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Beneficiary of Parliament-enacted welfare scheme would qualify as a "consumer" under the Consumer Protection Act: Supreme Court

Aishwarya

The Supreme Court has recently held that a beneficiary of a statutory welfare scheme is entitled to exact accountability from the statutory authorities by invoking the remedies under the Consumer Protection Act, 1986. (The Joint Labour Commissioner and Registering Officer and another v. Kesar Lal)

A Bench of Justices Dhananjaya Y Chandrachud and Ajay Rastogi held that,

"... a ‘consumer’ includes not only a person who has hired or availed of service but even a beneficiary of a service. The registered workers are clearly beneficiaries of the service provided by the Board in a statutory capacity."
Supreme Court

The dispute involved a construction worker (respondent), who was a beneficiary under Rules made pursuant to the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996.

The State of Rajasthan had framed the Rajasthan Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Rules in 2009 under which the Welfare Board had formulated several schemes for beneficiaries registered under the Act.

One such scheme was for rendering financial assistance of Rs 51,000 on the occasion of the marriage of a daughter of a beneficiary, subject to a limit of assistance on two occasions.

The Court noted that the respondent had applied under the scheme on November 6, 2012 which was rejected by the Joint Commissioner of Labour, Jaipur after nine months by an order which covered 327 such applications, on grounds of technical defects.

Contesting this rejection, the respondent approached a consumer forum for relief. The State contested his claim before the consumer forum contending that beneficiaries under statutory schemes were not consumers under the Consumer Protection Act.

The district forum accepted this stance and ruled against the construction worker. However, the state and national forums set aside the district forum ruling and directed the State Welfare Board to pay the amount sought to the worker/respondent.

The appeal before the Supreme Court arose against the judgement of the National Consumer Disputes Redressal Commission (NCDRC).

The question before the Supreme Court was whether a construction worker who was registered under the 1996 Act and was a beneficiary of the Scheme made under the Rules made in line with the enactment, could qualify as a ‘consumer’ within the meaning of Section 2(d) of the Consumer Protection Act 1986.

Relying on the provisions of the parent Act of 1996, the Court noted that every building worker who was registered as a beneficiary under the enactment was entitled to the benefits provided by the Board.

Further, it was noted a non-payment of the contribution to the fund for a continuous period of not less than one year, the individual ceased to be a beneficiary.

It was also found that the welfare fund was created to meet the expenses of the Board in the discharge of its statutory functions; towards payment of salaries, allowances and remuneration and for meeting the expenses on objects and for purposes authorised by the Act.

In this backdrop, the Court pointed out that the Board was entrusted with specific functions which fell squarely within the definition of the expression ‘service’ within the meaning of Section 2(1)(o) of the Consumer Protection Act 1986.

The Supreme Court went on to decide on to opine beneficiaries who had paid a 'meagre amount' as contributions could be regarded as ‘consumers’, while relying on a plethora of cases to justify this stance.

On a reading of various provisions, the Court added that the services rendered by the Welfare Board to the beneficiaries were not provided free of charge so as to constitute an exclusion from the statutory definitions contained in the Consumer Protection Act 1986. The Court said,

"The true test is not whether the amount which has been contributed by the beneficiary is adequate to defray the entire cost of the expenditure envisaged under the scheme. So long as the service which has been rendered is not rendered free of charge, any deficiency of service is amenable to the fora for redressal constituted under the Consumer Protection Act 1986."
Supreme Court

In this regard, it was also noted that the definition contained in Section 2(1)(d) of the Consumer Protection Act defined a ‘consumer’ to include not only a person who had hired or availed of service but even a beneficiary of a service. Therefore, the Court concluded that the registered workers were clearly beneficiaries of the service provided by the Board in a statutory capacity.

The Bench added that the provisions contained in the Consumer Protection Act, 1986 were to be construed in a purposive manner.

"Public accountability is a significant consideration which underlies the provisions of the Consumer Protection Act 1986. The evolution of jurisprudence in relation to the enactment reflects the need to ensure a sense of public accountability by allowing consumers a redressal in the context of the discharge of non-sovereign functions which are not rendered free of charge. This test is duly met in the present case."

Supreme Court

In view of these observations, the Court ruled that there was no reason to interfere with the decision to award the claim made by the construction worker/respondent. Hence, the appeal was dismissed.

Advocate PV Dinesh, assisted the Court as amicus curiae and Senior Advocate Manish Singhvi represented the appellant statutory authorities.

[Read the Judgment here]

The Joint Labour Commissioner and Registering Officer and Anr v Kesar Lal.pdf
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