Case Note & Summary
The Supreme Court of India disposed of a batch of civil appeals arising from orders of the National Consumer Disputes Redressal Commission (NCDRC) and the Gujarat State Consumer Disputes Redressal Commission, which had held that employees of the Oil and Natural Gas Corporation (ONGC) were consumers of ONGC under the Consumer Protection Act, 1986. The dispute concerned the Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991, introduced by ONGC for its employees. Under the scheme, employees contributed a percentage of their salary based on age, and ONGC made a token contribution of Rs.100 per annum. The scheme was managed by a Trust, with trustees nominated by the Chairman of ONGC and representatives of the employees. The claimants alleged that due to delay in sending their claims to the Life Insurance Corporation (LIC), they suffered a loss. The consumer fora awarded amounts and costs in their favor, holding ONGC liable. The Supreme Court examined whether a consumer-service provider relationship existed between the employees and ONGC. The court noted that the essential ingredient for a consumer relationship under Section 2(d) of the Act is payment of consideration for availing services. However, the contributions were made by the employees to a Trust, not to ONGC, and ONGC's contribution was nominal. The scheme was voluntary and optional for existing employees. The court held that the service, if any, was rendered by the Trust, not by ONGC, and therefore there was no privity of contract for providing service between ONGC and the claimants. Consequently, there was no relationship of consumer and service provider. The court partly allowed the appeals, setting aside the findings of the consumer fora on the existence of a consumer relationship and the costs imposed. However, in view of the statement made by ONGC's counsel that the amounts involved were small and the claimants had retired long ago, the court directed ONGC to pay the amounts payable (other than costs) under the impugned orders within eight weeks.
Headnote
A) Consumer Law - Consumer and Service Provider Relationship - Definition of Consumer under Section 2(d) of Consumer Protection Act, 1986 - The essential ingredient for a consumer relationship is payment of consideration for availing services. In the present case, the employees contributed to a trust-managed scheme, and the employer made only a token contribution of Rs.100 per annum. The service, if any, was rendered by the Trust, not the employer. Held that there is no relationship of consumer and service provider between the claimants and ONGC (Paras 5-7). B) Consumer Law - Service under Section 2(o) of Consumer Protection Act, 1986 - Free Service and Contract of Personal Service - The definition of service excludes rendering of any service free of charge or under a contract of personal service. The court did not decide this issue as it was not necessary in view of the finding on lack of privity of contract (Paras 6-7). C) Consumer Law - Trust-Managed Scheme - Liability of Employer - The Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991 was managed by a Trust with trustees nominated by the Chairman of ONGC and representatives of employees. The employer's contribution was nominal. Held that the service, if any, is rendered by the Trust, not the employer, and thus no consumer relationship exists between the employees and ONGC (Paras 5, 7).
Issue of Consideration
Whether there is a relationship of consumer and service provider between the employees (claimants) and the employer (ONGC) under the Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991, where the scheme is managed by a Trust and the employer makes only a token contribution.
Final Decision
The Supreme Court partly allowed the appeals and set aside the orders of the National Consumer Disputes Redressal Commission and the State Consumer Disputes Redressal Commission in so far as they held that there is a relationship of consumer and service provider between the claimants and the ONGC. The costs imposed by the National Commission were also set aside. However, in view of the statement made by the appellants' counsel, the court directed ONGC to pay the amounts payable (other than costs) under the impugned orders to the claimants within 8 weeks from the date of judgment.
Law Points
- Consumer Protection Act
- 1986
- Section 2(d) and 2(o)
- definition of consumer
- definition of service
- consideration
- free service
- contract of personal service
- relationship of consumer and service provider
- trust-managed scheme
- no privity of contract
