IN THE HIGH COURT OF JHARKHAND AT RANCHI

The Hon’ble Mr. Justice R.K.Merathia, The Hon'ble Mr. Justice R.R.Prasad & The Hon’ble Mr. Justice D.N.Upadhyay 

Dated the 17th February, 2012

Writ Petition (Civil) No. 4075 of 2003 

In the matter of an application under Article 226 of the Constitution of India.. 

The State of Jharkhand through District Provident Fund Officer, Palamau

Versus 

1. The District Consumer Forum, Palamau 

2. Mukhraj Dubey

Head Note:-

Consumer Protection Act, 1986 - Sections 2(1)(d) & 2(1)(o) - Bihar General Provident Fund Rules, 1948 - Rules 4, 11(1)(b) & 11(4) - Whether employee of the State, who is beneficiary of the Bihar General Provident Fund Rules, 1948 (as adopted by the State of Jharkhand), is getting the service for consideration and which service falls in the definition of Section 2 (I) (o) of the Consumer Protection Act, 1986?

Held:- In the result, the said question, referred to this Bench, is answered in the negative, i.e. the employee of State, who is beneficiary of Bihar General Provident Fund Rules, 1948, (as adopted by the State of Jharkhand), is not getting service for consideration within the meaning of 'service', under Section 2 (1) (o) of the Consumer Protection Act, 1986. In other words, it is held that recourse to the Consumer Protection Act, 1986 cannot be take by the employees covered under the G.P.F. Rules, 1948.

For the Petitioner :

• Mr. A. Allam, Sr. SCII 
• Mr. Shrawan Kumar

For the Respondents :

• M/s. Rajeev Ranjan Tiwary
• Saket Upadhyay 
• Amit Kumar Tiwary

J U D G M E N T 

By Court. 

The facts, in short Respondent No. 2 Mukhraj Dubey, (herein after referred to as the employee), retired as Constable from Excise Department of the State Government. He filed a case before the District Consumer Forum, Palamau at Daltonganj against the District Provident Fund Officer, Palamau, which was registered as Case No. 112 of 2000. His contention was that on verification, he found that the opening balance of Rs. 1462/in the year 197576, was not considered for preparing the statement, which has caused loss to him of Rs. 16,000/. Therefore, he prayed for necessary correction and payment of the said amount. By order dated 27/08/2002, the Forum allowed the said prayer of the employee.

2. The question of jurisdiction of Consumer Forum was not raised before the Forum. However, by filing this writ petition, such question has been raised on behalf of the State of Jharkhand (herein after referred to as the employer). This writ petition was admitted on 06/11/2003 by a Division Bench and the operation of the said order of Consumer Forum was stayed till further orders.

3. The instant writ petition was taken up for hearing by the Division Bench. The employer relying on the provisions of law and on the judgment reported in AIR 1996 SC 2519 State of Orissavrs. Divisional Manager LIC and Another, contended that the consumer forum had no jurisdiction to entertain and decide the dispute in question.

4. On the other hand the employee contended that the consumer forum had the jurisdiction. Reliance was placed on the judgment reported in AIR 2000 SC, 331 Regional Provident Fund CommissionervsShiv Kumar Joshi. The order dated 18/11/2010, passed in WPS No. 3144 of 2003, State of Jharkhandvrs. District Consumer Forum by a Division Bench, was also relied, which reads as follows:

“ The case has been called out in the revised list. Learned counsel for the petitioner remained absent even in the second round. 

We have heard Mr. Satish Kumar Deo, learned counsel appearing for respondent no. 3. 

The question in this case as framed in paragraph 3 is basically whether the consumer forum had jurisdiction to entertain the claim with regard to payment/nonpayment of the provident fund. 

This question has been answered in favour of respondent no. 3 and against the petitionerState in the decision of Regional Provident Fund Commissioner vs. Shiv Kumar Joshi (AIR 2000 Supreme Court 331) under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, holding that the employee is “Consumer” in respect of Provident Fund Scheme and the facilities provided by the Scheme are “Services”. 

The remaining questions raised are the questions of fact. Accordingly,, this writ petition is dismissed.” 

5. In view of such submissions, raised on behalf of the parties and for the reasons recorded in the order dated 17/11/2011, the following question has been referred to the Full Bench:

.“Whether employee of the State, who is beneficiary of the Bihar General Provident Fund Rules, 1948 (as adopted by the State of Jharkhand), is getting the service for consideration and which service falls in the definition of Section 2 (I) (o) of the Consumer Protection Act, 1986.” 

6. The submissions 

Mr. Allam, learned senior counsel appearing for the employer submitted that there is no dispute that the parties are guided by the Provident Fund Act 1925 and the Bihar General Provident Fund Rules 1948 (as adopted by the State of Jharkhand) (herein after referred to as GPF Rules for short) which has been framed in exercise of the powers conferred by clause (b) of Subsection 2 of Section 241 of the Government of India Act, 1935 as adopted by the India (Provisional Constitution) Order 1947. 

The provident fund establishment is being maintained by the State Government for the benefit of the employees in which they have to make certain minimum contribution of their salary per month, which is refunded with interest. For running such establishment established for the welfare of the employee no charges/consideration is levied or paid by the employees. He submitted that both the judgments, i.e. Divisional Manager, LIC (Supra) and Shiv Kumar Joshi (supra) are correctly decided but in the present case the judgment of “Divisional Manager, LIC” (Supra) is applicable whereas the judgment of Shiv Kumar Joshi (supra) is not applicable. He further submitted that nobody could appear on behalf of the State in the said writ petition, i.e. WPS No. 3144/2003 and the contentions raised here in this writ petition, could not be canvassed and moreover the judgment of Divisional Manager LIC (supra), could not be placed. He further submitted that the said order passed in the said writ petition, i.e. WPS No. 3144/2003 is per incurium. He also submitted that the judgments of Supreme Court are to be read in the context of the facts involved.

7. On the other hand, Mr. R.R.Tiwary, learned counsel appearing for the employee relying on the judgment of Shiv Kumar Joshi (supra), submitted that the expenses incurred by the State Government in maintaining the provident fund establishment under the Provident Fund Rules, will be deemed consideration and, therefore, the consumer forum had/has jurisdiction to decide the dispute with regard to provident fund.

8. In reply, Mr. Allam, submitted that if the submissions of Mr. Tiwary is accepted, then for all the disputes for pension, gratuity, leave encashment, provident fund etc., the expenses incurred by the State Government in maintaining the Government departments will be deemed consideration, which is not the intention of the legislature. He referred to Section 2 (1) (o) of the Consumer Protection Act, 1986, in which it is provided that rendering the service free of charge or under a contract of personal service is excluded from the service as defined in the Consumer Protection Act.

9. The relevant provisions of Law. 

There is no dispute between the parties that the Provident Fund Act, 1925 and the General Provident Fund Rules, 1948 are applicable to the employer State and it's employee in this case. 

Consumer Protection Act, 1986 

“2 (1) (d) “consumer” means any person who,

( i)................ 

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose.” 

.................................. 

(o) “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, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.” (emphasis supplied) 

Bihar General Provident Fund Rules, 1948 

State Government Notification : 

In exercise of the powers conferred by Article 309 of the Constitution of India the Governor of Bihar makes the following amendments to the Bihar Provident Fund Rules, 1948 namely 

(2) The present provisions of Rules 4, 11 (1) (b) and 11 (4) are being respectively substituted by the following: 

( i) Rule 4:All government servants in permanent pensionable and nonpensionable service (including probationers) and those temporary Government Servants (including all reemployed pensioners) who have completed one year service, and whose conditions of service the State Government are competent to determine shall be required to subscribe the minimum subscription. All Government servants shall have to subscribe the minimum prescribed rate during leave, deputation and foreign service. 

(ii) Rule 11 (1) (b):All nonGazetted Government Servants shall be required to subscribe to the Fund the minimum monthly subscription at the rate of 10% of his/her monthly emolument and all Gazetted Government servant at the rate of 12% of his/her emolument. There shall be no upper limit of the subscription. 

(iii) Rule 11 (4): The amount of subscription so fixed shall remain unchanged throughout the year. The subscriber may at his option increase the amount of subscription during middle of the year but he will not have the option to reduce the amount of subscription during the middle of the year.” 

10. The discussions 

We find force in the contentions raised on behalf of the employer. The submission advanced on behalf of the employee that the expenses incurred by the State Government in maintaining the establishment of provident fund, will be deemed consideration, is not acceptable. Firstly, there is no provision for charging any charges/consideration in the G.P.F. Rules in question. Secondly, there is nothing to show that the State Government is charging, receiving or gaining any consideration out of the contributions deposited by the employees. Whereas in the case of the employees covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Scheme framed thereunder, (E.P.F. Act and the Scheme for short), there is clear provision for charging administrative charges for meeting the administrative expenses, incurred for maintaining the provident fund establishment. (Please see paragraphs 30 and 38 of the Employees Provident Funds Scheme, 1952.

11. In the case of Divisional Manager, LIC (Supra), the Supreme Court interalia held as follows:

“ 6. A reading of the definition would indicate that the services contemplated thereunder alone are the services within the meaning of the Act except excluded services mentioned thereunder. The excluded services are “service free of charge or under a contract of personal service.” The concept of contract of personal service was considered in a recent judgment of this Court in Indian Medical Associationv. P. Shantha (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 cover a civil servant, the managing agents of a company and a Professor in the University. There can be a contract of personal service if there is relationship of master and servant between a doctor and the 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 S. 2 (1)(o) of the Act by virtue of the exclusionary clause I the said definition. The other excluded service is service rendered free of charge.

7. 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 circumstances the Government servant has been excluded from the purview of the Act to claim any damages against the State under the Act. 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.”(emphasis supplied) 

12. The judgment of Divisional Manager, LIC (Supra) was noticed in the case of Shiv Kumar Joshi (supra). But in the case of Shiv Kumar Joshi (supra) it was found that the employer was paying the administrative charges as provided under paragraph 30 of the Scheme of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and, therefore, it was held that the provisions of the Consumer Protection Act can be invoked by an employee concerned under the EPF Act and the Scheme. In view of the definition of 'Consumer', it was also held that even if the administrative charges/consideration is paid by the employer, it will be deemed as consideration against the service rendered to the employees and, therefore, the consumer forum had jurisdiction to decide such dispute. (Please see paragraphs 9 to 12). It is settled position that the judgments are to be read in the context of the facts and circumstances obtaining therein, and they are not be read as statutes. (Please see paragraph 31 of (2010) 5 SCC 388 Goan Real Estate & Construction LimitedvrsUnion of India) 

13. The conclusions 

After carefully examining the matter and hearing the parties, in our view, the case of Divisional Manager, LIC” (Supra) fully applies in the present case and not the case of Shiv Kumar Joshi (supra) and, therefore, with respect, we hold that the order dated 11/11/2010 passed in WPS No. 3144/2003 has got no binding effect.

14. We express our displeasure on the manner in which the State conducted WPS No. 3144/2003, in not appearing before the Court in such an important matter and, thereby, wasted valuable time of the Court.

15. In the result, the said question, referred to this Bench, is answered in the negative, i.e. the employee of State, who is beneficiary of Bihar General Provident Fund Rules, 1948, (as adopted by the State of Jharkhand), is not getting service for consideration within the meaning of 'service', under Section 2 (1) (o) of the Consumer Protection Act, 1986. In other words, it is held that recourse to the Consumer Protection Act, 1986 cannot be take by the employees covered under the G.P.F. Rules, 1948.

16. Mr. Allam and Mr. Tiwary, appearing for the parties agreed that now it is not necessary to send back this matter to the Division Bench.

17. In the result, this writ petition is allowed. The impugned judgment of the consumer forum dated 27/08/2002, is set aside. However, there will be no order as to cost.  

R.K. Merathia

R.R. Prasad

D.N. Upadhyay

NAFR/Mukund/c.p. 3