The Union of India informed the Supreme Court on Thursday (October 17) that a legal entity, even if it is a trust, is not disqualified from filing a consumer complaint as long as it fulfills the other necessary conditions of being a consumer.

“So your submission seems to be since definition is inclusive, considering the objects of the Act a public trust which otherwise qualifies under definition of consumer has to be held as a person. That is the long and short of your submission. And whether it will be a consumer or not for that the test will have to be applied”, Justice Abhay Oka summarised the argument of Additional Solicitor General Aishwarya Bhati.

A bench comprising Justice Abhay Oka, Justice Ahsanuddin Amanullah, and Justice Augustine George Masih is currently hearing a matter referred by a division bench to determine whether a charitable trust qualifies as a "consumer" under the Consumer Protection Acts of 1986 and 2019.

The matter was referred to a larger bench by a division bench, which had noted that the definition of "person" under the Consumer Protection Act is inclusive, potentially covering charitable trusts within its scope.

During the previous hearing, the Court sought the Union Government's stance on the issue. On Thursday, Additional Solicitor General Bhati, representing the Centre, argued that the trust status of an entity should not be the sole factor in determining whether it qualifies as a "consumer."

Bhati noted that the Supreme Court's ruling in Pratibha Pratisthan v. Manager, Canara Bank is the only instance where it was held that a trust cannot file a consumer complaint. She referred to the Lilavati Medical Trust case, arguing that the test established in that case should be applied to determine whether an entity qualifies as a consumer.

“we are relying on Lilavati Kirtilal Mehta Medical Trust v. M/S Unique Shanti Developers in which the test has been laid down and it is the Union's respectful submission that this is the yardstick to be adopted to see whether it will be a consumer complaint or not. The entity of the person, once it is a legal entity my lords that is sufficient. The purpose will have to be ascertained to see whether they are consumer. Trustee or not can neither be a qualification nor a disqualification, that is our respectful submission.”

Bhati contended that in determining whether a trust qualifies as a consumer, the purpose for which the goods or services were availed should be the key consideration. She emphasized, "The dominant purpose of the transaction has to be considered."

Bhati argued that merely being a trust should neither qualify nor disqualify an entity from being considered a consumer. She further contended that the decision in *Pratibha Pratisthan* was flawed in concluding that a trust cannot be a consumer, as it incorrectly determined that a trust does not fall under the definition of a "person" within the Act.

“Our stand is this - that the Pratibha Pratishthan judgement, with all due respect, made an error in saying that since it is not a person and therefore it is not a consumer”, Bhati said.

Following the submissions of the Additional Solicitor General, the counsel for the appellant-trust presented his arguments, asserting that an association of persons can qualify as a consumer and that a trust, as an association of trustees, should be included in this category. 

In response, Justice Oka challenged this interpretation, noting that a trust is not inherently an association of persons. He pointed out that a trust with a sole trustee could not be classified as such and emphasized the need to examine the trust's nature in detail.

“Where do you get the concept that a trust is an association of persons? Some trusts may have a sole trustee, and that can't be considered an association of persons,” Justice Oka remarked. He said that simply having trustees does not automatically make a trust an association of persons.

The counsel for the trust argued that the trustees unite for a common purpose, thereby constituting an association of persons. 

In contrast, Justice Oka illustrated that a trust can be established through the will of a single individual, with trustees appointed subsequently, which would not qualify it as an association of persons.

Justice Oka remained unconvinced, asserting that simply having trustees does not convert a trust into an association. He pointed out that in certain instances, once an entity is established as a trust, it no longer qualifies as an association of persons. 

The matter is scheduled for further arguments next week.