Taj palace Hotel filed a consumer case on 18 May 2018 against A.S. Khatana in the North East Consumer Court. The case no is cc/306/2012 and the judgment uploaded on 31 May 2018.
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST
GOVT. OF NCT OF DELHI
D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93
Complaint Case No. 306/12
In the matter of:
| TAJ PALACE HOTEL Sardar Patel Marg Diplomatic Enclave New Delhi-110021. |
Complainant |
|
Versus
| |
| A. S. KHATANA Proprietor M/s Highway & Roads Safety Equipments C-484, DDA Complex, Loni Road, Shahdara, Delhi-110094. |
Opposite Party |
| DATE OF INSTITUTION: JUDGMENT RESERVED ON: DATE OF DECISION : | 13.08.2012 25.04.2018 18.05.2018 |
N.K. Sharma, President
Ms. Sonica Mehrotra, Member
Ravindra Shankar Nagar, Member
Order passed by Ms. Sonica Mehrotra, Member:-
ORDER
The complainant has filed copy of the power of attorney, copy of the invoice of payment made of Rs. 2,05,833/- to the OP towards purchase of rubber hump alongwith copy of cheque and bank acknowledgment and series of e-mails from 16.11.2011 till 03.07.2012 exchanged between the complainant and the OP regarding the defective rubber hump and its replacement / repainting job etc and grievance voiced for inaction by the OP in the said e-mails.
The complainant placed reliance on judgment of Hon’ble NCDRC in Larsen& Toubro Ltd and Ors Vs Sunder Steels Ltd and Ors I (2009) CPJ 256 (NC) in which Hon’ble NCDRC held that machinery / equipment even if purchased for commercial purpose, purchaser will be “consumer” within section 2 (1) (d) of CPA in respect of services rendered / to be rendered by manufacturer / supplier during warranty. Further the complainant placed reliance on the judgment of Hon’ble NCDRC in Larsen and Toubro Ltd Vs Krishan Kumar Dhanker & Ors I (2009) CPJ 152 (NC) in which the Hon’ble NCDRC held that in case of defects in machinery within warranty, purchaser will be consumer even if the machinery sold for commercial purpose. Further the complainant relied upon the judgment of Hon’ble NCDRC Wipro Multimedia Vs Toppers Multimedia (P) Ltd and Ors II (2010) CPJ 39 (NC) in which the Hon’ble NCDRC held that entity purchasing goods for commercial purpose and availing service under warranty are entitled to seek redressal under CPA. The complainant also placed reliance on judgment of Hon’ble NCDRC in Tata Engineering & Locomotive Co.Ltd Vs Bachchi Ram Dangwal & Anr II (2009) CPJ 90 (NC) in which Hon’ble NCDRC held that warranty amounted to “service” under CPA and disqualifying exception relation to “commercial purpose” did not apply to consumer of service. Further complainant relied upon judgment of Hon’ble NCDRC in Viewtech Imaging Equipment Pvt Ltd and Ors Vs CMC Ltd & Anr II (2008) CPJ 240 (NC) in which the Hon’ble NCDRC equipment / machinery even if purchase for commercial purpose, buyer would be consumer if defects noticed during warranty and if not rectified, buyer would be entitled to relief for deficiency in service. Further complainant relied upon in judgment of Hon’ble NCDRC in Hindustan Power Plus Ltd Vs Santosh Drillers and Ors IV (2007) CPJ 161 (NC) in which the Hon’ble NCDRC held that purchaser for machinery for commercial purpose in which defects were noticed within warranty period would still entitle the purchaser to be consumer. At the time of oral arguments, the complainant filed additional compilation of judgments of Hon’ble NCDRC in Poonam Aggarwal Vs Gujral Associates II (2017) CPJ 447 (NC) in which the Hon’ble NCDRC observed that the services in order to exclude the hirer from the ambit of section 2 (1) (d) of the CPA should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services and therefore unless there is an evidence on record that the complainant was engaged in the business of selling and purchasing of properties on a regular basis, it would not be proper to classify such acquisition as a commercial activity. The complainant also relied upon judgment of Hon’ble NCDRC in P.G.Pai Vs Care Elevators & Engg. Co. Pvt. Ltd in which the Hon’ble NCDRC has observed that section 2 (o) of the CPA and section 2 (1) (d) of the said Act would include within the ambit of “consumer” any beneficiary of services other than the person who hires or avails such service of consideration when such services are availed of with approval of person paying the consideration. The complainant relied upon the judgment of Hon’ble NCDRC in Control and Switchgear Co. Ltd Vs Diamlerchrysler India Pvt Ltd and T and T Motors Ltd IV (2007) CPJ 1 (NC) in which interalia an issue for consideration before Hon’ble NCDRC was whether in case the company used its corporate resources to buy cars, can it be construed that the cars were purchased for commercial purpose. The Hon’ble NCDRC held the view that the car purchased was for use for directors and not for any activity directly connected commercial purpose of earning profit and therefore it cannot be said that the complainant company purchased cars for commercial purpose. Lastly the complainant placed relied upon the judgment passed by Hon’ble Supreme Court in Bunda Daniel Babu Vs M/s Sri Vasudeva Constructions & Ors in Civil Appeal No. 944 of 16 (SLP Civil No. 1633 of 2015) in which the Hon’ble Apex Court reiterated the judgment of Laxmi Engg Works Vs P.S.G. Industrial Institute and observed that the obtaining factual matrix has to be tested on the touchstone of the aforestated legal position to the effect that the principle that commercial purpose is required to be interpreted considering facts and circumstances of each case. The complainant also placed reliance upon the judgment of Hon’ble Supreme Court in Punjab University Vs Unit Trust of India AIR 2014 SC3670 in which the Hon’ble Supreme Court while highlighting the amendment in section 2 (1) (d) brought with effect from 15.03.2003 precluding commercial purpose from the ambit of consumer complaint as already dealt with by the Hon’ble Apex Court in Laxmi Engg. Works Judgment and Lucknow Development Authority Vs M.K. Gupta judgment (1994) 1 SCC 225 held that the commercial purpose would cover an undertaking the object of which is to make a profit out of the undertakings to exclude them from the definition of “consumer” as enshrined in the act.
OP in support of its defence of alleging the transaction between itself and the complainant of commercial nature and therefore outside the ambit of Consumer Protection Act, placed reliance upon judgment of Hon’ble SCDRC Delhi in Alpolic Industries Vs M/s Tiger Steel Engineering (II) Pvt Ltd III (2011) CPJ 369 DSCDRC in which the Hon’ble SCDRC while dealing with the transaction entered into between the parties for erecting sheds held that complainant was making wooden panels in course of business and sheds construction was for purpose of operation of company and therefore commercial and not deal of individual earning self livelihood but instead is a commercial deal and therefore dismissed the complaint. The OP also relied upon the Judgment of Laxmi Engg. Works Vs P.S.G. Industrial Institute II (1995) CPJ 1 (SC) which brought about amendments in 1993 w.e.f. 18.06.1993 to section 2 (1) (d) (i) of CPA to exclude commercial transactions from the ambit of Consumer Protection Act. The OP further relied upon the judgment of Hon’ble NCDRC of Meera Industries Vs Modern Constructions II (2009) CPJ 402 (NC) in which the Hon’ble NCDRC held that HOT MIX PLANT found defective during warranty period but since purchased for commercial purpose was outside the ambit of Section 2 (1) (d) (ii) in view of the amendment thereto in 2003 w.e.f. 15.03.2003 thereby setting aside decision of SCDRC which had held the complainant as consumer. The OP also relied upon the Judgment of Birla Technologies Ltd Vs Neutral Glass and Allied Industries Ltd I (2011) CPJ 1 (SC) passed by Hon’ble Apex Court in which the Hon’ble Apex Court held that development of computer software is a commercial activity. The OP further placed reliance upon Advik Industries Ltd Vs Uppal Housing Ltd & Anr IV (2012) CPJ 159 (NC) in which the Hon’ble NCDRC held that since the complainant was a limited company transacted business of investing funds and had applied for allotment of commercial space with OP for “office use”, it was not a consumer. Lastly, the OP relied upon the judgment of Satish Chander Gupta and Sons Vs Klick Nixon Ltd & Anr. III (2010) CPJ 438 (NC) in which the Hon’ble NCDRC held that engineers consultants and builders were engaged in commercial purpose of construction of a 500 rooms hostel by the complainant which he cannot do himself and therefore was a commercial activity and cannot be a consumer complaint.
The following issues arise for consideration/ determination for adjudication in the present complaint arising out of the factual matrix of transaction entered into by complainant with OP, allegation of defective rubber hump/ speed breaker supplied by the OP to the complainant within the warranty period and breach of contract and non fulfillment of promise to replace the same by the OP as stated by the complainant in the complaint against OPand objections taken thereto by the OP in its written statement for maintainability of the present complaint :-
Regarding the first issue, the word consumer is the fulcrum of the act defined in section 2 (1) (d) which was further amended in 1993 vide Laxmi Engg Works Vs P.S.G. Industrial Institute by Hon’ble Supreme Court and post 2003 amendment, a consumer who avail services for commercial purpose is excluded from the definition of term consumer. In Jay Kay Puri Engineering Vs Mohan Breweries and Distilleries Ltd 1996 (1) CPR 102 (NC), the Hon’ble NCDRC had held for the first time that a company is a consumer and later in the judgment of Shri Laxmi Cotton traders Ltd vs Central Warehousing Corporation 1996 III CPJ 22 (NC), the Hon’ble NCDRC went in detail into the issue whether an incorporated company would be a consumer and held that as per section 3 (42) of General Clauses Act 1897, a person is not only a natural person but also a person created under a statute such as a company incorporated under the companies act and shall include any company or association of body of individuals. Thus a person within the scope of CPA shall include a company within section 2 (1) (m) of CPA. The Hon’ble Supreme Court in landmark Judgment of Karnataka Power Transmission Corporation Vs Ashok Iron Works Pvt Ltd AIR 2009 SC 1905 fairly established that “company” would be a consumer under the provision of CPA. This issue is therefore decided in favour of the complainant that the complainant was competent to file the present complaint a consumer in capacity of being a consumer within the Consumer Protection Act.
On the second issue, the National Commission has been taken a consistent view that when a person purchases goods “with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit”, he will not be a consumer within the meaning of section 2 of the act but by way of amendment to section 2 (d) (i), if the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self employment, such purchaser of goods is yet a consumer. In the case of M/s Harsolia Motors Vs National Insurance Co. Ltd I (2005) CPJ 27 (NC) = 2005 (1) CPR 1 (NC), Hon’ble NCDRC held that “goods purchased or services hired should be used in any activity directly intended to generate profit to fall under commercial purpose and be excluded from the provisions of CPA” and the Hon’ble National Commission had held in the given case taking insurance policy by commercial units was only for indemnification and actual loss and not intended to generate profit and therefore such service was not for commercial purpose. The cardinal consideration in such cases is to be seen whether there is any direct nexus between services availed and process of profit making. By virtue of amendments of CPA effected in 2003, a person who avails of services for commercial purpose would no longer be within the ambit of “consumer” under CPA 1986 and in a case of Mohd Zubair Vs SBI 2004 (1) CPJ 186 (NC), the Hon’ble National Commission held that the complainant in course of business had applied for term loan and was alleging inordinate delay in handling proposals but the same was considered as commercial and not self employment or livelihood and this case was decided after the 2003 amendment to the act. The Hon’ble Supreme Court in its several rulings held that “commercial purpose” would cover and undertaking whose object is to make profit out of it. The Hon’ble National Commission in Ibrahim Khan Vs Srei Equipment Finance Pvt Ltd decided on 19.01.2015 held that by virtue of amendment to section 2 (1) (d) (ii) of CPA effected in 2003, a person who avails of service for commercial purpose would no longer within the ambit of consumer under the CPA whether he buys good for commercial purpose and avails of services attached to the goods in the nature of warranty, he cannot be considered a consumer even for the purpose of services during the warranty period. Whether the purpose for which a person has purchase goods or availed of services is a “commercial purpose” within the meaning of Section 2 (1) (d) of the act is always a question to be decided in the facts and circumstances of the case. The present case is clearly distinguishable from the ratios of Kalpavruksha Charitable Trust Vs Toshniwal Bros (Bombay) judgment passed by Hon’ble Supreme Court and Kusumam Hotels Pvt Ltd Vs Neicer India Ltd passed by Hon’ble NCDRC in which the purchase of CT scan machine and tiles were held to be purchased in close nexus with large scale commercial activity of service rendered to patients and guests respectively. In the present complaint however, the complainant had purchased the rubber hump/speed breaker for the purpose of security / comfort of the guest / visitor / employees of the hotel for which no amount of fee was being charged by the complainant and therefore the said purchase in our considered opinion was not for the purpose of promoting, advancing or augmenting an activity aiming towards earning profit and therefore it would not be proper to classify such a transaction / activity/ purchased as a commercial activity merely because the complainant is a big, well known large scale hospitality industry of worldwide repute by the name and style of Taj Palace Hotel. Contrarily what has to be seen is whether a breach of contract may result in deficiency of service or unfair trade practice to attract the provision of CPA. Therefore we hold that the purchase of the rubber hump by the complainant from OP was not used for any activity directly connected with commercial purpose of earning profit and therefore not a commercial transaction or purchase for commercial purpose and therefore this issue is decided in favour of the complainant against the OP.
As far as the third issue of colour fading of the rubber hump within warranty period is concerned, in view of the already decided issue that the transaction was not commercial, the complainant was a consumer and admittedly the OP had given warranty of two years with respect to the said rubber hump w.e.f the date of purchase vide e-mail dated 04.07.2011 filed as annexure C2 by the complainant alongwith the complaint and nowhere in that e-mail was it mentioned that the said warranty only was for heat and cold and breakage and crack and not for colour fading. The OP is trying to take advantage of absence of any written agreement/ contract between the parties clearly specifying the warranty terms and conditions to wriggle out of its contractual obligation by averring that the warranty was limited to the heat and cold and breakage and crack. The Hon’ble NCDRC in Tata Engg. and Locomotive vs Bachchi Ram Dangwal had taken the view that warranty amounted to “service” under the act and therefore disqualifying exception relating to “commercial purpose” shall not apply to consumer of service. We are in agreement with the plea of the complainant that the complainant got installed yellow coloured rubber hump/speed breakers from the OP for security purposes, comfort of the guests and to avoid rash and negligent driving and for smooth vehicular movement at their Hotel premises and the colour of the rubber hump was essence and an intrinsic / integral part of the rubber hump to attract the attention of the driver with its bright colour so that the driver reduces the speed of their vehicle and therefore we are not convinced with the lame excuse given by the OP in its defence that discolouring was a part of rubberized speed breaker as not being UV protected and therefore not under warranty. Therefore, the warranty has to be seen in totality and not in isolation to allow a convenient escape route to the OP. It is also clear that the complainant was not charging any fees from its guests for its usage and therefore not earning any profit out of it. From the documentary evidence placed on record by the complainant, it has been established that the rubber hump in question started fading within 4 months of its purchase for which the complainant regularly and repeatedly sent e-mails requesting and reminding the OP from November 2011 till April 2012 to send its technical team for site visit and to get the defective / discoloured rubber hump replaced but the OP, despite acknowledging the defect, kept dilly dallying the replacement even after their joint meeting held in April 2012 after which again in May 2012 to June 2012, complainant kept persisting the OP to replace the rubber hump and for the first time when OP expressed its reservation vide e-mail dated 22.05.2012 that replacement of the speed breaker by removal may cause the coming out of floor tiles underneath it for which the OP shall not be responsible for damage or fixing the same and had offered repainting instead, the complainant had even agreed to bear the loss of damaged tiles in the process of removal but had given an ultimatum to the OP to replace the defective rubber hump vide e-mail dated 03.07.2012. However, the OP failed to replace the defective rubber hump and therefore we hold OP guilty of deficiency of service in supplying defective rubber hump to the complainant of which the colour faded within warranty period and then not replacing the same despite assurances given to the complainant and repeated reminder and request by the complainant for almost one year. The intent of the complainant in the present complaint arising out of purchase of rubber hump/ speed breaker is not profiteering and the same is for benevolent interest of its guests and there is no intension whatsoever that the purchase was made for any commercial purpose or gain. Therefore, this issue is decided in favour of the complainant as the OP failed to fulfill its obligation of replacement of the defective rubber hump within the warranty period which is clearly indicative of unfair trade practice and deficiency in service on the part of OP.
The last issue is the entitlement of relief if any to the complainant. In keeping with the decision of this Forum in the above three issues decided in favour of the complainant, we direct the OP to refund the sum of Rs. 2,05,833.75/- paid by the complainant to the OP towards purchase of the rubber hump/speed breaker alongwith interest @ 9% p.a. from the date of filing of the complaint till realization. We further direct the OP to pay compensation of Rs. 30,000/- towards mental agony and harassment and Rs. 20,000/- towards litigation charges to the complainant. Let the order be complied within 30 days from the date of receipt of copy of this order by the OP.
(N.K. Sharma) President |
(Sonica Mehrotra) Member |
(Ravindra Shankar Nagar) Member |
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