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IN January this year, the apex consumer court had directed the Railways to pay punitive damages amounting to Rs 25,000 for harassing a senior citizen. Saying that this was a classic case of high-handedness on the part of a government servant, the National Consumer Disputes Redressal Commission had observed that this was a fit case for awarding exemplary damages in condemnation of the abuse of power by a government servant. Now it has directed a private company, Reliance India Mobile Limited, to pay punitive damages of Rs 1.5 lakh for giving false information in the affidavit submitted to the consumer court. While in the railway case, the entire amount was paid to the consumer, in this case, Rs 50,000 goes to the consumer and Rs 1 lakh to the Consumer Welfare Fund. Even though the consumer courts were armed with the power to award punitive damages way back in 2003, somehow they fought shy of using this provision. Looks like that phase is now over. Unlike general and special damages which put a price on the loss or suffering (monetary, physical and emotional) undergone by a complainant, punitive or exemplary damages have a special purpose: to act as a deterrent. Or to put it differently, it is awarded in special cases to deter a manufacturer or a service provider from pursuing a course of action that is condemnable or which can harm the complainant or the consumer. Even though the Consumer Protection Act, 1986, provided for award of compensation to the consumer who suffers on account of the negligence of the manufacturer or the service provider, it did not provide for punitive damages. When the law was amended in 2003, it was felt that there should be a provision to award exemplary damages in exceptional cases. And this was facilitated through Section 14 (d), which says that "provided that the District Forum shall have the power to grant punitive damages in such circumstances as it deems fit". Now in the case of Reliance India mobile vs Hari Chand Gupta, the complaint pertained to the failure of the service provider to transfer Gupta’s mobile phone connection from Chandigarh to Kurukshetra, despite several requests to this effect. He had paid Rs 21,000 in March 2003 and become a member of the Dhirubhai Ambani Pioneer Club, as per which he was to receive his cellphone through a courier at his Chandigarh address. However, he had to shift residence for health reasons and therefore requested them to shift his connection to his new address in Kurukshtra, but this was not done. The District Forum, before which Gupta filed a complaint, awarded Rs 10,000 as compensation and Rs 2,500 towards costs. The complainant then filed an appeal before the State Commission seeking enhancement of the compensation. His contention was that failure on the part of the telecom company to shift his phone had caused him immense loss, particularly because he had invested in shares and had to keep in constant touch with his stockbroker, which he could not do. The State Commission did not enhance the compensation, but awarded Rs 50,000 as punitive damages and quantified the costs of appeal as Rs 5000. In addition, it also directed the District Forum to hold an inquiry under Section 340 of the CrPC, and initiate criminal proceedings against the company, particularly its authorised signatory, Padamjit Singh, on the ground that he had filed a false reply and affidavit. The affidavit submitted by him had falsely claimed that the phone had been shifted from Chandigarh to Kurukshetra. Against this order, the company filed a revision petition before the National Commission. The Commission, after perusing the matter, set aside the order of the Sate Commission directing criminal proceedings. However, it felt that for making such a false statement in the affidavit, the amount of Rs 50,000 awarded as punitive damages by the State Commission was insufficient. Said the Commission: "It should be borne in mind that Consumer Fora are required to decide the matter speedily and render equitable justice to the consumer. The practice of making false and incorrect statements and the practice of denial of each and every sentence submitted by the complainant without any justifiable ground requires to be controlled. For false affidavits or misleading statements in pending proceedings, deponents are required to be dealt with appropriately by imposing punitive damages so that in future they or others may not indulge in such practice." (Reliance India Mobile Limited VS Hari Chand Gupta, RP no 53 of 2006, decided on May 8, 2006) This order should send a warning signal to all manufacturers and service providers who take consumer courts lightly.
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