Construction Worker, Consumer under CPA, 1985

Civil Appeal No 2014 of 2020 (Arising out of SLP(C) No 2150 of 2020)
The Joint Labour Commissioner and Registering Officer and Anr V/S Kesar Lal DATED 17.03.2020

“Whether a construction worker who is registered under the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 19961 and is a beneficiary of the Scheme made under the Rules framed pursuant to the enactment, is a ‘consumer’ within the meaning of Section 2(d) of the Consumer Protection Act 1986”

 Regional Provident Commissioner v Shiv Kumar Joshi (2000) 1 SCC 98 & Regional Provident Fund Commissioner v/s Bhawani (2008) 7 SCC 111, it was held that

  "The Regional Provident Fund Commissioner is a service provider within the meaning of Section 2(1)(o) of the Consumer Protection Act 1986. These decisions are sought to be distinguished on the ground that the corpus of the EPF scheme is contributed by the employers and the employees, there being no contribution by the State out of the tax revenues.

In a recent judgment of this Court in Ministry of Water Resources v Shreepat Rao Kamde Civil Appeal No 8472 of 2019 decided on 6 November 2019, it has been held that a government servant who makes a contribution to the General Provident Fund lies outside the purview of the Consumer Protection Act 1986; and

Canara Bank v United India Insurance Company Limited 2020 SCC Online SC 132 that even a beneficiary who is not a party to the contract is a ‘consumer’ under the Act.

“..As far as the definition of the consumer in relation to hiring or availing of services is concerned, the definition, in our view, is much wider. In this part of the section, consumer includes not only the person who has hired or availed of the services but also includes any beneficiary of such services. Therefore, an insured could be a person who hires or avails of the services of the insurance company but there could be many other persons who could be the beneficiaries of the services. It is not necessary that those beneficiaries should be parties to the contract of insurance. They are the consumers not because they are parties to the contract of insurance but because they are the beneficiaries of the policy taken out by the insured.”

National Campaign Committee for the Central Legislation on Construction Labour v Union of India (2018) 5 SCC 607. The judgment of this Court took note of the status of the implementation of the Act of 1996 and the Cess Act. Reviewing the status of implementation across the country, Justice Madan B Lokur prefaced the judgment with the following observations:

“Symbolic justice—there is nothing more to offer to several millions of construction workers in the unorganised sector—not social justice, not economic justice. The reason is quite simple. No State Government and no Union Territory Administration (UTA) seems willing to fully adhere to and abide by (or is perhaps even capable of fully adhering to and abiding by) two laws solemnly enacted by Parliament, namely, the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996 (the BOCW Act) and the Building and Other Construction Workers' Welfare Cess Act, 1996 (the Cess Act). Directions given by this Court from time to time to implement the two laws have been flouted with impunity. What is equally tragic is that multiple directions issued even by the Government of India under Section 60 of the BOCW Act have been disregarded by State Governments and UTAs — and this is candidly admitted in a statement made by the learned Additional Solicitor General in this Court and also by the Union of India on affidavit. Hopefully, the gravity of the situation in the constitutional and federal context, the human rights and social justice context will be realised by someone, somewhere and at some time.” 

The Court consequently came to the conclusion that a beneficiary of a service, in the context of a contract of insurance, need not be a party to the contract. Beneficiaries fall within the purview of the expression ‘consumer’ 

The true test is not whether the amount which has been contributed by the beneficiary is adequate to defray the entire cost of the expenditure envisaged under the scheme. So long as the service which has been rendered is not rendered free of charge, any deficiency of service is amenable to the fora for redressal constituted under the Consumer Protection Act 1986. The Act does not require an enquiry into whether the cost of providing the service is entirely defrayed from the price which is paid for availing of the service. As we have seen from the definition contained in Section 2(1)(d), a ‘consumer’ includes not only a person who has hired or availed of service but even a beneficiary of a service. The registered workers are clearly beneficiaries of the service provided by the Board in a statutory capacity

As a matter of interpretation, the provisions contained in the Consumer Protection Act 1986 must be construed in a purposive manner. Parliament has provided a salutary remedy to consumers of both goods and services. Public authorities such as the appellants who have been constituted under an enactment of Parliament are entrusted with a solemn duty of providing welfare services to registered workers. The workers who are registered with the Board make contributions on the basis of which they are entitled to avail of the services provided in terms of the schemes notified by the Board. Public accountability is a significant consideration which underlies the provisions of the Consumer Protection Act 1986. The evolution of jurisprudence in relation to the enactment reflects the need to ensure a sense of public accountability by allowing consumers a redressal in the context of the discharge of non-sovereign functions which are not rendered free of charge. This test is duly met in the present case.