JUDGEMENT DATE: MAY 14, 2024
1. The appeals arose from an order of the NCDRC holding that complaints alleging deficiency in service against advocates would be maintainable under the Consumer Protection Act (CPA).
2. In one case, an advocate was accused of not delivering a demand draft and cheque received from the accused to the complainant client in a cheque dishonor case.
3. The Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India, and an individual advocate challenged the NCDRC order.
4. The core issue was whether advocates’ services would fall under the definition of “service” in the CPA.
5. Arguments were advanced that the legal profession is noble, an extension of the justice system, and cannot be equated with business/trade.
6. It was argued that allowing CPA complaints against advocates would open floodgates of litigation and lead to conflicting decisions.
7. The unique duties of advocates towards the court, clients, and opponents and maintaining professional ethics were highlighted.
8. The amicus curiae distinguished between advocates engaged through vakalatnama and those providing legal opinions/drafting agreements.
9. The CPA’s statement of objects and reasons focused on protecting consumers from unfair trade practices.
10. The UN guidelines aimed to protect consumers, particularly in developing countries, from economic imbalances.
11. The CPA was enacted based on the UN Consumer Protection Resolution of 1985, to which India is a signatory.
12. Other countries like Malaysia, EU nations, Canada and USA explicitly exclude regulated professions like law from consumer protection laws.
13. The Australian High Court upheld advocates’ immunity, calling it fundamental to the judicial system.
14. The Advocates Act, 1961 is a complete code regulating the legal profession in India.
15. Globalization necessitates uniform application of laws framed on UN resolutions across countries.
Law Points:
1. Section 2(1)(o) of CPA 1986 and Section 2(42) of CPA 2019 define “service” and exclude services under a “contract of personal service.”
2. Section 2(1)(g) of CPA 1986 and Section 2(11) of CPA 2019 define “deficiency” in service.
3. The Advocates Act, 1961 is the law governing legal practitioners in India.
4. Section 16 of the Advocates Act provides for only two classes of advocates – senior and other advocates.
5. Section 29 states that only advocates are entitled to practice law.
6. Section 30 entitles advocates to practice in all courts, tribunals, and authorities.
7. Chapter V of the Advocates Act deals with disciplinary proceedings against advocates.
8. The Bar Council of India Rules prescribe standards of professional conduct and etiquette for advocates.
9. Order III of the Code of Civil Procedure deals with recognized agents and pleaders, including advocates.
10. Rule 4 of Order III requires a written document (vakalatnama) for appointing an advocate.
11. The vakalatnama confers certain authorities and duties on the advocate towards the client.
12. The definition of “service” in CPA has three parts – explanatory, inclusionary, and exclusionary.
13. The exclusionary part excludes services under a “contract of personal service.”
14. Supreme Court Rules (Order VI Rule 2) allow referring matters to a larger bench for reconsideration.
15. Consumer protection laws aim to protect consumers, not regulate professions (IMA v. V.P. Shantha).
16. The legal profession is sui generis and cannot be equated with business or trade (Muthukrishnan case).
17. Advocates owe fiduciary duties to clients and must follow their instructions (Himalayan Cooperative case).
18. The Bar Council Rules mandate advocates to uphold clients’ interests through fair means.
19. An advocate shall act only on instructions of the client or authorized agent (Bar Council Rules).
20. The nature of the legal profession involves complexity, adversarial dynamics, and ethical constraints.
21. Legal standards lack objective tests compared to medical standards of care (IMA case distinguished).
22. There is no universal standard to adjudicate abdication of duty of care in legal profession.
23. Greater control by the client over the advocate indicates “contract of personal service” (Dharangadhara case).
24. The legislature never intended to include professions or professionals under the CPA (State of Karnataka case).
25. Supreme Court can revisit earlier decisions if circumstances warrant (Triveniben case).
Argument Points:
1. The legal profession is noble, not commercial, and an extension of the justice delivery system, distinguishing it from businesses covered under the CPA.
2. Allowing CPA complaints against advocates would open floodgates of litigation and lead to conflicting decisions with court rulings.
3. Advocates have unique duties towards the court, clients, opponents, and colleagues, which constrain their autonomy, unlike typical service providers.
4. The complexity of legal issues and the adversarial nature of advocacy make it difficult to establish universal standards of care, unlike in medicine.
5. Greater control exercised by clients over advocates through vakalatnamas indicates a “contract of personal service” excluded from the CPA.
6. The preamble and statement of objects and reasons of the CPA focus on protecting consumers from unfair trade practices, not regulating professions.
7. Other countries like Malaysia, EU nations, Canada, and USA explicitly exclude regulated professions like law from consumer protection laws.
8. The Australian High Court upheld advocates’ immunity as fundamental to the judicial system’s functioning.
9. Treating advocates as “service providers” under the CPA would undermine the justice delivery system and the legal profession’s role.
10. The Advocates Act, 1961, being a special law, should prevail over the CPA concerning advocates’ conduct.
11. Negligence alone may not constitute professional misconduct, which is covered under the Advocates Act’s disciplinary mechanisms.
12. Applying the CPA’s summary proceedings to advocates could lead to speculative and vexatious claims against bona fide professional conduct.
13. The legislature never intended to include professions or professional services within the purview of the CPA.
14. Globalization necessitates uniformity in the application of laws framed on UN resolutions across countries.
15. The IMA vs. V.P. Shantha judgment requiring reconsideration as it equated medical and legal professions without recognizing the latter’s unique attributes.
References of the key judgments referred to in this particular judgment:
1. Indian Medical Association vs. V.P. Shantha & Others (1995) 6 SCC 651
– Held that the wide definition of ‘service’ in the CPA would cover services rendered by medical practitioners.
– The present judgment distinguishes this case and refers it for reconsideration by a larger bench, given the unique nature of the legal profession compared to medicine.
2. State of Karnataka vs. Vishwabharathi House Building Coop. Society and Others (2003) 2 SCC 412
– Examined the history, objects and reasons for enacting the CPA 1986.
– Held that it aimed to protect consumers from unfair trade practices by traders and manufacturers.
3. Dharangadhra Chemical Works Ltd. vs. State of Saurashtra and Others AIR 1957 SC 264
– Laid down tests to determine if a relationship is a ‘contract of service’ or ‘contract for service’, based on the extent of control exercised.
– Relied upon to conclude advocates’ services are under a ‘contract of personal service’ excluded from the CPA.
4. Himalayan Cooperative Group Housing Society vs. Balwan Singh and Others (2015) 7 SCC 373
– Discussed the unique advocate-client relationship, advocates’ duties as officers of the court, and the applicability of the Advocates Act.
– Relied upon to highlight advocates’ fiduciary duties and the control exercised by clients through vakalatnamas.
5. R. Muthukrishnan vs. Registrar General, High Court of Judicature at Madras (2019) 16 SCC 407
– Elaborated on the unique nature of the legal profession, its role in upholding the Constitution and rule of law.
– Relied upon to distinguish the legal profession from other traditional professions.
6. Triveniben vs. State of Gujarat (1989) 1 SCC 678
– Explained the scope of Supreme Court Rules allowing reference to a larger bench in certain circumstances.
– Relied upon to refer the IMA vs. V.P. Shantha judgment for reconsideration by a larger bench.
7. D’Orta-Ekenaike vs. Victoria Legal Aid (2005) 223 CLR 1
– Australian High Court upheld advocates’ immunity as fundamental to the judicial system.
– Referred to support excluding legal profession from consumer protection laws.
Judgment Points:
1. The CPA 1986/2019 aimed to protect consumers from unfair trade practices, not regulate professions.
2. The legal profession is sui generis and cannot be compared to other professions.
3. Services hired from an advocate fall under “contract of personal service,” excluded from CPA definition.
4. Complaints alleging deficiency in service against advocates are not maintainable under CPA 2019.
5. The NCDRC order allowing such complaints against advocates is set aside.
6. The legislature never intended to include professions or professional services under the CPA.
7. Allowing CPA complaints against advocates would lead to excessive litigation against the law’s intent.
8. Advocates have unique duties towards court, client, opponents, and professional ethics.
9. Advocates exercise their judgment in clients’ interests, unlike typical service providers.
10. Clients exercise considerable control over how advocates render services through vakalatnama.
11. The Advocates Act 1961 has robust mechanisms to deal with professional misconduct.
12. Negligence alone may not constitute professional misconduct under the Advocates Act.
13. The Advocates Act, being a special law, would prevail over the CPA for advocates’ conduct.
14. Treating advocates as service providers under CPA would undermine the justice delivery system.
15. Advocates engaged through vakalatnama would not fall under the CPA’s “service” definition.
16. Advocates providing legal opinions without litigation may fall under the CPA’s “service” definition.
17. The IMA vs. V.P. Shantha judgment deserves reconsideration by a larger bench.
18. The matter is referred to the CJI for placing it before a larger bench for reconsideration.
19. The legal profession’s unique attributes necessitate excluding it from the CPA’s purview.
20. Uniformity with international practices on exempting regulated professions from consumer laws is desirable.