Only paid service contestable

YOU have to pay for a service in order to get relief under the Consumer Protection (CP) Act. A group of 36 villagers learnt this the hard way after they lost their 10-year-old battle against civic apathy before the apex consumer court (Mangalore City Corporation vs FC Fernandes and 35 others, decided on December 28, 2022).

For these villagers, it was a question of their basic right to health, after a leakage in the sewage system contaminated the well water that was the main source of water supply in the village. However, despite the deleterious effect of the polluted water on the health of the villagers, and in spite of several petitions, the civic authority refused to clean up the water and prevent further contamination. In desperation, the residents of Majilla village at Valencia, Mangalore, took up the matter before the consumer court.

They did win the case at the district level — the District Consumer Disputes Redressal Commission not only directed the municipality to ensure the safety of the water, but also imposed a fine for each day’s delay in completing this task. It also awarded compensation to the villagers and cost of litigation. This was upheld by the consumer court at the state level.

However, much to the disappointment of the villagers, the National Consumer Disputes Redressal Commission set aside the orders of the lower consumer courts on the grounds of illegality and lack of jurisdiction. So, eventually, the villagers got no compensation for the suffering undergone, despite a long legal battle spanning over a decade. The only silver lining is that the order of the consumer court at the district level did force the local authority to take notice of the problem and finally clean up the water.

Even though the CP Act gives the right to redress against deficient services and defective goods, what many consumers do not know is that in order to exercise that right, they should have paid for the service or the goods because the law defines a consumer as any person who ‘buys any goods for a consideration’, or ‘hires or avails of any service for a consideration’. The definition of service also excludes services availed free of charge. So, if the services or goods are given free, one cannot complain before the consumer courts about them.

This aspect of the law has kept out certain services provided by municipalities out of the purview of the consumer courts. To circumvent that, consumers have argued in several cases that since the expenses for providing these services are met by taxes paid by taxpayers, such services cannot be considered as free at all.

In fact, soon after the consumer courts came into existence, a resident of Bengaluru, who was bitten by a stray dog while he was on his morning walk, had sued the Bangalore Development Authority (BDA) for failing to control the stray dog menace and argued that the BDA, which collects taxes from residents, is accountable under the CP Act. The Karnataka State Consumer Disputes Redressal Commission, however, dismissed it on the ground that there was no nexus between the tax paid and the services rendered by the BDA. (A Srinivasa Murthy vs Chairman, Bangalore Development Authority, Complaint No. 10 of 1989, decided on May 21, 1990).

In the present case, too, the villagers’ contention was that they paid taxes to the local urban body and this amounted to payment for the services rendered by it, and, therefore, they were entitled to seek relief before the consumer court for deficiency in that service.

However, the Supreme Court has held in several cases that payment of taxes does not constitute payment for any particular service and, thus, government authorities providing services free of charge cannot be held accountable under the CP Act. In Indian Medical Association vs VP Shantha and others (CA No. 688 of 1993, order dated November 13, 1995), for example, the Supreme Court reiterated this point.

Drawing a clear distinction between payment of tax and payment for a service, the Supreme Court said: “The essential characteristics of a tax are that (i) it is imposed under statutory power without the taxpayer’s consent and the payment is enforced by law; (ii) it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax and (iii) it is part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay.”

So, while setting aside the relief given by the lower consumer courts in the case of 36 villagers, the National Consumer Disputes Redressal Commission said that given the settled position of law in this regard, the order passed by the District Commission was vitiated by lack of jurisdiction. The commission also quoted its order in M/s Signet Corporation vs Commissioner, MCD, New Delhi (decided on May 19,1997), where it said: “It is well established by the rulings of the Supreme Court as well as of this commission that payment of a tax which is levied in the exercise of the sovereign function of the state cannot constitute consideration even remotely as quid pro quo for any service rendered or likely to be rendered.”

So, if you have a problem with civic services rendered free, do not go to the consumer court, but seek help from the civil court. I remember another sad case wherein a resident of Ulhasnagar, who suffered a permanent disability on account of the roof of a public toilet collapsing on him, had approached the consumer court for compensation. The tribunal regretted its inability to help him.

Similarly, you cannot get relief from consumer courts for negligent health services if they are completely free (free eye camps, for example) However, the Supreme Court’s order in the VP Shantha case has provided an exception. If at a hospital, health centre, dispensary, or even health camps, such services are provided on payment of charges to some and free of charge to others, such service would come under the jurisdiction of the consumer courts, and even those who receive free service would be entitled to seek compensation through the consumer courts.

— The writer is a consumer rights and safety expert