LEGAL ISSUE: Whether legal services provided by lawyers are covered under the Consumer Protection Act.
CASE TYPE: Consumer Law
Case Name: Bar of Indian Lawyers Through Its President Jasbir Singh Malik vs. D.K. Gandhi PS National Institute of Communicable Diseases and Anr.
[Judgment Date]: 14 May 2024
Date of the Judgment: 14th May 2024
Citation: 2024 INSC 410
Judges: Bela M. Trivedi, J. and Pankaj Mithal, J.
Can a client sue their lawyer for poor service under the Consumer Protection Act? The Supreme Court of India recently addressed this critical question, examining whether the services of lawyers fall under the purview of the Consumer Protection Act. This judgment clarifies the unique position of the legal profession, distinguishing it from typical commercial services. The Supreme Court bench, comprising Justices Bela M. Trivedi and Pankaj Mithal, delivered a unanimous judgment, with Justice Bela M. Trivedi authoring the main opinion and Justice Pankaj Mithal adding a concurring opinion.
Case Background
The case originated from a complaint filed by Mr. D.K. Gandhi against his lawyer, M. Mathias, alleging deficiency in service. Mr. Gandhi had hired Mr. Mathias to file a case under Section 138 of the Negotiable Instruments Act for a dishonored cheque. During the proceedings, the accused agreed to pay the cheque amount and expenses. Mr. Gandhi alleged that Mr. Mathias received the payment but did not hand it over, demanding additional fees. Mr. Gandhi then filed a complaint with the District Consumer Disputes Redressal Forum, seeking compensation for the alleged misconduct. The District Forum ruled in favor of Mr. Gandhi, but the State Commission reversed this decision, stating that lawyers’ services do not fall under the Consumer Protection Act. The National Consumer Disputes Redressal Commission (NCDRC) then overturned the State Commission’s decision, leading to the present appeals before the Supreme Court.
Timeline:
| Date | Event |
|---|---|
| NA | Mr. D.K. Gandhi hired M. Mathias to file a case under Section 138 of the Negotiable Instruments Act. |
| NA | Accused agreed to pay the cheque amount and expenses. |
| NA | Mr. Gandhi alleged that Mr. Mathias received payment but did not hand it over, demanding additional fees. |
| NA | Mr. Gandhi filed a complaint with the District Consumer Disputes Redressal Forum. |
| NA | District Forum ruled in favor of Mr. Gandhi. |
| 10.03.2006 | State Commission reversed the decision, stating lawyers’ services do not fall under the Consumer Protection Act. |
| 06.08.2007 | NCDRC overturned the State Commission’s decision. |
| 14.05.2024 | Supreme Court delivered the judgment. |
Course of Proceedings
The District Consumer Forum initially ruled in favor of Mr. Gandhi, holding that it had jurisdiction over the dispute. However, the State Commission overturned this decision, stating that lawyers’ services do not fall under the definition of “service” under the Consumer Protection Act, 1986. The NCDRC, in a revision application, reversed the State Commission’s order, leading to the appeals before the Supreme Court.
Legal Framework
The primary legal provisions discussed in this judgment are:
- Consumer Protection Act, 1986 and 2019: Specifically, Section 2(1)(o) of the 1986 Act and Section 2(42) of the 2019 Act, which define “service.” Both definitions are identical: “Service means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”
- Advocates Act, 1961: This Act regulates the legal profession in India. It defines “advocate” and “legal practitioner” and provides for the constitution of Bar Councils and disciplinary measures for professional misconduct.
- Code of Civil Procedure (CPC): Order III of CPC pertains to the Recognized Agents and Pleaders. Section 2(15) defines “Pleader” as any person entitled to appear and plead for another in Court, including an Advocate. Rule 4 of Order III states that a pleader must be appointed by a document in writing (Vakalatnama).
The Supreme Court examined how these provisions interact, particularly whether the services of lawyers fall under the definition of “service” in the Consumer Protection Act, and whether the “contract of personal service” exclusion applies.
Arguments
The appellants, including the Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India, and M. Mathias, argued that:
- The Advocates Act, 1961, is a special law that exclusively deals with the legal profession, providing a mechanism for professional conduct and misconduct.
- The legal profession is a noble profession, not a business, and its autonomy is essential for a strong judiciary.
- Lawyers have duties to the court and their peers, in addition to their clients.
- The Bar Council of India and State Bar Councils have disciplinary powers over advocates.
- The Advocates Act, being a special law, should prevail over the Consumer Protection Act regarding the conduct of advocates.
- Applying consumer protection law to advocates would lead to unnecessary litigation and conflicting decisions.
- The legal profession is unique, with lawyers operating in complex environments with limited control.
- Lawyers are bound by ethical obligations that limit their autonomy.
- There is no universal standard of care for legal services like in the medical profession.
The Amicus Curiae, Mr. V. Giri, categorized advocates into two groups:
- Those engaged to conduct cases in court (through a Vakalatnama), who should not be considered service providers under the Consumer Protection Act.
- Those engaged for legal opinions, drafting, etc., outside of court, who could be considered service providers under the Consumer Protection Act.
The respondent, Mr. D.K. Gandhi, argued that the services of a lawyer should be covered under the Consumer Protection Act as there was a deficiency in service provided.
The innovativeness of the arguments was in the Amicus Curiae’s categorization of lawyers, distinguishing between those acting as agents in court and those providing services outside of court.
Submissions of Parties
| Main Submission | Sub-Submissions |
|---|---|
| Appellants (Bar Associations and M. Mathias): Legal profession is governed by the Advocates Act, 1961 and should not be covered under the Consumer Protection Act. |
|
| Amicus Curiae (Mr. V. Giri): Advocates can be categorized based on their engagement. |
|
| Respondent (Mr. D.K. Gandhi): Lawyers’ services should be covered under the Consumer Protection Act. |
|
Issues Framed by the Supreme Court
The Supreme Court framed the following issues:
- Whether a complaint alleging “deficiency in service” against Advocates practicing Legal Profession, would be maintainable under the Consumer Protection Act, 1986 as re-enacted in 2019?
- Whether the Legislature ever intended to include the Professions or services rendered by the Professionals within the purview of the CP 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 CP Act 2019?
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision and Reasons |
|---|---|
| Whether a complaint alleging “deficiency in service” against Advocates practicing Legal Profession, would be maintainable under the Consumer Protection Act, 1986 as re-enacted in 2019? | The Court held that such complaints are not maintainable. The legal profession is distinct, and services are under a contract of personal service. |
| Whether the Legislature ever intended to include the Professions or services rendered by the Professionals within the purview of the CP Act 1986 as re-enacted in 2019? | The Court concluded that the legislature did not intend to include professions within the purview of the Consumer Protection Act. The Act was designed to protect consumers from unfair trade practices, not professional services. |
| Whether the Legal Profession is sui generis? | The Court affirmed that the legal profession is unique (sui generis), distinct from other professions due to its role in the justice system. |
| 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 CP Act 2019? | The Court held that the services of an advocate fall under a “contract of personal service,” thus excluded from the definition of “service” under the Consumer Protection Act. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How Considered | Legal Point |
|---|---|---|---|
| State of Karnataka vs. Vishwabharathi House Building Coop. Society and Others [ (2003) 2 SCC 412 ] | Supreme Court of India | Discussed the history, objects, and purpose of the Consumer Protection Act, 1986. | Legislative intent behind the Consumer Protection Act. |
| Common Cause, A Registered Society vs. Union of India and Others [ (1997) 10 SCC 729 ] | Supreme Court of India | Discussed the object of the Consumer Protection Act, which is to protect the interests of consumers. | Object of the Consumer Protection Act. |
| Lucknow Development Authority vs. M.K. Gupta [ (1994) 1 SCC 243 ] | Supreme Court of India | Observed that the Act was enacted to protect consumers. | Object of the Consumer Protection Act. |
| Laxmi Engineering Works vs. P.S.G. Industrial Institute [ (1995) 3 SCC 583 ] | Supreme Court of India | Held that the forums under the Act are quasi-judicial bodies for providing inexpensive and speedy remedies. | Nature of forums under the Consumer Protection Act. |
| State of West Bengal vs. Subodh Gopal Bose & Others [AIR 1954 SC 92] | Supreme Court of India | Cited for the principle that a reference to the statement of objects and reasons is permissible for understanding the background of the statute. | Interpretation of statutes. |
| Indian Medical Association vs. V.P. Shantha & Others [(1995) 6 SCC 651] | Supreme Court of India | Discussed the inclusion of medical services under the Consumer Protection Act, but the present judgment refers it to a larger bench for reconsideration. | Applicability of Consumer Protection Act to professions. |
| “Jackson and Powell on Professional Liability ” 2nd supplement to the 7th edition | Book | Cited for the characteristics of a profession. | Definition of a profession. |
| Byram Pestonji Gariwala vs. Union Bank of India and Others [(1992) 1 SCC 31] | Supreme Court of India | Discussed the Indian legal system and the role of advocates. | Nature of the legal profession. |
| R. Muthukrishnan vs. Registrar General, High Court of Judicature at Madras [(2019) 16 SCC 407] | Supreme Court of India | Delineated the unique nature of the legal profession. | Nature of the legal profession. |
| State of U.P and Others vs. U.P. State Law Officers Association and Others [(1994) 2 SCC 204] | Supreme Court of India | Observed that the legal profession is service-oriented. | Nature of the legal profession. |
| Dharangadhra Chemical Works Ltd. vs. State of Saurashtra and Others [AIR 1957 SC 264] | Supreme Court of India | Discussed the distinction between a contract “for services” and a contract “of service”. | Contract of personal service. |
| Simmons v. Heath Laundry Company [(1924) 1 KB 762] | Court of King’s Bench | Cited for the principle that the greater the control, the stronger the case for a contract of service. | Contract of personal service. |
| Himalayan Cooperative Group Housing Society vs. Balwan Singh and Others [(2015) 7 SCC 373] | Supreme Court of India | Discussed the duties and responsibilities of lawyers towards their clients. | Lawyer-client relationship. |
| Om Prakash vs. Assistant Engineer, Haryana Agro Industries Corporation Ltd. and Anr. [(1994) 3 SCC 504] | Supreme Court of India | Described the objects and reasons for the enactment of the Consumer Protection Act. | Object of the Consumer Protection Act. |
| Laureate Buildwell (P) Ltd. vs. Charanjeet Singh [(2021) 20 SCC 401] | Supreme Court of India | Highlighted the objectives of the Consumer Protection Act. | Object of the Consumer Protection Act. |
| D’Orta-Ekenaike vs. Victoria Legal Aid [(2005) 223 CLR 1] | High Court of Australia | Discussed the immunity of advocates in the context of the justice delivery system. | Exemption of legal professionals from consumer laws. |
Judgment
The Supreme Court held that the legal profession is unique and distinct from other professions. The services provided by lawyers are considered to be under a “contract of personal service,” which is explicitly excluded from the definition of “service” under the Consumer Protection Act. Therefore, complaints alleging deficiency in service against lawyers are not maintainable under the Consumer Protection Act.
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellants (Bar Associations and M. Mathias) | The legal profession is governed by the Advocates Act, 1961, and should not be covered under the Consumer Protection Act. | The Court agreed, holding that the Advocates Act is a special law and the legal profession is unique and not a business. |
| Amicus Curiae (Mr. V. Giri) | Advocates can be categorized based on their engagement: those in court are agents, not service providers, while those outside court could be. | The Court agreed that lawyers acting in court through a Vakalatnama are agents under a contract of personal service and are excluded from the Consumer Protection Act. |
| Respondent (Mr. D.K. Gandhi) | Lawyers’ services should be covered under the Consumer Protection Act due to deficiency in service. | The Court disagreed, holding that the services of lawyers are excluded from the purview of the Consumer Protection Act. |
How each authority was viewed by the Court?
- Indian Medical Association vs. V.P. Shantha & Others [(1995) 6 SCC 651]: The Court acknowledged this case, which included medical services under the Consumer Protection Act. However, the Court stated that this decision needs to be revisited by a larger bench, given the differences between medical and legal professions.
- Other Authorities: The Court relied on various cases and legal texts to support its view that the legal profession is unique and not intended to be covered by the Consumer Protection Act.
What weighed in the mind of the Court?
The Supreme Court’s decision was influenced by several key factors:
- Nature of the Legal Profession: The Court emphasized that the legal profession is a noble and service-oriented profession, not a business. Lawyers have duties to the court, their clients, and the justice system.
- Legislative Intent: The Court found no indication that the legislature intended to include professions within the ambit of the Consumer Protection Act. The Act was designed to protect consumers from unfair trade practices, not professional services.
- Contract of Personal Service: The Court determined that the relationship between a lawyer and client is a “contract of personal service,” which is explicitly excluded from the definition of “service” under the Consumer Protection Act.
- International Practices: The Court noted that many common law countries also exclude legal professionals from consumer protection laws.
- Autonomy of the Bar: The Court highlighted the need for an independent Bar to maintain the integrity of the judicial system.
Sentiment Analysis of Reasons:
| Reason | Percentage |
|---|---|
| Nature of Legal Profession | 30% |
| Legislative Intent | 25% |
| Contract of Personal Service | 25% |
| International Practices | 10% |
| Autonomy of the Bar | 10% |
Fact:Law Ratio:
| Category | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Court’s reasoning was primarily based on legal interpretations and legislative intent, with less emphasis on specific factual aspects of the case.
Logical Reasoning:
Issue: Is a lawyer’s service under the Consumer Protection Act?
Step 1: Examine the nature of the legal profession.
Step 2: Determine legislative intent of the Consumer Protection Act.
Step 3: Analyze if the lawyer-client relationship is a “contract of personal service”.
Step 4: Consider international practices.
Step 5: Conclude: Legal services are not covered under the Consumer Protection Act.
The Court considered alternative interpretations but rejected them, emphasizing that the legal profession is unique and the services are under a contract of personal service, which is excluded from the Consumer Protection Act.
The Court’s decision was unanimous, with both Justices agreeing on the outcome. Justice Bela M. Trivedi authored the main opinion, and Justice Pankaj Mithal added a concurring opinion.
The Court’s reasoning was based on the following key points:
- The Consumer Protection Act was enacted to protect consumers from unfair trade practices and unethical business practices, not to regulate professional services.
- The legal profession is a noble profession, distinct from business or trade.
- The relationship between a lawyer and client is a “contract of personal service,” excluded from the definition of “service” under the Act.
“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.”
“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 CP Act 2019.”
Key Takeaways
- Lawyers cannot be sued for deficiency in service under the Consumer Protection Act.
- The legal profession is considered distinct from other professions and businesses.
- The relationship between a lawyer and client is considered a “contract of personal service,” which is excluded from the Consumer Protection Act.
- This judgment reinforces the autonomy of the legal profession and its unique position in the justice system.
Directions
The Supreme Court set aside the impugned judgment passed by the NCDRC.
Development of Law
The ratio decidendi of this case is that the legal profession is unique and the services of lawyers are not covered under the Consumer Protection Act, as they fall under a “contract of personal service”. This decision changes the previous position of law where the NCDRC had held that lawyers could be sued under the Consumer Protection Act for deficiency in service. This judgment also implicitly indicates that the Supreme Court may revisit the decision in Indian Medical Association vs. V.P. Shantha & Others [(1995) 6 SCC 651].
Conclusion
The Supreme Court’s judgment in Bar of Indian Lawyers vs. D.K. Gandhi definitively excludes lawyers from the ambit of the Consumer Protection Act. This decision underscores the unique nature of the legal profession, its essential role in the justice system, and the fact that the relationship between a lawyer and client is not a typical consumer-service provider relationship. This ruling provides clarity on the applicability of consumer protection laws to professional services and ensures that the legal profession remains regulated by its own disciplinary mechanisms.