Revolutionary Accountability: The Jyoti Khemka Judgment Redefines Investment Intermediary Liability

 

A Paradigmatic Shift in Indian Financial Market Jurisprudence

The landmark decision of the Chandigarh State Consumer Disputes Redressal Commission in Jyoti Khemka vs Catalyst Trusteeship Limited and Ors (Appeal No. 58 of 2023) represents a seismic shift in Indian financial market jurisprudence. This groundbreaking judgment, delivered on July 31, 2025, by President Raj Shekhar Attri and Member Rajesh K. Arya, marks the first instance where a consumer forum has held market intermediaries—specifically debenture trustees and credit rating agencies—liable for investor losses arising from corporate defaults.

The Factual Matrix: A Tale of Systemic Failures

Read full judgment here: Click here.

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Whether continuous failure to obtain an occupancy certificate amounts to deficiency of service?

Based on these provisions, it is evident that there was an obligation on the Respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided. The Respondent has time and again failed to provide the occupancy certificate to the Appellant society. For this reason, a complaint was instituted in 1998 by the Appellant against the Respondent. The NCDRC on 20 August 2014 directed the Respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the Respondent has failed to provide the occupancy certificate. Owing to the failure of the Respondent to obtain the certificate, there has been a direct impact on the members of the Appellant in terms of the payment of higher taxes and water charges to the municipal authority. This continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the Respondent under the MOFA and amounts to a continuing wrong. The Appellants therefore, are entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation. {Para 18}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4000 of 2019

Samruddhi Co-operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and A.S. Bopanna, JJ.

Author:Dr. D.Y. Chandrachud, J.

Decided On: 11.01.2022

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Whether Consumer Forum Has Jurisdiction To Adjudicate Dispute Concerning Validity Of Statutory Due Arising Out Of Deficiency In Service?

We may also refer to the case of Ghaziabad Development
Authority (supra) wherein this Court, relying upon Lucknow
Development Authority case (supra), held that the power of the
Consumer forum extends to redressing any injustice rendered upon
a consumer as well as over any mala fide, capricious or any
oppressive act done by a statutory body. The relevant para of the
judgment reads as under:

“6. ….Thus, the law is that the Consumer
Protection Act has a wide reach and the
Commission has jurisdiction even in cases of
service rendered by statutory and public
authorities. Such authorities become liable to
compensate for misfeasance in public office i.e. an
act which is oppressive or capricious or arbitrary
or negligent provided loss or injury is suffered by
a citizen.
…
Where there has been capricious or arbitrary
or negligent exercise or nonexercise
of power
by an officer of the authority, the
Commission/Forum has a statutory obligation
to award compensation. If the
Commission/Forum is satisfied that a
complainant is entitled to compensation for
loss or injury or for harassment or mental
agony or oppression, then after recording a
finding it must direct the authority to pay
compensation and then also direct recovery
from those found responsible for such
unpardonable behaviour.
(emphasis supplied)
22. Therefore, in line with the law laid down by us, we hold that the
determination of the dispute concerning the validity of the
imposition of a statutory due arising out of a “deficiency in service”,
can be undertaken by the consumer fora as per the provisions of
the Act. The decision of this Court in the case of Sunita (supra),
wherein it was held that NCDRC has no jurisdiction to adjudicate
the legitimacy of the aforementioned statutory dues, was rendered

without considering any of the previous judgments of this Court
and the objects of the Act. Consequently, the law laid down in the
aforesaid case does not hold good before the eyes of law, and is
thereby overruled.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SLP (C ) NO. 4272 OF 2015

PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHORITY (NOW GLADA) Vs VIDYA CHETAL

N.V. RAMANA, J.
Dated:SEPTEMBER 16, 2019.

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Whether insurance companies can withhold admitted claim amount till insured gives receipt of full and final settlement?

The insurance companies cannot deny the payment of the
admitted claim amount to the insured unless a complete discharge is
given by the insured. The insistence of the insurance company to sign
a discharge voucher of full and final settlement before release of
admitted claim amounts to coercion and undue influence as defined in
Sections 15 and 16 of the Contract Act and such contracts are 
voidable under Section 19 and 19A of the Contract Act.
The withholding of the admitted amount by the insurance
companies unless complete discharge is given, amounts to deficiency
in service within the meaning of Section 2(1)(g) of the Consumer
Protection Act, 1986 as the insurance companies are not expected to
withhold the admitted claim amount till the insured gives the receipt
of full and final settlement.
IN THE HIGH COURT OF DELHI AT NEW DELHI
ARB.P. 459/2015
Date of Decision: 11th December, 2015
WORLDFA EXPORTS PVT.LTD

v
UNITED INDIA INSURANCE CO. LTD

CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
Dated;DECEMBER 11, 2015.

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Whether parents of victim are to be compensated in case of medical negligence?

Since there is no reason to assume that there has been
any change in the expenditure, we have calculated the
expenditure from January 2014 to March 2015 at the same rate
as the preceding period. In addition, we also deem it fit to
award a sum of Rs. 1,50,000/- in lieu of the financial hardship
undergone particularly by Sharanya’s mother, who became her
primary caregiver and was thus prevented from pursuing her
own career. In Spring Meadows Hospital and Another v. Harjol
Ahluwalia [1998 4 SCC 39] this court acknowledged the
importance of granting compensation to the parents of a victim
of medical negligence in lieu of their acute mental agony and
the lifelong care and attention they would have to give to the
child. This being so, the financial hardship faced by the parents,
in terms of lost wages and time must also be recognized. Thus,
the above expenditure must be allowed.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL No. 8065 OF 2009
V. KRISHNAKUMAR V STATE OF TAMIL NADU & ORS. 

S. A. BOBDE, J.
Citation; AIR 2015 SC 2836
Dated;JULY 1, 2015

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