IMPORTANT POINT
Insurance policy taken by commercial units can not be held to be hiring of services for commercial purposes so as to exclude it from purview of Consumer Protection Act.

M.B. Shah, President — The only question requiring decision in these appeals is whether insurance policy taken by commercial units could be

held to be hiring of services for commer-cial purpose and thereby excluded from the purview of the Consumer Protection Act, 1986.

2. The Gujarat State Consumer Disputes Redressal Commission arrived at the conclusion that Complainants have availed of the service of the Insu-rance Company for commercial purpose and, therefore, dismissed the complaints on the preliminary ground, as not maintainable. Hence, these appeals.

Relevant definitions of the words ‘consumer’ and ‘service’:

3. For deciding this, we would first refer to very wide definitions of words ‘consumer’ and ‘service’ under Sections 2(1)(d) and 2(1)(o) which are as under:

“Section 2(1)(d):

‘consumer' means any person who,—

(i) buys any goods for a consi-deration 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 consi-deration paid or promised or partly paid and partly promi-sed, 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 pro-mised, 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 com-mercial purpose.)”.

Explanation:- for the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and servi-ces availed by him exclusively

for the purposes of earning his liveli-hood by means of self-employment.

Section 2(1)(o)

‘service' means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construc-tion, entertainment, amusement or the purveying a news or other information (but does not include the rendering of any service free of charge or under a contract of perso-nal service).”

From the aforesaid definitions it can be held that:

(a) a person is a consumer who buys any goods for conside-ration and also include user of such goods;

(b) who hires any services for consideration and includes beneficiary of such services.

To this wide definition there are exclusions:

(i) It excludes a consumer who obtains such goods for resale or for any commercial purpose;

(ii) It also excludes a person who avails of services of any description-

(i) free of charge; or

(ii) under a contract of personal service; and

(iii) for any commercial pur-poses.

4. The Legislature has carved out further exception by providing that commercial purpose does not include use by a person of goods bought and used by him and services availed by him, exclu-sively for the purpose of earning his livelihood by means of self-employment.

5. Therefore, in sum and sub-stance, what is excluded is buying of goods or availing of services for ‘commer-cial purpose’. However, with a specific exclusion that if such buying of goods or availing of services is for earning of his livelihood by self-employment, then he would be a consumer.

Submissions:

6. Learned Counsel Mr. Sharma, appearing on behalf of the Appellants drew further distinction in the use of phraseology in exclusion clause by contending that Legislature has provided exclusion with regard to availing of the services and not for hiring