NCDRC

NCDRC

CC/35/2012

M/S. AJAY TRANSPORT CO. - Complainant(s)

Versus

KAMAZ VECTRA MOTORS LTD. - Opp.Party(s)

M/S. VIDHII PARTNERS, Advocate

19 Mar 2012

ORDER

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
 
CONSUMER CASE NO. 35 OF 2012
 
1. M/S. AJAY TRANSPORT CO.
A Partnership Firm Having Its., Office at New Road,
Phusro, District- Bokaro,
Jharkhand - 829 144
...........Complainant(s)
Versus 
1. KAMAZ VECTRA MOTORS LTD.
Thorugh Its Managing Director, 7& 8 Sipcot, Phase -I,
Hosur - 635 126
Tamil Nadu
...........Opp.Party(s)

BEFORE: 
 HON'BLE MR. JUSTICE R. C. JAIN, PRESIDING MEMBER
 HON'BLE MR. S. K. NAIK, MEMBER

For the Complainant :
Mr. Ajay Kumar, Advocate
Mr. Aman Varma, Advocate
For the Opp.Party :NEMO

Dated : 19 Mar 2012
ORDER

Once again, we are called upon to consider an important question in regard to the maintainability of complaints filed by certain persons (juristic person included) in this Commission or for that reason before any consumer fora established under the provisions of the Consumer Protection Act, 1986 for the redressal of their grievance in relation to goods which they had acquired from a certain supplier or services obtained from a service provider in which by their very nature can only be used for commercial purpose. 2. In nut shell the facts of the present case are that the complainant, a partnership firm engaged in the business of excavation, loading, drilling, blasting placed and transporting of heavy materials. It is a lead participant in major mining contracts. It had acquired five numbers of Kamaz 6540, new generation Multi-Axle Tippers at a Rs.1,65,00,000/- in all for their use in the aforesaid activities. Once the machines were put to use for the purpose for which they were acquired, the complainant firm realised that the machines were not upto the mark and were substandard or suffered from certain inherent manufacturing defects. The machines carried warranty of 36 months / 2,50,000 Km. whichever event was accomplished earlier. According to the complainant despite the opposite partiesengineers having being informed of the defects and their service personnel visiting the machines, the defects could not be rectified and the machines continued to suffer from the alleged defects. Alleging defects in goods supplied by the OPs and deficiency in service on the part of the opposite party, after issuing a legal notice, complainant has filed the complaint seeking the following relief:- a) The Respondent be held guilty and liable for defect and deficiency in the product provided by the Respondent as also liable for deficiency in services and unfair trade practices. (b) The Respondent to pay the amount of Rs.1,18,24643.04/- upto 02.02.2012 to the complainant with further interest @18% p.a. till realization as is mentioned in the statement of claim along with replacement of all the five vehicles and provide additional five vehicles as per the proposal mentioned in the letter dated 06.10.2011. (c) That Respondent be directed to refund the total purchase consideration of Rs.1,55,00,000/- alongwith interest at 18% p.a. from 11.12.2010 upto the date of realisation and also refund the amount of money spent on the five vehicles over and above the purchase consideration. ( ) That the Respondent be directed to pay Rs. 5 lakhs towards cost of this Complaint. ( ) Any other Grant or Relief which the Honle Commission deems fit and proper. 3. We have carefully gone through the averments and allegations made in the complaint as also the material filed alongwith the complaint. We have heard Mr. Ajay Kumar, Advocate counsel for the complainant at length on the question of maintainability of the present complaint. Prima-facie we held the view that the present complaint is not maintainable before this Commission or a consumer fora established under the Act. Learned Counsel for the complainant has strongly argued that the complainants are consumers within the meaning of section 2(1)(d) of the Consumer Protection Act, 1986 (for short he Act and therefore, are complainants within the meaning of 2(1)(c) and so entitled to file the complaint for the redressal of the grievance they have made out in the present complaint. In the first instance it was argued that the complainant firm is a firm of four family members who are engaged in the above referred business which they are carrying for the purpose of their livelihood and, therefore, going by the explanation appearing below section 2(1)(d), they are entitled to invoke the jurisdiction of this Commission. We must reject this contention because no averment to the above effect has been made in the complaint and in absence of the same it is not open for the complainant to make such a plea. 4. The main question answer to which will decide the fate of this complaint before this Commission is as to whether the goods (5 machines in this case) purchased by the complainant at a price of Rs.1,65,00,000/- were actually purchased by the complainant firm for a commercial purpose or some other purpose. There is no dearth of cases where this Commission has considered this question as to what amounts to commercial purpose in relation to the goods purchased or the services obtained. In the beginning years of this Commission, this Commission has taken view in the matters which was subject matter of scrutiny by the Apex Court. One such case we may refer here is axmi Engineering Works Vs. PSG Industrial Institute{(1995) 3 SCC 583}. In fact the counsel for the complainant has also relied upon this case in support of his submissions in order to point out that the goods (five machines) purchased by the complainant were not for a commercial purpose. He has heavily relied upon the observations made by Supreme Court in para 19 of the said judgement which are of the following effect:- 19. One of the members of the Commission, Sri Y. Krishan, however, took a different view. The learned Member was of the opinion that: "...... the word used in Sec.2(l)(d)(i) "for commercial purpose" have to be given a precise and restrictive meaning: commercial purpose has to be distinguished from commercial production and commercial activity. The subsection 2(1)(d)(i) and (ii) of the Consumer Protection Act have to be interpreted harmoniously. The interpretation of the words "Commercial purpose" in Sec.2(l)(d)(i) must be logical and equitable so as to avoid patent anomalies and inconsistencies in the application of the law. Viewed in this background the various tests for determining whether the goods have been purchased for a commercial purpose would be: i) the goods are not for immediate final consumption but that there is only transfer of goods. i.e., resale. ii) there should be a direct nexus between the purchase of goods and the profit or loss from their further disposal. Such a direct nexus is absent when the goods or services are converted for producing other goods or services. After conversion there is no direct nexus between the kind of goods purchased and the kind of goods sold. iii) there is nexus of form and kind between the goods purchased and the goods sold. Such a direct nexus of form and kind ceases when the goods undergo transformation or conversion. In brief the immediate purpose as distinct from the ultimate purpose of purchase, the 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 of a "commercial purpose" or not. Thus buyers of goods or commodities for "self-consumptions" in economic activities in which they are engaged would be consumers as defined in the Act." 5. Reliance is then placed on adan Kumar Singh (dead) through LRs Vs. District Magistrate, Sultanpur & Ors.[(2009) 9 SCC 79], in which Supreme Court has fully considered the question and held in para 16 & 17 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" or not. Thus, buyers of goods or commodities for "self-consumption" in economic activities in which they are engaged would be consumers as defined in the Act. 17. Apart from the above, it may also be seen that the purchase of the truck by the appellant would also be covered under explanation to Section 2(1)(d) of the Act. The appellant had mentioned categorically that he had bought the said truck to be used exclusively by him for the purpose of earning his livelihood, by means of self- employment. Even if he was to employ a driver for running the truck aforesaid, it would not have changed the matter in any case, as even then appellant would have continued to earn his livelihood from it and of course, by means of self-employment. Furthermore, there is nothing on record to show that he wanted to use the truck for any commercial purpose. 6. In our view, the complainant cannot seek any help from above decisions because the facts and circumstances of the said case were distinguishable from the facts and circumstances of the case in hand. Even in the case of Laxmi Engineering Works (supra) in para 18, the Supreme Court has fully clarified the position by making the following observations:- eference to the decisions cited by the learned counsel for the parties would be in order at this stage. In Synco Textiles Private Limited v. Greaves Colton and Co. Ltd. (1991 (1) CPJ 499), the appellant purchased from the respondent three generating sets at a total cost of Rs.5,53,000/ - for use in his factory. His case was that the generating sets supplied by the respondent-company were defective and that on that account he suffered substantial business losses. He applied to the State Commission for recovery of the cost of the machines as well as a sum of Rupees four lakhs by way of damages. The State Commission first took up the question whether the complainant can be called a "consumer" as defined in the Act. (The case arose before the explanation was added by the 1993 Amendment Act.) The State Commission held that since the generators were purchased by the appellant for generating electricity in its factory to be used for operating the machinery in the factory for the purpose of commercial production, the appellant cannot be called a "consumer". When the matter came to the National Commission by way of appeal, Balakrishna Eradi, J., President, dealt with the meaning of the words "for any commercial purpose" in the following words (majority opinion): "Since cases of resale have been separately referred to, it becomes obvious that the words "for any commercial purpose" are intended to cover cases other than those of resale of the concerned goods. The words "for any commercial purpose" are wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profit. According to the meaning given in standard dictionaries, the expression commercial’ means- "connected with, or engaged in commerce. mercantile; having profit as the main aim,, (See Collins English Dictionary). ertaining to commerce: mercantile" (See Chamber’s Twentieth Century Dictionary) The meaning of the expression ’commerce’ as given in the dictionaries is: "exchange of merchandise, especially, on a large scale" (See the Concise oxford Dictionary) "interchange of merchandise on a large scale between nations or individuals: extended trade or traffic" (See Chambers Twentieth Century Dictionary) Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression’ consumer’ any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making Profit. As already indicated since resale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words "for any commerce purpose" must be understood as covering cases other than those of resale of the goods. it is thus obvious that Parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for resale but also those who purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit activity will not be ’consumers’ entitled to protection under the Act. It seems to us clear that the intention of Parliament as can be gathered from the definition section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It would thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that exclusion clause should apply it is however necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit." 7. A perusal of the above should not leave any doubt in anybody mind that when the goods are purchased in bulk for consumption and manufacturing in large scale with a view to make profit, it will fall outside the scope of the definition. In other words, if the goods are acquired for being utilised for commercial purposes on large scale basis, the person who has acquired the goods is not a consumer within the definition. The magnitude of the business of the complainant as also of the activity in which it is engaged and the bulk purchase of five machines and the use to which the machines were put lead to irresistible conclusion that the complainant had acquired the said machines for commercial use. The complainant itself has made averments and allegation to this effect at several places in his complaint in unequivocal terms. Therefore, there is no escape from the conclusion that the complainant had acquired these machines at a heavy cost for no purpose other than commercial purposes. It will exclude him from the purview of onsumerunder section 2(1)(d)(i) straightaway. Even if the complainant tries to come through section 2(1)(d)(ii), i.e., deficiency in service provided by the opposite party, even then he will not fall under the definition of onsumeras it stands after amendment by the Amendment 62 of 2002 effective from 15.03.2003. Thus, looking from any angle, we have no hesitation to hold that the complainant has tried to misuse the jurisdiction of this Commission by filing the present complaint, may be with the motive to save on court fee which is payable on a civil suit. 8. For the foregoing discussion, we dismiss the complaint as not maintainable before this Commission with cost of Rs.10,000/- to be deposited in the onsumer Legal Aid Accountof this Commission, however, with liberty to the complainant to work-out its remedy based on the same cause of action before the appropriate court / forum in accordance with law.

 
......................J
R. C. JAIN
PRESIDING MEMBER
......................
S. K. NAIK
MEMBER

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