REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SLP (C) NO. 4272 OF 2015
PUNJAB URBAN PLANNING AND …PETITIONER
DEVELOPMENT AUTHORITY (NOW GLADA)
VERSUS
VIDYA CHETAL …RESPONDENT
WITH
SLP (C) NO. 5237 OF 2015
PUNJAB URBAN DEVELOPMENT …PETITIONERS
AUTHORITY AND ANOTHER
VERSUS
RAM SINGH …RESPONDENT
JUDGMENT
N.V. RAMANA, J.
1. The reference before us arises out of the order dated 13.07.2018,
passed by a twoJudge Bench of this Court, wherein they expressed
1
doubt as to the correctness of the judgment rendered in the case of
HUDA vs. Sunita, (2005) 2 SCC 479. This Court therein held that
the National Consumer Disputes Redressal Commission
(hereinafter referred to as “NCDRC”) had no jurisdiction to
adjudicate the legality behind the demand of “composition fee” and
“extension fee” made by HUDA, as the same being statutory
obligation, does not qualify as “deficiency in service”.
2. It is pertinent herein to note the opinion expressed by the twoJudge Bench regarding the decision in the case of Sunita (supra)
while passing the referral order:
“We are, prima facie, of the view that this sixparagraph order, which does not, prima facie,
contain any reason for the conclusion reached,
requires a relook in view of the fact that the
Consumer Protection Act, 1986 is a beneficent
legislation”
3. The counsel on behalf of the petitioner submitted that the order
in the case of Sunita (supra) is well reasoned, as it validly holds
that the NCDRC lacks jurisdiction to decide the legitimacy behind
the demand of “composition fee” and “extension fee”. Relying on the
aforesaid holding, the counsel further stated that “statutory dues”
cannot be claimed as “deficiency in services”. Lastly, the learned
counsel submitted that although the Consumer Protection Act,
2
1986 (hereinafter referred to as “the Act”) is beneficial in nature,
demanding a liberal construction, the same cannot be used to
extend the ambit of the Act by bringing in remedies or benefits
which were not intended by the legislature.
4. On the contrary, the learned senior counsel appointed by this
Court as amicus curiae to assist and appear on behalf of the
respondent claimed that the order passed in the case of Sunita
(supra), is an aberration in a series of longstanding judgments by
this Court. The learned amicus curiae thereafter placed strong
reliance upon the judgments of this Court in Lucknow
Development Authority v. M.K. Gupta, (1994) 1 SCC 243, and
Ghaziabad Development Authority v. Balbir Singh, (2004) 5
SCC 65, wherein it was held that the NCDRC has the jurisdiction to
protect consumers against defective services rendered even by a
statutory body. Further, the learned amicus curiae, while
supporting the view that the Sunita case (supra) was per incuriam,
has taken us through various judgments of this Court in this
regard and submitted that the statutory authorities come under the
ambit of the Act.
3
5. Heard the learned counsel appearing on behalf of the petitioner
and the learned amicus curiae in this case. The precise question
raised before us is whether the law laid down by this Court in the
case of Sunita (supra) is valid. We may note that the validity of
interpretation furthered in the case of Sunita (supra) hinges on the
interpretation of Section 2(1)(d), 2(1)(e), 2(1)(f), 2(1)(g) and 2(1)(o) of
the Act.
6. At the outset, we must remind ourselves that answer to majority
of legal questions before Courts essentially lie in the process of
interpretation.1
This Court in Commissioner of Customs (Import),
Mumbai v. Dilip Kumar and others, (2018) 9 SCC 40, had
emphasized that the purpose of interpretation is to find the
legislative intent of an Act. It is established by umpteen number of
cases in India and abroad that beneficial or remedial legislation
needs to be given ‘fair and liberal interpretation’ [refer Om Prakash
v. Reliance General Insurance and Anr., (2017) 9 SCC 724]. In
this regard we may note that, the liberal construction, extends the
letter to include matters within the spirit or purpose.2
1 Justice Felix Frankfurter, Some Reflections on Reading of Statutes, Columbia Law
Review, VOL. 47, Issue 4, PP. 527546
2 Sutherland, Statutes and Statutory Construction, §5505 (Callaghan, 1943).
4
7. Having observed the law on beneficial interpretation, we need to
observe the concerned statutory provisions of the Act:
Section 2 (1) (g) “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.
Thus, meaning of deficiency is explained as any fault, imperfection,
shortcoming or inadequacy in quality, nature and manner of
performance of any service or supply of goods, in terms of
standards set by the parties themselves through contract or
otherwise, or imposed by the law in force. The basis for application
of the consumer laws hinges on the relationship between the
service provider and consumer. The usage of ‘otherwise’ within the
provision subsumes other modes of standard setting alternative
instruments other than contracts such as laws, byelaws, rules and
customary practices etc.
8. Service is defined under Section 2(1)(o) of the Act, which reads as
under:
(o) “service” means service of any description
which is made available to potential users and
includes, but not limited to, the provision of
5
facilities in connection with banking, financing
insurance, transport, processing, supply of
electrical or other energy, board 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;
This definition is not exhaustive rather the legislature has left the
task to expound the provision on a case to case basis to the
judiciary. The purpose of leaving this provision open ended, without
providing an exhaustive list indicates the requirement for a liberal
interpretation. Broadly speaking, it is inclusive of all those services
performed for a consideration, except gratuitous services and
contract of personal services. Moreover, aforesaid provision reflects
the legislative intent of providing impetus to ‘consumerism’. It may
be noted that such a phenomenon has had a benevolent effect on
the Government undertakings, wherein a new dynamism of
innovation, accountability and transparency are imbibed.
9. On perusal of the impugned precedent, it may be noted that it
does not provide clearcut reasoning for the view held by the Court,
except to the extent of pointing out that statutory obligations are
not encompassed under the Act. Such broad proposition
necessarily required further elaboration, as there is a possibility of
6
overinclusivity. Further, there is no gainsaying that all statutory
obligations are not sovereign functions. Although all sovereign
functions/services are regulated and performed under
constitutional/statutory instruments, yet there are other functions,
though might be statutory, but cannot be called as sovereign
functions. These sovereign functions do not contain the consumerservice provider relationship in them and are not done for a
consideration. Moreover, we need to be mindful of the fact that
sovereign functions are undergoing a radical change in the face of
privatization and globalization. India being a welfare State, the
sovereign functions are also changing. We may note that the
government in order to improve the quality of life and welfare of its
citizens, has undertaken many commercial adventures.
10. Sovereign functions like judicial decision making, imposition of
tax, policing etc, strictly understood, qualify for exemption from the
Act, but the welfare activities through economic adventures
undertaken by the Government or statutory bodies are covered
under the jurisdiction of the consumer forums. Even in
departments discharging sovereign functions, if there are subunits/wings which are providing services/supply goods for a
consideration and they are severable, then they can be considered
7
to come within the ambit of the Act. [refer to Standard Chartered
Bank Ltd. v. Dr. B. N. Raman, (2006) 5 SCC 727]
11. Having observed the provisions and the interpretation of
pertinent provisions, we need to refer to Lucknow Development
Authority Case (supra), wherein this Court was concerned with the
question as to the amenability of statutory authorities like Lucknow
Development Authority, for development of plots, to the Consumer
Protection Act, 1986.
12. This Court in Lucknow Development Authority Case (supra)
elaborated the meaning of ‘Consumer’, as occurring under Section
2(1)(b), in the following manner:
“3……The word ‘consumer’ is a comprehensive
expression. It extends from a person who buys any
commodity to consume either as eatable or
otherwise from a shop, business house, corporation,
store, fair price shop to use of private or public
services.
…
It is in two parts. The first deals with goods and the
other with services. Both parts first declare the
meaning of goods and services by use of wide
expressions. Their ambit is further enlarged by use
of inclusive clause. For instance, it is not only
purchaser of goods or hirer of services but even those
who use the goods or who are beneficiaries of services
with approval of the person who purchased the goods or
who hired services are included in it.”
(emphasis supplied)
8
13. Further, this Court elaborated on the meaning of the ‘service’ in
the following manner:
“4. What is the meaning of the word ‘service’? Does it
extend to deficiency in the building of a house or flat? Can
a complaint be filed under the Act against the
statutory authority or a builder or contractor for any
deficiency in respect of such property.
…..
It is in three parts. The main part is followed by
inclusive clause and ends by exclusionary clause. The
main clause itself is very wide. It applies to any
service made available to potential users. The words
‘any’ and ‘potential’ are significant. Both are of wide
amplitude. The word ‘any’ dictionarily means ‘one or
some or all’. In Black's Law Dictionary it is explained
thus, “word ‘any’ has a diversity of meaning and may
be employed to indicate ‘all’ or ‘every’ as well as
‘some’ or ‘one’ and its meaning in a given statute
depends upon the context and the subjectmatter of
the statute”. The use of the word ‘any’ in the context
it has been used in clause ( o) indicates that it has
been used in wider sense extending from one to all.
…
The legislative intention is thus clear to protect a
consumer against services rendered even by statutory
bodies. The test, therefore, is not if a person against
whom complaint is made is a statutory body but whether
the nature of the duty and function performed by it is
service or even facility.”
(emphasis supplied)
Thereafter, this Court answered the relevant question in the
following manner:
“5. This takes us to the larger issue if the public
authorities under different enactments are
9
amenable to jurisdiction under the Act. It was
vehemently argued that the local authorities or
government bodies develop land and construct
houses in discharge of their statutory function,
therefore, they could not be subjected to the
provisions of the Act. …
… Any attempt, therefore, to exclude services offered
by statutory or official bodies to the common man
would be against the provisions of the Act and the
spirit behind it. … A government or semigovernment
body or a local authority is as much amenable to the
Act as any other private body rendering similar
service. Truly speaking it would be a service to the
society if such bodies instead of claiming
exclusion subject themselves to the Act and let
their acts and omissions be scrutinised as public
accountability is necessary for healthy growth of
society.
6. What remains to be examined is if housing
construction or building activity carried on by a
private or statutory body was service within the
meaning of clause (o) of Section 2 of the Act as it
stood prior to inclusion of the expression ‘housing
construction’ in the definition of “service” by
Ordinance No. 24 of 1993. … So any service except
when it is free of charge or under a constraint of
personal service is included in it. Since housing
activity is a service it was covered in the clause
as it stood before 1993.
…
8…..Under our Constitution sovereignty vests in
the people. Every limb of the constitutional
machinery is obliged to be people oriented. No
functionary in exercise of statutory power can
claim immunity, except to the extent protected
by the statute itself. Public authorities acting in
violation of constitutional or statutory provisions
10
oppressively are accountable for their behaviour
before authorities created under the statute like
the commission or the courts entrusted with
responsibility of maintaining the rule of law. …
Therefore, when the Commission has been vested
with the jurisdiction to award value of goods or
services and compensation it has to be construed
widely enabling the Commission to determine
compensation for any loss or damage suffered by a
consumer which in law is otherwise included in wide
meaning of compensation.
(emphasis supplied)
14. Coming back to the Sunita case (supra), this Court held that the
NCDRC had no jurisdiction to adjudicate the legality behind the
demand of composition or extension fee by a developmental
authority. This Court observed that the statutory obligations of a
developmental authority and the plot holder under the authority’s
statutory framework cannot be construed as acts or omissions
resulting in a “deficiency in service”. In view of the law laid down by
us, the interpretation provided by the Sunita case (supra) cannot
be sustained as the service provided by the petitioner herein
squarely comes under the ambit of ‘service’.
15. We do understand that the confusion, which arose from the
aforesaid situation, is that the authority does have the power to levy
certain statutory fee. However, that itself does not prohibit the
Consumer forums from evaluating the legality of such exactions or
11
fulfilment of conditions by the authority before such exaction. In
broad terms, nonfulfilment of conditions or standards required,
amounts to ‘deficiency in services’ under the Act. Having said that,
out of abundant caution, we note that the legality does not extend to
the challenge of vires of a rule prescribing such fee. Such
contentions are best agitated before the Constitutional Courts.
16. On a different note, if the statutory authority, other than the core
sovereign duties, is providing service, which is encompassed under
the Act, then, unless any Statute exempts, or provides for
immunity, for deficiency in service, or specifically provides for an
alternative forum, the Consumer Forums would continue to have
the jurisdiction to deal with the same.3 We need to caution against
overinclusivity and the tribunals need to satisfy the ingredients
under Consumer Protection Laws, before exercising the jurisdiction.
17. Moreover, we also need to note that the distinction between
statutory liability which arise generally such as a tax, and those
that may arise out of a specific relationship such as that between a
service provider and a consumer, was not considered by this Court
in the case of Sunita (supra). For instance, a tax is a mandatory
imposition by a public authority for public purpose enforceable by
3 Section 3 of the Act.
12
law; and is not imposed with respect to any special benefit
conferred, as consideration, on the tax payer. There is no element of
quid pro quo between the tax payer and the public authority.
However, the above is not the only form of due charged by a
statutory authority. In a catena of judgments, this Court has
recognized that certain statutory dues may arise from services
rendered by a statutory authority. In the case of Commissioner,
Hindu Religious Endowments, Madras v. Sri Lakshmindra
Thirtha Swamiar of Sri Shirur Mutt, 1954 SCR 1005, a seven
JudgeBench of this Court held that
“46. Coming now to fees, a “fee” is generally
defined to be a charge for a special service
rendered to individuals by some
governmental agency. The amount of fee
levied is supposed to be based on the
expenses incurred by the Government in
rendering the service, though in many cases
the costs are arbitrarily assessed. Ordinarily,
the fees are uniform and no account is taken of
the varying abilities of different recipients to pay
[ Vide Lutz on Public Finance, p. 215]. These are
undoubtedly some of the general characteristics,
but as there may be various kinds of fees, it is
not possible to formulate a definition that would
be applicable to all cases.
47. …The distinction between a tax and a fee
lies primarily in the fact that a tax is levied
as a part of a common burden, while a fee is
a payment for a special benefit or privilege.
13
Fees confer a special capacity, although the
special advantage, as for example in the case of
registration fees for documents or marriage
licences, is secondary to the primary motive of
regulation in the public interest [Vide Findlay
Shirras on Science of Public Finance, Vol. I, p.
202]. Public interest seems to be at the basis of
all impositions, but in a fee, it is some special
benefit which the individual receives.”
(emphasis supplied)
18. A five Judge Bench of this Court, in the case of Kewal Krishan
Puri and Anr. v. State of Punjab and Anr., (1980) 1 SCC 416,
also took note of the fact that certain statutory dues can arise from
a quid pro quo relationship between the authority and an individual
upon whom the liability falls.
“23. …(6) That the element of quid pro quo
may not be possible, or even necessary, to be
established with arithmetical exactitude but
even broadly and reasonably it must be
established by the authorities who charge
the fees that the amount is being spent for
rendering services to those on whom falls
the burden of the fee.”
(emphasis supplied)
19. Therefore, it is a clearly established principle that certain
statutory dues, such as fees, can arise out of a specific relation.
Such statutory dues might be charged as a quid pro quo for a
privilege conferred or for a service rendered by the authority. As
14
noted above, there are exactions which are for the common burden,
like taxes, there are dues for a specific purpose, like cess, and there
are dues in lieu of a specific service rendered. Therefore, it is clear
from the above discussion that not all statutory dues/exactions are
amenable to the jurisdiction of the Consumer Forum, rather only
those exactions which are exacted for a service rendered, would be
amenable to the jurisdiction of the Consumer Forum.
20. At the cost of repetition, we may note that those exactions, like
tax, and cess, levied as a part of common burden or for a specific
purpose, generally may not be amenable to the jurisdiction of the
Consumer Forum. However, those statutory fees, levied in lieu of
service provided, may in the usual course be subject matter of
Consumer Forum’s jurisdiction provided that there is a ‘deficiency
in service’ etc.
21. 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:
15
“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
16
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.
23. The reference stands answered accordingly. The instant special
leave petitions may be placed before an appropriate Bench for
considering the case on merits after obtaining orders from the
Hon’ble Chief Justice of India.
.........................J.
(N.V. RAMANA)
........................J.
(MOHAN M. SHANTANAGOUDAR)
........................J.
(AJAY RASTOGI)
NEW DELHI;
SEPTEMBER 16, 2019.
17
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SLP (C) NO. 4272 OF 2015
PUNJAB URBAN PLANNING AND …PETITIONER
DEVELOPMENT AUTHORITY (NOW GLADA)
VERSUS
VIDYA CHETAL …RESPONDENT
WITH
SLP (C) NO. 5237 OF 2015
PUNJAB URBAN DEVELOPMENT …PETITIONERS
AUTHORITY AND ANOTHER
VERSUS
RAM SINGH …RESPONDENT
JUDGMENT
N.V. RAMANA, J.
1. The reference before us arises out of the order dated 13.07.2018,
passed by a twoJudge Bench of this Court, wherein they expressed
1
doubt as to the correctness of the judgment rendered in the case of
HUDA vs. Sunita, (2005) 2 SCC 479. This Court therein held that
the National Consumer Disputes Redressal Commission
(hereinafter referred to as “NCDRC”) had no jurisdiction to
adjudicate the legality behind the demand of “composition fee” and
“extension fee” made by HUDA, as the same being statutory
obligation, does not qualify as “deficiency in service”.
2. It is pertinent herein to note the opinion expressed by the twoJudge Bench regarding the decision in the case of Sunita (supra)
while passing the referral order:
“We are, prima facie, of the view that this sixparagraph order, which does not, prima facie,
contain any reason for the conclusion reached,
requires a relook in view of the fact that the
Consumer Protection Act, 1986 is a beneficent
legislation”
3. The counsel on behalf of the petitioner submitted that the order
in the case of Sunita (supra) is well reasoned, as it validly holds
that the NCDRC lacks jurisdiction to decide the legitimacy behind
the demand of “composition fee” and “extension fee”. Relying on the
aforesaid holding, the counsel further stated that “statutory dues”
cannot be claimed as “deficiency in services”. Lastly, the learned
counsel submitted that although the Consumer Protection Act,
2
1986 (hereinafter referred to as “the Act”) is beneficial in nature,
demanding a liberal construction, the same cannot be used to
extend the ambit of the Act by bringing in remedies or benefits
which were not intended by the legislature.
4. On the contrary, the learned senior counsel appointed by this
Court as amicus curiae to assist and appear on behalf of the
respondent claimed that the order passed in the case of Sunita
(supra), is an aberration in a series of longstanding judgments by
this Court. The learned amicus curiae thereafter placed strong
reliance upon the judgments of this Court in Lucknow
Development Authority v. M.K. Gupta, (1994) 1 SCC 243, and
Ghaziabad Development Authority v. Balbir Singh, (2004) 5
SCC 65, wherein it was held that the NCDRC has the jurisdiction to
protect consumers against defective services rendered even by a
statutory body. Further, the learned amicus curiae, while
supporting the view that the Sunita case (supra) was per incuriam,
has taken us through various judgments of this Court in this
regard and submitted that the statutory authorities come under the
ambit of the Act.
3
5. Heard the learned counsel appearing on behalf of the petitioner
and the learned amicus curiae in this case. The precise question
raised before us is whether the law laid down by this Court in the
case of Sunita (supra) is valid. We may note that the validity of
interpretation furthered in the case of Sunita (supra) hinges on the
interpretation of Section 2(1)(d), 2(1)(e), 2(1)(f), 2(1)(g) and 2(1)(o) of
the Act.
6. At the outset, we must remind ourselves that answer to majority
of legal questions before Courts essentially lie in the process of
interpretation.1
This Court in Commissioner of Customs (Import),
Mumbai v. Dilip Kumar and others, (2018) 9 SCC 40, had
emphasized that the purpose of interpretation is to find the
legislative intent of an Act. It is established by umpteen number of
cases in India and abroad that beneficial or remedial legislation
needs to be given ‘fair and liberal interpretation’ [refer Om Prakash
v. Reliance General Insurance and Anr., (2017) 9 SCC 724]. In
this regard we may note that, the liberal construction, extends the
letter to include matters within the spirit or purpose.2
1 Justice Felix Frankfurter, Some Reflections on Reading of Statutes, Columbia Law
Review, VOL. 47, Issue 4, PP. 527546
2 Sutherland, Statutes and Statutory Construction, §5505 (Callaghan, 1943).
4
7. Having observed the law on beneficial interpretation, we need to
observe the concerned statutory provisions of the Act:
Section 2 (1) (g) “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.
Thus, meaning of deficiency is explained as any fault, imperfection,
shortcoming or inadequacy in quality, nature and manner of
performance of any service or supply of goods, in terms of
standards set by the parties themselves through contract or
otherwise, or imposed by the law in force. The basis for application
of the consumer laws hinges on the relationship between the
service provider and consumer. The usage of ‘otherwise’ within the
provision subsumes other modes of standard setting alternative
instruments other than contracts such as laws, byelaws, rules and
customary practices etc.
8. Service is defined under Section 2(1)(o) of the Act, which reads as
under:
(o) “service” means service of any description
which is made available to potential users and
includes, but not limited to, the provision of
5
facilities in connection with banking, financing
insurance, transport, processing, supply of
electrical or other energy, board 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;
This definition is not exhaustive rather the legislature has left the
task to expound the provision on a case to case basis to the
judiciary. The purpose of leaving this provision open ended, without
providing an exhaustive list indicates the requirement for a liberal
interpretation. Broadly speaking, it is inclusive of all those services
performed for a consideration, except gratuitous services and
contract of personal services. Moreover, aforesaid provision reflects
the legislative intent of providing impetus to ‘consumerism’. It may
be noted that such a phenomenon has had a benevolent effect on
the Government undertakings, wherein a new dynamism of
innovation, accountability and transparency are imbibed.
9. On perusal of the impugned precedent, it may be noted that it
does not provide clearcut reasoning for the view held by the Court,
except to the extent of pointing out that statutory obligations are
not encompassed under the Act. Such broad proposition
necessarily required further elaboration, as there is a possibility of
6
overinclusivity. Further, there is no gainsaying that all statutory
obligations are not sovereign functions. Although all sovereign
functions/services are regulated and performed under
constitutional/statutory instruments, yet there are other functions,
though might be statutory, but cannot be called as sovereign
functions. These sovereign functions do not contain the consumerservice provider relationship in them and are not done for a
consideration. Moreover, we need to be mindful of the fact that
sovereign functions are undergoing a radical change in the face of
privatization and globalization. India being a welfare State, the
sovereign functions are also changing. We may note that the
government in order to improve the quality of life and welfare of its
citizens, has undertaken many commercial adventures.
10. Sovereign functions like judicial decision making, imposition of
tax, policing etc, strictly understood, qualify for exemption from the
Act, but the welfare activities through economic adventures
undertaken by the Government or statutory bodies are covered
under the jurisdiction of the consumer forums. Even in
departments discharging sovereign functions, if there are subunits/wings which are providing services/supply goods for a
consideration and they are severable, then they can be considered
7
to come within the ambit of the Act. [refer to Standard Chartered
Bank Ltd. v. Dr. B. N. Raman, (2006) 5 SCC 727]
11. Having observed the provisions and the interpretation of
pertinent provisions, we need to refer to Lucknow Development
Authority Case (supra), wherein this Court was concerned with the
question as to the amenability of statutory authorities like Lucknow
Development Authority, for development of plots, to the Consumer
Protection Act, 1986.
12. This Court in Lucknow Development Authority Case (supra)
elaborated the meaning of ‘Consumer’, as occurring under Section
2(1)(b), in the following manner:
“3……The word ‘consumer’ is a comprehensive
expression. It extends from a person who buys any
commodity to consume either as eatable or
otherwise from a shop, business house, corporation,
store, fair price shop to use of private or public
services.
…
It is in two parts. The first deals with goods and the
other with services. Both parts first declare the
meaning of goods and services by use of wide
expressions. Their ambit is further enlarged by use
of inclusive clause. For instance, it is not only
purchaser of goods or hirer of services but even those
who use the goods or who are beneficiaries of services
with approval of the person who purchased the goods or
who hired services are included in it.”
(emphasis supplied)
8
13. Further, this Court elaborated on the meaning of the ‘service’ in
the following manner:
“4. What is the meaning of the word ‘service’? Does it
extend to deficiency in the building of a house or flat? Can
a complaint be filed under the Act against the
statutory authority or a builder or contractor for any
deficiency in respect of such property.
…..
It is in three parts. The main part is followed by
inclusive clause and ends by exclusionary clause. The
main clause itself is very wide. It applies to any
service made available to potential users. The words
‘any’ and ‘potential’ are significant. Both are of wide
amplitude. The word ‘any’ dictionarily means ‘one or
some or all’. In Black's Law Dictionary it is explained
thus, “word ‘any’ has a diversity of meaning and may
be employed to indicate ‘all’ or ‘every’ as well as
‘some’ or ‘one’ and its meaning in a given statute
depends upon the context and the subjectmatter of
the statute”. The use of the word ‘any’ in the context
it has been used in clause ( o) indicates that it has
been used in wider sense extending from one to all.
…
The legislative intention is thus clear to protect a
consumer against services rendered even by statutory
bodies. The test, therefore, is not if a person against
whom complaint is made is a statutory body but whether
the nature of the duty and function performed by it is
service or even facility.”
(emphasis supplied)
Thereafter, this Court answered the relevant question in the
following manner:
“5. This takes us to the larger issue if the public
authorities under different enactments are
9
amenable to jurisdiction under the Act. It was
vehemently argued that the local authorities or
government bodies develop land and construct
houses in discharge of their statutory function,
therefore, they could not be subjected to the
provisions of the Act. …
… Any attempt, therefore, to exclude services offered
by statutory or official bodies to the common man
would be against the provisions of the Act and the
spirit behind it. … A government or semigovernment
body or a local authority is as much amenable to the
Act as any other private body rendering similar
service. Truly speaking it would be a service to the
society if such bodies instead of claiming
exclusion subject themselves to the Act and let
their acts and omissions be scrutinised as public
accountability is necessary for healthy growth of
society.
6. What remains to be examined is if housing
construction or building activity carried on by a
private or statutory body was service within the
meaning of clause (o) of Section 2 of the Act as it
stood prior to inclusion of the expression ‘housing
construction’ in the definition of “service” by
Ordinance No. 24 of 1993. … So any service except
when it is free of charge or under a constraint of
personal service is included in it. Since housing
activity is a service it was covered in the clause
as it stood before 1993.
…
8…..Under our Constitution sovereignty vests in
the people. Every limb of the constitutional
machinery is obliged to be people oriented. No
functionary in exercise of statutory power can
claim immunity, except to the extent protected
by the statute itself. Public authorities acting in
violation of constitutional or statutory provisions
10
oppressively are accountable for their behaviour
before authorities created under the statute like
the commission or the courts entrusted with
responsibility of maintaining the rule of law. …
Therefore, when the Commission has been vested
with the jurisdiction to award value of goods or
services and compensation it has to be construed
widely enabling the Commission to determine
compensation for any loss or damage suffered by a
consumer which in law is otherwise included in wide
meaning of compensation.
(emphasis supplied)
14. Coming back to the Sunita case (supra), this Court held that the
NCDRC had no jurisdiction to adjudicate the legality behind the
demand of composition or extension fee by a developmental
authority. This Court observed that the statutory obligations of a
developmental authority and the plot holder under the authority’s
statutory framework cannot be construed as acts or omissions
resulting in a “deficiency in service”. In view of the law laid down by
us, the interpretation provided by the Sunita case (supra) cannot
be sustained as the service provided by the petitioner herein
squarely comes under the ambit of ‘service’.
15. We do understand that the confusion, which arose from the
aforesaid situation, is that the authority does have the power to levy
certain statutory fee. However, that itself does not prohibit the
Consumer forums from evaluating the legality of such exactions or
11
fulfilment of conditions by the authority before such exaction. In
broad terms, nonfulfilment of conditions or standards required,
amounts to ‘deficiency in services’ under the Act. Having said that,
out of abundant caution, we note that the legality does not extend to
the challenge of vires of a rule prescribing such fee. Such
contentions are best agitated before the Constitutional Courts.
16. On a different note, if the statutory authority, other than the core
sovereign duties, is providing service, which is encompassed under
the Act, then, unless any Statute exempts, or provides for
immunity, for deficiency in service, or specifically provides for an
alternative forum, the Consumer Forums would continue to have
the jurisdiction to deal with the same.3 We need to caution against
overinclusivity and the tribunals need to satisfy the ingredients
under Consumer Protection Laws, before exercising the jurisdiction.
17. Moreover, we also need to note that the distinction between
statutory liability which arise generally such as a tax, and those
that may arise out of a specific relationship such as that between a
service provider and a consumer, was not considered by this Court
in the case of Sunita (supra). For instance, a tax is a mandatory
imposition by a public authority for public purpose enforceable by
3 Section 3 of the Act.
12
law; and is not imposed with respect to any special benefit
conferred, as consideration, on the tax payer. There is no element of
quid pro quo between the tax payer and the public authority.
However, the above is not the only form of due charged by a
statutory authority. In a catena of judgments, this Court has
recognized that certain statutory dues may arise from services
rendered by a statutory authority. In the case of Commissioner,
Hindu Religious Endowments, Madras v. Sri Lakshmindra
Thirtha Swamiar of Sri Shirur Mutt, 1954 SCR 1005, a seven
JudgeBench of this Court held that
“46. Coming now to fees, a “fee” is generally
defined to be a charge for a special service
rendered to individuals by some
governmental agency. The amount of fee
levied is supposed to be based on the
expenses incurred by the Government in
rendering the service, though in many cases
the costs are arbitrarily assessed. Ordinarily,
the fees are uniform and no account is taken of
the varying abilities of different recipients to pay
[ Vide Lutz on Public Finance, p. 215]. These are
undoubtedly some of the general characteristics,
but as there may be various kinds of fees, it is
not possible to formulate a definition that would
be applicable to all cases.
47. …The distinction between a tax and a fee
lies primarily in the fact that a tax is levied
as a part of a common burden, while a fee is
a payment for a special benefit or privilege.
13
Fees confer a special capacity, although the
special advantage, as for example in the case of
registration fees for documents or marriage
licences, is secondary to the primary motive of
regulation in the public interest [Vide Findlay
Shirras on Science of Public Finance, Vol. I, p.
202]. Public interest seems to be at the basis of
all impositions, but in a fee, it is some special
benefit which the individual receives.”
(emphasis supplied)
18. A five Judge Bench of this Court, in the case of Kewal Krishan
Puri and Anr. v. State of Punjab and Anr., (1980) 1 SCC 416,
also took note of the fact that certain statutory dues can arise from
a quid pro quo relationship between the authority and an individual
upon whom the liability falls.
“23. …(6) That the element of quid pro quo
may not be possible, or even necessary, to be
established with arithmetical exactitude but
even broadly and reasonably it must be
established by the authorities who charge
the fees that the amount is being spent for
rendering services to those on whom falls
the burden of the fee.”
(emphasis supplied)
19. Therefore, it is a clearly established principle that certain
statutory dues, such as fees, can arise out of a specific relation.
Such statutory dues might be charged as a quid pro quo for a
privilege conferred or for a service rendered by the authority. As
14
noted above, there are exactions which are for the common burden,
like taxes, there are dues for a specific purpose, like cess, and there
are dues in lieu of a specific service rendered. Therefore, it is clear
from the above discussion that not all statutory dues/exactions are
amenable to the jurisdiction of the Consumer Forum, rather only
those exactions which are exacted for a service rendered, would be
amenable to the jurisdiction of the Consumer Forum.
20. At the cost of repetition, we may note that those exactions, like
tax, and cess, levied as a part of common burden or for a specific
purpose, generally may not be amenable to the jurisdiction of the
Consumer Forum. However, those statutory fees, levied in lieu of
service provided, may in the usual course be subject matter of
Consumer Forum’s jurisdiction provided that there is a ‘deficiency
in service’ etc.
21. 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:
15
“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
16
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.
23. The reference stands answered accordingly. The instant special
leave petitions may be placed before an appropriate Bench for
considering the case on merits after obtaining orders from the
Hon’ble Chief Justice of India.
.........................J.
(N.V. RAMANA)
........................J.
(MOHAN M. SHANTANAGOUDAR)
........................J.
(AJAY RASTOGI)
NEW DELHI;
SEPTEMBER 16, 2019.
17
