Verdict

In the Supreme Court of India, Civil Appellate Jurisdiction
Civil Appeal No. 2646

BAR OF INDIAN LAWYERS 
Through its President Jasbir Singh Malik …… APPELLANT(S)
Vs
K. GANDHI 
P.S National Institute of Communicable Diseases & anr. …… RESPONDENT(S)
with other appeals 
C.A. No. 2647 of 2009
C.A. No. 2648 of 2009
C.A. No. 2649 of 2009 (M. Mathias Vs DK Gandhi PS National Institute of Communicable diseases)

On 14th May 2024, the Supreme Court passed a crucial judgement stating that lawyers cannot be held responsible for ‘deficiency in service’ under the Consumer Protection Act. A look at the highlights of the case:

Facts

1. Mr. Mathias is an advocate by profession (‘advocate’). Mr. D.K Gandhi (‘Gandhi’) hired the services of the advocate for filing a complaint u/s 138 of the Negotiable Instruments Act. The complaint was a cheque dishonour case against Mr. Kamal Sharma (‘Sharma’) as a cheque of Rs. 20,000 issued by Sharma was dishonoured.
2. During the course of the case, Sharma agreed to pay Gandhi a sum of Rs. 20,000 and Rs. 5,000 towards legal expenses. 
3. Gandhi alleged that the sum of Rs. 20,000 (DD) + Rs. 5,000 (crossed cheque) was paid by Sharma to Gandhi’s advocate. However, the advocate did not deliver the DD and cheque to Gandhi. Instead, the advocate demanded Rs. 5,000 from Gandhi and further filed a suit for recovery of Rs. 5,000 in the Court of small causes. Subsequently, the advocate handed over the cheque and the DD to Gandhi. However, the cheque of Rs. 5,000 was stopped by Sharma at the insistence of Gandhi’s advocate.
4. Gandhi filed a case before the District consumer dispute redressal forum in Delhi seeking Rs. 15,000 as compensation and Rs. 10,000 towards mental agony and legal costs along with the Rs. 5,000 cheque amount due to him. The district forum decided in favour of Gandhi on the grounds of deficiency of service under the Consumer Protection Act.
5. Aggrieved by the order, the advocate approached the State Commission which ruled that services of advocates do not fall under the purview of the Consumer Protection Act.
6. Aggrieved by the State Commission, Gandhi filed a revision petition in the National consumer dispute redressal commission (NCDR) which held that inter alia that if there was any deficiency in service rendered by the Advocates/Lawyers, a complaint under the Consumer Protection Act, 1986 (for short “CP Act, 1986”) would be maintainable.
7. Aggrieved by the NCDRC order, the set of appeals were filed in the Supreme Court by the Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India and the Advocate Mr. Mathias.

Issue

Whether a “Service” hired or availed of an Advocate would fall within the definition of “Service” contained in the Consumer Protection 1986/2019? Will services of lawyers fall under the purview of the Consumer Protection Act?

Analysis & Judgment

1. The Apex Court examined the scope and object of the Consumer Protection Act 1986 / 2019 (‘CPA’).  While considering decided case laws1 the Court observed that the CPA was enacted to provide for the better protection of the interests of the consumers against their exploitation by the traders and manufacturers of the consumer goods, and to help consumers in getting justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies.(i) State of Karnataka vs. Vishwabharathi House & Others (2003) 2 SCC 412, (ii) Common Cause, A Registered Co-op society vs. Union of India & Others (1997) 10 SCC 729 (iii) Lucknow Development Authority vs. M.K. Gupta (1994) 1 SCC 243 and (iv) Laxmi Engineering Works vs. P.S.G. Industrial Institute (1995) 3 SCC 583
2. There was no mention in any part of the CPA which expressly include Professions, or the Services provided by the Professionals like Advocates, Doctors etc. within the purview of the Act. It is accepted fact that Professionals could not be called Businessmen or Traders, nor Clients or Patients be called Consumers. This is because ‘business’ or ‘trade’ has a commercial aspect involved which cannot be interchangeable used with ‘Profession’ which involves specialized knowledge and advanced learning gained by prolonged advanced education, training and proficiency. The nature of work is skilled and specialized substantial part of which would be mental rather than manual. Achieving success would depend upon many other factors beyond one’s control. Hence a Professional cannot be treated equally or at par with a Businessman or a Trader or a Service provider of products or goods as contemplated in the CPA. The Apex Court observed that there was nothing in the CPA that included ‘profession’ or services of professionals within the ambit of the CPA.
3. The Court was of the view that if services provided by all professionals were brought within the purview of the CPA, there would be a flood gate of cases / litigation in the consumer forums which would defeat the very object of the enactment of the CPA – timely and effective settlement of consumers’ disputes arising out of the unfair trade and unethical business practices. The Apex Court does not intend to state that professionals such as advocates or doctors would go scot-free for misconduct. Professionals are governed by their respective Councils like Bar Councils or Medical Councils for any professional misconduct and each profession is governed by a strict code of conduct. Disciplinary Committees of each Council take strict action against erring / negligent professionals. Besides, professionals can be tried for civil and criminal liability arising due to negligence or misconduct in various Courts of Law.
4. The Court opined that its own decision in the Indian Medical Association Vs V.P Shantha & Others bringing services rendered by medical professionals within the definition of ‘Service’ u/s 2(1)(o) of the CPA must be revisited having regard to the objects and purpose of enacting the CPA. Just as ‘profession’ cannot be treated as ‘business’ or ‘trade’, similarly services of professionals cannot be treated at par with services of a businessman or trader.
5. Referring to cases such as State of U.P and Others vs. U.P. State Law Officers Association & Others (1994) 2 SCC 204, the work of advocate(s) not only impacts their client, but also administration of justice which is the foundation for a civilized society. Legal services of advocates effectively create a strong judiciary which is the backbone of a democracy. Hence the Court held that the legal profession is sui generis – unique in nature and cannot be compared to any other profession.
6. The Apex Court also observed that the advocate – client relationship is in the nature of contract of personal service. This is because the advocate represents the client before the Court and conducts proceedings on behalf of the client. He is the only link between the Court and the client. His responsibility is onerous. To such extent, the advocate is perceived to be the agent of the client and has fiduciary duty to not act beyond the autonomy of the client’s interests. Thus, a considerable amount of direct control is exercised by the Client over how an Advocate renders his services during his employment.  Hence it can be said to be a contract of personal service. Now a contract of personal service is outside the ambit of the definition of ‘service’ under the CPA 2019. Consequently, ‘deficiency in service’ would not be maintainable under CPA 2019.

Based on the above,  the Hon’ble Supreme Court set aside the order passed by the NCDRC and held that the lawyers and their services are exempt from the purview of the Consumer Protection Act.

For full text of Judgment:
https://webapi.sci.gov.in/supremecourt/2007/27751/27751_2007_14_1501_53242_Judgement_14-May-2024.pdf