PUNJAB UNIVERSITYversusUNIT TRUST OF INDIA & ORS

                      [2014) 8 S.C.R. 273


                     PUNJAB UNIVERSITY                              A
                                V.
                UNIT TRUST OF INDIA & ORS.
              (Civil Appeal No. 400 of 2007 etc.)
                         JULY 09, 2014
                                                                     B
            [CHANDRAMAULI KR. PRASAD AND
              PINAKI CHANDRA GHOSE, JJ.]

      CONSUMER PROTECTION ACT.,11986:
                                                                    c
          s. 2(1) (d) (i) and (ii) -- "Consumer" - "Commercial
    purpose" -- Universities making investment in "Institutional
    Investors Special Fund Unit Scheme, 1998" (llSFUS-98)
 /floated by Unit Trust of India (UT/) - Complaints by
: Universities before National Commission that maturity 0
    proceeds were far less than that was stipulated 1!
    Mainta/nability of -- Held: .The term "commercial purpose"
    must be interpreted considering the facts and circumstances
    of each case - The words 'commercial purposes' .would cover
   'an undertaking the object of which is to make profit out of the E
 .· undertakings - In the instant case, services of UT/ were
    availed by complainants for betterment of their employees,
    and no benefit by way of profit was to accrue to complainants
    - In view of definition of word 'commerce', under no
    circumstances, appellants could be said to be indulging in
    any 'commercial' activity -- Thus complainant-Universities fall F
    within the definition of "consumer" as defined in s.2(1)(d) of
    the Act and the complaints are maintainable before National
    Commission - However, on merits, complainants have no
    case - It has been clearly stipulated in the. 'terms of offer' that
    the maturity amount will depend on the. NA V and that the G
    same was guaranteed not to be below the par value of Rs.
     10 per unit - All investments are subject to market risk and
     fluctuations and investors have to exercise due caution while

                                273                                  H
    274      SUPREME COURT REPORTS             [2014] 8 S.C.R.


A   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 - National
    Commission correctly dismissed the claim of complainants
    on merits -- Consumer Protection Act, 1987(UK) - S.20(6).
B
       The appellant in C.A. No. 400 of 2007, namely, the
   Punjab University, made investment in the "Institutional
   Investors Special Fund Unit Scheme, 1998" (llSFUS-98)
   floated by the respondent-Unit Trust of India, with a
C specific understanding that the dividend receivable
   during the Scheme period would be reinvested and it
   would be refunded with a minimum interest@ of 13.5%
   per annum. The investment was made out of the funds
   "Foundation for Higher Education & Research". UTI
   issued two llSFUS-98 certificates for 1,90,00,000 units and
D 45,00,000 units worth Rs. 19 crores and Rs. 4.5 crores,
   respectively, with each unit having a face value of Rs. 101
   -. When the cheques of the maturity amounts were
   received by the appellant, it found the same far less than
   the maturity proceeds. The appellant-University filed a
E. complaint before the National Consumer Disputes
   Redressal Commission contending that the respondent
   had assured that the dividend income would be
   reinvested in further units at Net Asset Value (NAV) and
   on those units the University was assured that they
F would get a minimum return@ 13.5% per annum and that
   it would be repurchased at par i.e. @ Rs. 101-. The
   National Commission held the complaint of the University
   as maintainable under the Act for deficiency of service by
   the respondent-Institution, but dismissed the same.
G Aggrieved, the Punjab University as well as UTI filed
   appeals. The other appeal was filed in the similar
   circumstances by the Punjab Agricultural University.

         In the instant appeals, it was contended for the UTI
    that the appellant-Universities did not fall und~r the term
H
  PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &              275
                    ORS.
"consumer" as defined uls 2(1 )(d) of the Consumer                A
Protection Act, 1986 and the respondent-UT! was not
providing any "services" as defined uls 2(1)(e) of the Act.
It was submitted that the services of participating in the
Schemes of the UTI were for commercial purpose if the
same were not availed by any person exclusively for the           B
purposes· of earning his livelihood by means of self-
employment.

    The questions for consideration before the Court
were: "whether the complainant-Universities fall within
the ambit of the definition of "consumer" as laid down in · C
Section 2(1)(d) of the Act and that the "services" hired by
them are not for any "commercial purpose"; and
"whether in terms of the offer, is there any deficiency of
services".
                                                                  D
    Disposing of the appeals, the Court

     HELD: 1.1. Clauses (i) and (ii) of s. 2(1 )(d) of the
Consumer Protection Act, 1986 must be interpreted,
harmoniously and in light of the same, Explanation
following s.2(1)(d)(ii) of the Act would be clarificatory in E
nature and would apply to the instant case and as held by
this Court in Laxmi Engineering Works*, the term
"commercial purpose" ·must be interpreted considering
the facts and circumstances of each case. This Court
further held that the Explanation added by way of F
amendment is clarificatory in nature and as the Act always
meant the same, the amendment will apply to all pending
proceedings ai>-well. [para 19-20] [288-F; 290-E-F]

    *Lax mi Engineering Works vs. P. S. G. Industrial Institute   G
1995 (3) SCR 174 = 1995 (3) SCC 583; Luckno~v
Development Authority vs. M.K. Gupta 1993 (3) Suppl. SCR
615 =1994 (1) SCC243 - relied on.

    1.2. The words 'commercial purposes' would cover
                                                                  H
    276       SUPREME COURT REPORTS            [2014] 8 S.C.R.


A an undertaking the object of which is to make a profit out
  of the undertakings. In the instant case the services of
  UTI were availed by the complainant for the betterment
  of their employees, therefore, such an investment was
  made, and no benefit by way of profit was to accrue to
8 the complainant, improving their balance-sheet. In view
  of the definition of the word 'commerce•, under no
  circumstances, the appellant could be saict. to be
  indulging in any 'commercial' activity so as to exclude it
  from the definition of 'consumer' as enshrined in the Act.
C The intent of the Universities in the instant 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,
  the complainant Universities fall within the definition of
  "consumer" as defined in s. 2(1)(d) of the Act and the
D complaints are maintainable before the National
  Commission. [para 21) [291-F-H; 292-A-B]

          Stroud's Judicial Disctionary - referred to.

E      1.3. 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
  Rs. 10 per unit. All investments are subject to market risk
  and fluctuations and an investor has to exercise due
F
  caution while investing any amount in any Scheme; just
  because the maturity amount is below the expectations
  of the investors they cannot drag the service provider to
  court for the same. [para 22) [293-E-G]

G      4. The National Commission correctly held that the
    complainant-Universities would come within the purview
    of "consumer" and correctly dismissed their
    complainants on merits. [para 23) [293-H; 294-A]

H
  PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &              277
                    ORS.
   Morgan Stanley Mutual Fund v. Kirtick Das 1994 (1)             A
Suppl. SCR 136 = 1994 (4) sec 225 - cited.

                     Case Law Reference
    1995 (3) SCR 174               relied on        para 6
                                                                  B
    1994 (1) Suppl. SCR 136 cited                   para 15
    1993 (3) Suppl. SCR 615 relied on               para 20

     CIVIL APP ELLATE JURISDICTION : Civil Appeal No. 400
of 2007.                                                          c
    From the. Judgment and Order dated 17 .10.2006 of the
National Consumer Disputes Redressal Commission, New
Delhi in Original Petition No. 97 of 2004.

                            WITH                                  D

C.A. Nos. 503 of 2008 and 4664 of 2009

    Amarendra Sharan, Vibhv Tiwari, Ravi Prakash Mehrotra,
Bhargava V. Desai, Shreyas Mehrotra, Annam D.N Rao,
Annam Venkatesh, Sudipto Sircar, Neelam Jain, Vaishali R.         E
Shivaji M. Jadhav for the Appearing parties.

    The Judgment of the Cour:t was delivered by

    PINAKI CHANDRA GHOSE, J. : 1. Delay in filing Civil
                                                                  F
Appeal No.503 of 2008 is condoned.

     2. Civil Appeal No.400 of 2007 has been filed by the
Punjab University which is a statutory/autonomous body
constituted under the Punjab University Act, 1947 for imparting
education to the general public. Civil Appeal No.503 of 2008      G
is the cross appeal filed by the Unit Trust of India. Both the
aforementioned appeals arise against the impugned judgment
dated October 17, 2006 of the National Consumer Disputes
Redressal Commission (hereinafter referred to as "National
Commission") in Original Petition No.97 of 2004, which was        H
    278       SUPREME COURT REPORTS                 [2014] 8 S.C.R.


A filed by Punjab University, being the complainant against the
  Unit Trust of India (hereinafter referred to as "UTI"). Civil Appeal
  No.4664 of 2009 filed by the UTI arises against the impugned
  order dated April 17, 2009 passed by the National Commission
  in Original Petition No.51 of 2005, which has been filed by the
B complainant Punjab Agriculture University against the opposite
  party being the UTI.

       3. As the consumer complaint filed in both the matters
  pertains to the same scheme being the "Institutional Investors
C Special Fund Unit Scheme, 1998" (hereinafter referred to as
  "llSFUS-98") in which the Punjab University (complainant in
  Original Petition No.97 of 2004) and Punjab Agriculture
  University (complainant in Original Petition No.51 of 2005)
  invested and the National Commission while passing the order
  in Original Petition No.51 of 2005 relied upon its earlier
D decision rendered in Original Petition No.97 of 2004, all the
  matters were heard together and are being disposed of by
  means of this common judgment.

        4. To understand the controversy in these appeals, we will
E briefly discuss the factual matrix, which for the sake of brevity
  is limited to the facts extracted from Civil Appeal No. 400 of
  2007 and is statea as under:

        4.1. Punjab University employs thousands of employees
F for th~ smooth functioning of the University and for this 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.
G lri the year 1993, Punjab University invested an amount of
  Rs.9.6 crores in the "Institutional Investors Special Fund Unit
  Scheme-93" (hereinafter referred to as "llSFUS-93") of UTI,
  which was an open ended scheme.

H         4.2. The amount was invested with the reinvestment option
  PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                 279
       ORS. [PINAKI CHANDRA GHOSE, J.]
of the dividend and the said amount became Rs.19. 78 crores          A
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
llSFUS-93 Scheme was unilaterally terminated by the UTI w.e.f.
March 31, 1998 and the maturity amount became                        B
Rs.19,78,26,299.44p.

     4.3. Thereafter, in the year 1998, another Scheme i.e.
llSFUS-98 was floated by the UTI and Punjab University
invested an amount of Rs.19 crores which was received by it
on the maturity of llSFUS-93 with a specific understanding that      C
the dividend receivable during the Scheme period would be
reinvested and it would be refunded with a minimum interest
at the rate of 13.5% per annum.

       4.4. In view of the conversion of Rs.19 cores from llSFUS-    D
  93 to llSFUS-98, the University also made an investment of
, Rs.4.5 crores. This investment was made ou't of the funds
'"Foundation for Higher Education & Research". The Head
  Office of UTI at Mumbai issued two llSFUS-98 certificates for
  1,90,00,000 units and 45,00,000 units worth Rs.19 crores and       E
  Rs.4.5 crores respectively, with each unit having a face v,alue
  of Rs.10/-. The dispute in this matter revolves around the
  question as to whether-the University is entitled to interest at
  the rate of 13.5% on the reinvested amount i.e the dividend
  which is reinvested with the UTI.                                  F
     4.5. On June 4, 2003, the UTI sent the cheques for the
maturity amount of Rs.30,45,23,910.23 and for Rs. 7, 13,81,520/
- drawn on UTI Bank Limited and also furnished the details of
the maturity payments against the investments. On receiving the
cheque for Rs.30,45,23,910.23, being the maturity amount of          G
Rs.19 crores from the UTI, the appellant University was
surprised and shocked as according to the "Terms of Offer" of
llSFUS-98,      the    maturity      proceeds     would      be
Rs.48, 76,88,935.12/- which is higher than the amount receivep.
The University served a legal notice to the UTI for the deficit      H
    280       SUPREME COURT REPORTS                   [2014] 8 S.C.R.


A payment of Rs.18,31,65,024.89 and Rs.4,21,93,558/- along-
  with interest. On November 10, 2004, the University filed a
  complaint, being Original Petition No.97 of 2004, before the
  National Commission. The contention of the appellant-University
  before the National Commission was that they were assured
B that the dividend income would be reinvested in further units at
  Net Asset Value (hereinafter refe~red to as "NAV') and on those
  units also, in any case, they were assured that they would get
  minimum return @ 13.5% per annum and that it would be
  repurchased at par i.e. @ Rs.10/-. The respondents filed a
C response to the said complaint filed by the appellant University.

       4.6. The National Commission vide its order dated October
  10, 2006 dismissed the said complaint filed by the appellant-
  University on merits. However, the Commission held that the
  complaint of the appellant-University is maintainable under the
D Act for deficiency of services by the respondent-Institution.
  Hence, the appellant University is before us challenging the
  order passed by the National Commission and the respondent-
  1nstitution is challenging the locus standi of the appellant-
  University before the National Commission in its cross-appeal
E 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
F 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 aJleged Non-Performing Assets and also failed to disclose
  the effot1s made by them to recover Non-Performing Assels and hew they in
G ended 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 oniy given a letter dated March 9, 1998 addressed
H
     PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &              281
          ORS. [PINAKI CHANDRA GHOSE, J.]
by the Executive Director of UTI, terms of offer and the           A
conversion application but not the offer document. It has been
lastly contended that the impugned order is incorrect in view
of the fact that the appellant as per the terms of offer was
required to read the offer document without the same being
binding on the parties and that the terms pertaining to the         B
Development Reserve Fund were not honoured.

     6. In addition to the above, the Punjab Agriculture
University the complainant in Original Petition No.51 of 2005,
being the respondent in Civil Appeal No 4664 of 2009 through       C
the learned counsel appearing on its behalf submitted that the
investment made by the appellant University in the llSFUS-98,
cannot come under the term "commercial" as per the meaning
of the word "commerce" as has been held by the National
Commission in the impugned judgment. For this purpose, he
relied upon the decision of this Court in Laxmi Engineering         D
Works vs. P.S.G. Industrial lnstitute 1 .

      7. Learned counsel for Punjab Agriculture University further
submitted that in the light of the specific findings of the National
Commission that "no benefit by way of profit was to accrue to . E
the complainant, improving its balance-sheet", there was no
question of the University making any profit and even if the
University was making any profit after paying the statutory dues
to its employees, it cannot be called a commercial purpose as
it had invested the money on the basis of the promise made F
by UTI that the University would be paid interest at the rate of
13.5% per annum for the investment made in the llSFUS-98,
for the reason that the scheme was open only to the institutions,
the UTI was charging a consideration for the scheme floated
by it.
                                                                     G
    8. It was further submitted by the learned counsel for the
appellant University that the investors who deposited their
money in the UTI Scheme are the consumers and in the event

1.    (1995) 3 sec 583.                                             H
    282       SUPREME COURT REPORTS                [2014] 8 S.C.R.


A of a breach by the UTI in respect of the promise made by it, it
  would be open to them· to approach the Consumer Forums for
  "deficiency" of service, and the UTI cannot take a plea that the
  investments were made for profit and not for earning livelihood.
  The counsel of the Punjab Agriculture University concluded his
B arguments by submitting that a distinction has to be made as
  to how the goods are further used;· merely because institutions
  at the invitation of the UTI had invested money in llSFUS-98,
  they cannot be called as commercial people just because the
  investment is made for the purpose of earning a profit, and if
c 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.
D     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 terrri
  "consumer" as defined under Section 2(1 )(d) of the Act and the
  respondent-UT! was not providing any "services" as defined
E 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:

F         '.'(d) 'Consumer' means any person who,-
                                               o
          (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
G         for consideration paid or promised or 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; or
H
  PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                 283
       ORS. [PINAKI CHANDRA GHOSE, J.]
    (ii) hires or avails of any services for a consideration which   A
    has been paid or promised or partly paid and partly
    promised, or under any system of deferred payment and
    includes any beneficiary of such services other than the
    person who 'hires or avails of the services ft>r
    consideration paid or promised, or partly paid and partly        B
    promised, or under any system of deferred payment, when
    such services are availed of with the approval of the first
    mentioned person but does not include a person who
    avails of such services for any commercial purpose;

    Explanation.- For the purposes of this clause,
                                                                     c
    "commercial purpose" does not include use by a person
    of goods bought and used by him and services availed by
    him exclusively for the purposes of earning his livelihood
    by means of self-employment"          ·
                                                                  D
     10. It is the contention of the learned senior counsel
appearing for the UTI that from the definition of "consumer" as
quoted above, it is clear that "consumer" means any person
who hires or avails of any services for a consideration, but does
not include a person who avails of such services for any E
commercial purpose and the "commercial purpose" does not'
include services availed by him exclusively for the purposes of
earning his livelihood by means of self-employment. Learned
senior counsel submitted that the services of participating in
the Schemes of the UTI are for commercial purpose if the same F
are not availed by any person exclusively for the purposes of
earning his livelihood by means of self-employment. He further
submitted that as the University invested the money in the UTl's
Scheme for the purpose of getting higher returns through the
Stock Market for commercial enrichment of its fund, and· no G
consideration was charged by the UTI for the returns on
investment, the University is excluded from the definition of
"consumer".

    11. Mr. Sharan, learned senior counsel further submitted
                                                                     H
   284       SUPREME COURT REPORTS                [2014] 8 S.C.R.


A that the University is not availing the Schemes exclusively for
  the purposes of earning its livelihood by means of self-
  employment inasmuch as the University's livelihood is by
  imparting education for consideration from students in the form
  of tuition and other allied fees/charges and this activity of the
B 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
C 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/
D 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
E 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 counsel further submitted
F that even assuming, without admitting, that the UTI was
  providing services to the University, there is no deficiency in
  services as alleged by the University. It is Mr. Sharan's case
  that the University opted for the reinvestment option and UTI
  reinvested the income into further units at the then prevailing
  NAV and at the end of the Scheme, the UTI has redeemed the
G parent units at par in terms of the Offer Document, and the·
  reinvested units were redeemed at the prevailing NAV rate in
  terms of the Scheme.

       14. In addition to the above, Mr. Sharan submitted that the
H National Commission failed to appreciate that the investment
  PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                   285
       ORS. [PINAKI CHANDRA GHOSE, J.]

in the llSFUS-98 was of "commercial nature" as it provided             A
higher return at the rate of 13.5% per annum on reinvestment
in commercial venture in the Stock Market Mutual Funds and/
or Debt market for earning higher commercial profit. The entire
investment made in the scheme was for the purpose of getting
higher commercial returns and thus it is purely a commercial           B
purpose.

      15. Learned senior counseL for the UTI further submitted
tuat the National Commission erred in not taking into account
tte provisions of the llSFUS-98 but the fact that the investments      C
were being made from the funds generated by Enif:>loyees
Pension and Provident Funds and that the instant investment
 made by the L,Jniversity for a commercial consideration,' is itself
 a commercial venture. He concluded his arguments by
 sulmitting that there was no direct investment by the individual
 ermloyees nor they were beneficiaries of higher income and            D
 it wts purely an Institutional investment and the beneficiary of
 sue~ investment was only the Institution. Individual employees
 wouij not have been paid the higher rate of interest on their
 EPF ind pension contribution but they would have been entitled
 to fix1d rate of interest as per the applicable Provident Fund        E
  Schehes, irrespective o.f whether the funds were invested or
  not. Ir support of his arguments, Mr. Sharan relied upon the
  decisi1ns of this Court in Morgan Stanley Mutual Fund v.
  Kirtick0as 2 , and Laxmi Engineering Works (supra).
                                                                       F
        16The broad arguments of Mr. Sharan on merits are that
 UTI ha< instituted a closed ended llSFUS-98 for five years for
 lnstitutiQ1al Investors who wanted to invest large amounts in an
 exclusi1e Scheme and that as per llSFUS-98, there were two
 options 1Vailable to the investors, first option being that UTI       G
 assuredncome of 13.5% on the invested amount and second
 option ~ing that the investor had an option to choose
  reinvestrent of income @ 13.5% into further units, income of


 2.   (1994) •SCC 225.                                                 H
    286      SUPREME COURT REPORTS               [2014] 8 S.C.R.


A 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
  llSFUS-98, all unit holders had an option to reinvest the income
B received @ 13.5% annually on the outstanding units into further
  units at NAV in terms of Clause XXVll of the 'offer document'
  of the llSFUS-98, as per which the units allotted under the
  reinvestment option under Clause XXVll are not subject to the
  conditions and stipulations governing the parent units in respect
c of the minimum holding, repurchase and other matters. That as
  per Clause XXVll, all the unit holders including the complainart
  University under llSFUS-98 were paid maturity amount as per
  the provisions of the Scheme i.e. the parents units wes
  repurchased at par as guaranteed and accumulated unis
  acquired by way on reinvestment option at NAV prevailing 3t
0
  the time of maturity. That as per the Scheme the income of tie
  University was reinvested annually by UTI at the prevailing Ni1V
  as per the provisions of the Scheme. Furthermore, he
  assurance given by the letter dated March 9, 1998 bythe
  Chairman of the UTI was with regard to the return of 13.5°/cper
E annum on the capital invested, and along with the said litter
  the Terms of Offer were enclosed, which gave an option ti the
  investor to receive the amount of 13.5% p.a. in cash x to
  reinvest the said roeturn by purchasing UTI units; the Tems of
  Offer also provided that the option for reinvestment of inome/
F return would be on prevailing NAV without any sales loc:l. Mr.
  Sharan concluded his arguments by submitting that in terns of
  the above submissions the National Commission ccrectly
  dismissed the complaint of Punjab University on merits

G       17. Having heard the arguments of the parties cor;erned
  and after perusing the documents produced before us,ve find j
  that the primary question to be answered in the present1ppeals ;
  is whether the complainant-Universities fall wi•in the·
  ambit of the definition of "consumer" as laid own in
H Section 2(1)(d) of the Act and that the "services" ired by
   PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                  287
        ORS. [PINAKI CHANDRA GHOSE, J.]
them are not for any "commercial purpose". Based on the                A
answer in the aforementioned question we need to consider
whether the learned Commission has correctly dismissed the
complaint on merits.

      18. We noticed that in the explanation given under Section
                                                                       B
2(1 )(d), by means of an amendment in 2003 (w.e.f. March 15,
2003) the term "sub-clause (i)" was substituted with "clause"
to further widen the scope of the appl[cability of the explanatory
clause. The quandary which exists tt<ius in light of the
amendments is whether services availed by the complainants
(being investment in the llSFUS-98 made through UTI)                   C
precludes them from being consumers under the Act by virtue
of those being availed for "commercial purpose". To determine
the same we will discuss the various interpretation of the term
"commercial purpose".
                                                                       D
       19. Jhis Court in Laxmi Engineering Works (supra) has
. dealt with the meaning of the term "commercial purpose" vis-
  a-vis the definition of "consumer" most exhaustively and the
  position remains the same till date. We will refer to the ~elevant
  portion of the said decision as under:                               E

     "Now coming back to the definition of the expression
     'consumer' 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          F
     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              G
     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               H
    288        SUPREME COURT REPORTS              [2014] 8 S.C.R.


A         "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
8         of merchandise, on a large scale" (Concise Oxford
          Dictionary).The National Commission appears to have
          been taking a consistent view that where a person
          purchases goods "with a view to using such goods for
          carrying on any activity on a large scale for the purpose of
          earning profit" he will not be a "consumer" within the
c         meaning of Section 2(d)(i) of the Act. Broadly affirming the
          said view and more particularly with a view to obviate any
          confusion the expression large-scale" is not a very precise
          expression the Parliament stepped in and added the
          explanation to Section 2(d)(i) by Ordinance/Amendment
D         Act, 1993. The explanation excludes certain purposes from
          the purview of the expression "commercial purpose" - a .
          case of exception to an exception."

       It must be noted that in the aforesaid decision this Court
E was dealing with 'sale of goods', however, the Bench in all its
  wisdom made it clear that post the 1993 amendment, what is
  'commercial purpose' shall be governed by 'the facts of each
  case'. This Court further held that the Explanation added by way
  of amendment is clarificatory in nature and as the Act always
F meant the same, the amendment will apply to all pending
  proceedings as well.

        20. This Court in Laxmi Engineering Works (supra) relying
    upon another judgement of this Court in Lucknow Development
    Authority vs. M.K. Gupta 3 , observed as under:-
G
           "In Lucknow Development Authority v. M.K. Gupta the
           question was whether a public authority engaged in
           constructing and selling houses -can be said to be

H 3.      (1994) 1 sec 225.
PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &              289
     ORS. [PINAKI CHANDRA GHOSE, J.]
 rendering a 'service' and whether the person purchasing       A
 such houses can be called a 'consumer' within the meaning
 of the said definition. While answering the question in the
 affirmative, a Bench of this Court (Kuldip Singh and R. M.
 Sahai, JJ) also examined the scheme and object of the
 Act and the ambit of the definition of the expression         B
 'consumer'. The following observations are apposite :
 (SCC pp. 251 - 54, paras 2 and 3)

  "To begin with the preamble of the Act, which can afford
  useful assistance to ascertain the legislative intention, it
  was enacted, 'to provide for the protection of the interest C
  of consumers'. Use of the word 'protection' furnishes key
  to the minds of makers qf the Act. Various definitions and
  provisions which elaborately attempt to achieve this
  objective have to be construed in this light without
  departing from the settled view that a preamble cannot D
  control otherwise plain meaning of a provision. In fact the ·
  law meets long-felt necessity of protecting the common
, man from such wrongs for which the remedy under ordinary
  law for various reasons has become illusory.
                                                                E
  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    F
 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      G
 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.          H
    290        SUPREME COURT REPORTS                 [2014] 8 S.C.R.


A         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 use of inclusive clause. For instance,
B
          it is not only purchaser of goods or hirer of services but
          even those who use the goods or who are beneficiaries
          of services with approval of the person who purchased the
          goods or who hired services are included in it. The
          legislature has taken precaution not only to define
c         'complaint', 'complainant', 'consumer', but even to mention
          in detail what would amount to unfair trade practice by
          giving an elaborate definition in clause ® and even to
          define 'defect' and 'deficiency' by classes (f) and (g) for
          which a consumer can approach the Commission. The Act
D         thus aims to protect the economic interest of a consumer
          as understood in commercial sense as a purchaser of
          goods and in the larger sense of user of services."

          It is thus seen from the above extracts that Sectidn
E   2(1 )(d)(i) is discussed exclusively by this Court. We. are of the
    opinion that clauses,(i) and (ii) of Section 2(1 )(d) of the Act must
    be interpreted harmoniously and in light of the same, we find
    that Explanation following Section 2(1 }(d}(ii) of the Act would
    be clarificatory in nature and would apply to the present case
F   and as held by this Court in Laxmi Engineering Works (supra),
    the term "commercial purpose" must be interpreted considering
    the facts and circumstances of each case.

        21. Under Section 20(6) of the Consumer Protection Act,
    19~7 of the Un-ited Kingdo m, the definition of the term
                                     0




G   "consumer" is thus:

          "Consumer- (a} in relation to any goods means any
          person who might wish to be supplied with the goods for
          his own private use or consumption,
H
 PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                 291
      ORS. [PINAKI CHANDRA GHOSE, J.]
    (b) in relation to any services or facilities, means any        A
    person who might wish to be provided with the services
    or fucilities otherwise than for the purposes of any business
    of h·is;·and
       ,       ,.       I
           '        /

    (c) in relation to any accommodation, means any person
                                                                    B
    who might wish to occupy the accommodation otherwise
    than for the purposes of any business of his;"

     As per Stroud's Judicial Dictionary the term "commercial"
is defined as under:
                                                                    c
    "Commercial- (1) Commercial action includes any clause
    arising out of the ordinary transactions of merchants and
    traders and, without prejudice to the generality of the
    foregoing words, any cause relating to the constructions
    of a mercantile document, the export or import of               0
    merchandise, affreightment, insurance, banking,
    mercantile agency 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           E
    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 F
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
                                                                  G
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 dispu\j5 not profiteering and the
                                                                  H
    292       SUPREME COURT REPORTS                 [2014] 8 S.C.R.


A   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
B   Commission.                                                   ·

         22. Now, we need to consider whether in terms of the offer,
    is there any deficiency of services. The National Commission's
    findings regarding the same are as under:

c         'The terms of the offer specifically provides that the UTI
          would pay an assured return of 13.5% p.a. for all the 5
          years of the scheme. The said return (income) for the first
          year was agreed to be paid in July, 1998. Thereafter,
          income for the subsequent years was to be paid in July
D         each year. The balance period from 1st July, 2002 to 31st
          May, 2003 the income was to be paid in May, 2003. After
          this, option was given to the investors to reinvest the
          income a~ prevailing NAV. On maturity it is guaranteed that
          repurchase price will not be less than the par value of the
E         units, i.e. Rs.10/-. However, there is no such guarantee for
          premature repurchase and the purchase price will depend
          on NAV. Further, income assured under the scheme and
          protection of capital on maturity is guaranteed by the
          Development Reserve Fund of the Trust.
F         With regard to capital invested, admittedly, the units are
          repurchased at par value of unit, i.e. Rs.10 and not at NAV.

          Thereafter, the terms and conditions are provided in offer
          document. One of the highlights provides that capital
G         invested in the scheme will be protected on maturity and
          the units would not to be redeemed.below par.

          However, it is made clear that there is no such guarantee
          for units purchased from the return/dividend. It is true that
          there is vagueness in this term. There is no clarification
H
   PUNJAB UNIVERSITY v. UNIT TRUST OF INDIA &                     293
        ORS. [PINAKI CHANDRA GHOSE, J.]
      whether the said term is applicable to premature                    A
      repurchase of the units or repurchase of units purchased
      from the yearly return, i.e. dividend. However, this is to be
      read along with para-X which provides method of
      repurchase of units. In this also, the same phraseology is
      used as stated above. However,_ the clause makes it clear           B
      that return or dividend at the rate of 13.5% p.a. is to be
      reinvested on the basis of NAV, that means, if the price
      of the unit is Rs.9/-, the income would be invested in units
      and the purchase price for each unit would be Rs.9/- even
      though its face value is Rs.10/-.                                   c
      Thereafter, para XXVll provides for reinvestment of income
      distributable in further units. It specifically 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        D
      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."
                                                                          E
       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 Rs. 10            F
   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.
                                                                          G
      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 "consumer" as defined in Section 2(1 )(d) of the
                                                                          H
    294       SUPREME COURT REPORTS                 [2014] 8 S,C.R.


A   said Act and correctly dismissed the claim of the complainants
    on merits.

          24. In light of the aforesaid discussion Civil Appeal No.400
    of 2007 lacks merits and the same is dismissed. Civil Appeal
8   Nos.503 of 2008 and 4664 of 2009 are disposed of in terms
    of this judgment.
    Rajendra Prasad                                 Appeal disposed of.