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Unit 13: Consumer Protection Act

as per the articles of association of the company. At the stage of application there is no purchase Notes
of goods for consideration and again the purchaser cannot be called the hirer of services for
consideration.
Service: The term ‘service’ is defined under Section 2(1)(o) as to mean service of any description
which is made available to potential users and includes, but not limited to the provision 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.

Passengers travelling by trains on payment of the stipulated fare charged for the ticket are
consumers and the facility of transportation by rail provided by the railway administration is a
service rendered for consideration as defined in the Act Subscribers of telephones would also be
consumer under the Act.
In Consumer Unity and Trust Society v. State of Rajasthan (First Appeal No. 2/89, order dated
15.12.1989), the National Commission, while hearing an appeal from the State of Rajasthan, held
that complaints against government hospitals cannot be entertained under the Act on the ground
that a person receiving treatment in such hospital is not a consumer as the patient does not hire
the services of the hospital. Moreover, the treatment provided is free of charge, and therefore, it
does not amount to service.

Did u know? As for what is meant by the expression ‘contract of personal service’, the
interpretations are varied. Broadly speaking, any service rendered under a contract of
personal service includes service rendered in a private capacity e.g. employee-employer
relationship.
Liability of Medical Officer Employed by a Hospital Rendering Service Free of Charge: The
medical officer who is employed in the hospital renders service on behalf of the hospital
administration and if the services as rendered by the hospital do not fall within the ambit of
Section 2(1)(o), being free of charge, the same service can not be treated as service under Section
2(1)(o) for the reason that it has been rendered by a medical officer in the hospital who receives
salary for employment in the hospital. There can be no direct nexus between the payment of the
salary to the medical officer by the hospital administration and the person to whom service is
rendered. The salary paid by the hospital administration to the employee medical officer could
not be regarded as payment made on behalf of the person availing the service as a consumer
under Section 2(1)(d) in respect of the service rendered to him. The service rendered by the
employee-medical officer to such a person would, therefore, continue to be service rendered
free of charge and would be outside the purview of Section 2(1)(o).
Taxes Paid by Consumers is ‘Consideration for Service’ Rendered Free of Charge in Government
Hospitals: The tax paid by the person availing the service at a Government hospital can not be
treated as a consideration or charge for the service rendered at the hospital and such service,
though rendered free of charge would not cease to be so because the person availing the service
happened to be a tax payer. The reason for this is plain. There are certain essential characteristics
of a tax which are evolved by courts. They are: (i) it is imposed under statutory power without
the taxpayers consent and the payment would be enforced by law; (ii) it is an imposition made
for public purpose without reference to any special benefit to be conferred on the payer of the
tax, and (iii) it is part of the common burden, the quantum of imposition upon the tax payer
depends generally upon his capacity to pay.

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