At, National Consumer Disputes Redressal Commission NCDRC
By, THE HONOURABLE MR. JUSTICE V.K. JAIN
By, PRESIDING MEMBER
For the Petitioners: Anshul Sharma, Advocate. For the Respondent: Vikram Yadav, Advocate.
The complainants are companies incorporated under the provisions of the Companies Act. The case of the complainants is that they had made some deposit with the respondent Rajasthan Small Industries Corporation Limited for supply of coal. The grievance of the complainants/petitioners is that though the deposit was made for the purpose of supply of coal by the respondent to the complainants, neither the coal was supplied nor the deposit was refunded. Being aggrieved, the petitioner/complainant approached the concerned District Forum by way of separate Consumer Complaints, seeking refund of the deposit with interest. The petitioners/complainants alleged deficiency on the part of the respondent in rendering services to them.
2. The complaints were resisted by the respondent which took a preliminary objection that since the transaction between the parties was a commercial transaction, a Consumer Complaint was not maintainable and District Forum did not have jurisdiction to hear and adjudicate the dispute.
3. The District Forum having dismissed the Consumer Complaints, the petitioners/complainants approached the concerned State Commission by way of separate appeals. The said appeals also having been dismissed, the petitioners are before this Commission.
4. The term ‘consumer’ has been defined in Section 2(1) (d) of the Consumer Protection Act, which to the extent it is relevant for the purpose of this petition means a person who buys goods or hires or avails services for consideration but does not include a person who obtains goods for resale or who purchases goods or avails services for any commercial purpose. As per the explanation, inserted with effect from 15.3.2003, for the purpose of the above referred clause, commercial purpose does not include use of the goods or services exclusively for the purpose of the earning livelihood by means of self-employment.
‘The term ‘Consumer’ used in Section 2(1)(d) of the Consumer Protection Act came up for consideration of this Commission in Revision Petition No.2833 of 2018 decided on 06.01.2020 and after considering several decisions on the issue, including Synco Textiles Pvt. Ltd. Vs. Greaves Cotton & Company Ltd. I (1991) CPJ, 499 (NC), Cheema Engineering Services Vs. Rajan Singh (1997) 1 SCC 131, Madan Kumar Singh (Dead) through L.R. Vs. District Magistrate, Sultanpur & Ors. (2009) 9 SCC 79 and Paramount Digital Colour Lab & Ors. Vs. Agfa India Private Limited & Ors. (2018) 14 SCC 81, the larger Bench inter-alia held as under:
(a) Only a person engaged in large scale commercial activities for the purpose of making profit is not a consumer;
(b) There should be a direct nexus between the large scale commercial activities in which a person is engaged and the goods purchased or the services hired or availed by him, before he can be excluded from the purview of the term ‘consumer’. Therefore any goods purchased or the services hired or availed even by a person carrying on business activities on a large scale for the purpose of making profit will not take him out of the definition of the term ‘consumer’, if the transaction of purchases of goods or hiring or availing of services is not intended to generate profit through the large scale commercial activity undertaken by him and does not contribute to or form an essential part of his large scale commercial activities.
(c) What is crucial for the purpose of determining whether a person is a ‘consumer’ or not is the purpose for which the goods were purchased or the services were hired or availed and not the scale of his commercial activities.
5. In Revision Petition No.1750 of 2017 – Union Bank of India & Anr. Vs. M/s Learning Spiral Pvt. Ltd. & Ors., decided on 30.7.2018, this Commission held as under:
“If the business activities of a company cannot be conveniently undertaken without the goods purchased or the services hired or availed by a company, such purchase or hiring/availing as the case may be, would be for a commercial purpose, because the objective behind such purchase of goods or hiring or availing of the services would be to enable the company to earn profits by undertaking and advancing its business activities.”
6. The complainants had allegedly made deposits with the respondent for the purpose of supplying coal. The coal was to be used by the petitioners/complainants in the furnaces which they had installed for making ceramics and pottery. The coal was therefore, essentially required for the manufacturing activities of the petitioners/complainants since the furnaces could not have run without coal. The input in the form of coal was necessary for the complainants to carry out their commercial activities. Therefore, it can hardly be disputed that the coal was sought to be purchased by the petitioners/complainants from the respondent for a commercial purpose.
7. The submission of the learned counsel for the petitioner/complainant is that the coal was not meant for resale and therefore, the complainants/petitioners would be a consumer within the meaning of the Consumer Protection Act. In support of her contentions, she relies upon the decisions of the Hon’ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute, Civil Appeal No. 4193 of 1995, decided on 04.04.1995 and Sunil Kohli & Anr. Vs. M/s Purearth Infrastructure Ltd. Civil Appeal Nos.9004-9005 of 2018, decided on 01.10.2019.
8. The complainants being companies and not a natural person, the explanation below Section 2(1)(d) of the Consumer Protection Act does not apply to them. The explanation below Section 2(1)(d) of the Consumer Protection Act applies only to a natural person as is evident from the use of the words “exclusively for the purpose of earning his livelihood by way of employment”. In case of a juridical person such as a company, it cannot even be claimed that the goods were purchased or the services were hired or availed for the purpose of earning livelihood by means of self-employment. Therefore, the decision of the Hon’ble Supreme Court in Sunil Kohli (supra) which was a Consumer Complaint instituted by some Non Resident Indians who had booked a shop with a developer for the purpose of earning their livelihood, does not apply to the present case. As far as the decision in L
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axmi Engineering Works (supra) is concerned, nowhere the Hon’ble Supreme Court has said in the said decision that if a person who obtains the goods for a commercial purpose, would be a consumer. Such a person can be a consumer only if he comes within the purview of the explanation below Section 2(1)(d) of the Act. 9. For the reasons stated hereinabove, I find no ground to interfere with the concurrent view taken by the fora below. The Revision Petitions being devoid of any merits, are hereby dismissed. It is however, made clear that dismissal of the Consumer Complaints shall not come in the way of the petitioners availing such remedy other than a Consumer Complaint as may be open to them in law.