Pure 'Business To Business' Disputes Cannot Be Construed As Consumer Disputes : Supreme Court

The Supreme Court observed that pure 'business to business' disputes cannot be construed as 'consumer disputes'.When a person avails a service for a commercial purpose, to come within the meaning of 'consumer', he will have to establish that the services were availed exclusively for the purposes of earning his livelihood by means of self employment, the bench comprising Justices L. Nageswara Rao and BR Gavai observed.In this case, the complainant, a stockbroker by profession, had filed a complaint against the bank which had granted him overdraft facility. The main relief claimed in the said complaint was for a direction to the Bank to return 3,75,000 shares of ITC Ltd. along with dividend and all accretions thereon. The Bank raised a preliminary objection with regard to maintainability of the said complaint, on the ground that the complainant was not a consumer as envisaged under Section 2(1)(d) of the Consumer Protection Act, 1986. The National Consumer Disputes Redressal Commission dismissed the complaint observing that the complainant had availed the services of the Bank for 'commercial purpose' and as such, he was not a consumer as envisaged under Section 2(1)(d).Before the Apex Court, the appellant- complainant contended that since he was engaged in the profession of stockbroker and since the services of the said overdraft facility were taken for his profession as a stockbroker, the services rendered by the Bank were exclusively for the purposes of earning his livelihood. On the other hand, the bank contended that if any commercial dispute between the service provider and the availer/recipient of the service is included in the definition of the word 'consumer', it will give rise to floodgates of complaints. Thus the issues considered by the bench were (1) whether the services availed by the appellant from the Bank would fall within the term 'commercial purpose' ? (2) whether such services are exclusively availed by the appellant for the purposes of earning his livelihood by means of self employment ?Referring to the legislative history of Section 2(1)(d), the bench noted that if a person buys goods for commercial purpose or avails services for commercial purpose, though ordinarily, he would have been out of the ambit of the term 'consumer', by virtue of Explanation, which is now common to both Sections 2(1)(d)(i) and 2(1)(d)(ii), he would still come within the ambit of the term 'consumer', if purchase of such goods or availing of such services was exclusively for the purposes of earning his livelihood by means of self employment. The court observed: "When a person avails a service for a commercial purpose, to come within the meaning of 'consumer' as defined in the said Act, he will have to establish that the services were availed exclusively for the purposes of earning his livelihood by means of self employment. There cannot be any straitjacket formula and such a question will have to be decided in the facts of each case, depending upon the evidence placed on record.......the legislative intent is to keep the commercial transactions out of the purview of the said Act and at the same time, to give benefit of the said Act to a person who enters into such commercial transactions, when he uses such goods or avails such services exclusively for the purposes of earning his livelihood by means of self employment"The court noted that the relations between the parties in this case is purely "business to business" relationship. "As such, the transactions would clearly come within the ambit of 'commercial purpose'. It cannot be said that the services were availed "exclusively for the purposes of earning his livelihood" "by means of self employment". If the interpretation as sought to be placed by the appellant is to be accepted, then the 'business to business' disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes.", the court said while dismissing the appealCase name| no. | date : Shrikant G. Mantri vs Punjab National Bank | CA 11397 OF 2016 | 22 Feb 2022Citation: 2022 LiveLaw (SC) 197 Coram: Justices L. Nageswara Rao and BR GavaiCounsel: Sr. Adv Shyam Divan for appellant, Sr. Adv Dushyant Dave for respondentHeadnotesConsumer Protection Act, 1986 - Section 2(1)(d) - The 'business to business' disputes cannot be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes. (Para 47)Consumer Protection Act, 1986 - Section 2(1)(d) - When a person avails a service for a commercial purpose, to come within the meaning of 'consumer' as defined in the said Act, he will have to establish that the services were availed ...

Pure 'Business To Business' Disputes Cannot Be Construed As Consumer Disputes : Supreme Court

Ashok KM

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