M/S. NARNE CONSTRUCTION P. LTD. ETC. ETC.versusUNION OF INDIA AND ORS. ETC.

                        [2012] 4 S.C.R. 574


A       MIS. NARNE CONSTRUCTION P. LTD. ETC. ETC.
                                   V.
                 UNION OF INDIA AND ORS. ETC.
               (Civil Appeal Nos. 4432-4450 of 2012)

                            MAY 10, 2012
B
         [T.S. THAKUR AND GYAN SUDHA MISRA, JJ.]

         Consumer Protection Act, 1986: s.2(1)(o) -Activities of
    appellant-company involving offer of plots for sale to its
C   customers with assurance of development of infrastructure/
    amenities, lay-out approvals etc. - Whether activities of the
    appellant-company was a 'service' within the meaning of
    clause (o) of s.2(1) of the Act and amenable to the jurisdiction
    of the fora established under the Act - Held: Having regard
D   to the nature of the transaction between the appellant-
    company and its custome.•s-purchasers which involved much
    more than a simple transfer of a piece of immovable property,
    it is clear that the same constituted 'service' within the
    meaning of the Act - It was not a case where the appellant-
E   company was selling the given property with all advantages
    and/or disadvantages on "as is where is" basis - It was a case
    where a clear cut assurance was made to the purchasers as
    to the nature and the extent of development that would be
    carried out by the appellant-company as a part of the package
F   under which sale of fully developed plots with assured facilities
    was to be made in favour of the purchasers for valuable
    consideration - Thus, the appellant-company had indeed
    undertaken to provide a service - Any deficiency or defect in
    such service would make it accountable before the competent
    consumer forum at the instance of purchasers.
G
        The question which arose for consideration in the
    instant appeals was whether the High Court was justified
    in holding that the appellant-company was a service
    provider within the meaning of the Consumer Protection
H                             574
   NARNE CONSTRUCTION P. LTD. ETC. ETC. v.              575
        UNION OF INDIA AND ORS. ETC.

Act and thus amenable to the jurisdiction of the fora under A
the said Act.

    Dismissing the appeals, the Court

     HELD: The High Court was perfectly justified in
holding that the activities of the appellant-company           B
involving offer of plots for sale to its customers/members
with assurance of development of infrastructure/
amenities, lay-out approvals etc. was a 'service' within the
meaning of clause (o) of Section 2(1) of the Consumer
Protection Act and would, therefore, be amenable to the        C
jurisdiction of the fora established under the statute.
Having regard to the nature of the transaction between
the appellant-company and its customers which involved
much more than a simple transfer of a piece of immovable
property, it is clear that the same constituted 'service'      D
within the meaning of the Act. It was not a case where
the appellant-company was selling the given property
with all advantages and/or disadvantages on "as is where
is" basis. It was a case where a clear cut assurance was
made to tile purchasers as to the nature and the extent        E
of development that would be carried out by the
appellant-company as a part of the package under which
sale of fully developed plots with assured facilities was
to be made in favour of the purchasers for valuable
consideration. Thus, the appellant-company had indeed          F
undertaken to provide a service. Any deficiency or defect
in such service would make it accountable before the
competent consumer forum at the instance of consumers
like the respondents. [Para 7] [581-E-H; 582-A-C]

   Lucknow Development Authority v. M.K. Gupta (1994) 1 G
SCC 243: 1993 (3) Suppl. SCR 615; Bangalore
Development Authority v. Syndicate Bank (2007) 6 SCC 711:
2007 (7) SCR 47 - relied on.
    U. T. Chandigarh Administration and Anr. v. Amarjeet       H
    576      SUPREME COURT REPORTS                     [2012] 4 S.C.R.


A Singh and Ors. (2009) 4 SCC 660: 2009 (4) SCR 541 -
  distinguished.

                          Case Law Reference:
          1993 (3) Suppl. SCR 615          relied on        Para 1, 3
8
          2009 (4) SCR 541                 distinguished Para 7
          2007 (7) SCR 47                  relied on        Para 8
          CRIMINAL APPELLATE JURISDICTION: Civil Appeal No.
c 4432-4450 of 2012.
       From the Judgment & Order dated 13.08.2010 of the High
  Court of Judicature Andhra Pradesh at Hyderabad in Writ
  Petition Nos. 28246 of 2009, 302, 3947, 5091 of 2010, 26520
  of2009, 360, 364, 405, 429, 304, 305, 339, 356, 357, 5003,
D 5088, 5121, 5131 and 5903 of 2010.

          T. Anamika for the Appellants.

      Mohan Parasaran, ASG, Indra Sawhney, D.L. Chidanand,
E Sushma Suri, C. Mukund, Pankaj Jain, P.V. Sarvana Raja, Bijoy
  Kumar Jain, Ram Swarup Sharma, AP Roi, K. Maruthi Rao,
  K. Radha, Anjani Aiyagari, Priya Hingorani, Dr. Aman
  Hingorani, Hingorani & Associates, D. Mahesh Babu, Savita
  Devi, G.V.R. Choudhary, K. Shivraj Choudhuri, A. Chandra
  Sekhar, 8. Ramana Murthy for the Respondents.
F
          The Judgment of the Court was delivered by

       T.S. THAKUR, J. 1. The short question that falls for
  determination in these appeals by special leave is whether the
G 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
H Development Authority v. MK. Gupta (1994) 1 SCC 243, the
   NARNE CONSTRUCTION P. LTD. ETC. ETC. v.      577
 UNION OF INDIA AND ORS. ETC. [T.S. THAKUR, J.]
High Court has answered the question in the affirmative and            A
held that the respondents were 'consumers' and the appellant
was a 'service' provider within the meaning of the Act
aforementioned, hence amenable to the jurisdiction of the fora
under the said Act.
                                                                       8
     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            C
     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         D
     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     E
    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           F
    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            G
    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
                                                                       H
    578      SUPREME COURT REPORTS                   [2012] 4 S.C.R.


A         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
B '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:

c         " ........... 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
D         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
E         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."
F       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
G         itself is very wide. It applies to any service made available
          to potential users. The words 'any' and 'potential' are
          significant. Both are of wide amplitude. The word 'any'
          dictionarily means 'one or some or all'. In Black's Law
          Dictionary it is explained thus, "word 'any' has a diversity
H         of meaning and may be employed to indicate 'all' or 'every'
  NARNE CONSTRUCTION P. LTD. ETC. ETC. v.      579
UNION OF INDIA AND ORS. ETC. [T.S. THAKUR, J.]
   as well as 'some' or 'one' and its meaning in a given A
   statute depends upon the context and the subject-matter
   of the statute". The use of the word 'any' in the context it
    has been used in Clause (o) indicates that it has been used
   in wider sense extending from one to all. The other word
   'potential' is again very wide. In Oxford Dictionary it is B
   defined as 'capable of coming into being, possibility'. In
   Black's Law Dictionary it is defined as "existing in
   possibility but not in act. Naturally and probably expected
   to come into existence at some future time, though not now
   existing; for example, the future product of grain or treesc
   already planted, or the successive future instalments or
   payments on a contract or engagement already made." In
   other words service which is not only extended to actual
   users but those who are capable of using it are covered
   in the definition. The clause is thus very wide and extends D
  to any or all actual or potential users. But the legislature
  did not stop there. It expanded the meaning of the word
  further in modern sense by extending it to even such
  facilities as are available to a consumer in connection with
  banking, financing etc. Each of these are wide-ranging
  activities in day to day life. They are discharged both by E
  statutory and private bodies. In absence of any indication,
  express or implied there is no reason to hold that
  authorities created by the statute are beyond purview of
  the Act. When banks advance loan or accept deposit or
  provide facility of locker they undoubtedly render service. F
  A State Bank or nationalised bank renders as much
  service as private bank. No distinction can be drawn in
  private and public transport or insurance companies. Even
  the supply of electricity or gas which throughout the country
  is being made, mainly, by statutory authorities is included G
  in it. The legislative intention is thus clear to protect a
  consumer against services rendered even by statutory
  bodies. The test, therefore, is not if a person against whom
  complaint is made is a statutory body but whether the
                                                              H
    580       SUPREME COURT REPORTS                     (2012) 4 S.C.R.


A         nature of the duty and function performed by it is service
          or even facility."

                                                   (emphasis supplied)

       5. In the context of the housing construction and building
B activities carried on by a private or statutory body and whether
  such activity tantamounts to service within the meaning of clause
  (o) of Section 2(1) of the Act, the Court observed:

          "As pointed out earlier the entire purpose of widening the
c         definition is to include in it not only day to day buying and
          selling activity undertaken by a common man but even
          such activities which are otherwise not commercial in
          nature yet they partake of a character in which some
          benefit is conferred on the consumer. Construction of a
D         house or flat is for the benefit of person for whom it is
          constructed. He may do it himself or hire services of a
          builder or contractor. The latter being for consideration is
          service as defined in the Act. Similarly when a statutory
          authority develops land or allots a site or constructs a house
          for the benefit of common man it is as much service as by
E
          a builder or contractor. The one is contractual service and
          other statutory service. If the service is defective or it is not
          what was represented then it would be unfair trade practice
          as defined in the Act. Any defect in construction activity
          would be denial of comfort and service to a consumer.
F         When possession of property is not delivered within
          stipulated period the delay so caused is denial of service.
          Such disputes or claims are not in respect of Immovable
          property as argued but deficiency in rendering of service
          of particular standard, quality or grade. Such deficiencies
G         or omissions are defined in Sub-clause (ii) of Clause (r)
          of Section 2 as unfair trade practice. If a builder of a house
          uses substandard material in construction of a building or
          makes false or misleading representation about the
          condition of the house then it is denial of the facility or
H         benefit of which a consumer is entitled to claim value under
   NARNE CONSTRUCTION P. LTD. ETC. ETC. v.      581
 UNION OF INDIA AND ORS. ETC. [T.S. THAKUR, J.]
     the Act. When the contractor or builder undertakes to erect       A
     a house or flat then it is inherent in it that he shall perform
     his obligation as agreed to. A flat with a leaking roof, or
     cracking wall or substandard floor is denial of service.
     Similarly when a statutory authority undertakes to develop
     land and frame housing scheme, it, while performing               B
     statutory duty renders service to the society in general and
     individual in particular."

                                             (emphasis supplied)

     6. This Court further held that when a person applies for         C
allotment of building site or for a flat constructed by
development authority and enters into an agreement with the
developer or a contractor, the nature of the transaction is
covered by the expression 'service' of any description. The
housing construction or building activity carried on by a private      D
or statutory body was, therefore, held to be 'service' within the
meaning of clause (o} of Section 2(1) of the Act as it stood
prior to the inclusion of the expression 'housing construction'
in the definition of 'service' by Ordinance No.24 of 1993.
                                                                       E
     7-. In the light of the above pronouncement of this Court the
High Court was perfectly justified in holding that the activities
of the appellant-company in the present case involving offer of
plots for sale to its customers/members with an assurance of
development of infrastructure/amenities, lay-out approvals etc.
was a 'service' within the meaning of clause (o) of Section 2(1)       F
of the Act and would, therefore, Qe amenable to the jurisdiction
of the fora established under the statute. Having regard to the
nature of the transaction between the appellant-company and
its customers which involved much more than a simple transfer
of a piece of immovable property it is clear that the same             G
constituted 'service' within the meaning of the Act. It was not a
case where the appellant-company was selling the given
property with all advantages and/or disadvantages on "as is
where is" basis, as was the position in U. T. Chandigarh
                                                                       H
    582       SUPREME COURT REPORTS                  [2012] 4 S.C.R.


A Administration and Anr. v. Amarjeet Singh and Ors. (2009) 4
  SCC 660. It is a case where a clear cut assurance was made
  to the purchasers as to the nature and the extent of
  development that would be carried out by the appellant-
  company as a part of the package under which sale of fully
B developed plots with assured facilities was to be made in favour
  of the purchasers for valuable consideration. To the extent the
  transfer of the site with developments in the manner and to the
  extent indicated earlier was a part of the transaction, the
  appellant-company had indeed undertaken to provide a service.
c Any deficiency or defect in such service would make it
  accountable before the competent consumer forum at the
  instance of consumers like the respondents.

        8. This Court in Bangalore Development Authority v.
  Syndicate Bank (2007) 6 SCC 711, dealt with the nature of the
D relief that can be claimed by consumers in the event of refusal
  or delay in the transfer of the title of the property in favour of
  the allotteeslpurchasers and observed:

          "Where full payment is made and possession is delivered,
E         but title deed is not executed without any justifiable cause,
          the allottee may be awarded compensation, for
          harassment and mental agony, in addition to appropriate
          direction for execution and delivery of title deed."

        9. Suffice it to say that the legal position on the subject is
F fairly well-settled by the pronouncements of this Court and do
  not require any reiteration. The.High Court has correctly noticed
  the said pronouncements and applied them to the facts of the
  case at hand leaving no room for us to interfere with the answer
  given by it to the solitary question raised by the appellant-
G company.

         10. In the result, these appeals are hereby dismissed but
    in the circumstances without any order as to cost.

H D.G.                                          Appeals dismissed.