Holding

A government servant cannot claim compensation against the State under the Consumer Protection Act because the services rendered are excluded as free of charge or a contract of personal service.

Summary

Haribandhu Setha, a government servant, filed a consumer complaint under the Consumer Protection Act, 1986 seeking damages from the State of Orissa. The State Commission and later the National Consumer Disputes Redressal Commission awarded Rs.1,00,000 against the State. The State appealed to the Supreme Court, arguing that the claim was not maintainable because the services rendered to a government servant are either free of charge or fall under a contract of personal service, both excluded by Section 2(1)(o) of the Act. The Court examined the definition of "services" and the exclusion of "personal service" as clarified in Indian Medical Association v. V.P. Shantha. It held that a government servant, bound by service conditions, cannot claim compensation under the Act as the services are excluded. Consequently, the Supreme Court set aside the award and allowed the appeal, with no costs awarded.

Issues considered

Whether a claim for compensation against the State by a government servant is maintainable under the Consumer Protection Act, 1986.
Whether services rendered to a government servant fall within the exclusion of "free of charge" or "contract of personal service" under Section 2(1)(o) of the Act.

Legislation cited

Consumer Protection Act, 1986s. 2(1)(o)
Specific Relief Act

Subjects

Consumer Protection Actgovernment servantpersonal servicefree of chargeexclusion clausecompensationspecial leave petitionliability

Judgment

t
I

STATE OF ORISSA A
v.
DIVISIONAL MANAGER, UC AND ANR.

MARCH 18, 1996

[K RAMASWAMY AND G.B. PATTANAIK, JJ.] B

Consumer Protection Act, 1986 : Section 2( 1)(o ).

Consumer Protection-Se1vices excluded from the provisions of the
Act-Se1vices free of charge or under a contract of peiwnal se1vice-Contract C
of personal se1vice-Legal connotation of ·

Claim for compensation against State-Maintainability of-Respondent
a Govemment servant filed a claim before State Commission-Damages
awarded against L.l.C.-On appeal National Commission awarded damages
against State-Appeal preferred by State-Held respondent being a Govem-
ment servant was bound by se1vice conditions and the State was rendering D
se1vice free of charge to the contesting respondent-In the circunistances
Govemmel!f servant has been excluded from the purview of the Act to claim
damages against the State.

Indian Medical Association v. V.P. Shantha & Ors., [1995] 6 SCC 651,
referred to. E

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7092 of
1996.

From the Judgment and Order dated 17.1.95 of the National Con-
sumer Disputes and Redressal Commission at Orissa in F.A. No. 510 of. F
1992.

V.A. Mohanty and C.S.S. Rao for the Appellants.

P.P. Rao, S. Rajappa and KK Sharma for the Respondent.
G
Mrs. Sharda Devi for the Respondent No. 2.

The following Order of the Court was delivered :

This appeal is treated as special leave petitioner under Article 136
of the Constitution. H
527
~
I

528 SUPREME COURT REPORTS [1996] 3 S.C.R.

A Leave granted.

We have heard learned counsel on both sides.

This appeal arises from the order dated February 17, 1995 in FA No.
510 of 1992 of the National Consumer and Redressal Commission, New
B Delhi. The respondent-Haribandhu Setha filed a claim before the State
Commission, Orissa under the Consumer Protection Act, 1986 (for short,
the 'Act') for damages. The State Commission awarded damages against
the first respondent-UC. In appeal, the appellant was impleaded as party-
respondent and the National Forum awarded damages against the State in
C a sum of Rs. 1,00,000 (Rupees one lakh only) and directed to pay compen-
sation within a period of three months. Thus, this appeal by special leave.

The only question is : whether the appellant is liable to pay compen~
sation to Haribandhu Setha under the Act and whether the claim 1s
maintainable. Section 2(l)(o) of the Act defines 'services' as under :
D
"'services' means service of any description which is made available
to potential users and includes the provision of facilities in con-
nection with banking, financing, insurance, transport, processing,
supply of electrical or other energy, board of lading or both
housing construction entertainment, amusement or the purveying
E
of news or other informations; but does not include the rendering
of any service free of charge or under a contract of personal service."

(emphasis supplied)

F A reading of the definition would indicate that the services con-
templated thereunder alone are the services within the meaning of the Act
except excluded services mentioned thereunder. The excluded services are
nservice free of charge or under a contract of personal service". The
concept of contract of personal service was considered in a recent judg-
ment of this Court in Indian Medical Association v. V.P. Shantha & Ors.,
G (1995] 6 SCC 651. This Court had held therein that the expression "personal
service" has a well known legal connotation and has been construed in the
context of the right to seek enforcement of such a contract under the
Specific Relief Act. For that purpose, a contract of personal service has
been held to ccver a civil servant, the managing agents of a company and
H a professor in the University. There can be a contract of personal service
; STATEv. DIVISIONAL MANAGER 529

if there is relationship of master and servant between a doctor and the A
availing of his services and in that event the services rendered by the doctor
to his employer would be excluded from the purview of the expression
under Section 2(1)(o) of the Act by virtue of the exclusionary clause in the
said definition. The other excluded service is service rendered free of
charge.
B
It is not in dispute that the respondent was a Government servant
and, therefore, he is bound by the service conditions and the State was
rendering services free of charge to the contesting respondent. Under those
. r circumstances, the Government servant has been excluded from the pur-
view of the Act to claim any damages against the State under the Act. C
Therefore, if any claim arises for the contesting respondent, it would be
open to him to claim, in any other forum, but not under the Act. If the
claim is barred by limitation, time taken during the entire proceedings shall
stand excluded.

The appeal is accordingly allowed. No costs. D
T.N.A. appeal ~llowed.