In a landmark decree delving into consumer protection law, the Supreme Court, in a pivotal ruling issued on Friday, laid down stringent guidelines for adjudicating technical contentions raised by service providers regarding the validity of consumer complaints. This legal edict mandates that unless substantiated by the service provider, disputing the commercial nature of goods or services procured by consumers renders their challenge against the maintainability of consumer complaints untenable.
Affirming the verdict of the National Consumer Dispute Redressal Commission (NCDRC), the bench, chaired by Justices P.S. Narasimha and Aravind Kumar, emphasized the prerequisite for service providers to substantiate claims asserting the commercial utilization of goods or services by consumers to challenge the admissibility of consumer complaints.
The Consumer Protection Act of 1986 delineates the inadmissibility of consumer complaints against service providers if services are obtained for commercial purposes. Nonetheless, an exception exists whereby complaints remain viable if the goods or services are solely utilized for self-employment livelihood endeavors.
In the present litigation, the respondent, a consumer, lodged a complaint seeking reimbursement of subscription fees from the appellant, a chit fund company, subsequent to its closure. Contesting the admissibility of the complaint, the appellant contended that the consumer availed services for commercial purposes.
Dismissing the appellant’s contentions, the judgment articulated by Justice Aravind Kumar meticulously scrutinized the definition of a consumer under Section 2(7) of the Consumer Protection Act 1986. The court elucidated three components of the definition.
Firstly, the burden rests upon the complainant to demonstrate the procurement of goods or services for consideration. Secondly, a carve-out clause exempts goods or services acquired for commercial ends from the Act, with the onus of proof on the service provider. Thirdly, the complainant must substantiate that services obtained were exclusively for self-employment livelihood pursuits.
The court emphasized that the service provider must first discharge the burden of proving commercial utilization before the onus shifts to the complainant. In the absence of evidence substantiating commercial use, the court underscored the inadequacy of mere assertions without probative support.
In light of the foregoing, the court upheld the lower court’s decision, affirming the deficiency of service on the appellant’s part, and subsequently dismissed the appeal.
This legal victory serves as a crucial precedent, compelling service providers to furnish substantive evidence when disputing the commercial nature of goods or services in consumer complaints, thereby fortifying consumer protection laws.
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