SURRINDER SINGH vs ORIENTAL INSURANCE CO LTD

APPELLANT was the opposite party before the State Commission where respondent, Mr. Ashok Sekhon, had filed a complaint alleging deficiency in service on the part of the appellant. Briefly stated the facts of the case are that the Appellant who is a leading manufacturer of matchstick items, under a scheme floated jointly with NABARD, entered into an agreement with the respondents/complainant through which 1800 ETPs (Entire Transplants of Poplars) were to be given to the complainant for growing them into trees, of up to given dimension, and for which an agreement was entered between the parties. It was the case of the complainant that the appellant was to obtain the insurance cover for the plants, which he did not cover and since the plants got damaged in 1990 due to very, too very heavy rainfall and strong winds, causing damage to 1438 poplar trees, the appellant was liable to pay the damage, as according to the complainant, it was the appellant who should have obtained the insurance cover and since the appellant failed to do so, hence, the appellant is liable to pay the damage. The matter was taken up by the respondents/complainant with the appellant and when the matter was not getting settled a complaint was filed before the State Commission who after hearing the parties allowed the complaint and directed the appellant to pay Rs. 2,94,103 along with interest at the rate of 15% on Rs. 1,50,052 from 5. 9. 1995 and on Rs. 1,05,061from 21. 11. 1995 up to the date of payment along with cost of Rs. 5,000. Aggrieved by this order, this appeal has been filed before us.

WE heard the learned Counsel for both the parties, primarily, on the preliminary objection taken by the appellant, before the State Commission as well also before us that the complainant is not a consumer within the meaning of Section 2 (1) (d) (i) as the appellant had purchased the goods for commercial purposes for earning profit. We have gone through the record carefully. The basic facts are not in dispute. Hence, at this stage we are not reproducing them.

There is no disputing the fact that the appellant had taken the plea that the trees were purchased by the respondents/complainant in large scale for commercial profit and this has also been reflected in the order of the State Commission appearing in Para 1 of Page 4. Despite this plea having been recorded, no finding has been returned by the State Commission on this point. Learned State Commission has dealt with other preliminary objections like jurisdiction, referral to an Arbitrator as well as the complainant not being a consumer for which reference was also made on the judgment of Hon''ble Supreme Court in the case of M/s. Suraj Steel, Hazaribaph v. R. P. Sharma, (1989) CPR 153) and also whether the complainant will be a consumer in terms of the contract entered between the parties, yet, it did not deal specifically with the objection taken by the opposite parties, as also clearly recorded by the State Commission, referred to earlier about the complainant being a consumer that the trees were purchased in large scale for commercial profit.

AFTER perusal of the record and after going through the judgment, we are at pains to express our anguish that despite the fact that State Commission passed the order in March 2000, yet the learned State Commission did not care to refer to the order passed by this Commission in the case of Synco Textiles Pvt. Ltd. v. Greaves Cotton and Company Ltd. , I (1991) CPJ 499 (NC), as also the judgment of the Hon''ble Supreme Court in the case of Laxmi Engineering Works v. PSG Industrial Institute, II (1995) CPJ 1 (SC)=air 1995 SC 1428, which had settled the issue on this point. After going through the material on record, there is no disputing the fact that the complainant had agreed as per terms of agreement to undertake growing of trees from the transplanted material to a full grown poplar trees, i. e. the material, which was to be finally used by the appellant for its use.

THE Hon''ble Supreme Court in its judgment (supra), has almost reproduced the judgment of this Commission in the case of Synco Textiles Pvt. Ltd. v. Greaves Cotton and Company Ltd. in full, i. e. the majority judgment as well as the minority judgment and have given lot of credit to judgment passed by this Commission. It may be important to reproduce the definition of consumer as it appeared in the original Act passed by the Parliament in 1986 which reads as follows : section 2 (1) (d) (i): " (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. "

This clause was subsequently amended in 1993. This provision after amendment read as follows : section 2 (1) (d) (i): " (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. [explanation.-For the purposes of Sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment. "

THE Hon''ble Supreme Court in the judgment (supra) clearly held that this amendment is only clarificatory in nature.

THE definition after the amendment of 1993 would clearly envisage if any one buys goods for consideration or for any commercial purpose, he would not fall within the definition of consumer. The explanation after the amendment in 1993 clarified that goods bought and used by a consumer exclusively for the purpose of earning his livelihood by means of self-employment would oust the commercial purpose. In the case in hand, there is no disputing the fact that the complainant had decided to plant poplar trees in 9 acres of irrigated land. Anyone having a common sense would straightaway observe that taking up growing up of trees in 9 acres of irrigated land would not amount to indulging in self-employment. The Hon''ble Supreme Court in above cited judgment has given examples in para 12 of a judgment which we reproduce below: "the National Commission appears to have 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-the 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 other''s 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 situation, 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 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 a 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 lathy 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 auto-rickshaw, a car or a lathy 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 expression "used by him", and "by means of self-employment" 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. "

(Emphasis supplied) The view taken by this Commission in the case of Synco Textiles Pvt. Ltd. v. Greaves Cotton and Company Ltd. , was supported, and upheld by the Hon''ble Supreme Court that the intention of Legislature was to give restrictive meaning to the word consumer (emphasis supplied ). In the judgment of Synco Textiles Pvt. Ltd. v. Greaves Cotton and Company Ltd. , in the minority judgment passed by Hon''ble Mr. Krishnan, who has clearly held in para 22 of the judgment that: "therefore every person engaged in any economic activity of including agriculture and horticulture, manufacture, distribution and sale, is engaged in a commercial activity for the purpose of obtaining profit or making a living irrespective of the sale of the operations. "

In the facts and circumstances of the case, the goods purchased were not for self-consumption, but ultimately were for resale, and primarily it was for commercial purpose, with a view to make profit. Nobody undertakes plantation of 1800 poplar trees for sale (resale) in full or part without the aim of earning-profit. Nobody takes up any such activity in 9 acres of irrigated land for self-employment.

IN the aforementioned circumstances, in our view, the complainant will not fall within the definition of consumer as per law settled on subject by this Commission and also by the Hon''ble Supreme Court in the judgment cited earlier in view of which Consumer Fora would not have entertained this complaint. Accordingly, this appeal is allowed, complaint is dismissed. However, if the respondents/complainant chooses to file a suit for the relief claimed in these proceedings, he can do so according to law and, in such a case, he can claim the benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting proceedings under Consumer Protection Act while computing the period of limitation prescribed for such a suit as per law laid down by the Hon''ble Supreme Court in the case of Lakshmi Engineering Works v. PSG Industrial Institute (supra ). Appeal allowed.