ADVOCATES ARE NOT LIABLE UNDER CONSUMER PROTECTION ACT

[Mr. M. GOVINDARAJAN]

Consumer Protection Act, 1986 was enacted to protect the interest of consumers.  The Act provides that if there is any defect in the goods supplied to the consumer by the supplier and if there is any deficiency of service in the services rendered by the service providers, then the consumer can file a complaint before the Consumer forum for remedy.  If the defect/deficiency is proved the consumer forum may direct the person concerned to replace the defective product/rectify the deficient services and also award compensation to the consumer.

If the services received is for commercial purpose, then the consumer is not eligible to file complaint before the Consumer Forum.  There is many a case law involving jurisdiction of the consumer forums by means of various interpretation. 

Once such issue came to Supreme Court to decide as to whether the services rendered by the Advocate comes under the purview of the Consumer Protection Act in BAR OF INDIAN LAWYERS THROUGH ITS PRESIDENT JASBIR SINGH MALIK, DELHI HIGH COURT BAR ASSOCIATION THROUGH ITS PRESIDENT, BAR COUNCIL OF INDIA THROUGH BY ITS SECRETARY MR. S. RADHAKRISHNAN, M. MATHIAS VERSUS D.K. GANDHI PS NATIONAL INSTITUTE OF COMMUNICABLE DISEASES AND ANR. - 2024 (5) TMI 881 - SUPREME COURT  filed by an Advocate, Bar of Indian Lawyers, Delhi High Court Bar Association and the Bar Council of India.

In the above said case the appellant in this case is an Advocate.  One Mr. D.K. Gandhi hired the appellant to file a complaint before the before the Court of Metropolitan Magistrate against one Shri Kamal Sharma, under Section 138 of the Negotiable Instruments Act for the dishonor of Cheque for Rs.20000/- issued by Kamal Sharma in favor of D.K. Gandhi. During the complaint Kamal Sharma agreed to pay Rs.20000/- and Rs.5000/- for the expenses incurred by D.K. Gandhi.  Though the appellant received the said amounts from D.K. Gandhi, he did not hand over the same to D.K. Gandhi.  Instead, he demanded Rs.5000/- from D.K. Gandhi, as his professional fees.  He also filed a suit for the recovery of the said Rs.5000/- before the Court of Small Causes. 

The appellant subsequently handed over D.K. Gandhi both the amounts.  But, at the instance of the appellant, Kamal Sharma gave instructions to the bank to stop payment of Rs.5000/-   Therefore D.K. Sharma filed a complaint against the appellant Advocate before the District Forum seeking compensation Rs.15,000/- in addition to the sum Rs.5,000/- and Rs.10000/- for the harassment caused to him and with costs. 

The appellant raised a preliminary objection before the District Forum that Advocates will not come under the purview of the Consumer Protection Act, 1986.  The same was rejected by the District Forum and held that the District Forum has jurisdiction to entertain the complaint against Advocate.  The District Forum decided the case in favor of the complainant D.K. Gandhi.  Against this order the appellant filed an appeal before the State Commission.  The State Commission held that the services of the Advocate will not come under the purview of the Consumer Protection Act and not fall within the ambit of ‘service’ under section 2(l)(o) of the Act.

D.K. Gandhi filed a revision petition before the National Commission.  The National Commission, vide their order dated 06.08.2007, held that if there was deficiency in service rendered by the Advocate, a complaint under the provisions of the Consumer Protection Act would be maintainable.  Against this order the present appeals have been filed by the appellant advocate and by Bar of Indian Lawyers, Bar of Delhi High Court Bar Association and Bar Council of India.  The Supreme Court appointed an amicus curiae to assist the Court.

The following were submitted by the appellants before the Supreme Court-

• The Advocates Act, 1961 is a law dealing with exclusively with the legal profession, which provides a robust mechanism laying down professional standards for compliance and for determining the professional misconduct.
• The legal profession is not a business or a trade.  It is an extension of system of Justice.  The success of judicial process depends on the independence of the Bar.
• The Advocate has a duty to Court and his peers in addition to his duty to his client.
• The professional misconduct is covered by the Advocates Act, 1961.
• The Advocates’ Act is a special Act overriding the provisions of the Consumer Protection Act.
• In United Kingdom the legal professionals can be sued by way of civil action and they are not liable under any other law dealing with consumer rights for trade/commercial activities.
• If Advocates are put under the provisions of Consumer Protection Act, it would lead multiple proceedings before multiple forums, reagitating before High Court and Supreme Court.
• The summary proceedings under the Consumer Protection Act are speedy and inexpensive. It can be easy for disgruntled litigants to know the doors of Consumer Forums against the Advocates which would lead to vexatious/speculative claims rather than seeking relief in respect of bona fide grievances against the professional misconduct. 
• The legal profession is recognized as sui generis and stands out among other professionals due to its distinctive nature.  They have a higher degree of control over their surroundings navigating through complex legal landscapes by diverse factors.
• The lawyers often face ambiguity and uncertainty in their work, making control over outcomes elusive.
• Lawyers are bound by ethical and professional obligations that constrain their autonomy and control over their work.
• The Bar Council of India Rules prescribes four set of duty that a lawyer has to oblige as detailed below-

• duty to the Court;
• duty to the Client;
• duty to the opponent; and
• duty to colleagues.

The amicus curiae submitted the following before the Supreme Court-

• The Advocates can broadly be classified into two categories based on the terms of their engagement and nature of work being done by them for their clients-

• Advocates engaged by their clients to conduct their cases and represent them before any Court, Tribunal or any other forum, on the strength of Vakalatnama;
• Advocates engaged by clients to provide their professional expertise for providing legal opinions, issuing legal notices, drafting agreements, etc.

• The first category of Advocates would not come under the purview of Consumer Protection Act as in the case of second category.
• Once a vakalath is executed by the client the duties of the Advocate are alike to that of his acts and statements of the principal i.e., the client himself.  Such a relationship cannot be equated to that of a ‘service provider’ and ‘consumer’ as contemplated in the Consumer Protection Act.
• The second category of Advocates will come under the purview of Consumer Protection Act and if there is any deficiency in their services, they are liable to act as per the order of consumer forum.

The Supreme Court heard the submissions put forth by the appellants and ‘amicus curiae’.  The Supreme Court framed the following questions to be answered in the present appeal-

• Whether the Legislature ever intended to include the Professions or services rendered by the Professionals within the purview of the Consumer Protection Act 1986 as re-enacted in 2019?
• Whether the Legal Profession is sui generis?
•  Whether a Service hired or availed of an Advocate could be said to be the service under “a contract of personal service” so as to exclude it from the definition of “Service” contained in Section 2 (42) of the Consumer Protection Act, 2019?

For the first question the Supreme Court relied on the object and purpose of enacting the Consumer Protection Act, 1986 and also referred to various case laws which dealt with the constitutional validity of the Consumer Protection Act, 1986, scope and objects of the Act etc.  The Supreme Court observed that considering the intention of the Legislature, the objects and reasons of the Act of 1986 it was repeatedly held that the said Act was enacted to provide for the better protection of the interests of the consumers against their exploitation by the traders and manufacturers of the consumer goods, and to help consumers in getting justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies.

Due to many shortcomings and discrepancies noted in the Consumer Protection Act, 1986, the Government re-enacted the Consumer Protection Act, 2019.  The Supreme Court also analyzed the objects of this Act.  The Supreme Court further observed that due to the emergence of global supply chains, rise in international trade and rapid development of ecommerce leading to new systems for goods and services, new options and opportunities had become available to the consumers that leads for the enactment of new Act during 2019. However, new forms of unfair trade and unethical business practices also came to be developed, which made the consumers more vulnerable. Misleading advertisements, telemarketing, multi-level marketing, e-commerce posed new challenges, which necessitated the Legislature to re-enact the Act. 

The new Act does not include the Professions or the Services provided by the Professionals like Advocates, Doctors etc., within the purview of the Act. It is very well accepted proposition of the fact that Professionals could not be called Businessmen or Traders, nor Clients or Patients be called Consumers. It is also required to be borne in mind that the terms ‘business’ or ‘trade’ having a commercial aspect involved, could not be used interchangeably with the term ‘Profession’ which normally would involve some branch of learning or science. Profession as such would require knowledge of an advanced type in a given field of learning or science, or learning gained by a prolonged course of specialized study.   A “Profession” means “a vocation requiring advanced education and training; especially one of the three traditional Professions- Law, Medicine and the Ministry.” “Professional” means “someone who belongs to a learned profession or whose occupation requires a high level of training and proficiency.

The Occupations which are regarded as Professions have four characteristics, -

• the nature of the work which is skilled and specialized and a substantial part is mental rather than manual;
• commitment to moral principles which go beyond the general duty of honesty and a wider duty to community which may transcend the duty to a particular client or patient;
• professional association which regulates admission and seeks to uphold the standards of the profession through professional codes on matters of conduct and ethics; and
•  high status in the community.

Having regard to the nature of work of a professional, which requires high level of education, training and proficiency and which involves skilled and specialized kind of mental work, operating in the specialized spheres, where achieving success would depend upon many other factors beyond a man’s control, a Professional cannot be treated equally or at par with a Businessman or a Trader or a Service provider of products or goods as contemplated in the Consumer Protection Act. Similarly, the services rendered by a Businessman or a Trader to the consumers with regard to his goods or products cannot be equated with the Services provided by a Professional to his clients with regard to his specialized branch of profession. The legislative draftsmen are presumed to know the law and there is no good reason to assume that the legislature intended to include the Professions or the Professionals or the services provided by the professionals within the ambit of Consumer Protection Act. 

The Supreme Court was of the considered opinion that the very purpose and object of the CP Act 1986 as re-enacted in 2019 was to provide protection to the consumers from the unfair trade practices and unethical business practices only. There is nothing on record to suggest that the Legislature ever intended to include the Professions or the Professionals within the purview of the Act.   If the services provided by all the Professionals are also brought within the purview of the Act, there would be flood-gate of litigations in the commissions/forums established under the Act, particularly because the remedy provided under the Act is inexpensive and summary in nature. Consequently, the very object of providing timely and effective settlement of consumers’ disputes arising out of the unfair trade and unethical business practices would be frustrated.

The professionals are governed by their respective Councils like Bar Councils or Medical Councils also would not absolve them from their civil or criminal liability arising out of their professional misconduct or negligence. The Supreme Court was of the opinion that neither the Professions nor the Professionals were ever intended to be brought within the purview of the CP Act either of 1986 or 2019. Therefore, having regard to the role, status and duties of the Advocates as the professionals, the Supreme Court was of the opinion that the legal profession is sui generis i.e., unique in nature and cannot be compared with any other profession.

The Supreme Court considered the next question as to whether a service availed or hired of an Advocate could be said to be the service under a ‘contract of personal service’?  The Bar Council of India Rules framed thereunder, takes care of the professional misconduct of the Advocates, and prescribes the punishments if they are found guilty of professional or other misconduct by the Disciplinary Committees of the State Bar Council or the Bar Council of India as the case may be.  The Supreme Court then analyzed the definitions of ‘service’ and ‘deficiency’ as contained in both Act 1986 and 2019.  The greater the amount of direct control exercised over the person rendering the services by the person contracting for them, the stronger would be the grounds for holding it to be a “contract of service.” Hence, let us see whether in case of Advocate-Client relationship, the client exercises direct control over the Advocate who is rendering his legal professional services to him.

The Advocate can act for any person in any Court only when he is appointed by such person by executing the document called “Vakalatnama.” Such Advocate has certain authorities by virtue of such “Vakalatnama” but at the same time has certain duties too, i.e. the duties to the courts, to the client, to the opponent and to the colleagues as enumerated in the Bar Council of India Rules.   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.  In the opinion of Supreme Court, the services hired or availed of an Advocate would be that of a contract ‘of personal service’ and would therefore stand excluded from the definition of “service” contained in the section 2(42) of the Consumer Protection Act, 2019. As a necessary corollary, a complaint alleging “deficiency in service” against Advocates practising Legal Profession would not be maintainable under the CP Act, 2019.

The Supreme Court concluded as follows-

• The very purpose and object of the Consumer Protection Act, 1986 as re-enacted in 2019 was to provide protection to the consumers from unfair trade practices and unethical business practices, and the Legislature never intended to include either the Professions or the services rendered by the Professionals within the purview of the said Act of 1986/2019.
• The Legal Profession is sui generis i.e. unique in nature and cannot be compared with any other Profession.
• A service hired or availed of an Advocate is a service under “a contract of personal service,” and therefore would fall within the exclusionary part of the definition of “Service” contained in Section 2 (42) of the Consumer Protection Act 2019.
• A complaint alleging “deficiency in service” against Advocates practising Legal Profession would not be maintainable under the Consumer Protection Act, 2019.

The Supreme Court set aside the order of National Commission and allowed the appeal.