Friday, September 25, 2009

Bihar School Examination Board Versus Suresh Prasad Sinha

Consumer – Service - Examination Board is not rendering any `service' as defined under
the Consumer Protection Act, 1986.
Negligence/deficiency in service — Consumer Protection Act, 1986 — Section 2(1)(o) — 'service' — complaint filed by the respondent on behalf of his minor son — son of the respondent and another student allotted the same Roll No. — Centre Superintendent allotted a new Roll No. to minor child and communicated for the same to the Board office — result not published and hence the child re-appeared in the Board Examination and suffered a loss of 1 year — District Consumer Forum ordered the Board to pay compensation of Rs. 12,000/- with an interest @12% to the complainant — whether a statutory School Examination Board comes within the purview of the Consumer Protection Act? — No — any service rendered for a consideration is presumed to be a commercial activity — in course of conduct of the examination, evaluation of answer-scripts, furnishing marksheets, 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 — impugned orders of the Consumer Fora set aside — complaint under CP Act, 1986 not be maintainable against Board — appeal allowed with no costs. 

 IN THE SUPREME COURT OF INDIA

  CIVIL APPELLATE JURISDICTION

  CIVIL APPEAL NO. 3911 of 2003

  Bihar School Examination Board .. Appellant (s) -versus-

Suresh Prasad Sinha .. Respondent (s) WITH

 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

  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. 2

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 3

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 4

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.

 5

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.

  6

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 7

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.

  8

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 : "In absence of any indication, expressed or
implied there is no reason 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 9

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 :

  10

  "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 11

  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 12

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 13

  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 14

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.
 IN THE SUPREME COURT OF INDIA

  CIVIL APPELLATE JURISDICTION

  CIVIL APPEAL NO. 3911 of 2003

  Bihar School Examination Board .. Appellant (s) -versus-

Suresh Prasad Sinha .. Respondent (s) WITH

 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

  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. 2

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 3

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 4

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.

 5

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.

  6

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 7

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.

  8

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 : "In absence of any indication, expressed or
implied there is no reason 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 9

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 :

  10

  "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 11

  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 12

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 13

  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 14

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.

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