SC:Statutory exactions can be amenable to Consumer forum’s jurisdiction

The Hon’ble Supreme Court, on 16th September 2019, in the matter of Punjab Urban Planning and Development Authority (Now Glada) v. Vidya Chetal pronounced that 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.

The Hon’ble Supreme Court observed that:

Beneficial or remedial legislation needs to be given ‘fair and liberal interpretation’. (Para 6)

The basis for application of the consumer laws hinges on the relationship between the service provider and consumer.(Para 7)

The usage of ‘otherwise’ within Section 2(1)(g) of the Consumer Protection Act, 1986 subsumes other modes of standard setting alternative instruments other than contracts such as laws, bye­laws, rules and customary practices etc. (Para 7)

Service is defined under Section 2(1)(o) of the Consumer Protection Act. 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, this provision reflects the legislative intent of providing impetus to ‘consumerism’. (Para 8)

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. (Para 9)

Welfare activities through economic adventures undertaken by the Government or statutory bodies are covered under the jurisdiction of the consumer forums. (Para 10)

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 Consumer Protection Act.(Para 10)

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. (Para 15)

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. (Para 19)

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.  (Para 20)

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 Consumer Protection Act (Para 22)

Copy of judgement: Judgement_16-Sep-2019

-Tushar Kaushik

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