Introduction
The Consumer Protection Act, 2019 protects individuals who use services in exchange for payment. Many modern activities such as banking, transport, healthcare, and electricity supply involve service transactions.
To determine who can seek protection under the Act, the law clearly defines who is a consumer of services.
Meaning / Definition
Under Section 2(7)(ii) of the Consumer Protection Act, 2019, a consumer of services is a person who hires or avails any service for consideration (payment).
The payment may be:
- fully paid,
- partly paid and partly promised, or
- payable later under a deferred payment system (payment made later).
A beneficiary of the service, other than the person who hired it, is also considered a consumer if the service is used with the approval of the person who hired it.
However, a person who hires or avails services for commercial purposes is generally not treated as a consumer.
Modes or Types
Person Who Hires or Avails Services
A person becomes a consumer when they hire or use services in return for payment.
The word hire means to obtain the use of services for a price.
The word avail means to make use of a service that is available.
For example:
- Hiring an auto-rickshaw to travel to a destination.
- Booking a railway ticket for travel.
If the service is provided free of charge, it does not fall within the definition of service under the Act.
Beneficiary of Services
A person who benefits from a service may also be treated as a consumer, even if they did not personally hire the service.
This applies when the service is used with the approval of the person who hired it.
For example, if a parent hires a doctor to treat their child, both the parent and the child are considered consumers.
This is an exception to the rule of privity of contract (rule that only parties to a contract can sue).
Exclusion: Services for Commercial Purpose
A person who hires or avails services for commercial purposes is generally not considered a consumer.
This rule was clarified after amendments to the earlier Consumer Protection Act and continues under the Consumer Protection Act, 2019.
Meaning of Service
Section 2(42) defines service broadly as service of any description made available to potential users.
For a service to fall within the Act:
- The service must be available to potential users.
- It must be provided for consideration (payment).
- It must not be free of charge.
- It must not arise from a contract of personal service.
The definition covers many sectors such as banking, transport, insurance, electricity supply, and similar services.
Contract of Personal Service vs Contract for Personal Service
The Act excludes contract of personal service but includes contract for personal service.
A contract of personal service exists when the service receiver can control both what work is done and how it is done.
Example: Employer–employee relationship or master–servant relationship.
A contract for personal service exists when the service provider decides how the work will be done, while the customer only specifies the result.
Example: Giving cloth to a tailor for stitching.
Only contract for personal service is treated as service under the Act.
Important Case Law
Smt. Laxmiben Laxmichand Shah v. Smt. Sakerben Kanji Chandan
In this case, a tenant filed a complaint against a landlord for failing to provide certain agreed facilities. The National Commission held that the case involved lease of immovable property and not hiring of services. Therefore, it did not fall under the Consumer Protection Act.
Shamsher Khan v. Rajasthan State Electricity Board
The complainant applied for an electricity connection for a flour mill. The Electricity Board delayed providing the connection. The court held that the Board had deficient service, and the complainant was treated as a consumer.
Distinction / Comparison
| Basis | Contract of Personal Service | Contract for Personal Service |
|---|---|---|
| Control over work | Service receiver controls what and how work is done | Service provider decides how work is done |
| Relationship | Employer–employee relationship | Professional or independent service |
| Covered under the Act | Not covered | Covered as service |
Practical Example
A person books a railway ticket after paying the fare. By paying the fare, the passenger hires the transport service.
If the railway authority fails to provide the promised service properly, the passenger can file a complaint under the Consumer Protection Act.
Summary
- A consumer of services is defined under Section 2(7)(ii) of the Consumer Protection Act, 2019.
- A person becomes a consumer when they hire or avail services for consideration (payment).
- A beneficiary of the service with the approval of the person hiring it is also treated as a consumer.
- Services provided free of charge or under a contract of personal service are excluded from the Act.
- Services used for commercial purposes are generally not covered.
- The Act protects consumers from deficient services in both public and private sectors.