Advocate Not Liable Under Consumer Protection Act: A Critique of Supreme Court Judgment

A two-Judge Bench of the Supreme Court in Bar of Indian Lawyers v. D.K. Gandhi PS National Institute of Communicable Disease¹ (for short, “D.K. Gandhi case”) has held that services hired or availed of an advocate do not fall under the definition of word “service” of the Consumer Protection Act (for short, “CP Act”), 1986²/2019³.

The appeals arose before the Supreme Court against the order of the National Consumer Disputes Redressal Commission, which held that if there was any deficiency in service rendered by the advocates/lawyers, a complaint under the Consumer Protection Act is maintainable.

Therefore, the only issue for consideration before the Supreme Court was whether service rendered by an advocate, comes under the Consumer Protection Act or not. Nonetheless, the Supreme Court expanded the scope of its consideration and dealt with another aspect i.e. whether services rendered by the professionals falls within the purview of the CP Act? In dealing with this issue of services rendered by the professionals, the two-Judge Bench in D.K. Gandhi case⁴ doubted the correctness of the law laid down by the three-Judge Bench in Indian Medical Assn. v. V.P. Shantha⁵, (for short, “V.P. Shantha case/judgment”), and as it was less in number strength, the matter was referred to the Chief Justice of India to constitute the larger Bench.

As the two-Judge Bench in D.K. Gandhi case⁶ has dealt with the two aspects, therefore, this article will also discuss those two aspects individually i.e. (1) reference of the V.P. Shantha judgment⁷ to the larger Bench was not necessary; and (2) services hired or availed of an advocate do fall under definition of word “service” of the CP Act, 1986/2019, albeit to limited extent.

(1) Reference of the V.P. Shantha judgment to the larger Bench was not necessary

The reasons which the two-Judge Bench in D.K. Gandhi case⁸ gave before coming to conclusion that V.P. Shantha judgment⁹ requires reconsideration are thus: (i) there is no whisper in the Statement of Objects and Reasons either of the CP Act, 1986/2019 to include the professions or the services provided by the professionals like advocates, doctors within the purview of the CP Act as professionals cannot be called the businessmen or traders, nor clients or patients be called consumers and that the terms “business” or “trade” having a commercial aspect involved, cannot be used with term “profession”.¹⁰ Profession requires high level of education, training and proficiency which involves skilled and specialised kind of mental work¹¹; and (ii) the object of the CP Act is to provide timely and effective settlement of the disputes and if the services provided by all the professions are brought within purview of the CP Act, there would be floodgate of litigations in consumer commissions because remedy is inexpensive and summary in nature.¹²

Before discussing the aforesaid two reasons, it is apt to note that the three-Judge Bench of the Supreme Court in Indian Medical Assn. v. V.P. Shantha¹³, dealt with the issue of whether services rendered by “medical professionals” falls under the definition of “service” under Section 2(1)(o) of the CP Act, 1986¹⁴. The same was answered in affirmative. Now, the following discussion:

The seven-Judge Constitutional Bench of the Supreme Court in Keshav Mills Co. Ltd. v. CIT¹⁵, had laid down parameters before calling for reconsideration of the earlier view. It held that the Court should be satisfied that whether in the interests of the public good or any other valid and compulsive reasons, it is necessary that the earlier decisions should be revised. The Referring Court should ask to itself: what is the nature of infirmity or error on which plea of revision is based, was some patent aspects of question remain unnoticed or attention of court was not drawn to any relevant and material statutory provision or was any previous decision was noticed, has the earlier decision been followed by subsequent Benches or High Court, would reversal of earlier view lead to public inconvenience, hardship or mischief.¹⁶ The reason behind laying these parameters is stated thus:

23. … When this Court (Supreme Court) decides questions of law, its decisions are under Article 141, binding on all courts within the territory of India, and so, it must be constant endeavour and concern of this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country. Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable, may incidentally tend to make law uncertain and introduce confusion which must be consistently avoided.¹⁷

From these guiding principles, if one sees the aforementioned reasoning in D.K. Gandhi case¹⁸, none of the parameters as laid down in Keshav Mills judgment¹⁹ are shown as to why V.P. Shantha judgment²⁰ requires reconsideration. In fact, one of the reasonings of the two-Judge Bench in D.K. Gandhi case²¹ that “professionals” cannot be said to have been included in the definition of word “service” by the legislature as profession cannot be equated to commercial activity was argued in V.P. Shantha case,²² and the said contention was negatived by the three-Judge Bench, therefore, revisiting the law on the point which was earlier answered amounts to wastage of precious judicial time.

Having referred the issue whether “professionals” fall within the definition of term “service” to the larger Bench, still, the two-Judge Bench in D.K. Gandhi case²³ decided to deal with the aspect of whether service hired or availed of an advocate comes under Consumer Protection Act. For this, inter alia, it declared “legal profession” as sui generis i.e. the legal profession is different and unique, hence it cannot be equated with the other professions like medical profession, etc.²⁴ Firstly, as the issue before the two-Judge Bench was only whether advocates fall under the Consumer Protection Act or not, it would have sufficed to confine itself to the said issue, but it went into the aspect of entire gamut of “professionals”, by referring to the larger Bench. Secondly, when it had to hold “legal profession” as different from other professions, then there was no need to discuss and then refer to larger Bench whether “professionals” come under the definition of service as it was not called for to deal with that issue at all. Thirdly, having doubted the correctness of law declared in V.P. Shantha judgment²⁵ viz. inclusion of professionals in definition of term “service”, judicial discipline would have been in the fact that entire issue is referred to be dealt by the larger Bench itself. This piecemeal declaration of law would only lead to uncertainty and confusion in the law.

It is settled principle of statutory interpretation that the Statement of Objects and Reasons are an external aid of interpretation,²⁶ and cannot be used for interpreting the legislation if the words used in the statute are clear enough.²⁷ Keeping these principles in mind, if one gleans through the term “service” under the CP Act, 1986/2019, one would find that the term “service” is defined in three ways. One is general definition which is very wide. Second is, certain specific activities are included, and the third is, exclusionary clause which keeps “services provided free of charge” and “contract of personal service” outside the ambit of term “service”. For the discussion on present aspect of this article, the general definition would suffice. The general definition uses the language, “service of any description which is made available to potential users….” The Supreme Court in LDA v. M.K. Gupta²⁸ while interpreting Section 2(1)(o) of the old CP Act, 1986 which defined “service”, has held that the use of words “any” and “potential” are of wide amplitude.²⁹ Hence, when the language of the statute is very clear to mean that the service of each and every description, but for two exemptions, comes under the ambit of CP Act, there was no need to rely on Statement of Objects and Reasons which is an external aid of interpretation and which comes to rescue when the language of statute is unclear or ambiguous.

Furthermore, the Supreme Court in CIT v. Bansi Dhar³⁰ has held that “once certain words in an Act of Parliament had received a judicial construction in one of the superior courts, and the legislature repeated these without any alteration in a subsequent statute, the legislature must be taken to have used them according to the meaning which a court of competent jurisdiction had given to them”.³¹ Here, the definition of term “service” under Section 2(42) of the CP Act, 2019 is a verbatim copy of Section 2(1)(o) of the old CP Act, 1986 with extra inclusion of word “telecom” under Section 2(42) of the CP Act, 2019³². Therefore, the fact that the legislature while drafting Section 2(42) of the CP Act, 2019 has not made any change in the language of term “service” despite knowing the interpretation given by the three-Judge Bench in V.P. Shantha judgment³³ to include professional service, leads to only one conclusion that, even the legislature has accepted professional service to come under the definition of word “service”. Added to it, under the inclusionary part of Section 2(11) of the CP Act, 2019 which defines the expression “deficiency”, the term “any act of negligence or omission or commission by such person which causes loss or injury to the consumer” is used, meaning thereby, if there is any negligence or omission or commission in providing service, all of these could be by the professional as well, and the same would result in deficiency in service.

The other reasoning that as CP Act is brought to provide timely and effective settlement of the disputes and if the services provided by all the professions are brought within purview of the CP Act, there would be floodgate of litigations in consumer commissions is, with due respects, flawed. In no principle of interpretation or jurisprudence it is stated that by inclusion of certain class of litigants (here, professionals) within the ambit of a statute if there would be floodgate of litigation, such class of litigations should be excluded. Interpretation depends upon the language used by the statute and not based on workload of litigation. Also, as “the life of law has not been logic: it has been experience”,³⁴ and that experience of functioning of consumer commissions shows that against the avowed mandate of the CP Act to decide the complaint within 3/5 months³⁵ and appeal within 90 days period³⁶, it is already taking 1-3 years for District Commissions to decide original complaints and if matter is carried on appeal, it is taking 4-5 years to decide such appeal by the State/National Commissions. Further, the major chunk of filing comes out of real-estate matters like not registering the plot/flat or not completing the project/flat on time. Therefore, neither the disputes are getting resolved in time nor are the consumer commissions with less amount of cases, therefore, mere adding of cases against lawyers would not defeat the mandate of the statute for timely disposal of cases.

(2) Services hired or availed of an advocate do fall under definition of word “service” of the CP Act, 1986/2019, albeit to limited extent

The two-Judge Bench in D.K. Gandhi case³⁷ held that services engaged or hired of an advocate fall under the “contract of personal service” i.e. under the exclusionary clause of definition “service”, therefore, the advocates are exempted from the Consumer Protection Act, 1986/2019. It reasoned that: (i) 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, like advocate acts as an agent of the client, without instructions from the client an advocate cannot make concessions or give any undertaking to the court, advocate is like a link between the court and his client,³⁸ (ii) in different countries, the legislature has expressly excluded lawyers from the ambit of Consumer Protection Act,³⁹ therefore, based on universal practice, the Consumer Protection Act of India is said to exclude lawyers from ambit of the CP Act, 1986/2019.⁴⁰

In simple terms, this interpretation has led the advocate as an employee of his client. In the contract law jurisprudence, there are two terms viz. “contract for service” and “contract of service”. The differentiation between both is explained succinctly in V.P. Shantha judgment⁴¹ by referring to various authorities. It is observed thus:

A “contract for services” implies a contract whereby one party undertakes to render services e.g. professional or technical services, to or for another in the performance of which he is not subject to detailed direction and control but exercises professional or technical skill and uses his own knowledge and discretion. (See: Oxford Companion to Law, p. 1134.) A “contract of service” implies relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance.⁴² We entertain no doubt that parliamentary draftsman was aware of this well-accepted distinction between “contract of service” and “contract for services” and has deliberately chosen the expression “contract of service” instead of the expression “contract for services”, in the exclusionary part of the definition of “service” in Section 2(1)(o). The reason being that an employer cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment.⁴³

Also, “amount of control” is another major factor in determining whether particular service falls under contract of service or not. An advocate is not the servant/employee of his client because an advocate is a professional, and also, he is not always obliged to obey the orders/instructions of his client. Though an advocate has to act as per the instructions of his client, but his first obligation is that he is an officer of the court, which means without being bothered by the outcome of the case for the client for whom he/she is representing, an advocate owes a duty to assist the court in proper perspective to ensure that the rule of law gets glorified. So, if an occasion comes to decide between the court and the client, without hesitation, an advocate has to be on the side of the court, which means he has to forego the instructions of his client. An advocate also owes a duty to the other side advocate of treating him with respect.

Therefore, as CP Act, 1986/2019 does not use the words “contract for personal service”, it can be safely said that services hired or availed of the advocate come under the definition of word “service”. It is pertinent to note that not every act of an advocate comes under “deficiency of service”. For instance, if an advocate after representing the case effectively and arguing the matter, loses it, the same would not amount to deficiency in service as the outcome of case is not in the hands of the advocate.⁴⁴ But, having taken his professional fees, if the advocate does not attend the court which results in losing of the case, the same would amount to deficiency in service as because of his omission in attending the matter, his client has to suffer the loss.

The fact that in other countries the legislature has in explicit terms excluded lawyers from the ambit of Consumer Protection Act and that the Indian legislature even in the year 2019 has not done it, despite the ruling of the Supreme Court about professionals in V.P. Shantha judgment⁴⁵ in 1995 and ruling of the National Commission about the lawyers in the year 2007, only adds to the legislative intent to bring even the lawyers within the ambit of the CP Act. The statute under interpretation has to be interpreted based on the language and wording used in it, and not based on what practices are applied universally and also when statutes of other countries explicitly exclude something, unlike ours.

Now, as anyways, the larger Bench is called upon to decide whether “professionals” per se come under the definition of term “service”, it would be apt, though the scope of such bench would be limited to answer the question of reference, if this subsidiary question — whether services hired or availed of the advocate come under the definition of word “service” and to what extent — is also answered by the larger Bench, which it can do if such subsidiary question logically and unavoidably arises.⁴⁶