LAB PPT

1
Privity of Contract and Consumer Rights

• A Presentation by Group C-12
• Anish Goyal Anusha Sirasala
  D Arvindraj
• Gaurav Chaudhary Srikanth Hanumanula
  Varnith M K

2
Privity of Contract

• The Principals of a contract are the two
  contracting parties between whom an agreement is
  reached for the exchange of benefit and
  consideration.
• The person who is not involved in the formation
  of the agreement or meeting of the minds is not a
  Principal and is a Third Party to the Contact

Benefit
Contract
Consideration
3
Privity of Contract

•  At its most basic level, the rule is that a
  contract can neither give rights to, nor impose
  obligations on, anyone who is not a party to the
  original agreement, i.e. a "third party
•  One of the most universally disliked and
• criticised blots on the legal landscape".
• Because the Third Party who stands to benefit
• from the performance of the contract also cant
• enforce any term of the contract.

4
Privity of Contract

• The most commonly referred to case, where
  Privity of Contract was emposed by the English
  Court is Tweddle v/s Atkinson (1861)
• William Tweddle was engaged to a Miss Guy. The
  groom's father entered into an agreement with the
  bride's father, William Guy, to pay the groom,
  William Tweddle, 200 if he paid the groom 100,
  all of which was recorded in a written contract.
• However, William Guy subsequently died, and the
  estate would not pay. The groom then sued William
  Guy's estate for the promised 200, namely the
  estate executor Mr Atkinson.
• His suit was not successful as it was held no
  stranger (third party) to the consideration can
  take advantage of a contract, although made for
  his benefit. He has no legal entitlement to
  either benefits or obligations.

5
Spring Meadows Hosp. V/s Harjot Ahluwalia
6
Case Facts

• On 24th Dec 1993, Mr Mrs Ahluwalia brought
  Harjot to Spring Meadows as he was suffering from
  high fever. Dr. Bhutani diagnosed it as Typhoid
  and instructed the nurse, Bina Mathew to To
  give an injection to Harjot at night through
  the Duty Doctor.
• The nurse misunderstood the instructions and
  wrote a prescription for LARIAGO- trade name for
  an anti-malarial drug (Chloroquine) when she
  should have actually administered Chlorophenicol
  for typhoid.
• Also the dose administered-1 Ampule i.e. 5 ml.
  had been far in excess of the dose appropriate
  for the child. (Children must be administered
  syrup or tablet).
• This led to a severe reaction in Harjot, and he
  suffered from an immediate Cardiac Arrest and
  collapsed. The Duty Doctor (Dr. Dhananjay )tried
  to revive Harjot, but
• failed and placed Harjot on a Manual
  Ventilator , but should have been placed
• on an Auto-Repirator.
• Later the doctors advised the parents to move the
  child to AIIMS to avail better
• facilities and obtain expert care.
• The childs brain had suffered irreparable damage
  and he had gone into a
• permanent vegetative state.

7
Case Facts
8
Legal Battles
Consumer Protection Act, 1986
9
The Case reaches the Supreme Court
Defence Argument 1. No payment had been made to
the hospital. Thus, within the CPA, it cannot be
said that the services of the hospital had been
availed for consideration. 2. The complaint had
been filed by Harjot, through his parents. It
could only be Harjot who could be a consumer
under the CPA. As Mr. and Mrs. Ahluwalia were not
consumers, the Commission could not award them
compensation for their mental agony and
suffering. Thus, the award of Rs. 5 lakhs to them
was not justified.
10
The definition of Consumer
Consumer Protection Act, 1986
For the purpose of SERVICES (i) One who hires or
avails of any service or services for a
consideration which has been paid or promised or
partly paid and partly promised or under any
system of deferred payment. (ii) It includes any
beneficiary of such service other than the one
who actually hires or avails of the service for
consideration and such services are availed with
the approval of such person.
11
The definition of Consumer
Consumer Protection Act, 1986

• Observations by the Supreme Court
• The parents would come within the definition of
  consumer, having hired the services, and the
  young child would also become a consumer under
  the inclusive definition of being a beneficiary
  of such services.
• The definition clause being wide enough to
  include not only the person who hires the
  services but also the beneficiary of such
  services, which beneficiary is other than the
  person who hires the services, the conclusion is
  irresistible that both the parents as well as the
  child would be consumers.
• Under Section 2(1)(d) of the Act, the Commission
  will be fully justified in awarding compensation
  to both of them for the injury each one of them
  has sustained.

12
Tamil Nadu Govt. V/s Krishna Kumar
SC delivered the judgment on July 1,2015 (18
years after the case was registered)
The NCDRC awarded a compensation of just Rs.5
lakhs. But the SC awarded Rs. 1.8 crores as
compensation to both the parents and the child
13
AMRI Hospital V/s Dr.Kunal Saha

• Dr. Kunal and Dr. Anuradha Saha, residents of
  Ohio, were on a visit to Kolkata in 1998, when
  Dr. Anuradha fell sick and was admitted in AMRI
  Hospital by her husband.
• Here she was administered a very high dosage of a
  steroid called Prednisolone, which should have
  been administered slowly over a period of weeks.
  She was later moved to Breach Candy Hospital in
  Mumbai where she passed away.

• Dr. Kunal filed a case with National Consumer
  Disputes Redressal Comm. in 1999
• He was awarded a compensation of Rs. 1.7 Crore,
  as he was also a consumer by definition, as he
  himself admitted his wife to AMRI hospital and
  thus HAILED the services of the doctors there.
• Again, he filed a petition in the SC and was
  awarded a compensation of Rs.5.96 crore
  Interest for Pecuniary and Non-Pecuniary losses
  caused.
• This is the highest compensation awarded for any
  such case in India.

14
AMRI Hospital V/s Dr.Kunal Saha
VIDEO
15
Exceptions to Privity of Contract
16
(No Transcript)