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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 ..... sideration, 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. The onus of proving that the person falls within the carve out must necessarily rest on the service provider and not the complainant. This is in sync with the general principle embodied in Section 101 and 102 of the Evidence Act that one who pleads must prove . Since it is always the service provider who pleads that the service was obtained for a commercial purpose, the onus of proving the same would have to be borne by it. Having held that the onus to prove that the service was obtained for a commercial purpose is on the service provider, we may clarify the standard of proof that has to be met in order to discharge the onus. The standard of proof has to be measured against a preponderance of probabilities . The test to determine whether service obtained qualified as a commercial purpose is no longer res integra in view of this Court s decision in Lilavathi v. Kiritlal [ 2019 (11) TMI 1824 - SUPREME COURT ]. Para 19 sets out the principles on which it must be determined whether the onus of provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 had illegally stopped the chit business in the year 1996. The complainant requested the OP to repay the chit amount deposited until stoppage of the business. The OP refused to re-pay the subscription amount since, according to it, the complainant owed certain dues to it and therefore, it adjusted the subscription amount against pending dues of the complainant. 5. Initially, the complainant sought to redress its grievance relating to non-refund of the subscription amount, before the authority constituted under the Chit Funds Act 1982. The complainant had filed 10 cases before the Assistant Registrar of Co-operative Societies i.e., Dispute No.1062/2004-05 to 1071/2004-05, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 following issue: I. Whether the Complainant has proved the alleged deficiency in service by the Opposite Party? II. If so, to what relief the Complainant is entitled? 9. There was no specific issue framed on the preliminary question as to whether the complainant fell within the definition of consumer as understood under Section 2 (1) (d) of the Act of 1986. However, the District Forum did address itself, though incorrectly, to the objection of the OP that the complaint was not maintainable. Instead of examining whether the service availed on behalf of the complainant was for a commercial purpose, the District Forum determined whether the complainant fell within the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esale 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 mentioned person, but does not include a person who avails of such service for any commercial purpose. Explanation. For the purposes of this clause, (a) the expression commercial purpose does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment; (b) the expressions buys any goods and hires or avails any services includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing; 14. The provision as it stands now (as extracted above) was not how it appeared when it was grafted in the original Act. The definition of consumer has undergone textual amendments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 purpose. Explanation. For the purposes of this clause, commercial purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 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 shortly. 16. The carve out existed as part of the original enactment. However, the Explanation to Section 2(7) was inserted by amendment in 1993. 17. Judicial experience has shown us that the service providers most often than not take up a plea in their written version that the service obtained/goods bought was for a commercial purpose. For, if they succeed in their plea, the complainant is excluded from availing any benefit under the Act. According to Section 11, the District Forum has jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs . The expression complaint is defined in Section 2(1)(7)(c) to mean any allegation made in writing by a complainant relating to certain enumerated subjects. A complainant is defined 2(1)(b) to mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The onus of proving that the person falls within the carve out must necessarily rest on the service provider and not the complainant. This is in sync with the general principle embodied in Section 101 and 102 of the Evidence Act that one who pleads must prove . Since it is always the service provider who pleads that the service was obtained for a commercial purpose, the onus of proving the same would have to be borne by it. Further, it cannot be forgotten that the Consumer Protection Act is a consumer-friendly and beneficial legislation intended to address grievances of consumers. National Insurance Co. Ltd. v. Harsolia Motors and Ors. (2023) 8 SCC 362 Moreover, a negative burden cannot be placed on the complainant to show that the service available was not for a commercial purpose. 21. Having held that the onus to prove that the service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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