NATIONAL INSURANCE CO. LTD. versus HARSOLIA MOTORS AND OTHERS on 13 April 2023

448

SUPREME COURT REPORTS

[2023] 3 S.C.R.

ANATIONAL INSURANCE CO. LTD.

v.

HARSOLIA MOTORS AND OTHERS

(Civil Appeal No(s). 5352-5353 of 2007)

BAPRIL 13, 2023

[AJAY RASTOGI AND C. T. RAVIKUMAR, JJ.]

Consumer Protection Act, 1986 – s.2(1)(d) – Respondent(commercial enterprise) had taken fire insurance policy from theappellant insurance company – Respondent sufferred damage dueCto fire – Appellant denied the claim of respondent – Respondentfiled complaint before the State Commission for compensation –State Commission held that respondent was not a “consumer” asdefined u/s. 2(1)(d) of the Consumer Protection Act, 1986, and thecomplaint was not maintainable – However, National CommissionDheld that the respondent was a “consumer” and the complaint wasmaintainable – Issue before the Supreme Court was, whether theinsurance policy taken by respondent (commercial enterprise)insured amounts to hiring of services for “commercial purpose”thereby excluded from the purview of the expression “consumer”as defined u/s. 2(1)(d) of the Act, 1986 – Held: There is no suchEexclusion from the definition of the term “consumer” either to acommercial enterprise or to a person who is covered under theexpression “person” defined in Section 2(1)(m) of the Act, 1986merely because it is a commercial enterprise – Each case has to beexamined on its own facts and circumstances – What needs to beFdetermined is whether the insurance service had a close and directnexus with the profit generating activity and whether the dominantintention or dominant purpose of the transaction was to facilitatesome kind of profit generation for the insured or to the beneficiary– In the instant case, hiring of insurance policy is clearly an act forindemnifying a risk of loss/damages and there is no element of profitGgeneration – Judgment of the National Consumer Disputes RedressalCommission upheld.

Consumer Protection Act, 1986 – Nature of the insurancecontract – Insurance contracts are contracts of indemnity wherebyone undertakes to indemnify another against loss/damage or liabilityH

NATIONAL INSURANCE CO. LTD. v. HARSOLIA MOTORSAND OTHERS

arising from an unknown or contingent event and is applicableonly to some contingency or act likely to come in future.

Consumer Protection Act, 1986 – A social benefit-orientedlegislation – Discussed.

Words and Phrases – “Consumer”, “Commercial Purpose” –Discussed – Consumer Protection Act, 1986.

Dismissing the appeals, the Court

HELD: 1. The provisions of the Act, 1986 thus have to beconstrued in favour of the consumer to achieve the purpose ofenactment as it is a social benefit-oriented legislation. Theprimary duty of the Court/Commission while construing theprovisions of such an Act is to adopt a constructive approachsubject to that it should not do violence to the language of theprovisions and is not contrary to attempted objective of theenactment. [Para 24][458-F]

2. The word “consumer” so defined does not include aperson, who, in case of goods obtains such goods for resale orfor any commercial purpose, or who, in case of service, avails ofsuch services, for any commercial purpose. An explanationappended to the above definition states that the expression“commercial purpose” does not include the use by the buyer ofsuch goods or the person availing such service or services,exclusively for the purpose of earning his livelihood by means ofself-employment. [Para 27][460-F]

3. What is culled out is that there is no such exclusion fromthe definition of the term “consumer” either to a commercialenterprise or to a person who is covered under the expression“person” defined in Section 2(1)(m) of the Act, 1986 merelybecause it is a commercial enterprise. To the contrary, a firmwhether registered or not is a person who can always invoke thejurisdiction of the Act, 1986 provided it falls within the scope andambit of the expression “consumer” as defined under Section2(1)(d) of the Act, 1986. Applying the above principles to thepresent case, what needs to be determined is whether theinsurance service has a close and direct nexus with the profit A

BC

D

E

F

G

H

Agenerating activity and whether the dominant intention ordominant purpose for the transaction was to facilitate some kindof profit generation for the purchaser and/or their beneficiary.The fact that the insured is a commercial enterprise is unrelatedto the determination of whether the insurance policy shall becounted as a commercial purpose within the purview of SectionB2(1)(d) of the Act. [Paras 36, 37][466-C-F]

4. Two things are culled out; (i) whether the goods arepurchased for resale or for commercial purpose; or (ii) whetherthe services are availed for any commercial purpose. The two-foldclassification is commercial purpose and non-commercial purpose.CIf the goods are purchased for resale or for commercial purpose,then such consumer would be excluded from the coverage of theAct, 1986. [Para 39][468-B-C]

5. What needs to be determined is whether the insuranceservice had a close and direct nexus with the profit generatingDactivity and whether the dominant intention or dominant purposeof the transaction was to facilitate some kind of profit generationfor the insured or to the beneficiary and our answer is in thenegative and accordingly is of the view that the complaint filed bythe respondent insured herein has no close or direct nexus withEthe profit generating activity and the claim of insurance is toindemnify the loss which the respondent insured had sufferedand the Commission has rightly held that the respondent is a“consumer” under Section 2(1) (d) of the Act, 1986. It can beconcluded that in the instant case hiring of insurance policy isclearly an act for indemnifying a risk of loss/damages and there isFno element of profit generation and still what has been expressedby this Court is illustrative; it will always open to be examined onthe facts of each case, as to the transaction in reference to whichthe claim has been raised has any close and direct nexus withprofit generating activity. [Paras 43, 46][470-C-E; 470-B-C]

GLaxmi Engineering Works v. P.S.G. Industrial Institute(1995) 3 SCC 583 : [1995] 3 SCR 174; LucknowDevelopment Authority v. M.K. Gupta (1994) 1 SCC243 : [1993] 3 Suppl. SCR 615; Karnataka Power H

NATIONAL INSURANCE CO. LTD. v. HARSOLIA MOTORSAND OTHERS

Transmission Corporation and Another v. Ashok IronWorks Private Limited (2009) 3 SCC 240 : [2009] 1SCR 1109; United India Insurance Company Limitedv. Levis Strauss (India) Private Limited (2022) 6 SCC 1– relied on.

Madan Kumar Singh (Dead) Through LR. v. DistrictMagistrate, Sultanpur and Others (2009) 9 SCC 79 :[2009] 12 SCR 1186; Lilavati Kirtilal Mehta MedicalTrust v. Unique Shanti Developers and Others (2020) 2SCC 265 : [2019] 14 SCR 563; Paramount DigitalColour Lab and Others v. AGFA India Private Limitedand Others (2018) 14 SCC 81; Shrikant G. Mantri v.Punjab National Bank (2022) 5 SCC 42; KalpavrukshaCharitable Trust v. Toshniwal Brothers (Bombay) Pvt.Ltd. and Another (2000) 1 SCC 512 : [1999] 3 Suppl.SCR 619; Rajeev Metal Works and Others v. Mineral& Metal Trading Corporation of India Ltd. (1996) 9SCC 422 : [1995] 6 Suppl. SCR 118 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5352-5353 of 2007.

From the Judgment and Order dated 03.12.2004 of the NationalConsumer Disputes Redressal Commission, New Delhi in FA Nos. 159and 161 of 2004.

With

Civil Appeal Nos.5354 of 2007, 2821 of 2012, 3350 of 2018 and2787 of 2023.

A

B

C

D

E

F

G

H

AKailash Vasudev, Sunil Kumar, Dr. Bharat Bhushan Parsoon,Nakul Dewan, Surendra Kumar, N. Ganpathy, Sr. Advs., Amit KumarSingh, Apratim Animesh Thakur, Mrs. K Enatoli Sema, Ms. ChubalemlaChang, Prang Newmai, Moazzam Khan, Ms. Shweta Sahu, BrijeshUjjainwal, Ms. Anindita Mitra, Ms. Anvita Goel, Ms. Anany Gupta,Shivam Singh, P.K. Seth, Ms. Manjeet Chawla, Manish Kumar, AbhinavBSingh, Shivam Singh, Gopal Singh, Prem Ranjan Kumar, Awanish Sinha,Vinay Kumar Misra, Arjun Masters, Suraj Keserwani, Ms. Sonam Priya,Anurag Mishra, Ayush Kumar Singh, Gagan Gupta, Vishal Prasad,Abhishek Atrey, J.B. Mudgil, S.K. Sharma, Pradhuman Gohil, Mrs. TarunaSingh Gohil, Ms. Ranu Purohit, Alapati Sahithya Krishna, Ms. NoreenCSarna, Neil Chatterjee, Ms. Nooreen Sarna, Mayur R. Shah, Yash PalDhingra, Mukesh Verma, Pankaj Kumar Singh, Pawan Kumar Shukla,Kamal Kumar Pandey, Sandip C. Shah, Rajiv Ranjan Dwivedi, M. T.George, Mrs. Susy Abraham, Johns George, M. J. Paul, V.K. Khanna,Hitesh Kumar Sharma, Akhileshwar Jha, Ms. Niharika Dewivedi, RavishKumar Goyal, Narendra Pal Sharma, Dr. (Mrs.) Vipin Gupta, NikhilDGoel, Ms. Naveen Goel, Adithya K. Roy, S.L. Gupta, Asuthosh Sharma,Ms. Gunjan Sharma, Virender Kr. Sharma, Arup Ratan Dutta Choudhury,Rajive Kumar Deora, Dharam Pal Saini, Abdul Gaffar, Mohan Singh,Saurabh Sharma, Ayush Panwar, K.K. Chauhan, Ms. Shalu Sharma,Brahm Shankar, Soumya Dutta, V. Elanchezhiyan, Venkita SubramoniamET.R, Likhi Chand Bonsle, Rahat Bansal, Amit K. Nain, P. I. Jose, AshokMathur, Rohan Ganpathy, Aakarsh Kamra, Arunav Patnaik, Ms. BhabnaDas, Aaditya Mishra, Nilendu Vatsyayan, Chandra Bhushan Tiwari,Rajesh P., Manoranjan Sharma, Advs. for the appearing parties.The Judgment of the Court was delivered byFRASTOGI, J.CIVIL APPEAL NO(S).5352-5353 OF 2007

1. The assail in the present appeals by special leave is to judgmentand order passed by the National Consumer Disputes RedressalGCommission (hereinafter “National Commission”) dated 3[rd] December,2004, whereby the National Commission, while reversing the finding ofthe Gujarat State Consumer Disputes Redressal Commission (hereinafter“State Commission”), regarding maintainability of the complaint filed atthe instance of the respondent under the Consumer Protection Act, 1986(hereinafter “Act, 1986”) held that a person who takes insurance policyH

to cover the envisaged risk does not take the policy for the commercialpurpose. Policy is only for indemnification of an actual loss and is notintended to generate profits and finally held that the respondent (insured)was a consumer as defined under Section 2(1)(d) of the Act, 1986 andthecomplaint filed at his instance was maintainable and be examined bythe State Commission on merits.

2. Respondent no.1 (dealer in TATA vehicles) and respondentno.2 are the claimants. Respondent no.1 took out a fire insurance policywith the appellant for a cover of Rs.75,38,000/- and respondent no.2 fora cover of Rs.90 lakhs. That on 28[th] February, 2002, damage was causedto the goods of respondent nos.1 and 2 due to fire (during the course ofGodhra riots). The appellant denied the claim of respondent no.1, whileadmitting the claim of respondent no.2 to the extent of Rs.54,29,871/-.The respondents filed complaint before the State Commission.

3. Respondent no.1 M/s Harsolia Motors, a commercial entityengaged in the business of sale of vehicles, took fire insurance policyfrom the appellant insurance company covering the office, showroom,garage, machinery lying in the showroom premises, etc. The grievanceof the respondent was that their aforesaid premises were damaged duringthe Godhra riots on 28[th] February, 2002. A complaint was instituted bythe respondent, M/s Harsolia Motors, a partnership firm, before the StateCommission, for compensation of damage caused on the ground thatpost-Godhra incident, which took place on 27[th] February, 2002, riots brokeout resulting into complainant’s goods being destroyed by fire set up byrioters on 28[th] February, 2002 and the respondent/complainant was entitledto be indemnified the insured sum under the policy of insurance.

4. The State Commission held that the respondent is not coveredunder the expression “consumer” as defined under Section 2(1)(d) ofthe Act, 1986 and held that the complainant being a company running abusiness from the premises to earn profits falls under the term “forcommercial purpose” and the complaintis not maintainable under theprovisions of the Act, 1986.

5. On an appeal being preferred by the respondent insured beforethe National Commission, the question arose as to whether the insurancepolicies taken by a commercial unit could be held to be hiring of servicesfor commercial purpose and are hereby excluded from the provisions ofthe Act, 1986 after revisiting the provisions of the Act, 1986 and the A

B

C

DE

F

G

H

Adefinition of the terms “consumer” and “service” as defined under Section2(1)(d) and 2(1)(o) of the Act, 1986, respectively the Commissionrecorded a finding that the expression used “for any commercial purpose”would mean that the goods purchased or services hired should be usedin any activity directly intended to generate profit and profit is the mainaim of commercial purpose, but in a case where goods purchased orBservices hired in an activity which is not intended to generate profit, itwould not be a commercial purpose and held that a person who takesthe policy of insurance to cover the envisaged risk, for indemnificationof actual loss sufferedis not ordinarily intended to generate profits andaccordingly held that the respondent/complainant was a “consumer”Cunder Section 2(1)(d) of the Act, 1986 and complaint filed at its instanceis to be examined/decided by the State Commission on its own meritsunder the judgment impugned dated 3[rd] December, 2004, is a subjectmatter of challenge in appeal before this Court at the instance of theappellant insurance company.D6. While the notices were issued by this Court on 15[th] April, 2005,the operation and effect of the judgment impugned was stayed. Inconsequence thereof, the complaint filed at the instance of the respondenthas not been examined by the State Commission on merits so far.

7. The other batch of appeals which were heard along with CivilEAppeal No(s).5352-5353 of 2007 (National Insurance Co. Ltd. v. HarsoliaMotors and Others) arising from the judgment of the NationalCommission, placing reliance on the impugned judgment dated 3[rd]December, 2004, applying the self-same principles are also challengedat the instance of the appellant insurer before us.F8. The seminal issue that emanates for our consideration is whether

8. The seminal issue that emanates for our consideration is whetherthe insurance policy taken by the respondent (commercial enterprises)insured amounts to hiring of services for “commercial purpose” therebyexcluded from the purview of the expression”consumer” as defined underSection 2(1)(d) of the Act, 1986.G

9. Learned counsel for the appellant submits that there cannot bea blanket inclusion of all insurance matters within the purview of Act,1986 and if that is being taken at the face value, it would render theprovisions of the Commercial Courts Act, 2015 (hereinafter “Act, 2015”)nugatory and submits that Section 2(1)(XX) of the Act,2015 includesHinsurance and re-insurance within the ambit of commercial disputes.

10. Learned counsel further submits that law on the subject hasbeen examined by this Court in Laxmi Engineering Works v. P.S.G.Industrial Institute[1 ]and it was held that “commercial purpose” is to belooked into, in the facts and circumstances of each case to consider thepurpose for which the goods and services are bought or availed. If it isavailed with a view to carrying out large scale commercial activity withprofit motive, then the buyer would not qualify as a consumer and theAct, 1986 would not be applicable and the view of this Court has beenconsistently affirmed in the later judgments.

11. Learned counsel further submits that the Commission in itssecond last para explicitly takes the very policy of insurance within thepurview of the Act, 1986 and in sequel thereof, regardless of the natureof transaction, whenever there is a claim for compensation in referenceto the policy of insurance, such complaints became maintainable underthe Act, 1986.

12. Learned counsel further submits that dominant purpose ofobtaining insurance contracts by the business entities is to earn profitsand thus has a close and direct nexuswith it and accordingly these entitiesare not entitled to file the claim before the Consumer Court seekingsummary proceedings and the present disputes are not of a smalldisgruntled consumer who is seeking claim of an insurance for loss ofmobile for personal use, or of autorickshaw driver seeking claim forexpenses incurred for fixing a defective engine as that is covered for hislivelihood. The instant dispute pertains to large scale business entitiesentering into commercial agreements with the insurance companies toprotect the risks associated in carrying out their businesses. If they arebeing permitted to invoke the jurisdiction as a consumer under the Act,1986, it will frustrate the very mandate of the legislative wisdom, pursuantto which this Act has been enacted.

13. Learned counsel further submits that the doctrine of electionis not available to the litigant who is aggrieved by the insurance contractas Section 2(1)(d) of the Act, 1986 and Section 2(7) of the ConsumerProtection Act, 2019 Act specifically exclude the provisions of services“for commercial purpose” from the ambit of consumer courts and theonly remedy lies to the commercial courts under the Act, 2015.

A

B

C

DE

F

G

H

A14. Learned counsel submits that if contention to the contrary ofinsurance for commercial activities falling within the ambit of the Act,1986 is to be accepted, then obtaining any service for any commercialactivity even for facilitating profit generation for commercial enterprisewould fall within the expression “consumer” as defined under Section2(1)(d) of the Act, 1986and it would lead to improbability as it would goBagainst the basic tenets of service being used for commercial ends whoseviolation give rise to civil action and not consumer redressal.

A

A

15. Learned counsel further submits that if the respondent’ssubmission of insurance as a service availed by any person within themeaning of the Act is accepted, this would entail an exponential growthCof consumer disputes across the country, not only would that lead tofrustration of literal spirit and intent of the socially and economicallybeneficial legislation, rather it would inadvertently give rise to the premiumscharged by the insurance company which would again subserve theoverall intent of the Act, as actual consumers who regularly avail theDservices will have to pay more for the same coverage and this can betaken note from the Statement of Objects and Reasons which was keptin mind for the purpose of making the amendment in the year 2002.

16. Learned counsel lastly submits that the purchase of insurancepolicy has a direct nexus with the commercial activity in a large-scaleEenterprise. In other words, the insurance policy indemnifies the companyagainst loss arising out of fire, earthquake or any other insured peril.What is reimbursed by the insurance company is a loss and loss is directlyinterlinked with the commerce of the company and, therefore, a complaintseeking reimbursement of a loss would not be maintainable before theConsumer Court if it is filed by a large-scale commercial entity like theFrespondent herein andthe interpretation addressed by the NationalCommission of the provisions of the Act, 1986 not only runs contrary tothe judgments of this Court, it is otherwise not legally sustainable anddeserves to be interfered by this Court.

17. Per contra, learned counsel for the respondent, submits thatGthe purchase of insurance policy cover is a contract of indemnificationof particular risk and not a contract of doing or not doing something toearn profit/loss out of such act. If the contemplated risk out of particulareventuality i.e., fire, flood, etc., does not occur, then there is no questionof encashment of policy cover, and if this happens what is payable is theHrisk amount against premium paid in advance. Under the circumstances, the insurance policy cover is being offered/purchased not basically toearn profit, but to cover the uninvited risk, hence, buying of policy coveris not for commercial purpose even if it is purchased by commercialenterprises and what is commercial purpose is well defined not only inseveral dictionaries but also in the judgments of this Court and submittedthat it may be noticed that the Act, 1986 bars only a transaction for“commercial purpose” but it does not bar any commercial enterprise tobe a consumer and hence the commercial enterprise can be a buyer/consumer and can enforce its rights as a consumer, provided immediateintent is to generate profit out of such transaction by the commercialenterprise, as held by this Court in Madan Kumar Singh (Dead)Through LR. v. District Magistrate, Sultanpur and Others[2].

18. Learned counsel further submits that any transaction bycommercial enterprises even without immediate intention to make profitcannot be regarded for “commercial purpose”, otherwise all transactionsby commercial enterprises may or may not have even remote co-relationof generating profit will be treated for commercial purposes. Say, forexample, a company buying a water plant for its workers or for anystranger/outsider to serve free water - or paint tins in bulk for upgradingwalls etc. have no direct effect of earning profit out of it. Thus, buying awater plant cannot be treated for commercial purpose, otherwise virtuallyall transactions by commercial enterprise will get colour of commercialpurpose and had it been such an intention of the legislature, then it wouldhave worded the definition of term “consumer” differently – instead of“any person” would have used “any person other than commercialenterprises”, but the statute in its wisdom has allowed to cover commercialtransaction with commercial purpose. Therefore, the transactions bythe commercial enterprises per se cannot be considered as an exclusionaltogether under the Act, 1986.

19. We have heard learned counsel for the parties and with theirassistance perused the material available on record.

20. Before we proceed to examine the issue raised for ourconsideration, it will be apposite to take a bird’s eye-view of the Act, 1986.

21. The Act, 1986 is a social benefit-oriented legislation and,therefore, the Court has to adopt a constructive liberal approach whileconstruing the provisions of the Act. To begin with the Preamble of the 2 (2009) 9 SCC 79

AB

C

D

E

F

G

H

AAct, 1986 which can afford useful assistance to ascertain the legislativeintention, it was enacted to provide for the protection of the interests ofconsumers. Use of the word “protection” furnishes key to the minds ofmakers of the Act. Various definitions and provisions which elaboratelyattempt to achieve this objective have to be construed in this light withoutdeparting from the settled law that a Preamble cannot control otherwiseBplain meaning of a provision.

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

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

24. The provisions of the Act, 1986 thus have to be construed infavour of the consumer to achieve the purpose of enactment as it is asocial benefit-oriented legislation. The primary duty of the Court/FCommission while construing the provisions of such an Act is to adopt aconstructive approach subject to that it should not do violence to thelanguage of the provisions and is not contrary to attempted objective ofthe enactment.

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

“2. Definitions. - In this Act, unless the context otherwiserequires,- H……..

(d) “consumer” means any person who-

(i) buys any goods for a consideration which has been paid orpromised or partly paid and partly promised, or under anysystem of deferred payment and includes any user of suchgoods other than the person who buys such goods forconsideration paid or promised or partly paid or partlypromised, or under any system of deferred payment whensuch use is made with the approval of such person, butdoes not include a person who obtains such goods for resaleor for any commercial purpose; or

(ii) hires or avails of any services for a consideration whichhas been paid or promised or partly paid and partly promised,or under any system of deferred payment and includes anybeneficiary of such services other than the person who hiresor avails of the services for consideration paid or promised,or partly paid and partly promised, or under any system ofdeferred payments, when such services are availed of withthe approval of the first-mentioned person; Explanation: For the purposes of sub-clause (i), “commercialpurpose” does not include use by a consumer of goodsbought and used by him exclusively for the purpose ofearning his livelihood, by means of self-employment; ……

(m) “person” includes-

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

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

…….

(o) “service” means service of any description which is madeavailable to potential users and includes the provision of facilitiesin connection with banking, financing, insurance, transport,processing, supply of electrical or other energy, board or lodgingor both, [housing construction], entertainment, amusement or the A

B

C

D

E

F

G

H

Apurveying of news or other information, but does not include therendering of any service free of charge or under a contract ofpersonal service.”

26. The word “consumer” is the fulcrum of the Act. Since theAct hinges on the twin concepts of defect in goods or any deficiency inBservice, 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 inquestion, or C

(c) a hirer or person otherwise availing, 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 orDhiring or availing of any such service, is for a consideration, -

(i) paid, or

(ii) promised, or

(iii) partly paid or promised, or

E(iv)covered by any system of deferred payment.

27. However, the word “consumer” so defined does not include aperson, who, in case of goods obtains such goods for resale or for anycommercial purpose, or who, in case of service, avails of such services,for any commercial purpose. An explanation appended to the aboveFdefinition states that the expression “commercial purpose” does notinclude the use by the buyer of such goods or the person availing suchservice or services, exclusively for the purpose of earning his livelihoodby means of self-employment.

28. It may be noticed that Section 2(1)(m) defines “person” andGincludes a firm, whether registered or not, apart from other categorieswithout any distinction, big or small. So, as “services” defined underSection 2(1)(o) includes banking, insurance and if there is deficiency inservice in the matter of banking/insurance, etc., subject to the fact thathe is a consumer under Section 2(1)(d), remedy is always available tosuch a consumer to invoke the jurisdiction of the Act, 1986.H

29. This Court adverted to the concept of “consumer” as definedunder the Act, analysing the definition in the context of the Act, inLucknow Development Authority v. M.K. Gupta[3] held :

“3……It is in two parts. The first deals with goods and the otherwith services. Both parts first declare the meaning of goods andservices by use of wide expressions. Their ambit is further enlargedby use of inclusive clause. For instance, it is not only purchaser ofgoods or hirer of services but even those who use the goods orwho are beneficiaries of services with approval of the personwho 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 wouldamount to unfair trade practice by giving an elaborate definition inclause (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 consumeras understood in commercial sense as a purchaser of goods andin the larger sense of user of services. The common characteristicsof goods and services are that they are supplied at a price tocover the costs and generate profit or income for the seller ofgoods or provider of services. But the defect in one and deficiencyin other may have to be removed and compensated differently.The former is, normally, capable of being replaced and repairedwhereas the other may be required to be compensated by awardof the just equivalent of the value or damages for loss……”

30. Later, this Court in Laxmi Engineering Works (supra), whiledealing with the connotative expanse of the term “consumer” in theunamended form and the explanation added to the expression“Consumer”by an amendment, ruled that such explanation is clarificatoryin nature and taking note of the explanation added by the amendmentAct, 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 isrelevant for the purpose of this appeal, (i) a person who buys anygoods for consideration; it is immaterial whether the consideration A

B

C

D

E

F

G

A

B

C

D

E

F

G

H

is paid or promised, or partly paid and partly promised, or whetherthe payment of consideration is deferred; (ii) a person who usessuch goods with the approval of the person who buys such goodsfor consideration; (iii) but does not include a person who buyssuch goods for resale or for any commercial purpose. Theexpression ‘resale’ is clear enough. Controversy has, however,arisen with respect to meaning of the expression “commercialpurpose”. It is also not defined in the Act. In the absence of adefinition, we have to go by its ordinary meaning. ‘Commercial’denotes “pertaining to commerce” (Chamber’s TwentiethCentury Dictionary); it means “connected with, or engaged incommerce; mercantile; having profit as the main aim” (CollinsEnglish Dictionary) whereas the word ‘commerce’ means“financial transactions especially buying and selling of merchandise,on a large scale” (Concise Oxford Dictionary). The NationalCommission appears to have been taking a consistent view thatwhere a person purchases goods “with a view to using such goodsfor carrying on any activity on a large scale for the purpose ofearning profit” he will not be a ‘consumer’ within the meaning ofSection 2(d)(i) of the Act. Broadly affirming the said view andmore particularly with a view to obviate any confusion - theexpression “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 excludescertain purposes from the purview of the expression “commercialpurpose” - a case of exception to an exception. Let us elaborate:a person who buys a typewriter or a car and uses them for hispersonal use is certainly a consumer but a person who buys atypewriter or a car for typing others’ work for consideration orfor plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifiesthat in certain situations, purchase of goods for “commercialpurpose” would not yet take the purchaser out of the definition ofexpression ‘consumer’. If the commercial use is by the purchaserhimself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a ‘consumer’. In theillustration given above, if the purchaser himself works ontypewriter or plies the car as a taxi himself, he does not cease tobe a consumer. In other words, if the buyer of goods uses them

himself, i.e., by self-employment, for earning his livelihood, it wouldnot be treated as a “commercial purpose” and he does not ceaseto be a consumer for the purposes of the Act. The explanationreduces the question, what is a “commercial purpose”, to a questionof fact to be decided in the facts of each case. It is not the valueof the goods that matters but the purpose to which the goodsbought are put to. The several words employed in the explanation,viz., “uses them by himself”, “exclusively for the purpose of earninghis livelihood” and “by means of self-employment” make theintention of Parliament abundantly clear, that the goods boughtmust be used by the buyer himself, by employing himself forearning his livelihood. A few more illustrations would serve toemphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood wouldbe a consumer. Similarly, a purchaser of a truck who purchases itfor plying it as a public carrier by himself would be a consumer. Aperson who purchases a lathe machine or other machine to operateit himself for earning his livelihood would be a consumer. (In theabove illustrations, if such buyer takes the assistance of one ortwo persons to assist/help him in operating the vehicle or machinery,he does not cease to be a consumer.) As against this a personwho purchases an auto-rickshaw, a car or a lathe machine orother machine to be plied or operated exclusively by another personwould not be a consumer. This is the necessary limitation flowingfrom the expressions “used by him”, and “by means of self-employment” in the explanation. The ambiguity in the meaning ofthe words “for the purpose of earning his livelihood” is explainedand clarified by the other two sets of words.

and after a fair analysis of the definition “consumer” post-amendment 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 18-6-1993 is clarificatory in nature and appliesto all pending proceedings.

(ii) Whether the purpose for which a person has bought goods isa “commercial purpose” within the meaning of the definition of AB

C

DE

F

G

H

Aexpression ‘consumer’ in Section 2(d) of the Act is always aquestion of fact to be decided in the facts and circumstances ofeach case.

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

31. The exposition of law on the subject was further consideredby this Court in Lilavati Kirtilal Mehta Medical Trust v. Unique ShantiDevelopers and Others[4]in which one of us (Rastogi, J.) was a memberCand the question arose for consideration was whether the purchase offlats for the purpose of providing accommodation to nurses employed bythe Lilavati Kirtilal Mehta Medical Trust hospital qualifies a purchase ofservices for commercial purpose and whether the Hospital Trust wasexcluded from the definition of “consumer” under Section 2(1)(d) of theAct, 1986, this Court after revisiting the scheme of the Act, 1986 andDtaking note of the law of precedence in Laxmi Engineering Works(supra) of which a reference has been made and placing reliance on thejudgment of this Court in Paramount Digital Colour Lab and Othersv. AGFA India Private Limited and Others[5 ]held that a person whetheror not a consumer or other activities meant for commercial purpose willEalways depend upon the facts and circumstances of each case.

32. It may be a case that a person who is engaged in commercialactivities has purchased goods or availed of service for his personal useor consumption or for the personal use of a beneficiary and such purchaseis not linked to their ordinary profits generating activities or for creationFof self-employment, such a person may still claim to be a consumer andafter discussion of various illustrations summarized the discussion aftertaking note of the broad principles that were culled out for determinationwhether the activity or transaction is for a commercial purpose, held asunder:

G“19. To summarise from the above discussion, though a straitjacket formula cannot be adopted in every case, the followingbroad principles can be culled out for determining whether anactivity or transaction is “for a commercial purpose”:

4 (2020) 2 SCC 265H5 (2018) 14 SCC 81

19.1. The question of whether a transaction is for a commercialpurpose would depend upon the facts and circumstances of eachcase. However, ordinarily, “commercial purpose” is understoodto include manufacturing/industrial activity or business-to-businesstransactions between commercial entities.

19.2. The purchase of the good or service should have a closeand direct nexus with a profit-generating activity.

19.3. The identity of the person making the purchase or the valueof the transaction is not conclusive to the question of whether it isfor a commercial purpose. It has to be seen whether the dominantintention or dominant purpose for the transaction was to facilitatesome kind of profit generation for the purchaser and/or theirbeneficiary.

19.4. If it is found that the dominant purpose behind purchasingthe good or service was for the personal use and consumption ofthe purchaser and/or their beneficiary, or is otherwise not linkedto any commercial activity, the question of whether such apurchase was for the purpose of “generating livelihood by meansof self-employment” need not be looked into.”

33. This Court noticed that the hostel facilities were provided tothe nurses employed by Lilavati hospital but after sometime ofcompletion of the project because of alleged poor building quality, thestructure became dilapidated and the nursing staff had to vacate theflats being used by them and a consumer complaint filed by the Lilavatihospital for compensation on account of annual loss of rent wasmaintainable and whether the Trust was a consumer under Section2(1)(d) of the Act.

34. In Lilavati Kirtilal Mehta Medical Trust (supra), this Courtobserved that there is no nexus between the purchase of flats by theappellant Trust and its profit generating activity as the flats were notoccupied for undertaking any medical/diagnostic facilities within thehospital, but for accommodating the nurses employed by the hospital. Inthe given circumstances, it has nothing to do with earing of profits inproviding facilities to the nurses and held that the Trust is a “consumer”under Section 2(1)(d) of the Act, 1986 for the transaction underconsideration.

A

BC

D

EF

G

H

A35. Thus, what is important is the transaction in reference to whichthe claim has been filed under the Act, 1986 by a person who claimshimself to be a “consumer” covered under Section 2(1)(d) of the Act,1986, such exposition of law on the subject has been further reiteratedby this Court recently in Shrikant G. Mantri v. Punjab National Bank[6]and after the analysis on the subject and taking note of the judgment ofBthis Court in Lilavati Kirtilal Mehta Medical Trust (supra), of whichreference has been made, examined the case on the facts in questionand recorded a finding that the transaction in question would fall withinthe definition of the term “consumer” or “services” for the purpose ofinvoking jurisdiction under the Act, 1986.C

A

A

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

37. Applying the above principles to the present case, what needsto be determined is whether the insurance service has a close and directEnexus with the profit generating activity and whether the dominantintention or dominant purpose for the transaction was to facilitate somekind of profit generation for the purchaser and/or their beneficiary. Thefact that the insured is a commercial enterprise is unrelated to thedetermination of whether the insurance policy shall be counted as acommercial purpose within the purview of Section 2(1)(d) of the Act.F

38. In the case of Karnataka Power Transmission Corporationand Another v. Ashok Iron Works Private Limited[7], this Court whileanswering the question in the affirmative observed :

“17. It goes without saying that interpretation of a word orGexpression must depend on the text and the context. The resort tothe word “includes” by the legislature often shows the intentionof the legislature that it wanted to give extensive and enlargedmeaning to such expression. Sometimes, however, the context 6 (2022) 5 SCC 42H7 (2009) 3 SCC 240

may suggest that word “includes” may have been designed tomean “means”. The setting, context and object of an enactmentmay 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 underthe Societies Registration Act, 1860 (21 of 1860) or not while defining “person” cannot be held to be restrictive andconfined to these four categories as it is not said in terms that“person” shall mean one or other of the things which areenumerated, 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 bodyof individuals, whether incorporated or not;”

20. Section 3 of the 1986 Act upon which reliance is placed bylearned counsel for KPTC provides that the provisions of theAct are in addition to and not in derogation of any other law forthe time being in force. This provision instead of helping thecontention of KPTC would rather suggest that the access to theremedy provided to (sic under) the Act of 1986 is an addition tothe provisions of any other law for the time being in force. Itdoes 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 intoaccount in construing the expression “person” as it occurs inSection 2(1)(d). While defining “person” in Section 2(1)(m), thelegislature never intended to exclude a juristic person like company.As a matter of fact, the four categories by way of enumerationmentioned therein is indicative, Categories (i), (ii) and (iv) beingunincorporate and Category (iii) corporate, of its intention to A

B

C

D

EF

G

H

468SUPREME COURT REPORTS

Ainclude body corporate as well as body unincorporate. Thedefinition of “person” in Section 2(1)(m) is inclusive and notexhaustive. It does not appear to us to admit of any doubt thatcompany is a person within the meaning of Section 2(1)(d) readwith Section 2(1)(m) and we hold accordingly.”

B39. 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 two-fold classification is commercial purpose and non-commercialpurpose. If the goods are purchased for resale or for commercial purpose,then such consumer would be excluded from the coverage of the Act,C1986. For example, if a manufacturer who is producing product A, forsuch production he may be required to purchase articles which may beraw material, then purchase of such articles would be for commercialpurpose. As against this, if the same manufacturer purchases arefrigerator, television or air-conditioner for his use at his residence orDeven for his office has no direct or indirect nexus to generate profits, itcannot be held to be for commercial purpose and for afore-stated reasonhe is qualified to approach the Consumer Forum under the Act, 1986.

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

41. In other words, to make it further clear, let us have certainillustrations, as to whether the transaction falls for commercial purposeor whether the complainant can be held to be a “consumer” within thescope and ambit of Act, 1986.G

(i) A CT scan machine was purchased by a Charitable Trustand that was found to be defective, the question raisedwhether the machinery was purchased for a commercialpurpose and whether the appellant was a consumer. Fromthe narration of facts, this Court in Kalpavruksha H

Charitable Trust v. Toshniwal Brothers (Bombay) Pvt.Ltd. and Another[8]held that the machine was purchasedby the Charitable Trust for commercial purpose as everyperson who takes a CT scan has to pay for it and the servicesrendered are not free and thus the Trust was not a consumer.

(ii) In Rajeev Metal Works and Others v. Mineral & MetalTrading Corporation of India Ltd.[9], a manufacturerimported raw material through statutory authority that actedas a canalizing agency for manufacture and sale of thefinished product. The appellant approached the NationalCommission alleging that the respondent had not suppliedthe required quantity demanded by the appellant. This Courtheld that the purchase was for a commercial purpose andthe manufacturer was not a “consumer” for the purpose ofthe Act, 1986.

(iii) The bank which had taken bankers indemnity insurancepolicy from the insurance company and suffered loss owingto some of transactions in one of its branches, raised aninsurance claim stating that it is owing to dishonesty ofBranch Manager and the claim was repudiated by theinsurance company stating that the alleged loss was becauseof some dishonesty of the Branch Manager and this beingfor commercial purpose, may not be a consumer.

(iv) The complainant is a private limited company running adiagnostic clinic and alleges that X-ray machine purchasedby the complainant from the opposite party was defective.If an objection is raised that as machine was purchased forcommercial purpose and the complainant cannot be said tobe a consumer as defined under the Act, 1986 as he hasbeen employed for commercial purpose and has beencarrying out business for profit indeed the complainant isnot a consumer under the Act, 1986.

(v) A company purchased the EPBX system for the bettermanagement of the business of the company for commercialpurpose and the complaint filed for alleged supply of 8 (2000) 1 SCC 512

9 (1996) 9 SCC 422

A

B

C

D

E

F

G

Adefective system may not be covered by the explanatoryclause of Section 2(1)(d) of the Act, 1986 as the transactionhas no nexus to generate profits.

42. Thus, what is finally culled out is that each case has to beexamined on its own facts and circumstances and what is to be examinedBis whether any activity or transaction is for commercial purpose togenerate profits and there cannot be a straight-jacket formula whichcan be adopted and every case has to be examined on the broad principleswhich have been laid down by this Court, of which detailed discussionhas been made.

C43. Applying the above principles in the present case, what needsto be determined is whether the insurance service had a close and directnexus with the profit generating activity and whether the dominantintention or dominant purpose of the transaction was to facilitate somekind of profit generation for the insured or to the beneficiary and ouranswer is in the negative and accordingly we are of the view that theDcomplaint filed by the respondent insured herein has no close or directnexus with the profit generating activity and the claim of insurance is toindemnify the loss which the respondent insured had suffered and theCommission has rightly held that the respondent is a “consumer” underSection 2(1)(d) of the Act, 1986.

E

44. We further reiterate that ordinarily the nature of the insurancecontract is always to indemnify the losses. Insurance contracts arecontracts of indemnity whereby one undertakes to indemnify anotheragainst loss/damage or liability arising from an unknown or contingentevent and is applicable only to some contingency or act likely to come infuture.F

45. This Court in United India Insurance Company Limited v.Levis Strauss (India) Private Limited[10 ]has held as under:

“53.A contract of insurance is and always continues to be one forindemnity of the defined loss, no more no less. In the case ofGspecific risks, such as those arising from loss due to fire, etc. theinsured cannot profit and take advantage by double insurance.Long ago, Brett, LJ in Castellain v. Preston [Castellain v.Preston, (1883) 11 QBD 380] said that : (QBD p. 386)

“….. the contract of insurance … is a contract of indemnity.… and that this contract means that the assured, in the case ofloss … shall be fully indemnified,but shall never be more thanfully indemnified.””

(emphasis added)

46. Thus, it can be concluded that in the instant case hiring ofinsurance policy is clearly an act for indemnifying a risk of loss/damagesand there is no element of profit generation and still what has beenexpressed by this Court is illustrative; it will always open to be examinedon the facts of each case, as to the transaction in reference to which theclaim has been raised has any close and direct nexus with profitgenerating activity.

47. We do not agree with the submission made on behalf of theappellant that if insurance claims are covered under the Act, 1986, thenvirtually all insurance matters will come within the purview of the Act,1986 and this will render the Act, 2015 nugatory. In our view, both theseActs have different scope and ambit and have different remedialmechanism, are in different sphere having no internal co-relationship.

48. Consequently, the appeals are without substance andaccordingly dismissed. No costs.

49. Let the State Commission may adjudicate the complaint ofthe respondents on its own merits in accordance with law and since it isan old matter, be decided expeditiously as possible, but in no case laterthan one year.

CIVIL APPEAL NO(S).5354 OF 2007– (United IndiaInsurance Company Limited v. M/s Diwakar Goiram Porkhayat)

51. The present appeal is directed against the order passed by theNational Commission dated 3[rd] December, 2004 holding that the insurancepolicy taken by the respondent (commercial unit) in the facts of the casewas only to indemnity the loss which the respondent/complainant hassuffered and the transaction in reference to which the insurance claimhas been repudiated by the appellant, had no direct nexus with the profitgenerating activity and was a “consumer” as defined under Section2(1)(d) of the Act, 1986.

A

B

C

D

E

F

G

H

A

A52. The respondent/complainant (insured) is doing the business ofsale and purchase of jewellery in the name and style of “KhazanaJewellers” who obtained a policy of insurance from the appellant for theperiod 21[st] October, 1999 to 20[th] October, 2000 to cover the risk ofornaments in business.B53. On 24[[th]]

53. On 24[[th]] June, 2000, at about 7.00 a.m. when an employee ofthe respondent saw that the shutter of the showroom was partly openand that was indicative of the theft and upon inspection, it was foundthat goods worth Rs.20,55,200/- were stolen from the showroom.

54. On the claim being raised by the respondent to indemnify theCloss suffered, it was repudiated by the appellant and that was challengedby the respondent by filing a consumer complaint before the StateCommission, Ahmedabad, that was dismissed on the premise that therespondent was not a “consumer” within the ambit of Section 2(1)(d) ofthe Act, 1986 by an order dated 1[st] April, 2004.D

55. The respondent challenged the order of dismissal by an appealbefore the National Commission taking note of the nature of thetransaction and relying upon the order of the Commission in the case ofM/s Harsolia Motors dated 3[rd] December, 2004, the Commission heldthat the transaction in reference to which the insurance claim has beenEraised by the respondent has no direct nexus with the profit generatingactivity and the insurance cover was obtained only to cover the loss, ifany, being suffered on account of theft or by natural calamity and theorder passed by the National Commission dated 3[rd]December, 2004 isthe subject matter of challenge in appeal before us.F

56. In the light of the judgment passed by us today in Civil AppealNos.5352-5353 of 2007 (National Insurance Co. Ltd. v. Harsolia Motorsand Others), the present appeal is without substance and is accordinglydismissed. No costs.

G

57. The complaint is restored on the file of the State Commissionand the same be adjudicated on its own merits in accordance with lawand may be decided as expeditiously as possible, but in no case laterthan one year.

H

CIVIL APPEAL NO(S).2821 OF 2012– National InsuranceCo. Ltd. v. M/s Ankur and Another.

59. The judgment under appeal is dated 15[th] December, 2010passed by the National Commission.

60. Brief facts of the case are that the respondent is engaged inthe business of garments in wholesale, who took a standard fire andperil policy effective for the period from 6[th] January, 2006 to 5[th] January,2007 for a total sum of Rs.60,00,000/-. There was a fire on 28[th]December,2006 resulting in damage to the factory of the respondent. The appellantappointed spot surveyor, M/s Apex Surveyors Pvt. Ltd. for final survey,who submitted its report on 22[nd]December, 2008 assessing the loss tothe tune of Rs.53,17,790/- after deducting salvage amount of Rs.1 lakhand factoring sound stock being saved after the fire at Rs.51,969/-. Theappellant claimed that the respondent has failed to submit certaindocuments to the assessor and, therefore, assessment on such basiscould be treated as void. In the meanwhile, SARFAESI proceedingswere initiated against the respondent by Canara Bank (secured creditor).

61. While the claim of the respondent was being processed, therespondent filed a complaint before the State Commission claimingRs.60,00,000/- along with interest. At this stage, the appellant filed apreliminary objection that the respondent is not a “consumer” within thedefinition of Section 2(1)(d) of the Act, 1986. The State Commission atone stage had held that the respondent is engaged in commercial activityand, therefore, is not a consumer. The finding returned by the StateCommission was reversed by the National Commission under its orderdated 15[th] December, 2012 holding that commercial entity availing itsservices by the insurance company is a “consumer” in reference to thetransaction in terms of Section 2(1)(d) of the Act, 1986.

62. We have assigned detailed reasons in Civil Appeal Nos.(5352-5353 of 2007 (National Insurance Co. Ltd. v. Harsolia Motors andOthers). In the light of the judgment passed by us today in the saidappeal, the present appeal is without substance and is accordinglydismissed. No costs.

63. The complaint is restored on the file of the State Commissionand the same be adjudicated on its own merits in accordance with lawand may be decided as expeditiously as possible, but in no case laterthan one year.

A

B

C

E

F

G

H

A64. It is brought to our notice that pursuant to order dated 11[th]May, 2011 of this Court, the appellant had deposited 50% of the claimmade by the respondent and the office report dated 15[th] February, 2023indicates that an amount of Rs.59,74,814/- was invested in the fixeddeposit with the maturity date of 16[th] July, 2023. Let the amount betransferred to the State Commission and the money invested in fixedBdeposit shall continue and may be invested in an interest-bearing accounton automatic renewal basis and the parties shall abide by the orders ofthe State Commission.

A

CCIVIL APPEAL NO(S).3350 OF 2018– The Bank of NewYork Mellon (Formerly The Bank of New York) v. M/s METCO ExportInternational and Others.

66. The appellant has filed the present appeal by special leaveagainst the judgment and order dated 6[th] February, 2018 passed by theNational Commission.D

67. Brief facts of the case are that respondent no.1 entered into atransaction with a third party (an Italian buyer of respondent no.1) forsupply of five containers of sesame seeds and oil seeds for USD 141,375.In relation to this transaction, the services of Federal Bank Ltd.E(respondent no.2) were availed to send the invoice, bills of lading,surveyor’s certificate, bills of exchange, phytosanitary certificate andother related documents (four documents) to the buyer’s banker in Italy.Respondent no.2 engaged the services of the appellant to get exportdocuments delivered to the buyer’s banker in Italy which in turn engagedservices of a courier company (respondent no.3). The export documentsFwere lost in transit.

68. Respondent no.1 filed a consumer complaint before the StateCommission against the appellant, respondent no.2 and respondent no.3.The complaint was dismissed on the premise that respondent no.1 is nota consumer as defined under Section 2(1)(d) of the Act, 1986 by anGorder dated 10[th] December, 2013, that became the subject matter ofchallenge at the instance of respondent no.1 in appeal before the NationalCommission relying on the judgment in Laxmi Engineering Works(supra) and taking note of the judgment in the case of M/s HarsoliaMotors, the National Commission recorded a finding that the dispatch ofpapers by the bank which were lost in transit and never received by theH

Italian buyer per se is not related to generate any profit to the respondentas the actual profit will come from the sale of the exported goods whichhas no nexus to profit generating activity.

69. After we have heard counsel for the parties and consideringthe view expressed by this Court in Civil Appeal Nos.5352-5353 of 2007(National Insurance Co. Ltd. v. Harsolia Motors and Others), the presentappeal is without substance and is accordingly dismissed. No costs.

70. The complaint is restored on the file of the State Commissionand the same be adjudicated on its own merits in accordance with lawand may be decided as expeditiously as possible, but in no case laterthan one year.

CIVIL APPEAL NO(S). OF 2023

(@ SPECIAL LEAVE PETITION (CIVIL) NO(S).1039 OF2020) – IFFCO Tokio General Insurance Company Limited v. M/s OPGEnergy (P) Ltd.

72. Leave granted.

73. The present appeal has been filed by special leave to appealagainst the judgment and order dated 27[th] September, 2019 passed bythe National Commission.

74. We have heard counsel for the parties and taking note of thefact initially an ex-parte order was passed by the Consumer Forum againstthe appellant on 12[th] September, 2014, pursuant to which the appellantwas directed to pay Rs.9,57,903/- with interest @ 9% per annum fromthe date of complaint i.e., 8[th] April, 2011and Rs.5,000/- towards litigation.The appeal/revision filed at the instance of the appellant before the StateCommission and National Commission, both were dismissed by ordersdated 25[th] June, 2019 and 27[th] September, 2019 respectively.

75. After we have heard counsel for the parties, find no reason tointerfere with the impugned order and the same is accordingly dismissed.No costs.

Ankit Gyan(Assisted by : Aarsh Choudhary, LCRA)

Appeals dismissed.

A

B

C

D

E

F

G

H