Delhi

North

CC/104/2019

M/S. CROP CHAMICALS INDIA LIMITED - Complainant(s)

Versus

M/S. CAPITAL TRANSPORT OF INDIA - Opp.Party(s)

G.S. GANGWAR & ASSOCIATES

29 Aug 2023

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

CONSUMER COMPLAINT NO.: 104/2019

In the matter of

M/s Crop Chemicals India Limited

Office at 401-B, Usha Kiran Building,

Commercial Complex, Azadpur,

New Delhi-110033                                                                                                         ...   Complainant

Versus

M/s Capital Transport Corporation

Through its Partner Sh. D. P. Chopra,

Office: 50, Khanna Market, Tis Hazari,

Delhi-110054                                                                                                                …       Opposite Party

 

ORDER

29.08.2023

(Divya Jyoti Jaipuriar)

1. By way of this complaint, the Complainant Company has sought relief against M/s Capital Transport Corporation (OP herein) for the loss of the transported certain goods from its warehouse in Delhi to its another warehouse in Kolkata. The Complainant Company is admittedly in the business of manufacturing, distributing and selling of insecticides, fungicides, pesticides, bio products and fertilisers. The Complainant Company is having warehouses in different parts of the Country to cater its sales and distribution needs.

2. It is the case of the Complainant Company that it booked certain goods to be transported from its Delhi warehouse to its Kolkata warehouse through the transport service offered by OP. The said consignment was booked on 27.08.2018 and the consignment was delivered to the OP for transportation on 30.08.2018. Another consignment for the same route was also booked on 31.08.2018 and the consignment was handed over to the OP for transportation on 01.09.2018. Neither of these consignments was delivered by the OP to Kolkata warehouse of Complainant Company. The Complainant Company alleges that the said consignments were destroyed in fire when the truck carrying the said consignments caught fire.

3. On the onset, during arguments, we enquired from the Ld. Advocate for the Complainant to explain as to how the Complainant Company is covered under the definition of “Consumer” as defined in section 2 (1) (d) of the erstwhile Consumer Protection Act, 1986 in view of the fact that the Complainant Company hired the services of the OP for commercial purpose in order to send the consignments from its one ware house to another for further distributing the said items to the buyer of the products sold by the Complainant Company. In reply, Ld. Advocates for the Complainant has argued that as the Complainant Company availed the services of the OP for transporting its consignment, it becomes a Consumer within the meaning of the provisions of the Consumer Protection Act, 1986. It is also argued by the Ld. Advocates of the Complainant that although the consignment was sent for business purpose, it is still covered under the provisions of the erstwhile Consumer Protection Act, 1986. Ld. Advocate for the Complainant, during argument, also argued that sending the consignment to the buyer of the product cannot be termed as the commercial transaction as the relationship between the Complainant Company and the OP is not commercial in nature.

4. In support of his arguments, Ld. Advocate for the Complainant has relied on the judgment of Hon’ble National Commission in the matter of Lucky Forwarding Agency vs Binder Devi [(1999) 1 CPJ 400]. We are also aware of other judgments on similar aspect, some of which are as follows:

1. Dhanpati Devi vs New Delhi Karnataka Transways [I (2008) CPJ 217 NC]
2. South Eastern Roadways vs Jayashankar [II (2005) CPJ 96 NC]
3. Patel Roadways Limited vs Birla Yamaha Limited [(2000) 4 SCC 91]
4. M/s Nath Bros Exim International vs Best Roadways [(2000) 4 SCC 553]
5. State of UP vs McDonald and Co [(2022) 6 SCC 223]

5. Ld. Advocate for the OP has primarily argued on the maintainability of the complaint on the ground that the Complainant Company herein is not a consumer within the meaning of the provisions of Consumer Protection Act, 1986 particularly in view of the fact that the services of the OP were taken for commercial purposed.

6. Before proceeding further, it is paramount to reproduce relevant provisions of the Consumer Protection Act, 1986. Section 2 (1) (d) of the Consumer Protection Act, 1986, reads as under:

“2. Definitions.- (1) In this Act, unless the context otherwise requires,—

...

(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;

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;

…”

7. It is important to mention here that the expression “but does not include a person who avails of such services for any commercial purposes” in Section 2 (1) (d) (ii) of the Consumer Protection Act 1986 was not there in original legislation that was passed in 1986. This expression was added by Consumer Protection (Amendment) Act, 2002 [Act 62 of 2002], which came into effect on 15.03.2003. By the same Amendment Act, the explanation to this clause was also substituted to read as above.

8. Ld. Advocate for the Complainant relied on the judgment in the matter of Nath Bros Exim International (supra) in which the consignments booked by the Complainant therein were not delivered by the transport company. In the said case, Hon’ble Supreme Court had, in appeal, allowed the complaint and the liability of the carrier was fixed. But the said judgment was passed in a complaint the facts of which were from a date prior to 2003 amendments in the Consumer Protection Act, 1986. The facts in the Nath Bros case (supra) dated back to the year 1994, when the commercial usages were also part of the Consumer Disputes. After the amendment of 2003, Commercial usages were specifically excluded from the purview of the application of Consumer Protection Act, 1986. Hence, the judgment of Hon’ble National Commission in Binder Devi case (Supra) shall not have any application in the facts and circumstances of the present case.

9. Even the judgment of Hon’ble Supreme Court in the matter of Patel Roadways (supra) referred by the Ld. Advocate for the Complainant is not applicable in the case in hand for the same reason that the facts of the said case are from a date prior to 2003 when the 2002 amendments in Consumer Protection Act, 1986 came into effect. The facts in Patel Roadways case (supra) date back to 1994. After the amendment in the Consumer Protection Act, 1986 in the year 2003, both these judgments namely Nath Bros (supra) and Patel roadways (supra) have no application in the case in hand. When Hon’ble Supreme Court passed the judgments in Patel Roadways (Supra) and Nath Bros (supra) cases, the expression “but does not include a person who avails of such services for any commercial purposes” in Section 2 (1) (d) (ii) of the Consumer Protection Act 1986 was not examined as the same was not available when facts in these cases commenced. Prior to 2003, services availed for commercial purposes were also covered under the ambit of Consumer Protection Act, 1986, although goods purchased for commercial purposes were out of purview of Consumer Protection Act, 1986 since inception. Once the legislator has introduces the amendment in 2003 and introduced this expression, lis involving any availment of services for commercial purposes cannot be entertained by District Forums.

10. In this context, we would also like to refer to the judgment of Hon’ble Supreme Court in the matter of Laxmi Engineering Works vs. P.S.G. Industrial Institute [(1995) 3 SCC 583], in which Hon’ble Supreme Court has explained the term “Commercial Purpose”. While examining the issue, Hon’ble Supreme Court, in Laxmi Engineering case (Supra) has held as under:

“10. … Any consumer can go and file a complaint. Complaint need not necessarily be filed by the complainant himself; any recognized consumers' association can espouse his cause. Where a large number of consumers have a similar complaint, one or more can file a complaint on behalf of all. Even the Central Government and State Governments can act on his/ their behalf. The idea was to help the consumers get justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies. Indeed, the entire Act revolves round the consumer and is designed to protect his interest. The Act provides for “business ­to­ consumer” disputes and not for “business­to­business” disputes. This scheme of the Act, in our opinion, is relevant to and helps in interpreting the words that fall for consideration in this appeal.

11. … The explanation reduces the question, what is a “commercial purpose”, to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., “uses them by himself”, “exclusively for the purpose of earning his livelihood” and “by means of self­employment” make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood.”

11. Ld. Advocate for the Complainant has also relied on the judgment of Hon’ble Supreme Court in the matter of Lilavati Kirtilal Mehta Medical Trust vs Unique Shanti Developers and others [(2020) 2 SCC 265], in which Hon’ble Supreme Court has held as under:

“16. Ultimately, whether or not a person is a consumer or whether an activity is meant for a commercial purpose will depend upon the facts and circumstances of each case. It may be the case that a person who engages in commercial activities has purchased a good or availed of a service for their personal use and consumption, or for the personal use of a beneficiary, and such purchase is not linked to their ordinary profit-generating activities or for creation of self-employment. Such a person may still claim to be a “consumer.” For example, a large corporation may hire the services of a caterer or a 5-star hotel for hosting a function for its employees and their families. If there is any deficiency in service, the service-provider cannot claim that merely because the person availing of the service is a profit-generating entity, and because such transaction does not relate to generation of livelihood through self-employment, they do not fall under the definition of a “consumer”. A commercial entity may also be a consumer depending upon the facts of the case. It is not the identity of the person but the purpose for which the transaction is made which is relevant.”

12. Ld. Advocate for the Complainant, while relying on the above paragraph of the Leelawati Trust (supra) judgment, argues that to determine commercial nature of the transaction, there cannot be a straightjacket formula. We agree with him on this argument. As a matter of fact, in the Leelawati Trust case (supra), Hon’ble Supreme Court, while dealing with the issue of transaction for commercial purpose, has laid down certain guidelines and held as under:

“19. To summarise from the above discussion, though a strait jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is “for a commercial purpose”:

19.1. The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, “commercial purpose” is understood to include manufacturing/ industrial activity or business­to­business transactions between commercial entities.

19.2. The purchase of the good or service should have a close and direct nexus with a profit­generating activity.

19.3. The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.

19.4. If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of “generating livelihood by means of self­employment” need not be looked into.”

13. Hon’ble Supreme Court in Lilavati Trust case (supra) has guided that to decide that a transaction is for a commercial purpose or not, the facts and circumstances of each case has to be considered and there cannot be any straightjacket formula for that purpose. However, the dominant intention or dominant purpose for the transaction and close and direct nexus with a profit generating activity are two broad parameters to ascertain that whether the transaction in question is commercial in nature or not. Further, for application of the explanation of section 2 (1) (d) of the erstwhile Consumer Protection Act, 1989, it is also to be examined that if the dominant purpose behind purchasing the good or service was for the personal use and the consumption of the purchaser and/ or their beneficiary, or is otherwise not linked to any commercial activity, then the question of whether such a purchase was for the purpose of “generating livelihood by means of self- employment” need not be looked into.

14. While applying the principles laid down in Lilavati Trust case (supra), Hon’ble Supreme Court in the matter of Shrikant G. Mantri vs. Punjab National Bank [(2022) 5 SCC 42] has examined the overdraft facility being utilised by a stockbroker has held that relations between the appellant [Stockbroker] and the respondent [Bank] is purely “business to business” relationship. Hon’ble Supreme Court, therefore concluded that as such, the transactions would clearly come within the ambit of ‘commercial purpose’ and it cannot be said that the services were availed “exclusively for the purposes of earning his livelihood” “by means of self-employment”. Hon’ble Supreme Court has also opined that if the interpretation as sought to be placed by the appellant is to be accepted, then the ‘business to business’ disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes.

15. The other judgments namely Dhanpati Devi (supra), South Eastern Roadways (supra), referred by Ld. Advocate for the Complainant Company are not applicable to the case in hand simply for the reason that the facts of these cases are different and the ratio of these judgments are not applicable on the facts and circumstances of the case in hand.

16. In the case in hand, the facts clearly indicate and the Complainant Company also admits in the complaint that the consignment was booked for transporting the same from one ware house of the Complainant Company to another warehouse for the purpose of distributing the same for earning profit for the Complainant Company. This is a business-to-business transaction and the sole purpose of the said transaction was to earn profit. This is also apparent from the averment of the Complainant that because of the actions of the OP, the “Complainant Company has suffered huge financial loss”. This statements clearly indicate that the transaction between the Complainant Company and the OP is business-to-business, commercial in nature and it has a direct nexus with profit generating activity of the Complainant Company.

17. In view of the above, we are of the opinion that the transaction in question in this complaint is commercial in nature and it is not covered under the ambit of the Consumer Protection Act, 1986. Hence, this complaint is liable to be dismissed on the sole ground that Complainant Company is not a consumer within the ambit of section 2 (1) (d) of the Consumer Protection Act, 1986.

18. Accordingly, for the foregoing reasons, this complaint is dismissed. However, we grant liberty to the Complainant to approach the Forum/ Court of appropriate jurisdiction, if so advised for the relief so claimed in this complaint. We also clarify that while dismissing the complaint we have only examined one aspect that whether the Complainant is a consumer or not for application of the provisions of the Consumer Protection Act, 1986 and we have not examined the case on the facts and evidences and we have not examined the case on its merit. Therefore, we clarify that as we have not expressed any opinion on the merits of the case, if the Complainant approached any other Forum/ Court, the same shall decide the case on its own merit without being influenced by any of the observations made in this order. For explaining the delay, if any, the Complainant Company may seek the benefit of the judgment of Hon’ble Supreme Court in the matter of Laxmi Engineering Works (supra), if so advised and if so available to it.

19. Office is directed to supply the copy of this order to the parties as per rules. Thereafter, file be consigned to the record room.

 

 

 

___________________________

Divya Jyoti Jaipuriar, President

 

 

 

___________________________

Harpreet Kaur Charya, Member