TMI Blog2014 (7) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be said to be indulging in any 'commercial' activity, thus excluding him from the definition of 'consumer' as enshrined in the Act. The intent of the Universities in the present dispute is not profiteering and the same is for benevolent interest and there is no intention whatsoever that the investment is made for any commercial purpose or gain and therefore we find that the complainant Universities fall within the definition of "consumer" under the Act and the complaints are maintainable before the National Commission. Whether in terms of the offer, is there any deficiency of services? - Held that: - It has been clearly stipulated in the 'terms of offer' that the maturity amount will depend on the NAV and that the same was guaranteed not to be below the par value of ₹ 10 per unit. All investments are subject to markets risks and fluctuations and an investor has to exercise due caution while investing any amount in any Scheme just because the maturity amount is below their expectations they cannot drag the service provider to Court for the same. The University would come within the purview of "consumer" as defined in Section 2(1)(d) of the said Act. Appeal dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purpose it receives grants from the Central Government as well as from the State Government for making payment to its employees towards salaries, provident funds, gratuity etc. The University has a contributory Provident Fund Scheme for its employees and its fund is maintained and administered by the University. In the year 1993, Punjab University invested an amount of ₹ 9.6 crores in the Institutional Investors Special Fund Unit Scheme-93w (hereinafter referred to as IISFUS-93 ) of UTI, which was an open ended scheme. 4.2. The amount was invested with the reinvestment option of the dividend and the said amount became ₹ 19.78 crores on termination of the scheme by the UTI on March 31, 1998. This Scheme guaranteed protection of original capital and assured a return of 16% per annum payable half yearly. The IISFUS-93 Scheme was unilaterally terminated by the UTI w.e.f. March 31, 1998 and the maturity amount became ₹ 19,78,26,299.44p. 4.3. Thereafter, in the year 1998, another Scheme i.e. IISFUS-98 was floated by the UTI and Punjab University invested an amount of ₹ 19 crores which was received by it on the maturity of IISFUS-93 with a specific unders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices by the Respondent-Institution. Hence, the Appellant University is before us challenging the order passed by the National Commission and the Respondent-Institution is challenging the locus standi of the Appellant-University before the National Commission in its cross-appeal before us. 5. The case of the Appellant being Punjab University is that UTI failed to honour the assurance of 13.5% per annum returns and that they were in breach of contract as they invested more than 20% in equity markets owing to which the NAV fell and the same amounts to deficiency of services. It has been further submitted by the learned Counsel appearing on behalf of the Appellant that the Respondents failed to disclose the details of the alleged Non-Performing Assets and also failed to disclose the efforts made by them to recover Non-Performing Assets and how they intended to treat them. It has also been submitted that the National Commission was incorrect in considering the offer document which was not binding on the parties especially in the light of the fact that UTI did not give them the offer document and they were only given a letter dated March 9, 1998 addressed by the Executive Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IISFUS-98, they cannot be called as commercial people just because the investment is made for the purpose of earning a profit, and if such a narrow view is taken then the institutions who deposit money with the financial institutions in order to earn interest, in furtherance of their obligation of discharging their duties, would be deprived of litigating their cases for breach of promise under the Act. 9. Mr. Amarendra Sharan, learned senior Counsel appearing on behalf of UTI on the other hand, submitted that the complainant Universities do not fall under the term consumer as defined Under Section 2(1)(d) of the Act and the Respondent-UTI was not providing any services as defined Under Section 2(1)(o) of the Act and hence the complainant Universities are not entitled to any relief before the National Commission. We will reproduce Section 2(1)(d) of the Act for ready reference: (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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm of tuition and other allied fees/charges and this activity of the University is not 'self-employment'. That it is an admitted fact that the services availed by the University were neither for their self-employment nor for their livelihood and therefore the transactions were for the purpose of investment in the Stock Market with the object of earning profit and a higher rate of return and thus it would be for 'commercial purpose'. 12. Mr. Sharan, learned senior Counsel drew our attention to the fact that the University invested the monies of the CPF/GPF and Pension Funds and it admitted before the National Commission that the payment of pension to the pensioners/family pensioners is also made from the interest accrued from these investments. As per Mr. Sharan, the aforementioned clearly established that the investment by the University in the Stock Market is for earning profits and that these risks for higher returns are purely commercial ventures with clear intention and motive to achieve the purpose of higher commercial benefits to the University so as to enable it to discharge its liability of payments to the pensioners. 13. Mr. Sharan, learned senior Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the investors, first option being that UTI assured income of 13.5% on the invested amount and second option being that the investor had an option to choose reinvestment of income @ 13.5% into further units, income of which would go to the account of the investor. Punjab University had opted for the reinvestment option on its own volition, which is evident from the application form duly signed on behalf of Punjab University and as per the reinvestment option of IISFUS-98, all unit holders had an option to reinvest the income received @ 13.5% annually on the outstanding units into further units at NAV in terms of Clause XXVII of the 'offer document' of the IISFUS-98, as per which the units allotted under the reinvestment option under Clause XXVII are not subject to the conditions and stipulations governing the parent units in respect of the minimum holding, repurchase and other matters. That as per Clause XXVII, all the unit holders including the complainant University under IISFUS-98 were paid maturity amount as per the provisions of the Scheme i.e. the parents units were repurchased at par as guaranteed and accumulated units acquired by way on reinvestment option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 2(d), a consumer means in so far as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the consideration is paid or promised, or partly paid and partly promised, or whether the payment of consideration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression resale is clear enough. Controversy has, however, arisen with respect to meaning of the expression commercial purpose . It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. Commercial denotes pertaining to commerce (Chamber's Twentieth Century Dictionary); it means connected with, or engaged in commerce; mercantile; having profit as the main aim (Collins English Dictionary) whereas the word commerce means financial transactions especially buying and selling of merchandise, on a large scale (Concise Oxford Dictionary). The National Commission appears to have been taking a consistent view that where a person purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s long-felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons has become illusory. XXX XXX XXX XXX The word 'consumer' is a comprehensive expression. It extends from a person who buys any commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services. In Oxford Dictionary a consumer is defined as, 'a purchaser of goods or services'. In Black's Law Dictionary it is explained to mean, 'one who consumes'. Individuals who purchase, use, maintain, and dispose of products and services. A member of that broad class of people who are affected by pricing policies, financing practices, quality of goods and services, credit reporting, debt collection, and other trade practices for which State and Federal Consumer Protection Laws are enacted'. The Act opts for no less wider definition. XXX XXX XXX XXX It is in two parts. The first deals with goods and the other with services. Both parts first declare the meaning of goods and services by use of wide expressions. Their ambit is further enlarged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy and mercantile usage (2) An incorporated canal company whose profits arose from tolls, was held a 'commercial company', or a company associated for commercial purposes, and, as such, liable to become bankrupt under Joint Stock Companies Act, 1844. Thus, the words 'commercial purposes' would cover an undertaking the object of which is to make a profit out of the undertakings. In the present case the services of UTI were availed by the complainant for the betterment of their employees, that such an investment was made, and it is to be made clear that no benefit by way of profit was to accrue to the complainant, improving its balance-sheet, in view of the definition of the word 'commerce' given above, under no circumstances, the Appellant could be said to be indulging in any 'commercial' activity, thus excluding him from the definition of 'consumer' as enshrined in the Act. The intent of the Universities in the present dispute is not profiteering and the same is for benevolent interest and there is no intention whatsoever that the investment is made for any commercial purpose or gain and therefore we find that the complainant Univers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that: A unit holder who has repurchased the reinvested units may continue to avail of the reinvestment facility in respect of the income distributable for the subsequent years. The units allotted under the reinvestment facility under this clause are not subject to the conditions and stipulations governing the parent units in respect of the minimum holding, repurchase are other matters. We have considered the same in light of the documents produced before us and we find that on merits, the complainants have no case. It has been clearly stipulated in the 'terms of offer' that the maturity amount will depend on the NAV and that the same was guaranteed not to be below the par value of ₹ 10 per unit. All investments are subject to markets risks and fluctuations and an investor has to exercise due caution while investing any amount in any Scheme just because the maturity amount is below their expectations they cannot drag the service provider to Court for the same. 23. For the reasons stated and the discussion we had in the preceding paragraphs, we hold that the National Commission correctly held that the University would come within the purview of consume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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