TaxTMI 
TaxTMI 
2024 (5) TMI 881
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...., Mr. M.S Bhangle, Adv., Mr. Rahul 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 S....
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....ruments Act, as the cheque for Rs.20,000/- issued by the 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 ad....
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.... the Bar. Hence, its autonomy is needed to preserve the democracy and to keep judiciary strong. (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 ....
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....fidentiality, and obligations to the court limit the freedom of lawyers to act solely in their own interest or according to their preferences. (xiv) Unlike any other profession, 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 (19....
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....ction Act, having regard to the entire spectrum and scheme of the said Act, following further questions stem from the said question, which deserve consideration. (i) Whether the Legislature ever intended 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....
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....umers and for the said purpose, to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith, as would appear from the Statement of Objects and Reasons of the Act. 10. It further seeks inter alia to promote and protect 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 Ind....
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....he rest' and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked......" 11. Yet in Laxmi Engineering Works vs. P.S.G. Industrial Institute (1995) 3 SCC 583, it was held in paragraph 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 consume....
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....nce the enactment of the Consumer Protection Act in 1986. The modern market place contains a plethora of products and services. The emergence of global supply chains, rise in international trade and the rapid development of e-commerce have led to new delivery systems for goods and services and have provided new options and opportunities for consumers. Equally, this has rendered the consumer vulnerable to new forms 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. Subod....
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.... particular client or patient; (iii)professional association which regulates admission and seeks to uphold the standards of the profession through professional codes on matters of conduct and ethics; and (iv) high status in the community. 17. As observed in Indian Medical Association (supra) :- "22. In the matter of professional liability professions differ from other occupations for the reason that professions operate in 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 ....
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....l business practices would be frustrated. 20. We may clarify at this juncture that we do not propose to say that the professionals could not be sued or held liable for their alleged misconduct or tortious or criminal acts. In the process of overall depletion and erosion of ethical values and degradation of the professional ethics, the instances of professional misconduct are also on the rise. Undoubtedly, no professional either legal, medical or any other 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 Ind....
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....," the next question that falls for our consideration is whether the Legal Profession is sui generis or is different from the other Profession, particularly from the Medical Profession because the NCDRC in the impugned order has relied upon the decision in case of Indian Medical Association vs. V.P Shantha (supra) for bringing the Advocates within the purview of the CP Act. 26. As observed in Byram Pestonji Gariwala vs. Union Bank of India and Others (1992) 1 SCC 31, the Indian legal system 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 c....
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....nspired by their thoughts. They are remembered and quoted with reverence. It is the duty of the Bar to protect honest Judges and not to ruin their reputation and at the same time to ensure that corrupt Judges are not spared. However, lawyers cannot go to the streets or go on strike except when democracy itself is in danger and the entire judicial system is at stake. In order to improve the system, they have to take recourse to the legally available methods by lodging complaint against corrupt Judges to the appropriate 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 ensur....
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....up of the Nation. The Advocates are perceived to be the intellectuals amongst the elites and social activists amongst the downtrodden. That is the reason they are expected to act according to the principles of uberrima fides i.e., the utmost good faith, integrity, fairness and loyalty while handling the legal proceedings of his client. Being a responsible officer of the court and an important adjunct of the administration of justice, an Advocate owes his duty not only to his client but also to the court as well as to the opposite side. 30. The legal 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 ....
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....e in all Courts including the Supreme Court and before any Tribunal or any other authority or person before whom such advocate is by or under any law for the time being in force entitled to practice. The disciplinary powers for taking action against the Advocates and impose punishment for their misconduct have been conferred upon the State Bar Councils and Bar Council of India as the case may be under the Chapter V of the Advocates Act. The Bar Council of India Rules framed under the Advocates Act lay down the restrictions on the Senior Advocates, and also lay down the standards 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....
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....re, let us consider whether the service rendered by the Advocates practising Legal Profession could be said to be the Service under "a contract of personal service," so as to exclude it from the definition of "Service" contemplated under the Act. 38. The question as to whether a given relationship should be classified as a contract 'for services' as opposed to a contract 'of service' [i.e. contract 'of personal service'] is a vexed question of law and is incapable of being answered with exactitude without reference to the underlying facts in any given case. This Court in Dharangadhra Chemical Works Ltd. vs. State of Saurashtra 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 de....
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....", the proforma of which has been appended in Form No.19 of the 'Appendix H' to CPC. The said form is reproduced here under: - "No.19 VAKALATNAMA In the Court ........Suit/Miscellaneous case/ Civil Appeal/ Execution Case No........... of 19..../20...,fixed for Plaintiff/ Appellant/ Applicant/ D.H........... Defendant/ Respondent/ Opposite Party/ J.D. Vakalatnama of Plaintiff/ Appellant Applicant/ D.H./ Defendant/ Respondent/ Opposite Party/ J.D. In the case noted above Sri............, each of Sarvasri........... Advocate, is hereby appointed as counsel, to appeals, plead and act on behalf of the undersigned, in any manner, he thinks 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. ....
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....a lawyer must be specifically authorised to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise/settlement. To put it alternatively that a lawyer by virtue of retention, has the authority to choose the means for achieving the client's legal goal, while the client has the right to decide on what the goal will be. If the decision in question falls within those that clearly belong to the client, the lawyer's conduct in failing to consult the client or in making the decision for the client, is more likely to constitute ineffective assistance of counsel. 23. The Bar Council of India Rules, 1975 (for short "the BCI Rules"), 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 law....
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....itional duties that agents owe to their principals. For example, Advocates have to respect the client's autonomy to make decisions at a minimum, as to the objectives of the representation. 3) Advocates are not entitled to make concessions or give any undertaking to the Court without express instructions from the Client. 4) It is the solemn duty of an Advocate not to transgress the authority conferred on him by his Client. 5) An Advocate is bound to seek appropriate instructions from the Client or his authorized agent before taking any action or making any statement or concession which may, directly or remotely, affect the legal rights of the Client. 6) The Advocate represents the client before the Court and conducts proceedings on behalf of the client. He is the only link between 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 op....
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....t times, the lawyers may earn displeasure of the client while assisting the court. 3. The profession of law, as such, is regarded as sui generis i.e. which is unique. It is distinct from all other professions and is one of its own kind. 4. It is in the above context that we have to examine if the legislature in enacting the Consumer Protection Act intended to include the services rendered by professionals, particularly by lawyers to their clients, within the ambit of the Consumer Protection Act. 5. The laws intended to protect consumers, as opposed to traders are comparatively of recent origin. 6. The General Assembly of United Nations upon extensive discussions with Governments of various nations submitted draft guidelines for consumer protection to the United Nations Economic and Social Council (UNESCO) in the year 1983 inter alia providing for the following: 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 p....
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....he rights of consumers such as- "2. ... (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 practices or unscrupulous exploitation of consumers; and (f) right to consumer education." 12. The idea behind the Consumer Protection Act from 1986 till today has been to help the consumers get justice and fair treatment in matters of goods and services purchased and availed of by them in a market dominated by large trading and manufacturing bodies. The entire 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 lawy....
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....ws. 20. Illustratively, the Code of Maryland, Title 13, dealing with minimum standards of consumer protection in Maryland, in Subtitle 1 § 13-104 explicitly states that: "this title does not apply to: (1) The professional services of a certified public accountant, architect, clergyman, professional engineer, lawyer...." (emphasis supplied) 21. The Code of the District of Columbia, while highlighting the powers of the consumer protection agency in Title 28 Chapter 39 § 28- 3903 states in clause (c) that: "(c) The Department may not: ... (2) apply the provisions of section §28-3905 [Consumer Protection Complaints] to: ... (C) professional services of clergymen, lawyers, and Christian Science practitioners engaging in their respective professional endeavors"; (emphasis supplied) 22. The Australian High Court, the highest court of the land in Australia, in D'Orta-Ekenaike vs. Victoria Legal Aid (2005) 223 CLR 1 has emphatically echoed the need for such exemption and its direct bearing 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 ....