Defining ‘Consumer’ Under the Consumer Protection Act

The case explores the interpretation of the term ‘consumer’ under the Consumer Protection Act in relation to welfare services provided by statutory boards. The court’s legal analysis delves into the obligations and functions of the board in providing welfare services, the contributions made by beneficiaries, and the accountability of such boards under consumer protection laws. This summary focuses on the detailed legal examination conducted by the court regarding the applicability of consumer protection provisions to services offered by welfare boards.


  • Respondent filed a consumer complaint before the District Consumer Disputes Redressal Forum seeking financial aid for daughter’s marriage.
  • Application submitted on 6 November 2012 for marriage on 24 November 2012.
  • Joint Commissioner of Labour, Jaipur rejected application due to technical defects after nine months.
  • Appellants assured Court of payment, but complaint was dismissed on 6 October 2016.
  • Appellants raised question of law despite dismissal of complaint.
  • The National Consumer Disputes Redressal Commission upheld the decision that the respondent is a ‘consumer’ under the Consumer Protection Act 1986.
  • An amount of Rs 154.01 crores was collected in 2011-12 without submission of expenditure figures.
  • The State Consumer Disputes Redressal Commission overturned the District Forum’s decision and ordered the appellants to pay Rs 51,000 to the respondent, along with compensation, expenses, and interest at 18% per annum.
  • Funds allocated for construction workers were not utilized, revealing a concerning state of the welfare boards’ affairs nationwide.

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  • The issue to be adjudicated is whether a construction worker registered under the Building and Other Construction Workers’ Act of 1996 and a beneficiary of the Scheme under its Rules is considered a ‘consumer’ under the Consumer Protection Act of 1986.

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  • Mr PV Dinesh, as the amicus curiae, has disputed the approach taken by the appellants in his submissions.
  • Approximately Rs 1,488 crores are spent on welfare schemes for construction workers.
  • The cess collected contributes to the Welfare Board established under Section 24(1).
  • The fund generated from the cess collected from employers is substantial.
  • A circular was issued by the State of Rajasthan in 2011 for the registration of construction workers.
  • Contributions from construction workers for identification cards and subscriptions were initially higher but later reduced to lower amounts for ease of registration.
  • Around 22,46,904 construction workers are registered under the Act of 1996, with a significant number benefiting from the schemes.
  • Provisions of the Act and Rules emphasize the registration of workers as beneficiaries, constitution of State Welfare Board, and Workers Welfare Fund.
  • Mr. PV Dinesh contends that workers contribute to the welfare fund and receive services that are not gratuitous.
  • Welfare schemes implemented by the Board are not considered sovereign functions.
  • The appellants’ counsel, Dr. Manish Singhvi, highlighted that Parliament enacted the Building and Other Construction Workers Welfare Cess Act, 1996.
  • The cess collected under the Act is contributed to the fund, as per the submissions made.

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  • The provisions of the Consumer Protection Act 1986 must be interpreted in a purposive manner.
  • The Act defines ‘consumer’ to include beneficiaries of services, not just those who avail of services for consideration.
  • The welfare schemes provided by the Board are not free services and fall within the definition of ‘service’ under the Consumer Protection Act 1986.
  • The Board is accountable under the Consumer Protection Act 1986 due to the services provided to registered workers.
  • The Act of 1996 and the Cess Act outline the obligations and functions of the Board in providing welfare services.
  • The Act of 1996 mandates contributions from workers who are beneficiaries of the welfare schemes.
  • The existence of a welfare fund, contributions by beneficiaries, and expenditures on welfare activities are key aspects of the statutory scheme.
  • The significance of public accountability in the context of welfare services is highlighted.
  • The Consumer Protection Act provides a remedy to address deficiencies in services, even those provided by statutory welfare boards.
  • (v) Contribution paid by a beneficiary forms part of the fund along with grants, loans, sums received by the Board, and advances from the Union or State Governments.
  • (vi) Rule 45 outlines the contribution each beneficiary is required to make and the consequences of non-contribution.
  • (vii) Rules 58, 59, and 60 pertain to the notification of various welfare schemes.
  • The expression ‘beneficiary’ refers to a building worker registered under Section 12.
  • The Act does not cover services provided by the State in the discharge of highly subsidized or free welfare functions.
  • A beneficiary need not be a party to an insurance contract to be considered a ‘consumer’ under the Consumer Protection Act 1986.
  • The Welfare Board is not considered a service provider under the Consumer Protection Act 1986.
  • The Regional Provident Fund Commissioner is considered a service provider under the Consumer Protection Act 1986.
  • The Act is aimed at providing access to justice for small claims, ensuring construction workers can seek relief through consumer courts.
  • The fund for building workers is collected from contributions by employers and employees, not from State tax revenues.
  • The National Commission has jurisdiction to rule on the legitimacy of demands concerning composition and extension fees.
  • Construction workers’ vulnerability was highlighted, emphasizing the Cess Act’s intended use for their benefit.
  • The Consumer Protection Act does not cover redressal for non-commercial or business transaction injuries.
  • A subscriber to the General Provident Fund may be considered a ‘consumer’ under the Consumer Protection Act 1986.
  • Public authorities are held accountable under the Act, with emphasis on service definitions and liabilities.
  • Government employees contributing to the General Provident Fund are excluded from the Act’s purview.
  • Government servants seeking retiral benefits are advised to use appropriate forums like State Administrative Tribunals or civil courts, not consumer forums.
  • The Act codifies remedies for contractual or commercial transactions, distinct from civil suits.
  • Functions considered statutory but not sovereign can still be subject to the Act’s jurisdiction.
  • Section 16 mandates building workers registered as beneficiaries to make contributions, making them fall under the ‘consumer’ category.
  • The evolution of jurisprudence shows the need to ensure public accountability by providing consumers with redressal for non-sovereign functions that are not free.
  • The current case fulfills the criteria for redressal in the context of non-sovereign functions not rendered free of charge.


  • The appeal is dismissed and there will be no order as to costs.
  • The decision of the State Commission to award the claim is upheld, with modification of the rate of interest by the National Commission.
  • There is no reason to interfere with the ultimate decision of the State Commission.


Case Number: C.A. No.-002014-002014 / 2020

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