DISTRICT CONSUMER DISPUTES REDRESSAL FORUM (CENTRAL) ISBT KASHMERE GATE DELHI
CC/236/2016
No. DF/ Central/
M/s. Bagrrys India Ltd.,
Though it’s Authorized Representative
Off.:- LG 11-4, Vasant Square Mall,
Vasant Kunj, New Delhi – 110 070
…..COMPLAINANT
VERSUS
M/s United India Insurance Company Ltd.,
Through The Circle/Regional Manager,
D.O – 7, 10203, Jamuna House,
Padam Singh Road, Karol Bagh,
New Delhi - 110005
…..OPPOSITE PARTY
Quorum : Ms. Rekha Rani, President
Mrs. Manju Bala Sharma, Member
Shri R.C. Meena, Member
ORDER
Rekha Rani, President
- Instant complaint has been filed by M/s. Bagrrys India Ltd. (in short the complainant) under section 12 of the Consumer Protection Act 1986 as amended up to date pleading therein that complainant took Marine Cargo Open Policy from the Opposite Party to dispatch 600 bags porridge jumbo white oats loose material from Delhi to Bangalore to Consignee i.e. M/s General Mills India Pvt. Ltd., C/o Sunil
Agro Foods Ltd., Plot N. 4- C, Hosakote Indus Area, Chokkahally, Hoskote, Bangalore – 560 114 vide Bill No. R0399 dated 25.06.2010 of Rs. 10,51,996/- (Rupees Ten Lakh Fifty One Thousand Nine Hundred and Ninety Six only) through Katex Carriers Pvt. Ltd., GR. No. 44899 DTAED 25.06.2010.The same material reached at Bangalore in wet condition.
On request of complainant UIICL DO-IV, Bangalore appointed Mr. Badri Prasad, Insurance Surveyor and Loss Assessor who conducted the survey and assessed the loss of Rs. 33,313/- for 19 bags only while the consignee had rejected the whole consignment due to fungus and smell. On request of complainant and follow up as mentioned at Page no. 3 to 9 of the complaint second surveyor namely Bhaskar Associates conducted the Final Survey Report of 600 bags of oats and assessed the final loss & damage of Rs. 9,46,796/- out of the total claim of Rs. 10,51,996/-.
Complainant persued its claim regarding rejection of complete lot of 600 bags of oats with OP who vide their letter dated 05.12.2014 raised objections which are merely dilatory. The objections which are listed at page no. 13 of complaint were satisfactorily replied but OP has unlawfully withheld the claimed amount. Hence the instant complaint seeking direction to OP to pay a sum of Rs. 9,66,231/- with interest at the rate of 18% p.a. Rs. 50,000/- as compensation for causing harassment, mental agony and Rs. 20,000/- as cost of litigation.
2. Notice of the instant complaint was issued to the OP who appeared and contested the claim vide its reply. The claim is contested on the ground that the
complainant is a registered company incorporated under the provisions of Companies Act and carrying on Commercial activities and as such complainant is not a consumer under section 2 (1) (d) of the Consumer Protection Act and therefore the complaint is not maintainable. It is also stated that OP did receive written request from the complainant for arranging survey of the damaged goods at Delhi after the same were received back for monitoring destruction of the damaged/rotten items. It is further submitted that under contract of insurance it is the duty of the complainant to give an opportunity to the OP for inspection of the returned goods/disposal/destruction/finalization of salvage. It is also stated that complainant did not give any clarification on the points raised by OP as detailed in the Written Statement/Reply. It is also stated that complainant has not satisfactorily answered as to how partial loss was converted into total loss
through second survey.
3. Both the parties filed their evidence by way of affidavits. They have also filed written arguments. We have heard Shri Ashutosh K. Singh Counsel for complainant. Shri Sanjay Kumar Counsel for OP.
4. Learned Counsel for the OP vehemently argued that Complainant is not a consumer and as such the complaint is not maintainable under the Consumer Protection Act. It is not disputed that complainant is a Company incorporated under the Companies Act. It is also on record that the complainant has sold 600 bags porridge jumbo white oats loose material to M/s. General Mills India Pvt. Ltd., C/o Sunil Agro Foods Ltd. Plot No. 4 –C, Hosakote Indus Area, Chokkahaly Hoskote, Bangalore – 560 114 who is a client of the complainant as mentioned in para 12 of complainant.
5. Now a question arises as to whether the complainant is a consumer to maintain the instant complaint before this forum for the redressal of its grievance.
6. The word 'consumer' has been defined under Section 2(1)(d) (i) 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 obtain 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 or partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person."
7. Clause (i) provides that one who buys any goods for a consideration is a Consumer but a person who obtains such goods for resale or for any commercial purpose, is not a consumer. The intention of the Legislature behind said definition of Consumer is that when the goods are exchanged between a buyer and the seller for commercial purpose or for resale, such commercial transactions are excluded from the purview of the Act.
The Supreme Court has discussed the term 'consumer' in the judgment reported in Laxmi Engineering Works v PSG Industrial Institute, II (1995) CPJ 1 (SC) = 1995 3 SCC 583, wherein it was held :
"The National Commission appears to have been taken a consistent view that where a person purchases goods 'with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit', he will not be a 'consumer' within the meaning of Section 2(d)(i) of the Act. Broadly affirming the said view and more particularly, with a view to obviate any confusion - the expression 'large scale' is not a very precise expression - Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance / Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression 'commercial purpose' - a case of exception to an exception. Let us elaborate : a person who buys a typewriter or a car and uses them for his personal use is certainly a 'consumer' but a person who buys a typewriter or a car for typing others' work, for consideration or for plying the car as a 'taxi', can be said to be using the typewriter / car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for 'commercial purpose' would not yet take the purchaser out of the definition of expression of expression 'consumer'. If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of 'self employment', such purchaser of goods is yet a 'consumer'. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, , he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e. by self-employment, for earning his livelihood, it would not be treated as a 'commercial purpose' and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a 'commercial purpose', to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., 'uses them by himself 'exclusively for the purpose of earning his livelihood ' and 'by means of self-employment' make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself by employing himself for earning his livelihood. A few more illustrations would serve to emphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer.
Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist / help him in operating the vehicle or machinery, he does not cease to be consumer). As against this, a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person, would not be a consumer".
8. Biilagi Sugar Mill Ltd. v. Kessels Engineering Works (P) Ltd., (2010) (II) CPJ 242 (NC)., Hon'ble National Commission observed thus :-
"3. From the facts narrated in the complaint, it is clear that the Turbine (T.G. Set) in question had been purchased by the complainant for commercial purpose and, purchase for commercial purpose is excluded under Section 2(1)(d) (i) of the C.P. Act.’’
9. In Vandana Global Limited vs M/s Jaypee Engg. & Hydraulics Complaint Case No.13/06 before Chhattisgarh State Consumer Disputes Redressal Commission, Pandri, Raipur (C.G.) complainant was a limited Company and dealt in the business of manufacturing Sponge Iron, Billets, Power, Ferro Alloys, Ferro Manganese, Metal Ferro Manganese, Silico Manganese, Metal Silico Manganese etc. State Commission vide its order dated 08.04.2013 observed that complainant purchased JP-Rok Machine for commercial purpose and thus complainant was not a Consumer and its request to direct OP to return the amount paid for defective product with interest and compensation was dismissed.
10. In Raj Agrawal vs G.M.V.E. complaint case No. 23/2009, complainant purchased 4 vehicles. Claim was filed in respect of each vehicle which was still in
warranty period and were not being repaired by the OP. OP submitted that the vehicle in question was purchased for commercial purposes and plied by the complainant for transportation business for earning profits and therefore he did not come under the category of a consumer. Chhattisgarh State Commission vide its order dated 11/12/2009 observed that :
“12. From the description of the complainant in the cause title of the complaint, it appears that the complainant is running the business in the name and style as Raj Agrawal and Company. The use of word “and company’’ shows that it was not only Mr. Raj Agrawal, who is owner of the company, but along with him some other persons are also there and so it has become a company of more than one person that is why along with the name of Mr. Raj Agrawal, “and Company” word has been used. In the Certificate of Registration of the vehicle also, name of the registered owner has been shown as “Raj Agarwal and Company’’. Thus, when the vehicle is property of a Limited Company, // 14 // having more than one person engaged in the affairs of the company, then it can never be said that any of the vehicle, was purchased by a person to earn his/her livelihood by self-
employment. When it is a question of Company, then profit earning motive, is self apparent.
13. In the whole of the complaint, it has nowhere been stated that vehicle was purchased or was being used by the complainant to earn his livelihood by self-employment or by employing drivers. In absence of any such averment in the complaint, no inference, can be drawn in favour of the complainant to that effect. It is also worth mentioning that in the affidavit of the complainant, nothing to that effect has been stated. His affidavit simply verifies the facts stated in the complaint without any further statement of facts. Therefore, this affidavit is also not sufficient to warrant conclusions that any of the vehicle was purchased not for commercial purpose, but for earning livelihood by self-employment.
14. Sec. 2 (1) (d) of the Act defines the word Consumer as under : ‘‘(d) ‘‘Consumer’’ means any person …. (supra).
15. This definition clearly shows that if any goods are purchased by a person who obtains such goods for resale or for any commercial purpose, then such purchase is excluded from
the definition of the word, ‘‘consumer’’ unless purchase is
exclusively for the purpose of earning livelihood by self employment. Similarly under section 2 (1) (d) (ii) of the Act, if any services are hired or availed by any person, for any commercial purpose, then unless it is shown that such hire or availment is exclusively for the purpose of earning livelihood by means of self employment, such person, who avail or hire such services, cannot be said to be “consumer”.
xxx xxx xxx
20. Counsel for the O.P.Nos.1 to 3, during the course of arguments has drawn our attention towards pronouncement of Hon‟ble National Commission in case of M/S EITHER MOTORS LTD. VS. DILIP CHANDRA KANT VAIDYA & ORS., FIRST APPEAL NO.365 OF 1999, decided on 07.11.2006. In that case two buses were purchased by the complainant from M/s Eicher Motors Ltd. The complainant was Proprietor of a Travel Agency and the Buses were used as tourist buses. It was found that the complainant does not come in the category of „consumer‟ as per definition of the Consumer Protection Act, 1986. Then complainant of
that complaint went to Hon‟ble Supreme Court and ultimately his Civil Appeal No(s) 5912 of 2006 was also dismissed by Hon‟ble Supreme Court vide order dated 16/03/2011.
xxx xxx xxx
23. The controversy regarding availing services during warranty period even when the goods was purchased by complainant for commercial purpose, has been set at rest by the Hon’ble Supreme Court now by the decision in the case of BIRLA TECHNOLOGIES LTD. VS. NEUTRAL GLASS AND ALLIED INDUSTRIES LTD., I (2011) CPJ 1 (SC). It has been ruled by the Hon’ble Supreme Court in paragraph No. 9 as under:-
// 20 //‘‘9. In view of the finding of the National Commission that the goods sold by the appellant to the respondent/complainant amounted to “goods” and that such goods were purchased for commercial purpose of earning more profits, there could be no dispute that even the services which were offered had to be for the commercial purpose. Nothing was argued to the contrary. It seems that the whole error has crept in because of the wrong factual observation that the complaint was filed on 01.08.2000. In that view, it has to be held that the complaint itself was not maintainable, firstly, on the count that under Section 2 (1) (d) (i), the goods have been purchased for commercial purposes and on the second count that the services were hired or availed of for commercial purposes. The matter does not come even under the Explanation which was introduced on the same day i.e. 15.03.2003 by way of the amendment by the same Amendment Act, as it is nobody’s case that the goods bought and used by the respondent herein were exclusively for the purpose of earning the respondent’s livelihood by means of self-employment. In that view, it will have to be held that the complainant itself was not maintainable in toto.
24. Thus it is clear that if goods are purchased for commercial purpose for earning more profits, then there would be no dispute that even services which were offered had to be for commercial purpose and in this circumstance, the compliant regarding any defect in the vehicle or any deficiency in service as per terms of the warranty, is not
maintainable, as the complainant is excluded from the definition of “consumer” as defined under section 2 (1) (d) (i) & (ii) of the Act.
xxx xxx xxx
27. Thus, all the aforesaid four complaints are dismissed as not maintainable before the Consumer Fora. However, on the request of learned counsel for the complainant, (liberty is granted to the complainant to file Civil Suit or other appropriate proceeding before a Competent Court or Forum, if so chosen by the complainant. In case of filing any Civil Suit or other proceeding before any other Forum, the complainant may very well get benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting proceeding under the Act while computing period of limitation prescribed for such Civil Suit or proceeding.) No order as to the cost of these complaints.’’
11. In this case complainant is a big company dealing in sale of its products. The
transaction in question is not aimed at earning livelihood by way of self employment.
The transaction in question is sale of goods of the complainant for making profits and
thus is a commercial transaction. Complainant is not a consumer. As such the
complaint is not maintainable before this Forum. Copy of this order be sent to the
parties as per rules. File be consigned to record room.
Announced this 29th day of July 2019.
