damages can be awarded by a civil court through a lawsuit (that claims a large amount to discourage similar conduct in the future) has not yet been decided. This probably derives from the fact that most courts require payment of court fees based on the amount of the claim but, in addition, it is also uncommon for courts to tax negligence or impose penalties that would also be regarded as a windfall to the claimant. Some courts have imposed fines, especially in cases involving death, serious injury or ‘total failure to take reasonable care’. The NCDRC in 2015 awarded 11 million rupees (10 million as compensation and 1 million as punitive damages) against the Apollo Hospital in New Delhi for wrongful delivery of a child causing permanent damage to his brain in a negligent medical procedure in 1999 (Dr Indu Sharma v Indraprastha Apollo Hospital (Consumer Case No. 104 of 2002; decided on 22 April 2015)). The Rajasthan State Consumer Disputes Redressal Commission in Vikas Arya v Santokba Durlabhji Memorial Hospital and Medical Research Institute and Ors II (2017) CPJ35(RC), on 15 March 2017, held that the principle for awarding compensation that one can safely rely upon is restitutio in integrum and an application of this principle is that the aggrieved person should get that sum of money, which would put him or her in the same position as if he or she had not sustained the wrong. It must necessarily result in compensating the aggrieved person for the financial loss suffered due to the event, the pain and suffering undergone and the liability that he or she would have to incur due to the disability caused by the event. Hence, an amount of 5 million rupees was paid to the complainant as compensation; out of the said amount 4 million rupees was directed to be turned into a fixed deposit in the name of child and his mother and the accrued interest was to be utilised for the care of the child. Medical expenses of 35,000 rupees were directed to be paid to the complainant. As the matter had lingered on since 29 April 2003, and at the instance of the non-applicants, it was carried up to the NCDRC. Hence, in view of the same being delayed by the respondents, 50,000 rupees was awarded as costs. The complainant was also held to be entitled to 9 per cent interest on the amount of 500,000 rupees from the date of presentation of the complaint (ie, 29 October 2003).
In the civil appeal Balram Prasad v Kunal Saha & Ors IV (2013)ACC378(SC), a finding of contributory negligence by the NCDRC on the part of the claimant was set aside by the Supreme Court. The direction of the NCDRC to deduct 10 per cent of the awarded amount of compensation on account of contributory negligence was also set aside by enhancing the compensation from 13.466 million rupees to 60.800 million rupees with 6 per cent interest per year from the date of the complaint to the date of the payment to the claimant.
The compensation is usually not restricted to simple reimbursement of expenses and costs incurred consequent to the tortfeasor’s negligence, but extends to a reasonable figure for the harassment caused (see C Venuprasad General Manager (Operations) Premier Vinyl Flooring Ltd and others v M/s Narangs International Hotel Pvt Ltd and OTIS Elevator Co (India) Ltd (Original Petition No. 179 of 1994; decided on 9 November 2012) where the hotel operator was held liable and Otis was exonerated, having warned the hotel about preventative maintenance of the lift on numerous occasions.
The law with regard to product liability so far follows general principles set out for consumer cases in judgments of the NCDRC or the Supreme Court. The NCDRC has held that the award of compensation has to be made on well-recognised principles governing the quantification of loss or injury suffered to assess compensation and not arbitrarily; compensation is generally granted only for the monetary loss actually suffered and not for any imaginary or indirect loss (see the case of Punjab Tourism Development Corporation Ltd, Chandigarh v Kirit P Doshi, 1997 (5) CTJ 186 NCDRC).
The law of tort in India still has its foundations in English precedent and, as such, the reasonable foresight principle continues to limit damages (see Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd (1961) AC 388; and the Indian cases following this case such as Leena Mathew and Others v The Kerala Shipping Corporation Ltd 1988 (1) KLT 212; and Rajkot Municipal Corporation v Manjulaben Jayantilal Nakum and Others 1992 ACJ 792, etc).
Some cases speak of exemplary or penal damages and this interesting trend (and its impact on insurance) is worthy of careful observation. In the case of Mrs Rashmi Handa & Ors v OTIS Elevator Company (India) Ltd & Ors I (2014) CPJ 344 (NC), the NCDRC awarded damages of more than 30 million rupees along with interest at the rate of 9 per cent because of a faulty lift leading to the death of a senior government officer. The NCDRC followed precedents relating to death caused in motor accident cases (multiplier based on age of deceased times income and dependency with provision for income growth plus interest) and apportioned the greater part of the award against the manufacturer and service provider, namely Otis (70 per cent); the employer (Chairman of the Research and Analysis Wing) was only held liable for 5 per cent of the award and the Military Engineering Services that handled day-to-day maintenance were held liable to the extent of 25 per cent.
In Maruti Udyog (see question 11), the Supreme Court held that a warranty condition referred only to replacement of the defective part and not the car, or its price through a refund. In a case from 1993, the NCDRC held that replacement of the whole machine is not necessary and ‘would be prejudicial to the interest of the manufacturer’ without sufficient cause. Claims for refund of the price of the car are usually unsuccessful where the defective part can be replaced, but some compensation for mental agony and inconvenience is awarded (see Honda Siel Cars India Ltd v Indra Pati Singh and Others I (2011) CPJ 382). Guidelines for granting compensation have been set by the NCDRC (see Ghaziabad Development Authority v Yogesh Chandragupta I (2005) CPJ 23 NC.
In the case of Charan Singh v Healing Touch Hospital and Others III (2000) CPJ 1 (SC), the Supreme Court held that:
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 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, in moderation.
In the case of Britannia Industries Ltd v State of West Bengal IV (2015)CPJ418(NC), decided on 9 September 2015, the NCDRC, while discussing the scope of damages which can be awarded to the complainant as per the provisions of section 14 of the Act, held that section 14 of the Consumer Protection Act envisages grant of compensation for loss or injury which may not necessarily be monetary in nature. A consumer forum can also award compensation for physical, mental and emotional suffering. Provisions of the Consumer Protection Act enable a consumer to complain and empower a consumer forum to redress injustice to the consumer, irrespective of whether his or her suffering is monetary or otherwise. Compensation is awarded as recompense for the loss or injury that need not necessarily be pecuniary in nature. Though compensatory damages and punitive damages may be awarded at the same time, they serve distinct purposes. Compensatory damages are intended to redress a loss which the petitioner has suffered and is able to establish on account of the wrongful conduct of the respondent. Punitive damages, on the other hand, are intended to punish the defendant and deter future wrongdoing by the wrongdoer as well as potential wrongdoers. Punitive or exemplary damages are intended to deter the defendant from engaging in such wrongful conduct. Such damages are awarded when compensatory damages are deemed inadequate.
Back to top