Adarsh Kumar Goel, J.— These appeals have been preferred against the order dated 16-12-2008 of the National Consumer Disputes Redressal Commission (for short “the National Commission”) in Ashok Ramniklal Tolat v. Gallops Motor (P) Ltd. Revision Petition No. 3349 of 2006 The main question raised in these appeals is whether in the absence of any prayer made in the complaint and without evidence of any loss suffered, the award of punitive damages was permissible? Apart from the said main question, the appellant has also called in question the refund ordered and other relief granted in favour of the respondent complainant.
2. In the complaint filed before the District Forum, Ahmedabad (Rural) (for short “the District Forum”), the prayer of the respondent complainant was as follows:
“The complainant, therefore, most respectfully prays:
(a) That this Hon'ble Forum be pleased to hold that the opposite parties (jointly and severally) have practised unfair trade practice towards the complainant and direct them (jointly and severally) to remove unfair trade practice, practiced by them against the complainant;
(b) This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to remove the deficiencies in their services and negligence towards the complainant.
(c) This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to refund the complainant a sum of Rs 14,00,000 (Rupees fourteen lakhs) and Rs 1,91,295 to the complainant along with the 18% interest, from the date of payment to the complainant and the Hon'ble Forum be pleased to direct the opposite parties forthwith to take back the said vehicle from the complainant, after refunding the complainant's money with interest, as prayed;
(d) This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to pay compensation for physical and mental pain, shock, suffering, agonies, hardships, inconveniences and expenses suffered by the complainant, to the tune of Rs 50,000 (Rupees fifty thousand) or as thought fit in the interest of justice, by this Hon'ble Forum;
(e) The Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to pay Rs 25,000 to the complainant, as cost of this complaint.”
3. The case of the complainant is that he had passion for driving and dream to visit Leh Ladakh, Jammu and Kashmir and Nepal by driving a motor car. By surfing the internet, he read advertisement given by the appellant as follows:
“Introducing a world without borders, an SUV to end all SUVs. That's the new Chevrolet Forester. With the power of 120 horses under its bonnet unique All-Wheels (AWD), it literally puts the four corners of the earth within your easy reach. It won't just get you there. But get you there in unmatched comfort and luxury by road, off-road or no road.”
4. Relying upon the same, he visited the agents of the appellant and was given a book titled “for a special journey called life”. He was assured that the vehicle offered for sale will realise his dream. The brochure also assured that “the vehicle in question is an SUV to end all SUVs. And … it will put the four corners of the earth within your reach and … it won't just get you there every time. But get you there in unmatched comfort, by road, off-road or no road”. He was also shown visual presentation of the vehicle and was also given a copy of the VCD. Accordingly, he purchased the vehicle on 1-5-2004 for Rs 14 lakhs and got accessories worth Rs 1,91,295 fitted and also got the vehicle insured and registered.
5. Thereafter he realised that the vehicle was not fit for “off-road, no road and dirt road” driving as represented and had defects. Accordingly, he approached the appellant and its dealers who referred to the owner's manual at pp. 8-6, Columns 1 and 3 printed by the Company to the effect:
“off-road driving … . But please keep in mind that AWD Chevrolet is a passenger car and is neither a conventional off-road vehicle nor an all terrain vehicle … . If the driving through water such as when crossing shallow streams, first check the depth of the water and the water stream bed for firmness and ensure that the bed of stream is flat … . the water should be shallow enough that it does not reach under carriage.”
Thus he found that the owner's manual was contrary to the assurance in the brochure, internet and the book titled “for a special journey called life”.
6. The appellant also realised that the vehicle was not SUV but a mere passenger car, not fit for “off-road, no road and dirt road” driving. He could not realise his dream to drive it to Leh Ladakh, Jammu and Kashmir and Nepal. The action of the appellant was thus, “unfair trade practice”. He sought permission to remove “unfair trade practice” and deficiencies in service and also to refund a sum of Rs 14 lakhs, the price of the vehicle and Rs 1,91,295 the price of accessories with 18% interest from the date of purchase till the date of payment and also to pay compensation for physical and mental pain, shock, suffering, agonies, hardships, inconvenience and expenses suffered by the complainant to the tune of Rs 50,000 or as thought fit in the interest of justice and the costs. 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 5000 for mental agony and Rs 2000 as costs of litigation.
7. The said order of the District Forum was challenged by the appellant before the Consumer Disputes Redressal Commission, Gujarat State, Ahmedabad (for short “the State Commission”). The State Commission held that the vehicle had no mechanical or manufacturing defect but the advertisement that car was SUV amounted to “unfair trade practice”. Accordingly, 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. But at the same time, the complainant was required to pay Rs 5000 towards costs for undeserving claim. The appellant was directed not to describe the vehicle in question as SUV in any form of advertisement, website, literature, etc. and to make the correction that it is a passenger car as mentioned in the manual.
8. Accordingly, the appellant complied with the said direction by issuing a disclaimer.
9. The respondent preferred a revision petition against the order of the State Commission while the appellant filed a cross-revision petition.
10. The National Commission held that the appellant could not be allowed to contest the finding of committing “unfair trade practice” in view of its conduct in voluntarily complying with the order of the State Commission and filing cross-revision without any justification and belatedly. Referring to the material on record, particularly, the undisputed correspondence, the said finding was also affirmed on merits. After referring to the definition of “unfair trade practice” under Section 2(1)(r) of the Consumer Protection Act, 1986 (for short “the Act”), it was concluded:
“Keeping in view the above definition of unfair trade practice and the material obtaining on record more particularly the representations made and held out by the respondent in their brochures relating to the vehicle in question, the owner's manual as also the clarification rendered by the manufacturer of the vehicle, there can be hardly any doubt that the motor vehicle Chevrolet Forester AWD model was not a vehicle of the said description inasmuch as it was not a SUV vehicle. Therefore, the petitioner must have been misled on that score to believe that the vehicle offered for sale was a SUV. This act of the respondent would clearly fall within the mischief of unfair trade practice as envisaged in Section 2(1)(r) (supra). We therefore, affirm the findings of the State Commission in this behalf.”
11. After recording the above finding the National Commission proceeded to consider the relief to be given. It was held that the State Commission was not justified in reversing the direction of the District Forum once the commission of “unfair trade practice” was established, even as per finding of the State Commission. Accordingly, the National Commission restored the relief given by the District Forum with slight modification as follows:
“Once it is found that the respondent has indulged in unfair trade practice which had misled the petitioner to purchase the vehicle in question, in our view, the most appropriate relief to the petitioner would be to reinstate the petitioner to his original position before the purchase of the vehicle viz. refund of the price of the vehicle along with some compensation in that behalf. Keeping in view that the vehicle was used by the petitioner for a period of about one year and it has run approximately 14,000 km, we consider it appropriate that the respondent should refund a sum of Rs 12,50,000 (Rupees twelve lakhs fifty thousand only) to the petitioner subject to the condition that the vehicle in question, without the accessories, which the petitioner got fixed at a cost of Rs 1,91,295, is returned to the respondent.”
12. The above was not the end of the journey, though the above relief met the claim of the complainant in his complaint. The National Commission proceeded to consider the issue of punitive damages for “unfair trade practice” in selling the said vehicles to about 260 consumers. It was held that though the consumers had not approached the National Commission and a period of four years had passed, the appellant should pay punitive damages of Rs 25 lakhs and out of the said amount, a sum of Rs 5 lakhs be paid to the complainant while the rest be deposited in the “Consumer Welfare Fund” of the Central Government to be utilised for the benefit and protection of the interests of the consumers generally. Final operative order passed by the National Commission is as follows:
“The respondents are hereby directed to pay a sum of Rs 12,50,000 (Rupees twelve lakhs fifty thousand only) to the petitioner towards price of the vehicle subject to the petitioner returning the vehicle in question without accessories to the respondents. The respondents are hereby called upon to deposit a sum of Rs 25 lakhs (Rupees twenty-five lakhs) as punitive damages with this Commission. Out of the said deposited amount, a sum of Rs 5 lakhs (Rupees five lakhs) shall be paid to the petitioner complainant and rest of the amount shall be credited to the “Consumer Welfare Fund” of the Central Government to be utilised for the benefit and protection of the interests of the consumers generally. We also award a sum of Rs 50,000 (Rupees fifty thousand) in favour of the complainant to meet his cost of litigation before the three consumer fora. The liability to pay and deposit the amounts shall be joint and several on the respondents. We grant six weeks to the respondents to comply with the directions given hereinabove.”
13. We have heard the learned counsel for the appellant and Respondent 1 complainant in person and perused the record.
14. The concurrent finding recorded by the District Forum, the State Commission and the National Commission to the effect that “unfair trade practice” was committed by the appellant which is based on adequate material on record, does not call for any interference by this Court and the same is affirmed.
15. What survives for consideration is the submission of the learned Senior Counsel for the appellant that there was no claim before the National Commission for the punitive damages nor had the appellant an opportunity to meet such claim and that part of the order needs to be set aside. We find merit in this submission. Vide interim order of this Court dated 17-7-2009, the operation of the impugned order awarding punitive damages was stayed. The learned counsel for the appellant undertook to deposit the amount awarded in favour of the respondent complainant towards his claim. The said order was allowed to continue, vide order dated 20-11-2009 SLPs (C) Nos. 7313-14 of 2009, with the following modifications:
“(i) Respondent 1 shall return the vehicle to the appellant within a period of four weeks from today. The latter shall arrange for accepting delivery of the vehicle at Ahmedabad.
(ii) After return of the vehicle to the appellant, Respondent 1 shall be entitled to withdraw the amount of Rs 12,50,000 together with litigation costs deposited by the appellant before the District Forum in terms of the order of this Court dated 17-7-2009 subject to his furnishing security to the satisfaction of the District Forum.
(iii) It will be open to the appellant to sell the vehicle and keep the sale proceeds in a separate interest bearing account. Respondent 1 shall cooperate with the appellant by signing the documents necessary for selling the vehicle.”
16. We proceed to deal with the issue of correctness of finding recorded by the National Commission for awarding punitive damages. Before doing so, we may notice that the respondent complainant appearing in person, in his written submissions has raised various questions, including the question that the appellant should be asked to account for the proceeds of the vehicles sold by it. Admittedly, the vehicle in question has been ordered to be handed back to the appellant against which the respondent complainant has no claim. Thus, the plea raised is without any merit. The other issue raised for further punitive damages of Rs 100 crores and also damages for dragging him in this Court, merits no consideration being beyond the claim of the complainant in the complaint filed by him. Moreover, no litigant can be punished by way of punitive damages for merely approaching this Court, unless its case is found to be frivolous.
17. The Act is a piece of social legislation to provide a forum to the consumers who are taken for a ride by suppliers of goods and services. The redress is provided to a consumer against any deficiency in service as well as against any loss or injury arising out of “unfair trade practice”. By later amendment, scope of a complaint can cover not only individual consumer but also consumers who are not identifiable conveniently. However, the complainant has to make an averment and make a claim. Section 12 of the Act permits not only a complaint by a consumer to whom goods are sold or delivered but also any recognised consumer association or one or more consumers on behalf of and for the benefit of all consumers but still, a case has to be made out and the affected party heard on such issue. We are conscious that having regard to the laudable object of the social legislation to protect the interest of consumers, liberal and purposive interpretation has to be placed on the scheme of the Act avoiding hypertechnical approach. At the same time, fair procedure is the hallmark of every legal proceeding and an affected party is entitled to be put to notice of the claim which such affected party has to meet.
18. We may at this stage refer to the scheme of the Act with regard to claim against “unfair trade practice”. The background and scope of the provision was dealt with in Ludhiana Improvement Trust v. Shakti Coop. House Building Society Ltd. (2009) 12 SCC 369 as follows:
“18. Prior to the substitution of clause (r) in sub-section (1) of Section 2 of the Act with retrospective effect from 18-6-1993, there was no separate definition of the term ‘unfair trade practice’ and the said term was given the same meaning as in Section 36-A of the Monopolies and Restrictive Trade Practices Act, 1969 (for short ‘the MRTP Act’). But now after the said amendment, the definition of the term has been specifically provided in Section 2(1)(r), although the definition is practically a verbatim reproduction of the definition in Section 36-A of the MRTP Act.
19. The basic ingredients of ‘unfair trade practice’ are:
(i) it must be a trade practice;
(ii) the trade practice must be employed for the purpose of promoting the sale, use or supply of any goods or for the provision of any service; and
(iii) the trade practice adopts any unfair method or unfair or deceptive practice including any of the practices enumerated in sub-clauses (1) to (6) of Section 2(1)(r) of the Act.
Therefore, 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 has to be treated as ‘unfair trade practice’ for which an action under the provisions of the Act would lie, provided, the complainant is able to establish that he is a consumer within the meaning of Section 2(1)(d) of the Act.”
19. In Colgate Palmolive (India) Ltd. v. MRTP Commission (2003) 1 SCC 129, AIR 2003 SC 317 this Court laid down five ingredients which have to be established before a trade practice can be said to be an “unfair trade practice”. The Court laid down the ingredients in the following manner:
“16. A bare perusal of the aforementioned provision would clearly indicate that the following five ingredients are necessary to constitute an unfair trade practice:
(1) There must be a trade practice [within the meaning of Section 2(u) of the Monopolies and Restrictive Trade Practices Act].
(2) The trade practice must be employed for the purpose of promoting the sale, use or supply of any goods or the provision of any services.
(3) The trade practice should fall within the ambit of one or more of the categories enumerated in clauses (1) to (5) of Section 36-A.
(4) The trade practice should cause loss or injury to the consumers of goods or services.
(5) The trade practice under clause (1) should involve making a ‘statement’ whether orally or in writing or by visible representation.”
Again in Godfrey Phillips India Ltd. v. Ajay Kumar (2008) 4 SCC 504, it was observed:
“18. So far as Direction (iii) is concerned, it is to be noted that there was no prayer for any compensation. There was no allegation that the complainant had suffered any loss. Compensation can be granted only in terms of Section 14(1)(d) of the Act. Clause (d) contemplates award of compensation to the consumer for any loss or injury suffered due to negligence of the opposite party. In the present case there was no allegation or material placed on record to show negligence.”
Thus, 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.
20. We have already set out the relief sought in the complaint. Neither there is any averment in the complaint about the suffering of punitive damages by the other consumers nor was the appellant aware that any such claim is to be met by it. Normally, punitive damages are awarded against a conscious wrongdoing unrelated to the actual loss suffered. Such a claim has to be specially pleaded. The respondent complainant was satisfied with the order of the District Forum and did not approach the State Commission. He only approached the National Commission after the State Commission set aside the relief granted by the District Forum. The National Commission in exercise of revisional jurisdiction was only concerned about the correctness or otherwise of the order of the State Commission setting aside the relief given by the District Forum and to pass such order as the State Commission ought to have passed. However, the National Commission has gone much beyond its jurisdiction in awarding the relief which was neither sought in the complaint nor before the State Commission. We are thus, of the view that to this extent the order of the National Commission cannot be sustained. We make it clear that we have not gone into the merits of the direction but the aspect that in absence of such a claim being made before the National Commission and the appellant having no notice of such a claim, the said order is contrary to the principles of fair procedure and natural justice. We also make it clear that this order will not stand in the way of any aggrieved party raising a claim before an appropriate forum in accordance with law.
21. Accordingly we allow these appeals and set aside the order of the National Commission Revision Petition No. 3349 of 2006 to the extent of award of punitive damages.