TaxTMI 
TaxTMI 
2024 (5) TMI 881
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....Dubey, Adv., Mr. Sunny Singh, Adv., Mrs. K.Maruthi Rao, Adv., Mrs. K.Radha, Adv., Mrs. Anjani Aiyagari, AOR, Mr. Mohinder Jit Singh, AOR, Mr. Daya Krishan Sharma, AOR, Mr. Rohit Vats, Adv., Mr. Subham Rana, Adv., Mr. Ankit Bhanot, Adv. And Mr. Yashdeep, Adv. Respondent-in-person: Mr. V.K. Singh, Sr. Adv., Mr. Hitesh Kumar Sharma, Adv., Mr. S.K. Rajora, Adv., Mr. Akhileshwar Jha, Adv., Mr. Amit Kumar Chawla, Adv., Mr. Sandeep Singh Dingra, Adv., Ms. Niharika Dewivedi, Adv., Ms. Ritika Raj, Adv., Ms. Manisha Chawla, Adv., Mr. Mahi Pal Singh, Adv., Ms. N. Annapoorani, AOR, Dr. Adish C Aggarwala, Sr. Adv., Mr. Sukumar Pattjoshi, Sr. Adv., Mr. Rohit Pandey, Adv., Mr. Meenesh Kumar Dubey, Adv., Ms. Yugandhara Pawar Jha, Adv., Mr. Amarendra Kumar Singh, Adv., Mr. Arijit Prasad, Sr. Adv., Mr. Jayant Bhushan, Sr. Adv., Mr. Dinesh Kumar Goswami, Sr. Adv., Mr. S Wasim Ahmed Qadri, Sr. Adv., Mr. Pratap Venugopal, Sr. Adv., Mr. Vibhu Shanker Mishra, Adv., Mr. Kumar Gaurav, Adv., Mr. Vikas Gupta, Adv., Mr. Chanchal Kumar Ganguli, Adv., Mr. Manish Goswami, Adv., Mr. Upendra Mishra, Adv., Mr. Madhavan Srivatsan, Adv., Mr. Ratnesh Kumar, Adv. And Mr. Shashank Shekhar, AOR Petitioner-in-person: Mr....
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....e said Kamal Sharma in favour of the respondent D.K. Gandhi was dishonoured. (ii) During the course of the said complaint case, the accused Mr. Sharma agreed to pay the sum of Rs.20,000/- for the dishonoured cheque besides Rs.5,000/- as the expenses incurred by the complainant. It was alleged by the respondent (complainant) that though the appellant had received from the accused Mr. Sharma the DD/pay order for Rs.20,000/- and the crossed cheque of Rs.5,000/- on behalf of the respondent, the appellant did not deliver the same to the respondent and instead demanded Rs.5,000/- in cash from the respondent. The appellant also filed a suit for recovery of Rs.5,000/- in the court of Small Causes, Delhi raising a plea that the sum was due to him as his fees. Subsequently, the appellant gave the DD/pay order for Rs.20,000/- and cheque for Rs.5,000/- to the respondent, however, the payment of cheque for Rs.5,000/- was stopped by the accused Mr. Sharma at the instance of the appellant. The respondent therefore filed a complaint before the District Consumer Disputes Redressal Forum, Delhi seeking compensation of Rs. 15,000/- in addition to the amount of cheque of Rs.5,000/-, as also Rs.10,00....
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.... (iii) A unique feature which distinguishes an Advocate from other professional is that an Advocate has a duty to the court and his peers, in addition to his duty to the client. He is not mere a mouthpiece but he has to exercise his own judgment for upholding the interest of his client by all fair, legal and reasonable means, and by being respectful to the court. (iv) The Bar Council of India and State Bar Councils are invested with the disciplinary powers. An error of judgment or mere negligence may not be a professional misconduct. In any case, the professional misconduct which subsumes cases of negligence, which is covered by the special law i.e., Advocates Act, 1961. (v) The Advocates Act being special law would prevail over the CP Act so far as the conduct of Advocates are concerned. (vi) The law of negligence recognizes that a professional would be held liable in a civil action for negligence and includes professionals of varied fields who possess special skill in that profession generally. (vii) The legal professionals in United Kingdom can be sued for negligence by a way of regular civil action, however they would not be liable under the law dealing with consumer ....
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....ession, where professionals are in control of their surrounding fully, legal profession is the sole profession, where advocates have no control over their environment. The environment they work in is controlled by the presiding Judge. (xv) The Bar Council of India Rules prescribe at least four sets of duty that a lawyer has to oblige, viz., Duty to the Court, Duty to the Client, Duty to Opponent and Duty to Colleagues, in no particular order. These duties are sometimes conflicting in nature, however whenever a conflict arises, the duty to court is considered to be paramount. (xvi) Unlike the medical profession, where scientific standards exist to decide the standard of care, there is no universal standard of care or objective test that exists or can be prescribed as the threshold in the case of legal profession to adjudicate upon the question of abdication of duty to care. (xvii) Distinguishing the decision of this Court in Indian Medical Association vs. V.P. Shantha & Others (1995) 6 SCC 651, it was sought to be submitted that there is a fundamental difference between the practice of law and the practice of medicine, as also the difference in the nature of professional-clien....
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.... to include the Professions or services rendered by the Professionals within the purview of the CP Act 1986 as re-enacted in 2019? (ii) Whether the Legal Profession is sui generis? (iii) Whether a Service hired or availed of an Advocate could be said to be the service under "a contract of personal service" so as to exclude it from the definition of "Service" contained in Section 2 (42) of the CP Act 2019? 8. For adverting to the first question, whether the Legislature ever intended to include the Professions or the services rendered by the Professionals within the purview of the CP Act 1986 as re-enacted in 2019, it would be germane to ascertain the legislative intention and to look back to the history, object and purpose of enacting the CP Act 1986. A three-Judge Bench in case of State of Karnataka vs. Vishwabharathi House Building Coop. Society and Others (2003) 2 SCC 412, while dealing with the issue raised about the constitutional validity of the CP Act 1986, had elaborately considered the history, objects and purpose of enacting the said Act. "5. Before adverting to the question as regard the competence of Parliament to enact the said Act, we may notice the history of l....
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....the rights of consumers such as- "(a) The right to be protected against marketing of goods which are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to variety of goods at competitive prices; (d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums; (e) the right to seek redressal against unfair trade practice or unscrupulous exploitation of consumers; and (f) right to consumer education."" 9. The scope and object of the said legislation had also come up for consideration before this Court in Common Cause, A Registered Society vs. Union of India and Others (1997) 10 SCC 729 in which it was observed: - "2. The object of the legislation, as the Preamble of the Act proclaims, is "for better protection of the interests of consumers". During the last few years preceding the enactment there was in this country a marked awareness among the consumers of goods that they were not getting their money's worth an....
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....h 10 as under: - "10. A review of the provisions of the Act discloses that the quasi-judicial bodies/authorities/agencies created by the Act known as District Forums, State Commissions and the National Commission are not courts though invested with some of the powers of a civil court. They are quasi-judicial tribunals brought into existence to render inexpensive and speedy remedies to consumers. It is equally clear that these forums/commissions were not supposed to supplant but supplement the existing judicial system. The idea was to provide an additional forum providing inexpensive and speedy resolution of disputes arising between consumers and suppliers of goods and services. The forum so created is uninhibited by the requirement of court fee or the formal procedures of a court. Any consumer can go and file a complaint. Complaint need not necessarily be filed by the complainant himself; any recognized consumers' association can espouse his cause. Where a large number of consumers have a similar complaint, one or more can file a complaint on behalf of all. Even the Central Government and State Governments can act on his/their behalf. The idea was to help the consumers get ju....
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....orms of unfair trade and unethical business practices. Misleading advertisements, telemarketing, multi-level marketing, direct selling and ecommerce pose new challenges to consumer protection and will require appropriate and swift executive interventions to prevent consumer detriment. Therefore, it has become inevitable to amend the Act to address the myriad and constantly emerging vulnerabilities of the consumers. In view of this, it is proposed to repeal and re-enact the Act." 14. It is trite to say that a reference to statement of objects and reasons is permissible for understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute had sought to remedy., State of West Bengal vs. Subodh Gopal Bose & Others; AIR 1954 SC 92 As discernible from the statement of objects and reasons for re-enacting the CP Act, 2019, there were certain shortcomings found in the CP Act 1986 while administering the said Act, and at the same time, due to the emergence of global supply chains, rise in international trade and rapid development of ecommerce leading to new systems for goods and services, new options and o....
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....spheres where success cannot be achieved in every case and very often success or failure depends upon factors beyond the professional man's control. In devising a rational approach to professional liability which must provide proper protection to the consumer while allowing for the factors mentioned above, the approach of the courts is to require that professional men should possess a certain minimum degree of competence and that they should exercise reasonable care in the discharge of their duties. In general, a professional man owes to his client a duty in tort as well as in contract to exercise reasonable care in giving advice or performing services." 18. In view of the above, a "Profession" would require advanced education and training in some branch of learning or science. The nature of work is also skilled and specialised one, substantial part of which would be mental rather than manual. Therefore, having regard to the nature of work of a professional, which requires high level of education, training and proficiency and which involves skilled and specialized kind of mental work, operating in the specialized spheres, where achieving success would depend upon many other fa....
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....r professional enjoys any immunity from being sued or from being held liable for his professional or otherwise misconduct or other misdeeds causing legal, monetary or other injuries to his clients or the persons hiring or availing his services. The fact that professionals are governed by their respective Councils like Bar Councils or Medical Councils also would not absolve them from their civil or criminal liability arising out of their professional misconduct or negligence. Nonetheless, as discussed hereinabove, we are of the opinion that neither the Professions nor the Professionals were ever intended to be brought within the purview of the CP Act either of 1986 or 2019. 21. Of course, we are conscious of the decision in Indian Medical Association vs. V.P. Shantha & Others (supra), in which a three-Judge Bench of this Court has held inter alia that the wide amplitude of the definition of 'service' in the main part of Section 2(1)(o) would cover the services rendered by Medical Practitioners within the said Section 2(1)(o). However, in our humble opinion, the said decision deserves to be revisited having regard to the history, object, purpose and the scheme of the CP Act and in v....
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....ystem is the product of history. It is rooted in our soil; nurtured and nourished by our culture, languages and traditions; fostered and sharpened by our genius and quest for social justice; reinforced by history and heritage. After the attainment of independence and the adoption of the Constitution of India, judicial administration and the constitution of the law courts remained fundamentally unchanged. The concept, structure and organisation of courts, the substantive and procedural laws, the adversarial system of trial and other proceedings and the function of judges and lawyers remained basically unaltered and rooted in the common law traditions in contradistinction to those prevailing in the civil law or other systems of law. Resultantly, the role, status and capacity of an advocate to represent his client has also remained by and large unaltered. 27. This Court in R. Muthukrishnan vs. Registrar General, High Court of Judicature at Madras (2019) 16 SCC 407, delineating the unique nature of the legal profession and of the services rendered by the lawyers, observed thus: "16. The legal profession cannot be equated with any other traditional professions. It is not commercial i....
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.... administrative authorities and not to level such allegation in the public. Corruption is intolerable in the judiciary. 20. The Bar is an integral part of the judicial administration. In order to ensure that judiciary remains an effective tool, it is absolutely necessary that the Bar and the Bench maintain dignity and decorum of each other. The mutual reverence is absolutely necessary. The Judges are to be respected by the Bar, they have in turn equally to respect the Bar, observance of mutual dignity, decorum of both is necessary and above all they have to maintain self-respect too. 21. It is the joint responsibility of the Bar and the Bench to ensure that equal justice is imparted to all and that nobody is deprived of justice due to economic reasons or social backwardness. The judgment rendered by a Judge is based upon the dint of hard work and quality of the arguments that are advanced before him by the lawyers. There is no room for arrogance either for a lawyer or for a Judge. 22. There is a fine balance between the Bar and the Bench that has to be maintained as the independence of the Judges and judiciary is supreme. The independence of the Bar is on equal footing, it ca....
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....l profession is different from the other professions also for the reason that what the Advocates do, affects not only an individual but the entire administration of justice, which is the foundation of the civilized society. It must be remembered that the legal profession is a solemn and serious profession. It has always been held in very high esteem because of the stellar role played by the stalwarts in the profession to strengthen the judicial system in the country. Their services in making the judicial system efficient, effective and credible, and in creating a strong and impartial Judiciary, which is one of the three pillars of the Democracy, could not be compared with the services rendered by other professionals. Therefore, having regard to the role, status and duties of the Advocates as the professionals, we are of the opinion that the legal profession is sui generis i.e unique in nature and cannot be compared with any other profession. 31. The next question that falls for our consideration is whether a service hired or availed of an Advocate could be said to be the service under a "contract of personal service?" 32. At the outset, it may be stated that in the Indian Court....
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....ndards of professional conduct and etiquette, which include the duties of the advocate to the Court, to the client, to the opponent and to the colleagues. Thus, comprehensive provisions are contained in the Advocates Act, 1961 and the Bar Council of India Rules framed thereunder, to take care of the professional misconduct of the Advocates, and prescribing the punishments if they are found guilty of professional or other misconduct by the Disciplinary Committees of the State Bar Council or the Bar Council of India as the case may be. 35. In the light of the above provisions of the Advocates Act, let us consider some of the provisions of the Consumer Protection Act 1986/2019. The definition of "Service" contained in Section 2(1)(o) of the CP Act 1986 and in Section 2(42) of the CP Act 2019 is the same which reads as under: - "Service means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying o....
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....tra and Others AIR 1957 SC 264, recognized this position of law and held that "the correct method of approach, therefore, would be to consider whether having regard to the nature of the work there was due control and supervision by the employer". In the words of Fletcher Moulton, L.J. at P.549 in Simmons v. Heath Laundry Company [(1924) 1 KB 762] which were cited with approval in Dharangadhra Chemcial Works Ltd. (supra): "In my opinion it is impossible to lay down any rule of law distinguishing the one from the other. It is a question of fact to be decided by all the circumstances of the case. The greater the amount of direct control exercised over the person rendering the services by the person contracting for them the stronger the grounds for holding it to be a contract of service, and similarly the greater the degree of independence of such control the greater the probability that the services rendered are of the nature of professional services and that the contract is not one of service." 39. What is sought to be opined in the above cases is that the greater the amount of direct control exercised over the person rendering the services by the person contracting for them, the ....
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....inks it proper, either himself or through any other Advocate, and in particular to do the following, namely, - To receive any process of Court (including any notice from any appellate or revisional Court), to file any applications, petitions or pleadings, to file, produce or receive back any documents, to withdraw or compromise the proceedings, to refer to any matter to arbitration, to deposit or withdraw any moneys, to execute any decree or order, to certify payment, and receive any money due under such decree or order. The undersigned should be bound by all whatsoever may be done in the aforesaid case (including any appeal or revision therefrom) for and on behalf of the undersigned by any of the said counsel. Signature......... Name in full .......... full............. Date ............. Attesting Witness: Name in Address............... Date............. Accepted/ Accepted on the strength of the signature of the attesting witnesses." 40. A conjoint reading of the provisions contained in Order III CPC and Chapter IV of Advocates Act pertaining to right to practise, there remains no shadow of doubt that an advocate whose name has been entered in the State roll is....
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....ules"), in Part VI Chapter II provide for the "Standards of Professional Conduct and Etiquette" to be observed by all the advocates under the Advocates Act, 1961 (for short "the 1961 Act"). In the Preamble to Chapter II, the BCI Rules provide as follows: "An advocate shall, at all times, comport himself in a manner befitting his status as an officer of the Court, a privileged member of the community, and a gentleman, bearing in mind that what may be lawful and moral for a person who is not a member of the Bar, or for a member of the Bar in his non-professional capacity may still be improper for an advocate. Without prejudice to the generality of the foregoing obligation, an advocate shall fearlessly uphold the interests of his client and in his conduct conform to the rules hereinafter mentioned both in letter and in spirit. The rules hereinafter mentioned contain canons of conduct and etiquette adopted as general guides; yet the specific mention thereof shall not be construed as a denial of the existence of others equally imperative though not specifically mentioned." 24. The Preamble makes it imperative that an advocate has to conduct himself and his duties in an extremely res....
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....the court and the client. Therefore, his responsibility is onerous. He is expected to follow the instructions of his client rather than substitute his judgment. Thus, 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. All of these attributes strengthen our opinion that the services hired or availed of an Advocate would be that of a contract 'of personal service' and would therefore stand excluded from the definition of "service" contained in the section 2(42) of the CP Act, 2019. As a necessary corollary, a complaint alleging "deficiency in service" against Advocates practising Legal Profession would not be maintainable under the CP Act, 2019. 42. In that view of the matter, we summarize our conclusions as under- (i) The very purpose and object of the CP Act 1986 as re-enacted in 2019 was to provide protection to the consumers from unfair trade practices and unethical business practices, and the Legislature never intended to include either the Professions or the services rendered by the Professionals within the purview of the said Act of 1986/2019. (ii) The Legal Pro....
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....wing: a) To assist countries in achieving or maintaining adequate protection for their population as consumers; b) To facilitate production and distribution patterns responsive to the needs and desires of the consumers; c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers; d) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers; e) To facilitate the development of independent consumer groups; f) To further international cooperation in the field of consumer protection; g) To encourage the development of market conditions which provide consumers with greater choice at lower prices; 7. A bare reading of the above guidelines reveals that the same have been formulated taking into account the interests and needs of consumers in various countries, particularly developing countries, in order to level out economic imbalances between consumers and service providers. 8. The General Assembly of the United Nations Organization by Resolution No. 39/248 dated 9.4.1985 provided a framework known as Consum....
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.... Act revolves around the consumer and is designed to protect their interests. 13. Leaving aside India for the time being, if we consider the international practice with regard to the inclusion of lawyer-client relationships within the ambit of consumer protection laws, we would notice that the practice of common law countries evidences the exclusion of lawyers from the umbrella of consumer protection laws. It must be kept in mind that the consumer protection laws of almost all countries are based upon the same resolution of the UNO which forms the foundation for framing the Consumer Protection Act in India. 14. To illustrate, Consumer Protection Act, 1999 enacted by the Parliament of Malaysia vide Section 2 (2)(e) specifically provides that the said act shall not apply, inter alia, to services provided by professionals who are regulated by any law. It may be worth noting that the services of the professionals such as lawyers in Malaysia are governed by Legal Profession Act, 1976. Therefore, by virtue of the above Section 2 (2) (e), the services provided by the professionals such as lawyers stand excluded from the application of the Consumer Protection Act of Malaysia. 15. This l....
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....ring on the justice delivery system. The reasoning of its majority is instructive and deserves to be quoted in full: "84. To remove the advocate's immunity would make a significant inroad upon what we have earlier described as a fundamental and pervading tenet of the judicial system. That inroad should not be created. There may be those who will seek to characterize the result at which the Court arrives in this matter as a case of lawyers looking after their own, whether because of personal inclination and sympathy, or for other base motives. But the legal principle which underpins the Court's conclusion is fundamental. Of course, there is always a risk that the determination of a legal controversy is imperfect. And it may be imperfect because of what a party's advocate does or does not do. The law aims at providing the best and safest system of determination that is compatible with human fallibility. But underpinning the system is the need for certainty and finality of decision. The immunity of advocates is a necessary consequence of that need". (emphasis supplied) 23. It would be trite to mention here that the legal profession is a regulated profession in India. ....