Supreme Court to Decide if Charitable Trusts Can Claim Compensation Under Consumer Protection Act
Last Updated on September 14, 2024 by Srijan Raj
Supreme Court will hear on September 18 the question of whether a charitable trust can maintain an action and claim compensation under the Consumer Protection Act, 1986 as a ‘consumer’.
The issue was referred to a larger bench by a division bench of Justice UU Lalit and Justice Aniruddha Bose in 2019. The case arose when the District Consumer Disputes Redressal Forum, Jodhpur, accepted the claim of a complainant trust and directed the respondents to pay Rs. 5,90,000 in compensation along with 9 percent interest per annum. However, the State Consumer Disputes Redressal Commission in Jaipur overturned this decision, ruling that a trust could not be classified as a ‘consumer’ under the Act. This was upheld by the National Consumer Disputes Redressal Commission.
The complainant trust approached the Supreme Court, relying on the Supreme Court’s decision in Pratibha Pratisthan v. Canara Bank (2017), which held that a trust is not a ‘person’ and therefore not a ‘consumer’ under the Act. However, the division bench opined that the inclusive definition of ‘person’ under Section 2(1)(m) of the Consumer Protection Act could potentially cover a trust as well.
The bench also referred to Ramanlal Bhailal Patel v. State of Gujarat, where it was noted that the term ‘person’ includes entities recognized by law as capable of having rights and duties.
