Commercial Disputes Can’t Be Decided In Summary Proceeding Under Consumer Protection Act: Supreme Court
The Supreme Court observed that the commercial disputes cannot be decided in summary proceeding under the Consumer Protection Act, 1986.
The Court observed thus in an appeal seeking correctness of the order of the National Consumer Disputes Redressal Commission (NCDRC) by which the revision was dismissed and the order of the State Consumer Disputes Redressal Commission (SCDRC) and District Consumer Disputes Redressal Forum (DCDRF) was upheld.
The two-Judge Bench comprising Justice Vikram Nath and Justice Satish Chandra Sharma held, “Secondly, the investment made by the respondent No.1 complainant was for deriving benefit by getting an interest on the same at the rate of 18 % per annum, therefore, it would be an investment for profit/gain. It was a commercial transaction and therefore also would be outside the purview of the 1986 Act. Commercial disputes cannot be decided in summary proceeding under the 1986 Act but the appropriate remedy for recovery of the said amount, if any, admissible to the complainant-respondent No.1, would be before the Civil Court. The complaint was thus not maintainable.”
Advocate C.B. Gururaj appeared for the appellants while Advocate Chinmay Deshpande appeared for the respondents.
In this case, the State Commission and District Forum allowed the complaint of the respondent (complainant) and directed the opposite parties to be jointly and severally liable to pay Rs. 5 lakhs. The respondent had filed a complaint before DCDRF alleging that he had invested Rs. 5 lakhs in a partnership firm which was repayable after 120 months. The respondent sought for premature payment but it was denied on the ground that the same would be paid upon maturity. He waited for the maturity but still the payment was not made compelling him to issue notice to the opposite parties to make the payment.
As the payment was not made, a complaint was filed before DCDRF alleging deficiency in service. The opposite parties contended that the complainant was not a ‘consumer’ and filed the complaint with the wrong intention of recovering the amount illegally. The DCDRF allowed the complaint and hence, the appellants preferred an appeal before the SCDRC. The SCDRC dismissed the appeal and aggrieved by this, the appellants preferred a revision petition before the NCDRC. However, the same was also dismissed and hence, they approached the Apex Court.
The Supreme Court in view of the above facts noted, “We need not go into other details of the arguments raised by the parties. In our considered opinion, once there was a registered partnership deed dated 27.05.1996, there is no further document placed on record by the complainant-respondent No.1 regarding dissolution of the said registered deed which continued till the time when the investment was made by the complainant respondent No.1 on 21.05.2002 and hence the complainant respondent No.1 would be deemed to be partner of the firm. It is only upon the death of the Managing Partner Basavaraj Uppin in March 2003, that the status of the firm would cease to exist or would stand dissolved.”
The Court further said that there was no evidence on record to show that a fresh partnership deed was executed reconstituting the firm in which the appellants had become partners so as to take upon themselves the assets and liabilities of the firm and that the law is well settled that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner.
“The arguments of the respondents that the appellants had alternative remedy of approaching the High Court under Article 226 of the Constitution is of no avail in as much as this Court in Universal Sompo General Insurance (supra) has not issued any directions for the pending matters being either dismissed on this ground or being transferred to the High Court. It would apply prospectively for fresh matters coming up before this Court after the said judgment”, it added.
Accordingly, the Apex Court allowed the appeal and set aside the impugned orders.
Cause Title- Annapurna B. Uppin & Ors. v. Malsiddappa & Anr. (Neutral Citation: 2024 INSC 276)
Appearance:
Appellants: Advocate CB Gururaj, AOR Prakash Ranjan Nayak, Advocates Animesh Dubey, and Debendra Ghosal.
Respondents: Advocate Chinmay Deshpande and AOR Anirudh Sanganeria.
