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.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 2014 of 2020
(Arising out of SLP(C) No 2150 of 2020)
The Joint Labour Commissioner and
Registering Officer and Anr Appellants
Versus
Kesar Lal Respondent
J U D G M E N T
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.
1 Act of 1996
2
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.
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
2 Rules of 2009
3
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’,
non-correctness 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 nonsubmission 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
3 District Forum
4 State Commission
5 National Commission
4
percent per annum. The present appeal has arisen from the order of the National
Commission.
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

  1. 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
    6 The Cess Act
    5
    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;
    (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;
    6
    (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 ‘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
    7
    (2009) 8 SCC 483
    8
    (2000) 1 SCC 98
    7
    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;
    9
    (2008) 7 SCC 111
    10 Civil Appeal No 8472 of 2019
    8
    (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
    9
    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 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.
    11 2020 SCC Online SC 132
    10
    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 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
    12 (1994) 1 SCC 243
    13 (2019) 9 SCC 83
    14 (2018) 5 SCC 607
    11
    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 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
    12
    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 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
    13
    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 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
    14
    and used by him and services availed by him exclusively for
    the purposes of earning his livelihood by means of selfemployment; ]”
    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 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
    15
    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
    15 (2005) 2 SCC 479
    16
    fee and an extension fee on a challenge that there was a 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.”
    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;”
    17
    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. Such statutory dues might be charged as a quid pro
    quo for a privilege conferred or for a service rendered by the
    authority. As noted above, there are exactions which are for
    the common burden, like taxes, there are dues for a specific
    purpose, like cess, and there are dues in lieu of a specific
    service rendered. Therefore, it is clear from the above
    discussion that not all statutory dues/exactions are amenable
    to the jurisdiction of the consumer forum, rather only those
    exactions which are exacted for a service rendered, would be
    amenable to the jurisdiction of the consumer forum.”
    A Bench of two learned judges has in Canara Bank elaborated upon the width of the
    definition contained in Section 2(d)(ii) in relation to the availing or hiring of services.
    Justice Deepak Gupta, speaking for the Bench, held:
    “..As far as the definition of the consumer in relation to hiring
    or availing of services is concerned, the definition, in our view,
    is much wider. In this part of the section, consumer includes
    not only the person who has hired or availed of the services but
    also includes any beneficiary of such services. Therefore, an
    insured could be a person who hires or avails of the services
    of the insurance company but there could be many other
    persons who could be the beneficiaries of the services. It is not
    necessary that those beneficiaries should be parties to the
    contract of insurance. They are the consumers not because
    they are parties to the contract of insurance but because they
    are the beneficiaries of the policy taken out by the insured.”
    The Court consequently came to the conclusion that a beneficiary of a service, in the
    context of a contract of insurance, need not be a party to the contract. Beneficiaries fall
    within the purview of the expression ‘consumer’.
    18
    In Bihar School Examination Board, the question before the Court was whether a
    statutory School Examination Board falls within the purview of the Consumer Protection
    Act 1986 when it performs a statutory function of conducting examinations. A two judge
    Bench of this Court held that the fee paid by a student to the Board for the conduct of
    examinations does not amount to a ‘consideration’ paid for a service. Justice Markandey
    Katju, speaking for the Court observed:
    “When the Examination Board conducts an examination in
    discharge of its statutory function, it does not offer its “services”
    to any candidate. Nor does a student who participates in the
    examination conducted by the Board, hire or avail of any
    service from the Board for a consideration. On the other hand,
    a candidate who participates in the examination conducted by
    the Board, is a person who has undergone a course of study
    and who requests the Board to test him as to whether he has
    imbibed sufficient knowledge to be fit to be declared as having
    successfully completed the said course of education; and if so,
    determine his position or rank or competence vis-à-vis other
    examinees. The process is not, therefore, availment of a
    service by a student, but participation in a general
    examination conducted by the Board to ascertain whether
    he is eligible and fit to be considered as having
    successfully completed the secondary education course.
    The examination fee paid by the student is not the
    consideration for availment of any service, but the charge
    paid for the privilege of participation in the examination.”
    (Emphasis supplied)
    In Shreepat Rao Kamde, the issue before the Court was whether a subscriber to the
    General Provident Fund fulfills the definition of being a ‘consumer’ within the meaning of
    the Consumer Protection Act 1986. The issue had been considered in an earlier decision
    of this Court in Jagmittar Sain Bhagat v Director, Health Services, Haryana17
    , and
    17 (2013) 10 SCC 136
    19
    was answered in the negative, holding that a government servant is entitled to claim
    retiral benefits strictly in accordance with the regulations governing the conditions of
    service and the statutory rules for which the appropriate forum for redressal would be the
    State Administrative Tribunal, if any, or the civil court but not the consumer forum. It was
    held thus:
    “…it is evident that by no stretch of imagination can a
    government servant raise any dispute regarding his
    service conditions or for payment of gratuity or GPF or any
    of his retiral benefits before any of the forum under the
    Act. The government servant does not fall under the
    definition of a “consumer” as defined under Section
    2(1)(d)(ii) of the Act. Such government servant is entitled to
    claim his retiral benefits strictly in accordance with his service
    conditions and regulations or statutory rules framed for that
    purpose. The appropriate forum, for redressal of any of his
    grievance, may be the State Administrative Tribunal, if any, or
    the civil court but certainly not a forum under the Act.”
    (Emphasis added)
    This decision was followed by the two judge Bench in Shreepat Rao Kamde. Justice
    Uday Umesh Lalit noted that in view of the earlier decision, a consumer complaint in
    regard to the dues payable under the GPF was not amenable under the Consumer
    Protection Act 1986.
    13 Now it is in this context that it is necessary to briefly advert to the provisions of the
    Act of 1996. The expression ‘beneficiary’ is defined in Section 2(b) 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’. Section 11 speaks of the beneficiaries of the fund:
    20
    “11. Beneficiaries of the Fund:-Subject to the provisions of
    this Act, every building worker registered as a beneficiary
    under this Act shall be entitled to the benefits provided by the
    Board from its Fund under this Act.”
    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. Section 16 requires a building
    worker who has been registered as a beneficiary to make a contribution:
    “16. Contribution of building workers:- (1) A building worker
    who has been registered as a beneficiary under this Act shall,
    until he attains the age of sixty years, contribute to the Fund at
    such rate per mensem, as may be specified by the State
    Government, by notification in the Official Gazette and different
    rates of contribution may be specified for different classes of
    building workers:
    Provided that the Board may, if satisfied that a beneficiary is
    unable to pay his contribution due to any financial hardship,
    waive the payment of contribution for a period not exceeding
    three months at a time.
    (2) A beneficiary may authorise his employer to deduct his
    contribution from his monthly wages and to remit the same,
    within fifteen days from such deduction, to the Board.”
    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 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 18 provides for the constitution of the State Welfare Boards. Section
    22 provides for the functions of the Board in the following terms:
    “22. Functions of the Boards:-(1) The Board may—
    (a) provide immediate assistance to a beneficiary in case of
    accident;
    21
    (b) make payment of pension to the beneficiaries who have
    completed the age of sixty years;
    (c) sanction loans and advances to a beneficiary for
    construction of a house not exceeding such amount and on
    such terms and conditions as may be prescribed;
    (d) pay such amount in connection with premia for Group
    Insurance Scheme of the beneficiaries as may be prescribed;
    (e) give such financial assistance for the education of children
    of the beneficiaries as may be prescribed;
    (f) meet such medical expenses for treatment of major
    ailments of a beneficiary or, such dependent, as may be
    prescribed;
    (g) make payment of maternity benefit to the female
    beneficiaries; and
    (h) make provision and improvement of such other welfare
    measures and facilities as may be prescribed.
    (2) The Board may grant loan or subsidy to a local authority
    or an employer in aid of any scheme approved by the State
    Government for the purpose connected with the welfare of
    building workers in any establishment.
    (3) The Board may pay annually grants-in-aid to a local
    authority or to an employer who provides to the satisfaction of
    the Board welfare measures and facilities of the standard
    specified by the Board for the benefit of the building workers
    and the members of their family, so, however that the amount
    payable as grants-in-aid to any local authority or employer
    shall not exceed—
    (a) the amount spent in providing welfare measures and
    facilities as determined by the State Government or any
    person specified by it in this behalf, or
    (b) such amount as may be prescribed.
    whichever is less:
    Provided that no grant-in-aid shall be payable in respect of
    any such welfare measures and facilities where the amount
    spent thereon determined as aforesaid is less than the
    amount prescribed in this behalf.”
    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
    22
    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:
    “45. Contribution to the Fund.-(1) A beneficiary of the fund
    shall contribute to the fund at such rate per mensem as may
    be notified by the State Government under section 16 of the
    Act. This contribution shall be remitted in advance once in
    three months in any of the banks specified by the Board in the
    district in which the member resides.
    (2) If a beneficiary commits default in the payment of
    contribution continuously for a period of one year, he shall
    cease to be beneficiary of the Fund. However, with the
    permission of the Secretary or an officer authorized by him in
    this behalf the membership may be resumed on repayment of
    arrears of contribution with a fine of Rs 2 per month subject to
    the condition that such resumption shall not be allowed more
    than twice.”
    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
    23
    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 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. As we have seen from 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.
    14 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
    24
    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.
    15 Consequently, and for the reasons that we have indicated, 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. The
    appeal shall accordingly stand dismissed. There shall be no order as to costs.

………………………….……………………..J.
[Dr Dhananjaya Y Chandrachud]
…..…..…….………..……………….………..J.
[Ajay Rastogi]
New Delhi;
March 17, 2020.