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Report of the Medical Council cannot be determinative, when it contradicts with the evidentiary findings of Consumer Forum on Medical Negligence: Supreme Court

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Case title – Najrul Seikh vs Dr. Sumit Banerjee & Anr

Case no. – Civil Appeal No(S). OF 2024 [Arising out of SLP (Civil) No(s). 17437 of 2018]

Decision on – February 22, 2024

Quoram – Justice Vikram Nath and Justice Satish Chandra Sharma

Facts of the case

The Appellant is the father of Master Irshad, a 13-year-old boy. The appellant unable to finance the surgery at Disha Eye Hospital approached the Respondent 1 and 2 (Doctor and Megha Eye Centre). After the surgery, by Respondent No. 1, Irshad began experiencing irritation, pain, and blood clotting with no relief in his condition.

Respondent No.1 eventually referred them to the Regional Institute of Ophthalmology (‘RIO’). The Appellant and his son visited the RIO a month later and were informed that it was a case of Retinal detachment leading to permanent loss of vision in the right eye, caused due to the faulty operation conducted by Respondent No. 1.

The Appellant alleged negligent cataract surgery by the Respondents and filed a complaint under Section 12 of the Consumer Protection Act, 1986. The District Consumer Disputes Redressal Commission (DCDRC) relied on the uncontroverted expert evidence provided by Dr. Anindya Gupta and held that there was deficiency in the medical services provided by the Respondents and thereby, directed a payment of INR 9,00,000 as compensation.

However, the order of the DCDRC was set aside by the West Bengal State Consumer Disputes Redressal Commission (‘SCDRC’). The SCDRC relying on the report of the West Bengal Medical Council found contributory negligence on part of the Appellant in visiting the RIO a month later.

Thereafter, a revision petition preferred by the Appellant before the National Consumer Disputes Redressal Commission (the ‘NCDRC’) was also dismissed which was subsequently impugned before this Court.

Submission of the Parties

The Learned Counsel for the Appellant submitted that the NCDRC failed to notice a selective appreciation of evidence by SCDRC and completely ignored the report provided by Dr. Gupta regarding the lapses in pre-operative and post-operative care provided by the Respondents.

The Learned Counsel for the Respondents, on the contrary, submitted that both the NCDRC and the SCDRC have correctly placed reliance on the decision of the Medical Council to arrive at their conclusions regarding the absence of negligence on part of the Respondents.

Court’s Analysis and Judgement

The Court upon perusal of the orders of NCDRC and the SCDRC found merit in the Contention of the Appellants. The Court stated that DCDRC was right in holding the respondent for deficiency in services. Moreover, through the evidence of Dr. Gupta, it noted that a nexus was established between the lapses in post-operative care and the development of loss of vision after the operation, thereby held the expert evidence of Dr. Gupta as valid.

The Court pointed out that despite the presence of evidence regarding the negligence of the Respondents, both the SCDRC and the NCDRC failed to consider it and relied only on the report of the Medical Council. On a perusal of the Medical Council report, the court noted that it did not delve into the nuances of pre-operative and post-operative care.

The Court held that the report of the Medical Council can only be relevant in determining deficiency of service before a consumer forum, but not determinative, especially when it contradicts the evidentiary findings made by a consumer forum.

The Court, with the aforementioned findings, set aside the orders of SCDRC and the NCDRC. It upheld the decision of DCDRC and directed the respondents to comply with the order of the DCDRC within one month from the date of this order.

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Judgement Reviewed by – Keerthi K

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“NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION OVERSTEPPED ITS POWERS AND JURISDICTION”: SUPREME COURT

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CASE TITLE:  Venkataraman Krishnamurthy and Anr. v. Lodha Crown Buildmart Pvt. Ltd.

CASE NO: Civil Appeal No. 971 of 2023

DECIDED ON: 1.03.2024

QUORUM:  Hon’ble Justice Sanjay Kumar

FACTS OF THE CASE

This Civil Appeal has been filed by the complainants aggrieved by the order passed by the National Consumer Disputes Redressal Commission (NCDRC). The respondent company was constructing a building wherein the appellant wished to buy an apartment. Hence, the appellant and the company entered an Agreement to Sell on 29.11.2023. After that, a four bhk flat in ‘Lodha Evoq’ was allotted to the appellants. As mentioned in the contract’s payment schedule, the appellants were supposed to make payments in four instalments, and the balance amount was to be paid at the time of fit-outs. When the complaint was filed, it was undisputed that the appellants were up to date with their payments in accordance with the contract. The contract further mentioned that the respondent party was supposed to hand out the apartment on two occasions: one for fit-outs by 30.06.2016 and the second for the offer of possession of the apartment along with the issuance of the occupancy certificate. A grace period of one year was given to the company in case of failure to provide the apartment on the aforementioned date. The company failed to comply with the terms and conditions by not giving the apartment on an earlier date. Hence, the appellants approached the NCDRC, praying for a refund of the amount they paid with a compound interest of @18% p.a., as well as compensation for the litigation costs and mental distress caused.

The respondent party is hereinafter referred to as the ‘OP’.

The NCDRC passed the following judgement:

The NCDRC directed the OP to give the entire physical possession of the property to the complainants within three months from the date this order was passed.

Both parties must inspect the property in question together, and in case of any deficiencies, the same must be reversed within 30 days of the inspection. The OP shall inform the complainants in writing after making the necessary changes and give them 15 days to complete the required formalities to be fulfilled to possess the property. The OP can also demand maintenance costs, such as car parking, club membership, etc., from the complainants. If the OP deems it necessary, it can take an indemnity bond from the complainants to pay taxes the authorities may likely demand in the future.

The OP shall bear compensation for delay in property transfer at simple interest 6% p.a. Parties are to bear their litigation costs. If the complainants wish to seek a refund, the OP shall be informed in writing within 15 days of the order. The OP shall refund the money after deducting the deposit amount within two months of the request made by the complainants.

APPELLANTS CONTENTIONS

The appellants contended that the respondent company did not comply with the contractual terms since they failed to offer the property for fit-outs on the time and date mentioned in the agreement. The possession of the apartment was to be delivered to the appellants on 30.06.2016 or extended by the grace period of one year.

RESPONDENT’S CONTENTIONS

The respondents contended that they had already obtained the occupancy certificate required before the expiry of the grace period. They informed the same to the appellants via email and asked them to make balance payments for the final property transfer. However, the appellants did not respond to the mail; hence, the respondent did not breach the contract. Additionally, they contended that the appellants wanted to terminate the contract due to the introduction of the Goods and Services Tax. They only want to avoid tax.

LEGAL PROVISIONS

Regulation 6(7) of the Development Control Regulations, 1991.

COURT ANALYSIS AND JUDGEMENT

The respondent company had obtained a ‘Part Occupancy Certificate’ from the Town & Country Planning Division of Mumbai instead of an Occupancy Certificate. The certificate was issued on the condition that the respondent company must finish the internal work before applying for a total occupancy certificate. The format was not in accordance with Regulation 6(7) of the Development Control Regulations, 1991. Moreover, the respondent company bypassed the date of offering the apartment for fit-outs. It directly offered possession of the apartment and could not even procure the full occupancy certificate, which cannot be overlooked as it is a severe breach of the terms of the contract. The appellants rightfully exercised their rights to terminate the contract and contended that they had not received any letter for the offer of property for fit-outs.

The NCDRC opined that the respondent company’s delay in issuing the flat was not unreasonable. But if the complainants still want to terminate the agreement and seek a refund, the respondent’s company shall return the amount they paid in full after reducing the deposit amount. Hence, it passed the aforementioned judgement. However, it cannot be contended that there was no delay in providing possession of the property since it can be deduced that the contract provided a full occupancy certificate. To this effect, the respondent party still has to issue an occupancy certificate.

The Supreme Court stated that when the parties enter into a contract outlining all the terms and conditions, they must abide by the same. If the contract provides for the actions to be taken in case of a breach, then such a method must be followed. If not, the complainants can legally enforce the same on the party at fault.

In the case of General Assurance Society Ltd. v. Chandumull Jain and another[1] relating to insurance documents, it was held that the court’s duty is limited to interpreting the documents rather than amending them. This changes the structure and substance of the contract; hereby, the court goes beyond its powers. Hence, however unreasonable the contract may be, it is not the court’s responsibility to make changes. The court must interpret the contract and apply the established terms and conditions. The same was reiterated in the case of Rajasthan State Industrial Development & Investment Corporation vs Diamond & Gem Development Corporation[2], Ltd. Shree Ambica Medical Stores vs Surat People’s Coop. Bank Ltd.[3] and GMR Warora Energy Ltd. vs Central Electricity Regulatory Commission[4].

The court said that the respondent company could not argue because the appellants accepted their proposal of delayed apartment delivery. The appellants were informed about the delay on two separate occasions. However, their response still demanded that the occupancy certificate be uploaded to the website to obtain a loan. The appellants were scheduled to see the property/apartment in question on 14.06.2017, which was delayed to August 2017 or later. It is unknown when the appellants were given the ‘part occupancy certificate’, but it is undisputed that after the expiry of the grace period, the appellants immediately sought to terminate the agreement by providing notice to the respondent company in writing. The appellants rightfully followed the terms and conditions of the contract. The respondents cannot infer the communication between the parties before the expiry of the grace period as a green signal by the appellants. It is not suggestive of their acceptance when they were not even aware of the full facts of the situation then. The fact that the appellants wanted to complete all the formalities to avoid the Goods and Services Tax is not grounds for them to be held against. The court observed that the urgency shown by the appellants due to the introduction of GST was justified and natural. Avoidance of tax does not amount to evasion of tax.

The respondent company relied on the case of Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna[5] to pray for the reduction of interest rates. The court observed that the facts of this case do not apply to the current scenario. In this case, the contract provided that any delay after the expiry of the grace period shall allow the other party to terminate the contract and obtain a refund without any interest. Hence, in all fairness, the court ordered a refund with a 9% p.a. simple interest. In the instant matter, it has been explicitly laid down in the contract that an interest of 12% p.a. has to be paid along with the refund. Thus, the court does not hold the authority to amend the same.

The court further held that the National Consumer Dispute Redressal Commission (NCDRC) exceeded its power and authority. The court not only amended the terms and conditions of the contract but also set out the discourse to be taken by both parties, especially the appellants. The appellant company wished to terminate the agreement despite the offer of possession made by the respondents on 29.07.2017. Accordingly, the court has directed the respondent company to refund the amount the appellants paid in twelve equal monthly instalments. Post-dated cheques and a simple interest of 12% p.a will be paid. The first instalment must be paid on the 5th of April and the remaining on the fifth of each month till it is fully repaid.

CONCLUSION

In this judgement, the court reversed the NCDRC’s order. This judgement is crucial for determining the duties and powers of the judges when dealing with contractual cases. The court referred to various judgements and reiterated that the court’s power is limited to understanding the contract and applying the terms and provisions to the facts presented. Even in cases wherein the contract is arbitrary, the court must not amend a valid contract. This judgment also serves as a reminder to the parties entering into contracts to carefully devise and review the terms and conditions of the contract since they cannot change the same unless expressly provided for in the contract. The parties must be aware that even the omission of a task mentioned in the contract shall lead to a breach enforceable by the aggrieved party.

Judgement analysis written by- Rashi Hora

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[1] AIR 1966 SC 1644

[2] (2013) 5 SCC 470

[3] (2020) 13 SCC 564

[4] (2023) 10 SCC 401

[5] 5 (2021) 3 SCC 241

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Legal representatives of the deceased developer are not liable to discharge the deceased’s obligations which were primarily based on his skills and expertise – Supreme Court

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Case Title – Vinayak Purshottam Dube (deceased) vs Jayashree Padamkar Bhat & Others

Case No. – Civil Appeal Nos.7768-7769 of 2023

Decided On – March 01, 2024

Quoram – Justice B.V. Nagarathna and Justice Ujjal Bhuyan

The issue involved in this case was regarding the extent of liability of legal heirs in fulfilling obligations of the deceased developer, a sole proprietor under a development agreement.

In the case of Vinayak Purshottam Dube (deceased) vs Jayashree Padamkar Bhat & Others the appeals have been filed by the legal representatives of the opposite party-sole proprietor against the common final judgment passed by the NCDRC.

Facts of the Case

In this case, the appellants were the legal heirs of the original opposite party in the consumer complaint before the District Forum and the respondents were the complainants. The complainants, Jayashree Padmakar and others, owners of property had entered into a Development Agreement with the opposite party and according to the agreement, the complainants were entitled to receive eight residential flats and Rs.6,50,000/- as consideration.

The opposite party failed to fulfill the payment obligations and hence, the complainants alleged breaches of the agreement. Despite notices issued by the complainants, the opposite party denied the allegations and refused to take actions in that regard.

They filed a complaint before the District Consumer Forum. The District Forum considering the Development Agreement between the parties, it held that the opposite party was to be liable to pay an amount of Rs. 1,65,000/- and 1,85,000/- along with interest rate of 18% and an amount of Rs.1,50,000/- at the time of conveyance. Being aggrieved by its order; both parties approached the State Commission.

The State Commission partly modified the order by setting aside the directions to pay Rs. 1.85 lakhs and Rs. 1.65 lakhs as the said claims were held to be time-barred but upheld the direction to pay Rs. 1.5 lakhs. The State Commission also placed reliance on some other clauses of the Development Agreement and directed the opposite party to fulfil their obligations.

Then, a revision petition was filed before the NCDRC (National Consumer Disputes Redressal Commission). During the pendency of the petition before the NCDRC, the original opposite party – Vinayak Purushottam Dube died and his legal representatives i.e., his wife and two sons were brought on record, who are the appellants before this Court. The NCDRC disagreed with the finding and conclusion of the State Commission with respect to the time-barred transaction. Hence, it upheld the directions of District Forum ordering for the payments of Rs. 1.85 lakhs and Rs. 1.65 lakhs along with interest. The NCDRC also upheld the directions given by the State Commission with respect to fulfillment of their obligations.

The NCDRC, on pursuance of the review petition upheld its earlier findings. Further, NCDRC refused to accept the contention of the appellants-opposite party and held that the death of a developer has no effect upon the obligations of the developer under the Development Agreement and the same have to be executed by the legal heirs of the developer.

Legal provisions

Section 37 of Indian Contract Act, 1872 – Obligation of parties to Contract

Section 40 of Indian Contract Act, 1872 – Person by whom promise is to be performed

Section 2(11) of Code of Civil Procedure, 1908 – Legal Representative

Section 50 of Code of Civil Procedure, 1908 – The holder of the decree may apply to the Court to execute it against the legal representative of the deceased, if judgment-debtor dies before the enforcement of the decree.

Section 306 of the Indian Succession Act, 1925 – Demands and rights of action of or against deceased survive to and against executor or administrator. Legal Maxim – “actio personalis moritur cum persona” – a personal right of action dies with the person.

Submissions on behalf of the Appellants

The learned counsel submits that it not poossible for the legal representatives (wife and sons) to follow the directions of the District Forum and State Commission as they were issued personally against the opposite party who is a deceased now.

He contended that the original opposite party had skills and expertise to comply with the said directions as a developer. But, on his demise, his legal representatives, namely, his widow and two sons cannot be compelled to carry out those directions as they neither possess the necessary skills nor expertise to execute the same. Hence, the counsel submits that the clauses in the Development agreement which placed rights and obligations on Vinayak cannot be enforced against his legal heirs in pursuance of his demise.

Submissions on behalf of the Complainants

The Learned Counsel submits that the Complainants will have no recourse if the said directions are not enforced by the opposite part. He contended that the NCDRC
was justified in directing the legal representatives of the deceased opposite party to take steps for also complying with those directions.

Issue – The Question before the Court was whether the legal representatives can be made liable to comply with those obligations under the Development Agreement on the demise of the original opposite party

Courts Observation and Analysis

The Supreme Court examined the nature of the obligations under the development agreement. It distinguished between proprietary rights (inheritable and having economic value) and personal rights (non-transferable and ending with the individual).

The Court referred to Section 306 of the Indian Succession Act, 1925, and Sections 37 and 40 of the Indian Contract Act, 1872, highlighting that personal obligations dependent on an individual’s skills or competencies are not transferable to legal heirs.

Legal precedents, including Raghu Lakshminarayanan vs. Fine Tubes and Ajmera Housing Corporation vs. Amrit M. Patel, were cited to underline those obligations requiring personal performance by the deceased cannot be enforced against legal heirs.

The Court further said that where the decree or order is not against the estate of a deceased sole proprietor but based on the skills and expertise of the sole proprietor, the obligations which had to be performed by the sole proprietor would come to an end on his demise and the same cannot be imposed on his legal heirs or representatives.

Judgement

The Supreme Court ruled that while the legal heirs are responsible for monetary obligations from the deceased’s estate, they are not liable for personal obligations that were specific to the developer’s skills or expertise. Thus, the Court held that the legal representatives of the deceased developer are not liable to discharge the obligations which had to be discharged by the deceased opposite party in his personal capacity. Consequently, the Court set aside the NCDRC’s orders imposing personal obligations on the legal heirs but upheld the monetary liabilities to be settled from the estate.

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NCDRC overstepped its authority and jurisdiction by disregarding the Agreement’s binding covenants: Supreme court

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Case title: Venkataraman Krishnamurthy vs Lodha Crown Buildmart Pvt. Ltd.

Case no.: CIVIL APPEAL NO. 971 OF 2023

Decided on: 22.02.2024

Quorum: Hon’ble Justice Aniruddha Bose, Hon’ble Justice Sanjay Kumar

 

Hon’ble Justices stated that, “it was not open to the NCDRC to apply its own standards and conclude that, though there was delay in handing over possession of the apartment, such delay was not unreasonable enough to warrant cancellation of the Agreement. It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply its own subjective criteria to determine the course of action to be adopted by either of them.”

 

BRIEF FACTS:

The complainants, who planned to buy an apartment in a Mumbai building that the respondent company was going to build, were the appellants. The complainants received a flat as a result of the parties’ execution of an Agreement to Sell. The sale consideration was to be paid in four instalments of “application money” in accordance with the payment schedule, with the remaining sum due when fit outs started. According to the agreement, the complainants were to receive possession of the flat by June 30, 2016, or within a grace period of one year, so they could fit it out.

The complainants went to the NCDRC, claiming that the company had terminated the agreement and failed to deliver possession of the flat for fit outs by the specified date. In addition to reimbursement for the money they had paid, they prayed for damages for the harassment, mental anguish, and torture they had endured, as well as reimbursement for the costs of the lawsuit. The complainants were before the supreme Court because they were unhappy NCDRC order.

COURT ANALYSIS AND JUDGEMENT:

The court ruled that the contract condition required payment of delay compensation, and that if the delay lasted more than twelve months after the end of the grace period, the allottee could terminate the contract and receive a refund of his payment. The contract condition, however, stated that the refund would be made without any interest.

The Court went on to say that the appellants’ desire to avoid the additional tax liability resulting from the implementation of the Goods and Service Tax regime could not be used against them or attributed to them as an underhanded reason for withdrawing from the agreement.

After analysing the evidence and the parties’ agreement, the court concluded that the NCDRC exceeded its authority and jurisdiction by ignoring the binding covenants in the Agreement and introducing its own logic and rationale to determine what the parties’ future course of action, particularly the appellants, should be.  

The court orders the respondent-company to refund the deposited amount of Rs. 2,25,31,148 in twelve equal monthly instalments via post-dated cheques, with simple interest at 12% per annum, from the date of receipt of the amount or parts thereof until actual repayment.

 

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

 

Written by – Surya Venkata Sujith

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