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Chairman-cum-Managing Director, ONGC Ltd. & Ors. v. Consumer Education & Research Society & Ors.

Civil Appeal · 2019 INSC 1339Decided 9 Dec 2019
Civil Appeal No. 9257 of 2019
Justice S. Abdul Nazeer · Justice Deepak Gupta

Background

ONGC had set up a voluntary, self-funded "Self Contributory, Post Retirement and Death in Service Benefits Scheme" for its employees in 1991, managed by an independent trust (not by ONGC itself), with ONGC contributing only a token Rs. 100 per year. A group of ONGC employees/claimants complained to consumer fora that they suffered losses because of delay in forwarding their claims to LIC under this scheme, and the National and State Consumer Disputes Redressal Commissions ruled in their favour, ordering ONGC to pay compensation and costs on the basis that the employees were "consumers" of a service ONGC provided. ONGC appealed to the Supreme Court, while agreeing to pay the underlying claim amounts (since they were small and the employees were already retired) but contesting whether a consumer-service-provider relationship existed at all.

Decision Breakdown

The Supreme Court held that there was no real contractual relationship between ONGC and the employees for provision of this particular service, because the scheme was voluntary, funded almost entirely by the employees themselves, and run independently by a trust with its own board, not by ONGC. Since the service, if any, was being rendered by the trust and not by ONGC, the Court found no consumer-service-provider relationship existed between the claimants and ONGC, and set aside the consumer fora's findings and costs on that specific legal point, while still directing ONGC to pay the underlying amounts as it had already agreed to do.

Lesson Learnt

Consumer protection law requires a genuine service-provider relationship with the complained-of entity; an employer that merely facilitates or nominally supports an independently-run benefit scheme for its employees cannot automatically be treated as the "service provider" liable under the Consumer Protection Act.

Official source (sci.gov.in)View Judgment (PDF)

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