JUDGMENT
MARKANDEY KATJU, J.
This appeal by special leave has been filed against the impugned
judgment and order dated 24.10.2002 in R.P. No. 2167/02 of the
National Consumers Disputes Redressal Commission, New Delhi.
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2. Heard learned counsel for the parties and perused the record.
3. It appears that a complaint was filed before the District Consumer
Forum, Hazaribagh under Section 11 of the Consumer Protection Act
1986 (hereinafter referred to as the Act). The complaint was filed by the
respondent, Suresh Prasad Sinha on behalf of his minor son Rajesh
Kumar. In the said complaint it was mentioned that Rajesh Kumar
appeared in the Bihar Secondary School Examination in 1998. Rajesh
Kumar and another student Sunil Kumar Singh were allotted the same
Roll No. 496. Hence, the Centre Superintendent allotted to Rajesh
Kumar Roll No.496A and this was communicated to the Board office at
Patna. The result of Rajesh Kumar was not published in spite of several
letters written by him and hence he had to re-appear in the Board
Examination the following year, and thus he had to suffer a loss of one
year allegedly due to the fault of the Bihar School Examination Board
(hereinafter referred to as the `Board'). The result of Roll No.496A was
not declared and it is alleged that this was because Rajesh Kumar had
been given another Roll number. Hence the complainant prayed for
compensation from the District Consumer Forum.
4. In its written statement in reply the Board stated that the Consumer
Forum had no jurisdiction in the matter as the complainant was not a
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consumer, as defined in Section 2(1)(d) of the Act. It was also alleged
that on the application of the examinee the strong room was searched and
it was found that the serial number of his answer book of Advanced
Maths did not tally with the serial number in the attendance sheet.
While the answer book of the student found in the strong room was
bearing serial number 148774, the attendance sheet serial number was
148744. Hence, the result was not published.
5. The District Consumer Forum found that the complainant had filed
the Registration Receipt as well as the Admit Card, and the case of the
complainant was admitted so far as appearance of Rajesh Kumar in the
examination was concerned. It was held that if the serial number of the
answer book did not tally with that which was noted in the attendance-
sheet, that has to be explained by the Board and not by the student.
Hence the District Consumer Forum allowed the complaint and ordered
the Board to pay compensation of Rs.12,000/- with an interest of 12% to
the complainant.
6. Against the said order the Board filed an appeal before the State
Consumer Redressal Commission under Section 14 of the Act,which was
dismissed on 9.9.2002. In the order dated 9.9.2002, it has been again
stated in para 6 thereof that one of the contentions raised by the Board
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was that the complainant is not a consumer within the meaning of section
2(1)(d) of the Act. It seems that that plea was not, in fact, decided by the
State Consumer Commission.
7. The appellant Board then filed a further appeal before the National
Consumer Commission under Section 19 of the Act, which has been
dismissed by the impugned judgment dated 24.10.2002. Against the said
impugned judgment and order this appeal has been filed by the Board
under Section 23 of the Act.
8. The question that arises for our consideration is whether a
statutory School Examination Board comes within the purview of the
Consumer Protection Act. There is some confusion and divergence in the
decisions of the National Commission on this issue. In some cases, it has
been held that Examination Boards do not come within the purview of
the Act. In some other cases, the Commission has held that though
holding of examinations is a statutory function, issue of mark-sheets and
certificates etc., is an administrative function, and therefore, the
Examination Boards are amenable to the jurisdiction of consumer fora if
there is negligence amounting to deficiency in service, in such
consequential administrative functions.
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9. The definitions of the terms `service' and `deficiency' in clauses
(o) and (g) of Section 2 of the Act which are relevant, are extracted
below:
"Section 2(o): `Service' means service of any description which is
made available to potential users and includes, but not limited to, the
provisions of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy,
board or lodging or both, housing construction, entertainment,
amusement or the purveying of news or other information, but does
not include the rendering of any service free of charge or under a
contract of personal service;
Section 2(g): `Deficiency' means any fault, imperfection,
shortcoming or inadequacy in the quality, nature and manner of
performance which is required to be maintained by or under any law
for the time being in force or has been undertaken to be performed by
a person in pursuance of a contract or otherwise in relation to any
service."
According to the definition of 'consumer' in Section 2(d) of the Act, a
person who hires or avails of any services for a consideration, is a
consumer. The following category of service-availors will not be
consumers: (i) persons who avail any service for any commercial
purpose; (ii) persons who avail any free service; and (iii) persons who
avail any service under any contract of service. A consumer is entitled to
file a complaint under the Act if there is any deficiency in service
provided or rendered by the service-provider.
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10. The Board is a statutory authority established under the Bihar
School Examination Board Act, 1952. The function of the Board is to
conduct school examinations. This statutory function involves holding
periodical examinations, evaluating the answer scripts, declaring the
results and issuing certificates. The process of holding examinations,
evaluating answer scripts, declaring results and issuing certificates are
different stages of a single statutory non-commercial function. It is not
possible to divide this function as partly statutory and partly
administrative. When the Examination Board conducts an examination in
discharge of its statutory function, it does not offer its "services" to any
candidate. Nor does a student who participates in the examination
conducted by the Board, hires or avails of any service from the Board for
a consideration. On the other hand, a candidate who participates in the
examination conducted by the Board, is a person who has undergone a
course of study and who requests the Board to test him as to whether he
has imbibed sufficient knowledge to be fit to be declared as having
successfully completed the said course of education; and if so, determine
his position or rank or competence vis-`-vis other examinees. The
process is not therefore availment of a service by a student, but
participation in a general examination conducted by the Board to
ascertain whether he is eligible and fit to be considered as having
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successfully completed the secondary education course. The examination
fee paid by the student is not the consideration for availment of any
service, but the charge paid for the privilege of participation in the
examination.
11. The object of the Act is to cover in its net, services offered or
rendered for a consideration. Any service rendered for a consideration is
presumed to be a commercial activity in its broadest sense (including
professional activity or quasi-commercial activity). But the Act does not
intended to cover discharge of a statutory function of examining whether
a candidate is fit to be declared as having successfully completed a
course by passing the examination. The fact that in the course of conduct
of the examination, or evaluation of answer-scripts, or furnishing of
mark-sheets or certificates, there may be some negligence, omission or
deficiency, does not convert the Board into a service-provider for a
consideration, nor convert the examinee into a consumer who can make a
complaint under the Act. We are clearly of the view that the Board is not
a `service provider' and a student who takes an examination is not a
`consumer' and consequently, complaint under the Act will not be
maintainable against the Board.
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12. The learned counsel for the respondent placed considerable
reliance on the decision of this Court in Lucknow Development Authority
vs. M. K. Gupta [1994 (1) SCC 243] to contend that a statutory authority
that offers any kind of service for which a fee is charged, will be
amenable to the jurisdiction of the consumer fora. He relied upon the
following passages from paras 4 and 6 in support of his contention :
to hold that authorities created by the Statute are beyond purview of
the Act..... 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 nature of the duty and function
performed by it is service or even facility". (Vide para 4).
.......the entire purpose of widening the definition (of `service' under
section 2(o) of the Act) 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". (vide para 6)
13. Let us examine whether the said decision has any relevance. To
understand a decision correctly it is necessary to first know the facts of
the case. The facts in Lucknow Development Authority were that even
after the payment of the entire amount by the respondent for the flat
which was allotted to him, possession was not given to him and the work
of constructing the flat was still incomplete, although the time for
handing over the possession had expired. In these circumstances, the
National Consumer Commission ordered possession of the flat to be
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handed over without delay after completing the construction work and it
further directed payment of 12% simple interest on the deposit made by
the respondent. The question that was considered was whether any act or
omission by the Development Authority relating to housing activity such
as delay in delivery of possession of the houses to the allottees, non-
completion of the flat within the stipulated time or defective or faulty
construction etc. will come within the purview of the Act. The
submission before this Court in that case was that Statutory Development
Authorities do not come within the purview of the Act. While negativing
the said contention, this Court observed that activities which are not
otherwise commercial, but professional or service oriented in nature will
come within the purview of the definition of `service' in Section 2(o) of
the Act. But the said observation is of no relevance. The Board is not
carrying on any commercial, professional or service-oriented activity. No
`benefit' is conferred nor any `facility' provided by the Board for any
consideration. Therefore, the said decision is inapplicable.
14. The courts should guard against the danger of mechanical
application of an observation without ascertaining the context in which it
was made. In C.I.T vs. Sun Engg. Works (P) Ltd. - 1992(4) SCC 363
(vide para 39) this Court observed :
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"It is neither desirable nor permissible to pick out a word or a
sentence from the judgment of this Court, divorced from the context
of the question under consideration and treat it to be complete `law'
declared by this Court. The judgment must be read as a whole and
the observations from the judgment have to be considered in the light
of the questions which were before this Court. A decision of this
Court takes its colour from the questions involved in the case in
which it is rendered and while applying the decision to a later case,
the courts must carefully try to ascertain the true principle laid down
by the decision of this Court and not to pick out words or sentences
from the judgment, divorced from the context of the questions under
consideration by this Court, to support their reasonings."
It is also necessary to keep in mind the following principles laid down in
Government of Karnataka & Ors. vs. Gowramma & Ors. (AIR 2008 SC
863) with reference to precedential value of decisions:
"Reliance on the decision without looking into the factual background
of the case before it is clearly impermissible. A decision is a precedent
on its own facts. Each case presents its own features. It is not
everything said by a Judge while giving a judgment that constitutes a
precedent. The only thing in a Judge's decision binding a party is the
principle upon which the case is decided and for this reason it is
important to analyse a decision and isolate from it the ratio decidendi.
According to the well-settled theory of precedents, every decision
contains three basic postulates (i) findings of material facts, direct and
inferential. An inferential finding of facts is the inference which the
Judge draws from the direct, or perceptible facts; (ii) statements of the
principles of law applicable to the legal problems disclosed by the
facts; and (iii) judgment based on the combined effect of the above. A
decision is an authority for what it actually decides. What is of the
essence in a decision is its ratio and not every observation found
therein nor what logically flows from the various observations made in
the judgment. The enunciation of the reason or principle on which a
question before a Court has been decided is alone binding as a
precedent. (See: State of Orissa v. Sudhansu Sekhar Misra and Ors.
(AIR 1968 SC 647) and Union of India and Ors. v. Dhanwanti Devi
and Ors. (1996 (6) SCC 44). A case is a precedent and binding for
what it explicitly decides and no more. The words used by Judges in
their judgments are not to be read as if they are words in an Act of
Parliament. In Quinn v. Leathem (1901) AC 495 (H.L.), Earl of
Halsbury LC observed that every judgment must be read as applicable
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to the particular facts proved or assumed to be proved, since the
generality of the expressions which are found there are not intended to
be exposition of the whole law but governed and qualified by the
particular facts of the case in which such expressions are found and a
case is only an authority for what it actually decides.
Courts should not place reliance on decisions without discussing as to
how the factual situation fits in with the fact situation of the decision
on which reliance is placed. Observations of Courts are neither to be
read as Euclid's theorems nor as provisions of the statute and that too
taken out of their context. These observations must be read in the
context in which they appear to have been stated. Judgments of Courts
are not to be construed as statutes. To interpret words, phrases and
provisions of a statute, it may become necessary for judges to embark
into lengthy discussions but the discussion is meant to explain and not
to define. Judges interpret statutes, they do not interpret judgments.
They interpret words of statutes; their words are not to be interpreted as
statutes.
The following words of Lord Denning in the matter of applying
precedents have become locus classicus:
Each case depends on its own facts and a close
similarity between one case and another is not enough
because even a single significant detail may alter the
entire aspect, in deciding such cases. One should
avoid the temptation to decide cases (as said by
Cardozo) by matching the colour of one case against
the colour of another. To decide therefore, on which
side of the line a case falls, the broad resemblance to
another case is not at all decisive.
*** *** ***
Precedent should be followed only so far as it marks
the path of justice, but you must cut the dead wood
and trim off the side branches else you will find
yourself lost in thickets and branches. My plea is to
keep the path to justice clear of obstructions which
could impede it."
(emphasis supplied)
15. In Sarva Shramik Sanghatana (K.V), Mumbai vs. State of
Maharashtra & Ors. - AIR 2008 SC 946, this Court cited the following
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passage from Quinn v. Leathem [1901 AC 495] with approval :
"Now before discussing the case of Allen v. Flood
(1898) AC 1 and what was decided therein, there
are two observations of a general character which
I wish to make, and one is to repeat what I have
very often said before, that every judgment must
be read as applicable to the particular facts proved,
or assumed to be proved, since the generality of
the expressions which may be found there are not
intended to be expositions of the whole law, but
are governed and qualified by the particular facts
of the case in which such expressions are to be
found. The other is that a case is only an authority
for what it actually decides. I entirely deny that it
can be quoted for a proposition that may seem to
follow logically from it. Such a mode of
reasoning assumes that the law is necessarily a
logical Code, whereas every lawyer must
acknowledge that the law is not always logical at
all."
16. In Bhavnagar University vs. Palitana Sugar Mills Pvt. Ltd - (2003)
2 SCC 111 (vide paragraph 59), this Court observed :
"It is well settled that a little difference in facts or additional facts
may make a lot of difference in the precedential value of a decision."
17. As held in Bharat Petroleum Corporation Ltd. & another vs.
N.R.Vairamani & another - (AIR 2004 SC 4778), a decision cannot be
relied on without disclosing the factual situation. In the same judgment
this Court also observed:-
"Courts should not place reliance on decisions without discussing
as to how the factual situation fits in with the fact situation of the
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decision on which reliance is placed. Observations of Courts are
neither to be read as Euclid`s theorems nor as provisions of the
statute and that too taken out of the context. These observations
must be read in the context in which they appear to have been
stated."
(emphasis supplied)
18. We have referred to the aforesaid decisions and the principles laid
down therein, because often decisions are cited for a proposition without
reading the facts of the case and the reasoning contained therein.
19. For the reasons mentioned above, we are of the view that the Bihar
School Examination Board is not rendering any `service' as defined
under the Consumer Protection Act, 1986. The appeal is, therefore,
allowed. The impugned orders of the Consumer Fora are set aside. No
costs.
C.A. Nos. 676/2006, C.A. No. 1739/2006, C.A. No. 1764/2006, C.A.
No. 2236/2006, C.A. No. 2476/2006, C.A. No. 3718/2005 & C.A
No.6032/2009 @ SLP(C) No. 2844/2006
20. Leave granted.
21. In view of the order passed in Civil Appeal No. 3911/2003, these
appeals stand allowed in terms of the said decision. The impugned orders
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of the Consumer Fora are set aside and the complaints filed by the
respondents against the Board or University are held to be not
maintainable. No costs.
.................................J.
(R. V. Raveendran)
.................................J.
(Markandey Katju)
New Delhi;
September 4, 2009.
