In a significant legal development, the Supreme Court of India has delivered a landmark judgment concerning consumer jurisdiction under the Exim policy. This ruling has far-reaching implications for individuals making claims related to exports under the policy. The case, which pertains to the period of April 1988 to March 1991, holds importance for understanding the scope of consumer rights in the context of government benefits provided under the Exim policy.
Facts
- The respondent applied for an REP license with a premium entitlement of 20% on exports under the Exim policy.
- The additional Chief Controller held the premium in abeyance from 1988 to 31 March 1993.
- The respondent carried out exports during this period.
- The District Consumer Forum allowed the claim for Rs 1,23,223 with compensation for mental agony and legal expenses.
- The SCDRC and the National Consumer Disputes Redressal Commission upheld the decision.
- The appeal before the Ministry of Commerce and State Consumer Disputes Redressal Commission was rejected.
- Since the REP license scheme was discontinued, the premium remained unpaid.
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Issue
- The issue at hand is whether the government’s provision of benefits under the Exim policy can be considered a service.
- The question is whether individuals making claims under an REP license can be deemed consumers under the Consumer Protection Act, 1986.
- The case pertains to claims made under the import and export policy for April 1988 to March 1991.
- The determination of whether these claimants qualify as consumers is crucial in determining the jurisdiction of consumer fora in this matter.
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Arguments
- Mr. D L Chidanand represented the appellant and challenged the decision of the fora on specific grounds.
- The Exim policy is framed as part of the fiscal policy of the Union government to regulate foreign trade.
- The main aim of the Exim policy is to promote exports and control imports through regulatory measures and incentives to exporters.
- The benefits given to exporters do not fall under the definition of ‘service’ as per the Act.
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Analysis
- A person availing a service for commercial purposes is not considered a consumer.
- Consumer dispute is defined as a dispute where the person against whom a complaint is made denies or disputes the allegations.
- A complainant is defined as a ‘consumer’ in the context.
- A ‘consumer’ is defined as any person who buys goods or hires services for consideration, excluding those obtaining goods for resale or commercial purposes.
- The term ‘deficiency’ refers to faults, imperfections, or inadequacies in the quality or manner of service based on legal requirements or contractual obligations.
- Use of goods and services solely for self-employment is not considered ‘commercial purpose’.
- ‘Service’ is defined as any service made available to users, including but not limited to banking, insurance, and entertainment.
- A consumer includes a beneficiary of services, not just the person who directly hires or avails of the service.
- A ‘defect’ is defined as any fault in the quality, quantity, or standard of goods as required by law or under a contract.
- Government formulates Exim policy to stimulate industrial growth, import substitution, and export promotion.
- Government provides regulatory regimes and incentives as part of the policy, but this does not make the government a service provider.
- The objective of the import policy is to encourage exports by providing essential inputs through REP Licences.
- State may provide incentives with modalities for compliance and penalties for breach.
- Exim policy is part of the fiscal policy to control foreign trade and stimulate industrial growth.
- Licences for import of goods were freely transferable without endorsement or permission from licensing authority
- Transfer could be done through a simple letter from transferor to transferee
- Transferee became the lawful holder of the licence and could import goods or further transfer
- Board of Examinations conducting state exams was held not to be a service provider under Consumer Protection Act
- Candidates participating in exams were not considered consumers as they were undergoing a test of knowledge
- Examination fee was not for availing services but for participating in the exam
- Issue in Vikas Sales Corporation case was whether transfer of an REP licence or Exim scrip constitutes a sale of goods under state sales tax legislation
- Absence of jurisdiction in the District Forum for complaints under the Act regarding claims arising from an REP license governed by the Exim policy.
- Analogous principle to govern the present case based on the same reasons.
- Decision to allow the appeal on the basis of lack of jurisdiction in the District Forum.
Decision
- The judgment of the NCDRC dated 4 April 2012 is set aside.
- Any pending applications are disposed of.
- No costs are awarded.
Case Title: THE SECRETARY, MOC, NEW DELHI-1 . Vs. M/S VINOD AND COMPANY
Case Number: C.A. No.-005399-005399 / 2019
