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Suresh Singla & Another v/s Jaycee Automobiles Pvt. Ltd. & Others

    Revision Petition No. 3215 of 2016

    Decided On, 23 August 2018

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE DR. S.M. KANTIKAR
    By, PRESIDING MEMBER & THE HONOURABLE MR. DINESH SINGH
    By, MEMBER

    For the Petitioners: Naresh Dilawari, Advocate. For the Respondents: R1, Deboshree Saha, R2, Ekta Bhasin, R3, Deepak Agarwal, Advocates.



Judgment Text

1. The case of the revisionist - complainants was that in the year 2010 the complainants purchased an Audi car from respondent no.1 – authorized dealer of respondent no. 2 – manufacturer of the vehicle which was registered in the name of M/s Harmony Colonizers Pvt. Ltd. and was for the personal use of its Director and son-in-law of the Director i.e. complainants no.1 and 2 respectively. On 05.07.2014 the said car suddenly stopped and was brought to the workshop of the authorized dealer. The complainants paid Rs.3,95,190/- as repairing charges under protest. The complainants alleged deficiency in service and unfair trade practice.

2. The contention of the manufacturer was that the complainants concealed the fact of an accident having caused severe damage to the vehicle. The expert report filed by the complainants was not authentic, the said expert neither conducted a physical inspection of the vehicle and nor tested its fuel.

3. The contention of the authorized dealer was that the complainants purchased and registered the vehicle in the name of a private limited company to claim depreciation, ultimately to bring an overall reduction in income tax liability. The car was used for commercial activities by the company. The complainants were not consumers as defined under Section 2(1) (d) of the Consumer Protection Act 1986.

4. The contention of respondent no. 3 – insurance co. which insured the car was that the complainants were not consumers as the car was registered in the name of M/s Harmony Colonizers Pvt. Ltd., whereas the complaint was filed by the complainants in their personal capacity; as such the complaint was not maintainable.

5. The District Forum vide its Order dated 18.01.2016 allowed the complaint qua the authorized dealer and dismissed it against the manufacturer and the insurance co.

6. The authorized dealer appealed in the State Commission. The State Commission heard both sides and through a reasoned Order dated 30.08.2016 allowed the appeal and set aside the Order dated 18.01.2016 of the District Forum, inter alia holding that:

The question, whether the complainants, where purchase of car is for use of Director/employee, falls within the definition of consumer as per Section 2(1)(d) of 1986 Act, has been decided by the Hon’ble National Commission in Crompton Greaves Limited & Anr. Vs. Daimler Chrysler India Private Limited & Ors., Consumer Complaint No.51 of 2006 decided on 08.07.2016, wherein in Paras 6, 9 and 11, it was held as under:

'6. The goods and services made available by a company to its directors or employees can be classified into the following three broad categories:-

'(a) The goods and services which are obtained for and made available to the directors or employees of the company and are used by them only for their personal purposes, unconnected with the business of the company. For instance, the cars used by the directors and employees of the company for their shopping, outings, recreations, etc. or for commuting to and from the office of the company. Another example can be the air conditioners and furniture provided at the residence of the directors and employees of the company or the telephone or broadband got installed by the company at their residence.

'(b) The goods and services made available to the directors or employees of the company and used by them primarily for their personal purposes but incidentally, also for the purposes of the company. For instance, a car used mainly for outings, recreations, personal commuting etc. of the directors and employees or their families, but also for visiting the factory and offices of the company or attending the business meetings.

'(c) The goods and services made available by a company to its directors and employees primarily for the purposes of the company and used by them mainly for the purposes of the company but incidentally also for their personal purposes. For instance, a vehicle purchased for being used as a staff car or a delivery van, but sometimes also used for the personal purposes of the directors or employees, unrelated to the business of the company.'

9. As far as the goods or services falling in category (c) are concerned, since the dominant purpose behind such acquisition is to advance and sustain the business activities of the company and the use for the personal purposes of the directors or the employees being incidental, it can be safely said that such an acquisition was for the commercial purposes of the company.

11. For the reasons stated hereinabove, the issue referred to the larger Bench is answered as follows:

(a) If a car or any other goods are obtained or any services are hired or availed by a company for the use/personal use of its directors of employees, such a transaction does not amount to purchase of goods or hiring or availing of services for a commercial purpose, irrespective of whether the goods or services are used solely for the personal purposes of the directors or employees of the company or they are used primarily for the use of the directors or employees of the company and incidentally for the purposes of the company.

(b) The purchase of a car or any other goods or hiring or availing of services by a company for the purposes of the company amount to purchase for a commercial purpose, even if such a car or other goods or such services are incidentally used by the directors of the company for their personal purposes.'

It may be stated here that a Company acts/speaks through resolution(s). The terms and conditions regarding salary and perks of a Director are decided by way of resolution of the Company. In the instant case, no evidence to the effect that complainant No.1, as per any resolution of the Company, was entitled to a car has been brought on record. The car was purchased in the year 2010 in the name of the Company, and it is registered in the name of Company, a private limited company. It is case of the complainants that Audi car was being used by Sh. Suresh Singla son of Late Sh. Ranauq Ram, Director, for personal use and his son-in-law. Annexure C-37 indicates that Mr. Suresh Singla is a Director of the Company. The incident of stopping of the vehicle in between the road when the complainants were on way to Mansa Devi Temple and not starting thereafter took place on 05.07.2014 whereas the resolution, indicating that the car was being used by Sh. Suresh Singla, is after the date of incident. The appropriate and correct evidence to prove that the car was, in fact, being used by Sh. Suresh Singla, would be the terms and conditions/perks of the said Director and also the resolution before the date of incident whereby he was authorized to use the said car, which is not there. In these circumstances, we find that there is force in the argument put forth by the Counsel for the appellant/Opposite Party No.2 that evidence by way of Exhibit C-36 is afterthought being after the date of accident to bring the complainants within the definition of consumer.

Since it has not been established by cogent evidence that the car was for the use of the Director of the Company, the complainants do not fall within the definition of consumer as envisaged in Section 2(1)(d) of 1986 Act. Thus, the Forum erroneously allowed the complaint filed by respondents No.1 & 2/complainants on merits, without determining the issue as regards the complainants being consumers or not. Therefore, the impugned order passed by the Forum is liable to be set aside and the complaint deserves to be dismissed as the complainants are held to be not consumers.

No other point was raised by the Counsel for the parties.

For the reasons, recorded above, the appeal is accepted. The impugned order passed by the Forum is set aside. Consequently, Consumer Complaint No.447 of 2014 is dismissed, with no orders as to cost.

(paras 16,17,18,19 of the Order)

7. The revision was filed by the complainants against the said Order dated 30.08.2016 of the State Commission, inter alia stating that:

That Hon’ble State Commission, Chandigarh has allowed the appeal only on the basis that petitioners have not led any evidence that vehicle was being used by its directors hence it does not fall in the category of consumer and Hon’ble State Commission has misunderstood the judgment 'Crompton Greaves Ltd. & Anr. V/S Daimler Chrysler India Pvt. Ltd. & Ors.' which has been relied in the impugned order.

That Hon’ble State Commission has wrongly allowed the appeal and set aside the judgment without considering the fact that vehicle is a luxury car and same is not bus or truck which could be used for transfer of its employees or staff.

Hon’ble State Commission has set aside the well reasoned order passed by District Forum II, Chandigarh i.e. P-2 and has allowed the appeal vide impugned order P-1 on the basis of surmises and conjectures and same is illegal, void and unsustainable in law and hence liable to be set aside impugned order P-1 and order P-2 is liable to be upheld in view of facts contained therein.

That courts below have acted without jurisdiction and material irregularity has been caused by the courts below resulting in miscarriage of justice and hence impugned orders are liable to be set aside being nullity.

(paras 5, 6, 7, 8 of the Revision Petition)

8. Section 21(b) of the Act 1986 under which the revision has been filed is as below:

To call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

9. We have heard the learned counsels for the revisionist – complainants and the respondents – manufacturer, authorized dealer and insurance co., and have perused the record.

10. A clear finding has been given by the State Commission that it has not been established by cogent evidence that the car was for the personal use of the Director of the company, the complainants do not fall within the definition of ‘consumer’ under section 2(1) (d) of the Act 1986 (para 6 above).

11. The State Commission’s Order dated 30.08.2016 is well-appraised and well-reasoned. On the face of it, a jurisdictional error, or grave error in appreciating the evidence, or a legal principle ignored, or miscarriage of justice, is not visible.

12. The Board Resolution dated 15.07.2014 filed by the revisionist – complainants reads as below:

Resolution

A meeting of board of directors of the Company was held on 15/07/2014 at their office. It was resolved in the meeting that Mr. Ankur Bansal S/o Sh. Arjun Bansal R/o #576, Sector – 07, Panchkula is authorized to deal with any one regarding any issue regarding the AUDI CAR, audi A6-2.7TDI model bearing Engine No.000408 and Chassi No.CAN023776 and bearing registration No.HR02-X-0002. It is pertinent to mention here that above car is being used by Mr. Suresh Singla (Director) S/o Sh. Ronak Ram for their personal use.

13. The car was purchased on 24.03.2010. It was registered in the name of M/s Harmony Colonizers Pvt. Ltd., a private limited company. As per the complainants’ own version, the stated incident of the car suddenly stopping occurred on 05.07.2014. The complainants took the car to the authorized dealer on 06.07.2014. The Board Resolution is dated 15.07.2014. The consumer complaint was filed in the District Forum on 28.08.2014.

14. The Board Resolution authorized one of the complainants i.e. the son-in-law of the other complainant i.e. Director in the company to deal with ‘any one’ regarding ‘any issue’ regarding the audi car. It is also stated therein that it was ‘pertinent to mention’ that the car was being used by the Director for ‘their personal use.’

15. A bare reading of the chronology (para 13) and of the resolution (para 12) shows the patently absurd and patently mischievous manner that the resolution was prepared after 4 years and 3 months of the purchase of the car and after 9 days of the car statedly suddenly stopping and was put to mischievous use in the subsequent consumer complaint filed after 44 days of the stated date of the resolution. The fact remains that the car was registered in the name of the company. The company is not a ‘consumer’ under the Act 1986. It is clear that the complainants i.e. the son-in-law of the Director (who had no position in the company) and the father-in-law (Director in the company) manipulated the whole case of personal use for wrong gains through the medium of a consumer complaint under the Act 1986.

16. It is also relevant that the authorized dealer of the car in its written version has stated that they offered more than 50% discount on costs of parts as a goodwill gesture (while denying that the damages to the vehicle were caused due to manufacturing defect).

17. It is clear that the complainants are not ‘consumers’ under the Act 1986 and are attempting to misuse the statutory processes provided for for better protection of the interest of consumers to obtain wrong gains and to create ‘nuisance value’ qua the authorized dealer, manufacturer and insurance co. (all).

18. Section 26 of the Act 1986 is as below:

Dismissal of frivolous or vexatious complaints.-Where a complaint instituted before the District Forum, the State Commission or, as the case may be, the National Commission is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party such cost, not exceeding ten thousand rupees, as may

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be specified in the order. 19. The revision is clearly frivolous as well as vexatious. This is a fit case to direct the complainants to pay cost of Rs.10,000/- to the respondents. However, having regard to the respondents’ i.e. authorized dealer, manufacturer, insurance co.’s overall position per se and to the overall situation of the case, recourse to the provisions of cost provided for in Section 26 of the Act 1986 is not being adopted. (The respondents would no doubt appreciate the overall perspective, and maybe moreso after perusing para 20 below.) 20. It is but also to be seen that the time and resources of this Commission have been wasted in such manner and for such evident purpose. It is thus appropriate and albeit necessary to give stern advise of caution to the complainants through a small monetary deterrent ( / cost), to desist from misusing the statutory processes provided for a consumer for better protection of his interests under the Consumer Protection Act, 1986. (This Act is not meant to be a tool to obtain wrong gains or to create ‘nuisance value’). 21. In the totality of the case, it is felt just, apt and reasonable that Rs.25,000/- (rupees twenty five thousand only) may be deposited by the revision petitioners – complainants with the Consumer Legal Aid Account of this Commission within four weeks. 22. The revision petition is dismissed with the above direction. 23. A copy of this Order may be sent to the District Forum and the State Commission by the Registry.
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