Whether Charitable Trust Is Consumer Under Consumer Protection Act? Supreme Court To Examine On September 18

The Supreme Court will hear on September 18 the issue of whether a charitable trust can maintain an action and claim compensation under the Consumer Protection Act, 1986 as a 'consumer'.

A bench of Justice Abhay S Oka, Justice Ahsanuddin Amanullah and Justice Augustine George Masih directed the parties to file compilation of decisions they are going to rely upon while addressing the Court on this issue.

“In the lead matter the side of the petitioners will file compilation of decisions relied upon. Even the respondents will file compilation of decisions relied upon in the lead matter”, the Court stated.

“This issue will arise in several matters. Keep it on next Wednesday”, Justice Oka remarked.

The issue was referred to a larger bench by a division bench of Justice UU Lalit and Justice Aniruddha Bose in 2019.

The case arose when the District Consumer Disputes Redressal Forum, Jodhpur, accepted the claim of a complainant trust and directed the respondents to pay Rs. 5,90,000 in compensation along with 9 percent interest per annum.

However, the State Consumer Disputes Redressal Commission in Jaipur overturned this decision, ruling that a trust could not be classified as a "consumer" under the Act. This was upheld by the National Consumer Disputes Redressal Commission. Thus, the complainant trust approached the Supreme Court.

Reliance was placed on the Supreme Court's decision in Pratibha Pratisthan v. Canara Bank (2017), which held that a trust is not a "person" and, therefore, not a "consumer" under the Act.

However, the division bench opined that the issue needs reconsideration. The bench said that the inclusive definition of "person" under Section 2(1)(m) of the Consumer Protection Act which includes firms, Hindu undivided families, cooperative societies, and other associations of persons, whether registered or not could potentially cover a trust as well.

Section 2(1)(b) defines a "complainant" as a consumer, a voluntary consumer association, the Central or State Government, or legal heirs in the case of a deceased consumer. Section 2(1)(d) defines a "consumer" as any person who buys goods or avails services for consideration, excluding those who obtain them for resale or commercial purposes.

The bench also referred to Ramanlal Bhailal Patel v. State of Gujarat, where it was noted that the term "person" includes entities recognized by law as capable of having rights and duties.

The division bench opined that the exclusion of trusts from the definition of "consumer" may not align with the legislative intent, and referred the matter to be reconsidered by a larger bench.

Case no. – SLP(C) No. 18636/2019

Case Title – Administrator Smt. Tara Bai Desai Charitable Opthalmic Trust Hospital, Jodhpur v. Managing Director Supreme Elevators India Pvt. Ltd & Ors.