UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD. & ANR. V/S M/S. NEW MARK KNITWEARS - Consumer Court Case

NCDRC

CC/2990/2017

M/S. NEW MARK KNITWEARS - Complainant(s)

Versus

UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD. & ANR. - Opp.Party(s)

MR. HIMANSHU UPADHYAY

25 Apr 2023

ORDER


NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI


CONSUMER CASE NO. 2990 OF 2017

1. M/S. NEW MARK KNITWEARS
(Through its Prop. Deepak Sharma) R/o E-14,/253, Maskin Nagar,
Ludhiana
Punjab

...........Complainant(s)

Versus

1. UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD. & ANR.
R/o 201-208, Crystal Plaza, Opp., Infiniti Mall, Link Road, Andheri West,
Mumbai - 400058
Maharashtra

...........Opp.Party(s)

BEFORE:
	HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT

For the Complainant :

Mr. Himanshu Upadhyaya, Advocate
Ms. Riya Pandey, Advocate

For the Opp.Party :

Mr. D. Varadarajan, Advocate

Dated : 25 April 2023

ORDER

1.The present Consumer Complaint has been filed under Section 12 of the Consumer Protection Act, 1986 (for short “the Act”)byM/s New Mark Knitwears (hereinafter referred to as the Complainant Company) against Opposite Party, i.e., Universal Sompo General Insurance Co. Ltd. (hereinafter referred to as Opposite Party Insurance Company).

2.The brief facts of the case are that the Complainant Company is engaged in the business of Hosiery Blazer, Coats, Pullovers, Pants, Shirts, School Uniform, Cardigan, Woolen Material etc. since 2002. The Complainant Company used to purchase the raw material from Amritsar, Ludhiana, Ahemdabad, Hoshiarpur, Aligarh, Delhi and after getting the raw materials for fabrication, the Complainant used to store the readymade material in the godown. The Complainant Company opened OD account with Indian Overseas Bank. The Complainant Company obtained Insurance Policy No. 2114/52264622/03/000 on 22.01.2015 for covering the risk of ₹11,00,000/- towards Building and ₹80,00,000/- towards stock from the Opposite Party Insurance Company. Vide endorsement letter dated 24.10.2015 by getting additional insurance from the Opposite Party Insurance Company, the Complainant Company, revised the sum insured from ₹91,00,000/- to ₹1,50,00,000/-, i.e., (₹20,00,000/- towards Building and ₹1,30,00,000/- towards Stock). The Complainant Company after clearing all the dues of the Indian Overseas Bank, closed its OD Account and was directly dealing with the Opposite Party Insurance Company. During the currency of the Policy, in the midnight between 11.11.2015 and 12.11.2015 at around 3:00 hrs on Diwali night, fire broke out in the godown of the Complainant situated at BE-14/253, Maskin Nagar, Bohra, Jalandhar Bye Pass, Ludhiana, Punjab. The incident was reported to the Fire Brigade, which controlled the fire. The Opposite Party Insurance Company was also informed on 12.11.2015 by making a call at the help line number provided in the cover note as also by communicating in the Ludhiana Office of the Opposite party Insurance Company. The Insurance Company provided the telephone number of Surveyor, i.e., M/s. Mehta & Co.(hereinafter referred to as the Surveyor). On repeated request by the Complainant Company the Surveyor visited the spot on 14.11.2015 & 17.11.2015. The incident was also reported to the Police. The office of Assistant Divisional Fire Officer, Ludhiana, Punjab submitted the Fire Incidence Report on 18.11.2015.It is alleged that due to the fire incident, the Complainant Company suffered a loss of about ₹1,18,50,000/- towards damages to the stock and ₹50,00,000/- towards damages of the building. The Complainant Company lodged the insurance claim with the Opposite Party Insurance Company. The Insurance Company appointed the Truth Labs to investigate and assess the damages. The investigation team of ‘Truth Labs’ comprising of Assistant Director and Scientific Officer visited the spot on 17.11.2015 for verifying the damages. It was averred that certain documents which were burnt in the accident, could not be furnished to the Truth Labs. Despite providing the documents/information, i.e., relevant documents related to the stock and raw material, the report of the Excise and Taxation Department, Income Tax Return, the copies of the Bills/invoices, Police report, account statement of the Banks, balance sheets and Profit & Loss account etc., the Opposite Party Insurance Company neither provided the copy of the report of the surveyor nor did it settle the claim of the Complainant Company.Alleging deficiency in service and unfair trade practice on the part of the Opposite Party Insurance Company, the Complainant Company has filed the present Complaint seekingfollowing reliefs:-

“a) Direct the OP to pay a sum of ₹1,35,00,000/- (Rupees One Crore Thirty Five Lac only) along with the interest @18 % till the date of realization;

b) Direct the OP to pay a sum of ₹50,00,000/- towards damages to the building along with the interest @18% from the date of realization;

c) Direct the OP to pay a sum of ₹10,00,000/- to the Complainants for causing undue mental and physical pain, agony and harassment to the Complainant;

d) Direct the OP to pay ₹5,00,000/- on account of the cost and Litigation Expenses;

e) To pass such other order(s) which the Hon’ble Commission as deems fit and proper in the facts and circumstances of the case in favour of the complainants and against the OP.”

3.The Opposite Party Insurance Company contested the Complaint by filing the Written Statement in which it was stated thatas per the terms and conditions of the Policy, for the purpose of carrying out proper investigation and survey of the alleged loss, the Complainant was duty bound to provide all relevant documents and information to the Surveyor, however, the Complainant failed to do so as was evident by exchange of various emails and letters sent to the Complainant by the Surveyor and the Opposite Party. It was stated that Complainant had falsely claimed that it provided all the relevant documents to the Opposite Party and the Surveyor. It was further submitted that Investigator, vide Report dated 23.02.2016, analysed that the fire incident was not due to any short circuit, or any accident of any such nature, but, caused by extraneous flammable and ignitable fire accelerants close to the category of kerosene or diesel oil at multiple locations in the insured premises. Investigator concluded that the fire took place due to extraneously poured ignitable fire accelerants at multiple locations in the insured premises, and then deliberately setting them on fire, in the process of stage managing an incident of fire, making it a clear case of arson. It was submitted that as per the General Condition No. 6 of the Policy, the Complainant was required to intimate loss to the Opposite Party as soon as possible and further was required to provide all details and particulars of any loss suffered, which he failed to do. It is further submitted that as per the General Condition No. 8 of the Policy, all benefits under the policy stood forfeited if the claim was found to be fraudulent or if any false declaration or fraudulent devices were used by the insured to avail any benefit under the policy, which is the case in the present matter.

4.Mr. Himanshu Upadhyaya, learned Counsel appearing on behalf of the Complainant submitted that the Surveyor as well as the Opposite Party arbitrarily mentioned that the documents essential for releasing the claim amount were demanded again and again, however, the same had already been provided for. Further, it was argued that that the documents which were available with the Complainant were sent to the Opposite Party in time and the report of the Surveyor and Investigator was manipulated and not in accordance with the IRDA guidelines. He submitted that the reports of the Truth Lab Forensic Services and the Report of the Surveyor dated 8.8.2016 came to the knowledge of the Complainant only when these were submitted along with the reply/written statement made by the Opposite party. It was urged that the Truth Foundation Report discussed about various issues like burnt debris, godown and the effected premises of the Complainant however, the same were not taken into consideration while drawing the conclusion. It was submitted that it is an admitted fact that there were clothes made of synthetic, cotton and polyestar material which were burnt during the fire and there was also cotton linen which had high burning rate. Therefore, the conclusion drawn that the typical hydrocarbon derived from kerosene or diesel was totally baseless. In conclusion, learned Counsel for the Complainant submitted that the Opposite party’s act amounted to 'deficiency in services' & unfair trade practice as it failed to discharge their services due to which the Complainant had to face huge financial loss and the said acts were illegal and prohibited under the Consumer Protection Act. Consequently, since the Complainant was a consumer and had taken the Policy in question to indemnify the losses, the Opposite Party Insurance Company is duty bound to indemnify the loss. It was prayed that the Consumer Complaint be allowed in terms of the Prayer clause of the Complaint.

5.Per contra Mr. D. Varadarajan, learned Counsel for the Opposite Party Insurance Company submitted that the Complainant was not a 'consumer' to invoke the original jurisdiction of this Commission as the Complaint was silent as to whether the Complainant availed the services of the Opposite Party exclusively for the purposes of earning his livelihood by means of self-employment. It was urged that the Complainant had not approached this Commission with clean hands, reliance was placed on its reply which detailed the various acts of omission, commission and indifference to the letters/communications and requirements of the surveyor/Opposite party and Complainant’s failure to produce required records and documents even after 9 months, compelling the Opposite party to close the case. He further submitted that the Insurance Policy clauses cannot be interfered with even on equitable consideration, as that would amount to rewriting the Policy Contract entered into between the insured and the insurer, and that there cannot be any extra-liberalism in construing policy terms and conditions. It was argued that in a contract of insurance effected for indemnity of loss, the insured had to prove the loss by leading cogent evidence and materials, and that the Complainant clearly failed to do so as not a single piece of relevant material was placed on record by him. Relying on General Condition Nos. 6 and 8 of the Policy it was contended that the Opposite Party had taken a reasoned decision to close the claim, based on the Forensic Report of Truth Labs, a reputed forensic investigating agency, which had been duly considered by the Surveyor in his final Survey Report. Further, relying on its eloquent letter dated 06.12.2016 it was urged that the same would make it clear that there is neither a case nor a cause of the Complainant, and that the Complainant had only filed this speculative Complaint and therefore, it deserved to be dismissed with heavy costs for abusing the process of law.It was further contended that there was no deficiency in service on their part and prayed that the Consumer Complaint be dismissed.

6.I have heard Mr. Himanshu Upadhyaya, learned Counsel for the Complainant Company, Mr. D. Varadarajan, learned Counsel for the Opposite Party Insurance Company and perused the Complaint, Written Statement, the documents filed by the respective Parties and have given a thoughtful consideration to the various pleas raised by them.

7.As far as the preliminary objection regarding maintainability of the present Complaint raised by the Opposite Party Insurance Company, is concerned, it may be observed that the Hon’ble Supreme Court in the Case of Common Cause, A Registered Society Vs. Union of India And Ors., (1997) 10 SCC 729, has held that the object of the legislation, i.e. Consumer Protection Act, 1986, is for better protection of the interests of consumers. Paragraph No.1 and relevant portion of Paragraph No.2 of the said Judgment are reproduced below for ready reference:

“The Consumer Protection Act, 1986 (Act 68 of 1986) received the assent of the President on 24-12-1986. This legislation was enacted for the protection of the interests of the consumers and for that purpose to provide for the establishment of Consumer Councils and other authorities for the settlement of consumers' disputes and matters connected therewith. Section 1(3) thereof provided that it shall come into force on such date as the Central Government will provide by notification. Since different dates could be appointed by different States and for different provisions the provisions of the Act did not come into force on a single date in the entire country. The provisions contained in Chapters I, II and IV were brought into force by the Central Government w.e.f. 15-4-1987 and Chapter III from 1-7-1987. The Consumer Protection Rules, 1987 made under Section 30(1) of the Act were also brought into force w.e.f. 15-4-1987. For the sake of brevity these two pieces of legislations shall hereafter be referred to as “the Act” and “the Rules”, respectively.

2. The object of the legislation, as the Preamble of the Act proclaims, is “for better protection of the interests of consumers”. During the last few years preceding the enactment there was in this country a marked awareness among the consumers of goods that they were not getting their money's worth and were being exploited by both traders and manufacturers of consumer goods. The need for consumer redressal fora was, therefore, increasingly felt. Understandably, therefore, legislation was introduced and enacted with considerable enthusiasm and fanfare as a path-breaking benevolent legislation intended to protect the consumer from exploitation by unscrupulous manufacturers and traders of consumer goods. A three-tier fora comprising the District Forum, the State Commission and the National Commission came to be envisaged under the Act for redressal of grievances of consumers. …”

8.The Hon’bleSupreme Court in the Case of Imperia Structures Ltd. Vs. Anil Patni And Anr., (2020) 10 SCC 783, has held that the remedies available under the provisions of Consumer Protection Act, 1986 are additional remedies over and above other remedies including those made available under any special statutes and availability of an alternative remedy is no bar to entertain the Complaint under the Consumer Protection Act, 1986. Relevant Paragraphs No. 22, 22.1, 22.2, 22.3, 23, 38 and 39 of the said Judgment are reproduced below for ready reference:

“22. The question whether the remedies available to the consumers under the provisions of the CP Act would be additional remedies, was considered by this Court in some cases, the notable cases being:

22.1. In Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] , this Court observed: (SCC p. 312, paras 11-12)

“11. From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi-judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi-judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders.

12. As per Section 3 of the Act, as already stated above, the provisions of the Act shall be in addition to and not in derogation of any other provisions of any other law for the time being in force. Having due regard to the scheme of the Act and purpose sought to be achieved to protect the interest of the consumers better, the provisions are to be interpreted broadly, positively and purposefully in the context of the present case to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide remedy under the Act in addition to other remedies provided under other Acts unless there is a clear bar.”

The issue in this case was whether in the face of Section 156 of the Tamil Nadu Cooperative Societies Act, 1983 the persons concerned could avail remedies under the CP Act. Interpreting Section 3 of the CP Act, it was held that the remedy provided under the CP Act would be in addition to the remedies provided under the other Acts.

22.2. In National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] , it was observed: (SCC pp. 532 & 534, paras 57 & 62)

“57. It can thus be said that in the context of farmers/growers and other consumers of seeds, the Seeds Act is a special legislation insofar as the provisions contained therein ensure that those engaged in agriculture and horticulture get quality seeds and any person who violates the provisions of the Act and/or the Rules is brought before the law and punished. However, there is no provision in that Act and the Rules framed thereunder for compensating the farmers, etc. who may suffer adversely due to loss of crop or deficient yield on account of defective seeds supplied by a person authorised to sell the seeds. That apart, there is nothing in the Seeds Act and the Rules which may give an indication that the provisions of the Consumer Protection Act are not available to the farmers who are otherwise covered by the wide definition of “consumer” under Section 2(1)(d) of the Consumer Protection Act. As a matter of fact, any attempt to exclude the farmers from the ambit of the Consumer Protection Act by implication will make that Act vulnerable to an attack of unconstitutionality on the ground of discrimination and there is no reason why the provisions of the Consumer Protection Act should be so interpreted.

***

62. Since the farmers/growers purchased seeds by paying a price to the appellant, they would certainly fall within the ambit of Section 2(1)(d)(i) of the Consumer Protection Act and there is no reason to deny them the remedies which are available to other consumers of goods and services.”

In this case the provisions of the CP Act and those under the Seeds Act, 1966 were considered.

22.3. In Virender Jain v. Alaknanda Coop. Group Housing Society Ltd. [Virender Jain v. Alaknanda Coop. Group Housing Society Ltd., (2013) 9 SCC 383 : (2013) 4 SCC (Civ) 354] , it was observed by this Court as under: (SCC pp. 389-90, paras 13-15)

“13. The other question which needs to be considered is whether the District Forum should not have entertained the complaints filed by the appellants and directed them to avail the statutory remedies available under the Cooperative Societies Act. Shri Neeraj Jain vehemently argued that the forums constituted under the Act cannot grant relief to the appellants because the action taken by Respondent 1 was approved by the authorities constituted under the Cooperative Societies Act, who were not impleaded as parties in the complaints.

14. In our view, there is no merit in the submission of the learned Senior Counsel. In the complaints filed by them, the appellants had primarily challenged the action of Respondent 1 to refund the amounts deposited by them and thereby extinguished their entitlement to get the flats. Therefore, the mere fact that the action taken by Respondent 1 was approved by the Assistant Registrar, Cooperative Societies and higher authorities, cannot deprive the appellants of their legitimate right to seek remedy under the Act, which is in addition to the other remedies available to them under the Cooperative Societies Act. Law on this issue must be treated as settled by the judgments of this Court in Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] , Kishore Lal v. ESI Corpn. [Kishore Lal v. ESI Corpn., (2007) 4 SCC 579 : (2007) 2 SCC (L&S) 1] and National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] .

15. In the last mentioned judgment, National Seeds Corpn. case [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] , this Court referred to the earlier judgments in Fair Air Engineers (P) Ltd. v. N.K. Modi [Fair Air Engineers (P) Ltd. v. N.K. Modi, (1996) 6 SCC 385] , Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] , Skypak Couriers Ltd. v. Tata Chemicals Ltd. [Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC 294] and Trans Mediterranean Airways v. Universal Exports [Trans Mediterranean Airways v. Universal Exports, (2011) 10 SCC 316 : (2012) 1 SCC (Civ) 148] and held that the remedy available under the Act is in addition to the remedies available under other statutes and the availability of alternative remedies is not a bar to the entertaining of a complaint filed under the Act.”

In this case the statutory remedies available under the Haryana Cooperative Societies Act, 1984 as against those under the CP Act was the matter in issue.

23. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.

38. Lastly, it may be noted that the Consumer Protection Act, 2019 [ Most of the provisions in Chapters I, II, IV, V, VI, VII and VIII including Sections 100 and 107 were brought into force w.e.f. 27-7-2020 vide Notification dated 15-7-2020] (hereinafter referred as “the 2019 Act”) was enacted by Parliament “to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers' disputes and for matters connected therewith or incidental thereto”. Sections 2(7), 2(33), 2(37), and 2(42) define the expressions “Consumer”, “Product”, “Product Seller” and “Service”, respectively. Sections 85 and 86 deal with liability of “Product Service Provider” and “Product Seller”. Sections 100 and 107 of the 2019 Act are to the following effect:

“100.Act not in derogation of any other law.—The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

***

107.Repeal and savings.—(1) The Consumer Protection Act, (68 of 1986) is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.

(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.”

39. Section 100 of the 2019 Act is akin to Section 3 of the CP Act and Section 107 saves all actions taken or purported to have been taken under the CP Act. It is significant that Section 100 is enacted with an intent to secure the remedies under the 2019 Act dealing with protection of the interests of consumers, even after the RERA Act was brought into force.”

9.In the Case ofIreo Grace RealtechPvt. Ltd. Vs. Abhishek Khanna And Ors., (2021) 3 SCC 241, the Hon’ble Supreme Court has held that remedies under the Consumer Protection Act are in addition to and not in derogation of provisions of any other law for the time being in force. Relevant Paragraphs No. 30, 36, 36.1, 36.2, 36.3, 36.4 and 36.5 of the said Judgment are reproduced below for ready reference:

“30. In LDA v. M.K. Gupta [LDA v. M.K. Gupta, (1994) 1 SCC 243] , this Court discussed the legislative intent of including “housing construction” within the ambit of “service” as : (SCC pp. 252 & 256-57, paras 2 & 6)

“2. … A scrutiny of various definitions such as ‘consumer’, ‘service’, ‘trader’, ‘unfair trade practice’ indicates that legislature has attempted to widen the reach of the Act. Each of these definitions are in two parts, one, explanatory and the other expandatory. The explanatory or the main part itself uses expressions of wide amplitude indicating clearly its wide sweep, then its ambit is widened to such things which otherwise would have been beyond its natural import. Manner of construing an inclusive clause and its widening effect has been explained in Dilworth v. Commr. of Stamps [Dilworth v. Commr. of Stamps, 1899 AC 99 : 15 TLR 61 (PC)] as under : (AC pp. 105-06)

‘… “include” is very generally used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute, and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural, import, but also those things which the definition clause declares that they shall include.’

It has been approved by this Court in ESI Corpn. v. High Land Coffee Works [ESI Corpn. v. High Land Coffee Works, (1991) 3 SCC 617] ; CIT v. Taj Mahal Hotel [CIT v. Taj Mahal Hotel, (1971) 3 SCC 550] and State of Bombay v. Hospital Mazdoor Sabha [State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 : (1960) 2 SCR 866] . The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation. The primary duty of the court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to the attempted objective of the enactment.

***

6. … As pointed out earlier the entire purpose of widening the definition is to include in it not only day to day buying and selling activity undertaken by a common man but even such activities which are otherwise not commercial in nature yet they partake of a character in which some benefit is conferred on the consumer. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor. The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in sub-clause (ii) of clause (r) of Section 2 as unfair trade practice. … A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression “service of any description”. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in earlier part. So any service except when it is free of charge or under a constraint of personal service is included in it. Since housing activity is a service it was covered in the clause as it stood before 1993.”

Whether primacy to be given to RERA over the Consumer Protection Act

36. The Consumer Protection Act, 1986 was enacted to protect the interests of consumers, and provide a remedy for better protection of the interests of consumers, including the right to seek redressal against unfair trade practices or unscrupulous exploitation. The Statement of Objects and Reasons of the Consumer Protection Bill, 1986 reads as:

“Statement of Objects and Reasons.—The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matter connected therewith.

2. It seeks, inter alia, to promote and protect the rights of consumers such as—

(a) the right to be protected against marketing of goods which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and

(f) right to consumer education.

3. These objects are sought to be promoted and protected by the Consumer Protection Council to be established at the Central and State level.

4. To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the district, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give reliefs of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.”

(emphasis supplied)

36.1. Section 3 of the Consumer Act provides that the remedies under the Act are in addition to, and not in derogation of any other law applicable. Section 3 reads as:

“3. Act not in derogation of any other law.—The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

36.2. In Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] , this Court held that : (SCC p. 312, paras 11-12)

36.3. In National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] , the jurisdiction of the District Consumer forum was challenged on the ground that there was an arbitration clause in the Agreement between the parties. It was contended that the provisions of the Seeds Act, 1966 would prevail over the Consumer Protection Act. Relevant extracts of the ruling are extracted hereinunder : (SCC pp. 532 & 534-35, paras 57, 62, 64 & 66)

***

64. According to the learned counsel for the appellant, if the growers had applied for arbitration then in terms of Section 8 of the Arbitration and Conciliation Act the dispute arising out of the arbitration clause had to be referred to an appropriate arbitrator and the District Consumer Forums were not entitled to entertain their complaint. This contention represents an extension of the main objection of the appellant that the only remedy available to the farmers and growers who claim to have suffered loss on account of use of defective seeds sold/supplied by the appellant was to file complaints with the Seed Inspectors concerned for taking action under Sections 19 and/or 21 of the Seeds Act.

***

66. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Protection Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Protection Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996. Moreover, the plain language of Section 3 of the Consumer Protection Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”

36.4. Subsequently, the judgments in Thirumurugan Coop. Agricultural Credit Society [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] and National Seeds [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] were followed in Virender Jain v. Alaknanda Coop. Group Housing Society Ltd. [Virender Jain v. Alaknanda Coop. Group Housing Society Ltd., (2013) 9 SCC 383 : (2013) 4 SCC (Civ) 354]

36.5. Various judgments of this Court have upheld the applicability of provisions of Consumer Protection Act as an additional remedy, despite the existence of remedies under special statutes, including the Arbitration and Conciliation Act, 1996. In Emaar MGF Land Ltd. v. Aftab Singh [Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751 : (2018) 5 SCC (Civ) 652] , this Court has held that the remedy under the Consumer Protection Act, 1986 is confined to the complaint filed by a consumer as defined by the Act, for defects and deficiency caused by the service provider. The existence of an arbitration clause was not a ground to restrain the consumer fora from proceeding with the consumer complaint.”

10.In the Case ofVodafone Idea Cellular Ltd. Vs. Ajay Kumar Agarwal, (2022) 6 SCC 496, the Hon’ble Supreme Court has held that the Consumer Protection Act, 1986 is a special law providing protection to consumers and even where there is inconsistency between two legislations, the later law, even if general in nature, would override an earlier special law. It further held that the Consumer Protection Act, 1986 and its successor Consumer Protection Act, 2019 are subsequent enactments, which have been enacted by Parliament to protect the interest of consumers, hence, an ouster of jurisdiction cannot be lightly assumed unless express words are used or such a consequence follows by necessary implication. Relevant Paragraphs No. 9, 10, 11, 12, 13, 22, 23, 24 and 25 are reproduced below for ready reference:

“9. Section 11 of the 1986 Act specified the jurisdiction of the District Forum. Section 11(1) provided as follows:

“11. Jurisdiction of the District Forum.—(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.”

10. In terms of Section 11(1), the District Forum was conferred with the jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed did not exceed a stipulated amount. The amount was progressively revised from Rs 1 lakh to Rs 5 lakhs and eventually to Rs 20 lakhs. The expression “service” is defined in Section 2(1)(o) of the 1986 Act in the following terms:

“2. (1)(o) “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”

11. The expression “deficiency” is defined in Section 2(1)(g):

“2. (1)(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.”

12. The definition of the expression “service” is couched in wide terms. The width of statutory language emerges from the manner in which the definition is cast. Parliament has used the expression “service of any description which is made available to potential users”. The definition employs the “means and includes formula”. The means part of the definition incorporates service of “any” description. The inclusive part incorporates services by way of illustration, such as facilities in connection with banking, finance, insurance, transport, processing, supply of electrical and other energy, board or lodging and housing construction. The inclusive part is prefaced by the clarification that the services which are specified are not exhaustive. This is apparent from the expression “but not limited to”. The last part of the definition excludes (i) the rendering of any service free of charge; and (ii) services under a contract of personal service. Parliament has confined the exclusion only to two specified categories. The initial part of the definition however makes it abundantly clear that the expression “service” is defined to mean service of any description. In other words, a service of every description would fall within the ambit of the statutory provision.

13. The 1986 Act was a milestone in legislative efforts designed to protect the welfare and interest of consumers. The long title to the Act specifies that it is an Act “to provide for better protection of the interest of consumers”. Para 2 of the Statement of Objects and Reasons accompanying the introduction of the Bill in Parliament specifies the objects in the following terms:

“2. It seeks, inter alia, to promote and protect the rights of consumers such as—

(a) the right to be protected against marketing of goods which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and

(f) right to consumer education.”

22. We are unable to subscribe to the view which has been adopted in the above decision in M. Krishnan [Deptt. of Telecommunications v. M. Krishnan, (2009) 8 SCC 481] . The decision is incorrect on two grounds. First, it failed to recognise that the 1986 Act is not a general law but a special law that has been enacted by Parliament specifically to protect the interest of consumers. Second, even if it is assumed that the 1986 Act is a general law, it is a settled position of law that if there is any inconsistency between two legislations, the later law, even if general in nature, would override an earlier special law.

23. In Ajoy Kumar Banerjee v. Union of India [Ajoy Kumar Banerjee v. Union of India, (1984) 3 SCC 127 : 1984 SCC (L&S) 355] , a three-Judge Bench of this Court observed : (SCC pp. 153-54, paras 38-39)

“38. … As mentioned hereinbefore if the Scheme was held to be valid, then the question what is the general law and what is the special law and which law in case of conflict would prevail would have arisen and that would have necessitated the application of the principle Generaliaspecialibus non derogant. The general rule to be followed in case of conflict between two statutes is that the later abrogates the earlier one. In other words, a prior special law would yield to a later general law, if either of the two following conditions is satisfied:

‘(i) The two are inconsistent with each other.

(ii) There is some express reference in the later to the earlier enactment.’

If either of these two conditions is fulfilled, the later law, even though general, would prevail.

39. From the text and the decisions, four tests are deducible and these are : (i) The legislature has the undoubted right to alter a law already promulgated through subsequent legislation, (ii) A special law may be altered, abrogated or repealed by a later general law by an express provisions, (iii) A later general law will override a prior special law if the two are so repugnant to each other that they cannot co-exist even though no express provision in that behalf is found in the general law, and (iv) It is only in the absence of a provision to the contrary and of a clear inconsistency that a special law will remain wholly unaffected by a later general law. See in this connection, Maxwell on the Interpretation of Statutes, Twelfth Edn., pp. 196-198.”

24. In any event, the decision in M. Krishnan [Deptt. of Telecommunications v. M. Krishnan, (2009) 8 SCC 481] also fails to note that the 1986 Act is a special law providing protection to consumers. Crucially, M. Krishnan [Deptt. of Telecommunications v. M. Krishnan, (2009) 8 SCC 481] fails to notice that Section 3 of the 1986 Act clearly provides that the remedies available under the Act are in addition to the remedies available in other statutes and the availability of additional remedies would not bar a consumer from filing a complaint under the 1986 Act. Section 100 of the 2019 Act corresponds to Section 3 of the 1986 Act. In Emaar MGF Land [Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751 : (2018) 5 SCC (Civ) 652] , this Court held that the complaint under the 1986 Act is a special remedy provided to a consumer in addition to the remedies that can be availed of by them, including arbitration. In Imperia Structures Ltd. v. Anil Patni [Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783 : (2021) 1 SCC (Civ) 1] , this Court held that the remedies available under the 1986 Act are in addition to the remedies available under other statutes, including special statutes like the Real Estate (Regulation and Development) Act, 2016 (“RERA”). This Court reiterated the settled position of law in the following terms : (Imperia Structures case [Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783 : (2021) 1 SCC (Civ) 1] , SCC p. 809, para 23)

“23. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.”

25. The above position was reiterated in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna [IREO Grace Realtech (P) Ltd. v. Abhishek Khanna, (2021) 3 SCC 241 : (2021) 2 SCC (Civ) 121] by a three-Judge Bench of this Court, of which one of us (D.Y. Chandrachud, J.) was a part. Indu Malhotra, J., speaking for the Bench invoked the doctrine of election, which provides that when two remedies are available for the same relief, the party at whose disposal such remedies are available, can make the choice to elect either of the remedies as long as the ambit and scope of the two remedies is not essentially different. These observations were made in the context of an allottee of an apartment having the choice of initiating proceedings under the 1986 Act or the RERA.”

11.The Hon’ble Supreme Court in the Case of Debashis Sinha AndOrs. Vs. R.N.R. Enterprise, (2023) 3 SCC 195, has extended the applicability of the provisions of the Consumer Protection Act, 1986 (now repealed and replaced by Consumer Protection Act, 2019) to the persons, who have taken possession and approached the Consumer Foras subsequently finding some deficiency in the flats/apartments. Relevant Paragraphs No. 16 and 17 of the said Judgment are reproduced below for ready reference:

“16. We have failed to comprehend as to what NCDRC meant when it observed that the appellants “ought to have known what they were purchasing”. More often than not, the jurisdiction of the Consumer Fora under the CP Act is invoked post-purchase. If complaints were to be spurned on the specious ground that the consumers knew what they were purchasing, the object and purpose of the enactment would be defeated. Any deficiency detected post-purchase opens up an avenue for the aggrieved consumer to seek relief before the Consumer Fora. The reasoning of NCDRC is, thus, indefensible. Indeed, the appellants had purchased their respective flats on payment of consideration amounts as per market rate and there was due execution and registration of the deeds of conveyance preceded by agreements for sale and these instruments did indicate, inter alia, what formed part of the common facilities/amenities; however, the matter obviously could not have ended there. Whether the appellants had been provided what the respondents had promised did survive for consideration, which does not get reflected in the impugned order.

17. NCDRC, in our opinion, might have missed to appreciate the present day realities of life. Nowadays, flat owners seldom purchase flats with liquid cash. Flats are purchased on the basis of finances being advanced by banks and other financial institutions. Once a flat is booked and the prospective flat owner enters into an agreement for loan, instalments fall due to be paid to clear the debt irrespective of whether the flat is ready for being delivered possession. The usual delays that are associated with construction activities result in undue anxiety, stress, and harassment for which many a prospective flat owner, it is common knowledge, even without the project/flat being wholly complete is left with no other option but to take possession. Whether, upon taking possession, a flat owner forfeits his/her right to claim such services which had been promised but are not provided resulting in deficiency in services is a question that NCDRC ought to have adverted to. Once NCDRC arrived at a finding that the respondents were casual in their approach and had even resorted to unfair trade practice, it was its obligation to consider the appellants’ grievance objectively and upon application of mind and thereafter give its reasoned decision. If at all, the appellants had not forfeited any right by registration of the sale deeds and if indeed the respondents were remiss in providing any of the facilities/amenities as promised in the brochure/advertisement, it was the duty of NCDRC to set things right.”

12.It may be mentioned here that the Hon’ble Supreme Court in the Case of National Insurance Co. Ltd. Vs. Harsolia Motors AndOrs. (Civil Appeal No(s). 5352-5353 of 2007, decided on 13.04.2023, has taken a bird’s eye view of the Consumer Protection Act, 1986. Relevant Paragraphs No. 21 to 40 of the said Judgment are reproduced below for ready reference:

“21. The Act, 1986 is a socialbenefitoriented legislation and, therefore, the Court has to adopt a constructive liberal approach while construing the provisions of the Act. To begin with the Preamble of the Act, 1986 which can afford useful assistance to ascertain the legislative intention, it was enacted to provide for the protection of the interests of consumers. Use of the word “protection” furnishes key to the minds of makers of the Act. Various definitions and provisions which elaborately attempt to achieve this objective have to be construed in this light without departing from the settled law that a Preamble cannot control otherwise plain meaning of a provision.

22. In fact, the law meets long felt necessity of protecting the common man from such wrong for which the remedy under ordinary law for various reasons has become illusory. Various legislations and regulations permitting the State to intervene and protect interests of the consumers have become a haven for unscrupulous ones as the enforcement machinery either does not move or it moves ineffectively and inefficiently for reasons which are not necessary to be stated.

23. The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. A scrutiny of various definitions such as “consumer”, “service”, “trader”, “unfair trade practice” indicates that legislature has attempted to widen the ambit and reach of the Act. Each of these definitions are in two parts, one explanatory and the other inclusive. The explanatory or the main part itself uses expressions of amplitude indicating clearly its wide sweep within its ambit to widen such things which otherwise would have been beyond its natural import.

24. The provisions of the Act, 1986 thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a socialbenefitoriented legislation. The primary duty of the Court/Commission while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to attempted objective of the enactment.

25. Section 2(1)(d) defines “consumer”, Section 2(1)(m) defines “a person” and Section 2(1)(o) defines “service”, which are relevant to examine the moot question raised for our consideration are reproduced hereunder:

“2. Definitions. In this Act, unless the context otherwise requires,

........

(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 payments, when such services are availed of with the approval of the firstmentioned person;

Explanation: For the purposes of subclause (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 selfemployment;

......

(m) "person" includes

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a cooperative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (22 of 1860) or not;

.......

(o) "service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, [housing construction], entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”

26. The word “consumer” is the fulcrum of the Act. Since the Act hinges on the twin concepts of defect in goods or any deficiency in service, a consumer is one who buys any goods or hires any service. The term “consumer” has, thus, been defined to mean a person who is –

(a) a buyer, or

(b) with the approval of the buyer, the user, of the goods in question, or

(d) with the approval of such aforesaid persons, the beneficiary, of the service or services in question

With the condition super added that such buying of the goods or hiring or availing of any such service, is for a consideration,

(i) paid, or

(ii) promised, or

(iii) partly paid or promised, or

(iv) covered by any system of deferred payment.

27. However, the word “consumer” so defined does not include a person, who, in case of goods obtains such goods for resale or for any commercial purpose, or who, in case of service, avails of such services, for any commercial purpose. An explanation appended to the above definition states that the expression “commercial purpose” does not include the use by the buyer of such goods or the person availing such service or services, exclusively for the purpose of earning his livelihood by means of selfemployment.

28. It may be noticed that Section 2(1)(m) defines “person” and includes a firm, whether registered or not, apart from other categories without any distinction, big or small. So, as “services” defined under Section 2(1)(o) includes banking, insurance and if there is deficiency in service in the matter of banking/insurance, etc., subject to the fact that he is a consumer under Section 2(1)(d), remedy is always available to such a consumer to invoke the jurisdiction of the Act, 1986.

29. This Court adverted to the concept of “consumer” as defined under the Act, analysing the definition in the context of the Act, in Lucknow Development Authority v. M.K. Gupta held :

“3......It is in two parts. The first deals with goods and the other with services. Both parts first declare the meaning of goods and services by use of wide expressions. Their ambit is further enlarged by use of inclusive clause. For instance, it is not only purchaser of goods or hirer of services but even those who use the goods or who are beneficiaries of services with approval of the person who purchased the goods or who hired services are included in it. The legislature has taken precaution not only to define ‘complaint’, ‘complainant’, ‘consumer’ but even to mention in detail what would amount to unfair trade practice by giving an elaborate definition in clause (r) and even to define ‘defect’ and ‘deficiency’ by clauses (f) and (g) for which a consumer can approach the Commission. The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services. The common characteristics of goods and services are that they are supplied at a price to cover the costs and generate profit or income for the seller of goods or provider of services. But the defect in one and deficiency in other may have to be removed and compensated differently. The former is, normally, capable of being replaced and repaired whereas the other may be required to be compensated by award of the just equivalent of the value or damages for loss......”

30. Later, this Court in Laxmi Engineering Works (supra), while dealing with the connotative expanse of the term “consumer” in the unamended form and the explanation added to the expression “Consumer” by an amendment, ruled that such explanation is clarificatory in nature and taking note of the explanation added by the amendment Act, 1993 extensively examined the definition of the term “consumer” as under:

“11. Now coming back to the definition of the expression ‘consumer’ in Section 2(d), a consumer means insofar as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the consideration is paid or promised, or partly paid and partly promised, or whether the payment of consideration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration; (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression ‘resale’ is clear enough. Controversy has, however, arisen with respect to meaning of the expression “commercial purpose”. It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. ‘Commercial’ denotes “pertaining to commerce” (Chamber's Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile; having profit as the main aim” (Collins English Dictionary) whereas the word ‘commerce’ means “financial transactions especially buying and selling of merchandise, on a large scale” (Concise Oxford Dictionary). The National Commission appears to have been taking 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 ‘consumer’. If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of selfemployment, 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 selfemployment, 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 autorickshaw 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 a consumer.) As against this a person who purchases an autorickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions “used by him”, and “by means of selfemployment” in the explanation. The ambiguity in the meaning of the words “for the purpose of earning his livelihood” is explained and clarified by the other two sets of words.

and after a fair analysis of the definition “consumer” postamendment 1993 finally held as under:

“21. We must, therefore, hold that:

(i) The explanation added by the Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 1861993 is clarificatory in nature and applies to all pending proceedings.

(ii) Whether the purpose for which a person has bought goods is a “commercial purpose” within the meaning of the definition of expression ‘consumer’ in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.

(iii) A person who buys goods and uses them himself, exclusively for the purpose of earning his livelihood, by means of self-employment is within the definition of the expression ‘consumer’.”

31. The exposition of law on the subject was further considered by this Court in LilavatiKirtilal Mehta Medical Trust v. Unique Shanti Developers and Others in which one of us (Rastogi, J.) was a member and the question arose for consideration was whether the purchase of flats for the purpose of providing accommodation to nurses employed by the LilavatiKirtilal Mehta Medical Trust hospital qualifies a purchase of services for commercial purpose and whether the Hospital Trust was excluded from the definition of “consumer” under Section 2(1)(d) of the Act, 1986, this Court after revisiting the scheme of the Act, 1986 and taking note of the law of precedence in Laxmi Engineering Works (supra) of which a reference has been made and placing reliance on the judgment of this Court in Paramount Digital Colour Lab and Others v. AGFA India Private Limited and Others held that a person whether or not a consumer or other activities meant for commercial purpose will always depend upon the facts and circumstances of each case.

32. It may be a case that a person who is engaged in commercial activities has purchased goods or availed of service for his personal use or consumption or for the personal use of a beneficiary and such purchase is not linked to their ordinary profits generating activities or for creation of selfemployment, such a person may still claim to be a consumer and after discussion of various illustrations summarized the discussion after taking note of the broad principles that were culled out for determination whether the activity or transaction is for a commercial purpose, held as under:

“19. To summarise from the above discussion, though a strait jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is “for a commercial purpose”:

19.1. The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, “commercial purpose” is understood to include manufacturing/industrial activity or businesstobusiness transactions between commercial entities.

19.2. The purchase of the good or service should have a close anddirect nexus with a profitgenerating activity.

19.3. The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.

19.4. If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of “generating livelihood by means of selfemployment” need not be looked into.”

33. This Court noticed that the hostel facilities were provided to the nurses employed by Lilavati hospital but after some time of completion of the project because of alleged poor building quality, the structure became dilapidated and the nursing staff had to vacate the flats being used by them and a consumer complaint filed by the Lilavati hospital for compensation on account of annual loss of rent was maintainable and whether the Trust was a consumer under Section 2(1)(d) of the Act.

34. In LilavatiKirtilal Mehta Medical Trust (supra), this Court observed that there is no nexus between the purchase of flats by the appellant Trust and its profit generating activity as the flats were not occupied for undertaking any medical/diagnostic facilities within the hospital, but for accommodating the nurses employed by the hospital. In the given circumstances, it has nothing to do with earing of profits in providing facilities to the nurses and held that the Trust is a “consumer” under Section 2(1)(d) of the Act, 1986 for the transaction under consideration.

35. Thus, what is important is the transaction in reference to which the claim has been filed under the Act, 1986 by a person who claims himself to be a “consumer” covered under Section 2(1)(d) of the Act, 1986, such exposition of law on the subject has been further reiterated by this Court recently in Shrikant G. Mantri v. Punjab National Bank and after the analysis on the subject and taking note of the judgment of this Court in LilavatiKirtilal Mehta Medical Trust (supra), of which reference has been made, examined the case on the facts in question and recorded a finding that the transaction in question would fall within the definition of the term “consumer” or “services” for the purpose of invoking jurisdiction under the Act, 1986.

36. Thus, what is culled out is that there is no such exclusion from the definition of the term “consumer” either to a commercial enterprise or to a person who is covered under the expression “person” defined in Section 2(1)(m) of the Act, 1986 merely because it is a commercial enterprise. To the contrary, a firm whether registered or not is a person who can always invoke the jurisdiction of the Act, 1986 provided it falls within the scope and ambit of the expression “consumer” as defined under Section 2(1)(d) of the Act, 1986.

37. Applying the above principles to the present case, what needs to be determined is whether the insurance service has a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. The fact that the insured is a commercial enterprise is unrelated to the determination of whether the insurance policy shall be counted as a commercial purpose within the purview of Section 2(1)(d) of the Act.

38. In the case of Karnataka Power Transmission Corporation and Another v. Ashok Iron Works Private Limited, this Court while answering the question in the affirmative observed :

“17. It goes without saying that interpretation of a word or expression must depend on the text and the context. The resort to the word “includes” by the legislature often shows the intention of the legislature that it wanted to give extensive and enlarged meaning to such expression. Sometimes, however, the context may suggest that word “includes” may have been designed to mean “means”. The setting, context and object of an enactment may provide sufficient guidance for interpretation of the word “includes” for the purposes of such enactment.

18. Section 2(1)(m) which enumerates four categories, namely,

(i) a firm whether registered or not;

(ii) a Hindu Undivided Family;

(iii) a cooperative society; and

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not while defining “person” cannot be held to be restrictive and confined to these four categories as it is not said in terms that “person” shall mean one or other of the things which are enumerated, but that it shall “include” them.

19. The General Clauses Act, 1897 in Section 3(42) defines “person”:

“3. (42) ‘person’ shall include any company or association or body of individuals, whether incorporated or not;”

20. Section 3 of the 1986 Act upon which reliance is placed by learned counsel for KPTC provides that the provisions of the Act are in addition to and not in derogation of any other law for the time being in force. This provision instead of helping the contention of KPTC would rather suggest that the access to the remedy provided to (sic under) the Act of 1986 is an addition to the provisions of any other law for the time being in force. It does not in any way give any clue to restrict the definition of “person”.

21. Section 2(1)(m), is beyond all questions an interpretation clause, and must have been intended by the legislature to be taken into account in construing the expression “person” as it occurs in Section 2(1)(d). While defining “person” in Section 2(1)(m), the legislature never intended to exclude a juristic person like company. As a matter of fact, the four categories by way of enumeration mentioned therein is indicative, Categories (i), (ii) and (iv) being unincorporate and Category (iii) corporate, of its intention to include body corporate as well as body unincorporate. The definition of “person” in Section 2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly.”

39. Applying the aforesaid test, two things are culled out; (i) whether the goods are purchased for resale or for commercial purpose; or (ii) whether the services are availed for any commercial purpose. The twofold classification is commercial purpose and noncommercial purpose. If the goods are purchased for resale or for commercial purpose, then such consumer would be excluded from the coverage of the Act, 1986. For example, if a manufacturer who is producing product A, for such production he may be required to purchase articles which may be raw material, then purchase of such articles would be for commercial purpose. As against this, if the same manufacturer purchases a refrigerator, television or airconditioner for his use at his residence or even for his office has no direct or indirect nexus to generate profits, it cannot be held to be for commercial purpose and for aforestated reason he is qualified to approach the Consumer Forum under the Act, 1986.

40. Similarly, a hospital which hires services of a medical practitioner, it would be a commercial purpose, but if a person avails such services for his ailment, it would be held to be a non-commercial purpose. Taking a wide meaning of the words “for any commercial purpose”, it would mean that the goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose, but in a case where goods purchased or services hired is an activity, which is not directly intended to generate profit, it would not be a commercial purpose.”

13.Applying the principles laid down by the Hon’ble Supreme Court in the aforesaid Cases to the facts of the present case, the Complainant is a ‘consumer’ under the provisions of the Consumer Protection Act, 1986 and the Complaint filed by the Complainant is maintainable.

14.The contention of the Opposite Party that the present Complaint is not maintainable since the Complainant does not fall within the definition of ‘Consumer’,is rejected in view of the Judgment passed by this Commission in Harsolia Motors v. National Insurance Co. Ltd. I, (2005) CPJ 27 (NC) and affirmed by the Hon’ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Harsolia Motors and Ors. (Civil Appeal No(s). 5352-5353 of 2007, decided on 13.04.2023 wherein it has been held that:-

“37. Applying the above principles to the present case, what needs to be determined is whether the insurance service has a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. The fact that the insured is a commercial enterprise is unrelated to the determination of whether the insurance policy shall be counted as a commercial purpose within the purview of Section 2(1)(d) of the Act.

……

15.Since the insurance policy is taken for reimbursement or for indemnity of the loss which may be suffered on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose. Therefore,I am of the considered view that the Complainant Company is a ‘Consumer’ as defined under Section 2(1)(d) of the Act.

16.As far as the contention of the Opposite Party Insurance Company that the Complainant failed to comply with Condition No. 6 of the Policy according to which the Complainant was duty bound to intimate the loss to them as soon as possible and further was required to provide all details and particulars of any loss suffered, is concerned, I do not find any merit in the said contention since from the record it is crystal clear that requisite documents, i.e., Income Tax Return for the last 3 years, Balance Sheet for the last three years, Account statement of the Bank, copy of the Police Report, Fire Department Report and purchase bills of goods – 67 Nos., were duly received by the Surveyor, i.e., M/s. M.L. Mehta & Co. on 05.02.2016.

17.So far as the contention of the OP Insurance Company that they closed the claim of the Complainant relying on the Forensic Report of Truth Labs, which had been duly considered by the Surveyor in his final Survey Report, is concerned, it may be observed that the conclusion of the Truth Lab is based on typical hydrocarbon derived from Kerosene or diesel, which is on assumption and presumption because while drawing conclusion it ignored the fact that the Complainant Company deals in garments/clothes of synthetic cotton and polyestar material made clothes packed which is burnt during fire incident, have high burning rates as also the kerosene is used for decolorization of clothes, therefore, there is possibility of tracing kerosene oil. Even otherwise, the Truth Lab is appointed by OP Insurance Company therefore, it is possible that they can give favourable report to please their master, i.e., OP Insurance Company. On the other hand, in the Fire Incident Report issued by the Assistant Divisional Fire Officer, Fire Department, Ludhiana, i.e., an independent Government Agency, the cause of fire has been shown as ‘Appeared to be short-circuit of electricity’.

18.Undisputedly, the Complainant obtained Policy No. 2114/52264622/03/000 on 22.01.2015 for covering the risk of ₹11,00,000/- towards Building and ₹80,00,000/- towards stock from the Opposite Party Insurance Company. Vide endorsement letter dated 24.10.2015 by getting additional insurance from the Opposite Party Insurance Company, the Complainant Company, revised the sum insured from ₹91,00,000/- to ₹1,50,00,000/-, i.e., (₹20,00,000/- towards Building and ₹1,30,00,000/- towards Stock). Fire incident took place at the insured site in the midnight of 11th and 12th November 2015. In the Suveyor Report, the Surveyor has mentioned that as per the claim bills for the loss / damage reported to have occurred by the insured for the ‘stock’ is ₹1,17,88,000/- and list of saved stock has been mentioned as ₹2,03,000/- and after deducting the saved stock, the loss of stock can be figured out at ₹1,15,85,000/- yet the Surveyor has assessed the loss towards stock at ₹7,00,000/- which is without any basis and cannot be accepted. Similarly, in the Fire incident the Building worth ₹50,00,000/- has been fully destroyed as its lanter & roof etc. have been damaged, yet the Surveyor has assessed the loss at ₹80,000/- towards white wash charges, which is also not acceptable.

19.The Surveyor’s Report is not the final word and it is not binding upon the insured or insurer. A reference can be made to the Judgment passed by the Hon’ble Supreme Court in “New India Assurance Co. Ltd. v. Pradeep Kumar, (2009) 7 SCC 787” in which it has been held as under:-

“21. Section 64-UM(2) of the Act, 1938 reads:

64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as ‘approved surveyor or loss assessor’):

Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.”

The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is ₹20,000 or more, the loss must first be assessed by an approved surveyor (or loss assessor) before it is admitted for payment or settlement by the insurer. The proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor).

22. In other words although the assessment of loss by the approved surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be the basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”

20.As per material available on record, i.e., the audited Trading Account and Balance Sheet as on 11.11.2015, the Complainant company was having a closing stock of ₹1,06,31,480/-, which damaged during the fire incident. Consequently, the Complainant company is entitled for ₹1,06,31,480/- towards damage of stock. Although the Building worth ₹50,00,000/- damaged during the fire incident yet the Complainant is entitled for ₹20,00,000/- towards damages of Building as it had insurance cover of ₹20,00,000/- towards Building.

21.For the reasons stated hereinabove and respectfully following the principles laid down by the Hon’ble Supreme Court in Judgment quoted above, I am of the considered view that deficiency in service on the part of the Opposite Party Insurance Company is writ large while closing the rightful claim of the Complainant. Consequently, the present Consumer Complaint is partly allowed and the Opposite Party Insurance Company is directed to settle the claim of the Complainant Company by paying a sum of ₹1,26,31,480/- (Rupees One Crore Twenty Six Lakh Thirty One Thousand Four Hundred Eighty Only) (₹1,06,31,480/- towards stock and ₹20,00,000/- towards damage to Building) alongwith interest @9% p.a. from the date of lodging of the claim till realisation within 8 weeks from today, failing which the interest will increase from 9% p.a. to 12% p.a. The Opposite Party Insurance Company is also directed to pay ₹50,000/- towards cost of litigation to the Complainant.


......................J
R.K. AGRAWAL
PRESIDENT

NCDRC

NCDRC

CC/2990/2017

M/S. NEW MARK KNITWEARS - Complainant(s)

Versus

UNIVERSAL SOMPO GENERAL INSURANCE CO. LTD. & ANR. - Opp.Party(s)

MR. HIMANSHU UPADHYAY

25 Apr 2023

ORDER

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