Service Provider Liability**

Liability for Deficiency in Service

Under the Consumer Protection Act, 2019, service providers are primarily held liable for **deficiency in service**. When a consumer hires or avails of a service for consideration and suffers loss or injury due to a shortcoming in that service, they can file a complaint against the service provider before the consumer dispute redressal agencies.

The basis of this liability is the failure of the service provider to meet the expected standard of performance, which results in harm or loss to the consumer. The Act empowers the consumer forums to direct the service provider to rectify the deficiency, pay compensation, or provide other appropriate relief.

Elements of deficiency

The definition of **"deficiency"** in **Section 2(11)** of the Act provides the key elements that must be proven to establish liability for a service provider:

deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

1. Fault, Imperfection, Shortcoming or Inadequacy:

This is the descriptive element, indicating that the service provided is not up to the mark. It implies a deviation from the desired state of the service. This could range from minor errors to significant failures in performance.

2. In Quality, Nature and Manner of Performance:

These are the attributes of the service that are assessed for deficiency.

**Quality:** The standard or level of excellence of the service.
**Nature:** The inherent characteristics or type of service.
**Manner of Performance:** How the service was rendered, including timeliness, skill, care, and professionalism.

A deficiency can arise if the service is lacking in any of these aspects.

3. Required by Law, Contract, or Otherwise:

The benchmark against which the quality, nature, and manner of performance are measured is established by:

**Any law:** Standards or requirements mandated by statutes or regulations applicable to the specific service industry (e.g., banking regulations, medical standards, housing laws).
**Contract:** Terms and conditions agreed upon between the service provider and the consumer, whether express (written agreement) or implied (arising from the nature of the service or conduct of parties).
**Otherwise:** This is a broad term that can include representations made by the service provider, general industry practices, ethical standards, and the standard of care expected from a reasonably prudent service provider in that field.

To establish liability, the consumer must demonstrate that there was a fault, imperfection, shortcoming, or inadequacy in the service's quality, nature, or manner of performance, and this fell below the standard required by law, contract, or generally accepted norms for that service. The consumer must also show that they suffered loss or injury as a result of this deficiency.

Specific Sectors

The concept of deficiency in service applies across a vast array of sectors where services are rendered for consideration. The definition in Section 2(42) of the Act provides an illustrative list of covered services. Here are examples of potential service provider liability for deficiency in some key sectors:

Banking

Banking services are explicitly covered. Examples of deficiency leading to potential liability include:

Unreasonable delays in processing transactions, loan applications, or account opening/closing.
Errors in maintaining accounts, leading to incorrect balances, unauthorised debits, or wrong interest calculations.
Failure to honour cheques without sufficient justification.
Deficiency in ATM services, such as cash not dispensed but account debited, or non-functional machines without proper notice.
Mismanagement or loss of contents from locker facilities.
Charging excessive or unagreed-upon fees or charges.
Failure to provide timely and accurate information regarding account status, charges, or policy changes.
Negligence in preventing fraudulent transactions, where the bank failed to follow prescribed security protocols.

Insurance

Insurance services are also covered. Liability often arises from deficiency in the handling of insurance policies and claims:

Unreasonable delay or unjustified rejection of a valid insurance claim.
Failure to inform the policyholder about crucial terms and conditions, exclusions, or premium payment deadlines.
Misrepresentation of policy benefits or terms by the agent or company.
Errors in policy documentation or calculation of sums assured/bonuses.
Delay in settlement of maturity proceeds or surrender value.
Failure to provide cashless facility at network hospitals as per health policy terms.

Healthcare

Medical services provided by doctors, hospitals, and other healthcare professionals for consideration fall under the Act. Deficiency in healthcare is often termed as **medical negligence**.

Failure to exercise reasonable degree of skill and care expected from a medical professional of similar standing in similar circumstances (e.g., misdiagnosis, wrong treatment, surgical errors, improper administration of anaesthesia or medication).
Negligence by hospital staff (nurses, technicians) leading to harm to the patient.
Deficiency in hospital infrastructure or facilities (e.g., lack of essential equipment, poor hygiene leading to infections, inadequate staff).
Unnecessary or excessive treatment/procedures performed without proper justification or informed consent (where required).
Delay in providing emergency medical attention.

Establishing medical negligence often requires expert medical opinion to determine if the standard of care was breached.

Housing Construction

Services provided by builders and developers related to the construction and delivery of residential or commercial properties are covered.

Unreasonable delay in handing over possession of the property beyond the promised date as per the agreement.
Defects in construction quality, materials used, or structural integrity of the building.
Failure to provide promised amenities or facilities in the housing complex.
Significant deviations from the approved building plan or specifications without the buyer's consent.
Failure to obtain necessary completion or occupancy certificates.
Deficiency in common services and maintenance provided by the builder after handing over possession.
Demanding excessive amounts beyond the agreed-upon price or schedule.

Transport

Transport services (air, rail, road) are included. Examples of deficiency:

Unreasonable delays in scheduled departures or arrivals, especially without proper communication or alternative arrangements.
Loss or damage to passengers' luggage during transit.
Failure to provide promised services or facilities onboard (e.g., non-functional AC, poor quality of food if included).
Overcharging on fares or freight.
Cancellation of tickets or bookings without proper refund or alternatives.
Lack of adequate safety measures leading to accidents or injury.

Electricity Supply

Services provided by electricity distribution companies are covered. Deficiency can include:

Frequent and prolonged power outages beyond reasonable limits or without prior notice (unless due to unavoidable circumstances).
Faulty metering leading to inflated billing.
Delay in providing new connections or rectifying faults after complaints.
Damage caused to appliances or property due to voltage fluctuations where the supply company failed to maintain proper voltage standards.
Disconnection of supply without proper notice or justification.

These examples illustrate the wide range of potential liabilities for service providers across different sectors when their services fall short of the required standards, causing inconvenience, loss, or injury to consumers.