SUMAN MOTELS LTD. vs M/S. ENARR CAPITAL & ANR.

Both these revision petitions, which have been filed by sister concerns against the same respondents, involve same question of law and identical facts. They have, therefore, been heard together and are being disposed of by this common order. For the purpose of referencing and discussion, the first Revision Petition No.2052 of 2013 (Suman Motels Ltd. Vs. M/s Enarr Capital & Anr.) shall be the leading case.

Petitioner is a limited company carrying on business of tourism and having hotels and motels at different places in the country. The respondent/opposite parties are a company which provide expert advice and services to their clients who are facing financial crisis and are required to raise funds to improve their financial condition. The petitioner company was in financial difficulties and hence it entered into an agreement with the respondent company to provide advice in respect of business development and raising of funds. For this purpose, the petitioner paid the first instalment of Rs.2,50,000/- together with service charges of Rs.30,900/- by way of account payee cheque dated 4.9.2009. As per the allegation, in spite of lapse of more than 16 months, the respondents did not render any service as promised to the petitioner company. They did not even evolve any strategic planning or introduced any financiers who could assist the petitioner company in their financial crisis. Since the agreed advisory services were not given by the respondents to the petitioner company, a consumer complaint was filed by the petitioner before the District Forum for refund of the said amount along with interest and cost of litigation.

On notice, the respondents accepted that they provide advisory services to the institutions which are in financial difficulties with a view to enable them to come out from the financial crunch and to develop their business properly. While accepting the receipt of the amount of Rs.2,80,900/- for their services to the petitioner, they denied any deficiency in service on their part and submitted that as per the agreement between the petitioners and them, the service had been provided. On appraisal of the issues and the evidence adduced by the parties, the District Forum held that there is deficiency in service on the part of the respondent/opposite parties and as such partly allowed the complaint of the petitioner company vide its order dated 4.10.2011 in terms of the following relief:- "1) Complaint No.11/2010 is partially accepted.

2) The Respondents Nos.1 & 2 are hereby directed that as they have failed to provide the service to the complainants, they should, individually or collectively, refund Rs.2,80,900/- (Rupees Two Lakh Eighty Thousand Nine Hundred Only) along with interest @ 9% per annum from the date of filing the complaint on 3.2.2010 till the date the money is actually refunded.

3) The Respondents Nos.1 and 2 are hereby directed that they should, individually or collectively, pay to the Complainants an amount of Rs.5,000/- (Rupees Five Thousand only) on account of expenses for the complaint.

4) The Respondents Nos.1 and 2 should obey and implement this order within 30 days from the receipt of this order."

Aggrieved of the aforesaid order of the District Forum, the respondents challenged the same by filing an appeal before the State Commission. The State Commission vide its order dated 15.10.2012 allowed the appeal and set aside the order of the District Forum and also dismissed the complaint. Under these circumstances, the petitioner company has now filed the present revision petition against the impugned order of the State Commission under section 21(b) of the Consumer Protection Act.

The State Commission vide its impugned order has held that the services hired by the petitioner company are for commercial purpose and as such the petitioner company cannot be covered within the definition of consumer under the Consumer Protection Act and consequently its complaint is not maintainable before the consumer fora. Accordingly, the State Commission accepted the appeal, reversed the order of the District Forum and dismissed the complaint vide its impugned order. Hence the short question which arises for our consideration in this revision petition is as to whether the petitioner company hired the services of the respondents/opposite parties for commercial purpose or not.

We have heard Shri S. Deora, Authorized Representative of the petitioner company and perused the record. Admittedly, the petitioner/complainant is a limited company which is engaged in the business of tourism and is having hotels and also provides motel services at different places. It is also not in dispute that the petitioner company in order to come out of its financial difficulties, hired the services of the respondents who provide consultancy and expert advice in such cases to their clients. The authorised representative has submitted that the State Commission has erred in not considering the fact that the services hired by the petitioner company were not for sale and making profit rather the petitioner company has sought advice to solve the financial crisis faced by it. In view of this, he contended that the petitioner neither engaged the services of the respondents for earning profit nor for any commercial purpose but only with a view to seek the help of the respondents to overcome the financial crisis faced by it. It was further submitted that since the respondents have cheated the petitioner by not rendering the services for which they had received consideration by way of fees, it was clearly a case of deficiency in service on their part and as such the petitioner company was well within its rights to initiate action against them by filing the complaint in question before the District Forum which rightly allowed the same by its order directing the respondents to refund the amount along with interest. The authorised representative, therefore, pleaded that the impugned order which is based on wrong appreciation of the facts and legal position cannot be sustained in the eye of law and deserves to be set aside and the revision petition be allowed.

We are not at all impressed by the contentions raised by the authorised representative. The basic facts of the case not being under dispute, we have no manner of doubt in our mind that the services of the respondents were hired by the petitioner company during the course of its business so as to seek the advice of the respondents to overcome its financial difficulties which had also arisen in the course of business only. Prima facie, therefore, the services of the respondents were availed of by the petitioner company for commercial purposes. In view of this, the complainant company cannot be covered by the definition of a consumer by virtue of the provisions of section 2 (1) (d) which reads thus:- "(d) "consumer" means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who ''hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purposes];

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

Part (ii) of section 2 (1) (d) specifically deals with a consumer hiring / availing of any services for a consideration but does not include a person who avails of such service for any commercial purpose. Admittedly, consultancy / advisory services of the respondents were hired by the petitioners in connection with the financial difficulties faced by the petitioner company and as such it would be wrong to say that the services were not hired for commercial purpose. It would also be wrong to suggest that the services were not hired with a view to improve the profitability of the petitioner company by way of overcoming the financial difficulties and raising of funds. The contentions raised by the authorized representative of the petitioner are, therefore, absolutely misconceived and unacceptable. We may note that though the explanation appended to section 2 (1) (d) of the Act provides that the "commercial purpose" does not include the services availed by the person exclusively for the purpose of earning his livelihood by means of self-employment, it is of no avail to the petitioner because it is a body corporate and not a natural person who needs to indulge to earn his livelihood.

The authorised representative of the petitioner has placed before us a long list of judgements on which he has relied in support of his case. We have gone through the citations but since transactions in question in both the petitions pertained to and the complaints were filed during the period when the amendment to section 2 (1) (d) of the Consumer Protection Act which became effective on 15.3.2003 is already in force, none of them are applicable to the issue involved and the facts and circumstances of the present case and as such do not provide any comfort to the petitioner company.

In view of the above, we are of the considered view that the complainant/petitioner is not covered under the definition of consumer as defined under section 2 (1) (d) (ii) of the Consumer Protection Act, 1986. We, therefore, agree with the view taken by the State Commission in its impugned order while accepting the appeal of the respondents and dismissing the complaint. The District Forum obviously had gravely erred in partly accepting the complaint and granting the relief vide its order dated 4.10.2011 reproduced above. Both the revision petitions, therefore, being devoid of any merit are dismissed at the threshold with cost of Rs.10,000/- in each case. The cost of Rs.10,000/- shall be deposited by each of the revision petitioners with the ''Consumer Legal Aid Account'' maintained by this Commission within a period of four weeks failing which the petitioners will also be liable to pay interest @ 9% per annum for the period of delay.

List the matter for compliance on 23.01.2015.