Bar of Indian Lawyers v. D. K. Gandhi PS National Institute of Communicable Diseases and Anr., 2024 INSC 410

Bar of Indian Lawyers v. D. K. Gandhi PS National Institute of Communicable Diseases and Anr., 2024 INSC 410.[1]

Appellant: Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India, and M. Mathias.

Respondent: D. K. Gandhi PS National Institute of Communicable Diseases and Anr. Citation: 2024 INSC 410

Decided On: 14 May 2024

Bench: Bela M. Trivedi, Pankaj Mithal.

FACTS

In Civil Appeal No. 2649/2009, arising from an order by the National Consumer Disputes Redressal Commission, the following key facts are involved:

The appellant, M. Mathias is a practicing advocate. The respondent in this case, D.K. Gandhi, hired the appellant to file a complaint in the Metropolitan Magistrate Court, Tis Hazari Court, Delhi, against Kamal Sharma under Section 138 of the Negotiable Instruments Act due to a dishonoured cheque of Rs. 20,000. During the case, Kamal Sharma agreed to pay Rs. 20,000 plus Rs. 5,000 for expenses. The respondent alleged that although the appellant received a DD/pay order for Rs. 20,000 and a crossed cheque for Rs. 5,000 from Kamal Sharma, the appellant did not deliver them to the respondent but instead demanded Rs. 5,000 in cash. The appellant subsequently filed a recovery suit for Rs. 5,000 in the Court of Small Causes, Delhi claiming it as his fee. The appellant later gave the respondent the DD/pay order and the cheque, but the payment of the Rs. 5,000 cheque was stopped by Sharma, allegedly at the appellant’s instance. D.K. Gandhi then filed a complaint before the District Consumer Disputes Redressal Forum, Delhi, for compensation and additional costs. The appellant objected, arguing that the District Consumer Forum lacked jurisdiction as advocates were not covered under the Consumer Protection Act.[2] The District Forum rejected this objection and ruled in favour of the respondent. The appellant’s appeal to the State Commission was successful, with the State Commission ruling that legal services did not fall under the ‘service’ definition in the Consumer Protection Act. However, on revision, the NCDRC reversed the State Commission’s decision. Aggrieved by the NCDRC’s order, the Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India, and the appellant M. Mathias filed the present appeals.

ISSUES RAISED

1. Whether a complaint alleging ‘deficiency in service’ against Advocates practicing the legal profession, be maintainable under the Consumer Protection Act, 1986 as amended in 2019? (or) Whether the Legislature intended to include the Professions or services rendered by the Professionals within the purview of the Consumer Protection Act 1986 as amended in 2019?
2. Whether the Legal Profession is ‘sui generis’?
3. Whether a Service hired or availed of an Advocate could be said to be the service under ‘a contract of personal service’ to exclude it from the definition of ‘Service’ contained under Section 2 (42) of the Consumer Protection Act, 2019.[3]

CONTENTIONS

Since the issues in this batch of Appeals involve advocates practicing in various courts, tribunals, and legal forums across the country, a range of arguments were presented before the bench. The main points raised by the learned Senior Counsels are as follows: The legal profession in India operates under the exclusive purview of the Advocates Act, 1961, which meticulously regulates professional conduct and addresses instances of misconduct within the legal community. Renowned for its nobility and distinctiveness from commercial enterprises, the legal profession serves as a cornerstone of the justice system, necessitating the preservation of the Bar’s independence to uphold democratic principles and fortify the judiciary.[4] Unlike other professions, advocates bear multifaceted responsibilities extending beyond client representation to encompass duties towards the court and their peers. These obligations mandate the judicious exercise of discretion to advocate for clients ethically while upholding the integrity of the legal process. Disciplinary oversight rests with the Bar Council of India and the State Bar Councils, distinguishing between errors in judgment and professional misconduct, thereby ensuring adherence to the established professional standards. Given its specialized nature, the Advocates Act takes precedence over consumer protection laws concerning advocate conduct, reflecting the unique character of the legal profession. Extending consumer protection statutes to advocates could precipitate a surge in frivolous litigation, resulting in conflicting verdicts and disparate legal proceedings across multiple forums, ultimately detracting from the overarching public interest. Therefore, the regulatory framework governing the legal profession in India underscores its sui generis status, emphasizing the need to preserve its distinctiveness within the broader legal landscape.

Given the importance of the issues involved, the Bench appointed learned Senior Advocate Mr. Giri as Amicus Curiae to assist the Court. Mr. V. Giri argued that advocates could be divided into two main groups based on the terms of their engagement and the nature of their work for clients. The first category includes advocates hired to conduct cases and represent clients in courts, tribunals, or other forums through a Vakalatnama. The second category consists of advocates engaged to provide professional expertise such as legal opinions, issuing legal notices, and drafting agreements.[5]

Mr. Giri contended that the first category of advocates should not be considered service providers under the Consumer Protection Act because they act as representatives or agents of their clients. He emphasized that clients have the option to represent themselves in court, but when they sign a Vakalatnama, they appoint an advocate as their agent. The advocate’s actions and statements during the representation are akin to those of the client, making their relationship different from that of a ‘service provider’ and a ‘consumer’ under the Consumer Protection Act.[6] However, Mr. Giri acknowledged that the second category of advocates, those engaged for legal services outside the court process and not through a Vakalatnama, would fall under the definition of service providers. Any deficiencies or shortcomings in the professional services provided by these advocates, outside the context of litigation, would be covered by the Consumer Protection Act.

JUDGEMENT

BELA M. TRIVEDI, J.

ISSUE 1: Whether the legislature intended to include the Professions or services rendered by the Professionals within the purview of the Consumer Protection Act, 1986 as amended in 2019?

The Court analyzed the scope and purpose of the Consumer Protection Act, 1986 stating that the Act was designed to provide better protection for consumers against exploitation by traders and manufacturers of consumer goods. It aimed to ensure justice and fair treatment for consumers in a market dominated by large trading and manufacturing entities. The Court noted that there was no indication in the objectives or reasons for the Consumer Protection Act, either in 1986 or 2019, that professions or the services provided by professionals, such as advocates and doctors, were to be included within the Act’s scope. The Court emphasized that professionals could not be classified as businessmen or traders, nor could their clients or patients be considered consumers.

It is important to recognize that the terms ‘business’ or ‘trade,’ which involve a commercial aspect, are not synonymous with ‘profession’, which generally pertains to a field of learning or science requiring advanced knowledge and specialized study. The Court highlighted that professional work, which necessitates a high level of education, training, and proficiency, involves skilled and specialized mental tasks and operates in specialized areas where success often depends on various uncontrollable factors. Consequently, professionals cannot be equated with businessmen, traders, or service providers as defined in the CP Act. Furthermore, the services provided by businessmen or traders concerning their goods or products cannot be compared to the specialized services offered by professionals to their clients. The Court concluded that the main objective of the Consumer Protection Act 1986 and its 2019 reenactment was to protect consumers from unfair trade practices and unethical business practices, with no indication that professions or professionals were meant to be included. Therefore, professions and professionals were never intended to fall within the Consumer Protection Act’s purview, either in 1986 or 2019[7]

However, the Court explained that this does not mean professionals cannot be sued or held liable for alleged misconduct, tortious acts, or criminal behaviour. The bench also expressed the opinion that the judgment in Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 651[8], which held that doctors and medical professionals could be liable under the Consumer Protection Act, should be reconsidered. The bench requested the Chief Justice of India to refer the V.P. Shantha judgment to a larger bench for re-evaluation.

ISSUE 2: Whether the Legal Profession is ‘sui generis’?

The next issue to consider is whether the legal profession is sui generis, meaning fundamentally different from other professions, particularly the medical profession. The National Consumer Disputes Redressal Commission (NCDRC), in its impugned order, relied on the decision in Indian Medical Association vs. V.P. Shantha to include advocates within the purview of the Consumer Protection Act. As observed in Byram Pestonji Gariwala vs. Union Bank of India and Others[9], the Indian legal system has a deep historical foundation. It is deeply rooted in the country’s soil, nourished by its culture, languages, and traditions, and shaped by the quest for social justice. Post-independence, and following the adoption of the Constitution of India, the judicial system largely remained grounded in common law traditions. Consequently, the role, status, and capacity of an advocate to represent a client have also remained unchanged.

Numerous decisions have established that the legal profession is not comparable to other traditional professions. It is not commercial but is fundamentally a service-oriented and noble profession. Advocates play a crucial role in the justice delivery system. The development of jurisprudence and the vitality of the Constitution heavily rely on the positive contributions of advocates. They are expected to be fearless and independent to protect the rights of citizens, uphold the rule of law, and maintain the independence of the judiciary. The public holds great faith in the judiciary, and the Bar, being an integral part of the judicial system, plays a key role in preserving this independence and, by extension, the democratic structure of the nation. Advocates are regarded as intellectuals among the elite and social activists among the underprivileged. Thus, they are expected to act with the utmost good faith, integrity, fairness, and loyalty in their legal proceedings. As responsible officers of the court and essential components of the administration of justice, advocates owe duties not only to their clients but also to the court and opposing parties.[10]

The legal profession is distinct from other professions because the actions of advocates impact not only individuals but the entire administration of justice, which is fundamental to a civilized society. The legal profession is solemn and highly esteemed due to the pivotal role played by its leaders in strengthening the judicial system. The services provided by advocates in making the judicial system efficient, effective, and credible, and in building a robust and impartial judiciary, one of the three pillars of democracy, are unparalleled by other professionals. Therefore, considering the role, status, and duties of advocates, the legal profession is sui generis, unique in nature, and cannot be compared with any other profession.

ISSUE 3: Whether a service hired or availed of an Advocate could be said to be the service under a contract of personal service’ to exclude it from the definition of ‘Service’ contained in Section 2 (42) of the Consumer Protection Act, 2019[11]?

The court deliberated on whether the services rendered by an advocate could be classified as ‘a contract of personal service’, thus exempting them from being considered as ‘Service’ under Section 2(42) of the Consumer Protection Act, 2019. It was noted that the Advocates Act, 1961, and the Bar Council of India Rules contain extensive provisions for handling professional misconduct among advocates, with disciplinary measures prescribed by the State Bar Councils or the Bar Council of India. The court compared the definition of ‘Service’ in Section 2(1)(o) of the Consumer Protection Act, 1986, with Section 2(42) of the 2019 Act, and observed minor differences in how ‘Deficiency’ is defined between Section 2(1)(g) of the 1986 Act and Section 2(11) of the 2019 Act.[12]

In analyzing the advocate-client relationship, the court pointed out that advocates are generally seen as agents of their clients and have fiduciary obligations towards them. These obligations include adhering to the duties of agents, such as not making concessions or giving undertakings to the court without the client’s explicit instructions. Advocates must operate within the authority granted by their clients and seek proper instructions before taking any action or making statements that could affect the legal rights of their clients. The court emphasized that advocates act on behalf of their clients in court, manage proceedings for them, and are the sole intermediaries between the court and the client, thus holding significant responsibility. Advocates are expected to follow the instructions of their clients rather than substitute their own judgment. This dynamic indicates that clients exercise substantial direct control over how advocates deliver their services. Therefore, the services provided by an advocate would be classified as a contract ‘of personal service’, and thus, excluded from the definition of ‘service’ under Section 2(42) of the Consumer Protection Act, 2019. Consequently, any complaint alleging ‘deficiency in service’ against practicing advocates would not be sustainable under the Consumer Protection Act, 2019.

PANKAJ MITHAL, J.

The central issue at hand revolves around whether legal services provided by lawyers should be encompassed within the scope of the Consumer Protection Act, 1986. It is universally recognized that the legal profession is noble, with lawyers bearing duties not only to clients or opponents but also to assist the court, acting as officers and ambassadors of justice. This uniqueness of the legal profession, termed sui generis, distinguishes it from other professions. In analyzing the legislative intent, it becomes imperative to ascertain whether the lawmakers, in enacting consumer protection laws, intended to include services provided by professionals, particularly lawyers. The genesis of consumer protection laws lies in international efforts to balance economic power between consumers and service providers, as evidenced by United Nations resolutions providing guidelines for consumer protection. India’s Consumer Protection Act, 1986, was crafted to safeguard consumers from unfair trade practices, aligning with the broader international framework for consumer protection. However, legal precedents and legislative provisions from various countries demonstrate the exclusion of regulated professions, including legal services, from consumer protection laws. This exclusion is founded on the recognition of the unique nature of the legal profession and its paramount role in the administration of justice.[13]

In India, the legal profession is governed by the Advocates Act, 1961, which comprehensively regulates lawyers’ conduct. India needs to align its regulatory framework for the legal profession with international standards, particularly in the era of globalization. This alignment entails excluding legal services from consumer protection laws, as they are inherently unique and regulated by specific legislation. Consumer protection laws should have a universal application, restricted to consumers and excluding professional services, especially those of lawyers, which are inherently sui generis. Thus, it is concluded that the Indian legislature, similar to the legislative frameworks in some other countries, did not intend for the services provided by professionals, particularly lawyers, to fall within the scope of the Consumer Protection Act, 1986, or its reenactment in 2019.

Consequently, the decision overrules the stance of the National Consumer Disputes Redressal Commission, setting aside their order and disposing of the appeals accordingly.[14]

INFERENCE

The case of Bar of Indian Lawyers v. D. K. Gandhi PS National Institute of Communicable Diseases and Anr., 2024 INSC 410, presents a significant legal precedent regarding the applicability of consumer protection laws to the legal profession in India. The judgment underscores the ‘sui generis’ nature of the legal profession, emphasizing its distinction from conventional business or trade activities. Legal services are characterized by unique ethical obligations, fiduciary duties, and responsibilities towards the court, clients, and peers, which set them apart from typical commercial transactions. The Supreme Court’s decision clarifies that services provided by advocates fall outside the purview of consumer protection laws, both under the Consumer Protection Act, 1986, and its reenactment in 2019. This recognition aligns with international practices and acknowledges the special regulatory framework governing

the legal profession under the Advocates Act, 1961. The case underscores the need for clarity and reform within the legal framework to address the unique nature of legal services adequately. Clear guidelines and exemptions should be established to delineate the scope of consumer protection laws, ensuring that they do not encroach upon the specialized domain of the legal profession. Overall, the judgment reaffirms the crucial role of the legal profession in upholding democratic principles, preserving the independence of the judiciary, and ensuring access to justice. It sets a precedent for future cases involving the interface between consumer protection laws and professional services, providing clarity on the regulatory landscape governing the legal profession in India.

Reference(s):

[1] Bar of Indian Lawyers v. D. K. Gandhi PS National Institute of Communicable Diseases and Anr., 2024 INSC 410.

[2] 27751_2007_14_1501_53242_Judgement_14-May-2024.pdf,

https://webapi.sci.gov.in/supremecourt/2007/27751/27751_2007_14_1501_53242_Judgement_14-May- 2024.pdf (last visited June 12, 2024).

[3] Rohin Pujari, India – Advocates No Longer Liable Under Consumer Protection Laws For Alleged Deficiency In Services., CONVENTUS LAW (June 12, 2024), https://conventuslaw.com/report/india-advocates-no-longer- liable-under-consumer-protection-laws-for-alleged-deficiency-in-services/ (last visited June 12, 2024).

[4] The Advocates Act, 1961.

[5] Lawyers not liable for deficiency of services under the Consumer Protection Act: SC, LAWBEAT,

https://lawbeat.in/supreme-court-judgments/lawyers-liable-deficiency-services-consumer-protection-act- supreme-court (last visited June 12, 2024).

[6] The Consumer Protection Act, 2019.

[7] Apoorva, Consumer Protection| Advocates Not Liable for Deficiency of Services; Professionals to Be Treated Differently from Persons Carrying out Business and Trade: SC, SCC TIMES (May 14, 2024),

https://www.scconline.com/blog/post/2024/05/14/advocates-are-not-liable-under-consumer-protection-act- deficiency-of-services-supreme-court/ (last visited June 12, 2024).

[8] Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 651.

[9] Byram Pestonji Gariwala vs. Union Bank of India and Others, (1992) 1 SCC 31.

[10] Advocates Not Liable Under Consumer Protection Act For Deficiency Of Services: Supreme Court, https://www.livelaw.in/supreme-court/advocates-liable-under-consumer-protection-act-for-deficieency-of- services-supreme-court-257837 (last visited May 21, 2024).

[11] The Consumer Protection Act, 2019, supra note 6.

[12] Advocates not liable under Consumer Protection Act for deficiency of services – Acuity Law, https://acuitylaw.co.in/advocates-not-liable-under-consumer-protection-act-for-deficiency-of-services/ (last visited June 12, 2024).

[13] Debayan Roy, Services by Lawyers Will Not Fall under Consumer Protection Act: Supreme Court, BAR AND BENCH – INDIAN LEGAL NEWS (2024), https://www.barandbench.com/news/services-lawyers-will-not-fall- consumer-protection-act-supreme-court (last visited June 12, 2024).

[14] Aaratrika Bhaumik, Watch | Can You Take Your Lawyer to Consumer Court for Poor Services? | Explained, THE HINDU, May 16, 2024, https://www.thehindu.com/news/national/watch-can-you-take-your-lawyer-to-

consumer-court-for-poor-services-explained/article68182730.ece (last visited June 12, 2024).