May 11,2024
The Supreme Court held that the onus to prove that the service was obtained for a commercial purpose under the Consumer Protection Act, 1986 lies with the service provider and not the consumer.
The Bench reiterated that the Consumer Protection Act is a consumer-friendly and beneficial legislation intended to address the grievances of consumers which could not place a negative burden cannot be placed on the consumer to show that the service available was not for a commercial purpose.
Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed, “Structurally, there are three parts to the definition of a consumer. We can deconstruct Section 2(7)(i) as a matter of illustration. The first part sets out the jurisdictional prerequisites for a person to qualify as a consumer – there must be purchase of goods, for consideration. The second part is an ‘exclusion clause’ [‘carve out’] which has the effect of excluding the person from the definition of a consumer. The carve out applies if the person has obtained goods for the purpose of ‘resale’ or for a ‘commercial purpose’. The third part is an exception to the exclusion clause – it relates to Explanation (a) to Section 2(7) which limits the scope of ‘commercial purpose’.
“Since it is always the service provider who pleads that the service was obtained for a commercial purpose, the onus of proving the same would have to be borne by it. Further, it cannot be forgotten that the Consumer Protection Act is a consumer-friendly and beneficial legislation intended to address grievances of consumer”, the court added.
Sr. Advocate Shailesh Madiyal represented the appellant, while Sr. Advocate Gopal Sankaranarayanan appeared for the respondent.
The Shriram Chits (India) Private Limited Chit Fund) raised a plea arguing that the complainant company was excluded from availing any remedy as it did not come under the definition of a ‘consumer’ under the Act since the service obtained by the complainant was for a commercial purpose.
Source: Livelaw
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