Can’t take lawyers to consumer court for poor services — what SC said in judgment

SC drew distinction between 'profession' and 'business/ trade' and cited uniqueness of legal profession in its judgment.

File photo of the Supreme Court | Suraj Singh Bisht | ThePrint

New Delhi: Emphasising the difference between a “profession” and a “business” or a “trade” and the uniqueness of the legal profession, the Supreme Court (SC) Tuesday ruled that advocates cannot be held liable under the consumer protection law for deficiency in their services.

While pronouncing the judgment, a bench comprising Justices Bela M. Trivedi and Pankaj Mithal said that a 1995 SC ruling that allowed holding doctors and medical practitioners liable under the Consumer Protection Act needed to be revisited and considered by a larger bench and referred the matter to the Chief Justice of India.

In 2007, the National Consumer Disputes Redressal Commission (NCDRC) ruled that in case of any deficiency in the services rendered by a lawyer, there could be a complaint against them under the Act. The Bar Council of India and the Delhi High Court Bar Association then challenged the NCDRC judgment in appeals before the SC. The SC verdict now came on these appeals.

The question before the SC bench was whether a complaint alleging “deficiency in service” by lawyers would be maintainable under the Consumer Protection Act, 1986, as re-enacted in 2019, and the bench cited the “uniqueness” of the legal profession, among other things, to rule that it wouldn’t be maintainable under the 2019 law.

“The very purpose and object of the CP 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 professionals within the purview of the said Act of 1986/2019,” the SC bench said.

The bench, however, clarified it was not saying that professionals couldn’t be sued or held liable for alleged misconduct or criminal acts.

“In the process of overall depletion and erosion of ethical values and degradation of professional ethics, instances of professional misconduct are also on the rise,” it added.

The dispute

The case arose out of a dispute between a lawyer and his client way back in the 1990s.

D.K. Gandhi had hired the services of an advocate, M. Mathias, for filing a complaint in the metropolitan magistrate court in Delhi’s Tis Hazari court against one Kamal Sharma in a Rs 20,000 cheque bounce case.

As the case went on, Sharma agreed to pay Rs 20,000 for the bounced cheque, besides Rs 5,000 to meet the expenses incurred by Gandhi. Gandhi claimed Mathias received a Rs 20,000 demand draft (DD)/pay order and a crossed cheque of Rs 5,000 from Sharma but did not deliver it to him. Instead, Mathias allegedly demanded Rs 5,000 in cash from him. Mathias also filed a suit in a Delhi court for recovering the Rs 5,000, raising a plea that it was due to him in fees.

Later, Mathias passed on Sharma’s DD/pay order and cheque to Gandhi. However, Gandhi alleged that Sharma stopped the payment of the Rs 5,000 cheque at the insistence of Mathias.

Gandhi then filed a complaint before the District Consumer Disputes Redressal Forum, Delhi, seeking Rs 15,000 as compensation, in addition to the Rs 5,000 cheque and another Rs 10,000 for the mental agony and harassment inflicted on him.

In March 1998, Mathias resisted the complaint by raising a preliminary objection, saying that the district consumer forum had no jurisdiction to adjudicate the dispute since the 1986 Consumer Protection Act’s provisions do not cover lawyers.

While the district consumer forum rejected the preliminary objection and ruled it did have jurisdiction, the state commission held in 2006 that lawyers do not fall under the ambit of consumer law. However, a year later, the NCDRC held that the consumer courts could hear complaints against lawyers filed by their clients.

Professionals vs businessmen

In its judgment, this time, the SC interpreted that the legislature, while enacting the 1986 law, intended to protect the interests of consumers against any exploitation by traders or manufacturers of consumer goods.

However, the SC held that the statements of the objects and reasons for the 1986 and 2019 laws do not indicate that professions or services by professionals such as advocates and doctors would fall within their purview. “It is a very well accepted proposition of the fact that professionals could not be called businessmen or traders, nor clients or patients be called consumers,” the SC said.

The court emphasised that a profession would require advanced education and training in some branch of learning or science. It also asserted that a professional cannot be treated at par with a business, a trader, or a service provider under consumer law. The SC arrived at this, “having regard to the nature of work of a professional, which requires (a) high level of education, training and proficiency and which involves skilled and specialised kind of mental work, operating in the specialised spheres, where achieving success would depend upon many other factors beyond a man’s control”.

The court also looked into whether the legal profession is different from other professions, especially the medical profession, in the context of the NCDRC relying on the SC’s 1995 judgment to bring lawyers under the purview of the Consumer Protection Act, 1986.

It then ruled that the legal profession was “sui generis”, and, among other things, observed, “The legal profession is different from the other professions also for the reason that what the advocates do affects not only an individual but the entire administration of justice, which is the foundation of the civilised society.”

Is it a service?

Looking into whether “service” by an advocate would fall under the definition of “service” under the 1986 and 2019 laws, the SC said the definitions of “service” do not include “rendering of any service free of charge or under a contract of personal service”.

The court then relied on several past judgments to note that the greater the amount of direct control exercised over the person rendering the services by the person contracting for them, the stronger the grounds for holding it to be a “contract of service”.

The SC looked into whether the client exercises direct control over the advocate rendering legal professional services in case of an advocate-client relationship. It also looked at various provisions of the Code of Civil Procedure on the representation of litigants and parties through advocates.

After its assessments, the SC stressed that an advocate whose name is in the state roll can practise in all courts but only after a client appointed the advocate to fight a case in a court through a document, “vakalatnama”.

Highlighting lawyers’ duties to courts, clients, opponents and colleagues as listed under the Bar Council of India Rules, the SC asserted that advocates are perceived as clients’ agents and owe fiduciary duties to their clients. The SC, among other things, noted that advocates cannot give any undertaking in a court without express instructions from the client.

The SC then opined the client exercised a considerable amount of direct control over how an advocate rendered his services when employed by the client, which, it said, strengthened its opinion that services by an advocate come under the purview of a contract “of personal service” and stand excluded from the definition of “service” under the 2019 law.

(Edited by Madhurita Goswami)