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M/s. Max Infra (India) Ltd. Rep. by its Chairman, Dr. M.S. Phani Kumar v/s M/s. Ashok Leyland Ltd. & Others

    Consumer Complaint No. 93 of 2014

    Decided On, 22 May 2014

    At, National Consumer Disputes Redressal Commission NCDRC

    By, MEMBER

    For the Complainant: Rajagopala Rao, Advocate with M. Prasad, Law Officer. For the Opposite Parties: -----

Judgment Text

J.M. Malik, Presiding Member

1. The present complaint has been filed by M/s. Max Infra (I) Ltd. against M/s. Ashok Leyland Ltd, and its three employees. The key controversy swirls around the question, 'Whether, the complainant is a consumer?'.

2. Paras 1, 2, 3, 4 & 5 of the complaint are reproduced as follows :-

1. The complainant, Max Infra India Ltd. is a company incorporated under the Companies Act, 1956 in the year 1999 having its registered office at Plot Nos.319 and 320, East Avenue, Ayyappa Society, Madhapur, Hyderabad-500081, A.P. and engaged in construction works.

2. The Opposite Party No.1 is an Indian automobile manufacturing company registered under the Companies Act, 1956 having its registered office at No.1 Sardar Patel Road, Guindy, Chennai-600032. O.P. Nos.1 & 2 are the Managing Director and the Manager (Marketing) respectively of OP NO.1 whereas OP No.4 is the authorized dealer of the OP No.1.

3. The complainant company placed a Purchase Order dt.17.08.2011 on M/s Automotive Manufacturers Pvt. Ltd. (OP NO.5) for the supply of 10 Tipper Vehicles manufactured by the Opposite Party at the unit price of Rs.24,74,176/- each, total being Rs.2,85,92,665/-.

A copy of the Purchase Order dt.17.08.2011 is annexed hereto as Document No.1.

4. That since the complainant company had taken finance from M/s Srei Equipment Financial Pvt. Ltd., a Master Operating Lease Agreement dt.20.08.2011 was entered into between the complainant company and the aforementioned M/s Srei Equipment Financial Pvt. Ltd.

A copy of the Mater Operating Lease Agreement dt.20.08.2011 between Max Infra (I) Ltd. and M/s Srei Equipment Financial Pvt. Ltd. is annexed hereto as Document No.2.

5. That upon delivery of the Tippers, M/s Automotive Manufacturers Pvt. Ltd. raised invoices on various dates i.e. 27.08.2011, 29.08.2011, 06.09.2011 & 30.09.2011 in respect of the ten vehicles.

Copies of the invoices dt.28.08.2011, 29.08.2011, 06.09.2011 and 30.09.2011 are collectively annexed hereto as Document No.3.

3. The complainant has made the following prayers :-

(I) Direct the Opposite Parties to replace the ten defective Tipper Vehicles purchased by the complainant from the opposite parties under Purchase Order dt.17.08.2011, with new properly functional vehicles;


In the alternative, refund the amount of

Rs.2,85,92,665/- paid by the complainant to the opposite parties, along with interest @ 15% p.a. from the date of the complaint till the payment;

(II) Direct the Opposite Parties to pay further compensation of Rs.2,00,000/- towards harassment, strain, loss of work and loss of valuable time undergone by the complainant company;

(III) Direct the Opposite Parties to pay further an amount of Rs.5,00,000/- towards compensation for deficiency of service;

(IV) Direct the Opposite Parties to pay the costs of Rs.30,000/-; and

(V) Pass any other/further order (s) as this Hon’ble Commission deems fit in the interest of justice.

4. We have heard the counsel for the complainant at length. He has cited authorities reported in Super Computer Centre Vs. Globiz Investment Pvt. Ltd., 3 (2006) CPJ 256 (NC) and Madan Kumar Singh (Dead) Through LR Vs. District Magistrate, Sultanpur & Ors, (2009) 9 SCC 79. In Madan Kumar Singh (Dead) (supra) it was held as under :-

16. A further reading of the aforesaid

definition of ‘consumer’ makes it clear that Parliament wanted to exclude from the scope of the definition the persons, who obtain goods for resale and also those who purchase goods with a view to use such goods for carrying on any activity for earning. The immediate purpose as distinct from the ultimate purpose of purchase, sale in the same form or after conversion and a direct nexus with profit or loss would be the determinants of the character of a transaction – whether it is for a ‘commercial purpose’ in economic activities in which they are engaged would be consumers as defined in the Act.

5. We are of the considered view that these authorities do not dovetail with the facts of this case. These authorities pertain to the Amendment Act 62 of 2002, of C.P. Act, 1986, which was brought in force, w.e.f. 15.03.2003. The earlier explanation was inserted by Act 50 of 1993. There was remarkable change in the definition of 'consumer'. The definition of 'consumer' as it stood at the time of filing of this complaint, on 02.04.2014, is as follows:-

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 purpose'.

[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;]


6. This Commission in MonsteraEstate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd. – IV (2010) CPJ 299 (NC) held:-

'Housing – Purchase of space for commercial purpose - There was delay in possession. Complainant was a private limited company. Complainant was nominated for allotment of showroom. Possession not given. Sale deed was not executed. Deficiency in service was alleged. It was held that even if private limited company was treated as ‘person’, purchase of space could not be for earning its livelihood. Purchase of ‘space’ was for commercial purpose'.

7. This Commission vide its order passed in the case of M/s Purusharth Associates Pvt. Ltd. Vs. M/s Uppal Housing Ltd. Plaza & Anr. dated 05.07.2012 observed in para 11, which is reproduced as follows:-

'11. Learned counsel for the complainant argued that these flats will be used for the officers of the Company. Learned counsel for the complainant could not deny that those officers would transact the commercial activity. A bare-look on this Resolution clearly goes to show that these flats would be meant for commercial purposes.'

8. Aggrieved by that order the complainant approached the Apex Court. The Hon’ble Supreme Court in its order-dated 07.01.2013 dismissed the Civil Appeal Nos. 8990-91 of 2012.

9. In another case, ShikaBirla Vs. DLF Retailers Developers Ltd., Consumer Complaint No. 183 of 2012, decided by this Bench, on 01.02.2013, found that Shikha Birla was not a consumer. An SLP was filed before the Hon’ble Apex Court. The Hon’ble Apex Court in Civil Appeal No.5458 of 2013, passed a detailed order, observing as under :-

'This appeal filed is directed against order dt.01.02.2013 of the National Consumer Disputes Redressal Commission (for short, the ‘National Commission’) whereby the complaint filed by the appellant under Section 21 of the Consumer Protection Act, 1986 (for short, ‘the Act’) was dismissed as not maintainable.

We have heard learned counsel for the appellant and carefully perused the record. The averments contained in paragraphs 2 (A), 2(G), 2(N), 2(Q) of the complaint and paragraphs 3 to 5 of affidavit filed by her sometime in October, 2012 clearly show that the complainant had taken the disputed site from Mr. Ashwani Bahl who, in turn, had purchased the site for business purpose. It was neither the pleaded case of the appellant nor any evidence was produced by her before the National Commission to show that she had taken the site for earning livelihood. The National Commission took cognizance of all the facts and observed:

'6. It is thus clear that the complainant is purchasing the said plot for commercial purpose. There is no pleading nor any evidence to show that the shop purchased by her is exclusively for the purpose of her livelihood, by means of self-employment.

7. It must be borne in mind that the complainant has already paid more than Rs.2.00 crores. The total cost of the shop is of about Rs.3.00 crores. The complainant is silent about her occupation. In her affidavit, in para nos.3, 4, 5 & 6, for the first time, she mentions:

'3. That the complainant had purchased the said commercial area being provided respondent for her end use with a view to open a showroom for interior designing in the said area.

4. The complainant is working as an Interior Designer in the firm which is owned by her father in law i.e. Mr. Malik Chand Birla and her husband i.e. Mr. Anurag Birla under the name and style of 'M/s. Origin Overseas (Queen 10 the Home Affairs)'.

5. That with the view to provide a permanent place for the said boutique when the same was shut down in Hauz Khas, the complainant was forced to move to Gurgaon temporarily in the Grand Mall, GS – 122, thereafter the complainant decided to purchase the instant area for her usage.

6. xxx'.

10. In KalpavrukshaCharitable Trust Vs. Toshniwal Brothers (Bombay) Pvt. Ltd., AIR 1999 SC 3356, while placing reliance on LaxmiEngginering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583, the Hon’ble Apex Court was pleased to hold, as under :-

'6. It is, therefore, clear that in spite of the commercial activity, whether a person would fall within the definition of 'consumer' or not would be a question of fact in every case. The National Commission had already held on the basis of the evidence on record that the appellant was not a 'consumer' as the machinery was installed for 'commercial purpose'. We have been again referred to various documents, including the 'project document', submitted

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by the appellant itself to the Bank for a loan to enable it to purchase the machinery in question, but we could not persuade ourselves to take a different view. 9. In the instant case, what is to be considered is whether the appellant was a 'consumer', within the meaning of the Consumer Protection Act, 1986, and whether the goods in question were obtained by him for 'resale' or for any 'commercial purpose'. It is the case of the appellant that every patient who is referred to the Diagnostic Centre of the appellant and who takes advantage of the CT Scan, etc., has to pay for it and the service rendered by the appellant is not free. It is also the case of the appellant that only ten percent of the patients are provided free service. That being so, the 'goods' ('machinery'), which were obtained by the appellant, were being used for 'commercial purpose'. [Emphasis Supplied] 11. Thus the Complainant has made a vain attempt to make bricks without straw. It is not a consumer. The complaint is, therefore, dismissed. No costs. However, liberty is given to the complainant to approach the proper Forum/Civil Court for redressal of its grievances, as per Law.