Understanding
who is Consumer
A. Definitions
Following definitions under the Consumer
Protection Act, 1986 (“CPA”) require
our attention.
1. Section
2(1)(b) the
definition of the "complainant"
means:
(i) A consumer; or
(ii) Any voluntary consumer
association registered under the Companies Act, 1956 (1of 1956) or under any
other law for the time being in force; or
(iii) The Central Government or any
State Government,
(iv) One or more consumers, where
there are numerous consumers having the same interest;
(v) In case of death of a consumer,
his legal heir or representative; who or which makes a complaint;
2. Section
2(1) (d) states
that the definition of "Consumer"
means any person who—
(i) Buys any goods 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 user of such
goods other than the person who buys such goods for consideration paid or
promised or partly paid or partly promised, 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 promised, 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
commercial purposes;
Explanation.— For the purposes of this clause, “commercial purpose” does not
include use by a person of goods bought and used by him and services availed by
him exclusively for the purposes of earning his livelihood by means of
self-employment;
3. Section
2(1) (m) states that the "person"
includes,—
(i) A
firm whether registered or not;
(ii) A
Hindu undivided family;
(iii) A
co-operative society;
(iv) Every other association of
persons whether registered under the Societies Registration Act, 1860 (21 of
1860) or not;
B. Jurisprudence
In Karnataka Power Transmission
Corpn.
vs. Ashok Iron Works Pvt. Ltd[1] the
apex court held that a company can be a consumer and can maintain a complaint
under the CPA.
Fact of the Case: The
complainant before the forum below was a private limited company that has
applied for the supply for electricity from the State Electricity Board(“SEB”). The
company herein was engaged in the manufacturing the iron ore products. There
was delay in supply of electricity by the SEB for which the company approached
the consumer forum for relief.
Orders of Forum below: The
District Forum on the ground that the company is not a consumer dismissed the
complaint of the Complainant.
However, the State Commission of Karnataka set the said order aside.
KTPC challenged the order of the State Commission before National Commission. It was
dismissed in view of its decision dated November 23, 2001, in the case of M/s. Welmelt Steel Cast Pvt. Ltd. v.
Karnataka State Electricity Board. Thereafter
the matter came before Supreme Court.
Argument
of the Appellant: The question that was under consideration before
Supreme Court was whether a private limited company is a ‘person’ as contemplated
under Section 2(1)(d) of the CPA? The contention of the learned counsel for the
KPTC is that
(i) The definition of “persons”
specified and enumerated in Section 2(1)(m) are the only categories of persons
covered by that clause and a company incorporated under the Companies Act is
not covered thereunder.
(ii) The learned counsel submited that a company is excluded from the
definition of ‘person’ since the object of the CPA which is to provide an
affordable remedy to individuals or four categories of collectivities or
associations of individuals which may constitute legal entities for suing or
being sued.
(iii) According to learned counsel,
the companies incorporated were never intended to be covered by the CPA because
they could always pursue the ordinary remedy provided in law.
(iv) The learned counsel also
submitted that the word “includes” must be read as “means”. In this regard, the
learned counsel placed reliance upon two decisions of this Court namely; (1)
The South Gujarat Roofing Tiles Manufacturers Association and Anr. v. The State
of Gujarat and Anr. [(1976) 4 SCC 601] (2) Reserve Bank of India v. Peerless
General Finance and Investment Co. Ltd. and Ors. ((1987) 1 SCC 424).
The
ratio of the judgment with regard to the definition of “Consumer” is based on
the following reasons:
Definition of Consumer: The
definition of “consumer” can be ascertained from section 2(1)(d) read with
section 2(1)(m) of the CPA. The
definition of the word “include” in section 2(1)(m) of the CPA is important to
ascertain the meaning of consumer. The ratio of the judgment emerged from the
following deliberation:
(a) Meaning of Word Include: Lord
Watson in Dilworth v. Commissioner of Stamps[2]
made the following classic statement:
“The word “include” is very generally
used in interpretation clauses in order to enlarge
the meaning of words or phrases occurring in the body of the statute; and
when it is so used these words or phrases must be construed as comprehending, not only such things as they signify
according to their natural import, but also those things which the
interpretation clause declares that they shall include. But the word
“include” is susceptible of another construction, which may become imperative,
if the context of the Act is sufficient to show that it was not merely employed
for the purpose of adding to the natural significance of the words or
expressions defined. It may be equivalent to “mean and include”, and in that case it may afford an exhaustive
explanation of the meaning which, for the purposes of the Act, must invariably
be attached to these words or expressions.”
(b) Intention of the Legislature: Dilworth (supra) and few other
decisions came up for consideration in Peerless
General Finance and Investment Co. Ltd. [Citation is not provided] and this
Court summarized the legal position that inclusive
definition is used by the Legislature;
(A) To enlarge the meaning of
words or phrases so as to take in the ordinary, popular and natural sense of
the words and also the sense which the statute wishes to attribute to it;
(B) To include meaning about which there might be
some dispute;
(C) To bring under one
nomenclature all transactions possessing certain similar features but
going under different names.
It goes without saying that
interpretation of a word or expression must depend on the text and the context.
The resort of the word ‘includes’ by the Legislature often shows the intention
of the Legislature that it wanted to give extensive and enlarged meaning to
such expression. Sometimes, however, the context may suggest that word
‘includes’ may have been designed to mean “means”. The setting, context and
object of an enactment may provide sufficient guidance for interpretation of
word ‘includes’ for the purposes of such enactment.
(c) Definition of “Person” under CPA: Section
2(1)(m) which enumerates four categories defined in afore going para or not
while defining ‘person’ cannot be held to be restrictive and confined to these
four categories as it is not said in terms that ‘person’ shall mean one or
other of the things which are enumerated, but that it shall ‘include’ them.
(d) Definition of “Person” under General
Clauses Act: The General Clauses Act, 1897 in Section 3(42) defines
‘person’:
“Person shall include any company or
association or body of individuals whether incorporated or not.”
Section 3 of
the CPA upon which reliance is placed by learned counsel for KPTC provides that
the provisions of the Act are in addition to and not in derogation of any other
law for the time being in force. This provision instead of helping the
contention of KPTC would rather suggest that the access to the remedy provided
to the CPA is an addition to the provisions of any other law for the time being
in force. It does not in any way give any clue to restrict the definition of
the ‘person’.
(e) Definition is Exhaustive: Section
2(1)(m), is beyond all questions, an interpretation clause, and must have been
intended by the Legislature to be taken into account in construing the
expression ‘person’ as it occurs in Section 2(1)(d). While defining ‘person’ in
Section 2(1)(m), the Legislature never intended to exclude a juristic person
like company. As a matter of fact, the four categories by way of enumeration
mentioned therein is indicative, categories (i), (ii) & (iv) being
unincorporate and category (iii) corporate, of its intention to include body
corporate as well as body un-incorporate. The definition of ‘person’ in Section
2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of
any doubt that company is a person within the meaning of Section 2(1)(d) read with
Section 2(1)(m) and we hold accordingly.
Conclusion
Therefore,
from the bare reading of the CPA and judgment, it can be safely concluded that
the company is a consumer and their complaint is maintainable before Consumer
Forum.
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This is an informatory article by
Ms. Jyoti S. who is a Partner, Legal Imperials. She is Head Litigation,
Arbitration and Corporate Advisory. She handles the consumer related disputes
of the firm.
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