Shriram Chits (India) Private Limited Earlier Known as Shriram Chits (K) Pvt. Ltd vs Raghachand Associates

Held: Onus to prove that the service was obtained for a commercial purpose is on the service provider – Standard of proof has to be measured against a ‘preponderance of probabilities’ – If and only if, the service provider discharges its onus of showing that the service was availed, in fact for a commercial purpose, does the onus shift back to the complainant to bring its case within the third part-explanation (a) to s. 2(7) to show that the service was obtained exclusively for the purpose of earning its livelihood by means of self-employment – Plea of the opposite party that the complainant has not pleaded nor proved that the service was obtained for earning his livelihood through the means of self employment, relates to the third part of the definition of consumer – Question of inquiring into the third part would only arise if the service provider succeeds in crossing the second part by discharging its onus and proving that the service obtained was for a commercial purpose – Unless the service provider discharges its onus, the onus does not shift back to the complainant to show that the service obtained was exclusively for earning its livelihood through the means of self-employment – On facts, opposite party merely pleaded in its version that the service was obtained for commercial purpose – No evidence led to probabilise its case other than merely restating its claim on affidavit – Plea without proof and proof without plea is no evidence in the eyes of law, thus, the matter dismissed. [Paras 21-23] Consumer Protection Act, 1986 – Technical pleas – Manner in which consumer forums must decide the pleas – Plea raised by service providers that the services obtained/goods bought was for a commercial purpose and, thus, the complaint filed on behalf of such persons not maintainable:

Held: Such pleas are decided on the manner in which the issues are framed – Unless the burden of proof is properly cast on the relevant party, the consumer forum would not be in a position to arrive at proper decision – Thus, guidance provided on how the issues must be framed and the manner in which the evidence must be appreciated. [Para 19]

Consumer Protection Act, 1986 – s. 2(7) – Definition of consumer – Deconstruction of s. 2(7)(i):

Held: There are three parts to the definition of a consumer – First part sets out the prerequisites for a person to qualify as a consumerthere must be purchase of goods, for consideration – Second part is an ‘exclusion clause’ [‘carve out’] which has the effect of excluding the person from the definition of a consumer – The carve out applies if the person has obtained goods for the purpose of ‘resale’ or for a ‘commercial purpose’ – Third part is an exception to the exclusion clause, it relates to explanation (a) to s. 2(7) which limits the scope of ‘commercial purpose’, the expression, ‘commercial purpose’ does not include persons who bought goods ‘exclusively for the purpose of earning his livelihood, by means of self-employment’ – Significance of deconstructing the definition into three parts was for the purpose of explaining on whom lies the onus to prove each of the different parts – Onus of proving the first part-person had bought goods/availed services for a consideration, rests on the complainant himself – Carve out clause, in the second part, is invoked by the service providers to exclude the complainants from availing benefits under the Act – Onus of proving that the person falls within the carve out must necessarily rest on the service provider and not the complainant – Since it is always the service provider who pleads that the service was obtained for a commercial purpose, the onus of proving the same would have to be borne by it – Act is a consumer-friendly and beneficial legislation intended to address grievances of consumers – Negative burden cannot be placed on the complainant to show that the service available was not for a commercial purpose. [Paras 15, 20]