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Meera Industries v/s Modern Constructions

    Revision Petition No. 1765 of 2007 in SC Case No. 14/0/06

    Decided On, 22 May 2009

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE R.K. BATTA
    By, PRESIDING MEMBER & THE HONOURABLE MR. S.K. NAIK
    By, MEMBER

    For the Petitioner: S.K. Ghosh, Advocate. For the Respondent: Ranjan Mukherjee, Advocate.



Judgment Text

R.K. Batta, Presiding Member:

1. The complainant, Modern Constructions, which is a partnership firm, had purchased TPH computerized HOT MIX PLANT from O.P.-Meera Industries on 2.11.2005 on payment of Rs. 18.72 lakh. According to the complainant, the said TPH computerized HOT MIX PLANT could not start operation from inception in spite of efforts being made by the technicians/engineers of OP. The engineers of O.P. failed to put the machine in operation in spite of their best efforts for a prolonged period. The complainant, therefore approached the State Commission seeking refund of the total cost of the TPH computerized HOT MIX PLANT to the tune of Rs. 27,71,578 with 18% interest thereon from 3.11.2005 till the filing of the application and further interest thereon. The opposite party in their written submissions had contended that the TPH computerized HOT MIX PLANT was purchased for commercial purpose for earning huge profit and the complainant was not a consumer on account of which, the complaint was not maintainable.

2. The State Commission had taken note of the fact that the complainant had ventured into a big commercial project and for execution of the project had purchased the TPH computerized HOT MIX PLANT for earning profit. Regarding the contention of the complainant that they are consumers with the ambit of Section 2(1)(d) since the TPH computerized HOT MIX PLANT was purchased for earning livelihood and for self-employment, it was held that the complainant cannot directly take shelter under Section 2(1)(d) of the Consumer Protection Act. However, relying upon judgment of this Commission in AmtrexAmbience Ltd. v. M/s. Alpha Radios & Anr., I (1996) CPJ 324 (NC), the State Commission held that the purchaser becomes consumer in respect of services rendered or to be rendered by the manufacturer or supplier during the warranty period. Accordingly, it was held that though the TPH computerized HOT MIX PLANT was sold for commercial purpose, yet the purchaser would certainly be a consumer under Section 2(1)(d)(ii) of the CP Act in respect of services rendered or to be rendered by the consumer for the proper functioning of the machinery/equipment during the period of warranty and as such, the complaint was maintainable.

3. It appears that subsequently, O.P. filed petition on 24.4.2007 for further clarification of order dated 28.3.2007 on the ground that the decisions cf the National Commission on which reliance was placed in order dated 28.3.2007 were in connection with the un-amended Section 2(l)(d)(ii) of the Act and after the amendment which came into effect from 15.3.2003, the position has changed considerably. The State Commission made it clear that though it would hear the petition filed on 24.4.2007, there would be no order modifying or reviewing order dated 28.3.2007, since the State Commission has no power to review its own order. The State Commission referred to other judgments of the National Commission and held that order dated 28.3.2007 was passed on correct appraisal of the complaint and was a reasoned order. The view taken in order dated 28.3.2007 was in fact reiterated by order dated 7.5.2007 and it was held that the complainant was very much a consumer in terms of Section 2(1)(d)(ii) since the defects had arisen within the warranty period. These orders are subject matters of revision before us.

4. The short controversy, which has been raised in this revision, is when goods are purchased for commercial purpose whether the purchaser would be consumer during the warranty period in terms of Section 2(1)(d)(ii) of the Act. According to learned Counsel for the petitioner, the amendment to Section 2(1)(d)(ii) of the Act, which came into effect from 15.3.2003, excludes a person who avails of service for any commercial purpose. According to learned Counsel for the petitioner, warranty is a kind of service and would fall within the ambit of services as contained in Section 2(1)(d)(ii) of the C.P. Act. Learned Counsel for the petitioner has further emphasized that the purpose of CP Act is to protect consumers and not commercial consumers who have to go to Civil Court to seek remedy available to them. He, therefore, contends that the complainant is not a consumer and the complaint is not maintainable.

5. On the other hand, learned Counsel appearing for the complainant/respondent has submitted that warranty is not a case of personal service contract and service referred to in Section 2(1)(d)(ii) is service to the goods during warranty. He, therefore, further submitted that though the complainant is not a consumer regarding goods, yet he is invoking the benefits available under the warranty. However, at this stage we may point out that, ultimately, the petitioner seeks to enforce warranty pursuant to purchase of goods for commercial purpose. According tohim, even though, the goods are purchased for commercial purpose yet, the purchaser can go to the Consumer Court during the period of warranty. He also states that the action of the opposite party amounts to unfair trade practice in terms of Section 2(1)(r) of the Act. Learned Counsel for the complainant has, however, stated that the complainant does not press issue of livelihood and does not challenge the findings of the State Commission that the goods were purchased for commercial purpose.

6. In reply, learned Counsel for the petitioner has submitted that the complainant has to first gualify as a consumer within the meaning of Section 2(1)(d) read with Section 2(1)(d)(ii) for the purpose of filing complaint under Section 12 of the Act.

7. Learned Counsel for both sides have placed reliance of judgment of this Commission in M/s. Pearlite Liners Ltd.v. M/s. Thermo Jarrell Ash Corporation and Anr., IV (2006) CPJ 375 (NC)=2006 (1) CPR 4 (NC). In this judgment, the view taken by this Commission is that even though goods are purchased for commercial purpose, a consumer is entitled to approach the Consumer Forum in respect of defect or deficiency in services during the warranty period.

8. For better appreciation of the discussion which will take place hereinafter it will be prope to refer to Section 2(i)(d), which defines a ‘consumer’ as under:

(d) 'consumer' means any person who-

(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 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

(ii) hires or avails of any services 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 beneficiary of such services other than the person who ‘hires or avails of the services for consideration paid or promised, or partly paid and partly 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 purposes; Added by Act 62 of 2002 w.e.f.15.3.2004.

Explanation.-For the purposes of this clause, '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;

Section 2(i)(o) defines service as under:

'service' means service of any description which is made available to potential users, and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

9. Insofar as purchase of goods, which is covered by Section 2(1)(d)(i) is concerned, a person who purchases goods for commercial purpose is not a ‘consumer’. However, insofar as hire or availing of services is concerned, after amendment, which came into force on 15.3.2003, any person who avails of such services for any commercial purpose has been excluded from the ambit of service.

10. We have scanned through the judgments of this Commission, which primarily rely upon judgments of this Commission in AmtrexAmbience Ltd. v. M/s. Alpha Radios & Anr., I (1996) CPJ 324 (NC) and Jay Kay Puri Engineers & Anr. v. MohanBreweries & Distilleries Ltd., I (1998) CPJ 38 (NC). Both these judgments relate to pre-amended Section 2(1)(d)(ii) of the Act. The other rulings of the Commission which are primarily based on the said rulings are namely, Meera& Co. Ltd. v. ChinarSyntex Ltd., II (2004) CPJ 24 (NC)=2004 CTJ 1086 (CP) (NCDRC), Dr. Vijai Prakash Goyal v. The Network Limited, IV (2005) CPJ 206 (NC), Super Computer Centre v. GlobizInvestment Pvt. Ltd., III (2006) CPJ 256 (NC), JindalDrilling & Industries Ltd. v. IndoconEngineers Pvt. Ltd. & Anr., III (2006) CPJ 264 (NC), East India Construction Co. & Anr. v. Modern Consultancy Services & Ors., II (2006) CPJ 289 (NC), PearliteLiners Ltd. v. Thermo Jarrell Ash Corporation & Anr., IV (2006) CPJ 375 (NC) and Larsen & Toubro Ltd. & Ors. v. SunderSteels Limited & Ors., I (2009) CPJ 256 (NC).

11. In all these judgments, it is held that even if a consumer purchases goods for a commercial purpose, yet insofar as warranty attached to the goods is concerned, he would still be a consumer if some defect is found during the warranty period. All these judgments relate to goods purchased prior to amendment to Section 2(1)(d)(ii) of the Act. None of these judgments have considered the effect of amendment to Section 2(1)(d)(ii) of the Act. All the decisions of this Commission, which have been rendered are with reference to the provisions of unamended Section 2(1)(d)(ii) of the Act where hiring or availing of services for commercial purpose had not been excluded. In these judgments, the position after amendment to Section 2(i)(d)(ii) of the Act, which came into effect from 15.3.2003 by which a person who avails of such services for any commercial purpose is excluded has not been considered. Warranty, which comes along with purchase of goods is nothing but service attached to the goods during the period of warranty. Therefore, even the service availed for commercial purpose is excluded from the scope and ambit of consumer.

12. We may at this stage refer to judgment of this Commission in JayantKumar Sahu v. Dr. Prasanna Kumar Patel, II (2006) CPJ 71 (NC)=2006 CTJ 324 (CP) (NCDRC), where cognizance of amendment to Section 2(1)(d)(ii) of the Act w.e.f.15.3.2003 was taken and it was observed that service rendered for commercial activity has been excluded w.e.f. 15.3.2003. However, before

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that date service rendered for commercial purpose was within the ambit of Consumer Forum. 13. In view of the above, we are of the opinion that whether a consumer buys goods for commercial purpose and avails of services attached to the goods in the nature of warranty, he cannot be considered to be a consumer even for the purpose of services during the warranty period in view of the amendment to Section 2(d)(ii) of the Act, which came into force w.e.f. 15.3.2003. In view of this, the complainant cannot be held to be a consumer with reference to the services attached to the warranty and the complaint is not maintainable. The decision of the State Commission is based on the judgment of Jay Kay Puri Engineers & Anr.(supra) and AmtrexAmbience Ltd. (supra), which we have already referred to above. The order of the State Commission holding that the petitioner is a consumer in respect of services rendered or to be rendered by manufacturer or supplier during the warranty period and complaint is maintainable are required to be set aside. The revision is accordingly allowed, the order of State Commission is set aside and the complaint is dismissed. In the facts of the case, there shall be no order as to cost. R.P. allowed.
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