This appeal is directed against the order of the State Commission, Karnataka dated 24.8.2010 thereby the State Commission allowed the consumer complaint filed by the respondent/complainant and directed the petitioner Bank as under:-

“The complaint is allowed in part.

The OP Bank is directed to release the balance amount to the complainant as per the sanction of loan within two months from the date of receipt of the order.

The complainant on receipt of the said amount shall utilize the same for the purpose of establishing the poultry Farm, for which the loan was sanctioned.

The OP Bank is also directed to pay Rs.5,000/- to the complainant towards the costs of this proceedings”.

2.         Briefly stated, the facts relevant for the disposal of the appeal that respondent raised a consumer complaint dispute by filing a consumer complaint before the State Commission, Karnataka alleging that the respondent is a partnership firm. The respondent firm with a view to develop a poultry farm, approached the petitioner Bank for seeking finance. The opposite party No.1 after processing the loan application of the respondent, agreed to finance a sum of Rs.93,77,000/- to the  respondent/complainant against the security of the simple mortgage of land in favour of the Bank. Pursuant to the agreement, first instalment of loan, Rs.27,97,7777/- was released in favour of the respondent. After the utilisation of the said amount, the complainant/respondent  submitted the Utilisation Certificate dated 25.7.2006 issued by Sri S.V. Venugopal, Surveyor and sought for the release of further sum. The petitioner Bank failed to release the further amount of the loan without any justification. Claiming this to be deficiency in service, the respondent filed a consumer complaint with the following prayers:-

“WHEREFORE, complainant prays that this Hon’ble Commission may be pleased to summons the opposite parties and pass order directing them:

1. Directing opposite parties to release the balance of loan amount;

2. Pay a sum of Rs.500/- per day from 27.4.2007 to date on which opposite parties have received the utilization certificate to the date to release the further installments;

3. To direct the opposite parties if not release the remaining loan amount they have not to claim bank the money so far paid as utilization has become ineffective to give return;

4. To direct the opposite parties to grant additional loan amount of Rs.25,00,000/- and

5. Not to claim any interest with release further installments.And grant such other reliefs to complainants as the Hon’ble court commissioner may feel just in the interest of justice”.

    

3.         The opposite parties i.e. the Bank and its official filed a joint written statement. The OPs admitted that they had sanctioned a loan of Rs.93,77,000/- in favour of the respondent/complainant. According to the opposite party, the loan was to be disbursed in four parts depending upon the development and progress of the business of the complainant.  It was pleaded by the appellant Bank that in the first phase, loan of Rs.28,13,250/- was released to the complainant and as the complainant failed to submit Utilisation Certificate of the first instalment, the balance instalment was declined to be released. It is contended that under these circumstances, the petitioner Bank has not committed any deficiency in service besides the aforesaid allegations on merits. The petitioner Bank also took the preliminary objection that the consumer complaint is not maintainable, firstly, because the respondent/complainant is not a consumer and secondly that the relief claimed in the complaint being in the nature of specific relief cannot be entertained by a consumer Fora.

4.         The learned State Commission on consideration of pleadings and the evidence produced by the parties, partly allowed the complaint and directed the opposite party Bank to release the balance sanctioned loan within two months from the date of receipt of order and the complainant was also directed that on the receipt of the said amount, he shall utilise the same for the purpose of establishing the poultry farm. Rs.5,000/- was awarded as cost for litigation. Being aggrieved by the order of the State Commission, the appellant  has preferred the instant appeal. The appeal was filed after the expiry of 30 days limitation period with the delay of 120 days. The said delay was condoned vide order dated 28.5.2014.

5.         Learned Shri Rishi Kapoor, Advocate for the appellant/opposite party has contended that the impugned order of the State Commission is without jurisdiction. The State Commission has failed to appreciate that the respondent is not a consumer as envisaged under section 2(1) (d) of the Consumer Protection Act, 1986 and as such he had no locus-standi to raise a consumer complaint. Expanding on the argument learned counsel has contended that admittedly the complainant is a partnership firm and took the loan for business purpose. Therefore, in view of the exception carved out in the definition of consumer, the respondent cannot term as a consumer.

6.         Learned Shri Gururaj, Advocate on behalf of the respondent, on the contrary, has argued in support of the impugned order. He has contended that the respondent/complainant had taken the loan and availed the services of the Appellant Bank for the purpose of earning the livelihood by way of self-employment, therefore, he is covered under the Explanation to Section 2(1) (d) which gives a restricted meaning to the term “Commercial Purpose”.

7.         Section 2 (1) (d) of the Consumer Protection Act, 1986 defines the term consumer. The relevant definition is reproduced as under:

“(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 '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 purposes;

Explanation.— For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment.” 

8.         On reading of the above, it is clear that a person is a consumer who buys any goods or hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary.  However, in the definition, there is an exception that if the goods are bought or services are hired or availed for the commercial purpose, the said person would not be a consumer for the purpose of the Act.

9.         We have considered the rival contentions and perused the record. On perusal of the complaint, we find that in para 1, the complainant has categorically alleged that it is a partnership firm and it approached the opposite party for loan as the firm was interested in developing the poultry farm. From the above, it is clear that the complainant firm had approached the appellant/opposite party to raise a loan for establishing the poultry farm business. There is no allegation in the complaint that the loan was raised with the intention of exclusively earning the  livelihood by way of self-employment. Nor any evidence in this regard has been adduced by the respondent/complainant. Thus, it is clear that the services of the appellant Bank were availed for the commercial purpose.

10.       Learned counsel for the respondent has tried to wriggle out of the situation taking shelter of the explanation given in section 2 (1) (d) which gives restricted meaning to the term ‘commercial purpose’. The aforesaid explanation in our view is not of any help for the respondent. For the reason that the complainant has neither alleged nor led any evidence to show that the services of the Bank were hired by the complainant/respondent exclusively for the purpose of earning the livelihood by way of self-employment.

11.       In view of the discussion above, we are of the view that the complainant/respondent is not a consumer  and he could not have raised a consumer complaint. The State Commission has exceeded its jurisdiction in entertaining the consumer complaint filed by the complainant who is not a consumer. As the complaint itself is not maintainable, we are not going into the merits of the case.

12.       In view of the above, we allow the appeal, set aside the impugned order and dismiss the complaint.