1. Dispute regarding the existence of a consumer-service provider relationship between employees and employer under a post-retirement benefit scheme managed by a trust under the Consumer Protection Act, 1986. (Para 4 , 5 )
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2019 Supreme(SC) 1340
SUPREME COURT OF INDIA
S. Abdul Nazeer, Deepak Gupta, JJ.
CHAIRMANCUMMANAGING DIRECTOR ONGC LTD. & ORS. – APPELLANT(S)
Versus
CONSUMER EDUCATION RESEARCH SOCIETY & ORS. – RESPONDENT(S)
CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). 9257 OF 2019 (Arising out of SLP (C) No(s).14941 of 2014) WITH CIVIL APPEAL NOS. 9258 OF 2019 (Arising out of SLP (C) Nos. 26660 of 2014) CIVIL APPEAL NOS. 9259 OF 2019 (Arising out of SLP (C) No. 26659 of 2014) CIVIL APPEAL NOS. 9260 OF 2019 (Arising out of SLP (C) No. 26662 of 2014) CIVIL APPEAL NOS. 9261 OF 2019 (Arising out of SLP (C) No. 26655 of 2014) CIVIL APPEAL NOS. 9262 OF 2019 (Arising out of SLP (C) No. 26657 of 2014) CIVIL APPEAL NOS. 9263 OF 2019 (Arising out of SLP (C) No. 26661 of 2014) CIVIL APPEAL NOS. 9264 OF 2019 (Arising out of SLP (C) No. 26663 of 2014)
Decided On : 09-12-2019
Important Points
IMPORTANT POINT
There is no relationship of consumer and service provider between claimants and ONGC.
There is no relationship of consumer and service provider between claimants and ONGC.
Subject
Consumer Law - Definition of Consumer
Act Referred
Headnote
Consumer Protection Act, 1986 – Sections 2(1)(d) and 2(1)(o) – Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991 of ONGC – Retiral benefits – Delay in sending of claims causing loss to claimants – There is virtually no privity of contract for providing service between ONGC and claimants – Contributors to Scheme were employees of ONGC – Whereas employer was only making a token contribution of Rs.100 per annum, Scheme was also voluntary and optional for employees who were in service from effective date – Scheme is managed and run by a Trust and not by ONGC – Trustees of Trust are nominated by Chairman of ONGC and representatives may be nominated to Board of Trustees by Central Working Committee (CWC) of Association of Scientific and Technical Officers – Service is being rendered by Trust and not by ONGC – There is no relationship of consumer and service provider between claimants and ONGC – Orders of National Consumer Disputes Redressal Commission and State Consumer Disputes Redressal Commission in so far as it held that there is relationship of consumer and service provider between claimants and ONGC, set aside – ONGC directed to pay amounts payable (other than costs) under orders impugned to claimants within 8 weeks. (Paras 7 and 8)
Facts of the case:
Main issue involved is whether there is relationship of consumer and service provider existing between private respondents (claimants) and the appellants. Consumer Fora held that employees were consumers of ONGC and therefore passed orders awarding various amounts and costs in favour of the claimants and hence the ONGC is liable to pay the same.
Findings of Court:
Scheme is managed and run by a Trust and not by ONGC. The trustees of the Trust are 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.
Result : Appeals Partly allowed.
Legal Category Hierarchy
Advocates Appeared:
For the Petitioner(s):Krishnan Venugopal, Jay Cheema, Shivendra Singh, Rajat Roshan Sharma, Jatinder Cheema, Akshat Razdan, Avinash Das, M/s. Cyril Amarchand Mangaldas, Advocates
For the Respondent(s):Anil Shrivastav, Arjun Garg, S. Mahesh Sahasranaman, Rajat Roshan Sharma, , Advocates
For the Petitioner(s):Krishnan Venugopal, Jay Cheema, Shivendra Singh, Rajat Roshan Sharma, Jatinder Cheema, Akshat Razdan, Avinash Das, M/s. Cyril Amarchand Mangaldas, Advocates
For the Respondent(s):Anil Shrivastav, Arjun Garg, S. Mahesh Sahasranaman, Rajat Roshan Sharma, , Advocates
Table of Contents
2. Whether payment of consideration was made for services and whether the arrangement constitutes a contract of personal service excluded from the definition of service. (Para 6 )
3. The benefit scheme was managed and run by a separate trust rather than the employer, meaning any service rendered was provided by the trust. (Para 7 )
4. No consumer-service provider relationship exists between an employer and employees when the benefit scheme is managed and operated by an independent trust. (Para 7 )
5. Appeals partly allowed; findings of consumer-service provider relationship and costs set aside, but employer directed to pay the principal amounts to claimants. (Para 8 )
6. Does a consumer-service provider relationship exist between an employer and employees for a benefit scheme managed by a trust?
No. If the scheme is managed and run by a trust, the service, if any, is rendered by the trust and not the employer. Consequently, there is no privity of contract for providing service between the employer and the employees. (Para 7 )
7. What are the essential ingredients for a person to be considered a consumer under the Consumer Protection Act, 1986?
A consumer is defined as any person who hires or avails of any services for a consideration which has been paid, promised, or partly paid, or under a system of deferred payment. (Para 6 )
8. What types of services are excluded from the definition of service under the Consumer Protection Act, 1986?
The definition of service specifically excludes the rendering of any service free of charge or any service provided under a contract of personal service. (Para 6 )
JUDGMENT
Deepak Gupta, J.
Leave granted.
2. All these appeals are being disposed of by a common judgment since the issue involved is common in all the cases.
3. At the outset, we may note that Shri Krishnan Venugopal, learned senior counsel appearing for the appellants submits that without prejudice to the rights of the appellants to challenge the impugned orders of the National Consumer Disputes Redressal Commission as well as the Gujarat State Consumer Disputes Redressal Commission and the District Forum, the appellants shall pay the amount as directed in the impugned orders. This has been done because the amounts involved are small, the appellants had retired a long time back and they should not be forced to go into the second round of litigation.
4. The main issue involved is whether there is relationship of consumer and service provider existing between the private respondents (claimants) and the appellants.
5. The undisputed facts are that all the claimants were employees of the Oil and Natural Gas Commission (for short ‘the ONGC’). A Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991 (for short ‘the Scheme’) was introduced in the ONGC after obtaining permission of the Government of India and the relevant portion of the letter dated 18.09.1991 granting permission reads as follows:“(i) Contribution to the fund to be established from the employee of the ONGC would be in cash, with a token contribution of Rs.100 per annum by ONGC.”
The Scheme has also been annexed and the relevant portion of the Scheme reads as follows:
“1(c) Membership
(i) xxx xxx xxx
(ii) The Scheme shall be optional to the existing executives in regular service of the Commission on the effective date of the Scheme 01 04 1990 However, t will be compulsory for executives joining regular service in the Commission as new entrant on or after the effective date of the Scheme option once exercise shall be final and irrevocable
xxx xxx xxx
2 Contribution
2.1 The contribution to be make by the memberemployee shall be calculate his salary and the rate will be as given hereunder depending on his age on the effective of the Scheme for employees on the rolls ONGC as on 01.04.1990 and on the date Joining ONGC for new entrants. The rate of contribution fixed at the time of entry will remain constant. The following rates of the contribution are payable in the various age group:
| (i) | Below 25 years | 0.5% of salary |
| (ii) | 25 and upto 35 years | 0.75% of Salary |
| (iii) | above 30 and up to 35 years | -1% of salary |
| (iv) | above 35 and up to 40 years | -2% of salary |
| (v) | Above 40 and up to 45 years | -3% of salary |
| (vi) | Above 45 and up to 48 years | -4.5% of salary |
| (vii) | Above 48 and up to 50 years | -4.5% of salary |
| Above 50 and up to 58 years | -5% of salary |
xxx xxx xxx
5. MANAGING THE SCHEME
(a) The Scheme shall be run by a Trust consisting of trustees to be nominated by the Chairman ONGC and representative as may nominated on the board by CWC of ASTO. The Trust would make investment plan of the fund as per pattern of Rule 67 (2) of Income Tax Rule 1961 and would purchase annuity from LIC for the beneficiaries under the Scheme.
It is not necessary to deal with other facts. The case of the claimants was that due to delay in sending their claims to the LIC, they suffered a loss. This averment is denied by the appellants but, in our view, that is not very relevant. The Consumer Fora held that the employees were consumers of the ONGC and therefore passed orders awarding various amounts and costs in favour of the claimants and hence the ONGC is liable to pay the same.
6. Shri Venugopal has raised various pleas before us. The first is that in terms of the definition of consumer in the Consumer Protection Act, 1986 (for short ‘the Act’), the first essential ingredient is payment of consideration for availing services. The second contention is that rendering of service free of charge under a contract of personal servic
