Law Notify, January 05, 2026 : The Delhi State Consumer Disputes Redressal Commission has reaffirmed that disputes relating to Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) benefits, when arising from an employer–employee relationship, do not qualify as consumer disputes under the Consumer Protection Act. Dismissing a first appeal filed by Jai Prakash Malik, the Commission held that an employee does not fall within the definition of a “consumer” under Section 2(1)(d) of the Act and that consumer fora lack jurisdiction over such statutory employment disputes.
The appeal, registered as FA-195/2022, was decided by a Bench of Justice Sangita Dhingra Sehgal (President) and Bimla Kumari (Member). Upholding the order of the District Consumer Commission, the State Commission found no reason to interfere with the conclusion that claims relating to EPF and ESI benefits must be pursued before the appropriate statutory or labour forums.
Background of the dispute
According to the facts recorded in the judgment, the appellant was employed with Baba Chaurangi Nath Pvt. Ltd., Delhi, and was drawing a monthly salary of ₹7,410. He alleged that despite being eligible for EPF and ESI coverage, he was deprived of benefits because his employer, allegedly in connivance with the authorities, failed to deposit statutory contributions on his behalf. Claiming denial of social security benefits, the appellant alleged deficiency in service and unfair trade practice.
Aggrieved, he approached the District Consumer Commission by filing a consumer complaint against the Employees’ Provident Fund Organisation (EPFO) and the ESI authorities. The EPFO contested the complaint, stating that the complainant was never covered under the EPF Scheme, 1952, and was an excluded employee under the relevant provisions. It was further argued that no case of deficiency in service or unfair trade practice was made out.
Findings of the District Commission
After examining the record, the District Commission dismissed the complaint, holding that the dispute was essentially between an employer and an employee concerning statutory benefits. It observed that such disputes do not constitute “service” within the meaning of the Consumer Protection Act and that the complainant did not qualify as a “consumer” under Section 2(1)(d). The Commission granted liberty to the complainant to approach the appropriate forum under law.
State Commission’s decision on appeal
Challenging this order, the appellant filed a first appeal before the State Commission, reiterating claims relating to ESI unemployment allowance, medical benefits, and monetary compensation following his termination in December 2012. However, the State Commission noted that the grounds of appeal did not specifically challenge the core finding of the District Commission on lack of consumer jurisdiction. Instead, the appeal largely set out a breakup of alleged dues and benefits.
The State Commission observed that the District Commission had clearly held that the appellant was an employee and not a consumer, and therefore the consumer forum was not empowered to adjudicate disputes relating to employment and statutory benefits. It further noted that the appellant failed to point out any legal infirmity or jurisdictional error in the impugned order. As recorded in the judgment, the contents of the appeal did not carve out any ground for challenging the District Commission’s reasoning, but merely reiterated the claims already made.
Finding no merit in the appeal, the State Commission dismissed it and upheld the order of the District Consumer Commission. The decision once again underscores that disputes relating to EPF and ESI benefits, arising out of an employer–employee relationship, fall outside the ambit of consumer jurisdiction and must be addressed before the competent statutory authorities or courts.
Cause Title: Jai Prakash Malik v. ESI & Anr.
Case No.: FA-195/2022
Coram: Justice Sangita Dhingra Sehgal (President) and Bimla Kumari (Member)
