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2025 Supreme(Online)(SCDRC) 6967
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
JUSTICE SANGITA DHINGRA SEHGAL, CJ, MS PINKI, J
M/S. MARUBENI-ITOCHU STEEL INDIA PRIVATE LIMITED. – Appellant
Versus
M/S. IFFCO TOKIO GENERAL INSURANCE COMPANY LIMITED – Respondent
Complaint Case No. 47/2021
For the Appellants/Petitioners: Malvika Kapila Kalra, Ms. Tanwangi Shukla
For the Respondents: Mr. Shubham Janghu, Mr. Ishwar Singh
The definition of 'consumer' under the Consumer Protection Act excludes entities availing services for commercial purposes, affirming a narrow interpretation in commercial insurance scenarios.
Headnote:(A) Consumer Protection Act, 2019 - Section 2(7) - Definition of 'consumer' - Allegations of deficiency in service and unfair trade practices made by complainant against insurer - Insurer contended that complainant does not qualify as a consumer due to commercial purpose of insurance policy availed - Court discusses criteria for determining consumer status and affirms that complainant's acquisition of policy was purely for commercial purposes - Complaint dismissed. (Paras 8-14)
(B) It is reiterated that the dominant purpose of obtaining the insurance policy was not for personal use and hence does not meet the criteria set out in the Consumer Protection Act, 2019 for classifying as a consumer. (Paras 10-12)
Facts of the case:
The Complainant, a steel manufacturing company, availed a Credit Insurance Policy for covering debts against default payments. The insurer contested the claim on grounds that the complainant was not a consumer under the Consumer Protection Act as the policy served a commercial purpose.
Findings of Court:
The Court found that the complainant's purpose behind obtaining the insurance policy was commercial, thus excluding it from the definition of 'consumer'.
Issues: The central issue was whether the complainant qualifies as a consumer under the Consumer Protection Act, 2019 considering the policy's commercial purpose.
Ratio Decidendi: The court concluded that the definition of consumer under the Act excludes individuals or entities availing services for commercial purposes, reaffirming that compliance with the statutes is crucial in consumer disputes.
Result: Complaint dismissed with no order as to costs.
| Table of Content |
|---|
| 1. complaint filed alleging deficiencies in service. (Para 1 , 2) |
| 2. determining consumer status involves analyzing the intention behind acquiring insurance. (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 3. complaint dismissed based on legal interpretation of the consumer protection act. (Para 14) |
| 4. conclusion and procedural closing of the judgment. (Para 15 , 16 , 17) |
JUDGMENT
1. The present Complaint has been filed before this Commission by the Complainant alleging deficiency in service and unfair trade practice on the part of Opposite Party and have prayed for the following reliefs:-
a) Pass an Order declaring the Opposite Party guilty for deficiency in services and unfair trade practices as an insurer;
b) Direct the Opposite Party to release the outstanding claim amount of Rs. 13,511,648.31/-, along with interest @ 18% from the date of illegal deduction of the outstanding claim amount until the realization of the claim amount;
c) Direct the Opposite Party to pay litigation cost of Rs.
5,00,000/- to the Complainant;
d) Pass any such other or further Orders as deemed fit by this Hon’ble Commission in the facts and circumstances of the present case.
2. Brief facts necessary for the adjudication of the present Complaint are that the Complainant entered into a Credit Insurance Policy bearing no. GA1467344/67702274 with the Opposite Party which provided the Complainant with a cover with respect to the risk of non-payment of debts for a period of duration of 01.08.2018 to 31.07.2019. The maximum credit limit (CL) under the policy was Rs. 15,00,00,000/- (Rupees Fifteen Crores Only) and the insured percentage was 85% of the net debt. Under the policy, the Complainant could bring a claim within 30 days along-with all written evidence of the debt and secure ay payment default on the part of the debtors of the Complainant. The aforesaid secured payment could only be made on the condition of the Complainant complying with all the terms of the insurance contract in question and all evidence of the debts had been sent to the Opposite Party. One of the customers of the Complainant, namely, National Steel and Argo Industries Limited (NSAIL) defaulted in making payment of an amount of Rs. 16,35,11,648.31/- (Rupees Sixteen Crores Thirty-Five Lakh Eleven Thousand Six Hundred and Forty-Eight and Thirty-One Paise Only) due towards the Complainant, which was in excess of the maximum credit limit i.e. Rs. 15,00,00,000/- (Rupees Fifteen Crores Only). Thereafter, the Complainant entered into a rotation plan and set off agreement dated 12.12.2018 with NSAIL to reduce the credit period from 90 days to 60 days and consequently reduce the outstanding debt amount to Rs. 9,40,80,125.31/- (Rupees Nine Crores Forty Lakh Eighty Thousand One-Hundred and Twenty-Five and Thirty-One Paise Only). In furtherance of the abovesaid rotation plan and set off agreement, the Complainant filed a claim of amount to Rs. 9,40,80,125.31/- (Rupees Nine Crores Forty Lakh Eighty Thousand One-Hundred and Twenty-Five and Thirty-One Paise Only) with the Opposite Party, however, the Opposite Party only approved an amount of Rs. 8,05,68,477/- (Rupees Eight Crores Five Lakh Sixty-Eight Thousand Four- Hundred and Seventy-Seven Only), and therefore, 85% of the net debt amounted to Rs. 6,84,83,205/- (Rupees Six Crores Eighty-Four Lakh Eighty-Three Thousand Two-Hundred and Five Only) was disbursed to the account of the Complainant on 24.09.2019. Thereafter, the aggrieved Complainant approached the Opposite Party vide letter dated 10.01.2020 regarding the deducted amount from the total claim amount, and the Opposite Party vide letter dated 03.02.2020 communicated that the reason for the said deduction was that the monies were adjusted according to the maximum credit limit of Rs. 15,00,00,000/- (Rupees Fifteen Crores Only) as there was an overtrading of an amount to the extent of Rs. 1,35,22,648.31/- (Rupees One Crore Thirty-Five Lakh Twenty-Two Thousand Six-Hundred and Forty-Eight and Thirty-
