October 4, 2022

Case comment: National consumer dispute redressal commission (NCDRC) judgments

These case comments is written by Punyata kakar. She is a law student of Department of Laws, Panjab University Chandigarh.

1.Manu solanki & othrs vs vinayaka mission university in consumer case no. 261 of 2012 

Where reference was made to NCDRC by complainants accusing the opposite party of deficiency of services and unfair trade practice by inducing them false insurances

Question of law:

1. whether educational institutions fall within the jurisdiction consumer forums.

2. whether all educational activities , whether the admission stage , whether activities strictly related to curriculum, whether these activities are involved in course of imparting  knowledge fall within definition of education was needed to be decided .

Bench: Bench by which judgement passed comprised of justice RK Agarwal, justice VK Jain & M. Shreesha of consumer fora, decided on 20 january 2020.

Facts of the case are in respect to deficiency of services by an educational institution that is a dental college for admitting students when it was neither affiliated with the university nor recognized by the medical council of India. The complainants were admitted to the offshore program in 2005 -2006 comprising of a 2-year study in Thailand and two years study at opposite party university from where they would be getting their medical degree. Learned counsel submitted that after two years of study in Thailand students were asked to continue study there and asked them to come for screen test in India by submitting writ petition. The national board of education filed writ appeal claiming that the degree of medical qualification granted to students was not recognised by medical council of Thailand. then the university vice-chancellor orally committed to providing seats to students in NRI quota in 2012-13, so as to not to lead loss of students but students were not granted seats nor refunds.

Contentions & analysis: the opposite party learned counsel placed reliance on the supreme court decision in PT Koshy vs Ellen charitable trust 2012 (3) CPC615 (SC) [a] and stated that students are not consumers and education is not a commodity and the educational institutions are not rendering services.

Whereas complainants counsel referred P. Sreenivashu vs P.J Alexander (civil appeal 7003-7004 of 2015) [b], wherein it was held that educational institutions would come within the purview of the consumer protection act 1986 and that the education is a service.

Whereas commission addressed the ratio laid down by the supreme court in catena of judgements with respect to ‘education’ & ‘educational services’ vis a vis consumer protection act 1986.

Bihar school examination board vs Suresh Prasad sinha (2009) 8 SCC 483 [c] held that any dispute relating to fault in holding of examination and non-declaration of result by an examinee does not fall within the purview of consumer protection act 1986. The supreme court laid down the principle that the board is a statutory authority under Bihar school examination board, hence when the board conducts exams in discharge of its statutory function it does not offer its services to any candidate nor any candidate hires or avails services from the board as consumer.

The other case referred was Ghaziabad development authority vs balbir singh (2004) 5SCC 65 [d] where it was held that the power of consumer form extends to redressing any injustice rendered upon consumer as well as over any mala fide, a capricious act done by body.  When there have been arbitrary exercise of power by the officer he is liable to compensate for loss of harassment or oppression.

Maharishi Dayanand University vs Surjeet kaur (2010) 11 SCC 159 [e], In this case supreme court examined in detail the jurisdiction of the consumer forum to entertain a complaint with respect to deficiency of service by educational institutions. In this case the complainant along with took admission in b.ed degree where she gave the examinations but board did not declare her result detecting to it to be mischief, the complainant filed petition in district forum where the decision was taken in her favour in which appeal was filed but state commission reversed it and referred to higher bench. the revision petition was filed under article 21 of consumer protection act and it was preferred before national commission where commission held that imparting education by institution falls within ambit of service. But supreme court later on set aside the judgment given by the commission and held that education is not a commodity hence the learned counsel of opposite party of manu solanki case (supra) relied on this judgment saying that lack of refund of admission fees is not a deficiency in service. 

In the case, Unni Krishnan J.P vs state of A.P (1993) 1 SCC 645 [f] it was laid that education has never been a commerce in this country and that establishing an educational institution can neither be trade or business nor can be a profession within the meaning of Article 19(1)(g). it was held that education in its truest aspect is more a maen and avocation rather than a profession or trade.

In Anupama college of engineering vs gulshan kumar & anr (civil no 17802 dated 2017)[g] the question in this case was whether a college is a service provider. the bench referred to maharishi dayanand university case and PT Koshy case whereas sreenivasulu case ws not brought in its notice .

The commission too relied on Amar Singh Yadav vs Shanta Devi (AIR 1987 Patna 191)[h] wherein it was held that while deciding the law of precedence has observed that when there is direct conflict between two decisions of the supreme court of co equal bench, the subordinate court must follow the judgements which states the law more elaborately and accurately & in the case supra maharishi dayanand university the court had discussed the law elaborately.

To some extent the counsel for the petitioner in review petition contended it rightly that if a student leaves his degree, his seat post admission in ongoing session then any deficiency in marks , certificates, issuance of degree does not fall within purview of consumer protection act 1986.

If the university is not affiliated the consumer fora has no jurisdiction to entertain it , then taking children for trip to historical places come within ambit of education , charging fees for bus services come within ambit of imparting knowledge hence out of ambit of consumer protection actr 1986..

Decision: In this case it was held by The national consumer dispute reddressal commission (NCDRC) that educational institutions don’t impart services and hence the consumer forum don’t have jurisdiction to certain complaints against them. this judgement was a deadlock breaker between two conflicting judgements of supreme court .

The commission clarified its position on this aspect and held that institutions rendering education including vocational courses and activities undertaken during process of pre-admission as well as post-admission and also imparting tours, picnics, co-curricular activities, sports, etc will not be covered under provisions of the consumer protection act. They even said that any defect or deficiency or unfair trade practice pertaining to a service provider like coaching centers does not fall within the jurisdiction. Hence the commission dismissed the complaint.

2. Ambrish kumar shukla vs Ferrous infrastructure Pvt. ltd, 2016

Bench: 3 tier bench involved: justice DK Jain, justice  BC Gupta, justice VK Jain 

FACTS of the case: the buyer booked an apartment with the builders, ferrous infrastructure. the allotment was canceled by the builder and they stated that balance sale consideration was not paid by the buyer. The buyer approached consumer court district forum seeking restoration of flat with possession and compensation  The respondent i.e Ambrish shukla contested the complaint and objected that district consumer forum pecuniary jurisdiction was not adequate to entertain the complaint & the district forum seeing the amount of flat Rs.46 lakhs too held that it had no pecuniary jurisdiction to entertain compliant. then the aggrieved party moved to state commission where again the compensation amount being 10 lakhs the complaint was dismissed. From where it went to national commission which on seeing divergence of opinion among different commission on pecuniary jurisdiction referred case to larger bench.

Issues and decision : referred to 2 judge bench  2016, issues raised were,  

1. where possession of property has been delivered to complainants but dome deficiencies have been found in construction whether the pecuniary jurisdiction is to be determined taking value of whole property or according to the deficiency of part alleged?

2. whether the interest claimed on such value by way of compensation is to be taken in account for determining pecuniary jurisdiction of particular forum?

3. Whether value of goods to be taken according to the original value or its price at the time of purchase?

4. In complaints proposed to be filed under section 12(1)(c) of the act whether value of goods to be taken individually or their aggregate value?

5. Whether the term consumer is given in section 12(1)(c) includes person as defined under section 2(m) of the act meaning thereby that groups, firms, societies could join hands to file a complaint? 

To this, the decision is given by 2 judge bench dated 11.8.2016 was that it is the value of the goods, not its deficiency which is to be considered for determining pecuniary jurisdiction, the consideration paid or agreed to be paid by consumer at time of purchasing along with the compensation if claimed to determine jurisdiction, if complaint instituted by best consumer court lawyers under section 12(1)c of act the pecuniary jurisdiction to be determined on basis of aggregate of value of goods purchased, if by top consumer court lawyers the complaint filed can be instituted by one or more consumers if more than one complaint filed then its not maintainable on behalf of consumers having similar interest.

Via order dated 24.5.2016, following issues relating to interpretation of section 12(1)c of act was referred by 2 members of national consumer court to larger bench.

1.whether complaint filed by best consumer court lawyers is maintainable before national consumer court, whether the value of goods or services claimed in respect of purchasers exceeds one crore.?

2. Whether the complaint filed by best consumer lawyers maintainable before national commission where the value of goods claimed in respect of individual allotees exceeds rs 1 crore  but does not exceed 1 crore with respect to other allotees?

3.whether the complaint filed by best consumer court laywers maintainable in case of allotment of several flats in project/building where bookings are made on different dates and agreed cost is not identical?

In Decision given by larger bench to above issues it was held that complaint under section 12(1)C of consumer protection act can be filed on behalf of or benefit of all consumers having common interest, grieveance are seeling same relief, hence complaint filed on behalf of some consumer not maintainable. Such complaint shall not be deemed to have been filed as individual consumer. The complaint under this act is maintainable before this omission where aggregate of value of goods purchased or service hired by all consumers on whose behalf complaint is instituted and total compensation if exceeds 1 crore. The pecuniary jurisdiction of national commission is above 1 crore.

Law applied : Section 12(1) of the Consumer Protection Act reads as under:

(1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by-

(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;

(b) any recognized consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not;

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or

(d) the Central or the State Government, as the case may be, either in its individual capacity

or as a representative of interests of the consumers in general  Section 13(6) of the Consumer Protection Act reads as under:

(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon. Section 2(1)(b) of the Consumer Protection Act reads as under:

(b) “complainant” means-

(i) a consumer; or (ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of

1956) or under any other law for the time being in force; or

(iii) the Central Government or any State Government; or (iv) one or more consumers, where there are numerous consumers having the same interest;

(v) in case of death of a consumer, his legal heir or representative;] who or which makes a complaint;

 Order I of Rule 8 of the Code of Civil Procedure which finds reference in Section 13(6) of the Consumer Protection Act, reads as under: 8. One person may sue or defend on behalf of all in same interest.- (1) Where there are numerous persons having the same interest in one suit,- (a) one or more of such persons may, with the permission of the court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested; (b) the court may direct that one or more of such persons may sue or be sued, or maydefend such suit, on behalf of, or for the benefit of, all persons so interested.

(2) The court shall, in every case where a permission or direction is given under sub-rule (1), at the plaintiff’s expense, give notice of the institution of the suit to all persons so interested, either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the courtin each case may direct. (3) Any person on whose behalf, or for whose benefit, a suit is instituted, or defended, under sub-rule (1), may apply to the court to be made a party to such suit. (4) No part of the claim in any such suit shall be abandoned under sub-rule (1), and no such suit shall be withdrawn under sub-rule (3) of rule 1 of Order XXIII, and no agreement, compromise or satisfaction shall be recorded in any such suit underrule 3 of that Order, unless the court has given, at the plaintiff’s expenses notice to all persons so interested in the manner specified in sub-rule (2).

  • Where any person suing or defending in any such suit does not proceed with due diligence in the suit or defence, the court may substitute in his place any other person having the same interest in the suit.
  • A decree passed in a suit under this rule shall be binding on all persons on whose behalf, or for whose benefit, the suit is instituted, or defended, as the case may be.

8. The scope and object of the principle embodied Rule 8 of Order I of Code of Civil Procedure was stated as under by a Four-Members Bench of this Commission in Anil Textorium Pvt. Ltd. Vs. Rajiv Niranjanbhai Mehta, III (1997) CPJ 31 (NC) [i]: laid the principle admitted in all Courts /Tribunals/Quasi-Judicial Authorities upon questions affecting the suitor’s person and his liberty and his property is that the rights of no man shall be decided unless he himself is present. Therefore, all persons having an interest in the subject-matter are to be made parties in a suit or other proceedings but of Order I Rule 8 of the Code of Civil Procedure has carved out an exception. It provides that where a number of persons are similarly interested in a suit one or more of them can with the permission of the Court or on a direction given by the Court, sue or be sued on behalf of themselves and others. The provisions of this rule have been included in the Code in public interest to avoid multiplicity of litigation and to facilitate the decision on questions; in which a large number of persons are interested, without recourse to the ordinary procedure. These provisions are meant for the benefit and protection of the persons who have the same interest as one who has filed the suit. The exception is adopted by the Courts to avoid inconvenience, because if all persons interested are made parties, there would be considerable delay and justice would be hampered.It is the existence of a sufficient community of interest among the persons on whose behalf or against whom the suit is instituted that should be the governing factor in deciding as to whether the procedure provided in the representative.

Held in the above case :A larger bench of NCDRC was interpreting section 12(1)c of consumer protection act in October 2019 on reference to smaller judgement in context of real estate case. It was held that its the value of goods or services and the compensation , if any claimed which determines the pecuniary jurisdiction of consumer forum. In this landmark judgement NCDRC had stated that consumers seeking compensation worth 1 crore or more or group of consumers with similar grievances  against a builder can now approach the national commission. This judgement expedite justice delivery  as now consumers can directly apply to national commission instead of going through 3 tier process.

Case citations:

a] 2012(3)CPC615(SC)

b] civil appeal 7003-7004 of 2015

c] (2009)8SCC483

d] (2004)5SCC 65

e] (2010)11SCC159

f] (1993)1SCC 645

g] civil no 17802 dated 2017

h] AIR 1987 Patna 191

i] (1997) CPJ 31 (NC)

Punyata Kakar

Punyata Kakar is a student of legal studies at Panjab University Chandigarh. She is currently publishing blogs and cases with regards to consumer disputes resolution, corporate law, and has a keen interest in criminal law. Recently she has interned in the law office of advocate Mr. Rajiv Joshi of Punjab and Haryana High court. She has been a member of NSS society and looks forward to working especially for women’s welfare.