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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 8072-8073  OF 2009

GENERAL MOTORS (INDIA) PRIVATE LIMITED      ..... APPELLANT

VERSUS

ASHOK RAMNIK LAL TOLAT & ANR.            ..... RESPONDENTS

J U D G M E N T

ADARSH KUMAR GOEL, J.

1. These  appeals  have  been  preferred  against  the  order   

dated 16th December, 2008 of the National Consumer Disputes  

Redressal Commission (for short “the National Commission”) in  

Revision Petition Nos.3349 of 2006 and 2858 of 2008.

2. 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.

3. In  the  complaint,  filed  before  the  District  Forum,

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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  (joint  and  severally)  to  have  practiced  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 Lakh) 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 to   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 serverally)   to  pay  Rs.25,000/-  to  the  complainant,  as  

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cost of this complaint.”

4. The  case  of  the  complainant  is  that  he  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  

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  borne  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.  But   get you there in unmatched comfort and luxury  by-road, off-road or no-road.”

5. 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 each and ……….. it won’t just get you their every   

time.   But get you’re 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 1st May, 2004 for  

Rs.14 Lakhs and got accessories worth Rs.1,91,295/- fitted and  

also got the vehicle insured and registered.   

6. Thereafter he realised that the vehicle was not fit for “off-

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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 pages 8-6 column  

1 & 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”.  He 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 & 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

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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.5,000/- for mental agony  

and  Rs.2,000/- 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.5,000/-  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

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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 in as much 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(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

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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 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 kms, we consider it   appropriate that the respondent should refund a  sum  of  Rs.12,50,000  (Rupees  twelve  lacs  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

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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 utilized 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 Lacs 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  lacs  (Rupess   Twenty Five Lacs) as punitive damages with this   Commission.  Out of the said deposited amount, a   sum of Rs.5 lacs (rupees five lacs) 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  utilized  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 herein above. ”

13. We have heard learned counsel for the appellant and the  

respondent No.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 .

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15. What  survives  for  consideration  is  the  submission  of  

learned senior counsel for the appellant, that there was no claim  

before the National  Commission for the punitive damages nor  

the appellant had an opportunity to meet such claim and that  

part of the order needs to be set aside.   

16. We find merit in this submission.  Vide interim order of this  

Court dated 17th July, 2009, the operation of the impugned order  

awarding punitive damages was stayed.  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, with the  

following modifications :  

“(i) Respondent No.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  No.1  shall  be entitled  to  withdraw  the  amount  of  Rs.12,50,000/-  together  with   litigation cost deposited by the appellant before  the District Forum in terms of order of this Court   dated  17th July,  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 No.1 shall   cooperate  with  the  appellant  by  signing  the   documents necessary for selling the vehicle.”

17. We proceed to deal with the issue of correctness of finding

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recorded  by  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  

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.

18. 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

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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 hyper technical approach.  At the same time,  fair  

procedure is hall mark of every legal proceeding and an affected  

party  is  entitled  to  be  put  to  notice  of  the  claim  with  such  

affected party has to meet.     

19. 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.1 as follows :  

“18. Prior to the substitution of clause (r) in sub- section  (1)  of  Section  2  of  he  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   

1   (2009) 12 SCC 369

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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 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.”

In  Colgate Palmolive  (India)  Ltd. v.  MRTP  

Commission2  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 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   2   (2003)  1 SCC 129

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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 Kumar3,  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 the  

appellant  was  aware  that  any such claim is  to  be  met  by it.  3   (2008)  4 SCC 504

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Normally,  punitive  damages  are  awarded  against  a  conscious  

wrong doing 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  before  the  National  Commission  and  the  

appellant  having no  notice  of  such a  claim,  the said  order  is  

contrary to 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.

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21. Accordingly we allow these appeals and set aside the order  

of the National Commission to the extent of award of punitive  

damages.

……..…………………………….J. [ V. GOPALA GOWDA ]

.….………………………………..J. NEW DELHI     [ ADARSH KUMAR GOEL ] October 9, 2014

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ITEM NO.1A-For Judgment   COURT NO.13               SECTION  XVII                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal  No(s).  8072-8073/2009 GENERAL MOTORS (I) PRIVATE LIMITED                Appellant(s)                                 VERSUS ASHOK RAMNIK LAL TOLAT & ANR.                    Respondent(s) Date : 09/10/2014 These appeals were called on for JUDGMENT  today.

For Appellant(s)  Mr. Vikram Shokalia, Adv.                      For M/s. Dua Associates                       For Respondent(s)                      Caveator-in-person                      Ms. Aparna Jha,Adv.                              

Hon'ble Mr. Justice Adarsh Kumar Goel pronounced  the judgment of the Bench comprising His Lordship and  Hon'ble Mr. Justice V.Gopala Gowda.

The appeals are allowed in terms of the signed   order.

     (VINOD KUMAR)     (MINAKSHI MEHTA)

COURT MASTER  COURT MASTER   (Signed Reportable judgment is placed on the file)