1999 (12) TMI 770 - SC - Companies Law

Whether the provisions of Consumer Protection Act, 1986 can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund Scheme? Held that - Appeal dismissed. We cannot accept the argument that the Regional Provident Fund Commissioner, being Central Government, cannot be held to be rendering service within the meaning and scheme of the Act. A perusal of the scheme clearly and unambiguously indicate that it is a service within the meaning of section 2(1)(o) and the member a consumer within the meaning of section 2(1)(d). It is, therefore, without any substance to urge that the services under the scheme are rendered free of charge and, therefore, the scheme is not a service under the Act. Both the State as well as National Commission have dealt with this aspect in detail and rightly came to the conclusion that the Act was applicable in the case of the scheme on the ground that its member was a consumer under section 2(1)(d) and the scheme was a service under section 2(1)(o).

Issues Involved:
1. Applicability of the Consumer Protection Act, 1986, to the Provident Fund Commissioner.
2. Definition of 'consumer' under the Consumer Protection Act.
3. Definition of 'service' under the Consumer Protection Act.
4. Consideration of delayed payment of provident fund as a deficiency in service.
5. Interpretation of administrative charges under the Provident Fund Scheme.
6. Legal status of the Provident Fund Commissioner as a service provider.
7. Scope and beneficiaries of the term 'consumer.'

Detailed Analysis:

1. Applicability of the Consumer Protection Act, 1986, to the Provident Fund Commissioner:
The core issue is whether the provisions of the Consumer Protection Act, 1986, can be invoked against the Provident Fund Commissioner by a member of the Employees Provident Fund Scheme. The judgment explores if a member qualifies as a 'consumer' and whether the duties performed by the Provident Fund Commissioner constitute a 'service' under the Act.

2. Definition of 'consumer' under the Consumer Protection Act:
The Act defines a 'consumer' as any person who buys goods or hires/avails services for consideration. The definition is broad and includes beneficiaries of such services. The judgment references previous cases, including Lucknow Development Authority v. M.K. Gupta, where the Court emphasized the wide scope of the term 'consumer' to include users and beneficiaries of services.

3. Definition of 'service' under the Consumer Protection Act:
'Service' is defined as any description of service made available to potential users, including banking, financing, insurance, etc., but excludes services rendered free of charge or under a contract of personal service. The judgment cites various precedents, including Indian Medical Assn. v. V.P. Shantha, to elaborate on the inclusive nature of the term 'service.'

4. Consideration of delayed payment of provident fund as a deficiency in service:
The judgment examines whether delayed payment of the provident fund amounts to a deficiency in service under the Act. The Court concludes that the delay in payment constitutes a deficiency, as the services under the scheme are not rendered free of charge but for consideration, making the member a 'consumer.'

5. Interpretation of administrative charges under the Provident Fund Scheme:
The judgment delves into the administrative charges under the Provident Fund Scheme. It concludes that these charges are for consideration of the employee being a member of the scheme, and the employer's payment of these charges does not negate the employee's status as a 'consumer.'

6. Legal status of the Provident Fund Commissioner as a service provider:
The Provident Fund Commissioner, under the Act, discharges statutory functions and is not a sovereign entity. The judgment clarifies that the Commissioner provides services under the scheme for consideration, making the facilities provided a 'service' under the Act.

7. Scope and beneficiaries of the term 'consumer':
The judgment emphasizes that the term 'consumer' includes not only the person who hires the services but also the beneficiaries. Even if administrative charges are paid by the Central Government, the employee, as a beneficiary, is deemed a 'consumer.' The Court references Spring Meadow Hospital v. Harjol Ahluwalia to support this interpretation.

Conclusion:
The Supreme Court concluded that the Employees Provident Fund Scheme constitutes a 'service' under the Consumer Protection Act, and the member is a 'consumer.' The appeal was dismissed, affirming the decisions of the State and National Commissions that the Act applies to the scheme, and the delayed payment of the provident fund amounts to a deficiency in service.

← Previous Next →