Avm J. Rajendra, Avsm Vsm (Retd.), Presiding Member
1. The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 11.04.2019 passed by the State Consumer Disputes Redressal Commission, Delhi, (“the State Commission”), in CC No. 138/2015, wherein the Complaint of the Complainant (Appellant) was dismissed.
2. For convenience, the parties involved in this Appeal will be referred as per their position in the Complaint originally filed before the Ld. State Commission. The Complainant/Appellant, "Pawan Hans Ltd.” is a Mini-Ratna Govt. of India Enterprises, provides helicopter services to both Govt. and Private sector companies to cover areas such as oil rigs, mines, jungles etc and the "New India Assurance Company Ltd. is the Opposite Party/Respondent or the insurer (OP).
3. Brief facts of the case, as per the Complainant, are that the Complainant secured a "Group Insurance Policy LOL (Loss of License Policy)" from the Opposite Party (OP) for its 152 pilots, with coverage set at Rs. 30 lakhs for pilots under 55 years of age and Rs. 24 lakhs for pilots aged 55 to 65. Previously, the policy was obtained from 01.04.2012, to 31.03.2013. Subsequently, a tender was floated for the period from 01.04.2013, to 31.03.2014 to the OP and three other PSU Insurance Companies, namely New India Assurance Company Ltd., Oriental Insurance Company, National Insurance Company, and United India Insurance. The OP submitted a tender on 19.03.2013, for the renewal of the policy, providing premium rates without specifying any conditions. As per the Complainant's employment terms, every recruited pilot is entitled to a PA Aircrew insurance policy and a loss of license (LOL) policy while serving in the company. The validity and continuity of the pilot's license, issued by the Directorate General of Civil Aviation (DGCA), hinge upon the pilots' physical and mental medical fitness. The OP Insurance Company secured the tenders for the year 2014-15, with the premium paid by the Complainant to the OP being approximately Rs. 20 lakhs annually, considerably higher than the premiums paid by pilots under their individual policies.
4. During the year 2012-13, a claim was made for loss of license of Capt. Indu Kumar Kanwar for permanent disablement due to illnesses. The claim amount was Rs. 24 Lakhs, and the OP settled it for Rs. 18 Lakhs, without objection. Subsequently, during the period from 01.04.2013, to 31.03.2014, four pilots suffered total or partial disablement due to illnesses. Their claims totalling Rs. 80 lakhs were filed with the OP. However, all four claims were repudiated by the OP, citing that the pilots had already taken individual policies from other insurance companies and therefore are not entitled to this claim, under Clause/Condition no.2 under the heading 'exclusion' reads as follows:-
"Notwithstanding anything to the contrary contained in this Policy no liability shall attach to the company to the extent to which the insured and insured persons is also entitled to benefit under any other policy of insurance insuring the insured person against any of the risks hereby insured, (other than any personal accident insurance), unless written notice of the existence of that other policy shall have been given to the company and the company's acquiescence has been noticed by the endorsement hereon."
5. The Complainant alleged that the OP’s rejection was unjustified, as the terms and conditions outlined in the individual policies obtained by the four pilots explicitly stated that the policies would remain valid even if a group policy had been procured by the employer. Capt. Mahajan and Capt. Shukla had acquired policies from United India Insurance Company Ltd., while Capt. Mahal and Capt. Ramani had policies from Bajaj Allianz. The rejection of the claim by the OP was mere pretext for avoiding the settlement of legitimate claims of the pilots, especially considering that no such queries or objections were raised by the OP in 2012-13 during the settlement of claim of Capt. Indu Kanwar. It was further contended that the rejection by the OP was incorrect, as the contracting parties in the policy in question were the OP and the Complainant, with the pilot being merely a beneficiary. The Complainant was never requested by the OP to disclose any other policies taken out by individual pilots and their respective conditions. Therefore, neither was the Complainant aware of any policies taken out by pilots individually nor were they informed by the pilots. The premium was paid by the Complainant and not by any insured pilot, thus establishing the Complainant's independence from any policies taken out by pilots in their individual capacities. It was contended that in insurance contracts, the rule of contract perferentum applies, wherein any vague condition must be interpreted in a manner that favours the insured. In this regard reference has been made to constitution bench judgement of Hon'ble Supreme Court in the case of General Assurance Society Ltd. vs. Chandumull Jain, AIR 1966 SO 1644. Subsequently, the OP assured vide letter dated 27.03.2014, that it had noted the details of individual policies taken out by pilots and that there would be no rejections in future loss of license claims. The Complainant, vide email dated 27.03.2014, provided a list of pilots who had obtained additional PA and loss of license insurance in their personal capacities. Further, the Condition No.2 of the LOL documents for the subsequent period of 2014-15 mentioned that the said condition was deleted in all respects, indicating that Clause no.2 was mere formality and did not significantly affect the insurance claims lodged by the Complainant. Despite their attempts to clarify, the OP vide letter dated 16.09.2014, reiterated that the claim was to be strictly governed by the terms and conditions of the policy, and no review was warranted. When the matter was escalated to the ombudsman, he advised that it first be presented to the Grievance Redressal officer of the OP. Accordingly, the matter was referred to the grievance cell on 13.01.2015, but no response was received. The Complainant then filed CC No. 138/2015 demanding Rs. 80 lakhs from the OP towards the total claim for the four insured pilots, along with interest at 18% per annum. Additionally, pay Rs. 4 lakhs as compensation for mental tension, distress and harassment, and Rs.50,000 towards costs.
6. In reply, the OP/Insurer asserted that the Complainant, being a company engaged in commercial activity, does not fall within the category of a consumer. Further, the individual employees for whom the policy was procured had not filed the complaint, nor had they authorized the Complainant to file the same on their behalf. Objection was also raised concerning the non-joinder of individual employees, deeming the complaint defective on these grounds. The policy was issued as per guidelines set forth by the Insurance Regulatory and Development Authority of India (IRDA), laying down terms. On merits, the OP reiterated that in the case of Capt. Indu Kumar Kanwar, there was no breach observed and the claim was settled. For the balance, she filed a case before the District Forum, which was dismissed vide order dated 16.04.2015, due to non-maintainability of the complaint. The OP also denied that individual policies taken out by pilots could be considered as double insurance.
7. The Ld. State Commission upon hearing the parties, and considering the facts and the circumstances, of the case dismissed the complaint with the following Order: -
“24. Counsel for OP submitted that the conduct of individual employee reporting to the OPs about their separate policy in future and act of the OP in making endorsement thereof is sufficient to show that the said condition was mandatory and that is why the employee complied with the same. I find considerable force in this argument of the OP.”
25. In view of the above discussion I do not find any deficiency in the act of OP in rejecting the claims. There is no merit in the complaint. The complaint is dismissed.”
8. Being aggrieved by the impugned order dated 11.04.2019, the Appellant /Complainant filed this present Appeal no. 967 of 2019 with the following prayer:
“a. Set aside the Impugned Order dated 11.04.2019 passed by the Hon'ble State Consumer Disputes Redressal Forum in Complaint Case No. CC/138/2015;
b. Direct that a sum of Rs. 79,91,677 be paid by the Respondent to the Appellant towards the total amount of the claims in respect of 4 insured pilots namely, Capt. S.V. Ramani - Rs 24 Lakhs; Capt. R K Mahajan - Rs. 1,91,677/-; Capt. RPS Mahal - Rs 24 Lakhs; and Capt. J.S. Shukla - Rs.30 Lakhs with interest @18% p.a. payable from the date of rejection of the claims till the date of payment; and
c. Pass such other and further orders as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case and in the interests of justice.”
9. In the Appeal, the Appellant/Complainant raised the following key issues:
a. The State Commission overlooked the interpretation of Condition No. 2 of the Loss of License policy for 2013-14. Plain reading of this condition, it only disclaims liability if the Appellant (as the insured) and the individual pilots (insured persons) are covered by another policy of insurance, and the existence of such policy is not disclosed to the Respondent, with its acquiescence obtained by way of endorsement. Essentially, this condition implies that the Appellant cannot procure a second policy covering the insured persons (the pilots). Therefore, the independent individual policies acquired by the pilots cannot be considered within the scope of this exclusion under Condition No. 2. It is factual that the Appellant did not obtain a second group Loss of License insurance policy, which would trigger the applicability of Condition No. 2.
b. The State Commission failed to recognize that Condition No. 2 of the Loss of License policy is applicable only when the Appellant has procured "another policy." This term, "other policy" (singular noun), suggests that the Appellant should not have obtained an additional policy covering the same risks as the Loss of License policy from the Respondent insurance company and cannot be construed to encompass 'policies' (plural noun) acquired by individual pilots in their personal capacity.
c. The State Commission did not note that the need for providing a written notice regarding the existence of 'other policies', if interpreted to include individual Loss of License policies taken by the pilots personally, under Condition No. 2 of the Loss of License policy is not a material condition under the agreement. Failure to disclose such 'other policies' does not entitle the OP insurance company to repudiate the claims.
d. The State Commission overlooked the deliberate misinterpretation/ misapplication of Condition No. 2 in the policy to reject the claim.
e. The State Commission failed to recognize that any ambiguity in Condition No. 2 of the policy should have been resolved in favour of the Appellant.
10. Upon the notice on of Appeal, the Respondent / OPs-Insurance Company filed written submission appreciating the Impugned Order passed by the Ld. State Commission.
11. The learned counsel for the Appellant/Complainant reiterated the facts of the case and the grounds of appeal. He asserted that the premium for the Loss of License (LL) policy was paid by the Appellant, which has not procured any other LL policy. Thus, the claims made by the Appellant are not excluded by Condition No.2. He emphasized that the pilots are mere beneficiaries, and any other personal policies have been acquired by them in their individual capacity. There exists no privity of contract between the Respondent and the pilots. He relied on Hon'ble Supreme Court in Haris Marine Products v. Export Credit Guarantee Corporation (ECGC) Limited [AIR 2022 SC 3036], wherein principles of 'business common sense' and 'the rule of contra proferentem' were applied. In relation to business common sense, it was asserted that a claim cannot be dismissed on grounds immaterial to the insurance, emphasizing the necessity to consider the purpose for which Appellant obtained the insurance policy. Regarding 'contra proferentem', it was highlighted that ambiguous terms in an insurance contract are to be construed harmoniously, and if no clarity emerges, the interpretation should favor the insured, as the party with little power to bargain. The concept of contract d' adhesion or boilerplate contracts, where the insured has limited bargaining power, was invoked stressing the need to protect the insured's interests from unfavorable interpretations of ambiguous terms to which they did not agree. In insurance contracts, when two interpretations are possible, the one favoring the insured should be adopted, citing General Assurance Society Limited v. Chandumull Jain AIR 1966 SC 1644. Moreover, it was pointed out that no objection was raised by the Respondent while settling the claim of Capt. Indu Kanwar pursuant to the LL policy of 2012, which contained a similar term in Condition No.2. Subsequently, the Appellant had provided a list of 33 pilots who had obtained personal LL policies via email dated 27.03.2014. The Respondent assured the Appellant that these policies would not affect future LL claims of the employees listed. Additionally, it was noted that Condition No.2, relied upon for the rejection of claims, was deleted when the policy was renewed for FY 2014-15. Therefore, it was argued that the rejection of the claim by the Respondent was arbitrary.
12. The learned Counsel for the OP Insurer vigorously argued that the core issue in this case revolves around whether a claim is payable under the Loss of License (LOL) Policy, despite a breach of the terms and conditions of the Insurance Policy. It was asserted that the policy issued by the Respondent Co. was tailor-made and laid down specific terms as per guidelines of the Insurance Regulatory and Development Authority of India (IRDAI). The Appellant and insured Pilots breached Condition No.2 of the policy by failing to notify the existence of the LOL Policy taken by them. It was observed during the claims processing that certain pilots held similar policies from other insurance companies, which resulted in the fundamental breach of Condition Number 2, leading to the repudiation of claims. The Counsel contended that such attempt to gain unlawfully under the policy is not permissible in law, as the insurance contracts are based on the principle of good faith.
13. Furthermore, emphasis was placed on the fact that the terms and conditions of insurance policies are approved by IRDAI. Condition No.2 was incorporated in the policy for the year 2013-14 with the approval of IRDAI, and the claims in dispute had arisen under this policy. It was highlighted that this condition was subsequently deleted in the policy for the year 2014-15 with IRDAI approval. Referring to established legal principles, it was argued that the Court must simply apply the terms and conditions of the contract without rewriting or creating a new contract between the parties. The Counsel cited a judgment by the Hon'ble Supreme Court in Shree Ambica Medical Stores and Others Vs The Surat People's Co-operative Bank Ltd & Others Civil Appeal No. 562 of 2020 held that the Court cannot rewrite a contract while interpreting the terms and conditions.
14. The Counsel also pointed out that the claim of Captain Indu Kumar was paid under the LOL Policy for the year 2012-13 as there was no violation of Condition Number 2 of the policy during that period. Condition number 2, it was argued, applies to individual pilots as well, as the terms "insured and insured persons" used in the condition make this clear. Thus, the impugned order was deemed to be in order, as the Hon'ble State Commission correctly interpreted the meaning and implication of Condition Number 2 of the LOL Policy taken out by the Appellant Co. for its Pilots during the year 2013-14. Additionally, it was argued that the impugned Judgment withstands the scrutiny of law, citing the precedent set by the Apex Court in the case of Ravneet Singh Bagga and KLM Royal Dutch Airlines and Anr. reported in (2000) 1 SCC 66. Therefore, it is prayed that the present First Appeal filed by the Appellant be dismissed with exemplary costs.
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15. I have gone through the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the Parties
16. The matter entails two main issues viz. firstly, whether the Appellant/Complainant qualifies as a "Consumer" under the Consumer Protection Act with respect to the Respondent/OP - Insurance Company from which the Complainant had obtained insurance policies for its employees for Loss of Licence during the service provided to the Complainant’s company. Secondly, if the Complainant is deemed a "Consumer," whether it is entitled to compensation for the losses incurred in loss of licence for its employees from the Respondent/OP-Insurance Company, and if so, to determine the amount.
17. Adverting to the first issue, the definition of the term ‘Consumer’ as contained in Section 2(1)(d) of the Act of 1986 and now repealed by Section 2 (7) (i) & (ii) of the Consumer Protection Act, 2019 reads:
(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 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; (Emphasis supplied)
18. While elaborately discussing the impact of amendments made to the definition of ‘Consumer’ in relation to exclusion of categories of activities envisaged under the exception of commercial activity, particularly after the 2002 Amendment, the Hon’ble Supreme Court in Shrikant G. Mantri Vs. Punjab National Bank, Civil Appeal No.11397 of 2016 decided on 22.02.2022, held as under:-
30. It could thus be seen that by the 2002 Amendment Act, the legislature clearly provided that a person, who avails of such services for any commercial purpose would be beyond the ambit of definition of the term ‘consumer’. The Explanation, which is an exception to an exception, which earlier excluded a person from the term ‘commercial purpose’, if goods were purchased by such a person for the purposes of earning his livelihood by means of self-employment, was substituted and the Explanation was made applicable to both clauses (i) and (ii). It can thus clearly be seen that by the 2002 Amendment Act, though the legislature provided that whenever a person avails of services for commercial purposes, he would not be a consumer; it further clarified that the ‘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.
31. It is thus clear that by the 2002 Amendment Act, the legislature has done two things. Firstly, it has kept the commercial transactions, insofar as the services are concerned, beyond the ambit of the term ‘consumer’ and brought it in parity with Section 2(1)(d)(i), wherein a person, who bought such goods for resale or for any commercial purpose, was already out of the ambit of the term ‘consumer’. The second thing that the legislature did was that even if a person availed of the commercial services, if the services availed by him were exclusively for the purposes of earning his livelihood by means of selfemployment, he would still be a ‘consumer’ for the purposes of the said Act. Thus, a person who availed of services for commercial purpose exclusively for the purposes of earning his livelihood by means of self-employment was kept out of the term ‘commercial purpose’ and brought into the ambit of ‘consumer’, by bringing him on par with similarly circumstanced person, who bought and used goods exclusively for the purposes of earning his livelihood by means of selfemployment. It could thus be seen that the legislature’s intent is clear. If a person buys goods for commercial purpose or avails services for commercial purpose, though ordinarily, he would have been out of the ambit of the term ‘consumer’, by virtue of Explanation, which is now common to both Sections 2(1)(d)(i) and 2(1)(d)(ii), he would still come within the ambit of the term ‘consumer’, if purchase of such goods or availing of such services was exclusively for the purposes of earning his livelihood by means of selfemployment. With this legislative history in background, we will have to consider the present case.
32. The purpose of the said Act has been succinctly described by this Court in the case of Laxmi Engineering Works vs. P.S.G. Industrial Institute 6 (1995) 3SCC 583, which is as under:
“10. A review of the provisions of the Act discloses that the quasijudicial bodies/authorities/agencies created by the Act known as District Forums, State Commissions and the National Commission are not courts though invested with some of the powers of a civil court. They are quasijudicial tribunals brought into existence to render inexpensive and speedy remedies to consumers. It is equally clear that these forums/commissions were not supposed to supplant but supplement the existing judicial system. The idea was to provide an additional forum providing inexpensive and speedy resolution of disputes arising between consumers and suppliers of goods and services. The forum so created is uninhibited by the requirement of court fee or the formal procedures of a court. Any consumer can go and file a complaint. Complaint need not necessarily be filed by the complainant himself; any recognized consumers' association can espouse his cause. Where a large number of consumers have a similar complaint, one or more can file a complaint on behalf of all. Even the Central Government and State Governments can act on his/their behalf. The idea was to help the consumers get justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies. Indeed, the entire Act revolves round the consumer and is designed to protect his interest. The Act provides for “businessto consumer” disputes and not for “businesstobusiness” disputes. This scheme of the Act, in our opinion, is relevant to and helps in interpreting the words that fall for consideration in this appeal.”
33. It could thus be seen that this Court has clearly held that the idea of enacting the said Act was to help the consumers get justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies. It has been held that the entire Act revolves round the consumer and is designed to protect his interest. It provides for “businesstoconsumer” disputes and not for “businessto business” disputes. It has been held that forums/ commissions provided by the said Act are not supposed to supplant but supplement the existing judicial system. The idea was to provide an additional forum providing inexpensive and speedy resolution of disputes arising between consumers and suppliers of goods and services.
34. In the case of Laxmi Engineering Works (supra), this Court, while considering the scope of the definition of the expression ‘consumer’ with relation to Section 2(1)(d)(i) of the said Act and the Explanation added by 1993 Amendment Act, observed thus:
“11. Now coming back to the definition of the expression ‘consumer’ in Section 2(d), a consumer means insofar as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the consideration is paid or promised, or partly paid and partly promised, or whether the payment of consideration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration; (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression ‘resale’ is clear enough. Controversy has, however, arisen with respect to meaning of the expression “commercial purpose”. It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. ‘Commercial’ de-notes “pertaining to commerce” (Chamber's Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile; having profit as the main aim” (Collins English Dictionary) whereas the word ‘commerce’ means “financial transactions especially buying and selling of merchandise, on a large scale” (Concise Oxford Dictionary). The National Commission appears to have been taking 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 — 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 others' 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 situations, 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 selfemployment, 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 selfemployment, 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 selfemployment” 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 an autorickshaw 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 lathe 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 autorickshaw, a car or a lathe 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 expressions “used by him”, and “by means of selfemployment” 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]
35. It can thus be seen that this Court observed that the National Commission was taking 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. This Court observed that in order to obviate any confusion that the expression “large scale” was not a very precise expression, the Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/ Amendment Act, 1993. It has been held that that the explanation excludes certain purposes from the purview of the expression “commercial purpose”. Various examples have been given by this Court as to what would come within the term of ‘selfemployment’.
36. One instance given is that a person who purchases a typewriter and works on the typewriter himself, the purchase would be for the purposes of earning his livelihood by means of selfemployment and he would not cease to be a ‘consumer’ for the purposes of the said Act. Another example given is that, if a person who purchases an autorickshaw to ply it himself on hire for earning his livelihood, he would still be a consumer too. This Court held that the question as to whether the transaction is for the ‘commercial purpose’ or for ‘earning his livelihood by means of selfemployment’ is a question of fact that has to be decided in the facts of each case. It has been held that it is not the value of the goods that matters but the purpose to which the goods so bought, are put to. It has been held that several words used 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 the Parliament abundantly clear, that the goods bought must be used by the buyer himself, for earning his livelihood.
42. It is thus clear, that this Court has held that the question, as to whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, “commercial purpose” is understood to include manufacturing/industrial activity or business to business transactions between commercial entities; that the purchase of the good or service should have a close and direct nexus with a profit generating activity; that the identity of the person making the purchase or the value of the transaction is not conclusive for determining the question as to whether it is for a commercial purpose or not. What is relevant is the dominant intention or dominant purpose for the transaction and as to whether the same was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. It has further been held that if the dominant purpose behind purchasing the good or service was for the personal use and the consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, then the question of whether such a purchase was for the purpose of “generating livelihood by means of self-employment” need not be looked into.
45. It could thus be seen, that when a person avails a service for a commercial purpose, to come within the meaning of consumer’ as defined in the said Act, he will have to establish that the services were availed exclusively for the purposes of earning his livelihood by means of self-employment. There cannot be any straitjacket formula and such a question will have to be decided in the facts of each case, depending upon the evidence placed on record.
46. In the present matter, it is not in dispute that the appellant was already engaged in the profession of stockbroker, much before he availed of service of the overdraft facility from the respondent Bank. It is also not in dispute that he was also acting as a stockbroker for the respondent Bank. It is also not in dispute that the appellant took the overdraft facility and also sought enhancement of the same from time to time in furtherance of his business as a stockbroker and for the purpose of enhancing the profits therein. As already held by this Court in the case of Laxmi Engineering Works (supra), the terms “services availed by him”, “exclusively for the purpose of earning his livelihood” and “by means of selfemployment” will have to be given its meaning, as intended by the legislature. The said terms will have to be construed in context with the purpose for which the said Act is enacted. We have elaborately discussed the legislative history as to how Section 2(1)(d) of the said Act has come in its present form from the original form. The amendments incorporated by the 1993 Amendment Act as well as by the 2002 Amendment Act would clearly show that the legislative intent is to keep the commercial transactions out of the purview of the said Act and at the same time, to give benefit of the said Act to a person who enters into such commercial transactions, when he uses such goods or avails such services exclusively for the purposes of earning his livelihood by means of selfemployment.
47. In the present case, the Commission has come to a finding that the appellant had opened an account with the respondent Bank, took overdraft facility to expand his business profits, and subsequently from time to time the overdraft facility was enhanced so as to further expand his business and increase his profits. The relations between the appellant and the respondent is purely “business to business” relationship. As such, the transactions would clearly come within the ambit of ‘commercial purpose’. It cannot be said that the services were availed “exclusively for the purposes of earning his livelihood” “by means of self-employment”. If the interpretation as sought to be placed by the appellant is to be accepted, then the ‘business to business’ disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes.”
19. The first issue in the case is whether the dispute pertaining to the terms of the agreement between the Parties to provide for insurance to its employees for Loss of License as pilots of the business of the Complainant, namely, Pawan Hans Limited by the Respondent/ OP Insurance Company constitutes a Consumer dispute under the Act? In this regard, as enunciated in the Act and clarified by the Hon’ble Supreme Court, the Act is mainly for the purpose of securing expeditious legal remedies to Consumers. As per Section 2 (7) (i) & (ii) of the Act 2019, a Consumer is a person who buys goods or hires or avails services for consideration, except for commercial purposes. However, this exception has been expanded to a limited extent that, if such transactions are carried out for the purpose of earning livelihood, the individual undertaking such transaction will be considered as a Consumer.
20. It is the admitted position that the Complainant-Pawan Hans Limited took insurance policy for its employees from OP-Insurance Company. After perusing all the pleadings available on record, there is not a single word uttered that the Complainant doing the said business for self-employment or earning its livelihood. It is evident that the Complainant is a commercial entity and involved entirely in commercial transactions with OP-Insurance Company. Thus, relationship between the Appellant/Complainant and Respondent/OP-Insurance Company is purely “business to business” in nature and the said transaction would clearly come within the ambit of ‘commercial purpose’. Therefore, the Complainant ‘Pawans Hans Limited” is not a Consumer for any relief from any Commission constituted under the Act. Therefore, I am of the considered view that the impugned order passed by the State Commission dated 11.04.2019 rejecting the complaint does not suffer any illegality or material irregularity and the same is upheld.
21. The issue whether the Complainant is entitled for compensation for the losses of licence of its employees from the Respondent/OP-Insurance Company, and if so, the determination of the amount is not a matter for adjudication by this Commission. Accordingly, the Complainant is granted liberty to avail legal remedy by approaching appropriate forum, having jurisdiction to decide the matter.
22. Consequently, the First Appeal No.967 of 2019 is disposed of accordingly.
23. There shall be no order as to costs.
24. All pending Applications, if any stand disposed of accordingly.
