Disputes relating to Employees' Provident Fund (EPF) arising out of an employer–employee relationship, do not fall under Consumer Protection Act
“Disputes relating to Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) benefits, arising out of an employer–employee relationship, do not constitute consumer disputes under the Consumer Protection Act. observing that an employee is not a “consumer” within the meaning of Section 2(1)(d) of the Act.”
State Consumer Dispute Redressal Commission Delhi
Jai Prakash Malik v/s Baba Chaurangi Nath Pvt. Ltd
Dated 05.01.2026
Facts
The complainant was employed with Baba Chaurangi Nath Pvt. Ltd. Delhi, and was drawing a monthly salary of ₹7,410. He alleged that his employer failed to deposit statutory contributions on his behalf under the EPF and ESI Schemes and this way was denied social security benefits.
Jaiprakash Malik filed a consumer complaint alleging deficiency in service and unfair trade practice against the Employees’ Provident Fund Organisation (EPFO – OP No.1) and the Employees’ State Insurance authorities (ESI – OP No.2. It is alleged by the complainant that in connivance with the OP his employee got succeeded in not paying in the EPF Scheme on behalf of his employee. He further states that he is entitled for the EPF Scheme issued by the Govt. of India, however due to the deficiency on the part of OP as well as in connivance of the official of the OP with his employer he was deprived of the same which amounts to unfair trade practice on the part of the OP, hence this complaint.
The District Consumer Commission dismissed the complaint, holding that disputes between an employer and employee concerning statutory benefits do not fall within consumer jurisdiction and that the complainant was not a “consumer” under Section 2(1)(d) of the Consumer Protection Act. Liberty was granted to the complainant to approach the appropriate forum under law.
Challenging this decision, the complainant filed the present first appeal before the Delhi State Consumer Disputes Redressal Commission, primarily reiterating his claim for ESI unemployment allowance, medical benefits, and monetary compensation following his termination in December 2012.
The opposite parties, including the EPFO and the ESI authorities, supported the impugned order and contended that the dispute raised by the appellant arose purely out of an employer–employee relationship and pertained to statutory benefits, which fall outside the scope of consumer jurisdiction.
It was submitted that the appellant was not a “consumer” under Section 2(1)(d) of the Consumer Protection Act and that no deficiency in service could be alleged against the statutory authorities.
Section 2(1)(d) of the Act defines the term “Consumer” as under: 2 (1) (d) “Consumer” means any person who-
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 defined payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale of for any commercial purpose; or
[hires or avails of] any services for a consideration which has been paid or promised or partly paid any partly promised, or under any system of deferred payment and includes any beneficiary or such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid any 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];
Undisputedly, in the present complaint, the complainant was the employee of Baba Chaurangi Nath Pvt. Ltd., Peeragarhi, Delhi, this being a dispute between the employer and the employee, would not fall within the purview of service to attract beneficial provision incorporated under Consumer Protection Act.The judicial precedence of the National Commission have cautioned us not to embark upon for adjudication in the matters which are not consumer disputes. (Reliance is placed upon the judgement of Hon’ble National Commission titled as Maharashtra State Electricity Board and Representatives Vs Madhukar Vithal Kale through Lrs and Ors, 1 (2010) CPJ 20(NC).
The case, Maharashtra State Electricity Board & Representatives Vs. Madhukar Vithal Kale (since deceased) through LRs & Ors., 1 (2010) CPJ 20 (NC), is a significant consumer forum case, notable for establishing that a government employee cannot bring disputes about retiral benefits (like gratuity or GPF) to consumer forums, as they fall outside the definition of ‘consumer’ under the Consumer Protection Act, directing them to tribunals or civil courts instead. This principle, reinforced by Supreme Court rulings, clarifies jurisdiction, emphasizing that consumer forums handle service deficiencies, not service-related service benefits for government employees.
The opposite parties further argued that the appellant had failed to point out any legal infirmity or jurisdictional error in the order passed by the District Commission, rendering the appeal liable to be dismissed.
It noted that in the present appeal, the appellant had not challenged this core finding. Instead, he merely reiterated his claims regarding ESI benefits, unemployment allowance, and compensation, without demonstrating any legal error in the District Commission’s order
Since the appeal failed to raise any valid ground to dispute the finding that the matter was not a consumer dispute, the Commission held that the District Commission had rightly dismissed the complaint.
Accordingly, the appeal was dismissed, and the order of the District Commission was upheld.
By Dr Prem Lata
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