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State Consumer Disputes Redressal Commission

Om Metals Spml (Jv) vs United India Insurance Co. on 8 September, 2021

          IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
                           COMMISSION

                                         JUDGMENT RESERVED ON: 03.09.2021
                                      JUDGMENT PRONOUNCED ON: 08.09.2021

                                COMPLAINT NO. 233/2013

     IN THE MATTER OF

     OM METALS- SPML (JV)                                        .... COMPLAINANT
                           VERSUS
     UNITED INDIA INSURANCE
     CO. LTD. & ANR.                                          ...OPPOSITE PARTIES

     CORAM:

     HON'BLE DR. JUSTICE SANGITA DHINGRA                                   SEHGAL
     (PRESIDENT)
     HON'BLE SH. ANIL SRIVASTAVA, (MEMBER)

     Present: None for the complainant.
              Sh. Pankaj Seth, Counsel for the Opposite Party.

     PER: HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,
                PRESIDENT
                                      JUDGMENT

[Court hearing convened via video conferencing on account of COVID-19]

1. The present complaint has been filed by the complainant under Section 17 of the Consumer Protection Act, 1986 before this Commission, asseverating deficiency of service and unfair trade practices by the opposite parties and has prayed as under:

a) An amount of Rs. 52,76,500.00 (Rupees Fifty Two lakhs Seventy Six Thousand and five Hundred only) as and towards the Insurance claim raised by the complainant;

b) An Interest @ 12% (Twelve Percent) on the aforesaid amount of Insurance claim from 13/09/2010 to 1/03/2013, amounting to Rs. 15,09,223.80 (Rupees Fifteen Lakhs Nine Thousand Two Hundred Twenty Three and Eighty Paise Only) along with Pendente-lite & future Interest @ 12% p.a.

c) An amount of Rs. 20,00,000/- (Rupees Twenty Lakhs Only) as and towards Mental agony & Harassment

d) Award Cost of litigation for an Amount of Rs. 5,00,000/-.

e) Pass such other or further orders as this Hon'ble court may deems fit and proper in the facts and circumstances of the case, for which act of kindness the petitioner as in duty bound shall ever pray.

2. Brief facts necessary for the adjudication of the present complaint are that the complainant obtained a marine cargo policy bearing no. 041300/21/08/02/00000364 for the period from 07.01.2009 to 06.01.2010 from the opposite party no. 1. The total sum assured in the said policy was Rs. 97,00,00,000 and premium of Rs. 1,08,990/- was paid to the opposite party no. 1. The consignments were sent from the complainant's workshop at Deepnagar, Nirmal Matigara, Darjeeling & Kota to Kalijhora & Darjeeling. The consignments reached the respective destination on 22.05.2009. Unfortunately, the super cyclone ALIA arrived in the evening of 25.05.2009, which was followed by flood on the next date as a result of which the consignments suffered huge damages. The complainant sent the intimation about the said incident to the opposite party no. 1 on 26.05.2009. The surveyor scrutinized the site on 10.07.2009 and submitted his report on 30.06.2010, vide which the claim of the complainant was repudiated. The complainant issued legal notice dated 26.10.2012 seeking release of their claim but was of no avail.

3. Alleging deficiency in service and unfair trade practice by the opposite parties, the complainant has approached this commission.

4. The Opposite Party no. 1 has contested the present case and has raised some preliminary objections as to the maintainability of the complaint case. The counsel on behalf of the Opposite Party no. 1 submitted that the complainant is not a consumer as it is a big organization involved in huge activity and obtained policy for commercial purpose. He further submitted that the controversy between the parties cannot be decided in a summary proceedings under the Consumer Protection Act, 1986.

5. The counsel for the Opposite Party No. 1 submitted that the claim was rightly repudiated by the surveyor as the insurer's liability ceases after delivery of the consignment at final destination. Pressing the aforesaid preliminary objections, the counsel appearing on behalf of the Opposite Party no. 1 prayed that the complaint should be dismissed.

6. During the course of proceedings, the opposite party no. 2 was proceeded ex-parte vide order dated 07.05.2015.

7. The complainant filed their Rejoinder rebutting the written statement filed by the Opposite Party no. 1. Both the parties filed their Evidence by way of Affidavit in order to prove their averments on record.

8. We have perused the material available on record and heard the arguments of the counsel for the opposite party. The complainant was directed to file its written arguments vide order dated 13.10.2017 but the complainant neither filed the same despite multiple opportunities nor addressed final arguments. The complainant was not showing interest to pursue the matter. The case pertains to the year 2013 and this commission can't wait for the complainant endlessly. In the given circumstances, the present complaint was reserved for judgment vide order dated 03.09.2021.

9. The main question of consideration before us is whether the complainant falls under the category of 'consumer' under the Consumer Protection Act, 1986. We deem it necessary to produce the definition of consumer as provided under Section 2 (1) (d) of the Act. The definition reads as under: -

"(d) "consumer" means any person who--

(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) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;

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"

10. On reading of the above, it is clear that consumer is a person who buys goods or hires or avails of services for consideration present, past or CC 233/2013 OM METALS VS. UNITED INDIA INSURANCE LTD. Page 4 of 8 future. The section however carves out an exception by providing that the person who has purchased goods or hired/availed of services for commercial purpose, shall not be included in the definition of consumer. The explanation to Section 2(1)(d) however gives restricted meaning to the term "commercial purpose" in the context of Section 2 (1) (d) by providing that if the goods are bought or services are hired or availed exclusively by the complainant for earning his livelihood by way of self-employment, it shall not be treated as commercial purpose.

11. On perusal of the complaint it appears that it is not the case in which the complainant has hired or availed the services of the opposite party no. 1 exclusively for the purpose of earning livelihood by means of self-employment. The following extracts in the complaint support our view: -

"The Complainant being "Om-Metals-SPML(JV)" was constituted for bidding and executing various projects relating to the field of turnkey execution from design, detailed engineering, manufacture, supply, installation, testing & commissioning of complete range of hydro- mechanical equipments for hydroelectric power & irrigation projects, PHED, PWD & various corporations. The joint venture has to its credentials various projects completed all over India for design, manufacture, supply, erection, testing and commissioning of hydro-mechanical equipment."

12. On perusal of the above extract, it is clear that complainant has a huge portfolio and is involved in the business of Hydro mechanical equipment, turnkey solutions for steel fabrication, Hydro power developments, Real Estate Leasing, Finance etc. The insurance policy CC 233/2013 OM METALS VS. UNITED INDIA INSURANCE LTD. Page 5 of 8 in question was taken by the complainant for the work at Teesta Low Dam project and by such work the complainant was not only earning livelihood but was also providing employment to many persons. That being the case, the complainant does not fall within the explanation to Section 2(1) (d) of the Act. In aforesaid view, we are supported by the judgment of Hon'ble Supreme Court in the matter of Lakshmi Engineering Works vs. P.S. G. Industrial Institute reported at (1995) 3 SCC 583. Relevant observation of Hon'ble Supreme Court reads as under: -

"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 definition of expression "consumer". If the commercial use is by the purchaser himself for the purpose of earing 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 CC 233/2013 OM METALS VS. UNITED INDIA INSURANCE LTD. Page 6 of 8 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 emphasis 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 consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions "used by him", and "by means of self-employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words."

13. In view of the discussion above, we hold that the complainant does not fall within the definition of consumer as defined under the Consumer Protection Act, 1986 and has no locus standi to maintain this consumer complaint.

14. Consequently, the present complaint is dismissed with the observation that this order will not prevent the complainant from availing the legal CC 233/2013 OM METALS VS. UNITED INDIA INSURANCE LTD. Page 7 of 8 remedy before the appropriate Forum on the same cause of action. No order as to cost.

15. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.

16. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.

17. File be consigned to record room along with a copy of this Judgment.

(DR. JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (ANIL SRIVASTAVA) MEMBER Pronounced On:

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