Burden to prove transaction as commercial is on the Defendant

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Shubham Budhiraja[1]

 


Mr. A subscribed to the chit tickets of chit fund company. The chit company stopped the business and Mr. A instituted consumer case seeking refund of deposits made in chit fund. The chit company took a plea that Mr. A is not a consumer because transaction is for commercial purpose. The Learned District Forum, Hon’ble State Commission and Hon’ble NCDRC favoured the complainant. The Hon’ble Supreme Court held as under[2]:

 

(i)             To file a complaint, one must be a complainant and for one to be a complainant, he must be a consumer. If a person fails to come within the definition of a consumer, he cannot be a complainant and therefore, such person cannot file a complaint under the Act.

 

(ii)           The definition of consumer has three parts. The 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. There can hardly be any dispute that the onus of proving the first part i.e. that the person had bought goods/availed services for a consideration, rests on the complainant himself. The carve out clause, in the second part, is invoked by the service providers to exclude the complainants from availing benefits under the Act.

 

(iii)         The onus of proving that the person falls within the carve out must necessarily rest on the service provider and not the complainant. This is in sync with the general principle embodied in Section 101 and 102 of the Evidence Act that ‘one who pleads must prove’.

 

(iv)         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. Further, it cannot be forgotten that the Consumer Protection Act is a consumer-friendly and beneficial legislation intended to address grievances of consumers. Moreover, a negative burden cannot be placed on the complainant to show that the service available was not for a commercial purpose.

 

(v)           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, i.e. the Explanation (a) to Section 2(7) – to show that the service was obtained exclusively for the purpose of earning its livelihood by means of self-employment.


[1] Advocate, Delhi High Court [LLB, ACS, BCOM(H)], Budhirajalawchambers@gmail.com

[2] SPECIAL LEAVE PETITION (CIVIL) NO. 15290 OF 2021)

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