[2009] 13 (ADDL.) S.C.R. 1239

BIHAR SCHOOL EXAMINATION BOARD A v.

SURESH PRASAD SINHA (Civil Appeal No. 3911 of 2003)

SEPTEMBER 4, 2009 8

[R.V. RAVEENDRAN AND MARKANDEY KATJU, JJ.)

Consumer Protection Act, 1986: s.2(d) - Consumer - Definition of - Discussed - Examination Board - Held: Is not a service provider - While conducting examination, Board c discharging statutory function and not offering any services to candidates - Since candidate participating in the examination conducted by Board is not a consumer, complaint against the Board under the Act would not be ..,,. maintainable.

Precedent: Mechanical application of observations made in judgment - Reliance on the decision without looking into the factual background of the case is impermissible.

Complainant is the father of a student who appeared E in the Bihar Secondary School Examination. The result of his son was not published and he reappeared in the

>-- Examination in the following year. He filed a complaint before the District Forum praying for compensation for . loss of one year due to fault of Board. The District Forum F

allowed the complaint and ordered the Board to pay compensation of Rs. 12,000. The State Commission upheld the order of District Forum. National Commission affirmed the same. Hence the 'present appeal.

Allowing the appeal, the Court G

HELD: 1. According to the definition of 'consumer' in Section 2(d) of the Consumer Protection Act, a person

1239 H

A 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 B 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. f- [Para 9) [1246-A-C]

2. 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 of periodical examinations, evaluating the answer scripts, declaring the -i results and issuing certificates. The process, of holding D 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 fction as partly statutory and partly administrative. When the Examination Board E 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 F 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 ,.

~ G course of education; and if so, determine his position or rank or competence vis-a-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

PRASAD SINHA

> eligible and fit to be considered as having successfully A

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. [Para 10] [1246-C-H; 1247-A-B] B

3. 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 C the Act does not intend 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- D 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. The Board is E not a 'service provider' and a student who takes an

1>-- examination is not a 'consumer' and consequently,

complaint under the Act is not maintainable against the Board. The Board is not carrying on any commercial, professional or service-oriented activity. No 'benefit' is F conferred nor any 'facility' provided by the Board for any consideration. [Paras 11 and 13] (1247-8-E; 1248-H; 1249- A]

Lucknow Development Authority v. M. K. Gupta 1994 (1) G

A. SCC 243 - held inapplicable.

4. The courts should guard against the danger of mechanical application of an observation without ascertaining the conte~ in which it was made. Reliance on the decision without looking into the factual H

A background of the case before it is clearly impermissible. "'

A decision is a precedent on its own facts. Each case presents its own features. 1t is not everything said by a Judge while giving a judgment that constitutes a precedent _The only thing in a Judge's decision binding B 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. A decision cannot be relied on without disclosing the factual situation. + [Paras 14 and-17] [1247-A-E; 1248-H; 1249-A] c C./. T v. Sun Engg. Works (P) Ltd. 1992 (4) SCC 363; Government of Kamataka & Ors. v. Gowramma & Ors. AIR 2008 SC 863; SaNa Shramik Sanghatana (K. VJ, Mumbai v.

State of Maharashtra & Ors. AIR 2008 SC 946; Quinn v.

Leathern 1901 AC 495; Bhavnagar University v. Palitana D Sugar Mills Pvt. Ltd (2003) 2 SCC 111; Bharat Petroleum ~

Corporation Ltd. & another v. N.R. Vairamani & another AIR 2004 SC 4778, relied on.

5. The Bihar School Examination Board is not E rendering any 'service' as defined under the Consumer Protection Act, 1986. [Para 19) [1253-A] ·

Case Law Reference:

1994 (1) sec 243 held inapplicable Para 12 F 1992 (4) sec 363 relied on Para 14

AIR 2008 SC 863 relied on Para 14

AIR 2008 SC 946 relied on Para 15

1901 AC 495 relied on Para 15

_..,_

(2003) 2 sec 111 relied on Para 16 , l

AIR 2004 SC 4778 relied on Para 17

H CIVIL AP PELLA TE JURISDICTION : Civil Appeal No.

BIHAR SCHOOL EXAMINATION ROARD v. SURESH 1243

PRASAD SINHA

> 3911 of 2003.

From the Judgment & Order dated 24.10.2002 of the National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 2167 of 2002.

WITH

C.A. No. 676,1739,1764,2236,2476,3718, 6032, SLP (C) No. -+ 2844 of 2006.

Manish Kumar, Vimla Sinha, Gopal Singh, Atul Jha, T.M.

C Bhagalpuri and Naresh Kumar for the Appellant.

S.K. Bhattacharya, Ugra Shankar Prasad, Respondent-in- Person and K. Sarada Devi for the Respondent.

The Judgment of the Court was delivered by

MARKANDEY KAT JU, J.1. 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. 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 F 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 G 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 H

A 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 B had been given another Roll number. Hence the comelainant 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 + C complainant was not a consumer, as defined in Section 2(1)(d) of the Act. It was also alleged that oq 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 D bearingserial 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 E 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 attendancesheet, that has to be explained by the Board and not by the _..

F 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 G 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 was that the complainant .i 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 H Consumer Commission.

PRASAD SINHA [MARKANDEY KAT JU, J.]

7. The appellant Board then filed a further appeal before A ... the National Consumer Commission urer Section 19 of th$ Act, which has been dismissed by th impugned judgmen~ 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

-'t a statutory School Examination Board comes within the purview of the Consumer Protection Act. There is some confusibn an~ divergence in the decisions of the National Commission on this c 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 examination~ is a statutory function, issue of mark-sheets and certificates etc.l .... is an administrative function, and therefore, the Examination Boards are amenable to the jurisdiction of consumer fora if D ...,,.

there is negligence amounting to deficiency in service, in such consequential administrative functions.

9. The definitions of the terms 'service' and 'deficiency' in clauses (o) and (g) of Section 2 of the Act which are relevant, E are extracted below:

"Section 2(o): 'Service' means service of any description which is made available to potential users and includes1 but not limited to, the provisions of facilities in connection

F 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; G

Section 2(g): 'Deficiency' means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintaineq by or under any law for the time being in force or has beeri H

A 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

B consideration, is a consumer. The following category of service- availers will not be COl]lsumers: (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

"Icontract of service. A consumer is entitled to file a complaint c under the Act if there is any deficiency in service provided or rendered by the service-provider.

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 ...;- D 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.

E 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

F or avails'of any service from the Bocird for a consideration. On the other hand, a candiC:late 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

G declared as having successfully completed the said course of education; and if so, determine his position or rank or competence vis-a-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

H whether he is eligible and fit to be considered as having

BIHAR SCHOOL EXAMINAllON BOARD v. SURESH 1247

PRASAD SINHA [MARKANDEY KAT JU, J.]

successfully completed the secondary education course. The A 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 B 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 quasicommercial activity). But the Act does not intended to cover discharge of a statutory function of examining whether a

candidat~ is fit to be declared as having successfully C completed a course by passing the examination. Th~ 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 D 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 consequntly, complaint under the Act will not be maintainable against the E Board.

12. The learned counsel for the respondent placed considerable reliance on the decision of this Court in Lucknow Development Authority v. M. K. Gupta [1994 (1) SCC 243] to F 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 G 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 H

<I)..

A statutory body but whether the nature of the duty and function perfonned by it is service or even facility". (Vide ... para 4) .

... .... the entire purpose of widening the definition (of

B '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 c 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 D 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 E possession of the flat to be 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 ~

F 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

G 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' A in Section 2(o) of the Act But the said observation is -of no

H relevance. The Board is not carrying on any commercial,

PRASAD SINHA [MARKANDEY KAT JU, J.]

professional or service-oriented activity. No 'benefit' is A 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 8 the contet in which it was made. In C./. T v. Sun Engg. Works (P) Ltd. - 1992(4) SCC 363 (vide para 39) this Court observed:

"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 and1 C 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 D 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 E consideration by this Cort. to support their reasonings."

It is also necessary to keep in mind the following principles laid , down in Government of Kamataka & Ors. v. Gowramma & Ors. (AIR 2008 SC 863) with reference to precedential value of F 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 G 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 . H

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 qbservation 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) sec 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.

Leathern (1901) AC 495 (H.L.), Earl of Halsbury LC observed 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 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.

G 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 H statutes. To interpret words, phrases and provisions of a

) ,

....{

PRASAD SINHA [MARKAND[Y KAT JU, J.] """!

.. statute, it may become necessary for judges to embark into A 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 B

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 detail1 c 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!

D broad resemblance to another case is not at all decisive . ..

*** *** ***

Precedent should be followed only so far as it marks E

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

1 keep the path to justice clear of obstructions which • could impede it. n F

(emphasis supplied)

15. In Sarva Shramik Sanghatana (K. VJ, Mumbai v. State of Maharashtra & Ors. - AIR 2008 SC 946, this Court cited the G following passage from Quinn v. Leathern (1901AC495] 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, H

~ A 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; B 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 c 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. n

16. In Bhavnagar University v. Palitana Sugar Mills Pvt.

D Ltd - (2003) 2 SCC 111 (vide paragraph 59), this Court observed:

"It is well settled that a little difference in Tacts or additional facts may make a lot of difference in the precedential value of a decision.n E

17. As held in Bharat Petroleum Corporation Ltd. & another v. 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:-

F "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 G out of the context. These observations must be read in the context in which they appear to have been stated. n A.

(emphasis supplied)

18. We have referred to the aforesaid decisions and the H principles laid down therein, because often decisions are cited

PRASAD SINHA [MARKANDEY KAT JU, J.)

_.. for a proposition without reading the facts of the case and the A 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.

B 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. 6032/2009 @ SLP(C) No. 2844/2006 C

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 D decision. The impugned orders 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.

D.G.

Appeal allowed.