Services of lawyers excluded from consumer protection law: Top Court overrules NCDRC’s order upholding maintainability of complaint under Consumer Protection Act alleging deficiency in service rendered by lawyers
Justices Bela M. Trivedi & Pankaj Mithal [14-05-2024]

Read Order: BAR OF INDIAN LAWYERS THROUGH ITS PRESIDENT JASBIR SINGH MALIK AND ORS v. D. K. GANDHI PS NATIONAL INSTITUTE OF COMMUNICABLE DISEASES AND ANR [SC- CIVIL APPEAL NO. 2646 OF 2009]

Tulip Kanth

New Delhi, May 15, 2024: In a landmark ruling, the Supreme Court has set aside an order of the NCDRC whereby it was held that in respect of deficiency in service rendered by the lawyers, a complaint under Consumer Protection Act, 1986 would be maintainable. The Apex Court has held that a service hired or availed of an Advocate is a service under “a contract of personal service” and would fall within the exclusionary part of the definition of “Service” contained in Section 2 (42) of the Consumer Protection Act, 2019.

The Division Bench of Justice Bela M. Trivedi and Justice Pankaj Mithal was considering the issue of whether a complaint alleging “deficiency in service” against Advocates practicing the Legal Profession, would be maintainable under the Consumer Protection Act, 1986 as re-enacted in 2019. 

The factual background of the case was such that the appellant, an Advocate by profession, was hired by the respondent D.K. Gandhi as an advocate for filing a Complaint in the Court of Metropolitan Magistrate, Tis Hazari Court, Delhi, against one Kamal Sharma under Section 138 of the Negotiable Instruments Act.

During the course of the said complaint case, the accused agreed to pay the sum of Rs.20,000/- for the dishonoured cheque besides Rs.5,000/- as the expenses incurred by the complainant. It was alleged by the respondent (complainant) that though the appellant had received from the accused the DD/pay order for Rs.20,000/- and the crossed cheque of Rs.5,000/- on behalf of the respondent, the appellant did not deliver the same to the respondent and instead demanded Rs.5,000/- in cash from the respondent. 

Subsequently, the appellant gave the DD/pay order for Rs.20,000/- and cheque for Rs.5,000/- to the respondent, however, the payment of cheque for Rs.5,000/- was stopped by the accused at the instance of the appellant.The respondent therefore filed a complaint before the District Consumer Disputes Redressal Forum, Delhi seeking compensation of Rs. 15,000/- in addition to the amount of cheque of Rs.5,000/-, as also Rs.10,000/- for the mental agony and harassment along with the cost. The appellant resisted the said complaint by filing a reply raising a preliminary objection to the effect that the District Consumer Forum had no jurisdiction to adjudicate the dispute raised in the complaint as the Advocates were not covered under the provisions contained in the CP Act.

The District Forum decided the complaint in favour of the respondent. The State Commission allowed the appellant’s appeal with the observation that the services of lawyers/advocates did not fall within the ambit of “service” defined under section 2(1)(o) of the CP Act, 1986. The NCDRC, however in the Revision Application preferred by the respondent passed the impugned order. Being aggrieved by the same, the present set of appeals was filed by the Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India, and the appellant M. Mathias.

Referring to the slight difference in the definition of ‘Deficiency’ in Section 2(1)(g) of 1986 Act and Section 2(11) of 2019 Act, Justice Trivedi opined that the definition of ‘service’ is divided into three parts – the first part is explanatory in nature and defines service to mean service of any description which is made available to the potential users; the second part is inclusionary part, which expressly includes the provision of facilities in connection with the specific services; and the third part is exclusionary part which excludes rendering of any service free of charge or under a contract of personal service.

On a conjoint reading of the provisions contained in Order III CPC and Chapter IV of Advocates Act pertaining to right to practice, Justice Trivedi held that an advocate whose name has been entered in the State roll is entitled as of right to practice in all Courts, however he can act for any person in any Court only when he is appointed by such person by executing the document called “Vakalatnama.” Such Advocate has certain duties to the courts, to the client, to the opponent and to the colleagues as enumerated in the Bar Council of India Rules. 

Noting that a considerable amount of direct control is exercised by the Client over the manner in which an Advocate renders his services during the course of his employment, Justice Trivedi stated, “All of these attributes strengthen our opinion that the services hired or availed of an Advocate would be that of a contract ‘of personal service’ and would therefore stand excluded from the definition of “service” contained in the section 2(42) of the CP Act, 2019. As a necessary corollary, a complaint alleging “deficiency in service” against Advocates practicing Legal Profession would not be maintainable under the CP Act, 2019.”

Thus, setting aside the order of the NCDRC, Justice Trivedi summarized the conclusions as under:

• The very purpose and object of the CP Act 1986 as re-enacted in 2019 was to provide protection to the consumers from unfair trade practices and unethical business practices, and the Legislature never intended to include either the Professions or the services rendered by the Professionals within the purview of the said Act of 1986/2019.
• The Legal Profession is sui generis i.e. unique in nature and cannot be compared with any other Profession.
• A service hired or availed of an Advocate is a service under “a contract of personal service,” and therefore would fall within the exclusionary part of the definition of “Service” contained in Section 2 (42) of the CP Act 2019.
• A complaint alleging “deficiency in service” against Advocates practicing Legal Profession would not be maintainable under the CP Act, 2019.

Justice Mithal concurred with the views of Justice Trivedi. He referred to the Directives of the European Parliament which bears a befitting testimony to the continuing intent of lawmakers to safeguard regulated professions from any outside interference. 

Justice Mithal also opined that States in the USA exempt legal professionals from consumer laws and the Australian High Court has also emphatically echoed the need for such exemption and its direct bearing on the justice delivery system.

“ It is, therefore, essential that the consumer protection laws in all countries may somewhat have universal application and be confined to ‘consumers’ only i.e. to the persons who buys any goods for consideration or hires or avails of any service for consideration, impliedly excluding the professional services especially that of a lawyer whose profession is sui generis”, he said while also adding “In doing so, in India also the services of professionals more particularly that of lawyers have to be excluded from consumer protection law in accordance with the intention expressed in enacting the same.”