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National Consumer Disputes Redressal

Neyyar Aqua Products vs Divisional Manager, United India ... on 29 August, 2023

          NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION  NEW DELHI          FIRST APPEAL NO. 1739 OF  2019  (Against the Order dated 27/09/2018 in Complaint No. 52/2012       of the State Commission Kerala)        1. NEYYAR AQUA PRODUCTS  REP. BY ITS MANAGING PARTNER K.S. SHAIJU.
NMS-V/375 A & B, T B JUNCTION, NEYYATTINKARA.  THIRUVANANTHAPURAM. ...........Appellant(s)  Versus        1. DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO. LTD. & ANR.   LMS COMPOUND, PALAYAM.  THIRUVANANTHAPURAM.  2. THE MANAGER, SYNDICATE BANK.  STATUE BRANCH.  THIRUVANANTHAPURAM. ...........Respondent(s) 

     BEFORE:      HON'BLE MR. JUSTICE KARUNA NAND BAJPAYEE,PRESIDING MEMBER 
      FOR THE APPELLANT     :     FOR THE APPELLANT	 		: MR. SABARISH SUBRAMANIAN, ADVOCATE WITH
  					  MR. NAMAN DWIVEDI, ADVOCATE      FOR THE RESPONDENT      :     FOR THE RESPONDENT NO. 1	: MR. PRADEEP GAUR, ADVOCATE WITH
  					  MS. SWETA SINHA, ADVOCATE 
  
  FOR THE RESPONDENT NO. 2	: MR. BIJU THANKAPPEN, ADVOCATE WITH
  					  MR. RAVI KUMAR, ADVOCATE 
      Dated : 29 August 2023  	    ORDER    	    

1.   This appeal has been filed under section 19 of The Consumer Protection Act, 1986 in challenge to the Order dated 27.09.2018 of the State Commission in complaint no. 52 of 2012.

2.   The instant First Appeal has been filed with reported delay of 300 days.

            

However, in the interest of justice, inter alia having regard to the reasons contained in the applications for condonation of delay and in order to decide the matters on merit rather than to dismiss it on the threshold of limitation, the delay in filing the appeal is condoned.

3.   The complaint relates to the repudiation of the insurance claim. The policy was valid at the point when the occurrence took place. Aggrieved by the same, a complaint was filed by the complainant co. in the State Commission but the same has been dismissed as not maintainable for the reason that in the opinion of the fora below the complainant co. being a commercial entity involved in doing business is not a 'consumer'. The relevant extract of the impugned Order dated 27.09.2018 of the State Commission may be quoted herein below:

7.     Point No.1:- It is contended by the opposite parties that the complainant is not a consumer as defined in section 2(1) of the Consumer Protection Act and the complaint is not maintainable. The complainant has filed the complaint for an order directing the first opposite party to settle his claim of Rs 57,10,000/- as per the terms of the policy or the second opposite party to make good loss sustained by him due to the flood. The complainant is "Neyyar Aqua Products    " a partnership firm represented by its managing partner K.S.Shaiju. In the complaint, it is stated that the complainant is conducting the business of bottling and filling drinking water under the name "Pearl dew Neyyar Aqua" Neyyattinkara on the western bank of a streamlet and adjacent to the NH 47 on its northern side for the livelihood of the family. So the business is being conducted by a partnership firm. Ext.A8 the copy of the partnership deed will show that Rajeena, the wife of complainant is the managing partner of the firm and complainant also partner. On going through the definitions of various terms mentioned in section 2 of the Consumer Protection Act, it can be seen that a person having the status of consumer can file a complaint under the Act and the expression "person" includes a firm whether registered or not. So a complaint can be filed by the firm, as a consumer. The expression "consumer" is defined under section (2)(d) of the Act. In clauses (I) & (II) of that definition it is stated that the person mentioned in that section does not include a person who obtains good for resale or for any commercial purpose or avails service for any commercial purpose. Admittedly, the complainant firm is conducting business, bottling and selling drinking water and they availed service of insurance company for commercial purpose. In explanation to section 2(d) of the Act it is stated that 'commercial purpose' does not include use by a person of goods brought and used by him and service availed by him exclusively for the purpose of earning his livelihood by means of self employment. In the complaint it is stated that the complainant is conducting business for the livelihood of the family. In Lekshmi Engineering Works Vs PSG Industrial Institute (1995 AIR 1428) the Hon'ble Supreme Court considering the definition of expression 'consumer' in section 2(d) (1) of the Consumer Protection Act and various expressions employed in that section and in the explanation to that section such as "commercial purpose", 'exclusively for the purpose of self employment' etc held that what is a commercial purpose is a question of fact to be decided on the facts each case. It is not the value of the goods that matters but the purpose to which goods bought are put to. Several words employed in the explanation "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 by employing himself for earning his livelihood. It was held that the definition of the expression "person" in section 2(m) of the Act as including a firm (whether registered or not) a hindhu undivided family, a cooperative society or any other associations of persons (whether registered under the Societies Registration Act on 1860 or not) make no difference to the above interpretation. If a firm purchased the goods, the members of the firm should themselves ply, operate or use the goods purchased.

8.   As stated above, in the complaint it is stated that the complainant is conducting business for the livelihood of the family. In affidavit of complainant filed in lieu of examination also in chief is stated that he is the Managing partner of the firm and his wife is the other partner and he is conducting business for the livelihood of his family. He has no specific case that he is doing the business for eking out his livelihood. In the complaint the complainant has no case that his wife, the other partner has also been participating in the business for the purpose of eking out her livelihood. PW1 had also no such case PW1 has not stated anything about his wife, the other partner in the firm, whether she is employed or unemployed. In the light of the dictum laid down in the above cited decision and considering the facts and circumstances of the case it can be seen that complainant firm is not a consumer as defined under section 2(1) (d) of the Consumer Protection Act and hence the complaint is not maintainable and it is to be dismissed.

4.   Aggrieved by the aforesaid Order, the instant appeal has been filed.

5.     Heard the learned counsel for the appellant (the 'complainant co.'), the learned counsel for the respondent no.1 / opposite party no. 1 (the 'insurance co.') and the learned counsel for the respondent no. 2 / opposite party no.2 (the 'bank'). Perused the material on record including inter alia the State Commission's impugned Order dated 27.09.2018 and the memorandum of the appeal.

6.     Learned counsel for the appellant co. has drawn the attention of the Bench to the decision given by Hon'ble Supreme Court in case of National Insurance Co. Ltd. Vs. Harsolia Motors and Others 20023 SCC Online SC 409 and also to the two decisions given by this Commission in the cases of Polyplex Corporation Ltd. vs. National Insurance Co. Ltd. & Ors. (Order dated 07.04.2017) and in the case of United Shippers Limited vs. ICICI Lombard General Insurance Co. Ltd. (Order dated 09.02.2023).

The submission of the learned counsel is that the law on the issue involved in this matter has already been expatiated upon by Hon'ble Apex Court quite at length in the case of Harsolia Motors and Others (supra) which has also been consistently followed by this Commission. Thus the law regarding the pivotal question that is involved in the matter at hand is no more res integra. The appellant cannot be divested from the character of being a 'consumer' just because it was involved in doing the business or that it was a firm or a commercial entity. The purpose of the transaction at hand was the reimbursement of the loss or to indemnify the same in case the loss occurs and was aimed to insure the contingent event of perils. The services of the insurer were availed for protection per se and not for making profit. The complainant co. was not carrying on commerce or any kind of trading with the insurance policy or with regard to the insurance policy. All the allied issues which may have bearing in matters like this have been thoroughly gone into and postulated by Hon'ble Apex Court and in a case like this as is under consideration, it is beyond the pale of any doubt that the complainant co. is a 'consumer' well within the definition of the Act. The submission is that none of the authorities referred to hereinbefore which directly address the issue involved at hand have been considered by the State Commission and the relevant conclusive law on the point has completely escaped the attention and consideration of the State commission.

        It has been contended that the view taken by the fora below would have been otherwise, had it considered or had it been cognizant of the law and the views enunciated in the cases referred to herein above. Holding the complainant to be not a 'consumer' is, therefore, a completely unsustainable finding. It has been contended that the impugned Order dated 27.09.2018 is, therefore, untenable and ought to be set aside and the complainant should be given opportunity to contest the case on merits before the State Commission.

7.     The learned counsel for the respondent no.1 - the insurance co. and the respondent no.2 - the bank, both have been gracious enough to adopt a fair approach and have assisted the Bench appreciably on the point of law and facts both. Both the learned respondents' counsel have not been able to either doubt the authoritative nature of the law that has been laid down in the aforesaid cases or to doubt their applicability in the case at hand. Though learned counsel for the respondent no. 2 - the bank has tried to raise the plea that liability ought not to be affixed on the bank, but this issue is not at all germane to the controversy at hand which is being discussed i.e. whether the appellant is  a 'consumer' or not under the provisions of the Act.

8.     The Bench has considered the submissions raised at the Bar and has perused the record and the cited case law in that light. After considering the whole matter, this Bench finds reason to observe that the impugned Order dated 27.09.2018 passed by the State Commission cannot be sustained in the eyes of law and the view taken by the fora below would fly in the face of law laid down by Hon'ble Apex Court as well as the views taken by this Commission. Had the aforesaid cases as have been cited by the learned counsel for the appellant co. been considered, the decision of the State Commission would have been just otherwise.

9.     It may be apt refer to the relevant extracts from the case of Harsolia Motors and Others (supra) and the views expressed therein which reads as follows:

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43. Thus, what is finally culled out is that each case has to be examined on its own facts and circumstances and what is to be examined is whether any activity or transaction is for commercial purpose to generate profits and there cannot be a straight­jacket formula which can be adopted and every case has to be examined on the broad principles which have been laid down by this Court, of which detailed discussion has been made.

44. Applying the above principles in the present case, what needs to be determined is whether the insurance service had a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose of the transaction was to facilitate some kind of profit generation for the insured or to the beneficiary and our answer is in the negative and accordingly we are of the view that the complaint filed by the respondent insured herein has no close or direct nexus with the profit generating activity and the claim of insurance is to indemnify the loss which the respondent insured had suffered and the Commission has rightly held that the respondent is a "consumer" under Section 2(1) (d) of the Act, 1986.

45. We further reiterate that ordinarily the nature of the insurance contract is always to indemnify the losses. Insurance contracts are contracts of indemnity whereby one undertakes to indemnify another against loss/damage or liability arising from an unknown or contingent event and is applicable only to some contingency or act likely to come in future.

46. This Court in United India Insurance Company Limited v. Levis Strauss (India) Private Limited has held as under:

"53. A contract of insurance is and always continues to be one for indemnity of the defined loss, no more no less. In the case of specific risks, such as those arising from loss due to fire, etc. the insured cannot profit and take advantage by double insurance. Long ago, Brett, LJ in Castellain v. Preston [Castellain v. Preston, (1883) 11 QBD 380] said that: (QBD p. 386) "..... the contract of insurance ... is a contract of indemnity ... and that this contract means that the assured, in the case of loss ... shall be fully indemnified, but shall never be more than fully indemnified.""

                                    (emphasis added)

47.   Thus, it can be concluded that in the instant case hiring of insurance policy is clearly an act for indemnifying a risk of loss/damages and there is no element of profit generation and still what has been expressed by this Court is illustrative; it will always open to be examined on the facts of each case, as to the transaction in reference to which the claim has been raised has any close and direct nexus with profit generating activity.

48.   We do not agree with the submission made on behalf of the appellant that if insurance claims are covered under the Act, 1986, then virtually all insurance matters will come within the purview of the Act, 1986 and this will render the Act, 2015 nugatory. In our view, both these Acts have different scope and ambit and have different remedial mechanism, are in different sphere having no internal co­-relationship.

49.  Consequently, the appeals are without substance and accordingly dismissed. No costs.

10.   It may be apt to mention that Hon'ble Apex Court while giving its decision in Harsolia Motors and Others (supra) had also the occasion to adjudicate upon a number of other Civil Appeals relating the Complaints, where the complainant was said to have been involved in commercial activities. A number of such Appeals were also found to have no substance and were accordingly dismissed in the light of the view that was taken in the Civil Appeal No(s). 5352-5353 of 2007 National Insurance Co. Ltd. vs. Harsolia Motors and Others. The relevant extracts from the Harsolia Motors' case in that regard may be quoted herein below:

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CIVIL APPEAL NO(S). 5354 OF 2007 - (United India Insurance Company Limited v. M/s. Diwakar Goiram Porkhayat)

     52. The present appeal is directed against the order passed by the National Commission dated 3rd December, 2004 holding that the insurance policy taken by the respondent (commercial unit) in the facts of the case was only to indemnity the loss which the respondent/complainant has suffered and the transaction in reference to which the insurance claim has been repudiated by the appellant, had no direct nexus with the profit generating activity and was a "consumer" as defined under Section 2(1) (d)  of the Act, 1986.

     53. The respondent/complainant (insured) is doing the business of sale and purchase of jewellery in the name and style of "Khazana Jewellers" who obtained a policy of insurance from the appellant for the period 21st October, 1999 to 20th October, 2000 to cover the risk of ornaments in business.

     54. On 24th June, 2000, at about 7.00 a.m. when an employee of the respondent saw that the shutter of the showroom was partly open and that was indicative of the theft and upon inspection, it was found that goods worth Rs.20,55,200/­ were stolen from the showroom.

     55. On the claim being raised by the respondent to indemnify the loss suffered, it was repudiated by the appellant and that was challenged by the respondent by filing a consumer complaint before the State Commission, Ahmedabad, that was dismissed on the premise that the respondent was not a "consumer" within the ambit of Section 2(1) (d) of the Act, 1986 by an order dated 1st April, 2004.

     56. The respondent challenged the order of dismissal by an appeal before the National Commission taking note of the nature of the transaction and relying upon the order of the Commission in the case of M/s Harsolia Motors dated 3rd December, 2004, the Commission held that the transaction in reference to which the insurance claim has been raised by the respondent has no direct nexus with the profit generating activity and the insurance cover was obtained only to cover the loss, if any, being suffered on account of theft or by natural calamity and the order passed by the National Commission dated 3rd December, 2004 is the subject matter of challenge in appeal before us.

     57. In the light of the judgment passed by us today in Civil Appeal Nos. 5352­5353 of 2007 (National Insurance Co. Ltd. v. Harslia Motors), the present appeal is without substance and is accordingly dismissed. No costs.

     58. The complaint is restored on the file of the State Commission and the same be adjudicated on its own merits in accordance with law and may be decided as expeditiously as possible, but in no case later than one year.

     59. Pending application(s), if any, shall stand disposed of.

        The facts of the above Civil Appeal and the view taken by Hon'ble Apex Court are self-speaking and do not need any great elaboration. The complainant in the aforesaid Appeal was doing business of Jewellery and held a policy of insurance to cover the risk of ornaments which were eventually stolen from the showroom. The view of State Commission, holding that the complainant was not a 'consumer', was found erroneous by this Commission as it was found that the transaction in reference to which the insurance claim had been raised had no direct nexus with profit generating activity and the insurance cover was obtained only to cover the loss, if any, being suffered on account of theft or by natural calamity. Hon'ble Apex Court affirmed the view of this Commission and dismissed the Appeal against the same.  

11.     It would also be useful to extract and quote the facts and views regarding yet another Civil Appeal which too was dismissed in the light of the view taken in Harsolia Motors' case. The relevant extract reads as follows:

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CIVIL APPEAL NO(S).2821 OF 2012 - National Insurance co. Ltd. v. M/s. Thakur and Another.

     60. The judgment under appeal is dated 15th December, 2010 passed by the National Commission.

     61. Brief facts of the case are that the respondent is engaged in the business of garments in wholesale, who took a standard fire and peril policy effective for the period from 6 th January, 2006 to 5th January, 2007 for a total sum of Rs.60,00,000/­. There was a fire on 28th December, 2006 resulting in damage to the factory of the respondent. The appellant appointed spot surveyor, M/s Apex Surveyors Pvt. Ltd. for final survey, who submitted its report on 22nd December, 2008 assessing the loss to the tune of Rs.53,17,790/­ after deducting salvage amount of Rs.1 lakh and factoring sound stock being saved after the fire at Rs.51,969/­. The appellant claimed that the respondent has failed to submit certain documents to the assessor and, therefore, assessment on such basis could be treated as void. In the meanwhile, SARFAESI proceedings were initiated against the respondent by Canara Bank (secured creditor).

     62. While the claim of the respondent was being processed, the respondent filed a complaint before the State Commission claiming Rs.60,00,000/­ along with interest. At this stage, the appellant filed a preliminary objection that the respondent is not a "consumer" within the definition of Section 2(1)(d) of the Act, 1986. The State Commission at one stage had held that the respondent is engaged in commercial activity and, therefore, is not a consumer. The finding returned by the State Commission was reversed by the National Commission under its order dated 15th December, 2012 holding that commercial entity availing its services by the insurance company is a "consumer" in reference to the transaction in terms of Section 2(1)(d) of the Act, 1986.

     63. We have assigned detailed reasons in Civil Appeal Nos. (5352­ 5353 of 2007 (National Insurance co Ltd. v. Harsolia Motors). In the light of the judgment passed by us today in the said appeal, the present appeal is without substance and is accordingly dismissed. No costs.

        The facts of the above case are also self-speaking and unambiguous and the legal rationale adopted in Harsolia Motors' case was found sufficiently determinative to dispel the adverse finding given by State Commission against the complainant that he was not a 'consumer' for the reason of being involved in commercial activity. The view taken by this Commission upholding the complainant as a 'consumer' was similarly affirmed by Hon'ble Apex Court in this matter also.    

12.   This Bench also takes guidance from the views taken by Apex Court in the following appeals as they have been elucidated therein. Relevant extracts thereof may be quoted herein below:

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CIVIL APPEAL NO(S). 3350 OF 2018 - The Bank of New York Mellon (Formerly The Bank of New York) v. M/s. METCO Export International and Others.

   67. The appellant has filed the present appeal by special leave against the judgment and order dated 6th February, 2018 passed by the National Commission.

    68. Brief facts of the case are that respondent no.1 entered into a transaction with a third party (an Italian buyer of respondent no.1) for supply of five containers of sesame seeds and oil seeds for USD 141,375. In relation to this transaction, the services of Federal Bank Ltd. (respondent no.2) were availed to send the invoice, bills of lading, surveyor's certificate, bills of exchange, phytosanitary certificate and other related documents (four documents) to the buyer's banker in Italy. Respondent no.2 engaged the services of the appellant to get export documents delivered to the buyer's banker in Italy which in turn engaged services of a courier company (respondent no.3). The export documents were lost in transit.

   69. Respondent no.1 filed a consumer complaint before the State Commission against the appellant, respondent no.2 and respondent no.3. The complaint was dismissed on the premise that respondent no.1 is not a consumer as defined under Section 2(1)(d) of the Act, 1986 by an order dated 10th December, 2013, that became the subject matter of challenge at the instance of respondent no.1 in appeal before the National Commission relying on the judgment in Laxmi Engineering Works (supra) and taking note of the judgment in the case of M/s Harsolia Motors, the National Commission recorded a finding that the dispatch of papers by the bank which were lost in transit and never received by the Italian buyer per se is not related to generate any profit to the respondent as the actual profit will come from the sale of the exported goods which has no nexus to profit generating activity.                                                                                        70. After we have heard counsel for the parties and considering the view expressed by this Court in Civil Appeal Nos.5352­5353 of 2007 (National Insurance co. Ltd. v. Harsolia Motors), the present appeal is without substance and is accordingly dismissed. No costs.                                                                                      

13.   Now in this context it may also be useful to quote the relevant extract from the decision given by this Commission in the case of Polyplex Corporation Ltd. (supra) which reads as follows: 

7.      The first question which arises for consideration is as to whether the complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not.  It has been held by this Commission in Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) decided on 03.12.2004 that  since an insurance policy is taken for reimbursement or for indemnity for the loss which may suffer on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose and therefore, this Commission does possess the requisite jurisdiction to entertain a consumer complaint wherever a defect or deficiency in the services rendered by an insurer is made out.

The learned counsel for the OP states that as far as the loss of profit is concerned, the claim would not be covered by the decision of this Commission in Harsolia Motors (supra).  I however, find no merit in this contention.  In Harsolia Motors (supra), this Commission upheld the plea that  the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit.  It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product.  So long as the reimbursement on account of loss of profit is one of the products of the insurance policy, it remains covered by the decision in Harsolia Motors (supra).  Therefore, I find no merit in the contention that the insurance policy to the extent it pertains to reimbursement on account of the loss of profit, cannot be the subject matter of a consumer complaint.

14.   The Bench does not see much purpose in multiplying the citations of the case law in this regard which shall be only in the nature of repetition. Suffice it to say that the law laid down in Harsolia Motors' case has been consistently followed by this Commission. Just as a parting reference, the views taken by this Commission in the case of United Shippers Limited vs. ICICI Lombard General Insurance Co. Ltd. (Order dated 09.02.2023) may be recapitulated in brief which read as follows:

5. We may observe that the exposition in the Harsolia Motors Vs. National Insurance Co. Ltd. I (2005) CPJ 27 (NC)  inter alia postulates that 'Further, hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose.   The policy is taken for reimbursement  or for indemnity for the loss which may suffer due to various perils,  There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured' (para 12). The same has been cited by this Commission in the Polyplex Corporation Ltd. Vs. National Insurance Co. Ltd. & Ors., referred to by learned counsel for the complainant co. in his arguments, while further clarifying that 'the services of the insurer are availed for protection and not for making profit'.

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As such, whether, for a particular purpose, a person, individual or juridical, including a company, is a 'consumer', has to be determined by examining the facts and specificities of the case, seeing whether the transaction has a 'close and direct nexus' with a 'profit-generating activity' and whether the 'dominant purpose' behind availing the service was linked to any 'commercial activity'.

7. In the case at hand here, the purpose of the insurance taken by the complainant co. was essentially indemnification against perils, nothing per se to do closely and directly with its profit-generating activities, nor was profit-generation the dominant purpose, the insurance was for protection and not for profit, and as such the complainant co. straightaway falls within the meaning of 'consumer' in accordance with Section 2(1)(d)(ii) of the Act 1986, without necessitating further detailed elucidation.

15.   This Bench also finds it apt to recapitulate some pithy and beckoning observations made by Hon'ble Apex Court in Harsolia Motors' case which read as under:

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   37. Thus, what is culled out is that there is no such exclusion from the definition of the term "consumer" either to a commercial enterprise or to a person who is covered under the expression "person" defined in Section 2(1) (m) of the Act, 1986 merely because it is a commercial enterprise. To the contrary, a firm whether registered or not is a person who can always invoke the jurisdiction of the Act, 1986 provided it falls within the scope and ambit of the expression "consumer" as defined under Section 2(1) (d) of the Act, 1986.

   38. Applying the above principles to the present case, what needs to be determined is whether the insurance service has a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. The fact that the insured is a commercial enterprise is unrelated to the determination of whether the insurance policy shall be counted as a commercial purpose within the purview of Section 2(1) (d) of the Act.

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     40. Applying the aforesaid test, two things are culled out; (i) whether the goods are purchased for resale or for commercial purpose; or (ii) whether the services are availed for any commercial purpose. The two­fold classification is commercial purpose and non-­commercial purpose. If the goods are purchased for resale or for commercial purpose, then such consumer would be excluded from the coverage of the Act, 1986. For example, if a manufacturer who is producing product A, for such production he may be required to purchase articles which may be raw material, then purchase of such articles would be for commercial purpose. As against this, if the same manufacturer purchases a refrigerator, television or air conditioner for his use at his residence or even for his office has no direct or indirect nexus to generate profits, it cannot be held to be for commercial purpose and for afore-­stated reason he is qualified to approach the Consumer Forum under the Act, 1986.

16.   When the Bench adverts to tshe facts of the instant case under consideration, the complainant co. is said to be conducting business of bottling and selling drinking water. The transaction between insurance co. and the complainant is not about the purchase of any equipment needed for business. The insurance co. has nothing to do with the actual purchase of bottles or any of the tools or raw material needed for the production or which was needed for bottling or selling of the water. The transaction with the insurance co. relates essentially to providing a service to the consumer which was meant to compensate and which aims to protect or to indemnify the loss in case such a peril or mis-happening actualises. In the facts and circumstances of the case, this Bench sees no direct nexus of the insurance cover with the mainstream profit generating activity of the company. Policy cover was a contract of indemnification for a particular risk or peril, and was not to do something directly to earn profit out of such act. Expressions like remote nexus or an ancillary nexus or a collateral nexus or a peripheral nexus which are sometimes used to establish commercial purpose of transaction are substantially different from the term 'direct nexus' as has been used consistently by Hon'ble Apex Court as well as this Commission in this context in order to determine the commercial purpose of the transaction in a given case.    

17.   In case the apprehended peril did not take place there was no occasion of getting any encashment in lieu of the policy cover. The Bench finds that the taking of the insurance policy might have been done on behalf of a commercial entity, but it was not for commercial purpose so as to invite any legal embargo which may go to denude the complainant firm from its status of being a consumer in the present case.    

18.   In view of the aforesaid discussion, holding the appellant to be 'consumer' under the Act, the matter is remanded back to the State Commission to restore on the file of the State Commission with the direction to adjudicate the same on its merits according to the law.

19.   The parties are directed to appear before the State Commission on 03.10.2023.

20.   The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel immediately.  Copy of this Order be sent forthwith to the State Commission by fastest mode available. The stenographer is also requested to upload this Order on the website of this Commission immediately.   

1.   This appeal has been filed under section 19 of The Consumer Protection Act, 1986 in challenge to the Order dated 27.09.2018 of the State Commission in complaint no. 52 of 2012.

2.   The instant First Appeal has been filed with reported delay of 300 days.

            

However, in the interest of justice, inter alia having regard to the reasons contained in the applications for condonation of delay and in order to decide the matters on merit rather than to dismiss it on the threshold of limitation, the delay in filing the appeal is condoned.

3.   The complaint relates to the repudiation of the insurance claim. The policy was valid at the point when the occurrence took place. Aggrieved by the same, a complaint was filed by the complainant co. in the State Commission but the same has been dismissed as not maintainable for the reason that in the opinion of the fora below the complainant co. being a commercial entity involved in doing business is not a 'consumer'. The relevant extract of the impugned Order dated 27.09.2018 of the State Commission may be quoted herein below:

7.     Point No.1:- It is contended by the opposite parties that the complainant is not a consumer as defined in section 2(1) of the Consumer Protection Act and the complaint is not maintainable. The complainant has filed the complaint for an order directing the first opposite party to settle his claim of Rs 57,10,000/- as per the terms of the policy or the second opposite party to make good loss sustained by him due to the flood. The complainant is "Neyyar Aqua Products    " a partnership firm represented by its managing partner K.S.Shaiju. In the complaint, it is stated that the complainant is conducting the business of bottling and filling drinking water under the name "Pearl dew Neyyar Aqua" Neyyattinkara on the western bank of a streamlet and adjacent to the NH 47 on its northern side for the livelihood of the family. So the business is being conducted by a partnership firm. Ext.A8 the copy of the partnership deed will show that Rajeena, the wife of complainant is the managing partner of the firm and complainant also partner. On going through the definitions of various terms mentioned in section 2 of the Consumer Protection Act, it can be seen that a person having the status of consumer can file a complaint under the Act and the expression "person" includes a firm whether registered or not. So a complaint can be filed by the firm, as a consumer. The expression "consumer" is defined under section (2)(d) of the Act. In clauses (I) & (II) of that definition it is stated that the person mentioned in that section does not include a person who obtains good for resale or for any commercial purpose or avails service for any commercial purpose. Admittedly, the complainant firm is conducting business, bottling and selling drinking water and they availed service of insurance company for commercial purpose. In explanation to section 2(d) of the Act it is stated that 'commercial purpose' does not include use by a person of goods brought and used by him and service availed by him exclusively for the purpose of earning his livelihood by means of self employment. In the complaint it is stated that the complainant is conducting business for the livelihood of the family. In Lekshmi Engineering Works Vs PSG Industrial Institute (1995 AIR 1428) the Hon'ble Supreme Court considering the definition of expression 'consumer' in section 2(d) (1) of the Consumer Protection Act and various expressions employed in that section and in the explanation to that section such as "commercial purpose", 'exclusively for the purpose of self employment' etc held that what is a commercial purpose is a question of fact to be decided on the facts each case. It is not the value of the goods that matters but the purpose to which goods bought are put to. Several words employed in the explanation "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 by employing himself for earning his livelihood. It was held that the definition of the expression "person" in section 2(m) of the Act as including a firm (whether registered or not) a hindhu undivided family, a cooperative society or any other associations of persons (whether registered under the Societies Registration Act on 1860 or not) make no difference to the above interpretation. If a firm purchased the goods, the members of the firm should themselves ply, operate or use the goods purchased.

8.   As stated above, in the complaint it is stated that the complainant is conducting business for the livelihood of the family. In affidavit of complainant filed in lieu of examination also in chief is stated that he is the Managing partner of the firm and his wife is the other partner and he is conducting business for the livelihood of his family. He has no specific case that he is doing the business for eking out his livelihood. In the complaint the complainant has no case that his wife, the other partner has also been participating in the business for the purpose of eking out her livelihood. PW1 had also no such case PW1 has not stated anything about his wife, the other partner in the firm, whether she is employed or unemployed. In the light of the dictum laid down in the above cited decision and considering the facts and circumstances of the case it can be seen that complainant firm is not a consumer as defined under section 2(1) (d) of the Consumer Protection Act and hence the complaint is not maintainable and it is to be dismissed.

4.   Aggrieved by the aforesaid Order, the instant appeal has been filed.

5.     Heard the learned counsel for the appellant (the 'complainant co.'), the learned counsel for the respondent no.1 / opposite party no. 1 (the 'insurance co.') and the learned counsel for the respondent no. 2 / opposite party no.2 (the 'bank'). Perused the material on record including inter alia the State Commission's impugned Order dated 27.09.2018 and the memorandum of the appeal.

6.     Learned counsel for the appellant co. has drawn the attention of the Bench to the decision given by Hon'ble Supreme Court in case of National Insurance Co. Ltd. Vs. Harsolia Motors and Others 20023 SCC Online SC 409 and also to the two decisions given by this Commission in the cases of Polyplex Corporation Ltd. vs. National Insurance Co. Ltd. & Ors. (Order dated 07.04.2017) and in the case of United Shippers Limited vs. ICICI Lombard General Insurance Co. Ltd. (Order dated 09.02.2023).

The submission of the learned counsel is that the law on the issue involved in this matter has already been expatiated upon by Hon'ble Apex Court quite at length in the case of Harsolia Motors and Others (supra) which has also been consistently followed by this Commission. Thus the law regarding the pivotal question that is involved in the matter at hand is no more res integra. The appellant cannot be divested from the character of being a 'consumer' just because it was involved in doing the business or that it was a firm or a commercial entity. The purpose of the transaction at hand was the reimbursement of the loss or to indemnify the same in case the loss occurs and was aimed to insure the contingent event of perils. The services of the insurer were availed for protection per se and not for making profit. The complainant co. was not carrying on commerce or any kind of trading with the insurance policy or with regard to the insurance policy. All the allied issues which may have bearing in matters like this have been thoroughly gone into and postulated by Hon'ble Apex Court and in a case like this as is under consideration, it is beyond the pale of any doubt that the complainant co. is a 'consumer' well within the definition of the Act. The submission is that none of the authorities referred to hereinbefore which directly address the issue involved at hand have been considered by the State Commission and the relevant conclusive law on the point has completely escaped the attention and consideration of the State commission.

        It has been contended that the view taken by the fora below would have been otherwise, had it considered or had it been cognizant of the law and the views enunciated in the cases referred to herein above. Holding the complainant to be not a 'consumer' is, therefore, a completely unsustainable finding. It has been contended that the impugned Order dated 27.09.2018 is, therefore, untenable and ought to be set aside and the complainant should be given opportunity to contest the case on merits before the State Commission.

7.     The learned counsel for the respondent no.1 - the insurance co. and the respondent no.2 - the bank, both have been gracious enough to adopt a fair approach and have assisted the Bench appreciably on the point of law and facts both. Both the learned respondents' counsel have not been able to either doubt the authoritative nature of the law that has been laid down in the aforesaid cases or to doubt their applicability in the case at hand. Though learned counsel for the respondent no. 2 - the bank has tried to raise the plea that liability ought not to be affixed on the bank, but this issue is not at all germane to the controversy at hand which is being discussed i.e. whether the appellant is  a 'consumer' or not under the provisions of the Act.

8.     The Bench has considered the submissions raised at the Bar and has perused the record and the cited case law in that light. After considering the whole matter, this Bench finds reason to observe that the impugned Order dated 27.09.2018 passed by the State Commission cannot be sustained in the eyes of law and the view taken by the fora below would fly in the face of law laid down by Hon'ble Apex Court as well as the views taken by this Commission. Had the aforesaid cases as have been cited by the learned counsel for the appellant co. been considered, the decision of the State Commission would have been just otherwise.

9.     It may be apt refer to the relevant extracts from the case of Harsolia Motors and Others (supra) and the views expressed therein which reads as follows:

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43. Thus, what is finally culled out is that each case has to be examined on its own facts and circumstances and what is to be examined is whether any activity or transaction is for commercial purpose to generate profits and there cannot be a straight­jacket formula which can be adopted and every case has to be examined on the broad principles which have been laid down by this Court, of which detailed discussion has been made.

44. Applying the above principles in the present case, what needs to be determined is whether the insurance service had a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose of the transaction was to facilitate some kind of profit generation for the insured or to the beneficiary and our answer is in the negative and accordingly we are of the view that the complaint filed by the respondent insured herein has no close or direct nexus with the profit generating activity and the claim of insurance is to indemnify the loss which the respondent insured had suffered and the Commission has rightly held that the respondent is a "consumer" under Section 2(1) (d) of the Act, 1986.

45. We further reiterate that ordinarily the nature of the insurance contract is always to indemnify the losses. Insurance contracts are contracts of indemnity whereby one undertakes to indemnify another against loss/damage or liability arising from an unknown or contingent event and is applicable only to some contingency or act likely to come in future.

46. This Court in United India Insurance Company Limited v. Levis Strauss (India) Private Limited has held as under:

"53. A contract of insurance is and always continues to be one for indemnity of the defined loss, no more no less. In the case of specific risks, such as those arising from loss due to fire, etc. the insured cannot profit and take advantage by double insurance. Long ago, Brett, LJ in Castellain v. Preston [Castellain v. Preston, (1883) 11 QBD 380] said that: (QBD p. 386) "..... the contract of insurance ... is a contract of indemnity ... and that this contract means that the assured, in the case of loss ... shall be fully indemnified, but shall never be more than fully indemnified.""

                                    (emphasis added)

47.   Thus, it can be concluded that in the instant case hiring of insurance policy is clearly an act for indemnifying a risk of loss/damages and there is no element of profit generation and still what has been expressed by this Court is illustrative; it will always open to be examined on the facts of each case, as to the transaction in reference to which the claim has been raised has any close and direct nexus with profit generating activity.

48.   We do not agree with the submission made on behalf of the appellant that if insurance claims are covered under the Act, 1986, then virtually all insurance matters will come within the purview of the Act, 1986 and this will render the Act, 2015 nugatory. In our view, both these Acts have different scope and ambit and have different remedial mechanism, are in different sphere having no internal co­-relationship.

49.  Consequently, the appeals are without substance and accordingly dismissed. No costs.

10.   It may be apt to mention that Hon'ble Apex Court while giving its decision in Harsolia Motors and Others (supra) had also the occasion to adjudicate upon a number of other Civil Appeals relating the Complaints, where the complainant was said to have been involved in commercial activities. A number of such Appeals were also found to have no substance and were accordingly dismissed in the light of the view that was taken in the Civil Appeal No(s). 5352-5353 of 2007 National Insurance Co. Ltd. vs. Harsolia Motors and Others. The relevant extracts from the Harsolia Motors' case in that regard may be quoted herein below:

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CIVIL APPEAL NO(S). 5354 OF 2007 - (United India Insurance Company Limited v. M/s. Diwakar Goiram Porkhayat)

     52. The present appeal is directed against the order passed by the National Commission dated 3rd December, 2004 holding that the insurance policy taken by the respondent (commercial unit) in the facts of the case was only to indemnity the loss which the respondent/complainant has suffered and the transaction in reference to which the insurance claim has been repudiated by the appellant, had no direct nexus with the profit generating activity and was a "consumer" as defined under Section 2(1) (d)  of the Act, 1986.

     53. The respondent/complainant (insured) is doing the business of sale and purchase of jewellery in the name and style of "Khazana Jewellers" who obtained a policy of insurance from the appellant for the period 21st October, 1999 to 20th October, 2000 to cover the risk of ornaments in business.

     54. On 24th June, 2000, at about 7.00 a.m. when an employee of the respondent saw that the shutter of the showroom was partly open and that was indicative of the theft and upon inspection, it was found that goods worth Rs.20,55,200/­ were stolen from the showroom.

     55. On the claim being raised by the respondent to indemnify the loss suffered, it was repudiated by the appellant and that was challenged by the respondent by filing a consumer complaint before the State Commission, Ahmedabad, that was dismissed on the premise that the respondent was not a "consumer" within the ambit of Section 2(1) (d) of the Act, 1986 by an order dated 1st April, 2004.

     56. The respondent challenged the order of dismissal by an appeal before the National Commission taking note of the nature of the transaction and relying upon the order of the Commission in the case of M/s Harsolia Motors dated 3rd December, 2004, the Commission held that the transaction in reference to which the insurance claim has been raised by the respondent has no direct nexus with the profit generating activity and the insurance cover was obtained only to cover the loss, if any, being suffered on account of theft or by natural calamity and the order passed by the National Commission dated 3rd December, 2004 is the subject matter of challenge in appeal before us.

     57. In the light of the judgment passed by us today in Civil Appeal Nos. 5352­5353 of 2007 (National Insurance Co. Ltd. v. Harslia Motors), the present appeal is without substance and is accordingly dismissed. No costs.

     58. The complaint is restored on the file of the State Commission and the same be adjudicated on its own merits in accordance with law and may be decided as expeditiously as possible, but in no case later than one year.

     59. Pending application(s), if any, shall stand disposed of.

        The facts of the above Civil Appeal and the view taken by Hon'ble Apex Court are self-speaking and do not need any great elaboration. The complainant in the aforesaid Appeal was doing business of Jewellery and held a policy of insurance to cover the risk of ornaments which were eventually stolen from the showroom. The view of State Commission, holding that the complainant was not a 'consumer', was found erroneous by this Commission as it was found that the transaction in reference to which the insurance claim had been raised had no direct nexus with profit generating activity and the insurance cover was obtained only to cover the loss, if any, being suffered on account of theft or by natural calamity. Hon'ble Apex Court affirmed the view of this Commission and dismissed the Appeal against the same.  

11.     It would also be useful to extract and quote the facts and views regarding yet another Civil Appeal which too was dismissed in the light of the view taken in Harsolia Motors' case. The relevant extract reads as follows:

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CIVIL APPEAL NO(S).2821 OF 2012 - National Insurance co. Ltd. v. M/s. Thakur and Another.

     60. The judgment under appeal is dated 15th December, 2010 passed by the National Commission.

     61. Brief facts of the case are that the respondent is engaged in the business of garments in wholesale, who took a standard fire and peril policy effective for the period from 6 th January, 2006 to 5th January, 2007 for a total sum of Rs.60,00,000/­. There was a fire on 28th December, 2006 resulting in damage to the factory of the respondent. The appellant appointed spot surveyor, M/s Apex Surveyors Pvt. Ltd. for final survey, who submitted its report on 22nd December, 2008 assessing the loss to the tune of Rs.53,17,790/­ after deducting salvage amount of Rs.1 lakh and factoring sound stock being saved after the fire at Rs.51,969/­. The appellant claimed that the respondent has failed to submit certain documents to the assessor and, therefore, assessment on such basis could be treated as void. In the meanwhile, SARFAESI proceedings were initiated against the respondent by Canara Bank (secured creditor).

     62. While the claim of the respondent was being processed, the respondent filed a complaint before the State Commission claiming Rs.60,00,000/­ along with interest. At this stage, the appellant filed a preliminary objection that the respondent is not a "consumer" within the definition of Section 2(1)(d) of the Act, 1986. The State Commission at one stage had held that the respondent is engaged in commercial activity and, therefore, is not a consumer. The finding returned by the State Commission was reversed by the National Commission under its order dated 15th December, 2012 holding that commercial entity availing its services by the insurance company is a "consumer" in reference to the transaction in terms of Section 2(1)(d) of the Act, 1986.

     63. We have assigned detailed reasons in Civil Appeal Nos. (5352­ 5353 of 2007 (National Insurance co Ltd. v. Harsolia Motors). In the light of the judgment passed by us today in the said appeal, the present appeal is without substance and is accordingly dismissed. No costs.

        The facts of the above case are also self-speaking and unambiguous and the legal rationale adopted in Harsolia Motors' case was found sufficiently determinative to dispel the adverse finding given by State Commission against the complainant that he was not a 'consumer' for the reason of being involved in commercial activity. The view taken by this Commission upholding the complainant as a 'consumer' was similarly affirmed by Hon'ble Apex Court in this matter also.    

12.   This Bench also takes guidance from the views taken by Apex Court in the following appeals as they have been elucidated therein. Relevant extracts thereof may be quoted herein below:

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CIVIL APPEAL NO(S). 3350 OF 2018 - The Bank of New York Mellon (Formerly The Bank of New York) v. M/s. METCO Export International and Others.

   67. The appellant has filed the present appeal by special leave against the judgment and order dated 6th February, 2018 passed by the National Commission.

    68. Brief facts of the case are that respondent no.1 entered into a transaction with a third party (an Italian buyer of respondent no.1) for supply of five containers of sesame seeds and oil seeds for USD 141,375. In relation to this transaction, the services of Federal Bank Ltd. (respondent no.2) were availed to send the invoice, bills of lading, surveyor's certificate, bills of exchange, phytosanitary certificate and other related documents (four documents) to the buyer's banker in Italy. Respondent no.2 engaged the services of the appellant to get export documents delivered to the buyer's banker in Italy which in turn engaged services of a courier company (respondent no.3). The export documents were lost in transit.

   69. Respondent no.1 filed a consumer complaint before the State Commission against the appellant, respondent no.2 and respondent no.3. The complaint was dismissed on the premise that respondent no.1 is not a consumer as defined under Section 2(1)(d) of the Act, 1986 by an order dated 10th December, 2013, that became the subject matter of challenge at the instance of respondent no.1 in appeal before the National Commission relying on the judgment in Laxmi Engineering Works (supra) and taking note of the judgment in the case of M/s Harsolia Motors, the National Commission recorded a finding that the dispatch of papers by the bank which were lost in transit and never received by the Italian buyer per se is not related to generate any profit to the respondent as the actual profit will come from the sale of the exported goods which has no nexus to profit generating activity.                                                                                        70. After we have heard counsel for the parties and considering the view expressed by this Court in Civil Appeal Nos.5352­5353 of 2007 (National Insurance co. Ltd. v. Harsolia Motors), the present appeal is without substance and is accordingly dismissed. No costs.                                                                                      

13.   Now in this context it may also be useful to quote the relevant extract from the decision given by this Commission in the case of Polyplex Corporation Ltd. (supra) which reads as follows: 

7.      The first question which arises for consideration is as to whether the complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not.  It has been held by this Commission in Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) decided on 03.12.2004 that  since an insurance policy is taken for reimbursement or for indemnity for the loss which may suffer on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose and therefore, this Commission does possess the requisite jurisdiction to entertain a consumer complaint wherever a defect or deficiency in the services rendered by an insurer is made out.

The learned counsel for the OP states that as far as the loss of profit is concerned, the claim would not be covered by the decision of this Commission in Harsolia Motors (supra).  I however, find no merit in this contention.  In Harsolia Motors (supra), this Commission upheld the plea that  the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit.  It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product.  So long as the reimbursement on account of loss of profit is one of the products of the insurance policy, it remains covered by the decision in Harsolia Motors (supra).  Therefore, I find no merit in the contention that the insurance policy to the extent it pertains to reimbursement on account of the loss of profit, cannot be the subject matter of a consumer complaint.

14.   The Bench does not see much purpose in multiplying the citations of the case law in this regard which shall be only in the nature of repetition. Suffice it to say that the law laid down in Harsolia Motors' case has been consistently followed by this Commission. Just as a parting reference, the views taken by this Commission in the case of United Shippers Limited vs. ICICI Lombard General Insurance Co. Ltd. (Order dated 09.02.2023) may be recapitulated in brief which read as follows:

5. We may observe that the exposition in the Harsolia Motors Vs. National Insurance Co. Ltd. I (2005) CPJ 27 (NC)  inter alia postulates that 'Further, hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose.   The policy is taken for reimbursement  or for indemnity for the loss which may suffer due to various perils,  There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured' (para 12). The same has been cited by this Commission in the Polyplex Corporation Ltd. Vs. National Insurance Co. Ltd. & Ors., referred to by learned counsel for the complainant co. in his arguments, while further clarifying that 'the services of the insurer are availed for protection and not for making profit'.

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As such, whether, for a particular purpose, a person, individual or juridical, including a company, is a 'consumer', has to be determined by examining the facts and specificities of the case, seeing whether the transaction has a 'close and direct nexus' with a 'profit-generating activity' and whether the 'dominant purpose' behind availing the service was linked to any 'commercial activity'.

7. In the case at hand here, the purpose of the insurance taken by the complainant co. was essentially indemnification against perils, nothing per se to do closely and directly with its profit-generating activities, nor was profit-generation the dominant purpose, the insurance was for protection and not for profit, and as such the complainant co. straightaway falls within the meaning of 'consumer' in accordance with Section 2(1)(d)(ii) of the Act 1986, without necessitating further detailed elucidation.

15.   This Bench also finds it apt to recapitulate some pithy and beckoning observations made by Hon'ble Apex Court in Harsolia Motors' case which read as under:

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   37. Thus, what is culled out is that there is no such exclusion from the definition of the term "consumer" either to a commercial enterprise or to a person who is covered under the expression "person" defined in Section 2(1) (m) of the Act, 1986 merely because it is a commercial enterprise. To the contrary, a firm whether registered or not is a person who can always invoke the jurisdiction of the Act, 1986 provided it falls within the scope and ambit of the expression "consumer" as defined under Section 2(1) (d) of the Act, 1986.

   38. Applying the above principles to the present case, what needs to be determined is whether the insurance service has a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. The fact that the insured is a commercial enterprise is unrelated to the determination of whether the insurance policy shall be counted as a commercial purpose within the purview of Section 2(1) (d) of the Act.

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     40. Applying the aforesaid test, two things are culled out; (i) whether the goods are purchased for resale or for commercial purpose; or (ii) whether the services are availed for any commercial purpose. The two­fold classification is commercial purpose and non-­commercial purpose. If the goods are purchased for resale or for commercial purpose, then such consumer would be excluded from the coverage of the Act, 1986. For example, if a manufacturer who is producing product A, for such production he may be required to purchase articles which may be raw material, then purchase of such articles would be for commercial purpose. As against this, if the same manufacturer purchases a refrigerator, television or air conditioner for his use at his residence or even for his office has no direct or indirect nexus to generate profits, it cannot be held to be for commercial purpose and for afore-­stated reason he is qualified to approach the Consumer Forum under the Act, 1986.

16.   When the Bench adverts to tshe facts of the instant case under consideration, the complainant co. is said to be conducting business of bottling and selling drinking water. The transaction between insurance co. and the complainant is not about the purchase of any equipment needed for business. The insurance co. has nothing to do with the actual purchase of bottles or any of the tools or raw material needed for the production or which was needed for bottling or selling of the water. The transaction with the insurance co. relates essentially to providing a service to the consumer which was meant to compensate and which aims to protect or to indemnify the loss in case such a peril or mis-happening actualises. In the facts and circumstances of the case, this Bench sees no direct nexus of the insurance cover with the mainstream profit generating activity of the company. Policy cover was a contract of indemnification for a particular risk or peril, and was not to do something directly to earn profit out of such act. Expressions like remote nexus or an ancillary nexus or a collateral nexus or a peripheral nexus which are sometimes used to establish commercial purpose of transaction are substantially different from the term 'direct nexus' as has been used consistently by Hon'ble Apex Court as well as this Commission in this context in order to determine the commercial purpose of the transaction in a given case.    

17.   In case the apprehended peril did not take place there was no occasion of getting any encashment in lieu of the policy cover. The Bench finds that the taking of the insurance policy might have been done on behalf of a commercial entity, but it was not for commercial purpose so as to invite any legal embargo which may go to denude the complainant firm from its status of being a consumer in the present case.    

18.   In view of the aforesaid discussion, holding the appellant to be 'consumer' under the Act, the matter is remanded back to the State Commission to restore on the file of the State Commission with the direction to adjudicate the same on its merits according to the law.

19.   The parties are directed to appear before the State Commission on 03.10.2023.

20.   The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel immediately.  Copy of this Order be sent forthwith to the State Commission by fastest mode available. The stenographer is also requested to upload this Order on the website of this Commission immediately.   

  ..................................................J KARUNA NAND BAJPAYEE PRESIDING MEMBER