In this landmark judgment by the Supreme Court, the interpretation of the Consumer Protection Act, 1986 was clarified, establishing that government and semi-government bodies like the Lucknow Development Authority, Delhi Development Authority, etc., also fall under the purview of the Act. The Court declared that activities like housing construction or land allotment are included in the definition of “service,” regardless of whether they are carried out by private builders or government authorities.

The judgment further stated that if a consumer suffers mental agony or harassment due to deficiencies in service, appropriate compensation must be awarded, and that amount should be recovered directly from the officials responsible for such misconduct. The Court emphasized that delays or defects in service constitute a violation of consumer rights and that this not only harms individuals but also society at large.

In the case of the Lucknow Development Authority, the Court found that a consumer was not given possession of a flat on time, causing mental harassment. The authority was ordered to pay ₹10,000 as compensation and ₹44,615 for incomplete construction work. Crucially, the Court instructed that the compensation amount be recovered proportionately from the salaries of the officials responsible.

This ruling signifies that consumer rights are paramount and that any institution—public or private—can be held accountable for service deficiencies or negligence. It is a powerful step toward enforcing public accountability.