IMPORTANT POINT
Building activities – whether service?

T.S. Thakur, J.-The short question that falls for determination in these appeals by special leave is whether the appellant-company was, in the facts and circumstances of the case, offering any ‘service’ to the respondents within the meaning of the Consumer Protection Act, 1986 so as to make it amenable to the jurisdiction of the fora established under the said Act. Relying upon the decision of this Court in Lucknow Development Authority v. M.K. Gupta1 the High Court has answered the question in the affirmative and held that the respondents were ‘consumers’ and the appellant was a ‘service’ provider within the meaning of the Act forementioned, hence amenable to the jurisdiction of the fora under the said Act.

2. The undisputed facts in the context of which the question arises have been summed up by the High Court in the following words:

“Indisputable facts are that the opposite party promoted ventures for development of lands into house-sites and invited the intending purchasers through paper publication and brochures to join as members. The complainants responded and joined as members on payment of fees. It is also indisputable that the sale and allotment of plots were subject to terms and conditions extracted supra. The sale is not open to any general buyer but restricted only to the persons who have joined as members on payment of the stipulated fee. The members should abide by the terms and conditions set out by the seller. The sale is not on “as it is where it is” basis. The terms and conditions stipulated for sale of only developed plots and the registration of the plots would be made after the sanction of lay out by the concerned authorities. The sale price was not for the virgin land but included the development of sites and provision of infrastructure. The opposite party has undertaken the obligations to develop the plots and obtain permissions/approvals of the lay outs. The opposite party itself pleaded in its counters that the plots were developed by spending huge amounts and subsequent to the amounts paid by the complainants also plots were developed. It pleaded that huge amounts were spent towards protection of the plots from the grabbers and developed roads, open drains, sewerage lines, streetlights etc. It is therefore, manifest that the transaction between the parties is not a sale simplicitor but coupled with obligations for development and provision of infrastructure. Inevitably, there is an element of service in the discharge of the said obligations.”

3. In Lucknow Development Authority’s case (supra) this Court while dealing with the meaning of the expressions ‘consumer’ and ‘service’ under the Consumer Protection Act observed that the provisions of the Act must be liberally interpreted in favour of the consumers as the enactment in question was a beneficial piece of legislation. While examining the meaning of the term ‘consumer’ this Court observed:

“……….. The word ‘consumer’ is a comprehensive expression. It extends from a person who buys any commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services. In Oxford Dictionary a consumer is defined as, “a purchaser of goods or services”. In Black’s Law Dictionary it is explained to mean, “one who consumes. Individuals who purchase, use, maintain, and dispose of products and services. A member of that broad class of people who are affected by pricing policies, financing practices, quality of goods and services, credit reporting, debt collection, and other trade practices for which state and federal consumer protection laws are enacted.” The Act opts for no less wider definition.”

4. Similarly, this Court while examining the true purport of the word ‘service’ appearing in the legislation observed:

“It is in three parts. The main part is followed by inclusive clause and ends by exclusionary clause. The main clause itself is very wide. It applies to any