Holding

The delay, while not an unfair trade practice under the pre‑amendment MRTP Act, constitutes a deficiency in service under the Consumer Protection Act, warranting relief to the consumer.

Summary

Om Prakash booked a tractor on 12‑12‑1990, paying an advance and was first on the dealer's booking list. The dealer delayed delivery, supplied tractors to lower‑ranked customers, and when the tractor was finally delivered on 21‑9‑1991 the price had risen, causing a loss of Rs 40,690 to the consumer. The consumer filed a complaint under the Consumer Protection Act; the District Forum and State Commission held the delay amounted to an unfair trade practice and ordered a refund and compensation. The National Commission reversed, holding that mere delay did not constitute an unfair trade practice. The Supreme Court held that, although the amendment to Section 36‑A of the MRTP Act (effective 27‑9‑1991) was not applicable to the period of delay, the conduct amounted to a deficiency in service under the Consumer Protection Act, and therefore the appeal was allowed, setting aside the National Commission’s order and restoring the State Commission’s decision.

Issues considered

Whether the intentional delay in delivery of the tractor constitutes an 'unfair trade practice' under Section 36‑A of the MRTP Act as read with Section 2(r) of the Consumer Protection Act.
Whether the delay amounts to a 'deficiency in service' under Sections 2(1)(g) and 2(1)(o) of the Consumer Protection Act, thereby giving the consumer a cause of action.

Legislation cited

Consumer Protection Act, 1986s. 2(1)(c)(i), s. 2(1)(o), s. 2(i)(c)(iii), s. 2(i)(g)
Monopolies and Restrictive Trade Practices Act, 1969s. 36-A

Subjects

consumer protectionunfair trade practicedeficiency in serviceMRTP Actprice escalationdelayed deliverycompensationappeal

Judgment

OM PRAKASH A
v.
ASSISTANT ENGINEER, HARYANA AGRO INDUSTRIES
CORPORATION AND ORS.

APRIL 12, 1994
B
[KULDIP SINGH, N.P. SINGH AND B.L. HANSARIA, JJ.]

Consumer Protection Act, 1986 and MRTP Act, 1969--Complaint as
regards "unfair trade practice" resulting in loss and damages-Whether inten-
tionally delayed delievery of tractor by the respondent to the appellant con- C
stitutes "unfair trade practice'· under Section 36-A (amended by Act 58 of 1991 ,
w.e.f 27.9.1991) of MRTP Act, 1969, read with section 2(r) of the Consumer
Protection Act 1986-IHtether stipulation in the agreement that consumer
shall pay to the respondent the price prevailing at the time of delivery is
material.
D
Consumer Protection Act, 1986 : Section 2(i)(c)(iii), 2(i)(g) and
2( 1)(o )-Complaint in regard to delivery of tractor intentionally delayed by
J the respondent-Whether constitutes 1'deficienncy in service 11•

The appellant booked a tractor with the respondent on 12.12.90. The E
price of the tractor was quoted at Rs. 1,86,975. Although the appellant was
placed first in the list of persons who had booked tractors, the respondent
postponed the delivery to the appellant while went on supplying to others.
who were below the appellant in the said list. In the meanwhile, there was a
rise in the price of tractor and ultimately when the tractor was supplied to
the appellant on 21.9.91 the appellant had to pay a higher price, that is, F
R•.2,27,664. In this process, the appellant had suffered a loss of Rs.40,690.

On a complaint tiled by the appellant under the Consumer Protec-
tion Act, 1986, the District Forum held that the respondent intentionally
did not deliver the tractor to the appellant which amounts to "unfair trade
practice". Hence a direction was given to the respondent to refnnd Rs. 40, G
690 along with interest thereon at the rate of 18% per annum with effect
from 21.9.91. Compensation of Rs. 2,000 was also directed to be paid to
the appellant by the respondent. An appeal by the respondent was dis-
missed by the State Commission but a second appeal by the respondent
before the National Commission was allowed on the ground that the mere H
463
464 SUPREME COURT REPORTS [1994] 3 S.C.R.

A · fact that there has been delay in the delivery of tractor will not constitute
'unfair trade practice' under the definition of the said expression con-
tained in the Consumer Protection Act. The statutory appeal has been
preferred by the consnmer.

Allowing the appeal, this Court
B
HELD : 1.1. Amended Section 36-A of the MRTP Act 1969, which
included within the definition of "unfair trade practice" even unfair
method or unfair or deceptive practice adopted while promoting sales and
snpplying goods, came into force with effect from 27.7.91. Before the said
C amendment in Section 36-A, prima facie none of the practices specified in
sub-section (1) to sob-section (5) of Section 36-A, would have covered a
case like the present one, that is, intentionally delaying the supply of goods
or articles booked by the consumer, according to the turn fixed, oecause
of which the consnmer suffered Joss or damage by a rise of the price in
the mean time. The condnct and the practice adopted by the respondent,
D that is, making delivery of tractors oc pick and choose basis ignoring the
appellant though he was at the top in the list of persons who had booked
tractors with the respondent, shall not fall under sub-section (5) of
Section 36-A of the MRTP AcL [468-D-E, 469-A] '

1.2. After the intorduction of the aforesaid amendment, which
E provides that the 'unfair trade practice' shall cover 'any unfair method
or unfair or deceptive practice' adopted by a trader vis-a-vis the con-
sumer, the conduct and practice intentionally adopted by the respondent
in not making delivery of the tractor to the appellant because of which he
had suffered loss, shall certainly deem to be an 'unfair trade practice'
F within the meaning of Section 36-A of the MRTP Act. [p.469-B]

1.3. The appellant booked with the respondent for the supply of \
tractor on 12.12.90. The respondent supplied the said tractor 21.9.91, that
is, prior to the introduction of the amendment in Section 36-A, whereby
the expression 'adopts any unfair methods or unfair or deceptive practice'
G were introduced which came into force with effect from 27.9.91. Therefore,
the unfair method or unfair practice adopted by the respondent between
12.12.90 and 21.9.91 shall not be deemed to be 'unfair trade practice'
within the meaning of Section 36-A of the MRTP Act 1969 read with
Section 2(r) of the CP Act, 1986. [469-F-H, 470-A] -.<

H 2. Once it is established ·that the respondent intentionally postponed
OM PRAKASH v. HARYANAAGRO iND. CORPN. [N.P. SINGH,J.] 465

the delivery of the tractor to the appellant, the stipulation in the agree- A
ment that the appellant shall pay the price prevailing at the time of
delivery, is inconsequential. [469-D-E]

3. However, in view of Section 2(1)(c)(iii) of the Consumer Protection
Act, 1986 "complaint" will include any allegation in writing made by a
complainant that the services mentioned in the complaint suffer from B
deficiency in any respect. As such, even if the complaint regarding the
delayed supply of tractor, in the facts and circumstances of the present
case, may not be covered by Section 2(1) (c) (i), it shall amount to deficiency
in services by the respondent The definitions of "deficiency" and "service"
under Section 2(i)(g) and (o), will cover the action of the respondent in C
intentionally delaying the supply of the tractor. Jn the facts and cir-
cumstances of the case, the service which was made available to the
appellant by the respondent, suffered from deficiency. [470-C-D].

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 373 of
1994. D

.., From the Judgment and Order dated 3.8.93 of the National Con-
sumer Disputes Redressal Commissio:Q, New Delhi in Revision Petition No.
42 of 1993.

Anil Mittar and Manoj Swarup for the Appellant. E
Bhal Singh Malik, Vishal Malik and P.S. Chauhan for the Respon-
dents.

The Judgment of the Court was delivered by
F
l N.P. SINGH, J. This appeal has been filed, against an order passed
by the 'National Commission', established. under the Consumer Protection
Act, 1986, setting aside the orders passed by the State Commission and the
District Forum, and dismissing the petition of complaint filed on behalf of
the appellant against the respondent No. 1 (hereinafter referred to as 'the G
respondent').

The appellant booked a tractor with the respondent and deposited
an amount of Rs. 2,500 as an advance on 12.12.1990. The price of the
tractor was quoted at Rs. 1,86,975. The appellant was first to receive the.
tractor from the said respondent according to the list of booking. On an It
~\

466 SUPREME COURT REPORTS [1994] 3 S.C.R.

A application made on behalf of the appellant, Allahabad Bank, Shahpur,
sanctioned loan to the appellant, which decision was communicated by a
letter dated 5.2.1991.

Although in the list of t.he persons of whom the tractors were to be
supplied, the position of the appellant was against Serial No. 1, the said
B respondent, according to the appellant, went on supplying tractors to
others, who were below the appellant in the said list. In the meantime, there
was a rise in the price of the tractor and ultimately when the tractor was
supplied to the appellant on 21.9.1991, the appellant had to pay Rs.
2,27,664. In this process, the appellant suffered a loss of Rs. 40,690 for no
c fault of his and due to the conduct and practice adopted by the respondent.

A complaint under the Consumer Protection Act was filed on behalf
of the appellant, before the District Forum. The District Forum, on con-
sideration of the materials produced on behalf of the parties, came to the
conclusion that the respondent intentionally did not deliver the tractor to
D the appellant, although the appellant was prepared to purchase the same.
It was also held that the respondent supplied the tractors to others who
were below the appellant in the list of booking and because of the delay,
the appellant had to pay an extra amount of Rs.40,690. A direction was
given to the respondent to refund Rs. 40,69.) along with the interest at the
E rate of 18% per annum with effect from 21.9.1991. A cor:tpensation of Rs.
2,000 was also directed to be paid to the appellant for the harassment and
mental agony caused to him due to the unfair trade practice indulged by
the respondent. The appeal filed on behalf of the respondent before the
State Commission was dismissed, atfirming the finding that because of the
unfair trade practice adopted by the respondent, by delaying the delivery
F of the tractor to the appellant, the appellant had to pay an extra amount
of Rs. 40,690. \

The National Commission, however, held that the mere fact 11 that
there has been delay in the delivery of the tractor, will not constitute 'unfair
G trade practice' under the definition of the said expression contained in the
Consumer Protection Act". The petition of complaint filed on behalf of the
appellant was dismissed. The National Commission did not point out in its
order, as to why in the facts and circumstances of the case it shall not
constitute 'unfair trade practice'. _,l ,-

H The laws intended to protect consumers, as opposed to traders, ar~ 1
\
\
OM PRAKASH v. HARYANAAGRO IND. CORPN. [N.P. SINGH, J.j 467

comparatively of recent developments. Because of general lack of informa- A
·tion on the part of consumers, many trade practices may result in causing
loss or damage to the consumers. It is well- known that many of the traders
having advance information, or on speculation regarding the rise in the
price of different articles, in order to avail the increase in the price,
withhold the supply of different goods or articles to the consumers. In this
process they cause loss or damage to consnmers by making them to pay
B
the excess price which they would not have been compelled to pay, if the
goods or articles had been supplied in time. The object and purpose of the
Consnmer Protection Act is to save the consumer from such unfair conduct
and practice of the traders also. On the materials produced, the District
Forum, the State Commission and the National Commission have to ex- c
anrine the grievance of a consnmer that by adopting an unfair conduct or
practice, a trader has wronged him and has compelled him to pay an excess
amount. But, at the same time, it need not be impressed that any interven-
tion, by such Consnmer Forums, should be only when they are satisfied that
the loss or damage has been caused to the consumer by the unfair conduct D
or practice, adopted by the trader.

From the Statement of Objects and Reasons of the Act, it appears
that the purpose of.the Act is to protect the interest of the consumer and
to provide 'the right', to seek redressal against unfair trade practices or
unscrupulous exploitation of consumers'. Section 2(1)(c)(i) defines the E
'complaint' to mean any allegation in· writing made by a complainant that
"as a res1.'.t of any unfair trade practice adopted by any trader, the com-
plaint has suffered loss of d::unag.: 11 S.-ction 2(r) says - the expression
'unfair trade practice' shaJJ have the oame meaning as "in Sec. 36-A of the
Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) ........ " F

1 In the Monopolies and Restrictive Trade Practices Act, 1969
(hereinafter referred to as 'the MRTP Act'), several amendments have
been introduced in Ct.apLr V nf the ,oid Act, including Part-B which
contains Section 36-A, hv Act No. 30 of 1984 with effect from 1.8.1984.
Section 36-A purported to define 'unfair trade practice' and in different G
sub-clause of the said Section, many 'unfair trade practices' have been
specified. However, by Act No. 58 of 1991, amendment was introduced in
Section 36-A, to make it more comprehensive, so as to cover within the
definition of 'unfair trade practice' even unfair method or unfair or decep-
tive practice adopted while promoting sales and supplying goods. The H
468 SUPREME COURT REPORTS (1994) 3 S.C.R.

A relevant part of Section 36-A is as follows :

"36-A Definition of unfair trade practice.- In this Part unless the
context _otherwise requires, 'unfair trade practice' means a trade
practice which, for the purpose of promoting the sale, use or supply
of any goods or for the provisions of any services,(adopt< any unfair
B method or unfair or deceptive practice including any of the following
practices), namely :.

(5) Permits the hoarding or destruction of goods, or refuses to sell
c the goods or to make them available for sale, or to provide any
service if such hoarding or destruction or refusal raises or tends
to raise or is intended to raise, the cost of those or other similar
goods or services."

D (Emphasis supplied)

The words "adopts any unfair method or unfair or deceptive practice
including any of the following practices" were introduced in Section 36-A
by aforesaid Act No.58 of 1991 with effect from 27.9.1991. It appears that
before the words "adopts any unfair method or unfair or deceptive prac-
E tice" were introduced in Section 36-A, prime facie none of the practices
specified in snb-section (1) to sub-section (5) of Section 36-A, would have
covered a case with which we are concerned i.e. intentionally delaying the
supply of articles or goods booked by the consumer, according to the turn
fixed, because of which the consumer suffers loss or damage. Sub-section
F (5) was there, but it shall not apply to a case where the trader delays the
supply of the goods or the articles to a consumer, because of which the
consumer suffers an injury by rise of the price in the meantime. Sub-section \
(5) of Section 36-A, will be attracted, where the trader permits the hoard-
ing or destruction of goods, or refuses to sell the goods or to make them
available for sale, and because of such hoarding or destruction or refusal
G to sell, raises or tends to raise the cost of those goods. Here it is not the
case of the appellant that the respondent was hoarding the tractors or was
refusing to sell them to anyone, and by this process was tending to raise
the price of the said tractor. The case of the appellant is that the respon-
dent was making delivery of the tractors on pick and choose basis, ignoring
H the appellant whose turn was first on the list of persons, who had booked
OM PRAKASH v. HARYANAAGRO IND. CORPN. [N.P.SINGH.J.] 469

the tractors with the respondent. The rise in the price of the tractor is not A
connected with any hoarding or refusal to sell the tractors on the part of
the respondent. As such the conduct and the practice adopted by the
respondent in respect of the sale of the tractor to the appellant, shall not
fall under sub-section (5) of Section 36-A of the MRTP Act.

But after the introduction of the aforesaid amendment, which
B
provides that the 'unfair trade practice', shall cover any unfair method or
unfair or deceptive practice adopted by a trader vis-a- vis the consumer,
the conduct and practice intentionally adopted by the respondent, in not
making delivery of the tractor to the appellant, shall certainly be deemed
to be an 'unfair trade practice' within the meaning of Section 36-A. It C
cannot be disputed that if a trader intentionally delays the delivery of any
goods to the consumer, because of which the consumer suffers, it shall
amount to an unfair method or unfair practice adopted by the trader. As
such after the introduction of the amendment by the Act No. 58 of 1991 in
Section 36-A, there should not be any difficulty in holding, that because of D
the unfair trade practice adopted by the respondent, the appellant has
suffered a loss and damage, within the meaning of Section 2(1)(c)(i) of the
Consumer Protection Act, in respect of which he can file a complaint. The
National Commission has pointed out that in the agreement, it had been
stipulated that appellant shall pay the price prevailing at the time of the
delivery. According to us, it is not of much consequence, once it is E
established that respondent intentionally postponed the delivery of the
tractor to the appellant, although he was not only entitled to the delivery
much earlier but, according to the findings of the District Forum and the
State Commission, he was through out willing to take delivery of the tractor
according to the list of booking. F

l But there is another aspect of the dispute. The appellant booked with
the respondent for the supply of the tractor on 12.12.1990 and deposited
an advance of Rs. 2,500 The respondent supplied the said tractor on 21.9.
1991. But till 21.9.1991 i.e. the date of the supply of the tractor by the
respondent, the expression "adopts any unfair method or unfair or decep- G
tive practice" had not been introduced in Section 36-A. The Amending Act
58 of 1991 introducing 'unfair method or unfair or deceptive practice' in
the definition of 'unfair trade practice', came into force with effect from
27.9.1991 i.e. after the tractor had been supplied by the respondent. As
Section 2(r) of the Consumer Protection Act defines 'nnfair trade practice' H
470 SUPREME COURT REPORTS [1994] 3 S.C.R

A to mean the definition given in Section 36-A of the MRTP Act, it is not
open to this Court to interpret the said expression without reference to
Section 36-A of the MR TP Act. As such it has to be held that the unfair
method or unfair practice adopted by the respondent between 12.12.1990,
and 21.9.1991shall not be deemed to be 'unfair trade practice' within the
meaning of Section 36-A of the MRTP Act read with Section 2(r) of the
B Consumer Protection Act. If the amendment introduced by Act No. 58 of
1991 in Section 36-A of the MRTP Act had come into force on any date
prior to the dale of the delivery of the tractor, then there would have been
no difficulty in holding that by intentionally delaying the delivery of the
tractor to the appellant, the respondent had adopted an 'unfair trade
C practice'.

However, in view of section 2(1)(c)(iii), 'complaint' will include any
allegation in writing made by a complainant that "the services mentioned
in the complaint suffer from deficiency in any respect." As such, even if the
complaint regarding the delayed supply of tractor, in the facts and cir-
D cumstances of the present case, may not be covered by Section 2(1)(c)(i)
aforesaid, it shall amount to deficiency in service by the respondent. The
definitions of 'deficiency' and 'service' given under Section 2(1)(g) and (o),
will cover the action of the respondent, in intentionally delaying the supply
of the tractor. In the facts and circumstances of the case, there should not
E be any difficulty in holding that the service which was made available to
the appellant by the respondent, suffered from deficiency.

Accordingly, the appeal is allowed. The order of the National Com-
n1ission is set aside and that of State Commission is restored. However, in
the facts and circumstances of the case, there shall be no order as to costs.

S.S.H.R. Appeal allowed.