Service free of charge under a contract of personal service is not included in the definition of ser

CHAIRMAN CUM MANAGING DIRECTOR ONGC LTD. & ORS. V CONSUMER EDUCATION RESEARCH SOCIETY & ORS – CIVIL APPEAL NO(S). 9257 OF 2019 (ARISING OUT OF SLP (C) NO(S).14941 OF 2014)

This appeal was brought to the Supreme Court of India before a bench consisting of Honourable Justice S. Abdul Nazeer and Honourable Justice Deepak Gupta.

ISSUES RAISED BEFORE THE COURT

The main issue involved was,

Whether there is relationship of consumer and service provider existing between the private respondents (claimants) and the appellants.

APPELLANTS CONTENTION

Shri Venugopal raised various pleas before the Honourable Court. The first contention was that in terms of the definition of consumer in the Consumer Protection Act, 1986 (for short ‘the Act’), the first essential ingredient was payment of consideration for availing services. The second contention was that rendering of service free of charge under a contract of personal service is not included in the definition of service under the Act. For this, the Court referred to Section 2(d) of the Act,

“(d) “consumer” means any person who, — (ii) hires or avails of any services 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 services 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 services for any commercial purpose;”

The counsel for the appellant relied upon the judgment of this Court in the case of Jagmittar Sain Bhagat & Ors. vs. Director, Health Services, Haryana & Ors. in this regard.

REPONDENTS CONTENTION

On the other hand, learned counsel for the respondents placed reliance on the judgment of this Court in Regional Provident Fund Commissioner v. Shiv Kumar Joshi and Regional Provident Fund Commissioner v. Bhavani. It was contended by them that it was not necessary to answer all the issues raised by the appellants since there was virtually no privity of contract for providing service between the ONGC and the claimants. From a perusal of the letter dated 18.09.1991 and the Scheme, relevant portion of which had been quoted above, it was apparent that contributors to the Scheme were the employees of ONGC. Whereas the employer were only making a token contribution of Rs.100 per annum, the Scheme was also voluntary and optional for the employees who were in service from the effective date i.e. 01.04.1990. It was not disputed that all the claimants were in service before the effective date. The Scheme envisaged that every employee shall contribute to the fund at rates specified therein. The younger the employee, the percentage deducted from his salary is less and this rises progressively as the age increases. It had obviously been done to ensure that the contribution of the employee is equal i.e. those who have less years of remaining service will contribute at a higher rate and those who have more years of remaining service would contribute at a lower rate. The most important aspect was that the Scheme was managed and run by a Trust and not by the ONGC. The trustees of the Trust were nominated by the Chairman of the ONGC and representatives may be nominated to the Board of Trustees by the Central Working Committee (CWC) of Association of Scientific and Technical Officers. We have been informed at the Bar that 7 trustees were nominated by the Chairman of the ONGC and 6 by the CWC. Be that as it may, it was the Trust which managed the fund. Therefore, without going into the question as to whether any amount is being paid by the employees for contribution to the services rendered by the Trust, it was apparent that the service, if any, was being rendered by the Trust and not by the ONGC. Therefore, the respondents came to the conclusion that there was no relationship of consumer and service provider between the claimants and the ONGC.

JUDGMENT DELIVERED

Thereby, this Honourable Court after inferring the facts and circumstances of the case gave its judgment as under,

“In view of the above discussion, we partly allow the appeals and set aside the orders of the National Consumer Disputes Redressal Commission and the State Consumer Disputes Redressal Commission in so far as it held that there is a relationship of consumer and service provider between the claimants and the ONGC. We also set aside the costs imposed by the National Consumer Disputes Redressal Commission. However, in view of the statement made by Shri Venugopal, recorded in the opening portion of this judgment, we direct the ONGC to pay the amounts payable (other than the costs) under the orders impugned to the claimants within 8 weeks from today. Pending application(s), if any, stand(s) disposed of.”

View/Download Judgment: Chairman-cum-managing Director ONGC Ltd. & Ors. v. Consumer Education Research Society & Ors.

– Tanvi Srivatsan

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