Bar of Indian Lawyers through its President Jasbir Singh Malik v. D.K. Gandhi PS National Institute of Communicable Diseases (2024)

Can a client drag his advocate before a consumer commission for "deficiency in service"? The National Consumer Disputes Redressal Commission (NCDRC) had said yes. The Supreme Court said no. The case settles, for now, that an advocate's services are outside the Consumer Protection Act, whether of 1986 or 2019.

It matters for a second reason: the Bench openly doubted Indian Medical Association v. V.P. Shantha, the three-Judge decision that brought doctors within the Act, and referred it to the Chief Justice for reconsideration by a larger Bench. Know exactly what this case decides and what it only refers.

The respondent, D.K. Gandhi, hired the appellant advocate (M. Mathias, C.A. No. 2649 of 2009) to file a complaint under s. 138 of the Negotiable Instruments Act before the Metropolitan Magistrate, Tis Hazari, Delhi, against one Kamal Sharma, whose cheque for Rs. 20,000 had been dishonoured.

During the case the accused agreed to pay Rs. 20,000 plus Rs. 5,000 as expenses. The complainant alleged that the advocate received the pay order and the cheque on his behalf but did not hand them over, and instead demanded Rs. 5,000 in cash as his fee; the advocate also filed a suit in the Small Causes Court for that sum. The advocate later handed over both instruments, but payment of the Rs. 5,000 cheque was stopped by the accused at the advocate's instance.

The client complained to the District Consumer Forum, Delhi. The advocate objected that the Forum had no jurisdiction because advocates are not covered by the Act. The District Forum rejected the objection and decided for the client. The State Commission allowed the advocate's appeal, holding that the services of lawyers do not fall within "service" under s. 2(1)(o). The NCDRC, in revision, reversed the State Commission by its order dated 6 August 2007. The Bar of Indian Lawyers, the Delhi High Court Bar Association, the Bar Council of India and the advocate appealed.

1. Whether "a complaint alleging “deficiency in service” against Advocates practising Legal Profession, would be maintainable under the Consumer Protection Act, 1986 as re-enacted in 2019".
2. Whether the Legislature intended professions and professionals to be within the Act at all.
3. Whether the legal profession is sui generis, distinct from other professions such as medicine.
4. Whether an advocate's service is rendered under "a contract of personal service", which the definition of "service" excludes.

The appeals were allowed and the NCDRC's order was set aside.

Professions were never meant to be covered

Trivedi J. held that the Act was enacted to protect consumers from unfair trade practices and unethical business practices, and that 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." Bringing all professionals in would open a "flood-gate of litigations" before forums whose remedy is inexpensive and summary.

Shantha referred to a larger Bench

The Court was "conscious of the decision in Indian Medical Association vs. V.P. Shantha", but said "the decision of the three- judge bench, in case of Indian Medical Association vs. V.P Shantha (supra) deserves to be revisited and considered by a larger bench." Relying on Order VI Rule 2 of the Supreme Court Rules, it referred the matter to the Chief Justice of India. It did not itself overrule Shantha — a two-Judge Bench could not.

The legal profession is sui generis

The Court concluded that "The Legal Profession is sui generis i.e. unique in nature and cannot be compared with any other Profession."

Contract of personal service

The definition of "service" has an exclusionary part which excludes service free of charge or "under a contract of personal service". Applying the control test from Dharangadhra Chemical Works v. State of Saurashtra — the greater the direct control exercised by the person hiring the services, the stronger the case for a contract of service — the Court listed features of the advocate–client relationship: advocates are perceived as their client's agents and owe fiduciary duties; they cannot make concessions or give undertakings without express instructions; they must not transgress the authority conferred by the client.

It held: "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." Therefore an advocate's service is a service under "a contract of personal service," and falls within the exclusionary part of s. 2(42) of the 2019 Act.

Conclusions (para 42)

The Court summarised: (i) the Legislature never intended professions or professionals to be covered; (ii) the legal profession is sui generis; (iii) an advocate's service is under a contract of personal service and is excluded; and (iv) "A complaint alleging “deficiency in service” against Advocates practising Legal Profession would not be maintainable under the CP Act, 2019."

What the case does NOT decide

The Court was careful: "we do not propose to say that the professionals could not be sued or held liable for their alleged misconduct or tortious or criminal acts." No professional enjoys immunity from being sued, and regulation by Bar Councils or Medical Councils does not absolve them from civil or criminal liability for professional misconduct or negligence. The client's remedy lies elsewhere — not before a consumer commission.

Mithal J., concurring

Mithal J. agreed, adding reasoning from the United Nations consumer-protection guidelines and foreign practice (Malaysia, the European Union, States in the USA, Australia), where regulated professions are excluded from consumer law. He noted that the legal profession is a regulated profession in India and that the Advocates Act, 1961, which regulates the conduct of lawyers, is a complete code in itself. He held that the NCDRC's view that a consumer complaint for deficiency in lawyers' services is maintainable "is incorrect and stands overruled."

The services of an advocate are rendered under a contract of personal service, because the client exercises considerable direct control over how the advocate performs them; they therefore fall within the exclusionary part of the definition of "service" in the Consumer Protection Act, and a complaint alleging deficiency in service against an advocate is not maintainable under the Act of 1986 or 2019. Advocates remain liable in ordinary civil and criminal law and to disciplinary proceedings for misconduct or negligence.

• Direct question: Are the services of an advocate "service" under the Consumer Protection Act, 2019? Discuss. Set out the three-part definition of "service", the contract-of-personal-service exclusion, the control test, and the para 42 conclusions.
• Comparison with Shantha: Distinguish the position of doctors and lawyers under consumer law. Doctors are covered under V.P. Shantha; lawyers are not under this case; and this case referred Shantha to a larger Bench.
• Problem question: a client says his lawyer negligently missed a limitation date and files before the District Commission. The complaint is not maintainable; advise a civil suit for negligence or a complaint to the Bar Council.
• Precision marks: give the date (14 May 2024), the Bench (Trivedi and Mithal JJ.), and say that Shantha was referred, not overruled.