DATE OF JUDGEMENT (HONOURABLE SUPREME COURT) (CIVIL APPELLATE JURISDICTION)
10th May ,2024
BENCH– Hon’ble Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar.
CASE NO.
Special Leave Petition (Civil) No.15290 OF 2021
FACTS OF THE CASE
The given case judgement revolves around the dispute between Shriram Chits (India) Limited (‘OP’/ ‘service provider’ used interchangeably, here as appellant) and Raghachand Associates (complainant, here as respondent). The fact of the case is that Shriram Chits (India) Limited is a company related to chit fund which deals in chit field business. Raghachand Associates made a subscription in this company. The association actually had made a subscription in a certain group with certain ticket number for a value of Rs 1 lakh which was payable at the rate of rupees two thousand five hundred for a time span of 40months that is 3years 4 months. But the company illegally stopped its business in 1996, thus the associates made a request to the company to refund the money stored till the date of closure of the company. But the company disagreed to refund the money by stating that the respondent has certain dues towards the company and it will adjust the same with the refund amount. With this unsatisfied response the respondent moved to the authority constituted under Chits Funds Act 1982 and with that he filed ten cases before the Assistant of Registrar of the Co-operative Societies and there an order was passed which directed the company to refund the amount. But the appellant in return filed an appeal before Additional Registrar against the mentioned order but there also it was unsuccessful as well and it directed the appellant to refund the money as it stated that said chit groups did not come under the Act related to Chit Fund. After this, the chit company filed Writ Petition related to No.22568/2012 with nine other connected WPs against the order of the authority mentioned previously that is Additional Registrar. The associates had also filed Writ Petition related No.17045/2014 with nine other connected WPs interrogating the finding related to the maintainability under the Act related to Chit Funds. On 16th of November in the year 2015, the High Court asked the associates to go upto the Consumer Forum and mentioned that cases here were not maintainable under the Act related to Chit Funds.
According to the given order, the complainant filed complaint before the District forum regarding the issue about illegal termination of the chit fund and request for the money repay of the amount which led to service deficiency and the same also made a prayer for an order to be given to the company to repay Rs. 18750/- with a future interest @ 18 percent per annum. But the company argued that the respondent was not a consumer under Consumer Protection Act and thus has availed the service for commercial purpose, and has also tried to rely the same by showing agreement of understanding between the associates and the company to further the chit business and internal audit conducted by the Chit Company.
The District Forum incorrectly addressed the issue and instead of addressing whether the service availed was for commercial purpose it addressed if the respondent fell under the actual meaning of a “ person” and further it found that there was a “ deficiency in service”, thus instructed and directed to repay the amount.
Following the further appeals in State Forum and National Consumer Dispute Redressal Commission, both of the bodies upheld the decision of the District Forum and thus all the three bodies failed to get the main fact of the case and being aggrieved with the decision of the same the appellant filed a special leave petition before the Hon’ble Supreme Court to address the main grievance. The petition was admitted.
ISSUES RAISED
1.Whether the complainant satisfied the definition of “consumer”?
2. The service acquired by the associates was for a commercial intent or not?
3.Whether the service was for commercial purpose or not, who holds the burden of proof?
CONTENTION
ARGUMENTS BY THE APPELLANT
The arguments showed by them that the complainant was not a “consumer” as said earlier and found the same through their understandings and internal audit. Mr. Shailesh Madiyal, advocate for the appellant mentioned that the complainant did not anywhere plead or prove that service availed by him was for his sustenance by the means of self-employment. According to him the burden of proof for proving that the service availed by him was for his sustenance by the means of self – employment lies on the opposite party. In support of his arguments, he has relied on cases like .The chit fund also had claimed that the respondent also had certain dues towards the company and thus it had adjusted the money for the same.
The chit fund also argued that the Consumer Protection Act has prevented the complaining company from pursuing any remedy. They argued that because the service was of commercial nature, the complainant is not covered by the CPA of 1986 as a “consumer.”
ARGUMENTS BY THE RESPONDENT
The respondent requested to refund its subscription money invested in that chit fund and argued that they were protected under the CPA and are qualified under 1986 CPA. They argued that they used the chits’ services for the reasons under the Act, and did not use for profit making.
RATIONALE
Hon’ble Bench rather than sending the matter back it decided to address the issue itself and then it went on deciding that whether in this case the service acquired by the respondent was for a business intent or comm. purpose or not and the court totally upheld the decisions of the other three forums later. Firstly, it explained and cited the actual meaning of a “consumer” which comes under sec. 2 (7) of the CPA. It explained how the issues needed to be addressed. The Hon’ble Bench mentioned that the appellant had cited that the burden to show that the acquired service by the complainant was for living, was needed to be proved by the complainant itself but nowhere it has pleaded nor proved the same and it was considered by the court. The Bench held that before proving the service was availed for livelihood by the complainant, the burden to show and prove that the service availed was for commercial reason needs to be proved by the service provider at first. If the service provider is able to demonstrate the that service acquired was for comm. purpose then only the onus to demonstrate that the benefit acquired was for own living by the means of self – work will shift back to complainant. Unless the service provider is able to provide the same, it won’t shift to the complainant and moreover, it explained which type of burden lies on whom and when. Rather it explained the definition of a consumer and how each part of it must be proven and by whom. Hon’ble Bench also synced this to the sec.101 and 102 of the Act of Evidence that ‘one who pleads must prove’. Actually, it is always the one who provides the service pleads that the service used was for business intent, the burden to prove it lies on the service provider. It mentioned that the act is also for the advantage of the consumer and no negative impact should exist. Finally, it was concluded that the appellant had only merely pleaded that service acquired was for business intent and no strong proof as such was submitted except for the affidavit claim and thus the court helped the respondent to conserve its consumer rights. It was concluded by the court that a plea where there is no proof and proof where there is no plea is no evidence before the legal eyes. They finally upheld the directions of the other three forums and finally dismissed the case.
DEFECTS OF LAW
The defect of law especially for this case can be stated that there is no such provision for the people who have availed or hired services or bought goods for commercial purposes to get refund or be compensated on the basis of any changes or problems by the service providers or any problems on their side as well and all benefits are availed by the consumers who avails or buys any service or goods for livelihood through the means of self -employment. Consumer Protection Act has also prevented the complaining company (here as the appellant) from pursuing any remedy.
INFERENCE
The inference that can be drawn here is that The Hon’ble Bench upheld the meaning and protection of the consumer rights and safeguarded against any unfair practices which harmed the interests of the consumers. The court directed the service provider to refund the money and safeguarded the association and proved there was a deficiency of service on the part of the service provider. The judgement was followed by multiple precedents as well. This judgement has proved a joy and win itself for the betterment of the consumer and can be called a landmark judgement and can be used for future references .It has helped to restore the rights of the consumers and maintained the actual meaning of law and justice and it has added more strictness through this judgement.
AUTHOR
Spandita Saha
St. Xavier’s University, Kolkata