9911796707
TMI Blog2024 (2) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... straitjacket formula can be laid down for determining whether an activity or transaction is for a commercial purpose and has laid down certain principles which are to be kept in mind.
What is to be seen here is that whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the person who has availed the service. Therefore, the respondent No.1 is not a 'consumer' in terms of Section 2 (1) (d) (ii) of the Act.
Conclusion - The borrower was not a consumer, thus rendering the consumer complaint non-maintainable.
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... y the amount even after issuance of Demand Notice by the appellant-bank, a Possession Notice was issued on 21.05.2015 and pursuant to the same, symbolic possession of the property pledged as collateral for the loan was taken in terms of the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act'). 6. Thereafter, on 09.10.2015 the Bank filed an application under Section 19 (1) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'RDDBFI Act') before the Debts Recovery Tribunal, Chennai for recovery of an amount of Rs 4,65,39,715/. This application came to be allowed by the Debts Recovery Tribunal, Chennai vide order dated 05.12.2016 and the Bank was held to be entitled to recover an amount of Rs.4,65,39,715/with interest @ 12% p.a. till the date of realisation along with costs. Pursuant thereto, a communication was addressed to the appellant-bank by respondent No.1 offering a One-Time Settlement of Rs. 3.56 Crores and the offer was duly accepted by the appellant-bank. 7. Thereafter, the appellant-bank called upon respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... faced on account of the same, respondent No. 1 filed Consumer Complaint No. 23 of 2021 before the NCDRC. Vide Impugned Order dt. 30.08.2023, NCDRC partly allowed the complaint, holding that the appellant-bank was deficient in service and also engaged in an unfair trade practice. It was observed by the NCDRC that since the wrongful reporting by the appellant-bank constitutes a serious breach of duty, it is liable to compensate respondent No. 1 for the losses it has incurred and accordingly, the NCDRC awarded a compensation of Rs. 75,00,000/to respondent No. 1 which was to be paid jointly and severally by the appellants herein and also directed them to pay litigation costs of Rs. 20,000/. Further, the appellants were directed to issue a certificate in favour of respondent No. 1, wherein it was to be stated by the appellant-bank that loan account of respondent No. 1 stood settled and no outstanding dues remained. The appellant-bank had to further state that it had been wrongly reporting the status respondent No. 1 as a 'defaulter' from 31.03.2017 till 30.06.2020. 11. We have heard learned counsel for the appellants as well as Shri M. Abirchand Nahar, who appeared and argued as party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 selfemployment; (emphasis provided) 14. A plain reading of the above makes it clear that where a service is availed, for any "commercial purpose" then the person who has availed such a service is not a "consumer" for purposes of the Act. All the same, this is subject to a caveat which is provided by the Explanation to Section 2 (1) (d) of the Act. The explanation clarifies that when the person uses the goods bought, or avails any service for the sole purpose of earning his livelihood, by means of self-employment, then such a person would not be excluded from the definition of 'consumer' under the Act. 15. As a counter to the submission of the appellants that respondent No.1 is not a 'consumer' on account of fact that the it had availed the loan facility, with the purpose of generating profits for its business, respondent No. 1 would argue that it is squarely covered by the Explanation to Section 2 (1) (d) of the Act and that loan was availed by it on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerating activity. 19.3. The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit-generation for the purchaser or their beneficiary." ( emphasis provided ) 18. We are cognisant of the fact that respondent No.1 would not be excluded from the definition of consumer merely on account of the fact that it is a commercial entity/enterprise. But what has weighed with us in coming to the conclusion that in the instant case, respondent No.1 cannot be said to be a 'consumer' is the fact that the transaction in question i.e. obtaining a project loan did have a close nexus with a profitgenerating activity and in fact, the dominant purpose for getting this loan sanctioned was to generate profits upon successful postproduction of the movie titled "Kochadaiyaan". 19. We may also refer to the decision of this Court in Shrikant G. Mantri vs. Punjab National Bank (2022) 5 SCC 42. The facts of this case were that the appellant therein was a stockbroker who availed an ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edical practitioner, it would be a commercial purpose, but if a person avails such services for his ailment, it would be held to be a non - commercial purpose. Taking a wide meaning of the words "for any commercial purpose", it would mean that the goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose, but in a case where goods purchased or services hired is an activity, which is not directly intended to generate profit, it would not be a commercial purpose." ( emphasis provided ) 21. From an analysis of the aforementioned decisions, it is quite clear that what is to be seen here is that whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the person who has availed the service. Therefore, it is our considered opinion that the respondent No.1 is not a 'consumer' in terms of Section 2 (1) (d) (ii) of the Act. 22. In view of the aforesaid, we find merit in this appeal and accordingly set aside the order dated 30.08.2023 passed by the NCDRC. The Civil Appeal stands allowed, accordingly. Pending applications, if any, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
