TORT 163 Tort Damages and Consumer Compensation — Law of Torts Notes for Judiciary

Tort Damages and Consumer Compensation: A Suit for a Wrong and a Complaint About a Service

A person injured by a defective product or a badly performed service has two routes and they are shaped very differently. The tort suit is a general remedy available to anyone to whom a duty was owed, requires proof of fault in most cases, is assessed head by head after a trial, and takes years. The consumer complaint under the Consumer Protection Act, 2019 is available only to a consumer, complaining of a defect in goods or a deficiency in services, is decided summarily by a Commission, carries a nominal fee, and in product liability dispenses with fault altogether. The consumer route is faster, cheaper and easier in almost every respect, and its whole difficulty lies in fitting within the Act's defined terms.

1. The Comparison

	Tort damages	Consumer compensation
The source	The common law	The Consumer Protection Act, 2019
The forum	A civil court	The District, State or National Commission
Who may claim	Anyone to whom a duty of care was owed	A consumer as defined, and a complainant under section 2(5)
What is complained of	A tort	A defect in goods, a deficiency in service, an unfair trade practice, an overcharge, or a hazardous product
Fault	Required in negligence; not in strict or absolute liability	Not required for product liability, section 84(2) saying so expressly
Privity	Not required in tort	Not required. A beneficiary with the buyer's approval is a consumer
Procedure	A suit, with pleadings, issues, evidence and a trial	Summary, on affidavits, with a time frame prescribed
Court fee	Ad valorem	A modest prescribed fee
Speed	Years	Faster, though the Commissions are heavily burdened
Limitation	The Schedule to the Limitation Act, 1963	Two years from the cause of action, with power to condone delay on sufficient cause
Assessment	Head by head, on evidence	A lump sum, with power to award for loss, injury and mental agony
Appeal	The ordinary hierarchy	District to State to National Commission, and to the Supreme Court

2. Who Is a Consumer

A person who buys goods or hires a service for consideration, and includes a user of the goods or a beneficiary of the service with the approval of the buyer.
A person who buys goods for resale or for any commercial purpose is excluded, subject to the important exception for goods bought and used exclusively for the purpose of earning a livelihood by means of self employment.
The 2019 Act extends the definition to electronic and online transactions, and to teleshopping, direct selling and multi level marketing.
Medical services are within the Act. Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 651, holds that medical service rendered for consideration falls within "service", excepting only service rendered free of charge to everybody: TORT 098 and TORT 131.
The commercial purpose exclusion is the commonest obstacle, and a claimant who bought the machine for his business will be met with it at once.

3. The Pecuniary Jurisdiction

The Commission	Its jurisdiction
District	Where the value of the goods or services paid as consideration does not exceed Rs 50 lakh
State	Above Rs 50 lakh and up to Rs 2 crore, and appeals from the District Commission
National	Above Rs 2 crore, and appeals from the State Commission

The 2021 Rules changed the basis of computation, and this is the single most practically important feature of the jurisdiction. The value is that of the goods or services paid as consideration, and not the amount of compensation claimed.
The effect is substantial. A patient who paid Rs 2 lakh for a surgery and claims Rs 5 crore files before the District Commission, because the consideration and not the claim fixes the forum.
A complaint filed in the wrong forum will be returned, and the error costs time that may take the claim outside the two year period.

4. What the Commission May Award

To remove the defect, to replace the goods, or to return the price paid, with interest.
To pay compensation for any loss or injury suffered by the consumer due to the negligence of the opposite party.
To pay punitive damages in appropriate circumstances.
To discontinue an unfair or restrictive trade practice and not to repeat it.
To cease manufacture of hazardous goods, to withdraw them, and to pay into the Consumer Welfare Fund.
To issue corrective advertisement to neutralise the effect of a misleading one.
To pay compensation for mental agony and harassment, which the Commissions award routinely and which a civil court reaches only within a recognised head.
And to pay costs.

5. Where the Consumer Route Is Better, and Where It Is Not

The situation	The better route
A defective consumer product causing injury	The consumer complaint. Chapter VI dispenses with fault and the forum is faster
Medical negligence by a paid practitioner or hospital	The consumer complaint, after V.P. Shantha
A deficient service: banking, insurance, housing, transport, education	The consumer complaint, which is what the Act was made for
A bystander injured by a product he did not buy	The tort suit. He is neither a buyer nor a beneficiary with the buyer's approval
A commercial buyer, or goods bought for resale	The tort suit, and the Sale of Goods Act, 1930: TORT 154
A claim brought beyond two years where delay cannot be condoned	The tort suit, where the limitation article may be more favourable
A catastrophic injury requiring a full assessment of future care	The tort suit, where evidence can be led properly, though the consumer complaint may be taken first
Seriously disputed facts requiring cross examination	The tort suit. A summary procedure on affidavits is not designed for it
Free medical treatment given to everybody	The tort suit. It is outside the definition of service

6. How the Two Fit Together

The remedies under the Act are in addition to and not in derogation of any other law, so the consumer route does not take away the right to sue.
But the claimant may not recover twice. A sum awarded by a Commission will be adjusted against anything recovered in a suit on the same cause of action.
The choice is therefore practical and not doctrinal: speed, cost and the absence of a fault enquiry against the ability to lead evidence and to obtain a fully reasoned assessment.
In a serious personal injury the two may be used in sequence, the complaint first for an early award and the suit afterwards for the balance, subject to the court being satisfied that the earlier proceeding does not bar the later on principles of res judicata, which requires care in how the first claim is framed.
Where the defendant is the State or a public body and a fundamental right is engaged, the constitutional tort is a third route and is faster than either: TORT 135 and TORT 137.

⚠ Why the consumer forum has become the default and what is lost when it is

For most claims arising out of goods and services in India the consumer complaint is plainly the right choice, and a practitioner who files a civil suit where a complaint would lie has usually cost the client years and a great deal of money for nothing. The procedure is summary, the fee is nominal, the Commissions award for mental agony readily, and in product liability the Act has removed the one question that defeats claimants in the ordinary courts. What is worth being clear eyed about is what the summary procedure cannot do. It is built for a documentary contest: the bill, the warranty, the report, the correspondence. It is not built for a case that turns on contested oral testimony, on the credibility of competing experts, or on a quantum requiring actuarial evidence about forty years of future care. A Commission faced with that kind of case will either decide it on affidavits, which serves the claimant badly, or relegate the parties to a civil suit, which wastes the time already spent. The judgment to make at the outset is therefore about the shape of the dispute rather than its subject: where the facts are documentary and the loss is ascertainable, the Commission is better in every respect; where the case will be won or lost on cross examination and the sum depends on a projection, the suit is the forum the procedure was designed for, and the consumer complaint should be used, if at all, only to secure an early payment on account.

7. The Position Stated Shortly

1. The tort suit is a general remedy requiring proof of fault in most cases; the consumer complaint is a statutory remedy available only to a consumer.

2. The Consumer Protection Act, 2019 covers a defect in goods, a deficiency in service, unfair trade practices, overcharging and hazardous products.

3. A consumer includes a user of goods or a beneficiary of a service with the approval of the buyer, so privity is not required.

4. A person who buys for resale or a commercial purpose is excluded, save for goods used exclusively to earn a livelihood by self employment.

5. Indian Medical Association v. V.P. Shantha brings medical services within the Act, excepting service rendered free to everybody.

6. The pecuniary jurisdiction under the 2021 Rules is Rs 50 lakh for the District and Rs 2 crore for the State Commission, computed on the consideration paid and not on the compensation claimed.

7. The Commission may order removal of the defect, replacement, refund, compensation for loss or injury, punitive damages, corrective advertisement and compensation for mental agony.

8. Section 84(2) of the Act makes a product manufacturer liable although not negligent, which is the principal advantage of the route.

9. The remedies are in addition to and not in derogation of any other law, but a claimant may not recover twice.

10. The consumer route suits a documentary dispute with an ascertainable loss; a case turning on cross examination and a long projection of future care belongs in a civil suit.