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Consumer Forum Has Jurisdiction To Adjudicate Dispute Concerning Validity Of Statutory Due Arising Out Of Deficiency In Service: SC [Read Judgment]

Ashok Kini
16 Sep 2019 1:51 PM GMT
Consumer Forum Has Jurisdiction To Adjudicate Dispute Concerning Validity Of Statutory Due Arising Out Of Deficiency In Service: SC [Read Judgment]
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The Supreme Court has held that 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 Consumer Protection Act.

A three judge bench comprising of Justice NV Ramana, Justice Mohan M. Shanthanagoudar and Justice Ajay Rastogi was answering a reference from a two judge bench which had doubted the correctness of the judgment in HUDA vs. Sunita, (2005) 2 SCC 479.

In Sunita, it was held that the National Consumer Disputes Redressal Commission 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 bench in the instant case ( Punjab Urban Planning and Development Authority (Now GLADA) vs Ram Singh)observed:

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 consumer service 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 to come within the ambit of the Act.

The Court noted that the definitions of 'service' and 'deficiency' in the Consumer Protection Act are not exhaustive and are kept open-ended. So they should receive liberal interpretation. 

The Court referred to the SC decision in Lucknow Development Authority v M K Gupta (1994) 1 SCC 243 which held that statutory authorities are amenable to jurisdiction of consumer courts if there is deficiency in services.

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.

Overruling the judgment in Sunita, the bench further held,

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 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.

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 


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