# THE JOINT LABOUR COMMISSIONER AND REGISTERING OFFICER & ANR v. KESAR LAL

- **Citation:** [2020] 5 S.C.R. 176
- **Court:** Supreme Court of India
- **Decided:** 2020-03-17
- **Case number:** Civil Appeal No. 2014 of 2020
- **Bench:** Dr. Dhananjaya Y. Chandrachud, Ajay Rastogi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-joint-labour-commissioner-and-registering-officer-anr-v-kesar-lal-34471
- **Pages:** 25

## Headnote

Consumer Protection Act, 1986 - s.2(d) and 2(1)(o)-
'Consumer'- If includes beneficiary of a statutory welfare scheme
- Parliament enacted 1996 Act to regulate employment, service
conditions of building & other construction workers and also to
provide for their safety, health & welfare measures - Pursuant
thereto, State of Rajasthan framed 2009 Rules - Rajasthan
Building & Other Construction Workers Welfare Board was
constituted - One of the schemes formulated by Board for
beneficiaries registered under the Act rendered financial assistance
on the occasion of marriage of a beneficiary's daughter -
Respondent obtained Labour Beneficiary Identity Card from
appellants after depositing Rs.25 as registration fee and Rs.60 as
annual contribution - Submitted application for availing financial
aid for the marriage of his daughter - Rejected - District Forum
dismissed respondent's complaint - Order set aside by State
Commission - Affirmed by NCDRC - Held: Functions of the Board
squarely fall within the definition of 'service' within the meaning
of s.2(1)(o) - Exception is a service rendered free of charge -
Workers registered under 1996 Act are beneficiaries of schemes
made by the Board - Upon registration, every worker is required
to make a contribution to the fund at such rate per month as may
be prescribed by State government - Fund is applied inter alia for
meeting the expenses incurred to fulfill the objects & purposes
authorized by legislation - True test is not whether the amount
contributed by beneficiary is adequate to defray the entire cost of
expenditure envisaged under the scheme - So long as the service
rendered is not free of charge, any deficiency of service is amenable
to the fora for redressal constituted under Consumer Actu/s.2(1)(d), a 'consumer' includes not only a person who has hired
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or availed of service but even a beneficiary of a service - Public
authorities such as the appellants constituted under an enactment
of Parliament are entrusted with a solemn duty of providing welfare
services to registered workers - Public accountability is a
significant consideration underlying the provisions of Consumer
Act - No reason to interfere with State Commission's decision to
award the claim, subject to modification of rate of interest by
NCDRC- Building and Other Construction Workers'(Regulation of
Employment and Conditions of Service) Act, 1996 - ss.2(b), (k),
11, 12, 16-18, 22, 24 - Building and Other Construction Workers'
(Regulation of Employment and Conditions of Service) Rules,1998
- Rajasthan Building and Other Construction Workers (Regulation
of Employment and Conditions of Service) Rules, 2009 - rr.43-45,
52, 58 - Building and Other Construction Workers Welfare Cess
Act, 1996.
Dismissing the appeal, the Court
HELD: 1.1 In relation to a service, the definition of the
expression incorporates in the first part any person who hires
or avails of any service for a consideration which has been paid
or promised (wholly or in part). In its latter component, the
definition includes the beneficiary of such a service other than
the person who actually avails of the service for consideration
paid or promised, so long as such services are availed of with
the approval of the person who hires or avails of the service for
consideration. The ambit of the first component of the
expression in Section 2(d)(ii) is expanded by the inclusive
definition in the latter component. The expression 'beneficiary'
is defined in Section 2(b), Building and Other Construction
Workers' (Regulation of Employment and Conditions of Service)
Act, 1996 to mean 'a building worker registered under Section
12'. The expression 'fund' is defined in Section 2(k) to mean
'the Building and Other Construction Workers Welfare Fund of
a Board constituted under sub-section (1) of Section 24'. Hence,
every building worker who is registered as a beneficiary under
the enactment is entitled to the benefits provided by the B

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THE JOINT LABOUR COMMISSIONER
AND REGISTERING OFFICER & ANR.
v.
KESAR LAL
(Civil Appeal No. 2014 of 2020)
MARCH 17, 2020
[DR. DHANANJAYA Y. CHANDRACHUD
AND AJAY RASTOGI, JJ.]
Consumer Protection Act, 1986 - s.2(d) and 2(1)(o)-
'Consumer'- If includes beneficiary of a statutory welfare scheme
- Parliament enacted 1996 Act to regulate employment, service
conditions of building & other construction workers and also to
provide for their safety, health & welfare measures - Pursuant
thereto, State of Rajasthan framed 2009 Rules - Rajasthan
Building & Other Construction Workers Welfare Board was
constituted - One of the schemes formulated by Board for
beneficiaries registered under the Act rendered financial assistance
on the occasion of marriage of a beneficiary's daughter -
Respondent obtained Labour Beneficiary Identity Card from
appellants after depositing Rs.25 as registration fee and Rs.60 as
annual contribution - Submitted application for availing financial
aid for the marriage of his daughter - Rejected - District Forum
dismissed respondent's complaint - Order set aside by State
Commission - Affirmed by NCDRC - Held: Functions of the Board
squarely fall within the definition of 'service' within the meaning
of s.2(1)(o) - Exception is a service rendered free of charge -
Workers registered under 1996 Act are beneficiaries of schemes
made by the Board - Upon registration, every worker is required
to make a contribution to the fund at such rate per month as may
be prescribed by State government - Fund is applied inter alia for
meeting the expenses incurred to fulfill the objects & purposes
authorized by legislation - True test is not whether the amount
contributed by beneficiary is adequate to defray the entire cost of
expenditure envisaged under the scheme - So long as the service
rendered is not free of charge, any deficiency of service is amenable
to the fora for redressal constituted under Consumer Actu/s.2(1)(d), a 'consumer' includes not only a person who has hired
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or availed of service but even a beneficiary of a service - Public
authorities such as the appellants constituted under an enactment
of Parliament are entrusted with a solemn duty of providing welfare
services to registered workers - Public accountability is a
significant consideration underlying the provisions of Consumer
Act - No reason to interfere with State Commission's decision to
award the claim, subject to modification of rate of interest by
NCDRC- Building and Other Construction Workers'(Regulation of
Employment and Conditions of Service) Act, 1996 - ss.2(b), (k),
11, 12, 16-18, 22, 24 - Building and Other Construction Workers'
(Regulation of Employment and Conditions of Service) Rules,1998
- Rajasthan Building and Other Construction Workers (Regulation
of Employment and Conditions of Service) Rules, 2009 - rr.43-45,
52, 58 - Building and Other Construction Workers Welfare Cess
Act, 1996.
Dismissing the appeal, the Court
HELD: 1.1 In relation to a service, the definition of the
expression incorporates in the first part any person who hires
or avails of any service for a consideration which has been paid
or promised (wholly or in part). In its latter component, the
definition includes the beneficiary of such a service other than
the person who actually avails of the service for consideration
paid or promised, so long as such services are availed of with
the approval of the person who hires or avails of the service for
consideration. The ambit of the first component of the
expression in Section 2(d)(ii) is expanded by the inclusive
definition in the latter component. The expression 'beneficiary'
is defined in Section 2(b), Building and Other Construction
Workers' (Regulation of Employment and Conditions of Service)
Act, 1996 to mean 'a building worker registered under Section
12'. The expression 'fund' is defined in Section 2(k) to mean
'the Building and Other Construction Workers Welfare Fund of
a Board constituted under sub-section (1) of Section 24'. Hence,
every building worker who is registered as a beneficiary under
the enactment is entitled to the benefits provided by the Board
from the fund. The effect of a non-payment of the contribution
under sub-section (1) of Section 16 for a continuous period of
not less than one year is that under Section 17 the individual
ceases to be a beneficiary. However, under the proviso, a person
JOINT LABOUR COMMR. AND REGISTERING OFFICER v.
KESAR LAL
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who is in default is allowed to deposit the arrears if there was
sufficient ground to satisfy the secretary of the Board in regard
to the non-payment of the contribution, upon which the
registration is to stand restored. Section 22 provides for the
functions of the Board. Under Section 24, the statute has
provided for the constitution of a welfare fund into which are
credited (i) grants and loans made to the Board by the Central
government; (ii) contributions made by the beneficiaries; and (iii)
sums received by the Board from other sources as decided by
the Central government. The fund is applied, under sub-section
(2) of Section 24 to meet the expenses of the Board in the
discharge of its statutory functions; towards payment of salaries,
allowances and remuneration and for meeting the expenses on
objects and for purposes authorized by the Act. The Rules of
2009 have been framed in terms of the provisions governing the
rule making power. Rule 43 provides for the constitution of the
welfare fund. Rule 44 provides for the registration of building
workers as beneficiaries. Rule 45 provides for contributions to
the fund. Rule 52 provides for the expenditure from the fund.
Under Rule 58, the Board is empowered to notify schemes
regarding benefits. The Board has been entrusted with specific
functions which have been defined in Section 22. These functions
squarely fall within the definition of the expression 'service'
within the meaning of Section 2(1)(o) of the Consumer Protection
Act 1986. The expression 'service' has been defined in the
widest possible terms to mean 'service of any description which
is made available to potential users'. The exception in Section
2(1) (o) is a service which is rendered free of charge. The
workers who are registered under the provisions of the Act of
1996 are beneficiaries of the schemes made by the Board. Upon
registration, every worker is required to make a contribution
to the fund at such rate per month as may be prescribed by the
State government. The fund into which the contributions by
persons who are registered under the Act are remitted,
comprises among other sources, the contributions made by the
beneficiaries. The fund is applied inter alia for meeting the
expenses incurred to fulfill the objects and purposes authorized
by the legislation. In view of the statutory scheme, the services
which are rendered by the Board to the beneficiaries are not
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services which are provided free of charge so as to constitute
an exclusion from the statutory definition contained in Section
2(1)(o) and Section 2(d)(ii) of the Consumer Protection Act 1986.
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. Under 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. [Paras 12,
13] [191-C-E; 196-C-F; 197-A-C; 198-C-F; 199-B-H]
1.2 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. There is no reason to interfere with the ultimate decision
of the State Commission to award the claim, subject to the
modification of the rate of interest by the order of the National
Commission. [Paras 14, 15] [200-A-D]
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KESAR LAL
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Regional Provident Commissioner v. Shiv Kumar Joshi
(2000) 1 SCC 98 : [1999] 5 Suppl. SCR 294 ; Canara
Bank v. United India Insurance Company Limited 2020
SCC Online SC 132 ; Lucknow Development Authority
v. M.K. Gupta (1994) 1 SCC 243 : [1993] 3 Suppl.
SCR 615 ; Punjab Urban Planning and Development
Authority (now GLADA) v. Vidya Chetal (2019) 9 SCC
83 : [2019] 12 SCR 516 ; National Campaign
Committee for the Central Legislation on Construction
Labour v. Union of India (2018) 5 SCC 607 : [2018]
9 SCR 204 - relied on.
Bihar School Examination Board v. Suresh Prasad
Sinha (2009) 8 SCC 483 : [2009] 13 SCR 1239 ;
Regional Provident Fund Commissioner v. Bhawani
(2008) 7 SCC 111 : [2008] 6 SCR 767 ; Ministry of
Water Resources v. Shreepat Rao Kamde Decision of
Supreme Court dtd. 06.11.2019 in Civil Appeal No.
8472 of 2019 ; Huda v. Sunita (2005) 2 SCC 479 ;
Jagmittar Sain Bhagat v. Director, Health Services,
Haryana (2013) 10 SCC 136 : [2013] 8 SCR 77 -
referred to.
Case Law Reference
[2009] 13 SCR 1239
referred to
Para 6 (vii)
[1999] 5 Suppl. SCR 294
relied on
Para 6 (viii)
[2008] 6 SCR 767
referred to
Para 6 (viii)
[2019] 12 SCR 516
relied on
Para 8
[1993] 3 Suppl. SCR 615
relied on
Para 8
[2018] 9 SCR 204
relied on
Para 10
(2005) 2 SCC 479
referred to
Para 12
[2013] 8 SCR 77
referred to
Para 12
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2014
of 2020.
From the Judgment and Order dated 25.10.2019 of the National
Consumer Disputes Redressal Commission, New Delhi in Revision
Petition No. 2312 of 2019.
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Dr. Manish Singhvi, Sr. Adv., D.K. Devesh, Sandeep Kumar Jha,
Advs. for the Appellants.
P.V. Dinesh, Adv. (AC), Ms. Sindhu T.P., Mukund P Unny,
Bineesh K., Ashwini Kumar Singh, C. Sanal Nambiar, Advs. for the
Respondent.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y. CHANDRACHUD, J.
1.The neat issue which has to be adjudicated upon in this appeal
is 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.
The issue assumes significance because the answer will determine
whether a beneficiary of a statutory welfare scheme is entitled to exact
accountability by invoking the remedies under the Consumer Protection
Act 1986.
2. Parliament enacted the Act of 1996 "to regulate the employment
and conditions of service of building and other construction workers and
to provide for their safety, health and welfare measures and for other
matters connected therewith or with incidental thereto". In pursuance
of the rule-making powers conferred by Sections 40 and 62, the Union
Government has framed the Building and Other Construction Workers'
(Regulation of Employment and Conditions of Service) Rules, 1998. The
State of Rajasthan has also framed the Rajasthan Building and Other
Construction Workers (Regulation of Employment and Conditions of
Service) Rules in 20092. In pursuance of the provisions contained in
Section 18, the State government constituted the Rajasthan Building and
Other Construction Workers Welfare Board. The Welfare Board has
formulated several schemes for beneficiaries registered under the Act.
One of the schemes which was formulated on 1 August 2011 is for
rendering financial assistance on the occasion of the marriage of a
daughter of a beneficiary. The scheme envisages that financial
assistance of Rs 51,000 is provided on the occasion of marriage, subject
to a limit of assistance on two occasions.
1 Act of 1996
2 Rules of 2009
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3. The respondent obtained a Labour Beneficiary Identity Card
on 29 December 2011 under the Welfare Board from the appellants after
depositing the registration fee of Rs 25 and an annual contribution of
Rs 60. The identity card was valid for a period of one year, from 29
December 2011 to 28 December 2012. Seeking to avail financial aid
under the scheme, the respondent submitted an application on 6
November 2012 in anticipation of the marriage of his daughter which
was to take place on 24 November 2012. Nine months after the
application was submitted, the Joint Commissioner of Labour, Jaipur
issued an order of rejection covering 327 such applications, finding
technical defects as a ground for the decision. The order reads thus:
"Upon scrutiny of applications received in this office, following
points are found to be incomplete like incomplete application form,
incompleteness of certificate of the planner in Form 'B', noncorrectness of birth certificate, submission of application after
solemnization of marriage and non-submission of affidavit or
absence of some information in application and letter was issued
reminding to complete the details, and upon non- submission of
any answer to that in the office, it is not possible to grant the
marriage assistance amount hence in following matters (list of
327 cases is annexed) the application for the marriage assistance
are rejected."
4. The respondent instituted a consumer complaint before the
District Consumer Disputes Redressal Forum3. The complaint was
dismissed on 6 October 2016. In appeal, the State Consumer Disputes
Redressal Commission4 set aside the order of the District Forum on
20 August 2019 and directed the appellants to pay an amount of Rs
51,000 to the respondent together with Rs 10,000 as compensation, Rs
5,000 for expenses and interest of 18 per cent per annum from the date
of the institution of the complaint. The National Consumer Disputes
Redressal Commission5 by its judgment and order dated 25 October
2019 affirmed the decision, overruling the objection that the respondent
is not a 'consumer' within the meaning of the Consumer Protection
Act 1986. The National Commission, however, reduced the rate of
interest from 18 percent per annum to 9 percent per annum. The present
appeal has arisen from the order of the National Commission.
3 District Forum
4 State Commission
5 National Commission
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5. On 27 January 2000, the appellants stated before this Court
that the amount which was awarded to the respondent would be paid.
The appellants, however, pressed the question of law. Instead of saddling
the respondent who is a construction worker with the insuperable burden
of defending the proceedings before this Court, we requested Mr PV
Dinesh, learned counsel to assist the Court as amicus curiae. We wish
to record our appreciation of the able and objective assistance which
has been rendered to the Court by Mr PV Dinesh.
6. Dr Manish Singhvi, learned Senior Counsel appearing on behalf
of the appellants, urged the following submissions:
(i) Parliament enacted the Building and Other Construction
Workers Welfare Cess Act, 19966. The cess which is
collected under the Act is contributed to the fund. The
fund is defined both under the Cess Act of 1996 as well
as the Act of 1996. The cess which is collected forms
a part of the Welfare Board constituted under Section
24(1). The collection of the cess which runs into
thousands of crores becomes part of the fund which is
generated from the compulsory exaction from employers
who engage construction workers;
(ii) A circular was issued on 25 January 2011 by the State
of Rajasthan for the registration of construction workers.
Under the circular, at the relevant point of time, an
amount of Rs 25 was to be deposited as subscription
fee for the preparation of an identification card while
Rs 60 per year was charged as a contribution under
Section 16(1) of the Act of 1996. On 24 November 2015
the subscription was reduced to Re 1 per month (Rs 12
per annum) so as to comprise of a payment of Rs 60
for a period of five years. This contribution is in the
nature of a token amount to ensure registration and
identification of building workers who can avail of the
benefits under the Act of 1996 and even this contribution
can be relaxed under the proviso to Section 16(1) upon
the satisfaction of the Board that the beneficiary is unable
to pay the contribution;
6 The Cess Act
JOINT LABOUR COMMR. AND REGISTERING OFFICER v.
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(iii) About 22,46,904 workers have been registered under the
Act of 1996, out of which about 64,678 have benefited
under the scheme between 2010-11 and 2019-20. Out
of a cess of Rs 2,671 crores which has been collected,
about Rs 1,488 crores is expended for the welfare
schemes. The welfare schemes are funded by the cess
and not by the contributions made under Section 16(1).
Between 2010 and 2020, the contribution of the workers
is Rs 27.92 crores which is meagre in comparison to
the expenditure on the welfare schemes;
(iv) The welfare schemes initiated by the State government
are to keep up with the rapid expansion of welfare
activities. The cess which is collected under the Cess
Act is for a specific purpose. The cess is nothing but a
tax under Article 366(28) of the Constitution;
(v) Undoubtedly, where the state for its multifarious
functions, charges a fee and services are rendered on
a quid pro quo basis, the activities of the State would
be amenable to the jurisdiction of a consumer forum
when a complaint of deficiency of service is made;
(vi) On the other hand, where the State commits itself to
welfare schemes and a negligible amount is charged in
token of the services which are rendered, the
beneficiary of a service is not a 'consumer' within the
meaning of Section 2(d) of the Consumer Protection Act
1986. Such services are primarily financed out of
budgetary allocations. In the present case, though a
service is rendered by the Board, the expenditure on the
welfare scheme is defrayed from the cess which is
collected and hence, is not a 'service' within the meaning
of Consumer Protection Act 1986;
(vii) In Bihar School Examination Board v Suresh
Prasad Sinha7 ("Bihar School Examination Board")
this Court held that where a statutory function was being
discharged by a public examination authority, a student
aggrieved by the evaluation of the answer was not a
7 (2009) 8 SCC 483
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'consumer' nor was the Board a 'service provider'. On
a parity of reasoning, the Welfare Board is not a service
provider under the Consumer Protection Act 1986;
(viii) In the two decisions of this Court in Regional
Provident Commissioner v Shiv Kumar Joshi8 ("Shiv
Kumar Joshi") and Regional Provident Fund
Commissioner v Bhawani9, 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 Kamde10 ("Shreepat Rao Kamde") 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
(ix) The edifice of the Consumer Protection Act 1986 is to
codify a remedy for a contractual or commercial
transaction in substitution of the remedy of filing a civil
suit. The enactment of the Consumer Protection Act
1986 does not cover a redressal mechanism for an injury
which is caused absent a commercial or business
transaction. The Act will not cover the services provided
by the State in the discharge of its welfare functions
which are highly subsidized or free.
7. Mr PV Dinesh, learned amicus curiae has, in his detailed
written submissions, controverted the logic of the approach which has
been adopted by the appellants. Mr Dinesh submits that the salient
features of the Act and the Rules are as follows:
(i) A construction worker is a 'beneficiary' under the Act,
Rules and the Schemes which have been framed;
8 (2000) 1 SCC 98
9 (2008) 7 SCC 111
10 Civil Appeal No 8472 of 2019
JOINT LABOUR COMMR. AND REGISTERING OFFICER v.
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(ii) Under Section 12, every worker should be registered as
a beneficiary. Section 12(3) provides that an application
must be submitted with documents together with a fee
not exceeding Rs 50 as may be prescribed;
(iii) Section 18 deals with the constitution of the State
Welfare Board which is a body corporate having
perpetual succession and a common seal;
(iv) Section 24 requires the constitution of a Workers
Welfare Fund into which the contribution of the
beneficiaries is credited. The provisions of Rules 28 and
43 implement Section 24.
(v) Under Rule 43(b), the contribution paid by a beneficiary
forms a part of the fund together with grants, loans, sums
received by the Board and advances from the Union or
State Governments, local authorities and other resources
as decided by the Central or State Governments;
(vi) Rule 45 deals with the contribution to be made by each
beneficiary and the consequence of non-contribution;
(vii) Rules 58, 59 and 60 deal with the notification of various
welfare schemes.
8. Based on the above provisions of the Act and the Rules, Mr
PV Dinesh submitted that:
(i) Every construction worker who is a beneficiary under
the Act and the Rules is a contributor to the workers'
welfare fund, and the service which is provided is not
gratuitous;
(ii) The welfare schemes which are implemented by the
Board cannot be construed as a sovereign function. The
State Welfare Board is a body corporate which is
capable of suing and being sued;
(iii) Though the claims of benefits provided under the scheme
are higher than the contribution by the worker -
beneficiary, this cannot be a reason to hold that it is not
a contribution;
(iv) In the context of the denial of insurance claims, this
Court while construing the provisions of Section 2(d) of
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the Consumer Protection Act 1986, has held in Canara
Bank v United India Insurance Company Limited11
("Canara Bank") that even a beneficiary who is not a
party to the contract is a 'consumer' under the Act;
(v) In the present case, there was a gross deficiency of
service on the part of the appellants and the denial of
benefits under the welfare scheme was casual and
mechanical. A poor construction worker was constrained
to approach the consumer court, faced with the rejection
of his application on the specious ground that it was not
accompanied by an application for exemption from the
procedural requirement of submitting it 90 days before
the marriage of his daughter. The defect, if any, was
curable and not fatal; and
(vi) The remedy under the Consumer Protection Act 1986
is a valuable provision made by the Parliament to provide
access to justice and the purpose embedded in the
Consumer Protection Act 1986 will be defeated if a
construction worker is required to approach a civil court
or the writ jurisdiction under Article 226 to seek relief
of a small claim.
In this context, reliance has been placed on the decisions in
Lucknow Development Authority v M.K. Gupta12 ("Lucknow
Development Authority"), Shiv Kumar Joshi and Punjab Urban
Planning and Development Authority (now GLADA) v Vidya
Chetal13 ("Vidya Chetal").
9. The rival submissions will now be analysed.
10. Before we deal with the specific issues of law which have
been raised in these proceedings, we begin with a reference to a
judgment of a two Judge bench of this Court in National Campaign
Committee for the Central Legislation on Construction Labour
v Union of India14. The judgment of this Court took note of the status
of the implementation of the Act of 1996 and the Cess Act. Reviewing
11 2020 SCC Online SC 132
12 (1994) 1 SCC 243
13 (2019) 9 SCC 83
14 (2018) 5 SCC 607
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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."
(emphasis supplied)
The Court noted that more than Rs 37,400 crores has been
collected for the benefit of construction workers under the Cess Act
of which only an amount of Rs 9,500 crores has been utilized, ostensibly
for their benefit. The Court emphasised that these laws were enacted
to implement the Directive Principles of State Policy contained in Articles
39 and 42 of the Constitution and for enforcing the right to life under
Article 21. The Court observed that monies which have been earmarked
for construction workers had not been spent, and a clear picture emerges
about the shocking state of affairs in regard to the welfare boards across
the country. The Court noted:
"...Overall, the affidavits gave a clear picture of a shocking state
of affairs inasmuch as some Welfare Boards had expenditure
out of the collected cess for payment of entry tax/value
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added tax, purchase of washing machines for construction
workers and purchase of laptops for construction workers.
This Court found that rather astonishing since it appeared
that there was no rationale in providing washing machines and
laptops to construction workers who were by and large poor and
uneducated as well as migrant labour..."
(emphasis supplied)
Adverting to the vulnerabilities of the construction workers, the
Court noted:
"What makes the situation even worse is that many of the
construction workers are believed to be women and at least some
of them have small children to look after. That even they are
victims of official apathy truly reflects a very sad state of affairs,
and the loss already caused to them and other construction
workers cannot be remedied. The reason for this is that it is not
known which construction worker is entitled to get how much in
terms of money or what benefit and under which scheme. Some
of these construction workers from the 1990s and even later, may
perhaps have unfortunately passed away or might be untraceable
or old enough to deserve a pension. The question therefore is:
what should be done with the thousands of crores that have been
collected for the benefit of construction workers but cannot be
utilised for their benefit? Can the State Governments and the
UTAs or the Welfare Boards unjustly benefit and fill their coffers
at the expense of unknown and helpless construction workers,
some of whom are women and some having small children?
These are questions for which we have not been provided any
answers at all - it is entirely for the Government of India and
Parliament to decide how to legally appropriate these thousands
of crores of rupees and then utilise the amounts for the benefit
of construction workers, at least for the future, assuming nothing
can be done for the past. It is a mammoth task for which the
powers that be must brace themselves, if they are serious in
assisting people with multiple vulnerabilities."
The position in the State of Rajasthan was specifically mentioned
in the judgment with regard to the failure to utilize the cess which was
collected. The judgment noted that though in 2011-12, an amount of
Rs 154.01 crores was collected, no figures for expenditure were
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submitted. For 2012-13, an amount of Rs 173.83 crores was collected
while the expenditure incurred for various schemes was only Rs 11.95
crores. In 2013- 14, an amount of Rs 251.95 crores was collected, of
which only Rs 25.93 crores was spent.
11. The appellants have been entrusted with the solemn duty of
enforcing and implementing the provisions of the welfare legislation
which has been enacted by Parliament specifically to ameliorate the
plight of construction workers. Construction workers belong to the
unorganized sector of the economy. Many among them are women.
Child labour is rampant. Their vulnerabilities have been attempted to
be safeguarded by a law which unfortunately has not been implemented
either in letter, or in spirit. Yet, we have in the present case, the
spectacle of a statutory welfare board seeking to exempt itself from
being held accountable to the remedies provided under the Consumer
Protection Act 1986. The submission which has been urged before the
Court, simply put, boils down to this: the beneficiaries of the service
pay such a meagre amount as contributions that they cannot be regarded
as 'consumers' within the meaning of Section 2(d) of the Consumer
Protection Act 1986. That is the submission which now falls for
consideration.
12. Section 2(d) of the Consumer Protection Act 1986 provides
as follows:
"(d) "consumer" means any person who,-
(i) buys any goods 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 user
of such goods other than the person who buys such
goods for consideration paid or promised or partly paid
or partly promised, or under any system of deferred
payment when such use is made with the approval of
such person, but does not include a person who obtains
such goods for resale or for any commercial purpose;
or
(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
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person who 8[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];
[Explanation.-For the purposes of this clause,
"commercial purpose" does not include use by a person
of goods bought and used by him and services availed
by him exclusively for the purposes of earning his
livelihood by means of self- employment; ]"
In relation to a service, the definition of the expression
incorporates in the first part any person who hires or avails of any
service for a consideration which has been paid or promised (wholly
or in part). In its latter component, the definition includes the beneficiary
of such a service other than the person who actually avails of the service
for consideration paid or promised, so long as such services are availed
of with the approval of the person who hires or avails of the service
for consideration. The ambit of the first component of the expression
in Section 2(d)(ii) is expanded by the inclusive definition in the latter
component. This was noticed in the judgment of a two Judge bench of
this Court in Lucknow Development Authority where Justice RM
Sahai, speaking for the Court, explained the ambit of Section 2(d):
"It is in two parts. The first deals with goods and the other with
services. Both parts first declare the meaning of goods and
services by use of wide expressions. Their ambit is further
enlarged by use of inclusive clause. For instance, it is not only
purchaser of goods or hirer of services but even those who use
the goods or who are beneficiaries of services with approval of
the person who purchased the goods or who hired services are
included in it.."
Emphasising the accountability of public authorities, the Court
observed:
"Under our Constitution sovereignty vests in the people. Every
limb of the constitutional machinery is obliged to be people
oriented. No functionary in exercise of statutory power can claim
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immunity, except to the extent protected by the statute itself.
Public authorities acting in violation of constitutional or statutory
provisions oppressively are accountable for their behavior before
authorities created under the statute like the commission or the
courts entrusted with responsibility of maintaining the rule of law.
Each hierarchy in the Act is empowered to entertain a complaint
by the consumer for value of the goods or services and
compensation..."
In Shiv Kumar Joshi, a Bench of two learned Judges of this
Court held that the invocation of the remedies under the Consumer
Protection Act 1986 is permissible against the Provident Fund
Commissioner by a member of the Employees' Provident Fund
Scheme. The Court held that the Regional Provident Fund
Commissioner discharges a statutory function and is not delegated with
any of the sovereign powers of the State. In that context, the Court
held:
"...The definition of "consumer" under the Act includes not only
the person who hires the "services" for consideration but also
the beneficiary, for whose benefits such services are hired. Even
if it is held that administrative charges are paid by the Central
Government and no part of it is paid by the employee, the services
of the Provident Fund Commissioner in running the Scheme shall
be deemed to have been availed of for consideration by the
Central Government for the benefit of employees who would be
treated as beneficiaries within the meaning of that word used in
the definition of "consumer"..."
The Court rejected the submission that the services which are
provided under the EPF Scheme are rendered free of charge and
therefore, would not qualify as a service under the Consumer Protection
Act 1986. The same view has been reiterated by a Bench of three
learned Judges of this Court in Vidya Chetal. The reference before
the three Judge Bench arose upon a doubt having been expressed in
regard to the correctness of the decision of a two Judge Bench in
HUDA v Sunita15. The issue was whether the National Commission
lacks the jurisdiction to decide the legitimacy of a demand for a
composition fee and an extension fee on a challenge that there was a
15 (2005) 2 SCC 479
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deficiency in service. Referring to the definition of the expression
'service' in Section 2(1)(o)16, the Court held:
"This definition is not exhaustive, rather the legislature has left
the task to expound the provision on a case-to-case basis to the
judiciary. The purpose of leaving this provision open ended,
without providing an exhaustive list indicates the requirement for
a liberal interpretation. Broadly speaking, it is inclusive of all those
services performed for a consideration, except gratuitous services
and contract of personal services. Moreover, the aforesaid
provision reflects the legislative intent of providing impetus to
"consumerism". It may be noted that such a phenomenon has
had a benevolent effect on the government undertakings, wherein
a new dynamism of innovation, accountability and transparency
are imbibed."
Justice NV Ramana, speaking for the three Judge Bench, noted
that all statutory obligations are not sovereign functions. Although
sovereign functions/services are regulated and performed under a
constitutional/statutory framework, yet there are other functions, which
may be statutory, but cannot be called as sovereign functions. The Court
held:
"..if the statutory authority, other than the core sovereign duties,
is providing service, which is encompassed under the Act, then,
unless any statute exempts, or provides for immunity, for
deficiency in service, or specifically provides for an alternative
forum, the consumer forums would continue to have the
jurisdiction to deal with the same. We need to caution against
over-inclusivity and the tribunals need to satisfy the
ingredients under Consumer Protection Laws, before
exercising the jurisdiction."
In the view of the Court:
"Therefore, it is a clearly established principle that certain
statutory dues, such as fees, can arise out of a specific relation.
16 2. (1)(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;"
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