Service provider must prove commercial purpose to deny consumer protection, not just claim it

The SC dismissed the appeal in a chit fund refund case. The complainant sought refund of subscription amount after illegal termination of chit fund business. The service provider refused repayment, claiming adjustment against pending dues and argued complainant was not a consumer as service was for commercial purpose. The SC held that burden of proving commercial purpose lies on service provider, not complainant, following preponderance of probabilities standard. Since the service provider merely pleaded commercial purpose without providing evidence beyond affidavit restatement, it failed to discharge its burden. The appeal was dismissed.

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Issues Involved:
1. Deficiency in service by the Opposite Party (OP).
2. Maintainability of the complaint under the Consumer Protection Act, 1986.

Summary:

Issue 1: Deficiency in Service by the Opposite Party (OP)
The appellant, a registered Chit Fund company, challenged the order dated 10.03.2021 of the National Consumer Disputes Redressal Commission (NCDRC). The respondent had initially redressed its consumer grievance before the Principal Consumer Disputes Redressal for Bangalore Urban District, which found a "deficiency in service" by the OP. This decision was upheld by the State Consumer Disputes Redressal Commission and the NCDRC. The complainant had subscribed to a chit group for a value of Rs.1,00,000/- but alleged that the OP illegally stopped the chit business in 1996 and refused to refund the subscription amount, claiming dues owed by the complainant. The District Forum ordered the OP to refund the claimed amount with interest of 18% p.a., a decision which was upheld by the State Forum and NCDRC.

Issue 2: Maintainability of the Complaint under the Consumer Protection Act, 1986
The OP raised a preliminary objection that the complaint was not maintainable as the complainant did not qualify as a 'consumer' u/s 2 (1) (d) of the Act of 1986, arguing that the service was obtained for a commercial purpose. The District Forum incorrectly addressed this by determining whether the complainant fell within the definition of a "person" u/s 2 (1)(m) of the Act. The NCDRC mirrored this approach, failing to examine whether the service was obtained for a commercial purpose. The Supreme Court clarified that the onus to prove that the service was obtained for a commercial purpose lies with the service provider. Since the OP failed to provide evidence beyond mere affidavits, the onus did not shift back to the complainant to prove that the service was for earning livelihood by means of self-employment. The Court dismissed the appeals, upholding the findings of deficiency in service by the lower forums.

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