State Consumer Disputes Redressal Commission
Rr Paper Mills vs Pspcl on 27 January, 2012
PUNJAB STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
Misc. Application No.2595 of 2011
In/and
First Appeal No.1513 of 2011
Date of institution: 14.10.2011
Date of decision : 27.01.2012
M/s R.R. Paper Mills, Sherpur, Distt. Sangrur through its partner and Power
attorney Holder Sunil Goyal son of Ramesh Kumar.
.....Appellant
Versus
1. Punjab State Power Corporatin Limited, Patiala through its CMD.
2. The Assistant Executive Engineers/DS, PSPCL Sherpur-1, Tehsil and Distt.
Sangrur.
.....Respondents
First Appeal against the order dated 23.12.2010
passed by the District Consumer Disputes
Redressal Forum, Sangrur.
Before:-
Hon'ble Mr.Justice S.N.Aggarwal, President
Mr.Baldev Singh Sekhon, Member
Present:-
For the appellant : Sh.Manu K. Bhandari, Advocate JUSTICE S.N.AGGARWAL, PRESIDENT M.A. FOR CONDONATION OF DELAY This application has been filed for condonation of delay of 283 days in filing the appeal. Reasons have been given in this application which caused the delay in filing the appeal. The application is supported by an affidavit. We have condoned the delay without issuing notice to the other party for the view we are taking in the main case MAIN CASE
2. This order will dispose of two appeals namely First Appeal No.1513 of 2011 (M/s R.R.Paper Mills v. Punjab State Power Corporation Limited and another) and First Appeal No.1518 of 2011 (M/s R.R.Paper Mills v. Punjab State Power Corporation Limited and another) as the questions of law and facts involved in both the appeals are identical. The facts are taken from First Appeal No.1513 of 2011 and the parties would be referred by their status in this appeal. First Appeal No.1513 of 2011 2 VERSION OF THE APPELLANT
3. The appellant had taken the electric connection bearing A/c No.S- 85-SP-01-00002 from the respondents with a sanctioned load of 137.428 KW. The appellant was running the R R Paper Mill business for self-employment.
4. It was further pleaded that on 18.3.2010, the premises of the appellant were checked by the officials of the respondents and no irregularity was noticed. Thereafter, the appellant received the notice dated 19.5.2010 demanding an amount of Rs.1,16,907/- from the appellant on the alleged violation of peak on the false plea of violation of peak load hours for the period from 7.1.2010 to 18.3.2010. The appellant had not received any supplementary bill for Rs.1,16,907/-.
5. It was further pleaded that the appellant had received monthly bill dated 8.7.2010 for Rs.3,97,964/-, in which, Rs.1,16,907/- were shown as sundry charges. Thus, the demand of Rs.1,16,907/- was illegal. This was imposed on the appellant without hearing him.
6. It was further pleaded that after the checking on 18.3.2010, the appellant had received the bills dated 5.4.2010, 6.5.2010 and 7.6.2010 but this amount of Rs.1,16,907/- was not shown in these bills nor any supplementary bill was issued for this amount. Hence, the demand of Rs.1,16,907/- in the electricity bill dated 8.7.2010 was illegal. Hence, the complaint for setting aside this demand notice. Compensation, interest and costs were also prayed. VERSION OF THE RESPONDENTS
7. The respondents filed the written reply. It was admitted that the appellant was having the electric connection bearing A/c No. S-85-SP-01-00002 (large scale connection) with sanctioned load of 137.428 KW. With this connection, the appellant used to run RR Paper Mills, Sherpur which was for commercial purpose and the appellant was earning a huge profit from this business. Therefore, the appellant was not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.
First Appeal No.1513 of 2011 3
8. It was further pleaded that the account was checked by the Executive Engineer of the respondents along with other officials on 18.3.2010. The DDL print out was taken by the checking authorities. The appellant had also placed his signatures on the checking report. The DDL print clearly revealed that the appellant had violated the terms and conditions of peak load restrictions. Notice dated 10.10.2008 was sent to him. Therefore, the appellant had violated the terms and conditions of the peak load hours from 7th January, 2010 to 16th March, 2010. Therefore, the demand was legal and valid. Dismissal of the complaint was prayed.
PROCEEDINGS BEFORE THE DISTRICT FORUM
9. Parties produced the affidavits/documents in support of their respective versions.
10. The learned District Forum dismissed the complaint vide impugned order dated 23.12.2010 on the plea that the electric connection was taken by the appellant for commercial purpose and, therefore, the complaint under the Consumer Protection Act was not maintainable.
11. Hence, this appeal.
DISCUSSION :
12. The submission of the learned counsel for the appellant was that the appeal be accepted, impugned judgment dated 23.12.2010 be set aside and the demand notice dated 8.7.2010 for Rs.1,16,907/- be quashed. He also prayed for compensation, interest and costs.
13. Record has been perused. Submissions have been considered.
14. The important question before this Commission to determine is whether the appellants are the consumers within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 (in short "the Act")?
15. Section 2(1)(d) of the Act, reads as under : -
"2(1)(d) "consumer" means any person who, -- First Appeal No.1513 of 2011 4
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) : [hired or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hired or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purposes].
[Explanation - For the purpose of this clause, "commercial purpose' does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;]"
16. Originally the words 'commercial purpose' were only a part of Section 2(1)(d)(i) of the Act. These were introduced in Section 2(1)(d)(ii) of the First Appeal No.1513 of 2011 5 Act by way of amendment Act No.61 of 2002 which became effective with effect from 15.03.2003.
17. These words have not been defined in the Consumer Protection Act.
18. The words 'commercial purpose' as used in Section 2(1)(d)(i) of the Act were interpreted by the Hon'ble Supreme Court in the celebrated judgment reported as "Laxmi Engineering Works v. P.S.G. Industrial Institute, II (1995) CPJ 1 (SC)". The Hon'ble Supreme Court was pleased to observe as under : -
"The National Commission appears to have been taking a consistent view that where a person purchases goods 'with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit' he will not be a 'consumer' within the meaning of Section 2(1)(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion - the expression 'large-scale' is not a very precise expression - the Parliament stepped in and added the explanation to Section 2(1)(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression 'commercial purpose' a case of exception to an exception. Let us elaborate: a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others' work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for 'commercial purpose would not yet take the purchaser out of the First Appeal No.1513 of 2011 6 definition of expression 'consumer'. If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a 'consumer'. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self employment, for earning his livelihood, it would not be treated as a 'commercial purpose' and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a 'commercial purpose', to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., 'uses them by himself', 'exclusively for the purpose of earning his livelihood' and 'by means of self- employment' make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood. A few more illustrations would serve to emphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a First Appeal No.1513 of 2011 7 consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer."
19. Although the matter before the Hon'ble Supreme Court related to the provisions of Section 2(1)(d)(i) of the Act as at that time, the words 'commercial purpose' were not a part of Section 2(1)(d)(ii) of the Act but the Hon'ble Supreme Court in this judgment had given the meaning of the words 'commercial purpose'. These very are the words introduced in 2(1)(d)(ii) of the Act with effect from 15.3.2003. Therefore, the meaning of words 'commercial purpose' as used in Section 2(1)(d)(i) is expected to be the same as used in Section 2(1)(d)(ii) of the Act.
20. Therefore, the interpretation of the words "commercial purpose"
given by the Hon'ble Supreme Court in Laxmi Engineering Works's case (supra) would also be applicable to the words 'commercial purpose' as used in Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.
21. The words 'commercial purpose' were also considered by the Hon'ble National Commission in the judgment reported as "Harsolia Motors v. National Insurance Co. Ltd., 2005 CTJ 141 (CP) (NCDRC)". The Hon'ble National also considered the judgment of the Hon'ble Supreme Court in Laxmi Engineering Works's case (supra). The Hon'ble National Commission held as under : -
"25. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words 'for any commercial purpose' it would mean that goods purchased or services hired should be used in any First Appeal No.1513 of 2011 8 activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose."
22. The Hon'ble National Commission distinguished the case relating to the insurance services hired/availed by a consumer by holding that the insurance policy is taken only for indemnification of any loss and that was not intended to generate profit. It was held as under : -
"26. In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit."
23. The Hon'ble National Commission considered a case in the judgment reported as "Mohammad Haseeb Ahmad v. Maharashtra State Electricity Board and others" 2010 CTJ 886 (CP)(NCDRC) where electric connection was taken for running a stone crusher. It was held by the Hon'ble National Commission as under:-
"13. It has been held that buying of goods and services for running commercial activity, stands excluded from the purview of the Act after the amendment of Section 2(1)(d)(ii) with effect from 15.3.2003.
14. Faced with this, learned Counsel for the petitioner contended that the Explanation to Section 2(1)(d)(ii) of the Act, excluded, from the ambit of commercial purposes, any goods purchased by the consumer and used by him exclusively for the purpose First Appeal No.1513 of 2011 9 of earning his livelihood by means of self-
employment. Such purchase of goods is not a
commercial purpose.
15. Petitioner, in his complaint, had not stated that he had taken the electricity connection for running the stone crusher for the purpose of earning his livelihood by means of self-employment. No evidence had been led to that effect either before the District Forum or before the State Commission. Before us, the petitioner has filed an affidavit along with certain documents to show that he had undertaken the business of running the stone crusher for self-employment by taking the help of 7 persons, out of which, 4 were temporary and on day- to-day basis. Whether the business was being run for self-employment, is a question of fact, which had to be alleged and proved by the petitioner by leading evidence before the District Forum which was not done."
24. The latest judgment of the Hon'ble Supreme Court defining the limits of the words 'commercial purpose' is reported as "Economic Transport Organization v. Charan Spinning Mills (P) Ltd. & anr. I (2010) CPJ 4 (SC)" in which it was held by the Hon'ble Supreme Court as under : -
"25. We may also notice that Section 2(d) of Act was amended by Amendment Act 62 of 2002 with effect from 15.3.2003, by adding the words "but does not include a person who avails of such services for any commercial purpose" in the definition of 'consumer'. After the said amendment, if the service of the carrier had been availed for any commercial purpose, then the First Appeal No.1513 of 2011 10 person availing the service will not be a 'consumer' and consequently, complaints will not be maintainable in such cases. But the said amendment will not apply to complaints filed before the amendment."
25. The Hon'ble Supreme Court also considered a similar controversy in Birla Technologies Limited's case (supra). It was held by the Hon'ble Supreme Court as under:-
"7. Shri U.U. Lalit, learned Senior Counsel appearing on behalf of the appellant pointed out that there is a basic error committed by the National Commission inasmuch as it has proceeded on the basis that the complaint was filed on 1.8.2000, which was prior to the amendment of Section 2(1)(d)(ii) by the Amendment Act, 2002. Shri Lalit pointed out that the complaint in fact was filed on 26.6.2003 i.e. after the amendment of the said Section, which came on 15.3.2003. The learned Senior Counsel, therefore, submitted that even if there was any service which was hired from the appellant in view of the finding of the National Commission that the goods themselves were purchased from the appellant for commercial purposes, there would be no question of the service being included in Section 2(1)(d)(ii) particularly in view of the amendment. The learned Senior Counsel pointed out that the service offered by the appellant was only for proper working of the Modules which were included in the software and as such was for commercial purpose. He, therefore, pointed out that the order of the National Commission holding the complaint First Appeal No.1513 of 2011 11 maintainable to the extent of service offered is clearly incorrect, as it proceeds on the wrong assumption that the complaint was filed on 1.8.2000 i.e. before 15.3.2003 when the amendment was made to Section 2(1)(d)(ii).
8. Shri Sidharth Bhatnagar, learned Counsel appearing on behalf of the respondent could not dispute this proposition and fairly accepted that the complaint was in fact filed on 26.6.2003 i.e. much after the amendment to Section 2(1)(d)(ii), by which the following words were added:
but does not include a person who avails of such services for any commercial purpose."
26. In the present case, the complaint was filed by the appellants on 19.7.2010 i.e. after the amendment in Section 2(1)(d)(ii) of the Act had come into force with effect from 15.3.2003. Therefore, it has to be considered in the context of amended provision whether the hiring of services of the respondents i.e. taking of electric connection by the appellant was for commercial purpose and whether the appellants were consumers of the respondents within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act.
27. The appellant was clearly having electric connection bearing A/c No. S-85-SP-01-00002 with sanctioned load of 137.428 KW which was a large scale connection. The appellant was running the RR Paper Mills, Sherpur. Therefore, it was obviously a commercial purpose.
28. Since the appellant have availed the services of the respondents for commercial purpose, therefore, they were not consumers within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.
29. Therefore, there is no merit in the present appeal and the same is dismissed.
First Appeal No.1513 of 2011 12
30. However, the liberty is granted to the appellant to resort to any other remedy available to them under the law.
31. The time spent by the appellant from the date of filing of the complaint in the learned District Forum on 19.7.2010 till today shall not be counted towards limitation in view of the judgment of the Hon'ble Supreme Court reported as "Trai Foods Ltd. v. National Insurance Co. and others" (2004) 13 SCC 656.
FIRST APPEAL NO.1518 OF 2011
32. In view of the reasons recorded above, this appeal is also dismissed.
33. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
(JUSTICE S.N.AGGARWAL)
PRESIDENT
(BALDEV SINGH SEKHON)
MEMBER
January 27, 2012.
Paritosh