Supreme Court of India
CHAIRMAN-CUM-MANAGING DIRECTOR ONGC LTD. & ORS. versus CONSUMER EDUCATION RESEARCH SOCIETY & ORS. on 9 December 2019
SUPREME COURT REPORTS
[2019] 14 S.C.R.
ACHAIRMAN-CUM-MANAGING DIRECTORONGC LTD. & ORS.
v.
CONSUMER EDUCATION RESEARCH SOCIETY & ORS.
(Civil Appeal No. 9257 of 2019)
B
DECEMBER 09, 2019
[S. ABDUL NAZEER AND DEEPAK GUPTA, JJ.]
Consumer Protection Act, 1986: Consumer-Service providerrelationship – Whether there is relationship of consumer andCservice provider existing between the private respondents(claimants) and the appellants – All the claimants were employeesof the ONGC – A Self Contributory, Post Retirement and Death inService Benefits Scheme, 1991 was introduced in the ONGC afterobtaining permission of the Government of India on 18.09.1991D– Case of the claimants was that due to delay in sending theirclaims to the LIC, they suffered a loss – Consumer Fora held thatthe employees were consumers of the ONGC and held in favourof the claimants – Held: There was no privity of contract forproviding service between the ONGC and the claimants – Letterdated 18.09.1991 and the Scheme showed that contributors to theEScheme were the employees of ONGC – The employer was onlymaking a token contribution of Rs.100 per annum, the Scheme wasalso voluntary and optional for the employees who were in service– The Scheme envisaged that every employee shall contribute tothe fund at rates specified therein – The Scheme was managed andFrun by a Trust and not by the ONGC – The service, if any, wasbeing rendered by the Trust and not by the ONGC – Thus, therewas no relationship of consumer and service provider between theclaimants and the ONGC – However, in view of the submission forthe appellant that without prejudice to their rights to challenge theimpugned orders of consumer forums, the appellants shall pay theGamount as directed in the impugned orders, ONGC is directed topay the amounts under the order impugned to the claimants.
Partly allowing the appeals, the Court
HELD: 1. There is virtually no privity of contract forHproviding service between the ONGC and the claimants. From
a perusal of the letter dated 18.09.1991 and the Scheme, it isapparent that contributors to the Scheme were the employeesof ONGC. Whereas the employer was only making a tokencontribution of Rs.100 per annum, the Scheme was also voluntaryand optional for the employees who were in service from theeffective date i.e. 01.04.1990. It is not disputed that all theclaimants were in service before the effective date. The Schemeenvisages that every employee shall contribute to the fund atrates specified therein. The younger the employee, thepercentage deducted from his salary is less and this risesprogressively as the age increases. It has obviously been doneto ensure that the contribution of the employee is equal i.e. thosewho have less years of remaining service will contribute at ahigher rate and those who have more years of remaining servicewill contribute at a lower rate. The most important aspect is thatthe Scheme is managed and run by a Trust and not by the ONGC.The trustees of the Trust are nominated by the Chairman of theONGC and representatives may be nominated to the Board ofTrustees by the Central Working Committee (CWC) ofAssociation of Scientific and Technical Officers. 7 trustees arenominated by the Chairman of the ONGC and 6 by the CWC.Be that as it may, it is the Trust which manages the fund.Therefore, without going into the question as to whether anyamount is being paid by the employees for contribution to theservices rendered by the Trust, it is apparent that the service,if any, is being rendered by the Trust and not by the ONGC.Therefore, there is no relationship of consumer and serviceprovider between the claimants and the ONGC. [Para 7] [779-F-G; 780-A-E]
Jagmittar Sain Bhagat & Ors. vs. Director, HealthServices, Haryana & Ors. (2013) 10 SCC 136 : [2013]8 SCR 77 ; Regional Provident Fund Commissionerv. Shiv Kumar Joshi (2000) 1 SCC 98 : [1999] 5 Suppl.SCR 294 ; Regional Provident Fund Commissioner v.Bhavani (2008) 7 SCC 111 – referred to.
2. The orders of the National Consumer DisputesRedressal Commission and the State Consumer DisputesRedressal Commission are set aside in so far as it held that A
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Athere is a relationship of consumer and service provider betweenthe claimants and the ONGC. However, in view of the statementmade by the counsel of appellant, recorded in the openingportion of this judgment the ONGC is directed to pay theamounts payable (other than the costs) under the ordersBimpugned to the claimants. [Para 8] [780-F-G]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9257of 2019.
From the Judgment and Order dated 20.03.2014 of the NationalConsumer Disputes Redressal Commission, New Delhi in RevisionDPetition No. 3382 of 2013
With
Civil Appeal Nos. 9258, 9259, 9260, 9261, 9262, 9263, 9264 of
2019.
EKrishnan Venugopal, Sr. Adv., Jay Cheema, Akshat Razdan,Avinash Das, Sivender Singh, M/S. Cyril Amarchand Mangaldas, Advs.for the Appellants.
Anil Shrivastav, Arjun Garg, Aakash Nandolia, DevanshSrivastava, Advs. for the Respondents.F
The Judgment of the Court was delivered by DEEPAK GUPTA, J.
Citations and Judicial Treatment
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Loading the citing and cited decisions…
This judgment in the centre: on the left the decisions it cites, on the right the decisions citing it. Colour is the treatment; choose a decision to open it.
1. Leave granted.
2. All these appeals are being disposed of by a common judgment Gsince 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 withoutprejudice to the rights of the appellants to challenge the impugned ordersof the National Consumer Disputes Redressal Commission as well asHthe Gujarat State Consumer Disputes Redressal Commission and the District Forum, the appellants shall pay the amount as directed in theimpugned orders. This has been done because the amounts involvedare small, the appellants had retired a long time back and they shouldnot be forced to go into the second round of litigation.
4. The main issue involved is whether there is relationship ofconsumer and service provider existing between the private respondents(claimants) and the appellants.
5. The undisputed facts are that all the claimants were employeesof the Oil and Natural Gas Commission (for short ‘the ONGC’). ASelf Contributory, Post Retirement and Death in Service BenefitsScheme, 1991 (for short ‘the Scheme’) was introduced in the ONGCafter obtaining permission of the Government of India and the relevantportion of the letter dated 18.09.1991 granting permission reads asfollows:- “(i) Contribution to the fund to be established from the employeeof the ONGC would be in cash, with a token contribution ofRs.100 per annum by ONGC.”
The Scheme has also been annexed and the relevant portion ofthe Scheme reads as follows:- “1(c) Membership
(i) xxxxxxxxx
(ii) The Scheme shall be optional to the existing executivesin regular service of the Commission on the effectivedate of the Scheme 01 04 1990 However, t will becompulsory for executives joining regular service in theCommission as new entrant on or after the effectivedate of the Scheme option once exercise shall be finaland irrevocable xxxxxxxxx 2 Contribution 2.1 The contribution to be make by the member-employee shallbe calculate his salary and the rate will be as given hereunderdepending on his age on the effective of the Scheme foremployees on the rolls ONGC as on 01.04.1990 and on the dateJoining ONGC for new entrants. The rate of contribution fixedat the time of entry will remain constant. The following rates ofthe contribution are payable in the various age group:
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[2019] 14 S.C.R.
5. MANAGING THE SCHEME
(a) The Scheme shall be run by a Trust consisting of trustees tobe nominated by the Chairman ONGC and representative as mayDnominated on the board by CWC of ASTO. The Trust wouldmake investment plan of the fund as per pattern of Rule 67 (2)of Income Tax Rule 1961 and would purchase annuity from LICfor the beneficiaries under the Scheme.
6. Scheme is based on voluntary contribution by the memberEemployees. No contribution will be made by ONGC towards thisScheme except Rs.100 p.a. No. other financial liability on accountof this Scheme will devolve on ONGC or the Govt. of India.”
It is not necessary to deal with other facts. The case of theclaimants was that due to delay in sending their claims to the LIC, theyFsuffered a loss. This averment is denied by the appellants but, in ourview, that is not very relevant. The Consumer Fora held that theemployees were consumers of the ONGC and therefore passed ordersawarding various amounts and costs in favour of the claimants andhence the ONGC is liable to pay the same.
G6. Shri Venugopal has raised various pleas before us. The firstis that in terms of the definition of consumer in the Consumer ProtectionAct, 1986 (for short ‘the Act’), the first essential ingredient is paymentof consideration for availing services. The second contention is thatrendering of service free of charge under a contract of personal serviceis not included in the definition of service under the Act. We may referHto Section 2(d) of the Act, which reads as follows:- “(d) “consumer” means any person who,—
(i) xxxxxxxxx
(ii) hires or avails of any services for a consideration which hasbeen paid or promised or partly paid and partly promised, orunder any system of deferred payment and includes anybeneficiary of such services other than the person who hires oravails of the services for consideration paid or promised, or partlypaid and partly promised, or under any system of deferredpayment, when such services are availed of with the approvalof the first mentioned person but does not include a person whoavails of such services for any commercial purpose;”
We may also refer to Section 2(o) of the Act, which reads asfollows:- “(o) “service” means service of any description which is madeavailable to potential users and includes, but not limited to, theprovision of facilities in connection with banking, financinginsurance, transport, processing, supply of electrical or otherenergy, board or lodging or both, housing construction,entertainment, amusement or the purveying of news or otherinformation, but does not include the rendering of any servicefree of charge or under a contract of personal service;”
Shri Venugopal has relied upon the judgment of this Court in thecase of Jagmittar Sain Bhagat & Ors. vs. Director, Health Services,Haryana & Ors.[1] in this regard. On the other hand, learned counselfor the respondents has placed reliance on the judgment of this Courtin Regional Provident Fund Commissioner v. Shiv Kumar Joshi[2]and Regional Provident Fund Commissioner v. Bhavani[3].
7. In our opinion, it is not necessary to answer all the issues raisedby Shri Venugopal since, in our opinion, there is virtually no privity ofcontract for providing service between the ONGC and the claimants.From a perusal of the letter dated 18.09.1991 and the Scheme, relevantportion of which has been quoted above, it is apparent that contributorsto the Scheme were the employees of ONGC. Whereas the employerwas only making a token contribution of Rs.100 per annum, the Schemewas also voluntary and optional for the employees who were in service 1 2013 (10) SCC 136
2 2000 (1) SCC 98
3 (2008) 7 SCC 111
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Afrom the effective date i.e. 01.04.1990. It is not disputed that all theclaimants were in service before the effective date. The Schemeenvisages that every employee shall contribute to the fund at ratesspecified therein. The younger the employee, the percentage deductedfrom his salary is less and this rises progressively as the age increases.It has obviously been done to ensure that the contribution of theBemployee is equal i.e. those who have less years of remaining servicewill contribute at a higher rate and those who have more years ofremaining service will contribute at a lower rate. The most importantaspect is that the Scheme is managed and run by a Trust and not bythe ONGC. The trustees of the Trust are nominated by the Chairman Cof the ONGC and representatives may be nominated to the Board ofTrustees by the Central Working Committee (CWC) of Association ofScientific and Technical Officers. We have been informed at the Barthat 7 trustees are nominated by the Chairman of the ONGC and 6 bythe CWC. Be that as it may, it is the Trust which manages the fund.Therefore, without going into the question as to whether any amount isDbeing paid by the employees for contribution to the services renderedby the Trust, it is apparent that the service, if any, is being rendered bythe Trust and not by the ONGC. Therefore, we have no hesitation incoming to the conclusion that there is no relationship of consumer andservice provider between the claimants and the ONGC. We make itEclear that we have not gone into the other questions since, in view ofthe aforesaid decision, it is not necessary to decide the other questionsraised by Shri Venugopal.
8. In view of the above discussion, we partly allow the appealsand set aside the orders of the National Consumer Disputes RedressalCommission and the State Consumer Disputes Redressal CommissionFin so far as it held that there is a relationship of consumer and serviceprovider between the claimants and the ONGC. We also set aside thecosts imposed by the National Consumer Disputes RedressalCommission. However, in view of the statement made by Shri Venugopal,recorded in the opening portion of this judgment, we direct the ONGCGto pay the amounts payable (other than the costs) under the ordersimpugned to the claimants within 8 weeks from today.
9. Pending application(s), if any, stand(s) disposed of.
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Devika Gujral