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TMI Blog2024 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... , Adv. Ms. Mansi Sharma , Adv. Mr. Mrigank Prabhakar , AOR Ms. Amisha Devi , Adv For the Respondent : Ms. Anindita Mitra , AOR JUDGEMENT Aravind Kumar , J. 1. Leave granted. 2. The appellant ('OP'/'service provider', used interchangeably) has challenged the order dated 10.03.2021 of the National Consumer Disputes Redressal Commission, New Delhi (NCDRC) in these appeals. The respondent (complainant) had successfully redressed its consumer grievance, originally, before the Principal Consumer Disputes Redressal for Bangalore Urban District, at Bangalore ('District Forum'). The service provider was unsuccessful in upsetting the order of the District Forum before the State Consumer Disputes Redressal Commission, Bangalore ('State Forum') as well as the NCDRC. That is how this matter has come before us. 3. The service provider is a registered Chit Fund company engaged in Chit business. Admittedly, the complainant had subscribed to certain chits in the said business. The subscription was made in the chit group 53005/Ticket No.9 for a chit value of Rs.1,00,000/- payable at the rate of Rs.2500/- per month for a period of 40 months. 4. It is the case of the complainant that the OP ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailing any remedy under the Consumer Protection Act, 1986. To demonstrate that the service was obtained for a commercial purpose, the OP relied on two circumstances: (a) the statement in the complainant that there was an 'understanding between complainant and opposite party to promote chit business'; (b) findings As per the Internal Audit, the Complainant held 1023 prized chits, and 1043 non-prized chits. The report also mentions various correspondences between the complainant and OP with regards to the increasing disparity between the total liability of the fund, and the paid-up value of the non-prized chits. As per the audit report, the balance liability amounted to Rs. 1.86 crores. It was stated that owing non-payment of outstanding arrears, the foreman in accordance with Section 28 and Section 29 of the Chit Fund Act is bound to remove the defaulted non-prized subscriber to keep the chit running, hence the defaulted nonprized tickets maintained by Complainant were removed, and the paid amounts were adjusted against arrears in the prized chits. of an internal audit conducted by the OP. 8. Against the said pleadings available on record, the District Forum proceeded to frame the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orums has now to be settled once and for all. That question simply is: Whether the service obtained by the complainant was for a commercial purpose? 13. Section 2 (7) of the Act defines a consumer to mean : Section 2 (7) "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 service 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 service 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 men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 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. 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 self - employment; "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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions through electronic means or by teleshopping or direct selling or multi-level marketing; 15. Structurally, there are three parts to the definition of a consumer. We can deconstruct Section 2(7)(i) as a matter of illustration. The logic can be identically extended to Section 2(7)(ii) The first part sets out the jurisdictional prerequisites for a person to qualify as a consumer - there must be purchase of goods, for consideration The consideration may have been paid or partly paid or agreed to be paid in future. The second part is an 'exclusion clause' ['carve out'] which has the effect of excluding the person from the definition of a consumer. The carve out applies if the person has obtained goods for the purpose of 'resale' or for a 'commercial purpose'. The third part is an exception to the exclusion clause - it relates to Explanation (a) to Section 2(7) which limits the scope of 'commercial purpose'. According to the said explanation, the expression, 'commercial purpose' does not include persons who bought goods 'exclusively for the purpose of earning his livelihood, by means of self-employment'. The significance of this structural break down will be discussed sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the manner in which consumer forums must decide technical pleas raised by service providers to the effect that the services obtained/goods bought was for a commercial purpose and, therefore, the complaint filed on behalf of such persons are not maintainable. The crucial step in deciding such pleas would turn on the manner in which the issues are framed. Unless the burden of proof is properly cast on the relevant party, the consumer forum would not be in a position to arrive at proper decision. Therefore, we proceed to provide some guidance on how the issues must be framed and the manner in which the evidence must be appreciated. 20. As we have shown above, the definition of consumer has three parts. The significance of deconstructing the definition into three parts was for the purpose of explaining on whom lies the onus to prove each of the different parts. There can hardly be any dispute that the onus of proving the first part i.e. that the person had bought goods/availed services for a consideration, rests on the complainant himself. The carve out clause, in the second part, is invoked by the service providers to exclude the complainants from availing benefits under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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