Consumer Protection Act, 1986 – ss.2(1)(d)-(g), 2(1)(o) – Interpretation of – Law laid down by Supreme Court in HUDA vs. Sunita holding that the National Consumer Disputes Redressal Commission (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” – Validity of – Held: Certain statutory dues, such as fees, can arise out of a specific relation – Such statutory dues might be charged as quid pro quo for a privilege conferred or service rendered by the authority – 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 specific service rendered – Not all statutory dues/exactions are amenable to the jurisdiction of the Consumer Forum – 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. – Service provided by the petitioner squarely comes under the ambit of ‘service’ – Determination of the dispute concerning the validity of the imposition of a statutory due arising out of “deficiency in service”, can be undertaken by the consumer fora as per the provisions of the Act – Decision of Supreme Court in the case of HUDA vs. Sunita, was rendered without considering any of the previous judgments of Supreme Court and the objects of the Act – Law laid down in the aforesaid case does not hold good and is overruled – Present special leave petitions be placed before an appropriate Bench for considering the case on merits after obtaining orders from the Hon’ble Chief Justice of India – Interpretation of Statutes.
Words & Phrases – Meaning of expression ‘deficiency in services’ – Explained – Consumer Protection Act, 1986 – s.2(1)(g), 2(1)(o).
Interpretation of Statutes – Beneficial/remedial legislation – Interpretation of – Discussed.
Words & Phrases – Distinction between ‘tax’ and statutory dues, such as ‘fees’ – Held: Tax is a mandatory imposition by public authority for public purpose enforceable by law – There is no element of quid pro quo between the tax payer and the public authority – However, certain statutory dues, such as fees, can arise out of a specific relation – Such statutory dues might be charged as quid pro quo for a privilege conferred or a service rendered by the authority. Answering the reference, the Court
HELD: 1.1 Beneficial or remedial legislation needs to be given ‘fair and liberal interpretation’. 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, bye-laws, rules and customary practices etc. Service is defined under Section 2(1)(o) of the Consumer Protection Act, 1986. 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’. 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 sub-units/wings which are providing services/supply goods for a consideration and they are severable, then they can be considered to come within the ambit of the Act. [Paras 6-10] 522-F; 523-B-C; F-G; 524-D-E]
1.2 In view of the law laid down, the interpretation provided by the Sunita case cannot be sustained as the service provided by the petitioner herein squarely comes under the ambit of ‘service’. 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 fulfilment of conditions by the authority before such exaction. In broad terms, non-fulfilment of conditions or standards required, amounts to ‘deficiency in services’ under the Act. Having said that, out of abundant caution, it is noted 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. 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. Need to caution against over-inclusivity and the tribunals need to satisfy the ingredients under Consumer Protection Laws, before exercising the jurisdiction. [Paras 14-16] [527-E-G; 528-A-B]
1.3 Moreover, 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. For instance, a tax is a mandatory imposition by a public authority for public purpose enforceable by 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. 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. 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, 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. 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. [Paras 17, 19 and 20] [528-C-D; 529-E-H; 530-A]
1.4 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 Supreme Court in the case of Sunita, 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.[Para 22] [530-G-H; 531-A]
HUDA v. Sunita (2005) 2 SCC 479 – overruled.
Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [1954] SCR 1005 ; Kewal Krishan Puri and Anr. v. State of Punjab and Anr. (1980) 1 SCC 416 : [1979] 3 SCR 1217 – followed.
Lucknow Development Authority v. M.K. Gupta (1994)
1 SCC 243 : [1993] 3 Suppl. SCR 615 ; Ghaziabad Development Authority v. Balbir Singh (2004) 5 SCC
65 : [2004] 3 SCR 68 – relied on.
Commissioner of Customs (Import), Mumbai v. Dilip Kumar and others (2018) 9 SCC 40 ; Om Prakash v. Reliance General Insurance and Anr. (2017) 9 SCC
724 : [2017] 11 SCR 893 ; Standard Chartered Bank Ltd. v. Dr. B. N. Raman (2006) 5 SCC 727 : [2006] 3 Suppl. SCR 558 – referred to.
Justice Felix Frankfurter, Some Reflections on Reading of Statutes, Columbia Law Review, VOL. 47, Issue 4, PP. 527-546 ; Sutherland, Statutes and Statutory Construction, 5505 (Callaghan, 1943) – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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