State Consumer Disputes Redressal Commission
Tops Security Limited, vs Shri Joseph Baretto on 16 November, 2012
BEFORE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI -GOA C .C. No. 05/2006 Tops Security Limited, having its regional Office at 5, Royal Palms Golf & Country Club, Aarey Milk Colony, Goregaon (E), Mumbai 400 065 with its Branch Office at 850, Journalist Colony, Opp. Goa Houseing Board Office, Alto Betim, Porvorim, Bardez, Goa through its Manager/ Branch Head Servicer, Shri Anees Shaikh, Porvorim, Goa. ... Complainant v/s 1. Shri Joseph Baretto alias Joseph Graciano Felizardo Barreto, son of Antonio Barreto, Proprietor of M/s. Shanti Natural Resort and M/s. Passive Active Tourism, With office at Hoetl 4 Pillars, Rua de Ourem, Panjim, Goa 2. Oriental Insurance Co., Govia Bldg., Panjim Goa ... Opposite Parties Complainant is represented by Adv.Shri S. Naik Opposite Party 1 is represented by Adv. A. R. Kantak Opposite Party 2 is represented by Adv. E. Afonso Coram: Shri Justice N. A. Britto, President Shri Jagdish Prabhudessai, Member Dated: 16/11/2012 ORDER
[Per Justice Shri. N. A. Britto, President] Is the complainant a consumer within the meaning of section 2(1)(d)(ii) of the Consumer Protection Act, 1986?
2. We have heard the lr. advocates appearing on behalf of the parties on the said question and before we answer the same a few facts are required to be stated.
3. The complainant is a registered company engaged in security business and has about 25,000/- employees, employed all over the country. The complainant company organized a seminar to discuss about the business promotion at Catrion Beach, Goa.
4. The complainant engaged the services of Opposite Party No. 1. Opposite Party No.1informed the complainant that he was an expert in conducting outdoor exercises which he had conducted even for some foreigners including Canadian army as well as to Corporates for the past 25 years. The complainant paid Opposite Party -1 a sum of Rs.1,76,232/- by way of advance and the outdoor management programme was fixed for 3 days i.e. to say on 12th, 13th and 14th of April 06. About 150 top management personnel and directors had arrived for the said seminar at the said Catrion Beach, Goa.
5. On 12th April, 2006 a stream walk as part of team building activities was organised and all the participants were taken to the stream by bus at about 11.30 a.m. The participants included about 135 men and 15 women. Opposite Party No.1 gave a briefing to the participants for about 10 minutes regarding the said stream walk. Participants were instructed to form small groups and each group was asked to get into the stream. The participants were required to cross the stream below the road river bridge within 15 minutes. Each group was entitled to certain points to win the game.
According to the complainant Opposite Party No.1 had informed the complainant that swimming was not necessary as the depth of the stream was less than 3 4 feet.
6. The first team consisting of 15 20 members and led by Brigadier (Retd) Mr. M. I. Jaisinghani entered the stream and started walking towards the opposite direction. As they walked they found that the depth of the stream was much more than what was conveyed to them by Opposite Party No.1 and that in fact it was a river. Some of the members of the said group started drowning and infact Sr. Executives by name Vijay Raghvan and Bertram Xavier died due to drowning.
A director by name Ramesh Iyer had to be hospitalized in critical condition. This happened inspite of the people from the locality rushing to the rescue of the said members of the group to save their lives. According to the complainant, Opposite Party No.1 and his 3 experts ran away from the scene without rendering any help to the unfortunate participants.
7. The said Brigadier Jaisinghani filed a written complaint to the Dy. Inspector General of Police, Goa on 13/04/2006. The offence was registered under section 304 A r/w 34 IPC against the Opposite Party No.1 and 2 others. They were prosecuted in C.C. No.28/5/2006 and have now been acquitted by judgment dated 31/08/2012 of the Lr. J.M.F.C., Sanguem.
8. The complainant paid a sum of Rs.7,43,250/- to the families of each of the deceased in addition to offering other forms of assistance. The case of the complainant was that loss was caused not only to the complainant but also to the families of the deceased due to the negligence of O.P. No.1. According to the complainant the deceased officers were trained officers and had lot of experience in the filed of operations of the complainant and were great assets to the company. The complaint is filed to recover the said sum of Rs.14,86,500 paid to the families of the deceased and other sums more particularly described in prayers 17 (b) to (h).
9. O.P. No.2 was impleaded subsequently by virtue of O.P. No.1s application dated 11/04/2007 as O.P. No.1 had obtained from O.P. No.2 a Public Liability Non Industrial Policy.
10. Shri S. Naik the lr. adv. of the complainant would submit that the question raised stands concluded by the order of this Commission dated 15/09/2006. Lr.
advocate submits that since the said question is concluded it cannot be reopened again.
10.1. We are not impressed with the said submission. Lr. advocate has referred to the order dated 15/09/06. By the said order the complaint was admitted.
Whether the complainant was a consumer within the meaning of the Consumer Protection Act, 1986 was not at all decided as a preliminary objection taken by any of the Opposite Parties.
Admitting a complaint and deciding an objection are entirely two different matters. Admission of a complaint is only an acceptance by a Court or a Forum for the purpose of consideration. Nothing more. Therefore when this Commission admitted the complaint on 15/09/06 it only decided to proceed further with the complaint. Whether the complainant was a consumer or not was not an issue which was decided by the said order dated 15/09/06.
11. Section 2 (1)(d) defines a consumer to mean any person who,
(i) buys any goods for a consideration etc. 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 etc. but does not include a person who avails of such services for commercial purpose;
[Explanation For the purposes of this clause, commercial purpose does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;] (emphasis supplied.) 11.1. Shri. Naik would submit that the complainant is a company and as such is a person and was entitled to file this complaint. Shri Naik has placed reliance of Karnataka Power Transmission Corpn. & anr. vs. Ashok Iron Works Pvt. Ltd., 2009 3 SCC 246. There is no doubt that the complainant being a company is a person within the meaning of section 2(1)(m) r/w section 2(1)(d) of the Consumer Protection Act, 1986. In the aforesaid decision all that the Apex Court has held is that the definition of person in section 2(1)(m) of the Consumer Protection Act, 1986 is inclusive and not exhaustive.
12. Shri. S. Naik would then submit that Opposite Party No.1 was engaged by the company for team building activities of the companys employees and the company was not to derive any profit from the services of the Opposite Party No.1. The lr. advocate submits that the services of the Opposite Party No.1 were engaged for the team bonding or team building activity of the employees. The lr. advocate submits that the services of Opposite Party No.1 were not engaged for any commercial purpose.
13. We are not impressed with this submission of lr. advocate Shri Naik. The complainant is a company. It is a group of persons who have come together to do business and earn profits for the benefit of its shareholders.
When the services of Opposite Party No.1 were engaged by the company for the team bonding activities of its employees, it was with a view to make them work better, so that the company functions more effectively and earns higher profits. The services of Opposite Party No.1 were engaged for the purpose of a company or its larger good, so that it functions more effectively for the benefit of its shareholders, and not for any single individual director. A company is a commercial venture to earn profits for the benefit of all the shareholders.
14. If we scrutinize the definition of consumer as given in section 2(1)(d)(ii) it is the individual who is to be considered and not a group of persons which come together to do business or commercial activities with a view to earn profits.
15. In Laxmi Engineering Works Vs P.S.G. Industrial Institute, AIR 1995 SC 1428, the complainant Laxmi Engineering Works was a proprietary concern and was registered as a small scale industry and had obtained financial assistance and it had placed an order for the supply of machinery from the Opposite Party. The machinery was supplied 6 months beyond the stipulated date and was defective. Soon after it was installed and operated, several defects came to light which the complainant brought to the notice of the Opposite Party and thereafter good amount of correspondence was exchanged.
Opposite Party had sent persons to rectify the defects but the machinery could not be put in proper order. The complainant claiming that he was suffering serious financial losses on account of defective functioning of the machinery filed a complaint claiming an amount of Rs.4 lacs on several counts. The Opposite Party took an objection that the complainant had purchased the machinery for commercial purpose and was not a consumer within the meaning of section 2(1)(d) of the Consumer Protection Act, 1986. The State Commission allowed the complaint, partly but the National Commission reversed the order and observed that from the facts on record it was manifest that the complainant was carrying on the business of manufacturing of machine parts on a large scale for the purpose of earning profits and significantly one single item of machinery in respect of which the complaint was filed by the complainant before the State Commission itself was of the value of Rs. 21 lacs and odd. The National Commission therefore came to the conclusion that the machinery purchased which was alleged to be defective was purchased for a commercial purpose and therefore the complainant was not entitled to be regarded as a consumer. The National Commission then observed that their order would not preclude the complainant from pursuing his remedy by way of ordinary civil suit.
15.1. In the case of Synco Textiles P. Ltd. vs. Grieves Cotton and Company Ltd., 1991 (1) CPJ 499 decided by the National Commission, to which reference was made by the Apex Court, it was held by National Commission by majority view that the words for any commercial purpose were wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profit; and after referring to the dictionary meaning of the expression commercial the National Commission further held that the intention of Parliament must be understood to be to exclude from the scope of the expression consumer any person who buys goods for the purpose of there being used in any activity engaged on a large scale for the purpose of making profit.
15.2. The Apex Court further observed as follows:
as against this a person who purchased an auto- rickshaw, a car or a lathe machine or other machines to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expression used by him, and by means of self-employment in the explanation. The ambiguity in the meaning of he words for the purpose of earning his livelihood is explained and clarified by the other two sets of words.
15.3. The Apex Court also held that he explanation which was added to the Consumer Protection Act, 1986, with effect from 18/06/93 was a clarificatory in nature and applied to all pending proceedings.
The Apex Court further held that the purpose for which a person has bought goods is a commercial purpose within the meaning of the definition in section 2(1)(d) is always a question of fact to be decided in the facts and circumstances of each case. The Apex Court also held that a person who buys goods and uses them himself, exclusively for the purpose of earning his livelihood by means of self-employment is within the definition of he expreseion consumer.
Ultimately, the Apex Court dismissed the appeal filed by Laxmi Engineering Works.
15.4. In a later decision in the case of MCS Computer Service (P) Ltd. Vs M/s. Alina Auto Industries (2012 (2) CPR 68) , National Commission has held as follows:
Explanation to Section creates an exception and states that clause commercial purpose does not include use by a person of goods brought and used by him and services available by him exclusively for the purpose of earning his livelihood by means of self-employment. Respondent is a private limited company and the commercial activities carried out by it cannot be for its earning livelihood by means of self-employment. Company has to act through somebody and the question of livelihood and self-employment under these circumstances would not arise. Company has judicious identity and it can be sued through a person. Company does the commercial activities for its shareholders. Question of earning livelihood by means of self-employment would not arise.
15.5. Recently, in Compage Computerts Ltd., 2012(1)CPR 275, it has been held that by no stretch of imagination a Pvt. Ltd., Company could be treated as a person of goods bought and used by it and services availed by it exclusively for the purpose of earning its livelihood by means of self employment.
16. Consumer jurisdiction under Consumer Protection act, 1986 is meant only for consumers. It is their one way street, so to say. Others who are not consumers cannot invoke this jurisdiction.
Complainant is not a consumer within the meaning of the expression as defined under section 2(1)(d)(ii) of the Consumer Protection Act, 1986 and therefore was not entitled to invoke the jurisdiction of this Commission. Complaint therefore needs to and is hereby rejected with the same liberty as was given to Laxmi Engineering Works (Supra) by the Apex Court in para 26 of the learned Judgment.
17. Considering the facts there shall be no order as to costs.
[Shri. Jagdish G. Prabhudesai] [Justice Shri. N. A. Britto] Member President