The determination of disputes concerning the validity of the imposition of a statutory due arising out of a “deficiency in service”, can be undertaken by the consumer fora: SC
A bench of Justices N.V. Ramana, Mohan M. Shantanagoudar and Ajay Rastogi ruled that the determination of disputes concerning the validity of the imposition of a statutory due arising out of a “deficiency in service”, can be undertaken by the consumer fora.The Supreme Court ruled that its decision in the case of HUDA vs. Sunita, (2005) 2 SCC 479, wherein it was held that the National...
A bench of Justices N.V. Ramana, Mohan M. Shantanagoudar and Ajay Rastogi ruled that the determination of disputes concerning the validity of the imposition of a statutory due arising out of a “deficiency in service”, can be undertaken by the consumer fora.
The Supreme Court ruled that its decision in the case of HUDA vs. Sunita, (2005) 2 SCC 479, wherein it was held that the National Consumer Disputes Redressal Commission (NCDRC) has no jurisdiction to adjudicate the legitimacy of the statutory dues such as “composition fee” and “extension fee”, was rendered without considering any of the previous judgments of the Supreme Court and the objects of the Consumer Protection Act, 1986 Act. Consequently, the law laid down in the aforesaid case is bad in law. The decision was thereby overruled.
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”.
The amicus curiae appointed by the Court to appear on behalf of the respondent claimed that the order passed in the case of Sunita, is an aberration in a series of longstanding judgments by the Apex Court. The learned amicus curiae thereafter placed strong reliance upon the judgments of the Supreme Court (precedents) wherein it was held that the NCDRC has the jurisdiction to protect consumers against defective services rendered even by a statutory body.
The precise question raised before the Supreme Court is whether the law laid down by the Supreme Court in the case of Sunita is valid.
The Supreme Court in the present case observed that beneficial or remedial legislation needs to be given ‘fair and liberal interpretation’. The basis for application of the consumer laws hinges on the relationship between the service provider and consumer.
In the Sunita case, it was held that the NCDRC had no jurisdiction to adjudicate the legality behind the demand of composition or extension fee by a developmental authority. The Court had observed that the statutory obligations of a developmental authority and the plot holder under the authority’s statutory framework could not be construed as acts or omissions resulting in a “deficiency in service”.
Overruling the Sunita case, the Supreme Court ruled that 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. In broad terms, non-fulfillment of conditions or standards required, amounts to ‘deficiency in services’ under the Act.
The Apex Court observed that “the Courts need to caution against over inclusivity and the tribunals need to satisfy the ingredients under Consumer Protection Laws, before exercising the jurisdiction. Moreover, we also need to note that the distinction between statutory liability which arise generally such as a tax, and those that may arise out of a specific relationship such as that between a service provider and a consumer, was not considered by this Court in the case of Sunita.”
The Court held that 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. 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, the Court observed 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.