VERY IMPORTANT POINT
A member of Employee Provident Fund Scheme under the Provident Fund Act, is a consumer within meaning of Consumer Protection Act, the scheme is a service and, therefore the provisions of Consumer Protection Act, 1986 (hereinafter referred to as the Act ) can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund Scheme.

Headnote:Consumer Protection Act, 1986-Section 2(1)(d) and 2(1)(o) and 2(1)(g)-Consumer-Service-Deficiency in service-Member of Provident Fund Scheme under Provident Fund Act is a consumer -Provident fund scheme is a service -Delay in settlement of provident fund claim would amount to deficiency in service-Provisions of Consumer Protection Act can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund scheme.
       Held : The combined reading of the definitions of "consumer" and "service" under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words "consumer" and "service" as defined under the Act should be construed to comprehend consumer and services of commercial and trade oriented nature only. Thus any person who is found to have hired service for consideration shall be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act. (Para 6)
       Obviously, it appears that as the payment of contribution includes the payment of administrative charges, the Scheme appears to be for consideration. The argument that as no part of the administrative charges is payable by the employee, he (employee) cannot be held to be a consumer within the meaning of Section 2(1)(d) of the Act is without substance and, if accepted, is likely to defeat the purpose and object of the Act as also the scheme framed under it. A perusal of the scheme unambiguously shows that it is for consideration which is applicable to all those factories and establishments covered under the Act and the scheme who are required to become a member of the Fund under the scheme. Para 26 provides that every employee employed in connection with any work of the factory or other establishment to which the scheme applies other than an excluded employee, shall be entitled and required to become a member of the Fund from the date the said para comes into force in such factory of the establishment. The scheme provides for the Board of Trustee, the appointment, power of Commissioner and other staff of Board of Trustee, membership of the Fund, contribution etc. Chapter V deals with contribution. The employer who is otherwise not a member of the scheme is obliged to contribute under the scheme at the rates specified therein of the basic wages, dearness allowance including cash value of any food concession and repairing allowances, if any, payable to each employee to whom the scheme applies. The contribution of the employee has to be equal to the contribution payable by the employer in respect of such employee. The words in respect of are significant as they indicate the liability of the employer to pay his part of the contribution in consideration of the employee working with him. But for the employment of the employee there is no obligation upon the employer to pay his part of the contribution to the scheme. The administrative charges, as required to be paid under para 30 of the scheme are also paid for consideration of the employee being the member of the scheme. It is immaterial as to whether such charges are deducted actually from the wages of the employee of paid by his employer in respect of the employee-member of the scheme working for such employer. The administrative charges are further required to be determined having regard to the basic wages, the dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon for the time being payable to the employee. If the contention of the appellant is accepted that as no part of the administrative charges are deducted from the actual wages of the employee, he cannot be deemed to be hiring the services of scheme, the consequences of such an interpretation shall frustrate the object of the Act and the scheme as in that event no obligation can be cast upon the employer to pay contributions which are equal to the contribution payable by the employe along with the administrative charges. The scheme has to be given such an interpretation which serves the purpose intended to be achieved by it keeping in view the objects of the Act. The administrative charges are in lieu of the membership of the employee and for the services rendered under the scheme. It cannot be held that even though the employee is the member of the scheme, yet the employer would only be deemed to be a consumer for having made payments of the administrative charges. Admittedly, no service is rendered to the employer under the scheme which is framed for the benefit of the employee under Sections 5, 6 and 7 of the Act. Chapter VII provides for administration of the Fund, Accounts and Audit. A separate account called "Central Administrative Account" for recording of administration expenses of the fund is required to be kept under Para 49. Para 52 deals with the investment of monies belonging to employee s provident fund and provided that such monies be deposited in the Reserve Bank or the State Bank of India or in such other scheduled banks as may be approved by the Central Government from time to time or be invested subject to the directions as the Central Government may from time to time give in securities mentioned or referred to in Clauses (a) to (d) of Section 20 of the Indian Trust Act, 1882. All expenses incurred in respect of, and loss, if any, arising from, any investment shall be charged to the Fund. Para 53 provides that the Fund not including the administration account shall be except with the previous sanction of the Central Government be expanded for any purpose other than the payment of the sums standing to the credit of individual member of the Fund or to their nominees or heirs or legal representatives in accordance with the provisions of the scheme. All expenses relating to the administration of the Fund including those incurred on Regional Committee are to be made from the Fund in terms of para 54 of the scheme. Similarly all expenses of administration of Fund including the fees and allowances of the trustees of the Central Board and salaries, leave and joining time allowance, travelling and compensatory allowances, gratuities and compassionate allowance, pensions, contributions to provident fund and other benefit fund instituted for the officers and employees of the Central Board, the cost of audit of the accounts, legal expenses and cost of all stationary and forms incurred in respect of the Central Board, cost and all expenses incurred in connection with the construction of office and staff quarters shall be met from the Administrative Account of the Fund. The member of the scheme is entitled only to the interest determined as per para 60. (Paras 7, 8 & 9)
       We cannot accept the argument that the Regional Provident Fund Commissioner, being Central Government, cannot be held to be rendering service within the meaning and scheme of the Act. The Regional Provident Fund Commissioner, under the Act and the scheme discharges statutory functions for running the scheme. It has not, in any way, been delegated with the sovereign powers of the State so as to hold it as a Central Government, being not the authority rendering the service under the Act. The Commissioner is a separate and distinct entity. It cannot legally claim that the facilities provided by the scheme were not service or that the benefit under the scheme being provided were free of charge. The definition of "consumer" under the Act includes not only the person who hires the services for consideration but also the beneficiary, for whose benefit such services are hired. Even if it is held that administrative charges are paid by the Central Government and no part of it is paid by the employee, the services of the Provident Fund Commissioner in running the scheme shall be deemed to have been availed of for consideration by the Central Government for the benefit of employees who would be treated as beneficiary within the meaning of that word used in the definition of consumer. (Para 10)
       A perusal of the scheme clearly and unambiguously indicate that it is a service within the meaning of Section 2(1)(o) and the member a consumer within the meaning of Section 2(1)(d) of the Act. It is, therefore, without any substance to urge that the services under the scheme are rendered free of charge and, therefore, the scheme is not a service under the Act. Therefore the provisions of Consumer Protection Act, 1986 (hereinafter referred to as the Act ) can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund Scheme. (Para 11)

JUDGMENT

Sethi, J.-The short but an important question of law to be decided in this appeal is as to whether the provisions of Consumer Protection Act, 1986 (hereinafter referred to as the Act ) can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund Scheme? It has to be ascertained as to whether any such member is a consumer and the duties performed by the Provident Fund Commissioner under the relevant scheme is a service within the meaning of the Act. If it is held that such member is the Consumer and the facilities provided are services , it has to be further considered as to whether the delayed payment of the provident fund to a member-employee amounts to deficiency of service under the Act.

2. The facts leading to the filing of the present appeal are that the respondent, who was a member of the Provident Fund Scheme, applied to the Regional Provident Fund Commissioner for the payment of his provident fund on 15th July, 1992. It was found that the application filed was not complete as required by Para 72(5)(d) of the Provident Fund Scheme applicable in the case. The appellant forwarded the application to the Respondent s employer for verification in terms of the said Para. The Inspector of the appellant is also stated to have visited the factory, where the respondent-employee was working, to impress upon the employer to expedite verification of the application. The appellant s Area Inspector is stated to have personally gone to the factory on 19th August, 1992 and obtained the verification application. The claim of the respondent was settled on 24th August, 1992. However, the respondent filed a complaint before the District Consumer Disputes Redressal Forum, Faridabad (hereinafter referred to as "the District Forum") on 26th August, 1992 alleging deficiency in service of the appellant and claimed damages to the tune of Rs. 65,000/- along with costs for the alleged delay in payment of his provident fund. The appellant raised a preliminary objection regarding the jurisdiction of the District Forum on the ground that the respondent was not a `consumer and the facilities provided by the scheme were not a `service . The District Forum vide its order dated 4.11.1992 directed the appellant to pay interest @ 18 on delayed payment and costs of Rs. 1,000/-. Not satisfied with the order of the District Forum, the appellant filed an appeal before the State Consumer Disputes Redressal Commission, Haryana at Chandigarh (hereinafter referred to as "the State Commission") under Section 15 of the Act. The appeal was dismissed by the State Commission on 1.3.1994. The revision filed before the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as "the National Commission") was dismissed vide the order impugned in this appeal.

3. Taking us through the Employees Provident Fund Scheme, 1952, Shri N.N. Goswamy, Senior Advocate appearing for the appellant submitted that the said scheme could not be held to be a service within the meaning of Section 2(1)(o) and the respondent No. 1 as consumer within the meaning of Section 2(1)(d) of the Act. It was urged that as the Provident Fund Commissioner was the custodian of the funde passed to him and the contribution to the Scheme was not for consideration, the Act was not applicable.

4. Consumer under the Act has been defined as 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 the deferred payment and includes 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 services for a consideration which h

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1999 Supreme(SC) 1514

Cases Referred (6)