1. THIS is a complaint filed by Sh. V.K. Vashisht describing himself to be the sole proprietor of M/s. Chandigarh Sales Company, opposite Railway Goods Shed, Railway Road, Chandigarh U.T. THIS complaint was filed on 17.10.2003. The complaint came for preliminary hearing on 21.10.2003 before the Presiding Member and the other Member of this Commission and notice of the complaint was issued to the opposite parties for 24.11.2003. The only opposite party impleaded in the complaint is the New India Assurance Company Limited, Divisional Office-III through its Senior Divisional Manager, SCO 37-38, Sector 17/C, Chandigarh. The allegations made in the complaint in brief were as under: The complainant was running the business of selling coal in which he was self-employed and was earning his livelihood for the last 25 years. He was an income tax payee as an individual assessee. In order to arrange sufficient financial resources for running the business of buying and selling coal, he approached Union Bank of India (for short hereinafter referred to as Bank), which offered to finance the complainant the working capital/cash limit and in order to protect its own interest, Bank had taken a fire policy from the O.P.-New India Assurance Company Limited (for short hereinafter referred to as the Assurance Company) from time-to-time. The last policy, which was taken prior to the incident of fire, was in the shape of a temporary cover note No. 2K/057189 issued on 24.10.2002. THIS policy was valid from 24.10.2002 to 23.10.2003 for a total sum of insurance being Rs. 66 lakhs. All the stores and stocks relating to the business of the complainant were to remain comprehensively insured against all risks at full value. A copy of the insurance cover note was placed on record as Annexure C-2. The premium of a sum of Rs. 77,700/- was duly debited from the account of the complainant by Bank vide copy of statement of account for the relevant period annexed as Annexure C-3. The complainant alleged that no copy of policy was ever supplied by the O.P.-Assurance Company to him till date.
2. AS per the cash credit agreement between the Bank and the complainant, the complainant was under no obligation to supply the stock statement to the Bank. The fire incident took place in the premises/godown of the complainant on 7.2.2003 in which the entire stock of the godown was turned to ashes. A report was lodged with the local police vide DDR No. 34 dated 7.2.2003 and intimation of the same was also sent to the ASsurance Company as well as the Bank vide letter dated 8.2.2003. A telephonic message was also sent to the O.P. on 8.2.2003. AS many as three units (fire tenders) of the Chandigarh fire services were pressed into service to douse the fire. The copies of the DDR, intimation to the O.P. dated 9.2.2003 and occurrence report of the Chandigarh Fire Service were placed on record as Annexures C-4, C-5 and C-6. The ASsurance Company immediately deputed a Surveyor Mr. Vijay Jindal of M/s. Citi Surveyors Pvt. Ltd., Chandigarh on 9.2.2003 for the assessment of damages.
The complainant further alleged that the conduct of the Surveyor aforesaid did not appear to be bona fide to him and he appointed an independent Surveyor on 1.3.2003 for the assessment of the loss occurred in the incident of fire. The independent Surveyor after thorough survey of the entire loss submitted his report on 12.3.2003 to the complainant wherein the loss was assessed at a sum of Rs. 59,29,975/-. The report of the Surveyor was placed on record as Annexure C-7. The Surveyor deputed by the Assurance Company required certain documents from the complainant vide letter dated 8.2.2003 (9.2.2003), which were supplied. A copy of the letter dated 8/9.2.2003 was placed on record as Annexure C-8.
The grievance of the complainant is that despite the conduct of the Surveyor and supply of all required documents/information from him as well as the Bank, the O.P., however, did not settle the claim of the complainant till July, 2003. The complainant alleged that despite a passage of six months, the O.P. did not settle his claim and the O.P. vide its letter dated 15.9.2003 (copy of repudiation letter was annexed as Annexure C-10) informed the Bank that his claim was not payable as the loss had occurred due to spontaneous combustion, which was not covered under the fire policy issued to the Bank to cover the risk to the stock/coal of the complainant.
3. THE complainant has alleged that the act of O.P. in repudiating the claim on the ground of spontaneous combustion was not covered under the aforesaid policy, amounted to deficiency in service. THE complainant, it was alleged, suffered unnecessary harassment and agony due to the act of the O.P. Hence, this complaint was filed claiming payment of a sum of Rs. 59,29,975/- assessed as loss suffered by the complainant in the incident of fire and also claimed interest @ 18% per annum from 7.2.2003 till realisation. A sum of Rs. 50,000/- was claimed as compensation for harassment. Lastly, a sum of Rs. 11,000/- is claimed as costs of litigation.
The O.P.-Assurance Company filed written statement to the complainant case and in the preliminary objection, it was contended that the complaint was not maintainable as the complainant was carrying on the business on large scale and for commercial purpose, which was excluded from the purview of the C.P. Act as amended and enforced w.e.f. 5.3.2003. The business, it was alleged, involved loading and unloading of the coal, procuring orders and supply of the coal to different industries in and around the city and they are only acting in a supervisory position. The jurisdiction of the State Commission was also challenged on the ground that there was no delay, defect or deficiency in rendering service to the complainant A Surveyor was appointed after the claim was lodged and the Surveyor submitted his report. It was found during investigation that no incident of fire took place and thick smoke/fog was coming out of the coal stock due to spontaneous combustion, which was not covered by the policy in question. It was also contended that for deciding the present complaint, number of witnesses would have to be examined and cross-examined and the same is not possible in a summary procedure and the case deserves to be tried by a Court of competent jurisdiction.
4. ON merit, it was contended that the stock of coal was got insured and cover note was issued. It was mentioned that due to inadvertence, the word "building'' has been written in the cover note. It was pointed out that the claim was not repudiated on the ground that the risk covered is that of the building and not that of the stock. Referring to the report of the Surveyor, it was contended that the report clearly pointed out that it was a case of spontaneous combustion without fire and, as such, the claim was not payable under the terms and conditions of the policy of insurance. It was contended that the Surveyor appointed by the complainant never visited the spot and the report of independent Surveyor has been obtained with ulterior motive and exaggerated amount has been claimed. The repudiation of the claim was thus defended.
The complainant filed in evidence his affidavit annexing therewith documents Annexures C-1 to C-10. The O.P.-Assurance Company filed affidavit of Shri B.S. Khosla, Senior Divisional Manage, SCO No. 463-464, New India Assurance Company Ltd., Sector 35-C, Chandigarh and also placed on record copy of policy as Annexure R-1 along with its terms and conditions. Affidavit of Shri Vijay Jindal, Director of M/s. City Surveyors Pvt. Ltd., Sector 27-D, Chandigarh has also been filed by the O.P.-Assurance Company.
We have heard Mr. Neeraj Sharma, Advocate, learned Counsel for the complainant and Mr. Raj Kumar Bashamboo, Advocate for the O.P-Assurance Company. We have also carefully gone through the documents and evidence on record.
5. THE O.P.-Assurance Company has raised a preliminary objection about the non-maintainability of the complaint under provisions of the C.P. Act on the ground that the complainant has availed the services alleged in the complaint for commercial purpose, which is excluded now under the amended provisions of the C.P. Act as amended by Act No. 62 of 2002, which came into force w.e.f. 15.3.2003. Section 2(1)(d)(ii) of the C.P. Act as amended, provides as under:
"(d) ''Consumer'' means any person who- (i)........ (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]."
6. IT is not disputed by the learned Counsel for the complainant that the complainant is running the business and services of the Assurance Company aforesaid have been hired for commercial purpose. The learned Counsel for the complainant, however, submited that the complainant is covered by the explanation appended to Section 2(1)(d) of the C.P. Act, which provides as under: "Explanation-for the purpose 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 purpose of earning his livelihood by means of self-employment."
Mr. Neeraj Sharma, Advocate appearing for the complainant contended that the complainant Shri V.K. Vashisht has availed the services of the Assurance Company for the business of sale of coal at the depot, which he was carrying on exclusively for the purpose of earning his livelihood by means of self-employment. It was urged by Mr. Neeraj Sharma, Advocate that the complainant has been carrying on this business for the last about 25 years.
Mr. R.K. Bashamboo, Advocate appearing for the Assurance Company, on the other hand, contended that the complainant is carrying on the said business of coal on a comparatively much large scale and the same would be evident from the fact that the coal stocks have been got insured for a sum of Rs. 66 lacs under the policy of insurance, which was taken by the Union Bank of India with whom the stocks of coal had been hypothecated in order to raise funds for running the business. Apart from it, Mr. R.K. Bashamboo, Advocate urged that a perusal of the Saral Form [Annexure C-1 (Colly.)] filed by the complainant for the period 1.4.2001 to 31.3.2002 would go to show that at Page 13 of the Saral Form, there is mention of Sh. V.K. Vashisht as Proprietor of M/s. Chandigarh Sales Company, Village Darua and in Column No. 24, agricultural income has been shown as Rs. 20,000/-. The Saral Form filed by the complainant go to show that the business of coal carried on by the complainant is not the sole business from which he was earning his livelihood by means of self-employment as he has evidently income from agriculture. Even regarding the running of this business, the scale of the business run by the complainant is on large scale and the policy taken by him from the Assurance Company is of a sum of Rs. 66 lacs.
7. IT may be mentioned that unless the case of the complainant is covered by the explanation appended to Section 2(1)(d) of the C.P. Act, the complaint would be barred under the provisions of the C.P. Act as the commercial purpose has been excluded after the amendment of the C.P. Act from both the clauses of Section 2(1)(d) i.e., relating to goods as well as hiring and availing of services. The complainant as well as the Assurance Company both have relied on the judgment of the Hon''ble Supreme Court in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, II (1995) CPJ 1 (SC). The Hon''ble Apex Court while considering the aspect that the expression "commercial purpose" was not defined in the C.P. Act, proceeded to consider the same and observed in para 10, inter alia, as under:
"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" denotes "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-the 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 situation, 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 self-employment, 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 self-employment, 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 the 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 self-employment" 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 auto-rickshaw, 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 self-employment" 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.
In view of the law laid down by the Hon''ble Apex Court in the case of Laxmi Engineering Works (supra), the intention of the Parliament clearly is that the goods bought must be used by the buyer himself by employing himself for earning his livelihood.
8. COMING to the facts of the instant case, the complainant has alleged in Para 1 of the complainant, inter alia, as under:
"1. That the complainant is a self-employed person, who has been earning her livelihood through the business of selling coal. The complainant, is an individual income-tax assessee, and has been earning her livelihood through supplying coal to various industries/busineses in and around Chandigarh..."
It is relevant to note that the complainant has not alleged that he was engaged exclusively in this business and was running the business by employing himself exclusively to do the business. In the evidence, the complainant filed his affidavit in which in Para 1, he deposed about it and as a matter of fact, this Para contains practically the same averments as in Para 1 of the complaint and here also, he has not deposed himself as the user of the goods or availing the services exclusively for the purpose of earning his livelihood by means of self-employment.
The O.P. No. 2 filed affidavit of B.S. Khosla, Senior Divisional Manager, wherein he deposed in Para 2, inter alia, as under:
"...The complainant and his wife are carrying on their respective business of purchase and resale of the coal at a large scale for commercial purposes for earning profits. They are employing a number of persons to carry on the business. The business involves loading, unloading of the coal, procuring orders and supply of the coal to different industries in and around the city and they are only acting in a supervisory position..."
9. IN his additional affidavit dated 20.1.2004, the complainant deposed that he was self-employed person and has been earning his livelihood through the business of purchasing and selling of coal and had engaged services of one driver, which the deponent shares with his wife, one Chowkidar (watchman) who is entrusted with the duty of keeping a watch of the stock lying in the premises of Chandigarh Sales Company as well as Kalyani Sales Company, which is owned and operated by his wife. Further to maintain the accounts of his business, the deponent has also engaged a full time accountant who is also shared by Kalyani Sales Company for maintenance of their accounts as well. The complainant further deposed that he as well as his wife have in total engaged the services of the above said, driver, watchman and accountant who are working for both the self-employed entrepreneurs, i.e., the complainant as well as his wife on sharing basis.
10. IN Para 3, he deposed that he has not engaged the services of any other person or persons in furtherance of his self-employed business. It has been further deposed that the process of loading and unloading of coal, is as a general practice undertaken by hired labour of the supplier or the seller of the coal to the deponent and the deponent is in no manner concerned or responsible for the maintenance of any workforce for the same. It was further deposed that the deponent himself made efforts to procure orders and the coal is supplied in satisfaction of the orders procured by hired labour and transportation provided either by the seller or the final buyer and the deponent is in manner directly connected or responsible for the same.
The averments made in this additional affidavit also go to show that number of person are required for loading and unloading of the coal though it has been claimed that as per the general practice undertaken by hired labour of the supplier or the seller of the coal and he is in no manner concerned or responsible for the maintenance of any workforce for the same.
In our considered opinion, the mere averment made in the affidavit by the complainant who not only himself is claiming self-employment for earning livelihood in the business of coal is sharing the staff between him and his wife Smt. Prem Vashisht who has filed a separate complaint being Complaint Case No. 33 of 2003 and she has also taken a similar plea of being covered by the explanation to Section 2(1)(d) of the C.P. Act by alleging that she has been doing the business of selling coal exclusively for earning his self-employment.
11. IN nutshell, Shri V.K. Vashisht, the complainant has claimed the benefit of explanation though he is running the business regarding the purchase and sale of coal and he has filed INcome Tax Returns/Saral Form showing income from other sources as well.
The Hon''ble National Consumer Disputes Redressal Commission, New Delhi [for short hereinafter referred to as the National Commission] in the case of M/s. Sakthi Engineering Works and Another v. M/s. Sri Krishna Coir Rope Industry rep. by Prop. P. Krishna Iyer, III (2000) CPJ 13 (NC)=1986-2002 CONSUMER 5262 (NS), observed in Para 6 , inter alia, as under:
"... The effect of this explanation is that even though a person who purchases goods for commercial purpose will not be a consumer within the meaning of the Act yet he will be treated as a consumer if the goods bought by him are used by him exclusively for the purpose of his earning livelihood by means of self-employment. The important words used in this explanation are "used by him exclusively", i.e., for the purpose of earning his livelihood and ''by means of self-employments''. If a person is not exclusively using the goods for the purpose of earning his livelihood he will not be able to get benefit of this explanation, as in this case the respondent-complainant has got 5 acres of land and also cattle. He has means of his earning livelihood. If he is supplementing that by another line of business, it cannot be said that he is earning his livelihood for his venture of producing coir."
12. THE averments made by Mr. B.S. Khosla, Senior Divisional Manager of the O.P-Assurance Company that the complainant was acting in a supervisory capacity was not controverted in the additional affidavit filed by the complainant. Moreover, as mentioned above, the complainant has shown, in the Saral Form [(Annexure C-1 (Colly.)], the other sources of income other than the business of coal, which clearly shows that the complainant is not exclusively earning his livelihood from the business of coal by means of self-employment.
We thus find considerable merit in the preliminary objection raised by the O.P.-Assurance Company and hold that the case of the complainant is not covered by the explanation appended to Sections 2(1)(d)(i) and (ii) of the C.P. Act and resultantly, the complainant is not a consumer within the meaning of Sections 2(1)(d)(i) and (ii) of the C.P. Act as he hired and availed the services exclusively for commercial purpose.
In view of the finding recorded as above that the complainant is not a consumer, we do not consider it appropriate to go into the merit of the complaint case and examine the same. The complaint deserves to be dismissed as the complainant is not a consumer within the meaning of Sections 2(1)(d)(i) and (ii) of the C.P. Act. Resultantly, the complaint is dismissed. The costs shall, however, be borne by the parties themselves. Copies of this order be sent to the parties free of charge. Complaint dismissed.
