[2009] 12 S.C.R. 1186

MADAN KUMAR SINGH (0) THR. LRS.

DISTI. MAGISTRATE, SULTANPUR & ORS.

(Civil Appeal No. 5165 of 2009)

AUGUST 07, 2009

[S.B. SINHA AND DEEPAK VERMA, JJ.]

Consumer Protection Act, 1986 - ss.2(1)(d),(g) & (o) and 12 - Consumer- Deficiency in service - Claim for damages t c - Truck purchased in auction sale - Respondents authorities delayed delivery of the truck to appellant-auction purchaser and also, despite efforts made by him, did not hand over - necessary papers of the truck to him for long number of years

- Appellant could not ply the truck for such long number of D years - Petition by appellant uls. 12 claiming damages - Held: Buyers of goods/commodities for "self consumption" in economic activities in which they are engaged would be consumers as defined in the Act - Appellant was 'consumer' within meaning of s.2(1)(d) as he purchased the truck for

E earning his livelihood by means of self-employment - Conduct, behaviour and attitude of respondents was highly reprehensible - There was deficiency in services on their part

- Rs. 1 lakh with 6% interest p.a. directed to be paid by respondents jointly or severally to the appellant.

F A truck was put in auction sale, on account of default in payment of instalments by its previous owner towards the loan taken by him from bank. Bid of the appellant was the highest. In 1999, the auction was confirmed and treated to be a final sale in favour of the appellant.

G Appellant deposited the requisite money consideration, however, the respondents authorities handed over the truck in question to the appellant only after six months from the date of auction. Even after getting delivery of the truck, the appellant could not start plying the same as he H 1186

MADAN KUMAR SINGH (D) THR. LRS. v. DISTI. 1187

MAGISTRATE, SULTANPUR

was not delivered the relevant papers thereof for long A number of years despite efforts made by him. The relevant papers of the truck were handed over to the appellant six years after the date of auction.

Meanwhile, the appellant filed petition Section 12 of 8 the Consumer Protection Act, 1986 claiming damages.

The appellant claimed damages @ Rs.500/- per day and interest at 5% on the amount of Rs.70,000/- deposited by him for the price of the truck and in addition, further claimed damages for mental and social injuries to the tune C of Rs.50,000/- plus litigation expenses.

The questions which arise for consideration in the present appeals were (i) whether the appellant was a 'consumer' within the definition of Section 2(1)(d) of the Act; and (ii) whether there was deficiency in services D committed by respondents as contemplated under Section 2(1)(g) of the Act.

Disposing of the appeals, the Court

HELD:1. Appellant would be deemed to be a E consumer within the definition as contained in Section 2(1 )(d) of the Consumer Protection Act, 1986. A plain reading of Section 2(1) (d) of the Act makes it abundantly clear that appellant would fall in the category of a 'consumer' as he had bought the truck for a consideration F which was paid by him. It was bought to be used exclusively for the purpose of earning his livelihood by means of self-employment. A further reading of the aforesaid definition of 'consumer' makes it clear that Parliament wanted to exclude from the scope of the G definition the persons, who obtain goods for resale and also those who purchase goods with a view to use such goods for carrying on any activity for earning. The immediate purpose as distinct from the ultimate purpose of purchase, sale in the same form or after conversion H

A and a direct nexus with profit or loss would be the determinants of the character of a transaction-whether it is for a "commercial purpose" or not. Thus, buyers of goods or commodities for "self consumption" in economic activities in which they are engaged would be B consumers as defined in the Act. The purchase of the truck by the appellant would also be covered under explanation to Section 2(1)(d) of the Act. The appellant had mentioned categorically that he had bought the said t.ruck to be used exclusively by him for the purpose of c earning his livelihood, by means of self-employment.

Even if he was to employ a driver for running the truck aforesaid, it would not have changed the matter in any case, as even then appellant would have continued to earn his livelihood from it and of course, by means of self- D employment. Furthermore, there is nothing on record to show that he wanted to use the truck for any commercial • purpose. [Paras 23, 24, 25 and 26) [1195-H; 1196-H; 1196-

A-G]

2. There is nothing on record to show that any stay E was granted in favour of any party, restraining the respondents not to deliver the papers of the truck to the appellant. It would go to show that respondents were

unlawfully holding back the papers with them, for which, otherwise they were not entitled to do so. The truck in F question was actually handed over to the appellant almost after six months from the date of auction in his favour. Even after getting delivery of the truck he could not have started plying the same unless he was delivered the relevant papers thereof. There is no dispute, which G even otherwise stands proved from the voluminous material available on record that despite best efforts made by the appellant, the relevant papers of the truck were handed over to him only after six years from the date of the auction. No plausible or convincing reasons have H been assigned by the respondents for not doing so. From

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MADAN KUMAR SINGH (D) THR. LRS. v. DISTT. 1189

MAGISTRATE, SULTANPUR

the narration of the aforesaid facts, it is clearly made out A that respondents were at fault in performance of the services which was otherwise required to be performed by them. What more could be the deficiency in service cannot be described. The respondents were certainly imperfect and the same would amount to shortcoming in B quality in providing the service to the appellant. Thus, all the ingredients, to enable the appellant to claim damages under the Act were made out. This has in fact been found by the National Commission also, that is why it proceeded to award compensation of Rs. 25,000/- to the c appellant. [Paras 21, 28, 29 and 30] (1194-H; 1195-A; 1197-

F-H; 1198-A-C}

3.1. The appellant suffered loss of earning firstly due to non-delivery of vehicle and then due to highly belated 0 supply of requisite documents. Moreover, the value of the truck also depreciated resulting in further loss to him.

Thus, the amount awarded by National Commission is too meagre and deserves to be enhanced. (Para 32]

[1198-E-F]

3.2. The conduct, behaviour and attitude of the respondents, throughout, has been highly reprehensible.

When the bank had issued a Fard Nilami and respondents were entrusted with the job of auction then

the said auction should have been implemented fully in F letter and spirit. Once the highest bid of the appellant was knocked down in his favour, pursuant thereto, he had deposited the requisite amounts, then as a necessary consequence thereof he should have been delivered the truck immediately along with the necessary documents. G For the reasons best known to the respondents they had not only delayed delivery of the truck !lut had also, despite the efforts made by the appellant, not handed over the papers of the truck to him for long number of years. Any explanation offered during the course of the H

A arguments is not acceptable, which certainly shows their

malafide intentions. [Para 34] [1199-8-D]

3.3. Even assuming for a moment that bank had not delivered the papers of the truck to the respondents then

B it. was the duty of the respondents to have insisted the bank for delivery of the papers which they had failed to do. Thus, in any case, there cannot be any escape of the respondents from shaking off the liability fastened on them by the National Commission. [Para 35] [1199-E] c 3.4. Taking the totality of the situation as it exists, a total amount of Rs. 1,00,000/- payable by respondents - jointly or severally to the appellant would subserve the justice. [Para 36] [1199-F]

4. Even though the Act specifically does not authorise to grant interest but in appropriate cases, grant " of interest on the facts and circumstances of the case is permissible. In this case also, keeping the circumstances under which appellant was made to run from pillar to

E post, to get the documents of the truck from the respondents, .ends of justice would be met if interest at the rate of 6% p.a. from the date of the original application till actual payment of the aforesaid enhanced awarded • amount is made by the respondents. [Paras 37 and 38]

[1199-G-H; 1200-A-B] F

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5165 of 2009.

From the Judgment & Order dated 18.5.2005 of the

G National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 929 of 2003.

WITH

C.A. No. 5166 of 2009.

H R.K. Kapoor, Gunjan Sinha, H. Pant, Anis Ahmed Khan for

,..

MADAN KUMAR SINGH (D) THR. LRS. v. DISTI. 1191

MAGISTRATE, SULTANPUR

the Appellants.

R.K. Gupta, Manoj Dwivedi, Gunnam Venkateswara Rao for the Respondents.

The Judgment of the Court was delivered by

DEEPAK VERMA, J. 1. Leave granted.

2. For the sake of convenience, facts have been taken from the appeal arising out of S.L.P.(C)No.20515 of 2005.

3. Appellant was an auction purchaser of a truck bearing registration No. UP 1-4775, put to an auction sale; on account of default in payment of instalments committed by its previous owner Iqbal, having taken loan from Union Bank of India under "Self Employment Scheme". Recovery Certificate was issued to the Collector, Sultanpur (U.P.) by the said bank. The auction was held in the Tehsil Compound, Sultanpur, on 19.8.1999. The appellant's bid for a sum of Rs. 70,000/- being the highest, was knocked down in his favour and accepted by respondent No. 1.

4. As per the terms and conditions of the.auction, appellant deposited a sum of Rs. 20,000/-, as soon as the bid was knocked down in his favour. Since no objection was received against the said auction sale, the appellant deposited balance amount of Rs. 50,000/- on 20.8.1999.

5. On 19.9.1999, the said auction was confirmed, since no objections were received much less, from the previous owner Iqbal. Thus, it was treated to be a final sale in favour of the appellant.

6. Obviously, after the sale having been confirmed in favour of the appellant, he was entitled to receive possession of the truck, which was not delivered to him by the respondents. Thus he made a representation on 30.11.1999 for delivery thereof.

He continued to make several representations with the

A respondents for delivery of the truck purchased in the auction and also to hand over to him the documents so that the vehicle could be transferred in the name of the appellant so as to enable him to ply the same. It appears that truck was delivered to the appellant after about six months from the date of auction 8 sale, for which no plausible reasons were assigned by the respondents.

7. Despite handing over possession of the truck at a belated stage, respondents did not deliver necessary c documents of the truck to the appellant so as to enable him to get the vehicle transferred in his name, thereby depriving him of its commercial use, the purpose for which he had purchased.

8. He was therefore, constrained to file a petition under Section 12 of the Consumer Protection Act, 1986 (for brevity, D 'the Act') claiming damages.

9. Appellant was ultimately delivered the possession of the truck on 14.3.2000, during the pendency of the complaint before the District Forum. The relevant papers thereof were not

E handed over to him for a long time but on persistent requests, the same were handed over to him some time in the month of January, 2005. Thus after a lapse of more than five years from the date, the auction was confirmed in favour of the appellant. •

10. The District Consumer Forum dismissed the complaint F of the appellant holding therein that appellant is not a

"consumer" within the definition of the Act.

1 t. Feeling aggrie..._ed, appellant filed an appeal before the State Consumer Disputes Redressal Commission, Uttar

G Pradesh, Lucknow which was registered as Appeal No. 2327 of 2000. The State Commission dismissed the appeal with certain observations reproduced herein below:

"The District Consumer Forum Sultanpur has dismissed the complaint on the finding that such matters H

MADAN KUMAR SINGH (D) THR. LRS. v. DISTT. 1193

MAGISTRATE, SULTANPUR [DEEPAK VERMA, J.]

are not cognizable by it under COPRA. No error at all can be found in the aforesaid finding. It is open to the appellant to file copy of this order before District Magistrate Sultanpur with such prayer relating to the documents of the vehicle as advised. The District Magistrate will deal with such representation in accordance with law and pass necessary orders within two months."

12. Pursuant thereto, appellant submitted representation to the District Magistrate on 17.2.2003 and continued to remind them that they have to deliver the necessary documents to the

appellant so as to enable him to get the vehicle transferred in his name,_ which would further enable him to use the same for commercial purposes.

13. Against the order of the State Commission, appellant filed Revision Petition No. 929 of 2003 before the National Consumer Disputes Redressal Commission, New Delhi. The same came to be disposed of vide impugned order on 18.5.2005 and the complaint filed by appellant has partly been allowed with the following directions:

"In view of the long delay, we are inclined to grant damages to the extent of Rs. 25,000/- along with cost of Rs.5000/- payable by the respondents to the Petitioner jointly and severally. In view of the facts and circumstances of the case, we direct the District Magistrate, Sultanpur, U.P. to conduct an inquiry into the matter and fix the responsibility including the recovery of this_ awarded amount from the officers who are found guilty of deficiency/negligenc_e_in this case." ~

14. Feeling aggrieved thereby the auction purchaser Madan Kumar Singh (since dead) preferred a Special Leave Petition whereas respondents have also preferred Special Leave Petition against Madan Kumar Singh (since dead).

15. The original appellant having died during the pendency

A of the appeal, his legal representative was brought on record.

16. We have, accordingly, heard the learned counsel for the appellant Mr. R.K. Kapoor and learned counsel for the respondents Mr. R.K. Gupta at length. Perused the record.

17. The questions which arise for consideration in the aforesaid appeals are (i) whether the appellant can be said to be 'consumer' within the definition of Section 2(1 )(d) of the Act; and (ii) whether it can be said that there has been deficiency .,. c in the services committed by respondents as contemplated under Section 2(1)(g) of the Act.

18. It is pertinent to mention here that even though respondents were parties before the District Consumer Forum, State Commission, as also before the National Commission D but they neither preferred to file any objections nor participated in the proceedings. Thus were proceeded ex-parte throughout.

19. Even though there has been long and chequered history of various litigations in the High Court of Allahabad and

E a civil suit which were either at the instance of previous owner of th~ truck Iqbal Ahmed or by Maqsood Ahmed, apparent[y set up by Iqbal Ahmed but we are not concerned with the same, in the aforesaid appeal. Needless to say that in none of the proceedings either initiated by Iqbal Ahmed or his stooge

F Maqsood Ahmed there was any order of stay granted by any court that appellant herein should not be delivered the relevant documents of the truck, so as to enable him to start plying the same.

20. It is trite to say that mere filing of a Petition, Appeal or G Suit, would by itself not operate as stay until specific prayer in this regard is made and orders thereon are passed.

21. There is nothing on record to show that any stay was granted in favour of any party, restraining the respondents not

H to deliver the papers of the truck to the appellant. It would go

MADAN KUMAR SINGH (D) THR. LRS. v. DISTT. 1195

MAGISTRATE, SULTANPUR [DEEPAK VERMA, J.]

to show that respondents were unlawfully holding back the A papers with them, for which, otherwise they were not entitled to do so.

22. To deal with the question projected hereinabove in the aforesaid appeal, it is necessary to go through the definition 8 of 'Consumer' as contained in Section 2(1)(d) of the Act.

"2(d) "Consumer'' means any person who -

(i) Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, c 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 0 such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) [hires or avails oij any services for a consideration which has been paid or promised or partly paid and partly E promised, or under any system of deferred payment and includes any beneficiary of such services other than the person [hires or avails oij the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such F services are availed of with the approval of the first mentioned person.

[Explanation- For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer G of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of selfemployment;]".

23. Plain reading of the same makes it abundantly clear that appellant herein would fall in the category of a 'consumer' H

A as he had bought the truck for a consideration which was paid by him. It was bought to be used exclusively for the purpose of earning his livelihood by means of self-employment. The said pleading by way of amendment was incorporated by the appellant in his application filed under Section 12 of the Act, B before the District Consumer Forum but proper cognizance thereof has not been taken.

24. A further reading of the aforesaid definition of 'consumer' makes it clear that Parliament wanted to exclude c from the scope of the definition the persons, who obtain goods for resale and also those who purchase goods with a view to use such goods for carrying on any activity for earning. The immediate purpose as distinct from the ultimate purpose of purchase, sale in the same form or after conversion and a

D direct nexus with profit or loss would be the determinants of the character of a transaction-whether it is for "commercial purpose" or not. Thus, buyers of goods or commodities for "self consumption" in economic activities in which they are engaged would be consumers as defined in the Act.

25. Apart from the above, it may also be seen that the purchase of the truck by the appellant would also be covered under explanation to Section 2(1 )(d) of the Act. The appellant had mentioned categorically that he had bought the said truck •

to be used exclusively by him for the purpose of earning his

F livelihood, by means of self-employment. Even if he was to

employ a driver for running the truck aforesaid, it would not have changed the matter in any case, as even then appellant would .:.,

have continued to earn his livelihood from it and of course, by means of self-employment. Furthermore, there is nothing on

G record to show that he wanted to use the truck for any

commercial purpose.

26. Thus, the question No.1 is answered in favour of the appellant that he would be deemed to be a consumer within the definition as contained in Section 2(1 )(d) of the Act.

MADAN KUMAR SINGH (D) THR. LRS. v. DISTI. 1197

MAGISTRATE, SULTANPUR [DEEPAK VERMA, J.]

27. Coming to question No.2 whether there has been a A • deficiency in the services committed by respondents as contained in Section 2(1 )(g) and (o) of the Act or not, "deficiency" and "services" have been defined as under:

"2(1)(g) "deficiency" means any fault, imperfection, B shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been

i undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. c 2( 1 )( o) "service" means service of any description which is made available to potential users and includes provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, [housing D construction], entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service."

28. The facts mentioned hereinabove would go to show E

that appellant having been declared as highest bidder had deposited the initial money and next day deposited the balance of the consideration. The truck in question was actually handed over to him almost after six months from the date of auction in F his favour. Even after getting delivery of the truck he could not -·· have started plying the same unless he was delivered the relevant papers thereof. There is no dispute, which even otherwise stands proved from the voluminous material available on record that despite best efforts made by the appellant, the G relevant papers of the truck were handed over to him only after six years from the date of the auction. No plausible or convincing reasons have been assigned by the respondents for not doing so.

29. From the narration of the aforesaid facts, it is clearly H

A made out that respondents were at fault in performance of the services which was otherwise required to be performed by them. What more could be the deficiency in service cannot be described. According to us, respondents were certainly imperfect and the same would amount to shortcoming in quality B in providing the service to the appellant.

30. Thus, in our considered opinion, all the ingredients, to enable the appellant to claim damages under the Act were made out. This has in fact been found by the National c Commission also, that is why it proceeded to award compensation of Rs. 25,000/- to the appellant.

31. Now, the question that arises for consideration before us is whether the amount of compensation awarded to the appellant is just and proper or deserves to be enhanced.

32. Even thougb the appellant claimed damages @ Rs.500/- per day and interest at 5% on the amount of Rs.70,000/- deposited by him for the price of the truck in addition, he further claimed damages for mental and social

E injuries to the tune of Rs.50,000/- + litigation expenses but in absence of any cogent and valid evidence available on record, it is not proper to consider the reliefs as claimed by the appellant. However, there is no doubt that the appellant suffered loss of earning firstly due to non-delivery of vehicle and then due

F to highly belated supply of requisite documents. Moreover, the value of the truck also depreciated resulting in further loss to him. Thus, in our opinion, the amount awarded by National ....

Commission is too meagre and deserves to be enhanced.

33. During the course of arguments, Sh. R.K. Gupta, G learned counsel for the respondents also made submissions that since the documents pertaining to the truck were received late from the bank, therefore, the same could not be delivered to the appellant herein. However, this plea had not been taken by the respondents nor it is reflected from any of the documents

H filed by respondents in their own appeal. It is, therefore, clearly

MADAN KUMAR SINGH (D) THR. LRS. v. DISTT. 1199

MAGISTRATE, SULTANPUR [DEEPAK VERMA, J.]

an afterthought and has been taken so as to shield the A unwarranted action of the respondents.

34. The conduct, behaviour and attitude of the respondents, throughout, has been highly reprehensible. When the bank had issued a Fard Nilami and respondents were 8 entrusted with the job of auction then the said auction should

have been implemented fully in letter and spirit. Once the highest bid of the appellant was knocked down in his lavour, pursuant thereto, he had deposited the requisite amounts, then as a necessary consequence thereof he should have been delivered the truck immediately along with the necessary C documents. For the reasons best known to the respondents they had not only delayed delivery of the truck but had also, despite the efforts made by the appellant, not handed over the papers of the truck to him for long number of years. Any explanation offered during the course of the arguments is not D acceptable to us, which certainly shows their malafide intentions. ·

35. Even assuming for a moment that bank had not delivered the papers of the truck to the respondents then it was E the duty of the respondents to have insisted the bank for delivery of the papers which they had failed to do. Thus, in any case, there cannot be any escape of the respondents from shaking off the liability fastened on them by the National Commission.

36. Taking the totality of the situation as it exists, we are of the opinion that a total amount of Rs. 1,00,000/- payable by respondents jointly or severally to the appellant would subserve the justice.

37. Even though the Act specifically does not authorise to G grant interest but in appropriate cases, grant of interest on the facts and circumstances of the case is permissible. The same has been done by this Court in long catena of cases.

38. In this case also, keeping the circumstances under H

A which appellant was made to run from pillar to post, to get the documents of the truck from the respondents, we are of the opinion that ends of justice would be met if interest at the rate of 6% p.a. from the date of the original application till actual payment of the aforesaid enhanced awarded amount is made 8 by the respondents. We accordingly do so. The appeal arising out of SLP(C) No.20515 of 2005 is allowed with costs and Appeal arising out of SLP (C) No.11210 of 2006 is dismissed with costs. Counsel fee assessed at Rs.10,000/- each.

8.8.8.

Appeals disposed of.