Tamil Nadu

StateCommission

A/82/2020

M/s Sumanth Holdings Pvt Ltd., Rep by its Managing Director, Mr.M.Vijay Kumar, No.45/23, Flat No2B, MKV Seraphic Courtyard, Plat Ground 3rd FCross Street, kilpauk Garden Colony, Kilpauk, Chennai 010. - Complainant(s)

Versus

M/s. Supriya Elevator Company India Ltd, Rep by its Director, No.51, Murthingar Street, Vyasarpadi, - Opp.Party(s)

M/s.N.Varadharajan

26 Jun 2023

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present: Hon’ble Thiru. Justice R.SUBBIAH ... PRESIDENT

             Thiru.R VENKATESAPERUMAL       … MEMBER

 

F.A. No.82 of 2020

 

(Against the Order, dated 28.01.2020, in C.C. No.37 of 2016, on the file of  the DCDRF, Chennai-North)

                                                    

                                                                                                                                   Orders pronounced on: 26.06.2023

 

M/s.Sumanth Holdings P. Ltd.,

Rep. by its Managing

         Director – M.Vijayakumar,

No.45/23, Flat No.2B,

MKV-Seraphic Courtyard,

Playground 3rd Cross St.,

Kilpauk Garden Colony,

Kilpauk, Chennai 600 010.    … Appellant/Complainant

 

vs.

 

M/s.Supriya Elevator

    Company (India) Ltd.,

Rep. by its Director,

No.51, Murthinagar,

Vyasarpadi,

Chennai 600 039.                 … Respondent/Opp. Party

 

             For Appellant           :  M/s.N.Varadha Rajan

             For Respondent       :   M/s.Rajkumar Jhabakh

 

This First Appeal came up for final hearing on 07.02.2023 and, after hearing the arguments of the counsels for the parties and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

 

O R D E R

 

R.Subbiah, J. – President.

 

             Aggrieved by the order, dated 28.01.2020, passed in C.C. No.37 of 2016, by the DCDRF, Chennai-North, in dismissing their Complaint by holding that the complaint is not maintainable for the reason that the complainant does not fall within the ambit of consumer as defined in Section 2(1)(d) of the CP Act, 1986, the complainant/Developer has come up with the present First Appeal.

 

             2. Since the District Forum dismissed the complaint solely on the ground of maintainability, we are not extracting the entire factual aspects except those that are relevant and necessary for our discussion.

             It is the case of the appellant/complainant that they are Builders and, in respect of a property developed by them into a residential apartment at Kilpauk, they had engaged the services of the OP for the erection of a Lift with a capacity to carry 6 persons; that, after inspection of the site condition, the OP gave a quotation to erect a lift having the capacity to accommodate 6 persons with the total weight of 408 Kgs; that on 31.03.2014, work order was given by the complainant to the OP for lift-erection and it was followed by payment of Rs.6.30 lakh out of Rs.7 lakh, which was the total sum fixed towards lift-erection and, as per the terms of contract, the complainants have to pay the balance sum of Rs.70,000/- against testing and completion of work fully; that, after receiving the last payment, when the OP had called upon the complainant to inspect the lift for a test drive, the latter was shocked to note that the lift car room space was very small that it was not even capable of accommodating 4 persons; that erection of such a lift contrary to the work order would cause serious misunderstanding between the complainant and the flat owners and the lift was meant for the latter’s use; that, after issuance of  a legal notice, although the OP admitted their mistake, they failed to comply with the demand to rectify the defect in such a way to make the lift to accommodate 6 person and virtually, they abandoned the work in half way; that the complainants were forced to engage a 3rd party-Lift Company for completing the erection of the lift to make it ready for the usage of all the flat owners by providing the mother board, etc. at the cost of the complainant for a sum of Rs.80,000/-; and that the acts of the OP amounts to clear service deficiency, hence, the complaint before the District Forum to direct the OP to pay to the complainant a sum of Rs.10 lakh as compensation for the service deficiency and unfair trade practice committed by them and another sum of Rs.30,000/- towards costs of the complaint.

             It is the main defence of the OP in their written version that the transaction involved is purely commercial in nature; as such, the complainant is not a consumer as defined under Section 2 (1)(d) of the Act.

             Both sides filed their respective proof affidavits and marked supportive documents and the District Forum, by accepting the contention of the OP that the complainant availed the services of the OP for commercial purpose, ultimately held that the complainant would not fall within the ambit of the consumer as defined in the Act and accordingly, dismissed the complaint as not maintainable.  Hence, the complainant has come up with the present Appeal.

 

             3. Learned counsel for the appellant/complainant primarily refers to the Ex.A1 Authorization letter given by all the Flat Owners and submits that it was on behalf of the said owners and for their personal use, the complainant hired the services of the OP to erect the Lift, which is in no way meant for the use of the appellant for their commercial purpose.  In fact, the appellant had availed the services of the respondent to provide the lift for the use of the flat owners without any service charge and no element of profit is involved in the activities between the appellant and the flat owners for erection of the lift. That being so, by totally ignoring the striking factum that the actual beneficiaries of the services availed by the appellant from the respondent are the flat owners for whose personal use the work order for erection of the lift was issued, the District Forum hurriedly rushed to cast out the appellant from the purview of consumer just because it is named as a Company.  Resultantly, the complainant/Developers, who suffered the implications of unfair trade practice at the hands of the OP that committed glaring service deficiency by acting contrary to the work order and also left the work in the halfway, are put to great prejudice due to the unfair dismissal of their case by the District Forum as not maintainable on a flimsy ground and hence, the impugned order is liable to be set aside.

 

             4. Per contra, it is the contention of the respondent/OP that the appellant/company would not fall within the definition of Consumer for the reason they availed the services of the respondent to provide a lift in the apartment/flats developed by them and those flats are meant for sale to the buyers on profit basis; as such, the commercial purpose involved is glaringly visible.  Learned counsel relies upon a catena of decisions including the one rendered by the Apex Court  in Laxmi Engineering Works vs. PSG Industrial Institute (1995-3-SCC-583) for the proposition that any usage of the goods or services availed under Act for a profit motive would make the usage one of commercial purpose. In the present case also, the facts are very clear that that the appellants are Real Estate Developers who do business for profit and, in such course of business, they collected necessary charges from the buyers for providing the lift and now, they cannot turn around and say that their service has no semblance to any profit-generation from the provision / erection of lift, particularly when they marketed the flats based on the availability of the lift that was procured from the respondent.  In fact, the appellant itself has acknowledged that the lift was being procured and installed by them to increase the value of their property; therefore, the only reason they availed the goods and services of the respondent was for a clear commercial purpose. Rightly, the District Forum found the existence of pure commercial activity and the profit motive of the appellant behind hiring the services of the             respondent and hence, it rightly dismissed the complaint as not maintainable and the said well considered order of dismissal does not call for any interference and the appeal deserves to be dismissed, learned counsel urged ultimately.

 

             5. In the light of the rival submissions advanced on either side, the only question that needs to be decided is –

               “Whether the arguments of the appellant that the ultimate finding rendered by the District Forum to the effect that the transaction involved is in the nature of commercial activity/purpose is perverse and that the said finding is not based upon proper assessment of the facts and circumstances to rationally reject the emphatic claim of the complainant that the instance is an exception to commercial purpose, merit acceptance or not?

 

             6. As the whole issue revolves around the point and concept pertaining to ‘consumer’ and ‘commercial purpose/activity’, it would be apt to reproduce below Section 2(d) of the CP Act, 1986 which deals with both the terms by way of definition and explanation:-

      “2. Definitions. ­ 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 payments, when such services are availed of with the approval of the first­mentioned person;

Explanation: For the purposes of sub­clause (i), “commercial purpose” does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self employment;”

In the present case, the deficiency is obviously not in respect of the product or good but it is in regard to the service availed to commission the product/Lift and hence, clause-ii of the definition needs to be focussed since it speaks about service.  As per the said clause, apart from the person, who hires or avails of the service, a beneficiary, who hired or availed of the service with the approval of the first-mentioned person, is also defined as a consumer.  As regards ‘commercial purpose’, it has been repeatedly held by the Apex Court in its handful of decisions that it is always a question of fact that needs to be decided in the facts and circumstances of each case.

         Keeping the above aspects in mind, if we examine the case on hand, no doubt, the complainant/appellant is a Developer, engaged in commercial activities. But, it is their case that the services hired by them from the OP has no nexus or link at all to their business activity to derive any profit and, on the contrary, they hired the OP’s services on behalf of the flat owners, who are the actual beneficiaries under the hired service. According to them, the said aspect is well substantiated by Ex.A1/letter, dated 01.02.2014, whereby, the flat owners offered their authorization in favour of their Builder/complainants to engage the services of a reputed lift firm for erecting a lift in the premises.  The contents of the said letter read as follows:-

          “ We do hereby authorize you to engage the services of a reputed lift company for erecting a Lift in our residential flat building at premises bearing door No.45, Old door No.23, Play Ground Street, Kilpauk Garden Colony, Kilpauk, Chennai-10, at the cost deemed to be fit and proper for you.

          We undertake to pay the cost of the lift paid by you on our behalf as and when you submit necessary bills to us in this regard. “

The said letter shows that the flat owners, in their pursuit to get a lift erected in the Apartment, had not only authorized the Developer to take up the task but also undertook to pay the costs connected to the same.  It seems, it is only after the said authorization, the Developer approached the OP and subsequently, the inspection was carried out by the OP who gave their quotation on 24.02.2014 and the work order issued to them by complainant shows that the lift meant to be erected shall have the capacity to carry 6 persons.  The complainant also emphatically states that they did not demand even the service charge for taking up the task on behalf of the beneficiaries/flat owners. But, from the impugned order passed by the lower forum, we find that no minimum discussion was ever made on the factual aspects to arrive at a satisfaction that the transaction involved has commercial purpose. It seems that the description and nomenclature of the complainant that it is a Real Estate Agency or Developer has much influenced the mind of the Forum to hold ab initio, without any appreciation of facts, that the complaint is not maintainable.  Not a single line of discussion is visible in the impugned order reflecting that the availing of services from the OP for erecting the lift was done by the complainant at their own initiative and costs for the purpose of deriving profits. In cases of this nature, identity of the entity hiring the service is not conclusive to decide the question regarding commercial purpose.  In other words,  when an entity engaged in commercial activities avails of services that are said to be not in connection with their enterprise but for the personal use of a beneficiary and such endeavour on their part is also said to have no link or nexus to their usual profit generating activities, they can very well maintain a consumer dispute over deficiency in service and, in such an instance, the Forum concerned shall have to primarily examine the facts and circumstances in the light of the materials adduced to find out as to whether any commercial purpose is involved or not and if it is found that commercial purpose has no nexus to the activity in question and that the hiring of service was only for the benefit of the beneficiaries and their personal use, the consequential main issue of alleged service deficiency and the claim made need to be decided by the Forum concerned.  Therefore, where it turns out from a proper examination of the facts and circumstances that the service availed is an activity which, in no way, is intended to generate profit, there cannot be any embargo for the complainant/commercial enterprise to launch a consumer dispute and the Forum concerned, without even appreciating or properly looking at the facts and circumstances that speak otherwise, cannot in limini dismiss the case as not maintainable merely because it was preferred by a commercial agency apparently engaged in profit-making activities. What needs to be looked into is the purpose & objective and not the person & demeanour. A strait jacket formula cannot be adopted in all cases to presuppose commercial purpose by looking at the identity of the entity hiring the service and what is to be seen is whether the dominant purpose or intention behind hiring a service from the service-provider concerned was to derive some sort of profit generation for the hirer or its beneficiary. Going one step ahead, the Apex Court, while considering the scope and context of ‘consumer’ as defined in the Act, in the decision reported in II-2007-CPJ-25 (Kishori Lal vs. ESI Corporation), much highlighted the point that the CP Act, being a beneficial legislation, should receive a liberal construction and categorically ruled thus:-

      “ 7. …. The comprehensive definition aims at covering every man who pays money as the price or cost of goods and services.  However, by virtue of the definition, the person who obtains goods for resale or for any commercial purpose is excluded, but the services hired for consideration even for commercial purposes are not excluded. ….”

From the above analogy drawn by the Apex Court, the point is so clear that a commercial agency will not fall outside the definition ‘consumer’ so long the service hired/availed by them has no direct nexus with their profit generating activity and the dominant purpose and intention behind availing the service was not meant to facilitate some sort of profit-making either for themselves or for their beneficiary.  In the present case, on the face of Ex.A1/authorization letter from the flat owners, there cannot be any impediment to treat the complainant as a consumer particularly when the element of profit generation is also not shown to exist in the activity undertaken.  Also, in this particular case, the lift erection cannot be said to be an incidental work arising from the main project meant for profit generation, for the reason that, prima facie, it was pursued at the request of the beneficiaries for their personal use.  While all the above aspects culled out from the facts and circumstances have been adverted to for reaching a proper conclusion on the limited point as to whether the complainant falls within the ambit of consumer, in regard to the major issue of service deficiency and as to whether either the complainant or the beneficiaries derived any profit otherwise, the OP can very well canvass and demonstrate the same during the course of final arguments.  But, on a perusal of the impugned order, we find that, for the conclusion reached to the effect that the complainant is not a consumer, absolutely there is no discussion at all based on the facts and circumstances and no proper reading or perusal of the materials was done by the lower forum which seemed to have been overtaken by the mere nomenclature of the complainant that it is a commercial agency.  In the one-page discussion, just after extracting the provision under Section 2(1)(d) of the Act, the lower forum suddenly jumped to the conclusion that it is a case of commercial activity. As the said conclusion is absolutely perverse and absurd since not based upon discussion of facts and circumstances, the impugned order is liable to be set aside by the allowing the appeal.

 

             7. In the result, the appeal is allowed by setting aside the impugned order, dated 28.01.2020, passed by the DCDRF, Chennai-North, in C.C. No.37 of 2016  and, since it is now held by us that the appellant/complainant falls within the ambit of consumer,  we remit the matter back to the forum below for fresh consideration of the case over the main issue and allegation of service deficiency and for rendering a just and proper decision based on merits in terms of the facts and circumstances involved and in accordance with law, and the Complaint shall be so disposed of within a period of two months from the date of receipt of a copy of this Order.

     .

 

R VENKATESAPERUMAL                                                                                                    R.SUBBIAH, J.

MEMBER                                                                                                                                 PRESIDENT.

 

ISM/TNSCDRC/Chennai/Orders/June/2023.

 

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