This case analysis is Written by Akanksha Chowdhury from Amity University, Kolkata.

Case Number



1994 SCC (1) 243


Sahai, R.M. (J)

Decided on

5th November, 1993

Relevant Act/Section

Section 21, 16 and 11 and 2(C) of the Consumer Protection Act, 1986

Brief Facts of the Case

This case is basically vested on one argument whether the Land Development Authorities and Housing come under the ambit of Consumer Protection Act,1986 and also in the amendments which came before 1993. The case was fought in the Supreme Court with an in-depth analysis. The section which was mainly focused in this case was section 2(1)(o) which mentioned about the definition of the consumer and the various other ambits which comes under it. The case was filed by the Development Authority in order to get an answer whether they were included in the definition of the consumer as per mentioned in the section of the act and thus they can claim for the damages of the goods which they had faced from the National Commission depending upon the amount of the damages which they had faced actually. The Plaintiff had suffered immense loss in respect to certain goods and because of which they wanted to approach the commission for the compensation of the damages suffered by them at that time. But they were not allowed to claim for the damages because the contention was made by the defendants that Land Development and Housing do not come under Consumer Protection Act, 1986 and also in the amendments that were made before 1993. In this particular case, the court had given a lot of analysis in the definition of the consumers and gave a really fair judgement in order to provide justice to the affected party.

Ratio Decidendi of the Case

This particular case is based on the Principles of Consumer Protection Act, 1986.


  1. Whether the rights and powers of the National Commission in order to hold all the statutory authorities is accountable for omissions and also award damages?
  2. Whether there is any liability of the state in the case of torts: Sovereign and Non-Sovereign Functions?
  3. Whether there has to be any compensation given for loss and injury even in the cases which results out of any actions that are authorised by law and are carried out without any negligence made?
  4. Whether the acts which are done in bad faith result in absolute liability on the part of the employee?
  5. Whether the compensation has to be made not only on the basis of the value of the goods but also on the damages for the injustices suffered?


The Judgement given by the Court was fair and also provided justice to the plaintiff regarding the damages faced by them. The court had looked into the definition of the consumer and stated that the Land Development Authority and the Housing Sector do come under the definition of the Consumer Protection Act, 1986 and also, the statutory boards like the State Commission, National Commission and District Commission are actually entitled to entertain the cases of these sectors and the plaintiffs can avail the services like banking, finance etc. The Court also took help from various other important cases which come under this matter. The main motive of the consumer protection act is to provide justice to the consumers who have faced a lot of trouble and thus have a demand for strict compensation so as to get justice soon. Also, it came into notice that the builders, building or construction activities came under the ambit of the new amendments too which were made in the year 1993. The appellants had stated that they provide services to the consumers by providing them houses to stay and with luxurious buildings. But the Supreme Court had clearly rejected this contention and said that services mean any sort of work done for the actual benefit of the consumers and not the construction of the buildings or skyscraper apartments. All such activities were discharged by statutory as well as private authorities. The supreme court while agreeing that the amendment did not have retrospective effect ruled that ‘housing construction’ was added as a matter of abundant caution as housing as a service was already there in the Act prior to the amendment. Likewise, in respect of the inclusion of the clause ‘avail’ in the 1993 amendment, the supreme court ruled that this was added in the Act only to dispel any doubt that a consumer means a person who not only hires but also avails of any facility for consideration. Finally, the court ruled that the Commission had all the rights under the Act to award compensation not only for deficient services but also for harassment and agony caused to a consumer. Citing various case laws, it was held that the State is liable to compensate for loss or injury suffered by a citizen due to arbitrary actions of its functionaries. It is now accepted law that even for bona fide action the State is liable to compensate if that action causes loss or injury to a person. Now there is no distinction between sovereign and non-sovereign functions in determining the liability of the State because under our constitution sovereignty vests in the people. No functionary of the State can claim immunity except to the extent provided in the statute itself. Thus, the supreme court was of the opinion that all public authorities are accountable for their actions. In the end, it was held that the judgement which was given by the Supreme Court had upheld the actual principles as per the RULE OF LAW. By giving the judgement, they provided a serious justice which was needed by the plaintiffs because of the amount of loss that they had suffered. By ordering the Lucknow Development Authority to fix their compensation amount and all other things from the concerned authorities, the court had set up a real good standard. It is the right of the plaintiff to raise their voice whenever they face any injustice and it should not be violated by anyone unless and until there is something serious.

Latest Posts


Leave a Reply

Your email address will not be published. Required fields are marked *