Case Note & Summary
The Supreme Court allowed the appeal filed by the legal heirs of a deceased partner against the concurrent orders of the consumer fora directing them to pay Rs.5 lakhs with interest to the complainant. The complainant, respondent No.1, had invested Rs.5 lakhs in a partnership firm on 21.05.2002, repayable after 120 months with 18% interest. Upon maturity, the firm failed to repay, leading to a consumer complaint alleging deficiency in service. The District Forum allowed the complaint, which was upheld by the State Commission and the National Commission. The appellants, legal heirs of the deceased managing partner, contended that the complainant was himself a partner of the firm as per a registered partnership deed dated 27.05.1996, and thus could not maintain a consumer complaint. The Supreme Court examined the partnership deeds and found that the complainant was indeed a partner under the registered deed, which was not dissolved before the investment. The Court held that a partner cannot be a consumer under the Consumer Protection Act, 1986, and the investment for earning interest was a commercial transaction outside the Act's purview. The Court also noted that the legal heirs of a deceased partner could not be impleaded in such proceedings. Consequently, the Court set aside the orders of the consumer fora and dismissed the complaint, leaving the complainant to seek remedy before a civil court.
Headnote
A) Consumer Law - Maintainability of Complaint - Partner as Consumer - A partner of a firm cannot be a 'consumer' under the Consumer Protection Act, 1986 in respect of a transaction with the firm, as the relationship is not that of a service provider and consumer. The investment made by a partner for earning interest is a commercial transaction, excluded from the purview of the Act. (Paras 6-7) B) Consumer Law - Commercial Transaction - Exclusion - Investment for profit/gain is a commercial transaction and falls outside the scope of the Consumer Protection Act, 1986. Such disputes must be adjudicated by a civil court, not in summary proceedings under the Act. (Para 7) C) Partnership Act, 1932 - Liability of Legal Heirs - Impleadment - Legal heirs of a deceased partner cannot be impleaded as opposite parties in a consumer complaint for recovery of firm's liability, as they are not partners and their liability, if any, is to be determined by a civil court. (Para 8) D) Consumer Protection Act, 1986 - Deficiency in Service - Partner's Investment - Where the complainant is a partner of the firm, the firm's failure to repay the investment does not constitute 'deficiency in service' under the Act, as the transaction is not for hiring of services. (Paras 6-7)
Issue of Consideration
Whether a partner of a firm can maintain a complaint under the Consumer Protection Act, 1986 against the firm and its partners for recovery of investment made in the firm, and whether the legal heirs of a deceased partner can be held liable in such proceedings.
Final Decision
The Supreme Court allowed the appeal, set aside the orders of the consumer fora, and dismissed the complaint. The complainant is at liberty to seek remedy before a civil court.
Law Points
- Consumer Protection Act
- 1986 does not cover disputes between partners or commercial transactions for profit
- partner cannot be a consumer under the Act
- legal heirs of deceased partner cannot be impleaded in consumer complaint for firm's liability
- remedy lies before civil court.
