Page 43 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes The dealer would not succeed as he continues to be the owner of the goods and the title in the
goods has not passed to the consignee. It is the dealer who has the insurable interest in the
goods.
Service

‘Service’ means service of any description which is made available to potential users and includes
the provision of facilities in connection with banking, financing, insurance, transport, processing,

supply of electrical or other energy, boarding or lodging or both, housing construction,
entertainment, amusement or the purveying of news or other information, but does not include
the rendering of any service free of charge or under a contract of personal service.

Example: Maina Devi’s husband took a life insurance policy for ` 50,000. Before the second
premium fell due, he died due to sudden illness. The claim made by her was not entertained for
as long as 14 years. It was only when she got her miseries published in newspapers and certain
MPs took up the matter in Parliament that she was sent a cheque for ` 50,39.

She made a complaint to the National Commission for deficiency of service by Life Insurance
Corporation of India. The National Commission held that the Corporation had been highly
negligent in the performance of its services. Maina Devi, the complainant, had suffered hardship

and loss on account of deficiency in service. She was held entitled to interest @12% p.a. from the
date of expiry of 3 months from the date of death of the assured till the amount was paid to her.
The Commission also awarded her compensation of ` 15,000 for mental torture and harassment.
Restrictive Trade Practice

This definition was introduced in the Act vide Amendment Act, 1993. It has now been amended
by the Amendment Act, 2002. It provides that a “restrictive trade practice” means a trade practice
which tends to bring about manipulation of price or its conditions of delivery or to affect fl ow
of supplies in the market relating to goods or services in such a manner as to impose on the
consumers unjustified costs or restrictions and shall include:

(a) delay beyond the period agreed to by a trader in supply of such goods or in providing the
services which has led or is likely to lead to rise in the price.
(b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the
case may be, services as condition precedent to buying, hiring or availing of other goods or
services;

Task S booked a motor vehicle through one of the dealers. He was informed subsequently
that the procedure for purchasing the motor vehicle had changed and was called upon to
make further payment to continue the booking before delivery. On being aggrieved, S fi led
a complaint with the State Commission. Would he succeed? [Hint: S would not succeed, as
he is not a consumer. The sale transaction has not taken place so far. Therefore there is no
question of any defect in the goods. In case it is alleged that the dealer is indulging in any
unfair trade practice and that S has suffered some loss or damage as a result thereof, then
S has to prove all these before his petition can be entertained.]

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