What is a Consumer Dispute as per Consumer Protection Act?
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Consumer Protection Act
Refer to Taxmann's Latest Consumer Protection Law & Practice. This book is a comprehensive guide to consumer protection laws in India. It includes a compact (250+ pages) commentary along with a compilation of amended, updated & annotated text of the Consumer Protection Act, 15+ Rules & Regulations, Circulars & Notifications, and draft Rules & Regulations. It also covers tables showing sections of the Consumer Protection Act, 2019 & corresponding provisionsof the Consumer Protection Act, 1986 and vice-versa.
1. Consumer Disputes relating to goods and services
The jurisdiction of Consumer Disputes Redressal Commission is invoked when a ‘complaint’ has been filed by ‘complainant’.
Act applies to all goods and services – Save as otherwise expressly provided by the Central Government, by notification, this Act shall apply to all goods and services – Section 1(4) of Consumer Protection Act, 2019.
1.1 Dispute relating to land and immovable property is not covered
Dispute regarding immovable property is not consumer dispute, as there is no sale of ‘goods’ or ‘services’ for consideration. However, dispute can be raised about service in connection with immovable property.
Land is not movable and hence not ‘goods’. Hence disputes regarding sale/allotment of land are outside purview of CPA. (Krishan Baldev Gupta v. Haryana State Development Corpn. (1993) II CPJ 191 (NCDRC).
In Shaila Construction v. Nainital Lake Development III (1996) CPJ 11 (NCDRC), it was held that there is no hire of services when there is outright sale of immovable property. However, there can be deficiency in service and complaint can be lodged.
2. What is a ‘Complaint’
“Complaint” means any allegation in writing, made by a complainant for obtaining any relief provided by or under this Act, that—
(i) an unfair contract or unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider.
(ii) the goods bought by him or agreed to be bought by him suffer from one or more defects.
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from any deficiency.
(iv) a trader or a service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price— (a) fixed by or under any law for the time being in force; or (b) displayed on the goods or any package containing such goods; or (c) displayed on the price list exhibited by him by or under any law for the time being in force; or (d) agreed between the parties.
(v) the goods, which are hazardous to life and safety when used, are being offered for sale to the public – (a) in contravention of standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force (b) where the trader knows that the goods so offered are unsafe to the public.
(vi) the services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by a person who provides any service and who knows it to be injurious to life and safety.
(vii) a claim for product liability action lies against the product manufacturer, product seller or product service provider, as the case may be – Section 2(6) of Consumer Protection Act, 2019.
Unfair contract, unfair practices and product liability – Issues relating to clause (i) an unfair contract or unfair trade practice or a restrictive trade practice and clause (vii) claim for product liability are discussed in other chapters.
2.1 No complaint for increase in prices
In a case where manufacturer increased the selling price of car, it was held that complaint is not maintainable as complaint can be lodged only in cases where price is fixed under any law and price is charged above the statutory price. –Maruti Udyog Ltd. v. Kodaikkanal Township (1993) 10 CLA 15 (NCDRC).
In Brig B S Gill v. Maruti Udyog Ltd. – (1996) 4 CTJ 105 (NCDRC) also, it was held that no complaint is maintainable in case of increase of price of motor car after booking but before maturity of the booking – same view in Mehsana Agro Auto v. Baldevbhai M Patel I(2001) CPJ 28 (NCDRC).
No complaint against costing or pricing – Consumer Forums have no jurisdiction to go into question of pricing (of houses and flats in this case) – Gujarat Housing Board v. Akhil Bharatiya Grahak Panchayat – (1996) 2 Comp LJ 378 (NCDRC) * Gujarat Housing Board v. Datania Amritlal (1993) III CPJ 351 (NCDRC) * MP Housing Board v. Prahlad Kumar III (1999) CPJ 37 (NCDRC).
Charges fixed by Banks for providing various services like issuing a cheque book are in the realm of pricing. Forum cannot adjudicate on questions of adequacy or reasonableness of the amount charged for the services rendered or to be rendered – Indian Banks’ Association v. Archana Kamath – 1(1995) CPJ 75 (NCDRC) – view confirmed in Archana Kamath v. Canara Bank 2003(2) SCALE 61.
Consumer forum cannot go into reasonableness of pricing of services. Cost or pricing of services cannot be looked into. – Maharashtra State Electricity Board v. Sheshrao (1995) 5 CTJ 680 (NCDRC). – – Costing of flat is beyond jurisdiction of FORA – Major Loknath Juggi v. Bhopal Development Authority III (2002) CPJ 154 (NCDRC).
Mere question of pricing a product or service does not fall within the purview of adjudication of Consumer Disputes Redressal Agency – decision of NCDRC confirmed in State of Gujarat v. Rajesh Kumar Chimanlal Barot (1994) 4 Comp LJ 1 (SC) = (1996) 5 SCC 477.
Complaint can be filed by ‘complainant’.
“Complainant” means –
(i) a consumer; or
(ii) any voluntary consumer association registered under any law for the time being in force; or
(iii) the Central Government or any State Government; or
(iv) the Central Authority; or (v) one or more consumers, where there are numerous consumers having the same interest; or
(vi) in case of death of a consumer, his legal heir or legal representative; or
(vii) in case of a consumer being a minor, his parent or legal guardian – Section 2(5) of Consumer Protection Act, 2019.
4. Who is ‘Consumer’
As per Section 2(7) of Consumer Protection Act, 2019, “Consumer” means any person who:
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.
Explanation—For the purposes of this clause,— (a) the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment (b) the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing – Explanation to Section 2(7) of Consumer Protection Act, 2019.
Direct selling – “direct selling” means marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location – Section 2(13) of Consumer Protection Act, 2019.
Seller is not a consumer – A seller of goods is not a ‘consumer’ as purchaser is not supposed to provide any service to seller – Larsen & Toubro Ltd. v. SCDRC AIR 1998 Cal 313.
Franchise is not consumer – Franchise holder who is maintaining STD/PCO office is licensee of the grantor of franchiser. The service is really provided by franchiser and not by franchise to final consumer. The franchisee is not consumer – General Manager, Madras Telephones v. R Kannan I (1994) CPJ 14 (NCDRC). Franchisee of computer training institute is not a consumer. – Softpec Software v. Digital Equipment II (2002) CPJ 5 (NCDRC).
Tenant is not consumer – A tenant is not consumer when landlord has not agreed to render any service to tenant in lease agreement. – Laxmiben Laxmichand Shah v. Sakerben Kanji I(2001) CPJ 7 (SC) – confirming Laxmiben Laxmichand Shah v. Sakerben Kanji I(1992) CPR 74 (NCDRC).
4.1 Meaning of ‘Commercial Purpose’
A person who buys goods for resale or commercial purposes or avails services for commercial purposes is specifically excluded from definition of ‘consumer’.
For example, a person buying one truck or tempo or sewing machine or one computer will be eligible under this section. However, if a person buys two typewriters, out of which one is used by a person employed by him, he will not be eligible under CPA as person buying goods for resale or commercial purposes is not a consumer.
In Laxmi Engineering Works v. P.S.G. Industrial Institute – 1995 AIR SCW 2114 = AIR 1995 SC 1428 = (1995) 3 SCC 583 = 84 Comp Cas 121 (SC), has defined the word ‘commercial’ as connected with or engaged in commerce having profit as the main aim. Any person buying goods for purpose of being used in any activity on a large scale for making profit is not a ‘consumer’.
University buying mutual fund for investing provident fund amount for sole benefit of employees is not for ‘commercial purpose’. ‘Commercial purpose’ must be interpreted considering facts and circumstances of each case – Punjab University v. Unit Trust of India (2015) 2 SCC 669.
In Kalpavruksha Charitable Trust v. Toshniwal Brothers 1999 AIR SCW 3732 = AIR 1999 SC 3356 = (1999) 4 Comp LJ 427 (SC), it was held that a charitable trust is not a consumer if it has purchased machinery for its diagnostic centre, when only 10% patients are provided free service and charges are levied on remaining patients. Thus, the use is for ‘commercial purpose’ and hence it is not a ‘consumer’.
A person purchasing truck for self-employment, appointing a driver to ply the said truck is still a ‘consumer’ – Madan Kumar Singh v. District Magistrate (2009) 9 SCC 79.
Person buying goods for manufacture of another product is not ‘consumer’ as the goods were intended for commercial purpose – Rajeev Metal Works v. MMTC 87 Comp Cas 315 = (1996) 2 Comp LJ 193 (SC) = AIR 1996 SC 1083
Contractor buying computer for his profession is not a ‘consumer’ as the computer was not bought for his personal use to earn livelihood – Sterling Computers Ltd. v. P Raman Kutty – (1995) 3 CPR 495 = LW 50.3-1996 – CS March 96 (NCDRC).
Purchaser of diesel generating set for installation in factory is not a consumer – Madhu Chawla v. R K Engineering Co. – LW 52.3-1996 – CS March 96 (NCDRC)
Buyer of EPBAX for better management of his business is not a ‘consumer’. – Catvision Products Ltd. v. Pragati Computers (P.) Ltd. – LW 53.3-1996 CS March 96 (NCDRC).
Electronic telephone system purchased for nursing home is for commercial purpose – Larsen & Toubro v. Phophale Nursing Home II(1992) CPJ 366 (NCDRC).
In Kores (India) Ltd. v. Samir Purkayastha – (1996) 4 CTJ 579 (NCDRC), it was held that if intention is to earn substantial profit (and not mere earning livelihood), the purchase will be for commercial purpose. (Xerox machine in this case). In Sakthi Engineering Works v. Sri Krishna Coir Rope Industry III(2000) CPJ 13 (NCDRC), it was held that purchase of machine when buyer did not have technical knowledge and 10 people were required to operate machine is purchase for ‘commercial purpose’.
In Sarat Equipments v. Interuniversity Consortium (1997) 5 CTJ 854 (NCDRC), it was held that equipment bought by an educational institution for use by students cannot be said to be for commercial purpose even where certain amount of fees is charged to students for allowing use of equipment.
Frequent breakdown in power supply of Electricity Board to the factory manufacturing yarn are not covered under CPA, as though ‘electricity’ is ‘goods’, power supply is for commercial purpose only. Shree Mfg. Co. Ltd. v. ADSDRC (1993) II CPJ 874 (APSDRC).
4.2 Buyer of Machinery, equipment or goods for self employment is a ‘consumer’
The buyer of machine will be treated as ‘consumer’ only if he operates it directly and not through labour/employees, e.g. person purchasing auto-rickshaw to ply it himself or a person purchasing truck for plying it as public carrier by himself or a person purchasing typewriter to type other’s work for consideration would be a ‘consumer’. (He will be consumer, even if he takes assistance of one or two persons to assist/help him in operating the vehicle or machinery).
In Cheema Engg Services v. Rajan Singh 88 Comp Cas 400 (SC) = (1997) 1 SCC 131 = (1997) 1 Comp LJ 70, it was held that ‘self employment’ means the person or his family alone should use the machinery. Burden is on him to prove the same. – . – . – Commercial purpose would mean employing on regular basis the employee or workman for trade.
Medical practitioner buying ultrasound scanner for use by using his skill for earning his livelihood is a ‘consumer’ – Kody Elcot Ltd. v. Dr. C P Gupta – LW 51.3-1996 – CS March 96 (NCDRC). Eye surgeon purchasing machine for hospital run by him is consumer, as it is required for using his professional skill, when he is not running a big hospital. – Rampion Pharmaceuticals v. Dr. Preetam Shah (1997) I CPJ 23 (NCDRC).
Civil contractor buying truck for self-occupation is a consumer – Telco v. Gajanan Mandrekar III (1996) CPJ 123 (NCDRC).
Purchase of copier machine by partnership firm to earn livelihood by partners by self employment is covered under CP Act – Remington Rand v. Pioneer Typewriter (1996) 2 CTR 112 (NCDRC) * Vijay Narain v. Chougule Industries II(1993) CPJ 231 (NCDRC).
4.3 Insurance company can file complaint in name of insured as his attorney holder or in joint name of insured and insurer, but not if the goods or service was for commercial purpose
If insurer pays the compensation to the insured person, it gets a ‘letter of subrogation’ in favour of insurance company. Right to recover compensation (from transporter or any other person) are assigned to Insurance Company.
However, in Oberai Forwarding Agency v. New India Assurance Co. Ltd. 2000 AIR SCW 436 = 2000(2) SCC 407 = 100 Comp Cas 591 = AIR 2000 SC 855 (SC 3 member bench), it was held that Insurance company is not the beneficiary of services (of transporter in this case) and hence is not a ‘consumer’, even if the assignor is made a co-complainant to the complaint.
This decision was considered by Constitution bench in Economic Transport Organisation v. Charan Spinning Mills (2010) 4 SCC 114 (SC 5 member bench). It was held that Insurance company can file complaint in Consumer Court against transporter, in the name of insured (as his attorney holder) or in joint name of insured and insurer, if there is subrogation cum assignment by insured in favour of insurer. Insurer cannot in its own name maintain complaint before Consumer Court. However, if service is for commercial purpose, complaint cannot be filed against the carrier in view of amendment made to the consumer Protection Act w.e.f. 15-3-2003. It was held that subrogation cum assignment is valid. It was observed that section 9 of Carriers Act does lay down that a carrier is liable even if there was no negligence on his part. The carrier can avoid the liability if he established that the loss, damage or non-delivery was due to an act of God or circumstances beyond his control. It was held that section 9 is applicable even when complaint is filed before Consumer Court.
The assignee of insurance policy, when policy was assigned after its validity only to recover loss suffered on short landing of goods, is not a beneficiary of service required to be rendered by insurer. Hence, he is not a consumer. If the policy had been assigned during the course of validity, it could perhaps be said that assignee had beneficial interest. – New India Assurance Co. Ltd. v. Sainani (1997) 92 Comp Cas 426 = 1997 AIR SCW 2956 = AIR 1997 SC 2938 = (1997) 6 SCC 383 = (1997) 3 Comp LJ 380. – followed in Savani Roadlines v. Sundaram Textiles 2001 AIR SCW 2555 = 106 Comp Cas 659 = 38 SCL 738 = (2001) 3 Comp LJ 376 (SC).
4.4 Patients in Government hospital not consumers
Patients availing medical treatment in Government hospital are not consumers and facility offered in Government hospitals cannot be regarded as service hired for consideration. The small charges paid are for general purposes of the State and not for any specific service. Thus, the service is not ‘hired’ by the patient. However, in case of demonstrable negligence, civil suit is possible. Consumer Unity Trust Society v. State of Rajasthan – decided on 15-12-89 (1991) CPR 241 (NCDRC) – confirmed by Supreme Court.
4.5 Who is a ‘consumer’
Some decided cases will clarify the legal position.
Land owner is consumer in respect of agreement with builder/promoter/developer – In Faqir Chand Gulati v. Uppal Agencies (2008) 15 STT 296 (SC), land owner had agreement with builder termed as ‘collaboration agreement’ or ‘joint venture agreement’. However, land owner had absolutely no say in matter of development, construction or sale of flats. It was held that this is not ‘joint venture’. If there is no joint control, it is not a joint venture. Hence, land owner is ‘consumer’ within the meaning of ‘Consumer Protection Act’.
Railway Passenger – It has been held that railway passenger travelling on payment of fare is a ‘consumer’ – GM, South Eastern Railways v. Anand Prasad Sinha – (1991) I CPJ 10 (NCDRC). In District Manager, Telephones v. Lalit Kumar Bajlal – (1992) 1 CPJ 189 (NCDRC), it was held that subscriber to telephone is ‘consumer’. In Union Bank v. Seppo Rally Oy – II (1996) CPJ 128 (NCDRC), it was held that beneficiary of a bank guarantee is a consumer.
Potential consumer is also a consumer – In Tele-Communication Dept. v. Shanmugham Chemical Industries – LW 149.9-1995 – CS Sept. 95, (NCDRC), it was held that a potential consumer is as good as consumer, within the scope of CPA.
Parent who bring the child to hospital and the child both are consumers – Parent who brings the child to hospital is ‘consumer’. The child, who is beneficiary of the services is also a consumer — Spring Meadows Hospital v. Harjot Ahluwalia (1998) 4 SCC 39 = AIR 1998 SC 1801 = 1998 AIR SCW 1590 = 92 Comp Cas 797 = (1998) 2 Comp LJ 228 (SC).
Allottees of house – Allottees of house by Housing Board are ‘consumers’ – UP Avas Gram Vikas Parishad v. Garima Shukla (1991) 1 CPJ 1 (NCDRC) – also in Gujarat Housing Board v. Akhil Bharatiya Grahak Panchayat – (1996) 2 Comp LJ 378 (NCDRC).
Person obtaining water from Water supply authority – A person obtaining water from a Government agency and paying water bills for the water supplied (and not ‘water tax’) is a consumer – Nagrik Parishad v. Garhwal Jal Sansthan 1998 AIR SCW 3944. [However, if water tax is levied, the person availing service will not be a ‘consumer’].
4.6 Forum can decide whether a person is consumer
In Laxmi Engineering Works v. P.S.G. Industrial Institute – 1995 AIR SCW 2114 = (1995) 3 CTJ 289 = AIR 1995 SC 1428 = (1995) 3 SCC 583 = 84 Comp. Cas. 121 (SC), it has been held that Consumer Forums have power to decide whether a person is a consumer and whether he has made grounds for relief.
5. Defect in Goods
Complaint can be filed if the goods bought by him or agreed to be bought by him suffer from one or more defects [clause (ii) of definition of ‘complaint’].
“Goods” means every kind of movable property and includes “food” as defined in section 3(1)(j) of the Food Safety and Standards Act, 2006 – Section 2(21) of Consumer Protection Act, 2019.
Defect – “defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied or as is claimed by the trader in any manner whatsoever in relation to any goods or product and the expression “defective” shall be construed accordingly – Section 2(10) of Consumer Protection Act, 2019.
5.1 Shares before allotment and debentures are not ‘goods’
In Morgan Stanley Mutual Fund v. Kartik Das (1994) 74 Taxman 409 = (1994) 1 SCL 19 = (1994) 2 CTJ 385 = 81 Comp. Cas. 318 (SC) = (1994) 4 SCC 225 = 1994 AIR SCW 2801 (SC 3 member bench), Hon. Supreme Court have held that shares before allotment are not goods, as shares do not exist before allotment is made. To constitute a ‘consumer’, there must be transaction of goods. Hence, a prospective investor cannot be regarded as a ‘consumer’ under CPA.
In R D Goyal v. Reliance Industries (2003) 1 SCC 81 = 40 SCL 503 = 113 Comp Cas 1 (SC), it was held that debenture is not ‘goods’. Similarly, shares before allotment are not goods.
6. Deficiency in services
Complaint can be lodged if the services hired or availed of or agreed to be hired or availed of by him suffer from any deficiency [clause (iii) of definition of ‘complaint’].
Service – “Service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service – Section 2(42) of Consumer Protection Act, 2019.
Deficiency – “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes – (i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and (ii) deliberate withholding of relevant information by such person to the consumer – Section 2(11) of Consumer Protection Act, 2019.
Injury – “injury” means any harm whatever illegally caused to any person, in body, mind or property – Section 2(23) of Consumer Protection Act, 2019.
6.1 What is ‘service’
In Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243= 1994 AIR SCW 97 = AIR 1994 SC 787 = 80 Comp. Cas. 714 (SC) = (1994) 1 Comp LJ 1 (SC), it has been held that any service which is for consideration and is not a contract of personal service is ‘service’ for purposes of the Act. In this case, it was held that housing construction is service, although related to immovable property. It was held that ‘potential users’ mean those who are capable of using the service. – followed in Gujarat Housing Board v. Akhil Bharatiya Grahak Panchayat – (1996) 2 Comp LJ 378 (NCDRC), where it was held that providing houses is a ‘service’.
Assurance of development of infrastructure/amenities etc. to customers of plots is a service. Housing construction or building activity carried out of a private or statutory body is service – Narne Construction v. UOI (2012) 5 SCC 359.
6.2 Contract of service and contract for service
Contract of personal services are excluded from definition of ‘service’.
NCDRC in Cosmopolitan Hospitals v. Vasantha P Nair I (1992) CPJ 302 (NCDRC) had held that medical services are covered under CPA. The reason is – there is difference between ‘contract for service’ and ‘contract of service’. In contract of service, the master can order or require what is to be done and how it is to be done. This is a ‘contract of personal service’ and hence is out of purview of CPA as the master can always dispense with service of servant and hence no occasion would arise for him to complain about service of the servant. However, in ‘contract for service’, the person cannot order what is to be done or how it is to be done e.g. lawyer-client relationship will fall in this category. Services rendered in professional category would fall in this category, e.g. when a person gives cloth to a tailor for stitching a suit, the service rendered is in the course of his profession and not under contract of personal service. Thus, service of doctor is covered under the definition of service, as it is ‘contract for service’ and not ‘contract of service’.
The distinction between ‘contract of service’ and ‘contract for service’ has been fully upheld by Supreme Court in Indian Medical Association v. V P Shantha (1995) 6 SCC 651 = (1996) 1 Comp LJ 15 = 1995 AIR SCW 4463 = AIR 1996 SC 550 = (1995) 3 CTJ 969 = 86 Comp Cas 806 (SC 3 member bench). In this case, it was held that ‘contract for services’ implies a contract whereby one party undertakes to render services e.g. professional or technical services to or for other in the performance of which he is not subject to detailed direction and control but exercises professional or technical skill and uses his own knowledge and discretion. However, a ‘contract of service’ implies a relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance – similar views in Shivnandan Sharma v. Punjab National Bank Ltd. AIR 1955 SC 404 * Chandi Prasad Singh v. State of Uttar Pradesh AIR 1956 SC 149 * Dhrangadhra Chemical Works v. State of Saurashtra AIR 1957 SC 264.
In Dhrangadhra Chemical Works v. State of Saurashtra AIR 1957 SC 264, it was observed, the principles according to which the relationship as between employer and employee or master and servant has got to be determined are well settled. The test which is uniformly applied in order to determine the relationship is the existence of a right of control in respect of the manner in which the work is to be done. A distinction is also drawn between a contract for services and a contract of service and the distinction is put in this way – ‘In the one case, the master can order or require what is to be done, while in other case, he can not only order or require what is to be done but how itself it shall be done. – – Prima facie test for the determination of the relationship between master and servant is the existence of the right of master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work. – – Test of control is not one of universal application. There are many contracts in which the master could not control the manner in which the work was done’.
In Smt. Savita Garg v. National Heart Institute AIR 2004 SC 5088 = (2004) 8 SCC 56 = 2004 AIR SCW 5820, it was held that doctors who are staff of hospital are on ‘contract of service’, while doctors on panel whose services are requisitioned from time to time by hospital are on ‘contract for service’. Hospital is controlling authority of both – quoted with approval in Balaram Prasad v. Kunal Naha (2014) 1 SCC 384.
In short, in case of contract of service, the employer not only orders/requires what is to be done but also directs as to how it shall be done, whereas in contract for service, the master can only require as to what is to be done – Max Mueller Bhavan In re (2004) 138 Taxman 113 (AAR)
Personal services are not covered – Personal services are outside the purview of CPA.
In State of Orissa v. LIC – AIR 1996 SC 2519 = 1996(8) SCC 655 = (1996) 87 Comp Cas 881 = 1996 AIR SCW 3129, it was observed that ‘personal service’ covers civil servants and professors in University.
In Centre for Research & Ind. Development v. Madan Lal Sahni – (1996-1) PLR 594 (P&H HC DB) also, it was held that consumer forum cannot decide disputes arising out of contract of appointment of personal service.
6.3 Services covered under CPA
Following services are held to have been covered –
Professional services are covered – Since doctors are covered under CPA, it can be safely presumed that other professionals like Engineers, Architects, Chartered Accountants, Cost Accountants, Advocates, Company Secretaries will be covered.
Services of Advocate – In Srimati v. UOI – AIR 1996 Mad HC DB 427 = (1997) 94 Taxman 322 (Mag.), it was held that advocates are covered under Consumer Protection Act. – same view in K Vishnu v. NCDRC (2000) CLA-BL Supp 340 (AP HC DB). In Ram Ralsh Pal v. Smt. Ranjana II (2002) CPJ 118 (NCDRC), it was held that non-appearance of lawyer in court or tribunal having been engaged and charging his fee could itself be deficiency in service. [In this case, absence of lawyer due to strike of lawyers was highly depreciated].
Accepting deposit from public is service – Accepting deposit from public agreeing to pay interest is ‘service’. If interest and principal is not paid on due dates, it is deficiency of service and Consumer forums can issue orders for payment of outstanding dues. – Neela Vasant Raje v. Amogh Industries 1993(3) CPJ 261 (NCDRC) – similar views in K Kasi Annapurna v. Smt. Vemuri Bharathi – (1996) 8 SCL 5 (NCDRC) = (1996) CPT 3 (NCDRC) * Kalawati v. United Vaish I (2002) CPJ 71 (NCDRC).
Share broker services covered – Share brokers sell and purchase shares. They provide the service and charge commission for the same. Hence, their services are covered under CPA. – Indravadan Choksy v. Hitesh Dineshchandra Mali (1994) 1 SCL 92 (GSCDRC- Gujarat State).
Provident Fund services under EPF Act covered – Regional Provident Fund Commissioner (RPFC) is providing service under Employees Provident Fund Act. Hence, RPFC is liable for deficiency in service. However, subscriber under State General Provident Act/Rules is not a ‘consumer’ as the Accountant General who is maintaining the accounts, is discharging a statutory function. – RPFC v. Shiv Kumar Joshi 1996 LLR 641 = (1996) 4 CTJ 805 (NCDRC) – confirmed in RPFC v. Shiv Kumar Joshi (2000) 1 SCC 98 = 1999 AIR SCW 4456 = 99 Comp Cas 347 = AIR 2000 SC 331 = 2000 LLR 217 = 24 SCL 46 (SC) – followed in RPFC v. Bhavani Mangat Ram (2008) 7 SCC 96 = 2008 LLR 661 = AIR 2008 SC 2957.
ESIC services covered – In Kishore Lal v. Chairman, ESIC 2007 LLR 740 = 80 SCL 108 (Mag) (SC 3 member bench), it has been held that medical service rendered by ESIC is ‘service’ and consumer forums have jurisdiction to adjudicate dispute between insured and ESIC.
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