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The Secretary, Ministry of Commerce & Ors. v. M/s Vinod and Company

Civil Appeal · 2019 INSC 750Decided 11 Jul 2019
Civil Appeal No. 5399 of 2019
Dr. Justice D.Y. Chandrachud · Justice M.R. Shah

Background

A company that had exported goods between 1988 and 1993 applied for a premium under a Replenishment (REP) import licence scheme tied to the government's Exim (import-export) policy. Before the premium could be paid, the government discontinued the scheme and declined to pay the claimed amount. The company filed a consumer complaint, and the District Consumer Forum, the State Commission, and finally the National Consumer Disputes Redressal Commission (NCDRC) all ruled in the company's favour, treating the denial of the premium as a deficiency in service. The Ministry of Commerce appealed to the Supreme Court, arguing that providing trade-policy incentives is not a "service" at all, so the consumer fora had no jurisdiction over the dispute in the first place.

Decision Breakdown

The Supreme Court examined the definitions of "consumer," "service," and "deficiency" under the Consumer Protection Act, 1986, and held that the Exim policy's incentive scheme is an instrument of the government's fiscal and trade policy, not a service rendered to exporters for consideration. Relying on its own precedent that a statutory examination board does not "serve" students who sit for an exam, the Court reasoned that a company availing itself of a government policy incentive is similarly not a consumer availing of a service. Because the underlying claim did not arise from a service-provider relationship, the consumer fora never had jurisdiction to entertain the complaint at all. The Court therefore allowed the Ministry's appeal and set aside the NCDRC's order, with no order as to costs.

Lesson Learnt

Not every benefit or incentive a citizen receives from the government counts as a "service" under consumer protection law: if a scheme is essentially a policy instrument (like a trade incentive) rather than a service rendered for consideration, a consumer forum has no jurisdiction to adjudicate disputes about it, and the claimant must pursue other legal remedies instead.

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

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