GENERAL MOTORS (INDIA) PRIVATE LIMITEDversusASHOK RAMNIK LAL TOLAT & ANR.
- Citation
- 2014 INSC 695
- Decided
- 9 October 2014
- Disposal
- Case Partly allowed
- Bench
- V GOPALA GOWDA
Holding
The Supreme Court held that while the finding of unfair trade practice is affirmed, punitive damages cannot be awarded absent a specific plea and notice, and thus the National Commission's award of punitive damages is set aside.
Summary
The complainant purchased a Chevrolet Forester advertised as an SUV capable of off‑road travel, but the vehicle was a passenger car and not fit for the promised use, leading him to allege unfair trade practice under the Consumer Protection Act, 1986. The District Forum, State Commission and National Consumer Disputes Redressal Commission ordered a refund, modest compensation and, controversially, punitive damages, although the latter were not pleaded in the original complaint. The Supreme Court affirmed the finding of unfair trade practice but held that punitive damages cannot be awarded without a specific prayer and without giving the opposite party notice, as such relief exceeds the Commission’s jurisdiction. The Court also reiterated that a complaint may be filed on behalf of a class of consumers, but relief must be linked to a demonstrable loss. Consequently, the appeals were partly allowed and the award of punitive damages was set aside, while the refund and other reliefs were upheld.
Issues considered
- Can the National Consumer Disputes Redressal Commission award punitive damages when no specific prayer for such damages is made and the opposite party is not given notice?
- Does a complaint under the Consumer Protection Act, 1986, cover consumers who are not individually identifiable, and what are the pleading requirements for such class actions?
- Is proof of unfair trade practice sufficient for granting relief, or must the complainant also establish actual loss or injury?
Legislation cited
- Consumer Protection Act, 1986s. 12, s. 14(1)(d), s. 2(1)(r)
Subjects
Judgment
A
[2014] 11 S.C.R. 16
GENERAL MOTORS (INDIA) PRIVATE LIMITED
v.
•
ASHOK RAMNIK LAL TOLAT & ANR.
(Civil Appeal Nos. 8072-8073 of 2009)
OCTOBER 09, 2014
B
[V. GOPALA GOWDA AND
ADARSH KUMAR GOEL, JJ.]
Consumer Protection Act, 1986:
c
s.2(1)(r) - Unfair trade practice - Complaint against
appellant - Claiming refund of amount - Courts below found
that the appellant had committed unfair trade practice -
National Commission apart from ordering on the claim, also
imposed punitive damages - Held: Finding of unfair trade
0
practice affirmed - But order of punitive damages set aside
because such claim was not made by the complainan.t and
the appellant had no notice of such claim.
s.2(1)(r) - Unfair trade practice - Mere proof of unfair
E labour practice not enough for claim or award of relief unless
causing of loss is established.
Complaint - Alleging unfair trade practice - Scope of -
Held: Complaint can cover not only individual but also
F consumers, who are not identifiable conveniently.
Interpretation of Statutes - Interpretation of Consumer
Protection Act - The Act being a social legislation, liberal and.
purposive interpretation has to be placed on the scheme of
the Act avoiding hyper-technical approach.
G
Damages - Punitive damages - Award of - Punitive
damages are awarded against a conscious wrong unrelated
to the actual loss suffered.
H 16
• GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK 17
RAMNIK LAL TOLAT
Partly allowing the appeals, the Court A
HELD: 1. The concurrent finding recorded by the
Courts below to the effect that "unfair trade practice" was
committed by the appellant is affirmed. [Para 14] [24-H;
25-A] B
2.1. The Consumer Protection Act is a piece of social
legislation to provide a forum to the consumers against
any deficiency in service as well as against any loss or
injury arising out of "unfair trade practice". Scope of a
complaint can cover not only individual consumer but C
also consumers who are not identifiable conveniently.
However, the complainant has to make an averment and
make a claim. [Para 18] [26-D-E]
2.2. Having regard to the laudable object of the social o
legislation liberal and purposive interpretation has to be
placed on the scheme of the Act avoiding hyper-
technical approach. At the same time, fair procedure is
hall mark of every legal proceeding and an affected party
is entitled to be put to notice of the claim. [Para 18] [26- E
F-G]
Ludhiana Improvement Trust v. Shakti Coop. House
Building Society Ltd. 2009 (6) SCR 12 : (2009) 12 SCC 369;
Colgate Palmolive (India) Ltd. v. MRTP Commission 2002
(4) Suppl. SCR 219: (2003) 1 SCC 129; Godfrey Phillips F
India Ltd. v. Ajay Kumar 2008 (5) SCR 937 : (2008) 4 SCC
504 - relied on.
2.3. Mere proof of "unfair trade practice" is not
enough for claim or award of relief, unless causing of loss G
is also established, which in the present case has not
been established. [Para 19] [29-C]
2.4. There is neither any averment in the complaint
about the suffering of punitive damages by the other
consumers nor the appellant was aware that any such H
18 SUPREME COURT REPORTS [2014] 11 S.C.R. •
A claim is to be met by it. Normally, punitive damages are
awarded against a conscious wrong doing unrelated to
the actual loss suffered. Such a claim has to be specially
pleaded. [Para 20) [29-D-E]
,8 2.5. The National Commission has gone m_uch
beyond its jurisdiction in awarding the relief which was
neither sought in the complaint nor before tlie State
Commission. Therefore, to this extent, the order of the
National Commission cannot be sustained. [Para 20) [29-
C F-G]
Case Law Reference:
2009 (6) SCR 12 Relied on Para 19
2002 (4) Suppl. SCR 219 Relied on Para 19
D 2008 (5) SCR 937 Relied on Para 19
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
8072-8073 of 2009.
From the Judgment & Order dated 16.12.2008 of the
E National Consumer Disputes Redressal Commission, New
Delhi in Revision Petition No. 3349 of 2006 and 2858 of 2008.
R.P. Bhatt, Vikram Dhokalia (for Dua Associates) for the
Appellant.
Aparan Jha, Braj K. Mishra for the Respondents.
F
Caveator1in-person.
The Judgment of the Court was delivered by
ADARSH KUMAR GOEL, J. 1. These appeals have
G been preferred against the order dated 16th December, 2008
of the National Consumer Disputes Redressal Commission (for
short "the National Commission") in Revision Petition Nos.3349
of 2006 and 2858 of 2008.
2. The main question raised in these appeals is whether
H in the absence of any prayer made in the complaint and without
• GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
evidence of any loss suffered, the award of punitive damages
19
A
was permissible. Apart from the said main question, the
appellant has also called in question the refund ordered and
other relief granted in favour of the respondent-complainant.
3. In the complaint, filed .before the District Forum,
8
Ahmedabad (Rural) (for short "the District Forum"), the prayer
of the respondent-complainant was as follows :
"The complainant, therefore, most respectfully prays :
(a) That this Hon'ble Forum be pleased to hold that c
the opposite parties (joint and severally) to have
practiced unfair trade practice, towards the
aomplainant and direct them (jointly and
severally) to remove unfair trade practice,
practiced by them against the complainant;
D
(b) This Hon'ble Forum be pleased to direct the
·opposite parties (jointly and severally) to remove
the deficiencies in their services and negligence
towards the complainant.
E
(c) This Hon'ble Forum be pleased to direct the
opposite parties (jointly and severally) to refund
the complainant a sum of Rs. 14, 00, 0001- (Rupees
Fourteen Lakh) and Rs. 1, 91, 2951- to the
complainant along with the 18% interest, from the F
date of payment to the complainant and the
Hon'ble Forum be pleased to direct the opposite
parties to forthwith to take back the said vehicle
from the complainant, after refunding the
complainant's money with interest, as prayed;
G
(d) This Hon'ble Forum be pleased to direct the
opposite parties (jointly and severally) to pay
compensation for physical and mental pain,
shock, suffering, agonies, hardships,
inconveniences and expenses suffered by the H
20 SUPREME COURT REPORTS [2014] 11 S.C.R . •
A complainant, to the tune of Rs.50,0001- (Rupees
Fifty Thousand) or as thought fit in the int19rest of
justice, by this Hon'ble Forum;
(e) The Hon'ble Forum be pleased to direct the
B opposite parties (jointly and serverally) to pay
Rs.25,0001- to the complainant, as cost of this
complaint."
4. The case of the complainant is that he had passion for
driving and dream to visit Leh Ladakh, Jammu & Kashmir and
C Nepal by driving a motor car. By surfing the. internet, he read
advertisement given by the appellant as follows :
"Introducing a world without borders, an SUV to end all
SUVs. That's the new Chevrolet Forester. With the Power
o of 120 horses under its borne unique All-Wheels (AWD},
it literally puts the four corners of the earth witl1in your
easy reach. It won't just get you there. But get you there.
But get you there in unmatched comfort and luxury by-
road, off-road or no-road."
E 5. Relying upon the same, he visited the agents of the
appellant and was given a book titled "for a special joumev
called life". He was assured that the vehicle offered for sale
will realise his dream. The brochure also assured that "the
vehicle in question is an SUV to end all SUVs. And
F .. .. .. .. .. .. .. . it will put the four comers of the earth within
your each an<J ........... it won't just get you their every
time. But get you're there in unmatched comfort, by road,
off-road or no road". He was also shown visual presentation
of the vehicle and was also given a copy of the VCD.
G Accordingly, he purchased the vehicle on 1st May, 2004 for
Rs.14 Lakhs and got accessories worth Rs.1,91,295/- fitted
and also got the vehicle insured and registered.
6. Thereafter he realised that the vehicle was not fit for "off-
H road, no road and dirt road" driving as represented and had
.GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK 21
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
defects. Accordingly, he approached the appellant and its A
dealers who referred to the owner's manual at pages 8-6
column 1 & 3 printed by the Company to the effect :
"off-road driving ............ But please keep in mind that
A WO Chevrolet is a passenger car and is neither a
B
conventional off-road vehicle nor an all terrain vehicle
........ If the driving through water such as when crossing
shallow streams, first check the depth of the water and the
water stream bed for firmness and ensure that the bed
of stream is flat ............ the water should be shallow
enough that it does not reach under carriage." c
Thus he found that the owner's manual was contrary to the
assurance in the brochure, internet and the book titled "for a
special journey called life''. He also realised that the vehicle
was not SUV but a mere passenger car, not fit for "off-road, D
no road and dirt road' driving. He could not realise his dream
to drive it to Leh Ladakh, Jammu & Kashmir and Nepal. The
action of the appellant was thus, "unfair trade practice". He
sought permission to remove "unfair trade practice" and
deficiencies in service and also to refund a sum of Rs.14 Lakhs E
the price of the vehicle and Rs.1,91,295/- the price of
accessories with 18% interest from the date of purchase till the
date of payment and also to pay compensation for physical and
mental pain shock, suffering, agonies, hardships, inconvenience
and expenses suffered by the complainant, to the tune of
F
Rs.50,000/- or as thought fit in the interest of justice and the
costs. The District Forum directed refund of Rs.14 Lakhs plus
Rs.1,91,295/- -towards cost of accessories with interest @ 9%
per annum from the date of complaint to the date of payment
subject to the return of the vehicle, apart from compensation of G
Rs.5,000/- for mental agony and Rs.2,000/- as costs of
litigation.
7. The said order of the District Forum was challenged by
the appellant before the Consumer Disputes Redressal
Commission, Gujarat State, Ahmedabad (for short "the State H
A
22 SUPREME COURT REPORTS [2014] 11 S.C.R.
Commission"). The State Commission held that the vehicle had
•
no mechanical or manufacturing defect but the advertisement
that car was SUV amounted to "unfair trade practice".
Accordingly, in substitution of the order of the District Forum,
the complainant was held entitled to Rs.50,000/- as
B compensation which included costs of litigation. But at the same
time, the complainant was required to pay Rs.5,000/- towards·
costs for undeserving claim. The appellant was ~irected not to
describe the vehicle in question as SUV in any form of
advertisement, website, literature etc. and to make the
c correction that it is a passenger car as mentioned in the manual.
8. Accordingly, the appellant complied with the~ said
direction by issuing a disclaimer.
9. The respondent preferred a revision petition against the
D Order of the State Commission while the appellant filed a cross
revision petition.
10. The National Commission held that the appellant could
not be allowed to contest the finding of committing "unfair trade
E practice" in view of its conduct in voluntarily complying with the
order of the State Commission and filing cross revision without
any justification and belatedly. Referring to the material on
record, particularly, the undisputed correspondence, the said
finding was also affirmed on merits. After referring to the
definition of "unfair trade practice" under Section 2(1) (r) of
F the Consumer Protection Act, 1986 (for short "the Act"), it was
concluded:
"Keeping in view the above definition of unfair trade
practice and the material obtaining on record more
G particularly the representations made and held out by the
respondent in their brochures relating to the vehicle in
question, the owner's manual as a/so the clarification
rendered by the manufacturer of the vehicle, there can
be hardly any doubt that the motor vehicle Ch1~vrolet
H forester A WO model was not a vehicle of the said
-·~··
• GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK 23
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
description in as much as it was not a SUV vehicle. A
Therefore, the petitioner must have been misled on that
score to believe that the vehicle of!)red for sale was a
SUV. This act of the respondent would clearly fall within
the mischief of unfair trade practice as envisaged in
section 2(r) (supra). We therefore, affirm the findings of B
the State Commission in this behalf"
11. After recording the above finding the National
Commission proceeded to consider the relief to be given. It was
held that the State Commission was not justified in reversing C
the direction of the District Forum once the commission of
"unfair trade practice" was established, even as per finding
of the State Commission. Accordingly, the National
Commission restored the relief given by the District Forum with
slight modification as follows :
D
"Once it is found that respondent has indulged in unfair
trade practice which had misled the petitioner to purchase
the vehicle in question, in our view, the most appropriate
relief to the petitioner would be to reinstate the petitioner
to his original position before the purchase of the vehicle E
viz., refund of the price of the vehicle along with some
compensation in that behalf Keeping in view that the
vehicle was used by the petitioner for a period of about
one year and it has run approximately 14,000 kms, we
consider it appropriate that the respondent should refund F
a sum of Rs.12,50,000 (Rupees twelve lacs fifty thousand
only) to the petitioner subject to the condition that the
vehicle in question, without the accessories, which the
petitioner got fixed at a cost of Rs. 1, 91, 2951-, is returned
to the respondent."
G
12. The above was not the end of the journey, though the
above relief met the claim of the complainant in his complaint.
The National Commission proceeded to consider the issue of
punitive damages for "unfair trade practice" in selling the said
vehicles to about 260 consumers. It was held that though the H
A
24 SUPREME COURT REPORTS [2014] 11 S.C.R.
consumers had not approached the National Commission and
•
a period of four years had passed, the appellant should pay
punitive damages of Rs.25 lakhs and out of the said amount,
a sum of Rs.5 Lakhs be paid to the complainant while tile rest
be deposited in the "Consumer Welfare Fund" of the Central
B Government to be utilized for the benefit and protection of the
interests of the consumers generally. Final operative order
passed by the National Commission is as follows :
"The respondents are hereby directed to pay a sum of
Rs. 12, 50, 0001- (Rupees Twelve Lacs Fifty Thousand
c only) to the petitioner towards price of the vehicle subject
to the petitioner returning the vehicle in question without
accessories to the respondents. The respondents are
hereby called upon to deposit a sum of Rs.25 lacs
(Rupess Twenty Five Lacs) as punitive cfamages with this
D Commission. Out of the said deposited amount, a sum
of Rs. 5 lacs (rupees five lacs) shall be paid to the
petitioner-complainant and rest of the amount shall be
credited to the "Consumer Welfare Fund" of the Central
Government to be utilized for the benefit and protection
E of the interests of the consumers generally. We also
award a sum of Rs.50,0001- (rupees fifty thousand) in
favour of the complainant to meet his cost of litigation
before the three consumer fora. The liability to pay and
deposit the amounts shall be joint and several on the
F respondents. We grant six weeks to the respondents to ·
comply with the directions given herein above. "
13. \Ve have heard learned counsel for the appellant anct
the respondent No.1-complainant in-person and perused the
G record.
14. The concurrent finding recorded by the District Forum,
the Stale Commission and the National Commission to the
effect that "unfair trade practice" was committed by the
appellant which is based on adequate material on record, does
H
.GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK 25
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
not call for any interference by this Court and the same is A
affirmed .
15. What survives for consideration is the submission of
learned senior counsel for the appellant, that there was no
claim before the National Commission for the punitive B
damages nor the appellant had an opportunity to meet such
claim and that part of the order needs to be set aside.
16. We find merit in this submission. Vide interim order
of this Court dated 17th July, 2009, the operation of the
impugned order awarding punitive damages was stayed. C
Learned counsel for the appellant undertook to deposit the
amount awarded in favour of the respondent-complainant
towards his claim. The said order was allowed to continue, vide
order dated 20.11.2009, with the following modifications :
D
"(i) Respondent No. 1 shall return the vehicle to the
appellant within a period of four weeks from today.
The latter shall arrange for accepting delivery of
the vehicle at Ahmedabad.
, (ii) After return of the vehicle to the appellant, E
respondent No. 1 shall be entitled to withdraw the
amount of Rs.12,50,0001- together with litigation
cost deposited by the appellant before the District
Forum in terms of order of this Court dated 17th
July, 2009 subject to his furnishing security to the F
satisfaction of the District Forum.
(iii) It will be open to the appellant to sell the vehicle
and keep the sale proceeds in a separate interest
bearing account. Respondent No. 1 shall G
cooperate with the appellant by signing the
documents necessary for selling the vehicle."
'
17. We proceed to deal with the issue of correctness of
finding recorded by National Commission for awarding punitive
damages. Before doing so, we may notice that the respondent- H
A
26 SUPREME COURT REPORTS [2014) 11 S.C.R.
complainant appearing in-person, in his written submissions
•
has raised various questions, including the question that the
appellant should be asked to account for the proceeds of the
vehicles sold by it. Admittedly, the vehicle in question has been
ordered to be handed back to the appellant against which
B respondent-complainant has no claim. Thus, the plea raised is
without any merit. The other issue raised for further punitive
damages of Rs.100 crores and also damages for dragging him
in this Court, merits no consideration being beyond the claim
of the complainant in the complaint filed by him. Moreover, no
c litigant can be punished by way of punitive damages for merely
approaching this Court, unless its case is found to be frivolous.
18. The Act is a piece of social legislation to provide a
forum to the consumers who are taken for a ride by suppliers
of goods and services. The redress is provided to a consumer
D against any deficiency in service as well as against any loss
or injury arising out of "unfair trade practice". By later
amendment, scope of a complaint can cover not only individual
consumer but also consumers who are not identifiable
conveniently. However, the complainant has to make an
E averment and make a claim. Section 12 of the Act permits not
only a complaint by a consumer to whom goods are 'sold or
delivered but also any recognised consumer association or one
or more consumers on behalf of and for the benefit of all
consumers but still, a case has to be made out and the affected
F party heard on such issue. We are conscious that having regard
to the laudable object of the social legislation to protect the
interest of consumers, liberal and purposive interpretation has
to be placed on the scheme of the Act avoiding hyper technical
approach. At the same time, fair procedure is hall mark of every
G legal proceeding and an affected party is entitled to be put to
notice of the claim with such affected party has to meet.
19. We may at this stage refer to the scheme of the Act
with regard to claim against "unfair trade practice". The
H background and scope of the provision was dealt with if
• GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
Ludhiana Improvement Trust v. Sha.kti Coop. House A
27
Building Society Ltd'. as follows :
"18. Prior tO the substitution of clause (r) in sub-section
(1) of Section 2 of he Act with retrospective effect from
18-6-1993, there was no separate definition of the term B
"unfair trade practice" and the said term was given the
same meaning as in Section 36-A of the Monopolies and
Restrictive Trade Practices Act, 1969 (for short "the
MRTP Act'). But now after the said amendment, the
definition of the term has been specifically provided in c
Section 2(1)(r), although the definition is practically a
verbatim reproduction of the definition in Section 36-A of
the MRTP Act.
19. The basic ingredients of "unfair trade practice" are:
D
(i) it must be a trade practice;
(ii) the trade practice must be employed for the
purpose of promoting the sale, use or supply of
any goods or for the provision of any service; and
E
(iii) the trade practice adopts any unfair method or
unfair or deceptive practice including any of the
practices enumerated in clauses (1) to (6) of
Section 2(1 )(r) of the Act.
F
Therefore, any trade practice which is adopted for
the purpose of promoting the sale, use or supply
of any goods or for the provision of any service,
by adopting any unfair method or unfair or
deceptive practice has to be treated as "unfair G
trade practice" for which an action under the
provisions of the Act would lie, provided, the
complainant is able to establish that he is a
1. (2009) 12 sec 369. H
A
28 SUPREME COURT REPORTS [2014] ·11 S.C.R.
consumer within the meaning of Section 2(1)(d) of
•
the Act."
In Colgate Palmolive (India) Ltd. v. MRTP
Commission2 this Court laid down five ingredients which have
8 to be established before a trade practice can be said to be an
"unfair trade practice". The Court laid the ingredients in the
following manner:
J
"16. A bare perusal of the aforementioned provision would
clearly indicate that the following five ingredients are
C necessary to constitute an unfair trade practice:
1. There must be a trade prac1fe {within the meaning
of Section 2(u) of the Monopolies and Restrictive
Trade Practices Act].
D
2. The trade practice must be employed for the
purpose of promoting the sale, use or supply of
any goods or the provision of any services.
3. The trade practice should fall within the ambit of
E one or more of the categories enumerated in
clauses ( 1) to (5) of Section 36-A.
4. The trade practice should cause loss or injury to
the consumers of goods or services.
F 5. The trade practice under clause ( 1) should involve
making a 'statement' whether orally or in writing or
by visible representation."
Again in Godfrey Phillips India Ltd. v. Ajay Kumar, it
G was observed :
"18. So far as Direction (iii) is concerned, it is to be noted
that there was no prayer for any compensation. There
2 (2003) 1 sec 129.
H 3. (2ooa) 4 sec 504.
• GENERAL MOTORS (I) PRIVATE LIMITED v. ASHOK 29
RAMNIK LAL TOLAT [ADARSH KUMAR GOEL, J.]
was no allegation that the complainant had suffered any A
loss. Compensation can be granted only in terms of
Section 14(1)(d) of the Act. Clause (d) contemplates
award of compensation to the consumer for any loss or
injury suffered due to negligence of the opposite party.
In the present case· there was no allegation or material B
placed on record to show negligence."
Thus, mere proof of "unfair trade practice" is not enough
for claim or award of relief unless causing of loss is also
established which in the present case has not been C
established.
20. We have already set out the relief sought in the
complaint. Neither there is any averment in the complaint about
the suffering of punitive damages by the other consumers nor
•$ the appellant was aware that any such claim is to be met by it. D
Normally, punitive damages are awarded against a conscious
wrong doing unrelated to the actual loss suffered. Such a claim
has to be specially pleaded. The respondent complainant was
satisfied with the order of the District Forum and did not
approach the State Commission. He only approached the E
National Commission after the State Commission set aside the
relief granted by the District Forum. The National Commission
in exercise of revisional jurisdiction was only concerned about
the correctness or otherwise of the order of the State
Commission setting aside the relief given by the District Forum F
and to pass such order as the State Commission ought to have
passed. However, the National Commission has gone much
beyond its jurisdiction in awarding the relief which was neither
sought in the complaint nor before the State Commission. We
are thus, of the view that to this extent the order of the National G
Commission cannot be sustained. We make it clear that we
have not gone into the merits of the direction but the aspect that
in absence of such a claim being before the National
Commission and the appellant having no notice of such a claim,
the said order is contrary to principles of fair procedure and H
A
30 SUPREME COURT REPORTS (2014] 11 S.C.R.
natural justice. We also make it clear that this order will not stand
•
in the way of any aggrieved party raising a claim before an
appropriate forum in accordance with law.
21. Accordingly we allow these appeals and set aside the
8 order of the National Commission to the extent of award of
punitive damages.
Kalpana K. Tripathy Appeals partly allowed.
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