Facts of the Case
The case arose from a dispute between D.K. Gandhi and the appellant, an advocate, over a dishonored cheque of ₹20,000. Gandhi had engaged the advocate's services to file a legal complaint under Section 138 of the Negotiable Instruments Act, 1881. During the case, a settlement was reached, but Gandhi claimed that the advocate failed to deliver the settlement amount and instead filed a suit for recovery of ₹5,000, claiming it as his legal fees.

Gandhi subsequently filed a consumer complaint before the District Consumer Forum alleging a deficiency in service by the advocate. The District Forum ruled in favor of Gandhi, stating that the advocate's services fell under the definition of "service" in the Consumer Protection Act (CPA)​.

Court: Supreme Court of India
Citation: 2024 SCC Online SC 928
Judgment Date: May 14, 2024
Legal Issue: Applicability of the Consumer Protection Act (CPA) to services rendered by legal professionals (advocates).

Legal Issues:
The main legal issue in the case was whether legal services provided by advocates fall within the scope of the Consumer Protection Act, 1986 (and later, the Consumer Protection Act, 2019). Specifically, the case focused on whether advocates could be held liable for "deficiency in service" under the CPA.

Key Legal Questions Included:

• Whether legal services constitute a "service" as defined under Section 2(1)(o) of the CPA.
• Whether a professional-client relationship can be categorized as a "consumer" and "service provider" relationship, and thus be subject to the provisions of the CPA.
• Whether legal professionals, like advocates, can be treated on the same basis as traders or service providers of goods.

Lower Court Rulings:

• District Consumer Forum: The District Forum ruled in favor of Gandhi, stating that the services provided by the advocate could be adjudicated under the CPA for any deficiency in service.
• State Consumer Disputes Redressal Commission (SCDRC): On appeal, the State Commission held that legal services do not fall within the ambit of the CPA as advocates do not provide "services" as defined under Section 2(1)(o) of the Act.
• National Consumer Disputes Redressal Commission (NCDRC): The NCDRC overturned the State Commission's ruling, holding that complaints for deficiency in services by advocates could be maintained under the CPA.

Supreme Court's Ruling:

The Supreme Court overturned the NCDRC's ruling and held that the services rendered by advocates are not covered under the CPA. The Court reasoned that:

• Legal services provided by advocates fall under a "contract of personal service," which is excluded from the definition of "service" under the CPA.
• The legal profession is "sui generis" (unique in nature) and cannot be treated on par with commercial transactions between a business and a consumer.
• The role of an advocate often involves highly skilled and specialized work, where outcomes depend on many uncontrollable factors. As such, professional services provided by advocates do not amount to a "deficiency in service" under the CPA.

Key Legal Principles:

• Contract of Personal Service vs. Contract for Service: The Court emphasized the distinction between a "contract of personal service" (which involves a personal relationship between the parties, as in the case of advocates) and a "contract for service" (which involves a commercial relationship where services are rendered). The CPA excludes "contracts of personal service" from its purview.
• Professional Autonomy: The Court highlighted that legal services require a high degree of education, training, and proficiency, and outcomes are subject to external factors beyond the control of the advocate. This distinguishes legal professionals from traders or service providers under the CPA.

Impact of the Judgment
The ruling has significant implications for the legal profession and its accountability under consumer protection laws. By excluding legal services from the CPA, the Court reinforced the idea that legal professionals are governed by specialized codes of conduct, such as the Advocates Act, 1961, and that disciplinary actions for professional misconduct should be handled by the Bar Council and not consumer courts​

This decision also calls for reconsideration of earlier judgments, such as Indian Medical Association v. V.P. Shantha, which had included medical professionals under the CPA, and suggests that the inclusion of other professionals, such as doctors and lawyers, may require re-evaluation​

Conclusion
The case underscores the unique nature of the legal profession and establishes that legal services do not fall within the ambit of the CPA. The ruling affirms that while consumer protection laws are crucial for safeguarding the rights of consumers, they should not interfere with the professional autonomy of highly specialized professions like law.

This judgment also emphasizes the need for clear boundaries between professional services and commercial transactions to prevent the dilution of standards in professional ethics and client-attorney relationships.