Selective justice under the Consumer Protection Act?

In a crucial development earlier this year, the Supreme Court in Bar of Indian Lawyers v. DK Gandhi PS National Institute of Communicable Disease held that advocates cannot be held liable under the Consumer Protection (CP) Act 1986, as re-enacted in 2019, for deficiency of services.

It reasoned that:

(i) 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, like an advocate acts as an agent of the client (para 51);

(ii) an advocate is also an officer of court and owes his duty not only to his client but also to the court, as well as to the opposite side (para 34); and  

(iii) in different countries, the legislature has expressly excluded lawyers from the ambit of consumer protection laws. Therefore, based on universal practice, the CP Act of India is said to exclude lawyers from its ambit. (para 69-77).

Further, the Supreme Court dealt with another aspect - whether services rendered by “professionals” falls within the purview of the CP Act? In dealing with this issue, the Bench doubted the correctness of the law laid down by a three-Judge Bench in Indian Medical Assocation v. VP Shantha, which held that the definition of ‘service’ in Section 2(1)(o) of the CP Act would cover the services rendered by medical practitioners. The Bench in DK Gandhi referred the question to the Chief Justice of India to constitute a larger Bench for reconsideration of the decision as laid down in VP Shantha.

The missed submission

While the judgment has been widely hailed by the legal community, and rightly so, there was one important aspect of the submissions that could not make it to the 35-page judgment. On the last day of the hearing, Senior Advocate V Giri, the amicus curiae in the matter, submitted that advocates can be broadly classified into two categories, based on the terms of their engagement and the nature of work being done by them for their clients: 

(1) Advocates engaged by clients to conduct their cases and then represent them before any court, tribunal or other forum, on the strength of a vakalatnama; and

(2) Advocates engaged by clients to provide professional expertise for legal opinions, issuing legal notices, drafting agreements, etc.

The former category refers to “advocates”, whereas the latter speaks about “lawyers”. The latter, he argued, would come within the purview of the CP Act and can be made liable therein. This is because outside the Court, lawyers are ‘hired’ and do not act as agents of their clients, unlike “advocates” who act as agents of their clients, as a considerable amount of direct control is exercised by the client over the manner in which an advocate renders his services. Further, they are not hired on the strength of the vakalatnama but a contractual agreement and thus, would be liable for want of sufficient ‘services’.

Though the above submission was recorded in the judgment (para 9-10), the Court failed to appreciate the same while adjudicating the matter. It did not acknowledge the fine difference between these two categories of legal professionals and used the terms interchangeably. On a prima facie reading of the judgment, one may conclude exclusion of both “advocates” and “lawyers” from the purview of the CP Act. But on a closer reading, it appears that the Court only made “advocates” immune under the CP Act and not “lawyers”.

This is significant because lawyers, like advocates, do come under the category of “professionals”. But, unlike advocates, they are liable for 'deficiency of services' under the CP Act.

The present position

On November 7, 2024, the Supreme Court refused to reconsider the VP Shantha judgment and disposed of the reference made in DK Gandhi against the VP Shantha decision, saying that it was unnecessary. It referred to the DK Gandhi judgment and noted:

“We find that the issue before the Court was with regards to the legal profession and Court in unequivocal terms came to a conclusion that the legal profession is not covered by the provisions of Consumer Protection Act. Since the Court came to the aforesaid finding, irrespective of the finding of this Court in Shantha, the reference was not necessary. The question as to whether the other professionals excluding legal profession could be covered by the Consumer Protection Act can be considered in appropriate cases, having a factual foundation... In view of the matter, we dispose of the reference."

At the first glance, this seems a well-crafted legal order, setting a standard for thoroughness in legal practice. However, when read in a detailed manner and in the context of what this article has said, it is clear that the three-judge Bench misinterpreted the conclusion derived by the Division Bench as regards the legal profession not being covered by the provisions of CP Act. The Division Bench merely made “advocates” immune from the CP Act and “lawyers” still come under its purview.

Thus, as of today, lawyers working at law firms, providing legal advice/opinion on the basis of contractual agreements (not vakalatnamas) between clients and themselves, would fall within the purview of the CP Act for deficiency of services.

Aman Garg is an advocate practicing at the Rajasthan High Court, Jaipur Bench. He can be reached at amangarg1219@gmail.com.