The Supreme Court reaffirming the fact that the jurisdiction of the National Commission is limited u/s.21 of the Act held that while the Commission can certainly reverse the concurrent findings of District and State Commission, it could only be done under 3 circumstances as envisaged under the Act – (i) When the State Commission exceeds jurisdiction, (ii) When the State Commission fails to exercise jurisdiction vested in it (iii) When the State Commission exercise jurisdiction with material illegality or illegally.
In the case of Lourdes Society Snehanjali Girls Hostel & Anr. v. M/s. H & R Johnson (India) Ltd. & Ors., a Society running girls hostel had purchased tiles from the opposite party, however the tiles had manufacturing defects. The Company took the defence that the Society is not a consumer considering the fact that it was doing commercial activity and hence cannot file Complaint under Consumer Protection Act, 1986. However both the District Forum as well as State Commission rejecting the said contention on the ground that the Society running hostel for tribal girls was not doing commercial activity is clear from the memorandum and article of association and the fee collected from them was to meet the necessary expenses and hence it cannot be termed as Commercial and therefore held in favour of the Society. Further, the report of Court Commissioner and expert Architect appointed by the Society indicated manufacturing defect in the tiles purchased by the Society.
The National Commission deferring with the concurrent finding and holding it to be commercial activity held that the Society is not a consumer.
The Society approached the Hon’ble Supreme Court against the order of NCDRC. The Apex Court holding that from the Articles and Memorandum of Association it is very clear that the Society is running the hostel only for the tribal girls and the fees taken is only towards meeting the expenses held that the National Commission had limited jurisdiction in Revision Application except 3 circumstances as envisaged under the Act i.e. (i) When the State Commission exceeds jurisdiction, (ii) When the State Commission fails to exercise jurisdiction vested in it (iii) When the State Commission exercise jurisdiction with material illegality or illegally., wherein in the present case, none of the three cases circumstances were attracted held in favour of the Society. The Apex Court upheld the concurrent findings of District Forum and State Commission and affirmed that the jurisdiction of National Commission, so far as Revision Application is concerned is limited as specified under the Act.