Judgment on Consumer and Service Provider Relationship in ONGC Scheme Case

The recent Supreme Court judgment in the case regarding the consumer and service provider relationship in the ONGC Scheme delves into crucial aspects of service provision and consumer protection. The ruling sheds light on the nuances of the Consumer Protection Act and its applicability to schemes like the one implemented by ONGC. Stay informed about the legal intricacies in this landmark decision.

Arguments

The appellants have agreed to pay the amount directed in the impugned orders without prejudice to their rights to challenge them.
The decision to pay is to avoid further litigation as the amounts involved are small, the appellants have retired long back, and to prevent a second round of legal proceedings.
The main issue at hand is to determine if there is a consumer and service provider relationship between the claimants and the appellants.
All claimants were former employees of the ONGC, which is an undisputed fact.
The argument raised is that providing service for free under a personal service contract is not covered in the definition of service under the relevant Act.
Learned counsel for the respondents cited cases to support their argument.
The court found that there is no privity of contract for providing service between ONGC and the claimants.
It was deemed unnecessary to address all the issues raised by Shri Venugopal.

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Analysis

Section 2(d) of the Act defines a ‘consumer’ as any person who hires or avails of services for a consideration, excluding those availed for commercial purposes.
Section 2(o) of the Act defines ‘service’ as any service made available to potential users, including various categories like banking, transport, entertainment, etc.
The Scheme mentioned is optional for existing executives but compulsory for new entrants in regular service of the Commission after a specific date.
The Scheme involves contributions from employees, with a token contribution of Rs.100 per annum by ONGC.
The scheme is based on voluntary contribution by the employee members of ONGC.
The rate of contribution is calculated based on the employee’s age and salary.
The trust manages the fund of the scheme, not ONGC.
The employees make contributions according to specified rates based on their age.
There is no relationship of consumer and service provider between the claimants and ONGC.
The scheme was voluntary and optional for employees in service before 01.04.1990.
The scheme is run by a Trust consisting of trustees nominated by the Chairman of ONGC and representatives from CWC of ASTO.
The employees were not considered consumers of ONGC as per the Consumer Protection Act.
Contributions varied based on the age groups of the employees.
Delay in claim processing did not constitute liability on ONGC.
The Trust manages the fund and services of the Scheme.
The appeals are partly allowed and the orders of the National Consumer Disputes Redressal Commission and the State Consumer Disputes Redressal Commission are set aside.
It was held that there is no relationship of consumer and service provider between the claimants and ONGC.
The costs imposed by the National Consumer Disputes Redressal Commission are also set aside.