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Consumer Protection Act : Maintainability Of Complaint By A Trust

Rudrajyoti Nath Ray & Anindita Mitra
23 April 2020 12:24 PM GMT
Consumer Protection Act : Maintainability Of Complaint By A Trust
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The Consumer Protection Act, 1986 ('the Act') provides protection for the interests of a 'consumer', who may allege the goods bought by her or him suffer from fault or imperfection or shortcoming in quality. Essentially, the 'complaint' of the 'consumer-complainant' may exhibit dissatisfaction with the 'defect' in the goods bought.

On 16/02/2015, Supreme Elevators India Pvt. Ltd., based in Gujarat, was ordered to compensate and remove their defective elevator from the premises of Smt. Tara Bai Desai Charitable Opthalmic Trust Hospital ('Opthalmic Trust Hospital'), based in Jodhpur.[1] In due course, National Consumer Disputes Redressal Commission did not accept this was a 'consumer dispute' and concluded, on 02/04/2019, that, i) Opthalmic Trust Hospital is run by a 'trust'[2]; ii) a 'trust' is not a 'consumer'; and iii) a 'trust' cannot file a 'complaint' under the Act.[3]

Did the remedy necessarily lie elsewhere? Should not a 'trust' be able to maintain an action and claim compensation under the provisions of the Act? Should not a 'trust' be included in the definition of 'person', a word appearing in the definition of 'consumer'? A bench of two Judges of Supreme Court of India ('SC') referred the issue to a larger bench, on 04/10/2019.[4]

The definition of 'consumer' in Section 2(1)(d) of the Act begins with the five words, "consumer means any person who…". Pratibha Pratisthan & Ors. v. Manager, Canara Bank & Ors., (2017) 3 SCC 712 was clear, a 'trust' is not a 'person' and therefore not a 'consumer'. This is questionable. A 'person' has been defined in Section 2(1)(m) of the Act.[5] It is an inclusive definition, made evident by usage of the expression 'includes'. Interestingly, Ramanlal Bhailal Patel v. State of Gujarat, (2008) 5 SCC 449 explained, 'includes' indicates an intention to enlarge the meaning of the word it is used for. When a word is defined to include so and so, the definition is extensive and not restrictive.[6] SC was correct in pointing out, "The definition of 'person' in terms of Section 2(1)(m) is also an inclusive definition… the legislative intent appears to have a wider coverage."[7] Indeed, sub-clause (iv) to Section 2(1)(m) of the Act allows an 'unregistered firm', "which otherwise has certain disabilities in law", to be a 'person' and hence a 'consumer'. It would be odd to admit, in the context of the Act, an 'association of persons', unregistered under the Societies Registration Act, 1860, is a 'consumer' while a 'trust' is not.

A 'person', who is not a human being, is a 'juristic person' in some jurisdictions. The expression 'person' appears in the definition of 'consumer' in the South African Consumer Protection Act, 2008 too. However, in contrast, the definition of 'person' includes a 'juristic person' and the definition of 'juristic person' includes a 'trust'. Shriomani Gurudwara Prabandhak Committee, Amritsar v. Som Nath Dass, (2000) 4 SCC 146 interpreted, a 'juristic person' to be an 'artificially created person', the recognition of which in the realm of law/rights/obligations is for "subserving the needs and faith of the society". Should not Indian law, like South African law, identify a 'trust' as a 'person', a 'juristic person'? At least, as regards the Negotiable Instruments Act, 1881, Hon'ble High Court of Madras in 2012[8] and Hon'ble High Court of Gujarat in 2017[9] answered in affirmative. It is true, what has not been provided for in the statute cannot be supplied by the Courts as a rule. But, consideration of conditions which gave rise to the Act and the mischief the Act wished to remedy must convince the Court to supplement the written word to give force and life to legislative intention.[10]

The argument concerning legislature's intention to have a 'trust' fall within the definition of 'person' in Section 2(1)(m) of the Act and hence fall within the definition of 'consumer' in Section 2(1)(d) of the Act needs further review. A 'person' who obtains goods, whether with a 'defect' or not, for "resale or for any commercial purpose" is not a 'consumer'. The term 'commercial purpose' must be interpreted on basis of facts and circumstances. [11] Lilavati Kirtilal Mehta Medical Trust v. M/s. Unique Shanti Developers & Ors., (2020) 2 SCC 265 decided by two Judges of SC, on 14/11/2019, is relevant to understand.[12] Was the purchase of flats for providing accommodation to nurses, employed by Lilavati Kirtilal Mehta Medical Trust's hospital, qualify as a purchase for a 'commercial purpose'? It was answered in negative.

"The purchase of the good or service should have a close and direct nexus with a profit-generating activity... It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary… The paramount object of providing such facilities is to cater to the needs of nurses and combat the challenges faced by those who lack permanent accommodation in the city, so as to recompense the nurses for the pivotal role which they play as co-ordinators and custodians of patients' care… The provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital so as to maintain the beneficial effects of the curative care efforts undertaken by it. Such a duty exists irrespective of the surplus or turnover generated by the hospital, and hence is not even remotely related to the object of earning profits or for any commercial use as envisaged under Section 2(1)(d)."

Lilavati Kirtilal Mehta Medical Trust, providing flats, without rent, for nurses at their hospital, was held to be a 'consumer'. Opthalmic Trust Hospital providing an elevator without entry fee, for doctors/nurses/patients/visitors, must be held to be a 'consumer' too. It must be mentioned, neither the flat nor the elevator was directly intended to generate profit. There are several 'trusts' with hospitals possessing poor-building-quality flats, for nurses, or out-of-order elevators, for doctors/nurses/patients/visitors. The identification of such 'trusts' with hospitals as 'consumers' and to grant them relief under the Act shall 'subserve the needs and faith of the society'.

It is of some curiosity that, SC in 1995, when assessing the situation of an invalid man, who had no means of livelihood and purchased an auto-rickshaw, eventually proved defective, to be plied and operated by someone else on payment, said, "there is certainly some logic" to accept the invalid man to be a 'consumer'.[13] But the logic did not lead to legal acceptance because of restraints concerning Judge-made law. Certainly, Lilavati Kirtilal Mehta Medical Trust's flat and Opthalmic Trust Hospital's elevator is much above, and not below, the certainty of "some logic" in the invalid man's auto-rickshaw example.

The reliance on Pratibha Pratisthan & Ors. v. Manager, Canara Bank & Ors., (2017) 3 SCC 712 continues.[14] A referral to a larger bench than two Judges of SC does not impede the reliance. A question regarding 'consumer law' in New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd., [Civil Appeal Nos. 10941-10942 of 2013] was directed to be placed before the Chief Justice of India, on 18.01.2017, by two[15]  Judges of SC and was answered by five[16] Judges of SC, on 04.03.2020. We hope the answer, this time, requires less than three years.

(The authors are Advocates at the Supreme Court of India)



[1] Administrator, Smt. Tara Bai Desai Charitable Opthalmic Trust Hospital, Jodhpur v. Supreme Elevators India Pvt. Ltd. & Ors., District Consumer Disputes Redressal Forum, Jodhpur, Consumer Complaint No. 671 of 2013.

[2] Indian law identifies: i) a 'public trust', governed by the Indian Trusts Act, 1882; ii) a 'private trust', not governed by the Indian Trusts Act, 1882; iii) a 'public cum private trust'.

[3] Administrator, Smt. Tara Bai Desai Charitable Opthalmic Trust Hospital, Jodhpur v. Supreme Elevators India Pvt. Ltd. & Ors., Revision Petition No. 86 of 2019.

[4] Hon'ble Justice U.U. Lalit and Hon'be Justice Aniruddha Bose in Administrator, Smt. Tara Bai Desai Charitable Opthalmic Trust Hospital, Jodhpur v. Supreme Elevators India Pvt. Ltd. & Ors., Special Leave Petition (Civil) No. 18636 of 2019.

[5] Section 2(1)(m) of the Consumer Protection Act, 1986: "person" includes, - (i) a firm whether registered or not; (ii) a Hindu undivided family; (iii) a co-operative society; (iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;.

[6] Craise on Statue Law (Seventh Ed., Indian Reprint 1999) at pg. 213. See, Anuj Jain v. Axis Bank Limited, [Civil Appeal Nos. 8512-8527 of 2019].

[7] Supra note 4.

[8] Abraham Memorial Educational Trust v. C. Suresh Babu, (2013) 1 CompLJ 371 (Mad).

[9] Hakkimuddin Taherbhai Shakor (Trustee) v. State of Guajarat, 2017 CriLJ 3143.

[10] See, Seaford Court Estates Ltd. v. Asher, (1949) 2 ALL ER 155; Bangalore Water Supply & Sewerage Board v. A. Rajappa & Ors., (1978) 2 SCC 213.

[11] Punjab University v. Unit Trust of India, (2015) 2 SCC 669.

[12] Hon'ble Justice Mohan M. Shantanagoudar and Hon'ble Justice Ajay Rastogi.

[13] Laxmi Engineering Works v. P.S.G. Industrial Institute, (1995) 3 SCC 583.

[14] Shibu K.P. v. State of Kerala, (2019) 4 CompLJ 51 (Ker).

[15] Hon'ble Justice J. Chelameswar and Hon'ble Justice Abhay Manohar Sapre.

[16] Hon'ble Justice Arun Mishra, Hon'ble Justice Indira Banerjee, Hon'ble Justice Vineet Saran, Hon'ble Justice M.R. Shah and Hon'ble Justice S. Ravindra Bhat.

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