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

Law of Torts · Consumer Protection Act 2019

Facts.

A development authority allotted a flat to the respondent, took his money, and then delayed possession for years and delivered a defective flat. The authority argued that it was a statutory body performing a statutory function, not a trader providing a service, and so fell outside the Consumer Protection Act.

Issue.

Does the Act apply to statutory authorities providing housing, and can the Commissions award compensation for harassment caused by official inaction?

Held.

Yes on both counts. The Supreme Court held that housing construction is a “service” and that a statutory authority enjoys no immunity from the Act. It further held that the Commissions may award compensation not merely for pecuniary loss but for harassment and mental agony, and may direct the authority to recover the amount from the officer responsible.

Why it matters.

It established the wide, purposive construction of the Act and the Commissions’ power to award real, not token, compensation — the foundation of much of what followed.

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