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Lourdes Society Snehanjali Girls Hostel and Another v. M/S H & R Johnson (India) Ltd. and Others

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 7223 of 2016)Decided 2 Aug 2016
Civil Appeal No. 7223 of 2016
Chief Justice T.S. Thakur · Justice V. Gopala Gowda · Justice R. Banumathi

Background

A registered charitable society running a girls' hostel for Adivasi students in Surat bought vitrified floor tiles that developed black and white spots after installation. An architect assessed the defect and resulting loss, and when the supplier company ignored a demand notice, the society filed a consumer complaint. The District Forum and the State Commission both found the tiles defective and awarded damages, but the National Consumer Disputes Redressal Commission reversed this on revision, holding the society was a "commercial establishment" and therefore not a "consumer" under the Consumer Protection Act, 1986.

Decision Breakdown

The Supreme Court held that the National Commission had exceeded its limited revisional jurisdiction under Section 21 of the Consumer Protection Act, 1986 by overturning the concurrent factual findings of the District Forum and State Commission without the statutory grounds (illegality, jurisdictional error, or failure to exercise jurisdiction) being present. It found the society was a genuine charitable institution, not a commercial entity, and that fees charged for hostel accommodation were for upkeep, not profit, so the society did qualify as a "consumer." The Court distinguished the precedent (M/s Kusumam Hotels) the National Commission had relied on, since that case involved an actual commercial hotel. It allowed the appeal, set aside the National Commission's order, and restored the District Forum's award (as affirmed by the State Commission), directing the respondents to pay the awarded damages with 9% interest within six weeks, plus Rs. 50,000 costs given the 14-year litigation history.

Lesson Learnt

A charitable or non-profit institution buying goods for its own use (not for resale or profit) generally qualifies as a "consumer" under consumer protection law, and appellate consumer forums cannot overturn concurrent factual findings of lower forums merely because they disagree, only for genuine jurisdictional error or illegality.

Official source (sci.gov.in)View Judgment (PDF)

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