Supreme Court to Deliberate on Whether Charitable Trusts Qualify as Consumers Under the Consumer Protection Act on September 18
On September 18, the Supreme Court of India is set to address a significant legal question: Can a charitable trust be considered a “consumer” under the Consumer Protection Act, 1986, and thus, maintain an action for compensation? This crucial issue, which could impact the interpretation and application of consumer rights law, will be deliberated by a bench comprising Justice Abhay S. Oka, Justice Ahsanuddin Amanullah, and Justice Augustine George Masih.
Key Proceedings and Legal Precedents
During the proceedings, the bench directed both parties involved in the case to submit compilations of legal precedents they intend to rely upon. These compilations will play a critical role in guiding the court’s assessment of whether the current legal definitions and interpretations under the Consumer Protection Act should include charitable trusts as consumers.
“In the lead matter, the side of the petitioners will file a compilation of decisions relied upon. Even the respondents will file a compilation of decisions relied upon in the lead matter,” the Court instructed, emphasizing the importance of a comprehensive review of relevant case law.
Justice Oka also noted the broader implications of this issue, remarking that the question of whether a charitable trust can be considered a consumer will arise in multiple cases. Therefore, the court has decided to take up the matter on the upcoming Wednesday.
Background of the Case
The roots of this legal debate trace back to 2019 when a division bench consisting of Justice U.U. Lalit and Justice Aniruddha Bose referred the matter to a larger bench for further examination. The case in question emerged after the District Consumer Disputes Redressal Forum in Jodhpur ruled in favor of a complainant trust, awarding it Rs. 5,90,000 in compensation, along with 9 percent interest per annum. However, this decision was later overturned by the State Consumer Disputes Redressal Commission in Jaipur, which concluded that a trust does not qualify as a “consumer” under the Act. This ruling was subsequently upheld by the National Consumer Disputes Redressal Commission, prompting the trust to seek recourse from the Supreme Court.
Legal Arguments and Implications
The legal arguments surrounding this issue are anchored in previous Supreme Court rulings. Notably, in the 2017 case of Pratibha Pratisthan v. Canara Bank, the Court held that a trust is not a “person” and, therefore, cannot be classified as a “consumer” under the Consumer Protection Act. However, the current division bench expressed the need to revisit this interpretation, particularly in light of the inclusive definition of “person” provided under Section 2(1)(m) of the Act. This section includes entities like firms, Hindu undivided families, cooperative societies, and other associations of persons, whether registered or not, suggesting that a trust could potentially fall under this definition.
Additionally, Section 2(1)(b) of the Act defines a “complainant” as including consumers, voluntary consumer associations, the Central or State Government, or legal heirs of deceased consumers. Section 2(1)(d) further defines a “consumer” as any person who purchases goods or services for consideration, excluding those who acquire them for resale or commercial purposes.
The bench also cited the case of Ramanlal Bhailal Patel v. State of Gujarat, where it was established that the term “person” encompasses entities recognized by law as capable of holding rights and obligations. This suggests that excluding trusts from the definition of “consumer” might not align with the legislative intent behind the Consumer Protection Act.
Conclusion: Anticipated Impact
The Supreme Court’s decision in this matter will have far-reaching consequences for how trusts engage with consumer rights in India.
Case No.: SLP(C) No. 18636/2019
Case Title: Administrator Smt. Tara Bai Desai Charitable Ophthalmic Trust Hospital, Jodhpur v. Managing Director, Supreme Elevators India Pvt. Ltd. & Ors.
