CONSUMER PROTECTION ACT

Topic: Unfair trade practices

General Motors (India) Private Limited (appellant)
VERSUS
Ashok Ramnik Lal Tolat (complainant)

THE CASE

Ashok Ramnik Lal Tolat had passion for driving and dream to visit Leh
Ladakh, Jammu & Kashmir and Nepal by driving a motor car. By surfing the
internet, he read an advertisement given by General Motors (India) Private
Limited for the new Chevrolet Forester- “an SUV to end all SUVs with the
Power of 120 horses under its borne unique All-Wheels (AWD), it literally
puts the four corners of the earth within your easy reach But get you there
in unmatched comfort and luxury by-road, off-road or no- road.” Relying
upon the same, he purchased the vehicle on 1st May, 2004 for Rs.14 Lakhs
and got accessories worth Rs.1,91,295 fitted along with vehicle insurance and
registration. After a few weeks, he realised that the vehicle was not fit for
rough terrain driving as represented and had defects. Accordingly, he
approached the appellant’s dealer who referred to the owner’s manual
printed by the Company to state that the vehicle “is a passenger car and is
neither a conventional off-road vehicle nor an all-terrain vehicle…” which
was contrary to the assurance in the brochure and advertisements. The
action of General Motors was thus, “unfair trade practice” and hence, the
complainant sought a permission to remove “unfair trade practice” and
deficiencies in service along with a refund of the price of the vehicle and the
price of accessories with 18% interest from the date of purchase till the date
of payment. A compensation for physical and mental pain shock, suffering,
agonies, hardships, inconvenience and expenses suffered by the
complainant was sought amounting to Rs.50,000 or as realised fit.

The District Forum directed refund of Rs.14 Lakhs plus Rs.1,91,295 towards
cost of accessories with interest @ 9% per annum from the date of complaint
to the date of payment subject to the return of the vehicle, apart from
compensation of Rs.5,000 for mental agony and Rs.2,000 as costs of litigation.

OTHER FACTS AND JUDGEMENT

• In substitution of the order of the District Forum, the complainant was

held entitled to Rs 50,000 as compensation which included costs of
litigation and the appellant undertook to deposit the amount awarded
in favor of the complainant towards his claim as it was concluded that
the petitioner must have been misled deliberately to believe that the
vehicle offered for sale was a SUV.

• The respondent complainant further sought that the appellant should

be asked to account for the proceeds of the vehicles sold by it. Since,
the vehicle had been ordered to be returned to the appellant, the
respondent complainant has no claim and the plea raised was without
any merit.

OPINION

It was seen in this case that the appellant used 'unfair trade practice' -
any trade practice which is adopted for the purpose of promoting the sale,
use or supply of any goods or for the provision of any service, by adopting
any unfair method or unfair or deceptive practice. This was done by
falsifying the image projection of the vehicle by exaggerated media content.)
Even though the complainant got compensation, it was examined that for a
claim of 'unfair trade practice' to be established under the provisions of the
Act, the complainant must be able to establish that he is a consumer within
the meaning of Section 2(1)(d) of the Act. A mere proof of
unfair trade practice is not enough for claim or award of relief unless causing
of loss is also established which in the present case has not been
established. Also, the complainants’ claim for suffering of punitive damages
wasn’t met as other consumers nor the appellant was aware that any such
claim is to be met by it.
 THE COMPANIES ACT
Topic: Lifting of Corporate Veil
Subhra Mukherjee And Another (appellant)
VERSUS
Bharat Coking Coal Ltd. And Others

THE CASE
The board of directors of M/s. Nichitpur Coal Company Private Limited
dated September 21, 1970, decided to sell their owned suit property
(bungalow and a piece of land) to the appellants for a consideration of
Rs.5,000. However, the appellants paid Rs.7,000 to one of the directors. There
was an agreement to sell the property to the appellants for a total of Rs.7000
which included Rs.5000 as consideration of the Bungalow and Rs.2000 as
price of the land. This was executed by the Company on January 3, 1971 and
this was executed by the company as a sale deed in their favor on March 20,
1972. The Coal Mines (Nationalization) Act, 1973 came into force on May 1,
1973 and from that date: the right, title and interest of the properties of coal
mines owners specified in the schedule appended to the Act were vested to
the Central Government – being referred to as the vested properties. These
vested properties were transferred to M/s. Bharat Coking Coal Ltd. (BCCL)
– a government Company. As the appellants did not hand over the
possession of the property to BCCL, proceedings under the Public Premises
(Eviction of Unauthorized Occupants) Act, 1971 was initiated for their
eviction from the property. The appellants filed a lawsuit against BCCL for
declaration of their rights in, title to and interest over the suit property.
This was resisted by BCCL that among other things and the Coal Mines
(Nationalization) Act, the suit property rights were vested in it and that the
alleged sale transaction of the property by the appellants was collusive,
sham, without any consideration and was made to avoid the effect of vesting
of the suit property und The Coal Mines (Nationalization) Act, 1973.
 OTHER FACTS AND JUDGEMENT

• The learned Senior Counsel appearing for the appellants pointed out
that there was a prejudice towards the appellants but there was
another aspect which made this even stronger - The transaction of sale
was carried out between the husbands (who were found to be
brothers) and the wives and that, the wives had no independent source
of their income. Also, the sale of property was done at Rs.7000 in place
of Rs 5000 and there was no valid explanation as to why it was
increased to Rs 7000 for which a receipt was signed by one of the
Directors of the Company.

• The High Court’s judgment covered that the transaction of sale

between the appellants and the Company was fraud, sham and bogus
and the sole purpose of that sale was to avoid the vesting of the suit
property in the Central Government under Section 3(1) of The Coal
Mines (Nationalization) Act, 1973. The High Court concluded that the
sale of the suit property was neither bona fide nor genuine and confers
no right on them.

• On appreciation of the evidence placed before it, the trial court held
that the appellants got no title to the suit property and were not
entitled to any relief and dismissed the suit with costs on 22 September
1977 and the suit property remained the property of BCCL and it
vested in the Central Government under Section 3(1) of the Act of 1973.

OPINION

This situation created within this case was a deception - In order to avoid the
vesting of the suit property of the company to Bharat Coking Coal Ltd under
the Coal Mines (Nationalisation) Act, 1973., it was sold to the wives of its
directors who were real brothers. The archives were tampered with and
back-dated to validate that the deal of the selling of the property to the wives
of the directors was before nationalization of the company. Such exchange is
claimed to be fraud under this act and the Court was successful in unveiling
this hoax of this corporation and discovered the false display of this family
fraud. The transaction was found bogus and not bonafide.
 REFERENCES

• https://www.casemine.com/search/in/Subhra%20Mukherjee%20A
nd%20Another%20v(DOT)%20Bharat%20Coking%20Coal%20Ltd(D
OT)%20And%20Others
• https://indiankanoon.org/doc/123516191/
• http://www.thelaws.com/Encyclopedia/Browse/Case?CaseId=004
102989000
• https://www.legitquest.com/case/general-motors-i-private-limited-
v-ashok-ramnik-lal-tolat/8B876