8 August 2022


Supreme Court

Punjab Urban Planning and Development Authority and Ors. Vs. Vidya Chetal and Ors.




Consumer Forum has jurisdiction to adjudicate the legitimacy of statutory dues

In present case, the reference arises out of the order passed by a two-Judge Bench of present Court, wherein they expressed doubt as to the correctness of the judgment rendered in the case of HUDA v. Sunita. Present Court therein held 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".

The counsel on behalf of the Petitioner submitted that, the order in the case of Sunita is well reasoned, as it validly holds that, the NCDRC lacks jurisdiction to decide the legitimacy behind the demand of "composition fee" and "extension fee". Relying on the aforesaid holding, the counsel further stated that "statutory dues" cannot be claimed as "deficiency in services". Further, the learned Counsel submitted that although the Consumer Protection Act, 1986 is beneficial in nature, demanding a liberal construction, the same cannot be used to extend the ambit of the Act by bringing in remedies or benefits which were not intended by the legislature. The precise question raised is whether the law laid down by this Court in the case of Sunita is valid.

As per Section 2(1)(g) of Act, 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.

The definition of service under Section 2(1)(o) of the Act is not exhaustive rather the legislature has left the task to expound the provision on a case to case basis to the judiciary. 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'. Such a phenomenon has had a benevolent effect on the Government undertakings, wherein a new dynamism of innovation, accountability and transparency are imbibed.

In Ghaziabad Development Authority v. Balbir Singh wherein this Court, relying upon Lucknow Development Authority v. M.K. Gupta , held that, the power of the Consumer forum extends to redressing any injustice rendered upon a consumer as well as over any mala fide, capricious or any oppressive act done by a statutory body.

Therefore, 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, 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. The reference stands answered accordingly. The instant special leave petitions may be placed before an appropriate Bench for considering the case on merits after obtaining orders from the Hon'ble Chief Justice of India.


Lucknow Development Authority v. M.K. Gupta MANU/SC/0178/1994
; Ghaziabad Development Authority v. Balbir Singh MANU/SC/0282/2004
, HUDA v. Sunita MANU/SC/2801/2005

Tags : imposition Statutory due Consumer fora Jurisdiction

Share :