1994 (11) TMI 364 - SC - Service Tax

If the housing activity carried on by the statutory authority or private builder or contractor came within the purview of the Act only after its amendment by the Ordinance No. 24 in 1993 or the Commission could entertain a complaint for such violations even before? Whether the suit has abated or survives? Held that - Appeal allowed. High Court fell into patent error in postponing the date of the operation of the notification. The notification, amending the Rules, was a legislative act.The amendment of the Rules being a delegated legislation; the High Court could not have interfered with the date of operation of the notification. Thus set aside the direction given by the High Court regarding the postponement of the enforcement of the notification and we direct that the notification dated March 27, 1992 shall be operative from April 1, 1992.

Issues Involved:
1. Applicability of the Consumer Protection Act, 1986 to statutory authorities for housing activities.
2. Jurisdiction of Consumer Forums and Commissions under the Act.
3. Definition and scope of "service" under the Act.
4. Liability of public authorities under the Act.
5. Retrospective applicability of the 1993 amendment to the Act.
6. Award of compensation for harassment and agony by the Commission.
7. Liability for payment of compensation by public authorities or responsible officers.

Detailed Analysis:

1. Applicability of the Consumer Protection Act, 1986 to Statutory Authorities for Housing Activities:
The judgment addresses whether statutory authorities like the Lucknow Development Authority, Delhi Development Authority, or Bangalore Development Authority, constituted under State Acts for planned city development, are amenable to the Consumer Protection Act, 1986 for issues like delayed possession, non-completion, or defective construction of houses. It concludes that these authorities are indeed subject to the Act for any act or omission related to housing activities.

2. Jurisdiction of Consumer Forums and Commissions under the Act:
The judgment clarifies the jurisdiction of District Forums, State Commissions, and the National Commission under Sections 11, 16, and 21 of the Act, respectively. It states that these bodies can entertain complaints depending on the valuation of goods or services and compensation claimed. The right to approach these bodies vests in consumers for unfair trade practices, defects in goods, or deficiencies in services.

3. Definition and Scope of "Service" under the Act:
The term "service" under Clause (o) of Section 2 of the Act is defined broadly to include any service made available to potential users, including housing construction. The judgment emphasizes that the term covers both actual and potential users and extends to services provided by statutory bodies. It concludes that housing construction or building activities by private or statutory bodies fall within the definition of "service" under the Act.

4. Liability of Public Authorities under the Act:
The judgment rejects the argument that public authorities performing statutory functions are exempt from the Act. It asserts that statutory bodies providing services to the public are as much subject to the Act as private entities. The judgment stresses the importance of public accountability and the need for statutory bodies to be subject to scrutiny under the Act.

5. Retrospective Applicability of the 1993 Amendment to the Act:
The judgment addresses whether the inclusion of "housing construction" in the definition of "service" by the 1993 amendment applies retrospectively. It concludes that the amendment was added by way of abundant caution and that housing construction was already included within the definition of "service" prior to the amendment. Therefore, the amendment does not materially affect vested rights or obligations in respect of past transactions.

6. Award of Compensation for Harassment and Agony by the Commission:
The judgment affirms the Commission's power to award compensation for harassment and agony suffered by consumers. It emphasizes that compensation includes both actual loss and emotional suffering. The judgment underscores the importance of awarding compensation to address social evils and improve public administration.

7. Liability for Payment of Compensation by Public Authorities or Responsible Officers:
The judgment addresses the issue of who should bear the liability for compensation awarded by the Commission. It concludes that while the public authority should initially pay the compensation from public funds, it should recover the amount from the responsible officers proportionately. This approach ensures accountability and deters oppressive and capricious behavior by public servants.

Conclusion:
The judgment comprehensively analyzes the applicability of the Consumer Protection Act, 1986 to statutory authorities involved in housing activities, the jurisdiction of Consumer Forums and Commissions, the definition and scope of "service," and the liability of public authorities. It affirms the power of the Commission to award compensation for harassment and agony and delineates the responsibility for payment of such compensation. The judgment underscores the importance of public accountability and the need for statutory bodies to be subject to scrutiny under the Act.

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