SC says BOCW beneficiaries are ‘consumers’; welfare boards answerable under Consumer Forums for deficient service

Case name: The Joint Labour Commissioner and Registering Officer & Anr. v. Kesar Lal

Date of Order: 17 March 2020.

Citation: Civil Appeal No. 2014 of 2020 (arising out of SLP(C) No. 2150 of 2020); 2020 INSC 304

Bench: Dr D.Y. Chandrachud, J.; Ajay Rastogi, J. (Division Bench).

Held: A registered construction worker under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 is a “consumer” under Section 2(d) of the Consumer Protection Act, 1986; services rendered by the Welfare Board are not “free of charge” merely because worker contributions are modest or the schemes are substantially funded by cess. Deficiency in extending notified welfare benefits (such as marriage assistance) is therefore amenable to the Consumer Fora’s jurisdiction.

Summary: The respondent, a registered BOCW beneficiary in Rajasthan, applied on 6 November 2012 for marriage assistance of Rs. 51,000 for his daughter’s wedding fixed on 24 November 2012. Nine months later, the Joint Labour Commissioner rejected 327 applications en masse citing technical defects. His consumer complaint was dismissed by the District Forum but allowed in appeal by the State Commission (directing payment of Rs. 51,000, compensation and costs), and substantially affirmed by the National Commission which reduced interest from 18% to 9% per annum. In the Supreme Court, while the appellants paid the amount, they pressed the question of law that a BOCW beneficiary is not a “consumer” because the schemes are funded by cess and worker contributions are nominal; they relied on Bihar School Examination Board and GPF decisions to argue absence of quid pro quo and sovereign character. Appointed as amicus, Mr P.V. Dinesh countered that beneficiaries contribute to the Fund and the Board’s notified schemes constitute “service” under Section 2(1)(o). The Court surveyed the statutory scheme (registration, mandatory contributions, constitution and application of the Welfare Fund, and the Board’s welfare functions), reiterated the inclusive reach of “consumer” (including beneficiaries) under Section 2(d)(ii), and emphasized purposive interpretation and public accountability. Referring to the dismal national record of cess utilisation for construction workers, the Court held that services are not “free” merely because contributions do not cover full cost; what matters is that some consideration is paid and the services are availed pursuant to notified schemes. Consequently, BOCW Boards’ failures in processing eligible claims can be tested for “deficiency in service” before Consumer Fora.

Decision: Appeal dismissed; the consumer fora’s direction to pay the marriage assistance stands (with the National Commission’s reduced interest), and no order as to costs.