Case Note & Summary
The dispute arose from a claim for damages filed by Haribandhu Setha, a government servant, before the State Commission, Orissa under the Consumer Protection Act, 1986. He alleged deficiency in service, seemingly against the Life Insurance Corporation of India (LIC). The State Commission awarded damages against the first respondent, LIC. Dissatisfied, the matter reached the National Consumer Disputes Redressal Commission, New Delhi, in First Appeal No. 510 of 1992. During the appeal, the State of Orissa was impleaded as a party-respondent. By order dated February 17, 1995, the National Commission awarded damages of Rs 1,00,000 against the State of Orissa and directed payment within three months. Aggrieved by this award, the State of Orissa approached the Supreme Court. The appeal was treated as a special leave petition under Article 136 of the Constitution, and leave was granted. The core legal issue before the Supreme Court was whether the State of Orissa was liable to pay compensation to Haribandhu Setha under the Consumer Protection Act, 1986, and whether the claim against the State was maintainable. The Court examined the definition of "services" under Section 2(1)(o) of the Consumer Protection Act, 1986. The definition includes service of any description made available to potential users, including various facilities such as banking, financing, insurance, transport, etc., but expressly excludes rendering of any service free of charge or under a contract of personal service. The Court noted that the excluded services are "service free of charge or under a contract of personal service." Relying on the earlier decision in Indian Medical Association v. V.P. Shantha & Ors., (1995) 6 SCC 651, the Court observed that the expression "personal service" has a well-known legal connotation and has been construed in the context of the right to seek enforcement of such a contract under the Specific Relief Act. A contract of personal service covers civil servants, managing agents of a company, and a professor in a university. There can be a contract of personal service if there is a relationship of master and servant between the service provider and the person availing the services. Applying these principles, the Court found that Haribandhu Setha was a Government servant and, therefore, bound by service conditions. The State was rendering services free of charge to him. Consequently, the Government servant was excluded from the purview of the Consumer Protection Act to claim any damages against the State under the Act. The Court held that if any claim arose for the contesting respondent, it would be open to him to claim in any other forum, but not under the Act. To protect the respondent's rights, the Court directed that if such a claim was barred by limitation, the time taken during the entire proceedings before the consumer forums and the Supreme Court would stand excluded. Accordingly, the Supreme Court allowed the appeal, set aside the National Commission's award of damages against the State of Orissa, and held that the claim against the State under the Consumer Protection Act was not maintainable. No order as to costs.
Headnote
A) Consumer Protection - Definition of Service - Exclusions - Consumer Protection Act, 1986, Section 2(1)(o) - The definition of service excludes service free of charge or under a contract of personal service. The Court relied on Indian Medical Association v. V.P. Shantha & Ors. to hold that a government servant receives service free of charge from the State and is bound by service conditions, thus excluded from claiming damages against State under the Act. Held that the claim against State under the Act was not maintainable. (Paras 1-2) B) Limitation - Exclusion of Time - Consumer Protection Act, 1986 - The Court directed that if the respondent's claim before any other forum is barred by limitation, the time taken during the entire proceedings shall stand excluded. Held that the remedy lies in another forum, not under the Act. (Paras 1-2)
Issue of Consideration
Whether the State is liable to pay compensation to a government servant under the Consumer Protection Act, 1986 and whether such a claim is maintainable given the exclusion of free service under Section 2(1)(o).
Final Decision
Appeal allowed. The claim against the State of Orissa under the Consumer Protection Act, 1986 is not maintainable; the Government servant is excluded from claiming damages against the State under the Act. If any claim arises, it may be pursued in another forum, and time taken in these proceedings is excluded for limitation. No costs.
Law Points
- Services under Consumer Protection Act exclude service free of charge or under a contract of personal service
- Government servant bound by service conditions cannot claim damages against State under Consumer Protection Act
- Claim for damages by government servant against State not maintainable under Consumer Protection Act
- If claim before other forum barred by limitation time taken during proceedings excluded
