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Judgment
B.A. Khan, C.J. (A)
These appeals are directed against the judgment dated 31st March, 2004 passed by State Consumer (Protection) Commission (for short the
Commission) and raise common questions of fact and law and are being decided by this common judgment.
Respondents are all companies. They had purchased Kisan Vikas Patras of different denominations on various dates in 1937. When these
Patras matured for payment on due maturity dates, the appellants refused to pay interest amount on the Patras on the ground that some irregularity
had been committed by appellants in issuing these Patras and purchase thereof by the respondent companies. All the respondents felt aggrieved of
this and filed complaints in the Commission claiming the interest amount on the ground that the appellants had retained their money for as good as
six years and at no stage they had been informed about any irregularity in issuance of these Patras and that appellants were estopped from invoking
some irregularity now and denying them the interest on the Patras.
These complaints were contested by appellants primarily on the ground that the respondent companies were not a consumer within the definition
of Section 2(d)(i) of the Consumer (Protection) Act and even if they were treated to be consumer, they were not entitled to payment of any
interest on the Patras which were issued to them after their issuance was discontinued and banned in case of companies like that of respondents
from 1st April, 1995 vide Ministry of Finance Notification No. GSR 119(E) dated 8th March, 1995. The contract was not, therefore, binding on
the appellants and under rules they were not obliged to pay any interest on these Vikas Patras.
The Commission passed a detailed judgment, which is impugned in these appeals, over-ruling the stand taken by the appellants. While doing so,
the Commission held that respondent-companies are consumer within the definition of Section 2(d)(i) of the State Consumer (Protection) Act; that
they had hired the service of the appellants and had not purchased any goods and the Vikas Patras were not goods but were like fixed deposits in
Bank; that any irregularity committed by the appellants in issuing these Patras to the respondents would not disentitle them from receiving the
interest amount and the appellants had retained their money for as good as six years during which time they had not intimated to respondents at any
time about any irregularity committed in issuing these Patras.
The appellants are back with the same thesis and their counsel has repeated the submissions to persuade us that these respondents would not
fall within the definition of consumer under the Act and that they were not entitled to any interest under the rules as the Vikas Patras were issued to
them in contravention of rules. Learned Counsel, Ajay Sharma, has also filed detailed submissions in a back-up effort to prove his point. His case
is that definition of consumer occurring in the Act starts with the word person who buys any goods for consideration or who hires or avails of any
such service for consideration and it includes goods purchased or hired for consideration. According to him, the word person in the definition
clause means a natural person and not a juristic person like a company because if the word person meant a company also then the Legislature
would have used which in place of who and buy instead of buys and hire instead of hires and avail instead of avails in the definition clause, but since
words used in this clause were who, buys, hires and avails, it was, therefore, clear that word person used in the definition clause meant only a
natural person or individual and not a corporate person or association of persons, and that if the Legislature had intended to include the word
company also in Section 2(m) defining person, there was nothing to stop it from including the company also when other types of persons were so
included in it. Therefore, the definition clause of consumer was to be taken as exhaustive and not inclusive, rendering the findings of the
Commission in this regard misplaced.
It is also contended by the learned Counsel that the definition of the word person in the General Clauses Act was also not to be attracted to the
word person used in Section 2(d)(i) of the Act because Clause 42 of the General Clauses Act uses expression unless there is anything repugnant in
the subject or context of any Act and in any Central Law or regulation. According to him, the definition given to the word person in the Consumer
Protection Act was repugnant to clause 42 in Section 3 of the General Clauses Act and, therefore, the definition of person in the latter Act would
not apply.
Learned Counsel has also referred to the rule position to buttress his claim that respondents were not entitled to payment of any interest under
the Rules. He submits that Rule 13 of Kisan Vikas Patra Rules, 1988 provides that the provisions of Post Office Saving Certificate Rules, 1960
would apply in relation to matters for which no provision had been made in the Vikas Patra Rules; and as per Rule 13 of the Post Office Saving
Certificate Rules, 1960, any certificate purchased or acquired in excess of the limits prescribed in the rules or in contravention of the rules will not
earn interest on either the excess holding or any holding in contravention of the rules. All told, his total thrust is that since respondents held or
acquired Kisan Vikas Patras after 1st April, 1995, they were unauthorised holders of these Patras and, therefore, were not entitled to any benefit
of interest as per Rule 13 of the Post Office Saving Certificate Rules, 1960 and that non-payment of interest to them cannot be construed to be a
case of deficiency in service either in terms of the law or in terms of the contract as defined in Section 2(i)(g) of the Consumer Protection Act. He
has referred to some judgments to support his contentions, most noticeable of which is Postmaster, Dargamitta H.P.O., Nellore Vs. Raja
Prameeelamma (Ms), .
Learned Counsel for respondents, Mr. Sakal Bhushan, has also re-stated his submissions taken before the Commission and reiterated his stand
that respondents were consumer and had hired the service of appellants. Refusal to pay interest on the Vikas Patras was a deficiency in service
within the meaning of Section 2(g) of the Act. He submits that the definition of person in Section 2(m) is not exhaustive but inclusive and so is the
purchase of Vikas Patras in the nature of service and not goods purchased for any commercial purpose. He has also brought out the conduct of
the appellants in retaining the respondent-companies money for all these years and has pointed out that these respondents had purchased the
Patras in 1997 which had matured in 2003. When these Patras were presented for encashment to appellant No. 2 he had refused to pay interest
on these Patras for having been allegedly issued irregularly. It is submitted that the appellants had not taken any objection or intimated to them all
these years that any irregularity had been committed in the issuance of these Patras nor had the respondents at any point of time concealed their
status of their being companies when the Patras were purchased in 1997. He also pointed out that the appellants had implemented a similar
judgment of the State Consumer Protection Commission in Manhas Finance Put. Ltd. v. Chief Postmaster paying the full maturity value of the
Patra in that case. Therefore, the appellants could not be allowed to treat the respondents herein differently.
We have gone through the judgment of the Commission which is both detailed and well reasoned and takes care of every contention raised by
the parties, more particularly by the appellants. We would not have liked to add even a word to what had been held by the Commission and the
reasoning advanced by it in support of its findings, but we would have to embark on a repeat exercise to deal with the contentions raised before us
to set the controversy at rest for good.
The only issue that falls for determination is whether the respondents were entitled to payment of interest on their Vikas Patras in the facts and
circumstances of the case?
The case of the appellants is that they were not so entitled as these Vikas Patras were issued to them against the rules as there was a ban on
issuing such Patras after 1st April, 1995 to companies like the respondents. They have gone a step further to challenge the jurisdiction of the
Commission itself and to urge that it had no competence to take cognisance of the complaints of the respondents who were not consumer within
the definition of Section 2(d)(i) of the Act and as there was no deficiency in service within the relevant provisions of the Act or any other law also.
We would, therefore, first deal with the plea of jurisdiction for which it becomes necessary to reproduce Section 2(d)(i) and 2(m) of the Act
which read:
Section 2(d)(1);
.... Consumer means any person who.
(i) buys any goods for 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 or promised partly paid or partly promised
or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains
such goods for resale or for any commercial purpose;
Section 2(m):
person includes.
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a co-operative society;
(iv) every other association of persons whether registered under the Jammu and Kashmir Societies Registration Act, Samvat 1998 or not;
Learned Counsel for appellants has placed hyper-technical definition on the word person occurring in Section 2(d)(i) of the Act and has
undertaken a grammatical exercise to suggest how it ought to have been if the word person was to include a company also. He has also gone a
step further to contend that definition of the word person within the meaning of Section 2(m) of the Act was inclusive and not exhaustive and that
even the definition of person in General Clauses Act was also not attracted to the word person occurring in the Consumer Act.
We find it difficult to accept either of these contentions because under the well established norms of interpretation a provision had to be
interpreted as it is and not how it ought to have been. We are also unable to appreciate that the word person occurring in the definition clause
would include a natural person only but not a juristic person also as held by the Commission. It is well settled that word person occurring in the
provision includes the juristic person like a company, unless specifically excluded. The support for this is available in the definition of person in the
General Clauses Act and we find no reason why this supportive definition should not be taken in regard or adopted while interpreting the word
person in Section 2(m) of the Act. The submission of Shri Sharma that the expression unless there is anything repugnant in the subject or context in
Clause 42 of Section 3 of the General Clauses Act should be read to exclude its application to the definition of person in Consumer Act appears to
us a hair splitting of the provisions of the two Acts which cannot be allowed to upset the legal position that person used includes a juristic person
like a company also.
Apart from this, we find that the definition of person in Section 2(m) is illustrative and not extensive and we see no reason to take any contrary
view than the one taken by the Commission in this regard. It is true that the Court cannot re-write, recast and reframe a provision enacted by the
legislature but it is equally true that wherever a definition uses the word includes it cannot be taken as exhaustive definition in all events and
circumstances. This has been dealt with in detail by the Commission while rejecting the appellants contention and we can do no better than quote
from the Supreme Court judgment relied upon by it, which reads:
The amendment does not restrict the original definition of seasonal factory but makes addition thereto by inclusion. The word include in the
statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension and not with restriction. The word
include is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of statute; and
when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural
import but also those things which the interpretation clause declares that they shall include.
So drawing support from this, we feel fully convinced that the word includes occurring in Section 2(m) is not restrictive but is inclusive and if
one looks at the enlisted entities in the definition clause it becomes clear that it illustratively includes a firm, a Hindu undivided family, a co-operative
society and every other association of persons whether registered under the J&K Societies Registration Act or not and this by no logic suggests
that only those enlisted entities would be a person other than a natural person. On the contrary, the enlisted ones are only illustrative of what could
be included in a person. Therefore, if the word person is defined as including any association or body of individuals, whether incorporated it could
as well include an association of persons like an incorporated company also.
We are also not impressed by the submission of learned Counsel for appellants that the Vikas Patras purchased by respondents were goods
for a commercial purpose and, therefore, respondents could not be held to be the consumer. This aspect has also been appropriately dealt with by
the Commission and we can perhaps do no better than to quote from what it says as under:
We are of the view that Vikas Patras are not goods like shares and debentures. Goods have been defined in the Sales of Goods Act. In Section
2(7) of the Sales of Goods Act, 1930, every kind of moveable property other than actionable claims and money and includes stocks and shares
etc. Learned Counsel for respondent has shown many authorities holding the shares, lotteries and debentures as goods. We have no dispute with
this but our view is that Vikas Patras are not debentures or shares. It relates to the money transaction. It is just like fixed deposits in banks of
transaction of money and even actionable claims are excluded from the definition of goods. This is just like deposit money in the fixed deposit
scheme in the bank for getting handsome interest. Vikas Patras also is a fixed deposit to get the double amount. We have been shown the purpose
of depositing the money through Vikas Patra by the complainant. Learned Counsel for the appellant has contended that Vikas Patras have not
been purchased for a big commercial purpose it is by way of necessity because sufficient security was declared as sine quarion for floating an
investment scheme. We have seen the relevant rule of Reserve Bank of India. It is a condition precedent to deposit minimum 3%, maximum not
exceeding 20% of the investment which is attracted by Finance Investment Scheme. It was by way of necessity that the Company had purchased
Vikas Patras to give the security to the investors so we are convinced that the complainants have hired services and not purchased the goods.
The appellants last contention that respondents were not entitled to interest because the Vikas Patras in question were issued to respondent-
companies irregularly despite the ban order is also not acceptable and must fail on its own ground even if it was to be assumed that Rule 13 of the
Post Office Saving Certificate Rules filled up the vacuum. This rule provides:
Excess or irregular holdings: (1) Any certificate? purchased or acquired in excess of the limits prescribed in these rules or in the old rules or in
contravention of these rules shall be encashed by the holder as soon as fact of the holding being in excess of the limit or in contravention of these
rules is discovered and no interest shall be paid on either the excess holding or any holding in contravention of these rules. Provided that the holding
shall not be considered in excess of the limit prescribed in these rules or in the old rules, if it is due to any of the following reasons, namely.
A plain reading of this rule suggests that if a post office saving certificate was purchased or acquired in excess of the limits prescribed in the
rules or in contravention of these rules, it shall be encashed by the holder as soon as the fact of holding being in excess of the limit or in
contravention of the rules is discovered and that no interest shall be paid on either the excess holding or any holding in contravention of the rules.
We find it difficult to comprehend how this disentitles the respondents from receiving interest and relieves the appellants of their obligation to
pay interest after they had retained the respondents money for about six years. It is nobodys case that these respondents had knowingly acquired
the Patras in excess or in contravention of any rule. In all probability they may not have known about any ban on issuance of Vikas Patras or, for
that matter, any provision of Post Office Saving Certificate Rules of 1960. Nor could any such knowledge be attributed to them. It is also not the
case that they had connived at it with appellants staff to purchase these Patras. They seem to have deposited their money in good faith in the hope
that it would earn them double the amount under the scheme on Vikas Patras. It was the appellants duty to ensure to adhere to the rules or to
observe any ban order and to issue or not to issue the Vikas Patras to the respondents. Moreover, even if it was assumed that these Patras were
issued to them by appellants staff inadvertently or any omission was committed, they had time enough to detect the mistake or error and to cancel
the transaction. Why and how they have waited for nearly six years till these Patras had matured and then woke up to discover some irregularity
should be only known to them. But they cannot be allowed now to apportion the blame on respondent-companies by invoking the Post Office
Saving Certificate Rules of which they had no knowledge.
Even under these Rules they cannot be deprived of the interest because they had not purchased these Vikas Patras in excess of any prescribed
limit under these rules. Even if they could be treated to have done so, these Patras were to be encashed as soon as the fact of holding them in
excess of any limit was discovered. If this analogy was extended to the Vikas Patras purchased by the Companies, there was no justification for
discovering the irregularity after six years during which period the appellants retained and enjoyed their money. Viewed thus, Rule 13 of the Post
Office Saving Certificate Rules, 1960 has no application to the respondents case and nor can it be invoked to disentitle respondents from receiving
the interest.
It also appears to us a case of deficiency in service. Because these respondents had hired the service of appellants in purchasing these Vikas
Patras in the hope that they would double their money under the scheme of appellants. Therefore, all told, the appellants were under an obligation
to pay them the interest which formed the basic structure of their scheme. They were also estopped from going back on their promise. Their plea
that any irregularity had been committed in issuance of these Vikas Patras notwithstanding, they cannot be heard to say now that the contract of
paying the maturity amount to respondent-companies was not binding on them. Nor is the judgment of the Supreme Court in Postmaster,
Dargamitta KHPO Nellore v. Raja Prameeelamma (supra) of any help to them. This judgment is wholly distinguishable and does not advance the
case of the appellants. The complainant in that case had purchased six National Saving Certificates on 28th April, 1987 from the Post Office. The
rate of interest was payable at 11% which was notified by Government of India. However, due to inadvertence on the part of clerical staff the
interest and maturity value which was printed on the certificates was not corrected which made a difference of 1 % in the rate of interest. The State
Commission and National Commission held that the Post Office was bound to pay the uncorrected amount of the certificates but the Supreme
Court held otherwise on the ground that the contract between the Post Office and the holder of the certificates was contrary to the terms issued by
the Government of India which was due to mistake of the staff and that this amount was not to be paid to the holder. We find, as the Commission
has also noticed, that this was a case of revision of rate of interest and in the case in hand appellants had unquestionably and undisputedly retained
respondents money for more than five years and in case there was any order or regulation saying that Vikas Patras were not to be issued to them,
they should have made it known to these respondents within a reasonable time after purchase. They did not choose to do so and on the contrary
retained their money for the full maturity period and enjoyed it. Therefore, by no norms of justice can they be allowed to take advantage of their
own wrong and deny the benefit of interest to the respondents who had invested their money only for doubling it under the scheme.
Though we are supported in our view by several judgments of the National Consumer Commission and also by this Court in S. Narinder Singh
Vs. Dr. R.D. Sood, , it becomes unnecessary to quote from these to prove the obvious.
We, accordingly, hold that the word person occurring in Section 2(d)(i) includes a juristic person like company also and that respondents are a
person within the meaning of this provision; that the appellants have committed a deficiency in service by refusing to pay interest to these
respondents on the Vikas Patras held by them; that Rule 13 of the Post Office Saving Certificate Rules, 1960 has no application to their case and
that they cannot be held disentitled to receive interest under this rule.
For all this we uphold the judgment of the State Consumer Protection Commission, which as we have already noticed is a very exhaustive and
well reasoned judgment, and dismiss these appeals.
We were informed that appellants have deposited the full award amount of Rs. 42,90,000 under the orders of this Court passed from time to
time. Registry is directed to release this amount to respondents forthwith along with any interest that may have accrued on this deposit.
We are also told that appellants had also deposited Rs. 5,36,250 on 30th April, 2004 and Rs. 5,36,250 on 3rd June, 2004 before the State
Commission by way of pre-deposit for filing the appeal which is said to be over and above the amount deposited by them before this Court out of
which a cheque for Rs. 5,36,250 has not been encashed. The State Commission is, accordingly, directed to return the .amount of Rs. 5,36,2450
to the appellants along with interest that may have accrued on this amount and also to return the cheque for similar amount which has not been
encashed.