REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 9257   OF 2019  (Arising out of SLP (C) No(s).14941 of 2014)

CHAIRMAN­CUM­MANAGING DIRECTOR  ONGC LTD. & ORS.      …APPELLANT(S)

Versus

CONSUMER EDUCATION RESEARCH  SOCIETY & ORS.                           …RESPONDENT(S)

WITH CIVIL APPEAL NOS.  9258  OF 2019

(Arising out of SLP (C) Nos. 26660 of 2014) CIVIL APPEAL NOS. 9259   OF 2019

(Arising out of SLP (C) No. 26659 of 2014) CIVIL APPEAL NOS. 9260  OF 2019

(Arising out of SLP (C) No. 26662 of 2014) CIVIL APPEAL NOS. 9261  OF 2019

(Arising out of SLP (C) No. 26655 of 2014) CIVIL APPEAL NOS. 9262  OF 2019

(Arising out of SLP (C) No. 26657 of 2014) CIVIL APPEAL NOS. 9263   OF 2019

(Arising out of SLP (C) No. 26661 of 2014) CIVIL APPEAL NOS. 9264  OF 2019

(Arising out of SLP (C) No. 26663 of 2014)

J U D G M E N T

Deepak Gupta, J.

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Leave granted.

2. All these appeals are being disposed of by a common

judgment since the issue involved is common in all the cases.

3. At the outset, we may note that Shri Krishnan Venugopal,

learned senior counsel appearing for the appellants submits that

without prejudice to the rights of the appellants to challenge the

impugned orders of the National Consumer Disputes Redressal

Commission  as  well as the  Gujarat  State  Consumer  Disputes

Redressal  Commission  and  the  District  Forum, the  appellants

shall pay the amount as directed in the impugned orders.   This

has been done because the amounts involved are small, the

appellants had retired a long time back and they should not be

forced to go into the second round of litigation.   

4. The main issue involved is whether there is relationship of

consumer and service provider existing between the private

respondents (claimants) and the appellants.   

5. The undisputed facts are that all the claimants were

employees of the Oil and Natural Gas Commission (for short ‘the

ONGC’).   A Self Contributory, Post Retirement and Death in

Service Benefits Scheme, 1991 (for short ‘the Scheme’) was

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introduced in the ONGC after obtaining permission of the

Government of India and the relevant portion of the letter dated

18.09.1991 granting permission reads as follows:­

“(i) Contribution to the fund to be established from the employee of the ONGC would be in cash, with a token contribution of Rs.100 per annum by ONGC.”

The Scheme has also been annexed and the relevant portion of

the Scheme reads as follows:­

“1(c)  Membership

(i) xxx xxx xxx

(ii) The Scheme shall be optional to the existing executives in regular service of the Commission on the effective date of the Scheme 01 04 1990 However, t will be compulsory for executives joining regular service in the Commission as new entrant on or after the effective date of the Scheme option once exercise shall be final and irrevocable

xxx    xxx  xxx

2  Contribution

2.1 The contribution to be make by the member­ employee shall be calculate his salary and the rate will  be as given hereunder depending on his age on the effective of the Scheme for employees on the rolls ONGC as on 01.04.1990 and on the date Joining ONGC for new entrants.   The rate of contribution fixed at the time of entry will remain constant.   The following rates of the contribution are payable in the various age group:

(i) Below 25 years ­0.5% of salary

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(ii) 25 and upto 35 years ­0.75% of Salary (iii) above 30 and up to 35 years ­1% of salary (iv) above 35 and up to 40 years  ­2% of salary (v) Above 40 and up to 45 years ­3% of salary (vi) Above 45 and up to 48 years ­4.5% of salary (vii) Above 48 and up to 50 years ­4.5% of salary

Above 50 and up to 58 years ­5% of salary xxx   xxx  xxx

5. MANAGING THE SCHEME (a) The Scheme shall be run by a Trust consisting of

trustees to be nominated by the Chairman ONGC and representative as may nominated on the board by CWC of ASTO.  The Trust would make investment  plan  of the fund as  per  pattern  of Rule 67 (2) of Income Tax Rule 1961 and would purchase annuity from LIC for the beneficiaries under the Scheme.

6. Scheme  is  based  on  voluntary  contribution  by the member employees.   No contribution will be made by ONGC towards this Scheme except Rs.100 p.a. No. other financial liability on account of this Scheme will devolve on ONGC or the Govt. of India.”

It is  not  necessary to  deal  with  other facts.  The case  of the

claimants was that due to delay in sending their claims to the

LIC, they suffered a loss.   This averment is denied by the

appellants but, in our view, that is not very relevant.   The

Consumer Fora held that the employees were consumers of the

ONGC and  therefore  passed orders awarding various amounts

and costs in favour  of the  claimants  and hence  the  ONGC  is

liable to pay the same.

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6. Shri Venugopal has raised various pleas before us.  The first

is that in terms of the definition of consumer in the Consumer

Protection Act, 1986 (for short ‘the Act’), the first essential

ingredient is payment of consideration for availing services.  The

second contention is that rendering of service free of charge

under a contract of personal service is not included in the

definition of service under the Act.  We may refer to Section 2(d)

of the Act, which reads as follows:­

“(d) “consumer” means any person who,—

(i)  xxx   xxx   xxx   (ii)      hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment,  when such services are availed of with the  approval of the first  mentioned  person but does not include a person who avails of such services for any commercial purpose;”

We  may  also refer to  Section 2(o)  of the  Act,  which  reads  as

follows:­

“(o) “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing,

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supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

Shri Venugopal has relied upon the judgment of this Court in the

case of  Jagmittar Sain Bhagat & Ors.  vs.  Director, Health

Services, Haryana & Ors.1  in this regard.  On the other hand,

learned counsel for the respondents has placed reliance on the

judgment of this Court in  Regional Provident Fund

Commissioner v. Shiv Kumar Joshi2 and Regional Provident

Fund Commissioner v. Bhavani3.  

7. In our opinion, it is not necessary to answer all the issues

raised by Shri Venugopal since, in our opinion, there is virtually

no privity of contract for providing service between the ONGC and

the claimants.  From a perusal of the letter dated 18.09.1991 and

the Scheme, relevant portion of which has been quoted above, it

is apparent that contributors to the Scheme were the employees

of ONGC.   Whereas the employer was only making a token

contribution of Rs.100 per annum, the Scheme was also

1 2013(10) SCC 136 2 2000(1) SCC 98 3 (2008) 7 SCC 111

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voluntary  and optional for the  employees  who were in  service

from the effective date i.e. 01.04.1990.  It is not disputed that all

the claimants were in service before the effective date.   The

Scheme envisages that  every  employee  shall contribute to the

fund at rates specified therein.   The younger the employee, the

percentage deducted from his salary is less and this rises

progressively as the age increases.  It has obviously been done to

ensure that the contribution of the employee is equal i.e. those

who have less years  of remaining  service  will contribute  at  a

higher rate and those who have more years of remaining service

will contribute at a lower rate.  The most important aspect is that

the  Scheme  is  managed  and run  by  a  Trust and  not  by the

ONGC.  The trustees of the Trust are nominated by the Chairman

of the ONGC and representatives may be nominated to the Board

of Trustees by the Central Working Committee (CWC) of

Association of Scientific and Technical Officers.   We have been

informed at the Bar that 7 trustees are nominated by the

Chairman of the ONGC and 6 by the CWC.  Be that as it may, it

is the Trust which manages the fund.   Therefore, without going

into the question as to whether any amount is being paid by the

employees for contribution to the services rendered by the Trust,

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it is apparent that the service, if any, is being rendered by the

Trust and not by the ONGC.  Therefore, we have no hesitation in

coming to the conclusion that there is no relationship of

consumer and service provider between the claimants and the

ONGC.   We make it clear that we have not gone into the other

questions since, in view of the aforesaid decision, it is not

necessary to decide the other questions raised by Shri

Venugopal.  

8. In view of the above discussion, we partly allow the appeals

and set aside the orders of the National  Consumer Disputes

Redressal Commission and the State Consumer Disputes

Redressal Commission in so far as it held that there is a

relationship of consumer and service provider between the

claimants and the ONGC.  We also set aside the costs imposed by

the National Consumer Disputes Redressal Commission.

However, in view of the statement made by Shri Venugopal,

recorded in the opening portion of this judgment, we direct the

ONGC to pay the amounts payable (other than the costs) under

the orders impugned to the claimants within 8 weeks from today.

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9. Pending application(s), if any, stand(s) disposed of.

..……………………..J. (S. Abdul Nazeer)

..…………………..…J. (Deepak Gupta)

New Delhi December 09, 2019

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