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Consumer Act to apply to Govt. departments providing service for a consideration

In SLP (C) NO. 4272 OF 2015, PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHORITY vs VIDYA CHETA & Others, reference was made to a larger bench by a two  judge bench of the Supreme Court wherein the said bench had expressed doubt as to the correctness of the judgment rendered in the case of HUDA vs. Sunita, (2005) 2 SCC 479 where it was 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”.

The larger bench held that beneficial or remedial legislation needs to be given ‘fair and liberal interpretation’ and the liberal construction, extends the letter to include matters within the spirit or purpose.

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. [refer to Standard Chartered Bank Ltd. v. Dr. B. N. Raman, (2006) 5 SCC 727]

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.

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.

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.

The Supreme Court decided that 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.

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