Services covered by the Consumer Protection

Act, 2019
By Rachit Garg - June 6, 2021

Image Source - https://rb.gy/c8syyk

This article has been written by Anagha S S.

Table of Contents 
1. Introduction
2. Banking
3. Insurance
4. E-commerce
5. Telecom sector
6. Electricity sector
7. Housing and construction service
8. Transport service
9. Education
10. Gas cylinder or service in liquified petroleum gas
11. Chit fund business
12. The exception to the definition of service
13. References

Introduction
Consumer Protection Act, 2019 expands the concepts that would be covered by the Act,
for example, product liability, e-commerce, etc. The protection provided by the Act is for
the goods bought or service utilized.[1] Section 2(o) of the Consumer Protection Act,
1986 defines services, while Section 2(42) of the current Act defines the same.

Service means any kind of service which is made available to the consumers for their use
for payment of consideration. The definition can be divided into three parts: descriptive
part, inclusive part and exclusionary part. 

The descriptive part says that service includes ‘any’ kind of service, which has been
availed by a potential consumer. This means that any and every kind of service shall
come within the definition. The inclusive part is the list of services that have been
mentioned in the statute. CPA, 2019 includes e-commerce as a new service under the
statute. The telecom sector was considered as a service and has now been explicitly
mentioned in the statute now. The exclusionary part is that part to determine those
services whether hired for free or not and for personal service or not.

Banking
Banking is a transaction dealing with money and there are a number of banks that have
been set up to provide services relating to money, in the form of cheques or loans or
accepting deposits, lockers facility, investment, etc.[2] Any service which is provided by
banks is not free of cost and there will be some percentage of transaction fees deducted
by them.[3] 

Thus, the service is not free of charge. A basic activity like opening a savings account is
considered to be a service rendered by banks.[4] The bank shall have a creditor-debtor
relationship where the bank gives loans or lends money on overdraft facilities or vice
versa.[5] Reserve Bank of India has also been considered to fall within the definition of
service. In this case, RBI was held liable for deficiency of service as there was a delay in
providing loans to the employees for their housing facilities.[6]

Insurance
Insurance is an agreement between one party, the insurer, to indemnify the insured in
cases of any financial loss according to the terms and conditions of the contract. If the
insurance company defrauds the insured or due to negligence from the company, the
loss has been incurred by the beneficiaries, then the insurance company can be sued.[7] 

For example, if the goods are lost in transit by a transport company, then the insurance
company can claim the loss incurred by the traveller due to the negligence of the
transport company.[8] 

In a recent case[9], the definition of consumer who availed the services of insurance has
been interpreted to include beneficiaries of the agreement as well. The Supreme Court
has held that the coverage given by the insurance agreement can include more people
than just the insured.

E-commerce
E-commerce is a new concept that has been included in the CPA, 2019. E-commerce is
buying or selling goods or utilizing services online through digital media or electronic
service providers.[10] The services provided by e-commerce entities may not be
according to the quality assured by them and thus protection has to be given to the
consumers.[11] 
The Consumer Protection (E-Commerce) Rules, 2020 was passed recently in line with the
CPA, 2019 to facilitate the online services provided.[12] The rules extend to those e-
commerce entities which do not have a company registered in India but provides
services in India. It is mandatory for all the e-commerce entities to mention their name,
address, address of the website, contact details like mail address, number.[13] 

A grievance redressal system has to be put in place by every e-commerce entity and a

grievance redressal officer has to be appointed to confirm the grievance within 2 days
and provide a solution for the grievance within 30 days.[14] Consent of the consumers for
availing services cannot be taken automatically but has to be given by consumers
explicitly.[15] The cancellation charges imposed by e-commerce entities should be
equivalent to the amount they have incurred due to the cancellation.[16] 

E-commerce entities have been differentiated as e-commerce inventory entities that

directly provide services to the consumers and e-commerce marketplace entities where
e-commerce entities act as a platform for many other services. These rules are subject
to the provisions of the Consumer Protection Act, 2019.[17]

Telecom sector
There have been a number of disputes before the CPA, 2019 with respect to whether
telecom disputes can be adjudicated by consumer fora. The Telecom Consumers
Protection And Redressal Of Grievances Regulations, 2007 has provided that consumers
can seek redressal for their grievances under Consumer Protection Act.[18] There are
many areas in which jurisdiction of consumer forum has been invoked, like the excessive
billing of telephone carriers[19], administrative problems such as delay in the processing
of the application for change of address of telephone line or telephone line is out of
order[20], broadband services by telephone companies like BSNL[21], fraudulent message
received by the consumers due to default of telephone company like Bharathi
Airtel[22] etc.

Electricity sector
Electricity is governed by the Electricity Act, 2003 but it also provides for filing of
complaints in other statutes and the Consumer Protection Act is one of them. Electricity
and other energy sectors have been included in the definition and consumers who face
deficiency in electricity service or anything related to it can file a case in consumer fora.
[23]
 NCDRC has affirmed that Consumer Protection Act cannot have any jurisdiction over
matters pertaining to tampering of meters, unauthorized use of electricity etc.[24] Supply
of electricity falls within the purview of CPA[25] and a case regarding delay in releasing
the electricity connection for a flour mill was held to be deficiency of service.[26]

Housing and construction service

Construction and housing business has grown over time as the increase in population
and expansion of business was seen, infrastructure and housing are required. Housing
services, to come within the purview of the Consumer Protection Act, can be with respect
to the quality of materials used in the construction[27], or if the properties of the
infrastructure are as promised according to the agreement or untimely delivery of the
house for possession[28] or incomplete construction, allotment of land by a government
authority[29], etc. Housing as a service was first included by the Supreme Court in the
landmark judgement of Lucknow Development Authority v. M K Gupta[30]. The business
of real estate also falls within the ambit of housing and construction services.[31]

Transport service
Transport service includes transport by road or by rail or by flight.[32] In different
instances, all three fields are considered to be service to provide compensation to the
aggrieved consumers. In the case of railways, cases like passenger have been refunded
for delay of train, unauthorized entry into reserved compartments[33], absence of
comfortable seats as promised in the terms and conditions[34], compensation for chain
snatching[35], etc. were dealt by consumer commission. In an unusual case, a passenger
who died falling from the pathway between two compartments was compensated.[36] 

With respect to airways, different cases like loss of luggage of the passenger in transit or
cancellation of a confirmed ticket for no reason from the airlines, cause of injuries to the
passenger for negligently moving the ladder[37], poor quality of food supplied[38] or non-
veg served in case of veg food, departure before time etc.[39] can be considered as
deficiency of service and cases can be filed against the respective airlines. With respect
to transportation on road, more or less the same grounds which have been covered by
airlines or railways can be used to file complaints in consumer commission.

Education
Education as a service under the Consumer Protection Act has been questionable
throughout as to whether to be included within the ambit of the Act or not.  There are a
number of cases decided by consumer commissions and the courts and they have
contrasting views for the inclusion of the education sector.

The case of Bhupesh Khurana v. Vishwa Bhudha Parishad[40], decided that education is a
service and the students are consumers under the Act. But the Supreme Court in
Maharshi Dayanand University v. Surjeet Kaur[41], gave a decision otherwise and held
that education is not a commodity and the institutions do not run a business for
commerce.

But again the Apex Court changed its view in P T Koshy v. Allen Charitable
Trust[42], reversed it and laid down that any educational institution should be evaluated
on the merits and then the question of service should be answered as every case is
different from one another. Other than this, activities of an educational institution like
taking fees to appear in an examination, not giving roll numbers or seat numbers on
time for examination, wrong numbers are given to the students which resulted in failure
of those students etc. are considered to be services.[43] 

But, activities like conduction of public examination, evaluation of the papers,

announcing the results etc. were considered to be statutory duties and cannot be
questioned under the CPA. Yet again, on the other hand, a student who had received the
wrong marks sheet of an examination was compensated for the loss incurred.[44] In a
recent case, it has been held that coaching classes do not attract the provisions of the
CPA.[45] Thus, there is no one view expressed by the courts on this matter and the
decisions have been different but yet the cases have to be evaluated on merit and based
upon the facts on each case.

Gas cylinder or service in liquified petroleum gas

LPG is found in every house used for various purposes. The companies, which are
involved in the distribution of gas cylinders, should be very careful in doing so as LPG is
flammable and slight mistakes can cause serious injuries. In such cases, companies are
held liable for a deficiency of services. Few cases which the consumer commission have
dealt in this sector include death or injury due to the mistake of mechanic sent by the
dealer[46], delivering the cylinder to a wrong address[47], failure by the dealer to re-
check the cylinder[48] etc.

Chit fund business

Chit fund is a process where small businesses and traders raise funds through monthly
instalments. It is governed by the Chit Fund Act, 1982, but there are few cases that have
come before the consumer commission. The maintainability of such cases has been an
issue and there are differing views on the same between Madras Consumer Commission
and Andhra Pradesh Consumer commission. But National Commission decided on a chit
fund case in Sri Ram Priya Chit Fund Pvt Ltd v. Yara Srinivasa Rao[49].

The exception to the definition of service

As told in the first part of this answer, the definition as given in the CPA, 2019 has an
exclusionary part that services free of cost and contract of personal service cannot be
questioned under the Act.

The term ‘hire’ services include payment of some consideration in return to the services
availed by the consumers. In case no payment has been made, then that particular
service is not a ‘service’. For example, even though healthcare has been removed from
the definition of service, treatment received by patients could not go to consumer
commission in case of any deficiency in the service.[50] 

The taxes paid by the citizens are used by the government and this is not considered to
be the payment made by citizens to the government.[51] If a consumer is paying house
tax and then files a complaint claiming that water supply is inadequate by the
corporation, then such a case cannot be filed as the corporation is discharging its
statutory duty which is not covered by CPA.[52] A government officer cannot complain
against the state as he is the servant of the state and the state renders services free of
cost.[53]

Another exception to ‘service’ is the contract of personal service. There are two types of
services available: contract for service and contract of service. Contract for service is like
a principal-agent relationship where the principal tells the agent to do some work and
the method adopted by an agent is up to him, whereas, contract of service is more likely
a master-servant relationship where the master orders what and how the work has to be
done.[54] Contract of service allows the employee to work at his freedom and to quit as
there is no agreement signed. It is a part of the overall service personally given to the
employer.[55] 

The list of services that can be questioned under the Consumer Protection Act, 2019 is
not an exhaustive list but inclusive as the phrase “includes but not limited to” has been
used in the definition. Even though healthcare has been removed from the inclusionary
part, it does not mean that medical professionals do not fall under the CPA. It is a matter
of time until any court shall have to interpret in this regard. Few other service sectors
which have been included within the bracket of service are the entertainment and
advertisement industry, postal services, investment-related services, etc.

References
[1] Section 2(7) of CPA, 2019.

[2] Garima Dhaka, Consumer Protection Act: Banking Service, 8 Int. J. Dev Res 20404
(2018), https://www.journalijdr.com/sites/default/files/issue-pdf/12969.pdf

[3] Amrit Lal vs. Instant Growth Funds Pvt. Ltd. 1992(2) CPR 35.

[4] Punjab and Sind Bank v. Manpreet Singh, 1994 (3) CP 532.

[5] Union Bank of India v. K.V. Venugopalan, (1991) BC 602.

[6] T.A. Abrahim v. RBI, 2001 (3) CPJ 293.

[7] Commentary on Consumer protection Act by NCDRC available at

http://ncdrc.nic.in/bare_acts/1_1_2.html.

[8] New India Assurance Company Ltd v. Green Transport Co., 1991 CPJ (1) Delhi.

[9] Canara Bank v. United Indian Insurance Corporation, (2020) 3 SCC 455.

[10] Section 2(16) of CPA, 2019.

[11] Shashi Nath Mandal, E-consumer protection in India, 16 Int. J. Manag. Bus. Res. 1
(2016).
[12] Vasundhara Majithia, The Changing Landscape of Intermediary Liability for E-
Commerce Platforms: Emergence of a New, 15 Indian J. Law Technol. 470 (2019).  

[13] Rule 4(2) of e-commerce rules, 2019.

[14] Rule 4(4) and 4(5) of e-commerce rules, 2019.

[15] Rule 4(9) of e-commerce rules, 2019.

[16] Rule 4(8) of e-commerce rules, 2019.

[17] Rule 8 of e-commerce rules, 2019.

[18] Regulation 25.

[19] Union of India v. Nilesh Agarwal reported in I (1991) C.P.J. 203 (NC).

[20] Chief General Manager, Calcutta Telephones v. M.K. Gupta, II (1991) CPJ 116 (WB).

[21] D P Sharma v. Bharath Sanchar Nigam Ltd, National Consumer Disputes Redressal
Commission, New Delhi, Revision Petition No. 2254 OF 2012.

[22] Akhilesh Kumar Singh V. Bharti Airtel Limited, National Consumer Disputes

Redressal Commission, New Delhi, First Appeal No. 403/2014

[23] Accounts Officer, Jharkhand Electricity Board v. Anwar Ali, National Consumer

Disputes Redressal Commission, New Delhi, Revision Petition No. 355 OF 2004.

[24] UP Power Corporation Ltd v. Anis Ahamed, 2013 (VIII) SCC 491.

[25] Karnataka Power Transmission Corporation v. Ashok Iron Works Private Limited, III
(2009) CPJ 5 SC.

[26] Shamsher Khan v. Rajasthan State Electricity Board, (1993) II CPR 6 (Raj).

[27] H. P. Housing Board Appellant v. Varinder Kumar Garg and another Respondents,
AIR 2004 SC 4168.

[28] Bangalore Development Authority v. Syndicate Bank (2007) 6 SCC 711.

[29] Chandigarh Housing Board v. Avtar Singh and Others (2010) 10 SCC 194.

[30] AIR 1994 SC 787.

[31] http://www.nja.nic.in/Concluded_Programmes/2018-19/SE-
11_Mar_2019_PPTs/8.housing%20construction.pdf

[32] Diljeet Titus, Traveller Rights, Money Today, Nov 2009,

https://www.businesstoday.in/moneytoday/cover-story/travellers-
rights/story/8417.html.
[33] Union of India v. Sanjiv Dilsukhrai Dave, ( I ) 2003 CPJ 72.

[34] Prabhakaran v. General Manager, Southern Railways, Madras, I (1992) CPJ 323

(NC).

[35] Mrs. M. Kanthimathi v. Government of India, Ministry of Railways, 1 (2003) CPJ 16

(NC).

[36] Union of India v. Nathmal Hansaria, 1997 (1) CPJ (NC).  

[37] Station Manager, Indian Airlines v. Dr. Jiteswar Ahir, II (1996) CPJ 326.

[38] Indian Air Lines v. S. N. Sinha (1) 1992 CPJ 62 (NC).

[39] Diljeet Titus, Traveller Rights, Money Today, Nov 2009,

https://www.businesstoday.in/moneytoday/cover-story/travellers-
rights/story/8417.html.

[40] (2001) 2 CPJ 74 (NC) (India).

[41] (2010) 11 SCC 159.

[42] 2012 (3) CPC 615.

[43] N K Rohtagi, Is Student ‘Consumer’ And Education ‘Service’ Under The Consumer
Protection Act, 1986, 49 JILI. J Ind L Instt. 415 (2007).

[44] Ibid.

[45] Manu Solanki v. Vinayak Mission University, 2020 SCC OnLine NCDRC 7.

[46] Akhlesh Kumar Bhansal v. Flame Gas Services, 1993 (1) CPR 434 (Raj).

[47] Monilisa Gas Service v. Rajesb Kumar Puran Chand Shah, 1994 (l)CPJ 478 (Guj).

[48] Indian Oil Corporation Ltd. v. Venkataraman, 1993(1) CPJ 218 (NC).

[49] IV (2009) CPJ 83.

[50] Consumer Unity and Trust Society v. State of Rajasthan, 1991 CPR 241.

[51] Commentary on Consumer protection Act by NCDRC available at

http://ncdrc.nic.in/bare_acts/1_1_2.html.

[52] Mayor, Culcutta Municipal Corporation v. Tarapada Chatterjee, (1994) 1 CPR 87

(NCDRC).

[53] State of Orissa v. Divisional Manager LIC, AIR 1996 SC 2519.

[54] Indian Medical Association v. V P Shanta, AIR 1996 SC 550.

[55] Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264.

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