CHAIRMAN-CUM-MANAGING DIRECTOR ONGC LTD. & ORS.versusCONSUMER EDUCATION RESEARCH SOCIETY & ORS.

774                       [2019]
               SUPREME COURT     14 S.C.R. 774
                              REPORTS                     [2019] 14 S.C.R.


A               CHAIRMAN-CUM-MANAGING DIRECTOR
                        ONGC LTD. & ORS.
                                       v.
         CONSUMER EDUCATION RESEARCH SOCIETY & ORS.
B                       (Civil Appeal No. 9257 of 2019)
                             DECEMBER 09, 2019
             [S. ABDUL NAZEER AND DEEPAK GUPTA, JJ.]
            Consumer Protection Act, 1986: Consumer-Service provider
      relationship – Whether there is relationship of consumer and
C
      service provider existing between the private respondents
      (claimants) and the appellants – All the claimants were employees
      of the ONGC – A Self Contributory, Post Retirement and Death in
      Service Benefits Scheme, 1991 was introduced in the ONGC after
      obtaining permission of the Government of India on 18.09.1991
D     – Case of the claimants was that due to delay in sending their
      claims to the LIC, they suffered a loss – Consumer Fora held that
      the employees were consumers of the ONGC and held in favour
      of the claimants – Held: There was no privity of contract for
      providing service between the ONGC and the claimants – Letter
      dated 18.09.1991 and the Scheme showed that contributors to the
E
      Scheme were the employees of ONGC – The employer was only
      making a token contribution of Rs.100 per annum, the Scheme was
      also voluntary and optional for the employees who were in service
      – The Scheme envisaged that every employee shall contribute to
      the fund at rates specified therein – The Scheme was managed and
F     run by a Trust and not by the ONGC – The service, if any, was
      being rendered by the Trust and not by the ONGC – Thus, there
      was no relationship of consumer and service provider between the
      claimants and the ONGC – However, in view of the submission for
      the appellant that without prejudice to their rights to challenge the
      impugned orders of consumer forums, the appellants shall pay the
G
      amount as directed in the impugned orders, ONGC is directed to
      pay the amounts under the order impugned to the claimants.
            Partly allowing the appeals, the Court
            HELD: 1. There is virtually no privity of contract for
H     providing service between the ONGC and the claimants. From
                                      774
       CHAIRMAN-CUM-MANAGING DIRECTOR ONGC LTD. v.                    775
          CONSUMER EDUCATION RESEARCH SOCIETY


a perusal of the letter dated 18.09.1991 and the Scheme, it is        A
apparent that contributors to the Scheme were the employees
of ONGC. Whereas the employer was only making a token
contribution of Rs.100 per annum, the Scheme was also voluntary
and optional for the employees who were in service from the
effective date i.e. 01.04.1990. It is not disputed that all the
                                                                      B
claimants were in service before the effective date. The Scheme
envisages that every employee shall contribute to the fund at
rates specified therein. The younger the employee, the
percentage deducted from his salary is less and this rises
progressively as the age increases. It has obviously been done
to ensure that the contribution of the employee is equal i.e. those   C
who have less years of remaining service will contribute at a
higher rate and those who have more years of remaining service
will contribute at a lower rate. The most important aspect is that
the Scheme is managed and run by a Trust and not by the ONGC.
The trustees of the Trust are nominated by the Chairman of the
                                                                      D
ONGC and representatives may be nominated to the Board of
Trustees by the Central Working Committee (CWC) of
Association of Scientific and Technical Officers. 7 trustees are
nominated by the Chairman of the ONGC and 6 by the CWC.
Be that as it may, it is the Trust which manages the fund.
Therefore, without going into the question as to whether any          E
amount is being paid by the employees for contribution to the
services rendered by the Trust, it is apparent that the service,
if any, is being rendered by the Trust and not by the ONGC.
Therefore, there is no relationship of consumer and service
provider between the claimants and the ONGC. [Para 7] [779-
                                                                      F
F-G; 780-A-E]
      Jagmittar Sain Bhagat & Ors. vs. Director, Health
      Services, Haryana & Ors. (2013) 10 SCC 136 : [2013]
      8 SCR 77 ; Regional Provident Fund Commissioner
      v. Shiv Kumar Joshi (2000) 1 SCC 98 : [1999] 5 Suppl.           G
      SCR 294 ; Regional Provident Fund Commissioner v.
      Bhavani (2008) 7 SCC 111 – referred to.
     2. The orders of the National Consumer Disputes
Redressal Commission and the State Consumer Disputes
Redressal Commission are set aside in so far as it held that          H
776             SUPREME COURT REPORTS                        [2019] 14 S.C.R.


A     there is a relationship of consumer and service provider between
      the claimants and the ONGC. However, in view of the statement
      made by the counsel of appellant, recorded in the opening
      portion of this judgment the ONGC is directed to pay the
      amounts payable (other than the costs) under the orders
B     impugned to the claimants. [Para 8] [780-F-G]
                              Case Law Reference
      [2013] 8 SCR 77                      referred to           Para 6
      [1999] 5 Suppl. SCR 294             referred to            Para 6
C     (2008) 7 SCC 111                     referred to           Para 6
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9257
      of 2019.
             From the Judgment and Order dated 20.03.2014 of the National
      Consumer Disputes Redressal Commission, New Delhi in Revision
D     Petition No. 3382 of 2013
              With
              Civil Appeal Nos. 9258, 9259, 9260, 9261, 9262, 9263, 9264 of
      2019.
E            Krishnan Venugopal, Sr. Adv., Jay Cheema, Akshat Razdan,
      Avinash Das, Sivender Singh, M/S. Cyril Amarchand Mangaldas, Advs.
      for the Appellants.
            Anil Shrivastav, Arjun Garg, Aakash Nandolia, Devansh
      Srivastava, Advs. for the Respondents.
F             The Judgment of the Court was delivered by
              DEEPAK GUPTA, J.
              1. Leave granted.
             2. All these appeals are being disposed of by a common judgment
G     since the issue involved is common in all the cases.
             3. At the outset, we may note that Shri Krishnan Venugopal,
      learned senior counsel appearing for the appellants submits that without
      prejudice to the rights of the appellants to challenge the impugned orders
      of the National Consumer Disputes Redressal Commission as well as
H     the Gujarat State Consumer Disputes Redressal Commission and the
      CHAIRMAN-CUM-MANAGING DIRECTOR ONGC LTD. v.                           777
  CONSUMER EDUCATION RESEARCH SOCIETY [DEEPAK GUPTA, J.]


District Forum, the appellants shall pay the amount as directed in the      A
impugned orders. This has been done because the amounts involved
are small, the appellants had retired a long time back and they should
not be forced to go into the second round of litigation.
      4. The main issue involved is whether there is relationship of
consumer and service provider existing between the private respondents      B
(claimants) and the appellants.
       5. The undisputed facts are that all the claimants were employees
of the Oil and Natural Gas Commission (for short ‘the ONGC’). A
Self Contributory, Post Retirement and Death in Service Benefits
Scheme, 1991 (for short ‘the Scheme’) was introduced in the ONGC
                                                                            C
after obtaining permission of the Government of India and the relevant
portion of the letter dated 18.09.1991 granting permission reads as
follows:-
      “(i) Contribution to the fund to be established from the employee
      of the ONGC would be in cash, with a token contribution of
      Rs.100 per annum by ONGC.”                                            D
      The Scheme has also been annexed and the relevant portion of
the Scheme reads as follows:-
      “1(c) Membership
            (i) xxx                xxx                 xxx                  E
            (ii) The Scheme shall be optional to the existing executives
                 in regular service of the Commission on the effective
                 date of the Scheme 01 04 1990 However, t will be
                 compulsory for executives joining regular service in the
                 Commission as new entrant on or after the effective
                 date of the Scheme option once exercise shall be final     F
                 and irrevocable
                xxx                xxx                 xxx
      2 Contribution
      2.1 The contribution to be make by the member-employee shall          G
      be calculate his salary and the rate will be as given hereunder
      depending on his age on the effective of the Scheme for
      employees on the rolls ONGC as on 01.04.1990 and on the date
      Joining ONGC for new entrants. The rate of contribution fixed
      at the time of entry will remain constant. The following rates of
      the contribution are payable in the various age group:                H
778            SUPREME COURT REPORTS                         [2019] 14 S.C.R.


A              (i) Below 25 years                          -0.5% of salary
              (ii) 25 and upto 35 years                    -0.75% of Salary
              (iii) above 30 and up to 35 years            -1% of salary
             (iv) above 35 and up to 40 years              -2% of salary
B             (v) Above 40 and up to 45 years              -3% of salary
             (vi) Above 45 and up to 48 years              -4.5% of salary
             (vii) Above 48 and up to 50 years             -4.5% of salary
                   Above 50 and up to 58 years             -5% of salary
C
             xxx                         xxx                  xxx
            5. MANAGING THE SCHEME
            (a) The Scheme shall be run by a Trust consisting of trustees to
            be nominated by the Chairman ONGC and representative as may
D           nominated on the board by CWC of ASTO. The Trust would
            make investment plan of the fund as per pattern of Rule 67 (2)
            of Income Tax Rule 1961 and would purchase annuity from LIC
            for the beneficiaries under the Scheme.
            6. Scheme is based on voluntary contribution by the member
E           employees. No contribution will be made by ONGC towards this
            Scheme except Rs.100 p.a. No. other financial liability on account
            of this Scheme will devolve on ONGC or the Govt. of India.”
            It is not necessary to deal with other facts. The case of the
      claimants was that due to delay in sending their claims to the LIC, they
F     suffered a loss. This averment is denied by the appellants but, in our
      view, that is not very relevant. The Consumer Fora held that the
      employees were consumers of the ONGC and therefore passed orders
      awarding various amounts and costs in favour of the claimants and
      hence the ONGC is liable to pay the same.

G             6. Shri Venugopal has raised various pleas before us. The first
      is that in terms of the definition of consumer in the Consumer Protection
      Act, 1986 (for short ‘the Act’), the first essential ingredient is payment
      of consideration for availing services. The second contention is that
      rendering of service free of charge under a contract of personal service
      is not included in the definition of service under the Act. We may refer
H     to Section 2(d) of the Act, which reads as follows:-
        CHAIRMAN-CUM-MANAGING DIRECTOR ONGC LTD. v.                             779
    CONSUMER EDUCATION RESEARCH SOCIETY [DEEPAK GUPTA, J.]


       “(d) “consumer” means any person who,—                                   A
       (i)   xxx                  xxx                   xxx
       (ii) hires or avails of any services for a consideration which has
       been paid or promised or partly paid and partly promised, or
       under any system of deferred payment and includes any
       beneficiary of such services other than the person who hires or          B
       avails of the services for consideration paid or promised, or partly
       paid and partly promised, or under any system of deferred
       payment, when such services are availed of with the approval
       of the first mentioned person but does not include a person who
       avails of such services for any commercial purpose;”
                                                                                C
      We may also refer to Section 2(o) of the Act, which reads as
follows:-
       “(o) “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            D
       insurance, transport, processing, supply of electrical or other
       energy, board 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;”
       Shri Venugopal has relied upon the judgment of this Court in the         E
case of Jagmittar Sain Bhagat & Ors. vs. Director, Health Services,
Haryana & Ors.1 in this regard. On the other hand, learned counsel
for the respondents has placed reliance on the judgment of this Court
in Regional Provident Fund Commissioner v. Shiv Kumar Joshi2
and Regional Provident Fund Commissioner v. Bhavani3.                           F
       7. In our opinion, it is not necessary to answer all the issues raised
by Shri Venugopal since, in our opinion, there is virtually no privity of
contract for providing service between the ONGC and the claimants.
From a perusal of the letter dated 18.09.1991 and the Scheme, relevant
portion of which has been quoted above, it is apparent that contributors
                                                                                G
to the Scheme were the employees of ONGC. Whereas the employer
was only making a token contribution of Rs.100 per annum, the Scheme
was also voluntary and optional for the employees who were in service
1
  2013 (10) SCC 136
2
  2000 (1) SCC 98
3
  (2008) 7 SCC 111                                                              H
780              SUPREME COURT REPORTS                        [2019] 14 S.C.R.


A     from the effective date i.e. 01.04.1990. It is not disputed that all the
      claimants were in service before the effective date. The Scheme
      envisages that every employee shall contribute to the fund at rates
      specified therein. The younger the employee, the percentage deducted
      from his salary is less and this rises progressively as the age increases.
      It has obviously been done to ensure that the contribution of the
B     employee is equal i.e. those who have less years of remaining service
      will contribute at a higher rate and those who have more years of
      remaining service will contribute at a lower rate. The most important
      aspect is that the Scheme is managed and run by a Trust and not by
      the ONGC. The trustees of the Trust are nominated by the Chairman
C     of the ONGC and representatives may be nominated to the Board of
      Trustees by the Central Working Committee (CWC) of Association of
      Scientific and Technical Officers. We have been informed at the Bar
      that 7 trustees are nominated by the Chairman of the ONGC and 6 by
      the CWC. Be that as it may, it is the Trust which manages the fund.
      Therefore, without going into the question as to whether any amount is
D     being paid by the employees for contribution to the services rendered
      by the Trust, it is apparent that the service, if any, is being rendered by
      the Trust and not by the ONGC. Therefore, we have no hesitation in
      coming to the conclusion that there is no relationship of consumer and
      service provider between the claimants and the ONGC. We make it
E     clear that we have not gone into the other questions since, in view of
      the aforesaid decision, it is not necessary to decide the other questions
      raised by Shri Venugopal.
             8. In view of the above discussion, we partly allow the appeals
      and set aside the orders of the National Consumer Disputes Redressal
      Commission and the State Consumer Disputes Redressal Commission
F     in so far as it held that there is a relationship of consumer and service
      provider between the claimants and the ONGC. We also set aside the
      costs imposed by the National Consumer Disputes Redressal
      Commission. However, in view of the statement made by Shri Venugopal,
      recorded in the opening portion of this judgment, we direct the ONGC
G     to pay the amounts payable (other than the costs) under the orders
      impugned to the claimants within 8 weeks from today.
             9. Pending application(s), if any, stand(s) disposed of.

      Devika Gujral                                          Appeals partly allowed.
H