SHRIKANT G. MANTRI vs. PUNJAB NATIONAL BANK

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NO.11397 OF 2016 SHRIKANT G. MANTRI   ...APPELLANT(S) VERSUS PUNJAB NATIONAL BANK       .... RESPONDENT(S) J U D G M E N T   B.R. GAVAI, J. 1. The   present   appeal   filed   by   the   appellant­ st complainant   challenges   the   judgment   and   order   dated   1 June,   2016,   passed   by   the   National   Consumer   Disputes Redressal Commission, New Delhi (hereinafter referred to as “the Commission”) in Consumer Complaint No.55 of 2006, thereby   holding   that   the   appellant­complainant  was   not a consumer   as   envisaged   under   Section   2(1)(d)   of   The Consumer   Protection   Act,   1986   (hereinafter   referred   to   as 2 “the said Act”).   As such, by the impugned judgment and order,   the   complaint   of   the   appellant   has   been   dismissed being not maintainable.  The facts in the present case are not in dispute.  The 2. bare necessary facts for adjudication of the present appeal are as under: 3. The appellant­complainant had opened an account with erstwhile Nedungadi Bank Limited (hereinafter referred to as “the erstwhile Bank”) in the year 1998.  The appellant is a stock­broker by profession.  The appellant had applied for th an overdraft facility on 25   April, 1998, in connection with his day­to­day share and stock transactions.   It is not in dispute that the said overdraft facility was sanctioned by the erstwhile Bank to the appellant­complainant initially for an amount of Rs.1 crore, for which the appellant­complainant had pledged certain shares worth more than Rs.1 crore, as security   as   per   the   margin   requirements   specified   by   the erstwhile   Bank.     Subsequently,   in   the   year   1999,   the 3 appellant­complainant applied for enhancement of the said overdraft facility.  The said overdraft facility was enhanced by the erstwhile Bank from Rs.1 crore to Rs. 5 crore, vide its th letter dated 13  December, 1999.     4. Again,   in   March   2001,   the   appellant­complainant approached the erstwhile Bank for temporary increase in the th overdraft limit.  The erstwhile Bank, vide its letter dated 17 March,   2001,   granted   the   request   of   the   appellant   and temporarily enhanced the overdraft facility from Rs.5 crore to Rs.6 crore, for a period of one week. It appears that due to steep fall in the share market, 5. th th the erstwhile Bank, vide its letters dated 16  and 17  March, 2001,   called   upon   the   appellant­complainant   to   pledge additional shares to regularize the overdraft account.  As an additional   security,   the   appellant­complainant   pledged 37,50,000 equity shares of face value of Rs.10/­ of unlisted company Ansal Hotels Ltd. (hereinafter referred to as “the said shares”) towards the dues of the Bank, vide his letter th dated   30   March,   2001.     It   is   not   in   dispute   that 4 subsequently, consequent to the merger of Ansal Hotels Ltd. with ITC Ltd., and the bonus and splitting of ITC shares, the aforesaid   37,50,000   equity   shares   of   Ansal   Hotels   Ltd. became equivalent to 3,75,000 shares of ITC Ltd. 6. It appears that during 2001, the overdraft account of the appellant­complainant became irregular and as such, the erstwhile   Bank   called   upon   the   appellant­complainant   to regularise   the   overdraft   account.     As   the   appellant­ complainant was unable to regularise the overdraft account, th the erstwhile Bank, vide letter dated 14   September, 2001, called   upon   the   appellant­complainant   to   pay   a   sum   of Rs.600.61 lakhs along with interest thereon.   7. It   is   the   case   of   the   appellant­complainant   that though he had advised the erstwhile Bank to sell the pledged shares in December, 2001, so as to close overdraft account, the erstwhile Bank chose not to sell the said shares at that point of time.  It is the case of the appellant­complainant that the said shares were sold by the erstwhile Bank in November 2002, when the market value of the said pledged shares was 5 at the lowest, which resulted in huge loss to the appellant­ complainant.   8. After selling a part of the pledged shares for a sum of Rs.2,69,66,215.79, the respondent Bank, the successor­in­ interest of the erstwhile Bank, filed a Recovery Petition before the Debts Recovery Tribunal, Mumbai against the appellant­ complainant for recovery of the balance amount due as on th 26  December, 2002.  The said petition was decreed by the th Debts Recovery Tribunal, Mumbai, vide order dated 26  May, 2004.   However, the matter was settled between the parties and a ‘One Time Settlement’ (“OTS” for short) was reached between   them   on   payment   of   Rs.   2   crore.     As   such,   the th respondent­Bank  issued  a  ‘No Dues  Certificate’  dated  14 May,   2005,   certifying   that   no   dues   were   left   outstanding against the overdraft account of the appellant.  After the OTS, the respondent­Bank withdrew the recovery proceedings filed against the appellant.  It   is   the   case   of   the   appellant   that   since   the 9. respondent­Bank  failed   to   return   the   said   shares   to   the 6 th appellant,   he   sent   a   notice   on   14   June,   2005   to   the respondent­Bank, seeking release of the said shares.   10. It appears that the appellant was also working as a stock­broker   of  the  respondent­Bank.    With  regard   to the transactions with the  appellant  in the capacity as a stock­ broker,   the   respondent­Bank   had   initiated   arbitration proceedings   against   the  appellant  before   the   Arbitration forum   of   the   Bombay   Stock   Exchange   (‘BSE”   for   short). According to the appellant, the respondent­Bank failed in the said arbitration proceedings, which have attained finality.  In this background, the appellant filed a complaint 11. before the Commission, alleging deficiency in services on the part of the respondent­Bank.  The main relief claimed in the said complaint was for a direction to the respondent­Bank to return 3,75,000 shares of ITC Ltd. (earlier 37,50,000 shares of Ansal Hotel Ltd.) along with dividend and all accretions thereon. 12. In the  said  proceedings,  on being  served with the notice, the respondent­Bank raised a preliminary objection with regard to maintainability of the said complaint, on the 7 ground that the  appellant­complainant  was not a consumer as   envisaged   under   Section   2(1)(d)   of   the   said   Act.     The Commission, by the impugned order, held that the appellant had   availed   the   services   of   the   respondent­Bank   for ‘commercial purpose’ and as such, he was not a consumer as envisaged under Section 2(1)(d) of the said Act.   13. Being aggrieved thereby, the  appellant­complainant has approached this Court by way of the present appeal.    14. We  have  heard   Shri  Shyam  Divan,  learned   Senior Counsel   appearing   on   behalf   of   the   appellant   and   Shri Dushyant Dave, learned Senior Counsel appearing on behalf of the respondent.  Shri Shyam Divan, learned Senior Counsel appearing 15. on behalf of the appellant­complainant, submitted that the appellant had a dual relationship with the respondent­Bank. In   the   first   capacity,   as   a   consumer,   he   had   taken   the overdraft facility from the respondent­Bank for the purposes of   his   self­employment.     In   the   second   capacity,   he   was working as the stock­broker for the respondent­Bank.   The learned Senior Counsel submitted  that with regard to the 8 said   relationship,   though   there   were   certain   disputes,   the claim of the respondent­Bank before the Arbitration Forum of BSE has been rejected by the BSE Arbitral Tribunal, which has attained finality. 16. Shri Divan further submits that it is undisputed that the said shares were pledged with the respondent­Bank only as a security towards the overdraft facility. He submits that th from the letter of the respondent­Bank dated 14  May, 2005, it   is   clear  that   there   were   no   dues   outstanding   in   the overdraft account of the appellant­complainant, which stood fully   and   finally   settled   through   compromise/OTS.     He submitted   that   once   the   dues   of   the   respondent­Bank towards the said overdraft facility stood cleared, there was no reason for the respondent­Bank to have withheld the said shares.     He   submitted   that   though   the   arbitration proceedings   between   the   parties   had   reached   finality,   the respondent­Bank had illegally withheld the said shares of the appellant.  He submitted that in spite of repeated requests for return of the said shares, the same were not returned and as 9 such, the appellant had no option but to file the complaint under the said Act.  17. Shri Divan submitted that though Section 2(1)(d)(ii) of the said Act, excludes a person who avails of such services for ‘any commercial purpose’, the Explanation thereto, which could be construed as proviso to proviso, would include even such a person if it is shown that the services availed by him were exclusively for the purposes of earning his livelihood by means of self­employment.  He submitted that the services of the overdraft facility were taken by the appellant from the respondent­Bank for the purposes of his business as a stock­ broker. He submitted that since the appellant was engaged in the profession of stock­broker and since the services of the said   overdraft   facility   were   taken   for   the   appellant’s profession as a stock­broker, the services rendered by the respondent­Bank were exclusively for the purposes of earning his   livelihood.     Learned   Senior   Counsel   submits   that   the appellant was self­employed as a stock­broker and as such, the   services   availed   were   exclusively   for   the   purpose   of 10 earning his livelihood by means of self­employment.  He relies on the dictionary meaning of the word ‘livelihood’ as provided in Black’s Law Dictionary, Ninth Edition. He submits that the Commission has grossly erred in giving restricted meaning to the term ‘earning his livelihood by means of self­employment’. Learned   Senior   Counsel   submits   that   merely   because   a person has availed the services of the Bank for expanding his business,   that   cannot   be   a   ground   to   give   a   restricted meaning to the said term.   Relying on the judgment of this Court in the case of   Internet and Mobile Association of 1 India   vs.   Reserve   Bank   of   India ,   he   submits   that   the services of the Bank provide lifeline for any business, trade or profession.  He submits that in the present era, it is unable for any person to survive without availing the services of a Bank.       Learned   Senior   Counsel   submits   that   the Commission has erred in holding that the appellant is not a consumer within the meaning of Section 2(1)(d)(ii) of the said 1 (2020) 10 SCC 274 11 Act.  In support of his submissions, he relied on the following judgments of this Court: (i) Lilavati   Kirtilal   Mehta   Medical   Trust   vs. 2 Unique Shanti Developers and others ; (ii) Paramount   Digital   Colour   Lab   and   others 3 vs. AGFA India Private Limited and others ;  (iii) Sunil   Kohli   and   another   vs.   Purearth 4 Infrastructure Limited ;  (iv) CBI, AHD, Patna vs. Braj Bhushan Prasad 5 and others . 18. Shri   Dushyant   Dave,   learned   Senior   Counsel appearing on behalf of the respondent­Bank, on the contrary, submits that the said Act is a special statute enacted with the purpose   of   providing   a   speedy   and   simple   redressal   to consumer disputes.   Shri Dave submits that the said Act provides   a   summary   procedure   so   that   the   consumer disputes are settled without undue delay. He submitted that if the definition of the word ‘consumer’ is expanded, so as to include in it a person who avails of such services for any 2 (2020) 2 SCC 265 3 (2018) 14 SCC 81 4 (2020) 12 SCC 235 5 (2001) 9 SCC 432 12 commercial purpose, the very purpose of the said Act would be defeated.     He submits that if any commercial dispute between the service provider and the availer/recipient of the service is included in the definition of the word ‘consumer’, it will give rise to floodgates of complaints.  It is submitted that if such an interpretation is accepted, apart from the same being inconsistent with the provisions of Section 2(1)(d)(ii) of the   said   Act,   it   will   defeat   the   very   purpose   of   providing speedy justice to the consumers. He, therefore, submits that no interference is warranted in the finding of the Commission and the appeal deserves to be dismissed.   19. For   appreciating   the   rival   submissions,   it   will   be necessary to refer to Section 2(1)(d) of the said Act, as it exists today, which is as follows: 

13

14 20. The short question, therefore, that would have to be answered in the present case is, as to whether the services availed by the appellant from the respondent­Bank would fall within the term ‘commercial purpose’.   The other question that would also have to be answered is, as to whether such services   are   exclusively   availed   by   the   appellant   for   the purposes   of   earning   his   livelihood   by   means   of   self­ employment.  21. For considering the said issues, we will also have to examine the object while enacting the said Act as well as the legislative history as to how Section 2(1)(d) has come in its present form.  The legislature found that though there were various provisions contained in various enactments to protect the   consumers   and   provide   relief   to   them,   yet   it   became necessary to protect the consumers from the exploitation and to save them from adulterated and sub­standard goods and services and to safe guard the interests of the consumers.  In order to provide for better protection of the interests of the 15 consumer, the Consumer Protection Bill was introduced in the Parliament.   22. Perusal of the ‘Statement of Objects and Reasons’ of the said Act would show that the said Act seeks to provide for better protection of the interests of consumers and for that purpose,   to   make   provision   for   the   establishment   of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith. One of the objects for enacting the said Act was the right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums. To provide speedy and simple redressal to consumer disputes, a quasi­ judicial machinery was sought to be set up at the district, State and Central levels.   It will be apposite to refer to the preamble of the said Act, which reads thus: “An Act to provide for better protection of the   interests   of   consumers   and   for   that purpose   to   make   provision   for   the establishment   of   consumer   councils   and other   authorities   for   the   settlement   of consumers’   disputes   and   for   matters connected therewith.” 16 23. The definition of the term ‘consumer’ as contained in Section 2(1)(d) of the said Act, as it existed in the original enactment of 1986, reads thus:

17 24. It could thus be seen that Section 2(1)(d) of the said Act is in two parts.  Section 2(1)(d)(i) of the said Act deals with buying   of   goods.     A   person   who   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 would be a consumer within the meaning of Section 2(1)(d)(i) of the said Act.   It also includes any user of such goods   other   than   the   person   who   buys   such   goods   for   a consideration,  which  has  been  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.  However, Section 2(1)(d)(i) of the said Act excludes a person   who   obtains   such   goods   for   resale   or   for   any commercial purpose.   25. Section 2(1)(d)(ii) of the said Act is with respect to hiring of services.  According to it, the term ‘consumer’ means any person who hires any services for a consideration, which has   been   paid   or   promised   or   partly   paid   and   partly promised, or under any system of deferred payment.   It also 18 included   any   beneficiary   of   such   services   other   than   the person who hires the services as is provided under Section 2(1)(d)(i) of the said Act.   26. It could thus be seen that as per the definition of the term ‘consumer’, under Section 2(1)(d)(ii) of the said Act, as enacted originally, even if a person who hires any services for any commercial purpose, he could still be included in the definition of the term ‘consumer’.  It is relevant to note that Section 2(1)(d)(i) of the said Act   clearly kept a person who obtains such goods for resale or for any commercial purpose, out   of   the   ambit   of   definition   of   the   term   ‘consumer’. However, insofar as hiring of services is concerned, no such provision was made in the original enactment.   27. The   legislature   noticed   various   deficiencies   and inadequacies in the said Act.   Therefore, in order to plug these loopholes and enlarge the scope of areas covered, the legislature brought certain amendments to the said Act by the Consumer Protection (Amendment) Act, 1993 (hereinafter referred to as “1993 Amendment Act”).  One of the objects of 19 the   said   Act   was   to   enable   the   consumers,   who   are   self­ employed, to file complaints before the redressal agencies, where  goods   bought  by   them  exclusively   for   earning  their livelihood,   suffer   from   any   defect.   By   sub­section   (5)   of Section   2   of   the   1993   Amendment   Act,   the   following amendments   were   effected   to   the   definition   of   the   term ‘consumer’: “(5) in clause  (d) ,­ (A)   in   sub­clause   (ii) ,   for   the   word “hires”,   in   both   the   places   where   it occurs,   the   words   “hires   or   avails   of” shall be  substituted ; (B) after   sub­clause   (ii) ,   the   following Explanation  shall be  inserted  at the end, namely:­ ‘ 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’;” 28.  It could thus be seen that by the 1993 Amendment Act,  insofar as  services are concerned,  wherever the  word “hires” was used, the same was substituted by the words 20 “hires or avails of”.  By the said 1993 Amendment Act, insofar as   Section   2(1)(d)(i)   is   concerned,   an   Explanation   was provided   to   the   effect   that   ‘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 self­employment.   It could thus be seen that though the original Act of 1986 excluded a person from the ambit of definition of the term ‘consumer’ whenever such purchases were   made   for   commercial   purpose;   by   the   Explanation, which is an exception to an exception, even if a person made purchases for ‘commercial purpose’, he was included in the definition of the term ‘consumer’, if such a person bought and used   such   goods   exclusively   for   earning   his   livelihood   by means of self­employment.  The legislative intent is clear, that though the purchases for commercial purposes are out of the ambit of the definition of the term ‘consumer’ in the said Act, if a person buys and uses such goods exclusively for earning 21 his livelihood by way of self­employment, he would still be entitled to protection under the said Act.    29. The   legislature   further   noticed   several   bottlenecks and shortcomings in the implementation of various provisions of the said Act and with a view to achieve quicker disposal of consumer   complaints,   and   to   make   the   said   Act   more effective   by   removing   various   lacunae,   the   legislature amended   the   said   Act   by   the   Consumer   Protection (Amendment) Act, 2002 (hereinafter referred to as “the 2002 Amendment Act”).   One of the objects for bringing out the 2002 Amendment Act was “exclusion of services availed for commercial   purposes   from   the   purview   of   the   consumer disputes redressal agencies”.  It could thus be seen that the legislature noticed the mischief, that though  Section 2(1)(d)(i) of the said Act kept out of its purview the goods purchased for commercial purpose, the said restriction was not found in Section 2(1)(d)(ii)  of the said Act.  As such, in order to bring Section 2(1)(d)(ii)   at par with   Section 2(1)(d)(i) , the following amendment was effected to in clause (d): 22 “(c) in clause  (d) ,­ (i) in   sub­clause   (ii) ,   the   following words   shall   be   inserted   at   the   end, namely:­ “but does not include a person who avails of such services for any commercial purpose”; (ii) for   the   Explanation,   the   following Explanation   shall   be   substituted, namely:­ ‘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   pur­ poses of earning his livelihood by means of self­employment’;” 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   self­employment,   was 23 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 24 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 25 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 6 Works vs. P.S.G. Industrial Institute ,   which is as under: “ 10.  A review of the provisions of the Act discloses that the quasi­judicial bodies/au­ thorities/agencies   created   by   the   Act known as District Forums, State Commis­ sions and the National Commission are not courts   though  invested   with  some   of   the powers of a civil court. They are quasi­judi­ cial tribunals brought into existence to ren­ der   inexpensive   and   speedy   remedies   to consumers. It is equally clear that these fo­ rums/commissions   were  not  supposed   to supplant but supplement the existing judi­ cial system. The idea was to provide an ad­ ditional   forum   providing   inexpensive   and speedy   resolution   of   disputes   arising   be­ tween   consumers  and  suppliers   of   goods and services. The forum so created is unin­ hibited by the requirement of court fee or the formal procedures of a court. Any con­ sumer can go and file a complaint. Com­ plaint need not necessarily be filed by the complainant himself; any recognized con­ sumers' association can espouse his cause. Where a large number of consumers have a 6 (1995) 3 SCC 583 26 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 ser­ vices 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 de­ signed to protect his interest. The Act pro­ vides for “business­to­consumer” disputes and   not   for   “business­to­business”   dis­ putes. This scheme of the Act, in our opin­ ion, 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 “business­to­business”   disputes.       It   has   been   held   that 27 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 im­ material whether the consideration is paid or   promised,   or   partly   paid   and   partly promised, or whether the payment of con­ sideration   is   deferred;   ( ii )   a   person   who uses such goods with the approval of the person who buys such goods for considera­ tion; ( iii ) but does not include a person who buys such goods for resale or for any com­ mercial purpose. The expression ‘resale’ is 28 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 ab­ sence of a definition, we have to go by its ordinary meaning. ‘Commercial’ de­ notes “pertaining to commerce” (Cham­ ber's Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile; having profit as the main aim”  (Collins  English  Dictio­ nary)   whereas   the   word   ‘commerce’ means   “financial   transactions   espe­ cially   buying   and   selling   of   merchan­ dise, on a large scale” (Concise Oxford Dictionary).  The National Commission ap­ pears 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   ‘con­ sumer’ within the meaning of Section 2( d )( i ) of the Act. Broadly affirming the said view and more particularly with a view to obvi­ ate 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   Ordi­ nance/Amendment   Act,   1993.   The   ex­ planation   excludes   certain   purposes from   the   purview   of   the   expression “commercial purpose” — a case of ex­ ception to an exception.  Let us elaborate: 29 a person who buys a typewriter or a car and uses them for his personal use is cer­ tainly 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 ex­ pression   ‘consumer’.   If   the   commercial use is by the purchaser himself for the purpose   of   earning   his   livelihood   by means   of   self­employment,   such   pur­ chaser of goods is yet a ‘consumer’ . In the   illustration   given   above,   if   the   pur­ chaser 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 ques­ tion 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 explana­ tion, viz., “uses them by himself”, “ex­ clusively for the purpose of earning his 30 livelihood”   and   “by   means   of   self­em­ ployment” make the intention of Parlia­ ment abundantly clear, that the goods bought must be used by the buyer him­ self, by employing himself for earning   A   few   more   illustrations his   livelihood. would serve to emphasise what we say. A person who purchases an auto­rickshaw to ply it himself on hire for earning his liveli­ hood   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 pur­ chases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illus­ trations, 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 auto­rick­ shaw, a car or a lathe machine or other machine to be plied or operated exclusively by   another   person   would   not   be   a   con­ sumer.   This is the necessary limitation flowing from the expressions “used by him”,   and   “by   means   of   self­employ­ ment” in the explanation. The ambigu­ ity in the meaning of the words “for the purpose of earning his livelihood” is ex­ plained and clarified by the other two sets of words.” [Emphasis supplied] 31 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’.    One instance given is that a person who purchases a 36. 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’ 32 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.  In  the case of   37. Cheema Engineering  Services vs. 7 Rajan Singh , this Court held that the manufacture  and sale of bricks in a commercial way may also be to earn livelihood. 7 (1997) 1 SCC 131 33 As such, the question as to whether the complainant used the machinery for the manufacture of bricks alone or with members of his family and as to whether the same was for earning his livelihood, were the questions of fact to be decided on the basis of evidence.    38. In the case of  Kalpavruksha Charitable Trust vs. 8 , this Toshniwal Brothers (Bombay) Pvt. Ltd. and another Court  considered the question as to whether the machines purchased by the Charitable Trust for use in the Diagnostic Centre were meant for ‘commercial purpose’ or not. It was sought to be urged on behalf of the Trust that the Trust was not carrying out a profit­making activity and as such, the purchase of diagnostic machines would not come within the ambit of the term ‘commercial purpose’.   It was, therefore, sought to be urged that it would fall within the definition of the term ‘consumer’.   This Court held that the finding of the National Commission that the machinery was installed for commercial   purpose   and   as   such,   the   Trust   was   not   a 8 (2000) 1 SCC 512 34 ‘consumer’ within the meaning of the said Act, required no interference.   39. In   the   case   of   Paramount   Digital   Colour   Lab (supra), this Court was considering the case of unemployed graduates,   who  had  started   a  business   of   photography  in partnership for self­employment and for their livelihood. For the said purpose, they had purchased an advanced photo processing, developing and printing machine.  It was the case of the appellants therein that the respondents, despite having the knowledge that the machine was not working properly, had unfairly and carelessly sold the same to the appellants. As   such,   the   appellants   were   required   to   file   a   complaint under the said Act.  The State Commission had allowed the complaint. In appeal, the National Commission held that the appellants   were   not   the   consumers   as   envisaged   under Section   2(1)(d)  of   the   said   Act,   since   the   purchase   of  the machine was for commercial purpose.   Reversing the view taken by the National Commission and upholding the view taken by the State Commission, this Court observed thus: 35 “ 12.  In this case, since the appellants have purchased  the  machine,  Section  2(1)( d ) of the Act is applicable. “Consumer” as defined under Section 2(1)( d ) of the Act does not in­ clude   a   person   who   obtains   goods   for   a “commercial   purpose”.   The   Explanation supplied   to   Section   2(1)( d )   clarifies   that “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”.   If   both   these provisions are read together, it leads to the conclusion that if a person purchased the goods for consideration not for any commer­ cial   purpose,   but   exclusively   for   the   pur­ poses of earning his livelihood by means of “self­employment”,   such   purchaser   will come within the definition of “consumer”. If a person purchases the goods for a “com­ mercial purpose” and not for the purposes of earning his livelihood by means of “self­ employment”, such purchaser will not come within   the   definition   of   “consumer”.   It   is therefore clear, that despite “commercial ac­ tivity”, whether a person would fall within the definition of “consumer” or not would be a question of fact in every case. Such ques­ tion of fact ought to be decided in the facts and circumstances of each case. 13.  “Self­employment”   necessarily   includes earning for self. Without earning generally there cannot be “self­employment”. Thus, if 36 a person buys and uses the machine exclu­ sively for the purposes of earning his liveli­ hood by means of “self­employment”, he def­ initely comes within the definition of “con­ sumer”. In the matter on hand, the quality of ultimate production by the user of the machine would depend upon the skill of the person who uses the machine. In case of ex­ igencies, if a person trains another person to operate the machine so as to produce the final product based on skill and effort in the matter of photography and development, the same cannot take such person out of the definition of “consumer”.” 40. This Court, on facts in the said case, found that the appellants   therein   were   unemployed   graduates   and   had bought   the   said   machine   for   their   own   utility,   personal handling   and   for   their   small   venture,   which   they   had embarked upon to make a livelihood.     This Court further found that this was distinct from large­scale manufacturing or   processing   activity   carried   on   for   huge   profits.   It   was, therefore,   held   that   the   appellants   therein   would   be consumers within the meaning of Section 2(1)(d) of the said Act. 37 41. Shri Shyam Divan, learned Senior Counsel appearing on behalf of the appellant, strongly relied on the judgment of this Court in the case of   Lilavati Kirtilal Mehta Medical Trust  (supra), wherein this Court after considering the earlier judgments held thus: “  To summarise from the above discus­ 19. sion, though a strait jacket formula cannot be   adopted   in   every   case,   the   following broad principles can be culled out for deter­ mining whether an activity or transaction is “for a commercial purpose”: 19.1.  The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However,  ordinarily , “commercial pur­ pose” is understood to include manufactur­ ing/industrial  activity   or   business­to­busi­ ness transactions between commercial enti­ ties. 19.2.  The purchase of the good or service should have a close and direct nexus with a profit­generating 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 38

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 business­to­business   transactions   between   commercial entities; that the purchase of the good or service should have a close and direct nexus with a profit­generating activity; that the identity of the person making the purchase or the value of the transaction is not conclusive for determining the question 39 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.   43. On facts, it was held that the purchase of flats by the appellant   therein   had   no   direct   nexus   with   the   profit generating   activities.     The   flats   were   not   occupied   for undertaking   any   medical/diagnostic   facilities   within   the hospital but for accommodating the nurses employed by the hospital.   It was further held that the flats are being provided to the nurses without any rent and that the appellant  therein 40 was not generating any surplus from occupying the flats or engaging in buying and selling of flats. 44. Insofar as the judgment of this Court in the case of Sunil   Kohli   (supra),   relied   upon   by   the   appellant,   is concerned, this Court on the basis of the evidence, clearly found that the complainants wanted to dispose of property in Denmark   and   wanted   to   come   down   to   Delhi   to   start   a business. It has further been found that for this purpose, the premises in question were booked. As such, the said case was a case wherein the commercial premises were booked by the appellants  therein,   who   had   left   their   employment   in Denmark and purchased the premises only for the purposes of starting their business for earning their livelihood by way of   self­employment.     Therefore,   the   said   case   was   a   case wherein the appellants  therein  had availed of the services exclusively   for   earning   their   livelihood   by   means   of   self­ employment.   45. It could thus be seen, that when a person avails a service for a commercial purpose, to come within the meaning 41 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   stock­ broker, much before he availed of service of the  overdraft facility from the respondent­Bank.   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 stock­ broker 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 42 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 respondent­Bank,   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 43 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.  48. We, therefore, find no error with the findings of the Commission.   In   any   case,   the   Commission   has   already granted  liberty  to the  appellant to avail of  his  remedy  by approaching the appropriate forum, having jurisdiction.  49. In the result, the appeal is dismissed.  There shall be no order as to costs.   All pending applications, if any, shall stand disposed of.  …............................J.                              [L. NAGESWARA RAO] 44 ......................J.                                                          [B.R. GAVAI] NEW DELHI; FEBRUARY 22, 2022