JUSTICE DEEPA SHARMA (ORAL) THROUGH VIDEO CONFERENCING The present Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (substituted now) (for short “the Act”), has been filed by the M/s Bajaj Allianz General Insurance Company Limited (Opposite Party no.5 in the original Complaint) (hereinafter called as “the Insurance Company”) challenging the order dated 01.08.2012 of the State Consumer Disputes Redressal Commission, Andhra Pradesh (for short “the State Commission”) in Appeal No.1150 of 2010. The said Appeal was filed by the Respondents No.1 to 3 (Opposite Parties No.1 to 3 in the original Complaint, hereinafter called as “the sellers”) against the order dated 16.04.2010 of the District Consumer Disputes Redressal Forum-I, Hyderabad (for short “the District Forum”) in Complaint No.207 of 2009 filed by M/s Sri Srinivasa Dairy Products Private Limited, Respondent No.4 (hereinafter called as “the Complainant”). The District Forum held the sellers liable to compensate the Complainant for supplying the damaged machinery. By the impugned order, the State Commission modified the order of the District Forum, however dismissing the original Complaint qua the sellers and had directed the Punjab Tempo Transport Company, Respondent No.5 (Opposite Party No.4 in the original Complaint, hereinafter called as “the transporter”) and the Insurance Company, the Petitioner to compensate the Complainant for supplying the damaged machinery. 2. The brief admitted facts of the case are that the Complainant had placed an order of machine to be used in its business at Hyderabad. The sellers were to supply that machine to the Complainant at its factory at Hyderabad. The sellers transported the machinery through transporter. When the machine arrived at the premise of the Complainant and unloaded and opened, it was found damaged. The Complainant filed the Complaint against the sellers and also included the transporter and the Insurance Company as party to its Complaint. It claimed relief in its Complaint only against the sellers and the transporter. No relief was claimed against the Insurance Company. The established facts on record clearly show that the sellers while transporting the machine insured it with the Petitioner. The surveyor was appointed by the Insurance Company who also gave its report that the machine was damaged and assessed the loss to the Complainant at ₹2,08,385/-. The sellers in their written version had not disputed the facts that the machine was purchased by the Complainant and was to be delivered by them at Hyderabad and it is they who had engaged the service of the transporter and insured the machine with the Insurance Company. The sellers also took the plea that the Complaint was not maintainable because the machine was purchased for commercial purposes. 3. Parties led their evidences. Transporter was ex-parte before the District Forum. The Complainant and the Insurance Company filed their affidavits of evidence before the District Forum. However, the sellers did not file any affidavit of evidence before the District Forum, so did not lead any evidence. 4. The District Forum heard the arguments of the parties and gave the findings in favour of the Complainant and held the sellers solely responsible to compensate the Complainant. The District Forum rejected the contention of the sellers that the Consumer Complaint was not maintainable because the subject machine was purchased for commercial purposes. It has held as under: “8. xxxxxxxxxxxxxxxxxxxxxxxxx There is no dispute that the complainant paid ₹2,58,384/- to Opposite Parties 1 to 3 even by 21-11-2008 by depositing the same in HDFC bank of their account at Hyderabad. Opposite Parties 1 to 3 clearly admitted the same. It is also not in dispute that the said amount was paid towards cost of machine. So, the complainant had purchased the goods for consideration. So, the complainant is a ‘consumer’. It is the contention of the Opposite Parties that the machinery was purchased for making profit and that therefore the complainant cannot invoke the jurisdiction of the Consumer Forum. It is also argued that the goods since purchased for Commercial purpose, “the complainant cannot be considered as a consumer. It is clearly found in the explanation of Section-2 (I) (d) (i) that for the purpose of this clause, “commercial purpose” does not include use of the goods bought for earning his livelihood. The complainant positively pleaded and stated that they have been eking out their livelihood by doing business in dairy products only. Such an assertion has not been denied. When the machine was purchased for eking out his livelihood, the complainant is held to be a “consumer” within the meaning of the Consumer Protection Act and as such this Forum can entertain this Complaint” 5. The District Forum also considered the matter on merits and held as under: 10. Point No.III : - There is no dispute and infact it is admitted that the complainant placed the order for the machinery with opposite parties 1 to 3. The complainant wanted them to inform in advance the date and mode of transportation but opposite parties 1 to 3 did not care to do so. Nextly, it is the duty of the opposite parties 1 to 3, who received the cost of the machinery to see that the machinery is delivered to the consumer in a good condition. Admittedly, the entire machinery is found damaged at the time of delivery of it to the complainant. In fact the agent of opposite parties 1 to 3 himself personally inspected the consignment and noted that the machinery was in a total damaged condition. The surveyor of opposite party No.5 insurance company also observed the same. So, there is no dispute that opposite parties 1 to 3 having received the total cost of the machinery, failed to deliver the machine in a good and defect less condition. They should have taken proper care to deliver the machinery in a good condition. They did not find fault with the complainant but found fault with opposite party No.4 transporter. Of course, it is to be litigated separately by the opposite parties 1 to 3 with opposite party No.4 in a separate proceedings. Opposite party No.4 has no contract or agreement with the complainant. In other words there is no privity of contract between the complainant and opposite party No.4. The opposite parties 1 to 3 alone are accountable for the damage. The interse dispute between opposite parties 1 to 3 on one hand and opposite party No.4 on the other hand cannot be decided in this complaint as the issued involved is different and the scope of the complaint is limited. The opposite parties 1 to 3 were deficient and negligent in their services in handing over the machinery to the complainant. So, they have to refund the total amount of ₹2,58,384/- which they had received. They unnecessarly and illegally retained that amount for several months and as such they are liable to refund the said amount with interest @ 12% p.a. 11. We understand that the complainant who placed the order for the machinery to eke out livelihood, could not succeed in his efforts due to the negligence of the Opposite Parties 1 to 3. The complainant must have been put to severe hardship, agony and inconvenience. His plans must have totally disturbed. So, this is a fit matter where adequate compensation should be awarded to the complainant. However, we cannot separately award any compensation towards loss of expected business loss. The ends of justice would be met if we award the compensation of ₹50,000/- and costs of ₹5,000/-. 12. Point No.IV:- There is no privity of contract between the complainant and Opposite Party no.5. The policy was issued by Opposite Party no.5 to Opposite Parties 1 to 3. So, Opposite Party No.5 is answerable to Opposite Parties 1 to 3 and not to the complainant. It is a separate litigation to be sorted out between Opposite Parties 1 to 3 and Opposite Party NO.5. The complainant cannot attribute any deficiency in service on the part of the Opposite Party No.5, with whom he had no agreement for dealings. Similarly, the complainant also has no such contract or agreement with Opposite Party no.4. So, we cannot grant any relief against Opposite Parties 4 & 5. 13. Point No.V:- In the result, the complaint is allowed against Opposite Parties 1 to 3 only and not against Opposite Parties 4 & 5. Opposite Parties 1 to 3 are directed to refund ₹2,58,384/- (Two Lakhs Fifty Eight Thousand Three Hundred Eighty Four only) with interest @ 12% p.a. from 21/11/2008 till the date of payment. They are further directed to pay the compensation of ₹50,000/- (Rupees fifty thousand only) and costs of ₹5,000/- (Rupees five thousand only). For compliance 30 days’ time is granted.” 6. Aggrieved by this, the sellers filed the Appeal in which the impugned order has been passed. The State Commission has held as under: 16. The appellants are the consignors and the first respondent is the consignee. The second respondent issued “Damage Certificate” in favour of the consignor and the consignee. The certificate authorizes the first respondent-company to lodge claim against it in respect of loss or damage or destruction of the consignment. The plea of the appellants that first respondent-company purchased the machine for commercial purpose which does not permit it to invoke the provisions of the Consumer Protection Act. The second respondent insured the consignment with the third –respondent insurance company. The second respondent issued Damage Certificate on 17.01.2009 authorizing to claim against it in case of loss or damage to the machine. Therefore, the complaint is maintainable not only on the aspect of commercial purpose as also on the capacity of the first respondent company as the beneficiary of the second respondent to proceed against the third respondent-insurance company. 7. Vide the impugned order, the State Commission has made the Insurance Company and the transporter liable to compensate the Complainant and absolved the sellers of their liability. The State Commission has held as under: 18. In the result, the appeal is allowed setting aside the order of the District Forum. The opposite parties no.3 and 4 are directed to pay the amount of `2,58,384/-with interest 9% p.a. from the date of filling the complaint till payment together with costs of `5,000/-. The complaint against the opposite parties no.1 to 3 is dismissed. No costs. The parties shall bear their own costs in the appeal. Time for compliance four weeks. 8. Aggrieved by this direction, the Insurance Company has filed the present Revision Petition. 9. It is argued by learned counsel for the Petitioner Insurance Company that the State Commission has committed a gross error on facts and law while fixing the liability upon the Petitioner Insurance Company to compensate the Complainant. It is argued that there is no privity of contract between the Complainant and the Insurance Company since the goods were insured by the sellers to whom the goods were belonging at that time. It is further argued that even in the Complaint, the Complainant has not claimed any relief qua them. It is submitted that this is an illegality committed by the State Commission and the impugned order is, therefore, liable to be set aside. 10. It is argued by learned counsel for the sellers that it is the Insurance Company who is liable to compensate the Complainant since the Complainant is the beneficiary and therefore, the order of the State Commission does not suffer with any illegality. It is argued that the Complainant was not a consumer within the meaning of the Consumer Protection Act, 1986 and vide order dated 15.05.2017, this Commission had directed the Complainant to file an affidavit supplying the details of its business. The affidavit filed by the Complainant clearly shows that it has engaged about 20 persons and therefore, it cannot be said that it was self-employed. It is argued that the income of the Complainant was more than ₹77 Lakhs. It is argued that the Complaint itself is liable to be dismissed. 11. It is argued by the learned counsel for the Complainant that the contentions of the sellers are baseless. It is submitted that the Complainant has clearly pleaded that it had purchased this machinery for extension of its business and that the sellers have not produced any evidence on record to prove that the Complainant was dealing in the commercial activities of these machines. It is further argued that the privity of contract was between the Complainant and the sellers and that there is no evidence on record to show that in the insurance policy purchased by the sellers, the Complainant is named as beneficiary. It is submitted that the impugned order, therefore, suffers with gross illegality and is liable to be set aside. 12. I have heard the arguments of learned counsel for the parties and perused the relevant record and given thoughtful consideration to the arguments of learned counsel. The admitted facts are that the Complainant had placed an order of a machine which it purchased for running its business at Hyderabad. The machine was to be delivered by the sellers at Hyderabad. In order to get the machine delivered at Hyderabad, the sellers hired the service of the transporter. Also in order to ensure the value of the machine to be transported and to avoid any risk on way, the sellers had purchased a policy from the Petitioner. Although, it is argued by learned counsel for the sellers that the Complainant was a beneficiary in the said insurance policy, however, neither any evidence to this effect has been led nor any contention in the written version has been made by the sellers to this effect. The argument, therefore, is meritless. Even the policy, copy of which is placed on record, clearly shows that the seller is the beneficiary under the insurance policy. Hence, the argument of learned counsel is also contrary to the facts on record. Therefore, the privity of contract qua the insurance of the subject machine was between the sellers and the insurance company. The Complainant was not a party to this contract between the sellers and the Insurance Company. The State Commission has wrongly held the Insurance Company liable to pay the damages to the Complainant and absolved the sellers of their liability. 13. It is clear that the findings of the State Commission are factually incorrect and legally not sustainable. 14. Although, it is argued on behalf of the sellers that the Complainant was not a consumer and hence, the Complaint was not maintainable, no evidence has been led by them to prove that the Complainant was indulging into activities of purchase and sale of the machines which they had purchased from them. The Complainant in its Complaint and also in the affidavit has clearly stated that the Complainant is running a business of ice cream factory for earning livelihood and had purchased coolex ice cream scooping cabinet (flavour) model-6 x R12 which is a freezer for keeping the ice creams. Therefore, it is clear that the machine was purchased for business extension and that the Complainant was not dealing in the business of sale and purchase of the machines. While dealing with the issue of meaning of earning livelihood by means of self-employment, the Hon’ble Suprme Court in “Madan Kumar Singh (D) Thr. LRs vs. Dist. Magistrate, Sultanpur, (2009) 9 SCC 79” has held as under: “22. To deal with the question projected hereinabove in the aforesaid appeal, it is necessary to go through the definition of 'Consumer' as contained in Section 2(1)(d) of the Act. "2(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 [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. [Explanation- For the purposes of sub- clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self- employment;]" 23. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 24. A further reading of the aforesaid definition of 'consumer' makes it clear that Parliament wanted to exclude from the scope of the definition the persons, who obtain goods for resale and also those who purchase goods with a view to use such goods for carrying on any activity for earning. The immediate purpose as distinct from the ultimate purpose of purchase, sale in the same form or after conversion and a direct nexus with profit or loss would be the determinants of the character of a transaction-whether it is for a "commercial purpose" or not. Thus, buyers of goods or commodities for "self consumption" in economic activities in which they are engaged would be consumers as defined in the Act.” 15. This argument of learned Counsel for the sellers, therefore, has no merits and is hereby rejected. 16. The admitted facts are that the machine was to be delivered by the sellers at their factory at Hyderabad. The expression “delivery” is defined under the Sales and Goods Act, 1930. Under Section 2 (2), “delivery” means voluntary transfer of possession from one person to another”. Since the delivery was to be done at the premises of the Complainant at Hyderabad, unless it is delivered the possession is taken, the goods remain that of the seller. 17. It is also proved on record by the surveyor’s report that the goods were not in deliverable state at the time when they were delivered to the Complainant. Under Section 2 (3) of the Sales and Goods Act, 1930,“goods are said to be in a “deliverable state” when they are in such state that the buyer would under the contract be bound to take delivery of them”. Hence, there is deficiency in service on the part of the sellers. The sellers are liable under this contract of sale and purchase of the said machine. The insured according to the Insurance Company is the sellers. 18. From the above, it is apparent that the order of the State Commission suffers with illegality and infirmity. The order of the State Commission is set aside and the order of the District Forum shall bind the parties. The Revision Petition stands disposed of in these terms with no order as to costs. |