Advocates Not Liable Under Consumer Protection Act For Deficiency Of Services : Supreme Court
In a crucial development, the Supreme Court on Tuesday (May 14) held that advocates cannot be held liable under the Consumer Protection Act 1986 (as re-enacted in 2019) for deficiency of services. The Court held that professionals have to be treated differently from persons carrying out business and trade.As a corollary, the Court held that complaints against advocates alleging deficiency...
In a crucial development, the Supreme Court on Tuesday (May 14) held that advocates cannot be held liable under the Consumer Protection Act 1986 (as re-enacted in 2019) for deficiency of services. The Court held that professionals have to be treated differently from persons carrying out business and trade.
As a corollary, the Court held that complaints against advocates alleging deficiency of services are not maintainable before the Consumer Forum.
A bench of Justices Bela Trivedi and Pankaj Mithal overruled a 2007 judgment of the National Consumer Disputes Redressal Commission which ruled that the services rendered by lawyers are covered under Section 2 (o) of the Consumer Protection Act 1986.
Justice Trivedi, reading out the operative part of the judgment, stated that the judgment has distinguished profession from business and trade. A professional requires high level of education, skill and mental labour; success of a professional is dependent on various factors which are beyond their control. Therefore, a professional cannot treated at par with businessmen under the Consumer Protection Act.
The bench also opined that the judgment in Indian Medical Association v. VP Shantna (1995) 6 SCC 651, which held that doctors and medical professionals can be held liable under the Consumer Protection Act, requires to be revisited. The bench requested the Chief Justice of India to refer VP Shanta judgment to a larger bench for reconsideration.
Professions different from trade and business
"We have distinguished profession from business and trade. We have said that a profession would require advance education and training in some branch of learning or science. The nature of work is specialisation and skill, substantial part of which is mental than manual. Having regard to the nature of work of a professional, which requires a high level of education and training and proficiency, and which involves skill and specialised kind of mental work operating in specialised spheres, where actual success depends on various factors beyond one'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," Justice Trivedi stated.
"We are therefore of the considered opinion that 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. There is nothing to suggest that the legislature ever intended to include professions or professionals within the purview of the Act," Justice Trivedi added.
Justice Trivedi clarified that the judgment does not propose to hold that advocates cannot be sued in ordinary courts of law.
Legal profession is sui generis
The Court held that the legal profession is sui generis in nature, having regard to the nature and role of advocates, and cannot be compared with other professions. The relationship between a client and an advocate has unique attributes. Advocates are generally perceived to be clients' agents and owe them fiduciary duties. Advocates have to respect the autonomy of clients and are not entitled to make concessions or undertakings without specific instructions from their clients. Advocates are bound by their clients' instructions. Thus, a lot of control is exercised by a client over an advocate in how they render their duties before the Court.
"All these attributes strengthen our opinion that services hired by a client of an advocate would be a contract of personal service and would therefore stand excluded from the definition of service contained in Section 2(42) of the Consumer Protection Act 2019," the judgment stated. Justice Pankaj Mithal wrote a separate but concurring judgment in which he considered the position of law in other countries.
The Division bench had heard the matter at length before reserving its judgment on February 26.
The NCDRC held that a lawyer may not be responsible for the favourable outcome of a case as the result/outcome does not depend on only the lawyer's work. However, if there was a deficiency in rendering services promised, for which he receives consideration in the form of a fee, then the lawyers can be proceeded against under the Consumer Protection Act.
Moreover, it was also opined that the contract between the client and a lawyer is bilateral. On receipt of fees, the commission said the lawyer would appear and represent the matter on behalf of his client.
It is against this order that the appeal was filed before the Supreme Court. Earlier, in 2009, the Top Court had stayed the impugned judgment of the Commission.
Arguments Advanced Before The Court
The matter was argued by a battery of senior advocates contending that a lawyer is not just a mouthpiece for her client but is also an officer of the court. It was also stressed that a certain amount of immunity and independence is necessary for a lawyer while discharging his/ her duties as an Officer of the Court.
Arguments ranged from the importance of an independent bar so that a lawyer must be able to speak fearlessly without any binding contract to the possibility of parallel proceedings. One is an appeal from a suit, and the other is a complaint against an advocate before the consumer forum.
Another argument that gathered the spotlight in this matter was how a medical profession was different from a legal one. This was in view of the Supreme Court judgment in Indian Medical Association v VP Shantha's (1995) 6 SCC 651, which held that healthcare services are covered under the Act. One of the attempts to win this argument was made while arguing that lawyers do not have control over the environment in which services are rendered.
Senior Advocate V Giri, who was appointed as an amicus curiae in the matter, also addressed the Bench on the last date of hearing. He argued, inter alia, that once a lawyer, being an agent of his client, appears and acts on his behalf before the Court, then it cannot amount to a relationship between a service provider and a service consumer.
Another crucial argument advanced by Giri was that lawyers who are engaged to appear before Courts of law or before different forums may have to be treated slightly differently from lawyers who are approached for their legal services, such as opinions, consultations, and drafting of agreements.
Counsels for the Appellants: Senior Advocate Narender Hooda and Advocate Jasbir Malik for Bar of Indian Lawyers, Senior Advocate Jaideep Gupta for Supreme Court Advocates-on-Record Association, Senior advocate Guru Krishnakumar for the Bar Council of India, senior advocate Manoj Swarup, for Punjab and Haryana High Court Bar Association, Senior advocate Vikas Singh, Senior Advocate Ramakrishnan Viraraghavan for Bengaluru Bar Association
The reports on the matter can be read here: Lawyers Appearing For Client In Courts Aren't 'Service Providers' As Per Consumer Protection Act, Says Amicus; Supreme Court Reserves Judgment
Can Advocate Be Held Liable Under Consumer Protection Act? Supreme Court Starts Hearing
Case Title: BAR OF INDIAN LAWYERS THROUGH ITS PRESIDENT JASBIR SIGH MALIK vs. D.K.GANDHI PS NATIONAL INSTITUTE OF COMMUNICABLE DISEASES., Diary No.- 27751 - 2007
Citation : 2024 LiveLaw (SC) 372
Click here to read the judgment