Reserved
State Consumer Disputes Redressal Commission
U.P. Lucknow.
Complaint Case No. 80 of 2022
M/s Medplan Private Limited, through
its Director Dr. Puneet Manocha,
Registered Office at C-115, Naraina
Industrial Aread Phase-1, New Delhi
-110028 also at: C-183, Sector 63,
Noida-201301 Uttar Pradesh. …Complainant.
Versus
1- RICHPEACE AI Co. Ltd., Ground Floor,
B-35, Sector-67, Noida District, Gautam Budh
Nagar-201301, through its Directors/
Authorized Representatives.
2- GETONAGAIN TECHNOLOGY CO. LIMITED,
Flat/Room 1-5 20/F Midas Plaza, 1 Tai Yau
Street, San PO Kong, Kowloon, Hongkong,
EMAIL: sales@getonagain.com
TEL: 00852-27551096 (Through email)
3- TIANJIN RICHPEACE TRADING CO. LTD,
No.6 Baozhong Road, Baodi Economy Zone,
Tianjin City, P. R. China.
EMAIL: - jenny@richpeace.com (Through email)
4- Ms. SUMMER PENG (India Market Sales),
Ground Floor, B-35, Sector-67, Noida Distt,
Gautam Budh Nagar - 201301
Email: summer@richpeace.com
5- Mr. AJAY TIWARI (Sales Manager),
Ground Floor, B-35, Sector-67, Noida
Distt., Gautam Budh Nagar-201301,
Uttar Pradesh, India.
Email: ajay@getonagain.com. ...Opposite Parties.
Before:
1- Hon’ble Mr. Justice Ashok Kumar, Presidrnt.
2- Hon’ble Sri Vikas Saxena, Member.
Ms. Aarti Bhalla, Sri Sravan Kumar and
Smt. Surangama Sharma, Advocates for the complainant.
None for opposite parties no.1 to 4.
Sri Pawan Verma, Advocate for opposite party no.5.
Dated : 19.11.2024
JUDGMENT
Per Mr. Vikas Saxena, Member:
The instant complaint has been filed stating that the complainant company is engaged in the field of manufacturing of surgical masks, surgical gowns, PPE coveralls, N95 respiratory masks, surgical drapes etc. for which they purchased various machines from the opposite parties. The complainant has alleged that they had to take huge amount of loan from the Central Bank of India and other sources to buy these machines. The description of the machines has been given in para 5 of the complaint.
As per complaint, the opposite party no.2 despatched 2 shipments in January and February, 2021. After installation of machines, it was noticed by the Director of the complainant company that out of total machines four (4) of them were having a few manufacturing defects due to which the parts of these machines constantly broke down and stopped working. The details of machines which were not working as per the complainant has been given in para 11 of the complaint. The complainant company sent various E-mails stating the frequent breakdowns in various machineries but the machines were not rectified to the satisfaction of the complainant company. Although, the Sales Manager of the opposite party no.2 Mr. Ajay Tiwari, the opposite party no.3 visited the site but did not take any step to rectify these machines.
It is further stated by the appellant company that opposite parties failed to deliver the quality machines and also provide after-sales-service as assured by them and some of machines have not yet been installed and handed over to the
complainant company in running condition for its best production capacity. The complainant company sent legal notices to the opposite parties at various level but some of them were not properly delivered to the opposite parties hence, the complainant filed this complaint with the following reliefs.
a. Paid up capital and personal investment of Rs.1.5 crores
b. USD 141,650/- (One Hundred Forty One Thousand Six Hundred Fifty US Dollars only @ 75/- Rs.One crore six lakhs twenty three thousand seven hundred and fifty only) in lieu of the defaulted machines;
c. Approximately Rs.16 lakhs in respect of the transportation paid for the said in respect of all defaulted machines;
d. Rs.5.5 lakhs as bonds submitted to customs as security;
e. Rs.5,00,50,000/- (Five Crores fifty thousand only) in lieu of the business loss incurred due to no or less production between March 2021 - December 2021;
f. Rs.5,88,600/- towards per month fixed expenses to run this business (included but not limited to rental, electricity, salaries),
g. USD 1,50,000/- @75/- Rs. 1,12,50,000/- in lieu of the new machines to be bought by the complainant company,
h. Rs.3,40,000/- per month towards the EMI and interest paid to the bank;
i. Rs.1,15,000/- per month, towards interest on personal funds invested;
j. Accreditation charges paid Rs.24 lakhs and ongoing Rs.2,00,000/- per month;
k. Rs.58,96,000 (Fifty eight lakhs ninety six thousand only) borrowed from the Central Bank of India on 31 December, 2021 under the ECGL scheme;
1. Rs.1 crores (one crore only) for mental agony and harassment suffered by my client;
m. Rs.1 crore (one crore only) towards opportunity cost;
n. Rs. 5 lakhs towards the litigation expenses.
Any other order which this Hon’ble Commission may deem fit and proper may also be granted to the complainant.
We have heard counsels of both the parties and perused the material available on records.
From perusal of the complaint, it appears that the complainant has described itself a company incorporated under the Company’s Act, 1956 which is engaged in the business of manufacturing of medical devices and it is also apparent from the complaint that the company purchased many machines stated in the complaint for manufacture of surgical masks, surgical gowns, PPE coveralls, N95 respiratory masks, surgical drapes etc. for further sale in the market and thus, purchased of these machines are closely associated with general of profit by a business concern and this transaction was directly for commercial purposes as one business concern purchased manufacturing machines from another business company i.e. the opposite parties, which according to section 2(7) of the Consumer Protection Act, 2019 cannot be considered as consumer. Section 2(7) of the Consumer Protection Act, 2019 has been given hereunder:
"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 service 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 service other than the person who hires or avails of the services for 6 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 service for any commercial purpose.”
The complainant is a large manufacturing company which cannot be considered a consumer as per section 2(7) of the Consumer Protection Act, 2019. The Hon’ble Supreme Court in judgment Shrikant G. Mantri vs Punjab National Bank, reported in II(2022) CPJ 9 (SC), has specifically held that idea behind the Consumer Protection Act was to help the consumers to get justice and fair treatment in the matter of goods purchased and availed by them in a market dominated by large trading and manufacturing bodies. It provides for “business-to-consumer” disputes and not for “business-to-business” disputes. In the judgment, the Hon’ble Supreme Court has held:
“It could thus be seen that this Court has clearly held that the idea of enacting the said Act 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. It has been held that the entire Act revolves round the consumer and is designed to protect his interest. It provides for “business-to-consumer” disputes and not for “business-to-business” disputes.”
Again in the judgment, Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers and ors., IV(2019)CPJ 65 (SC), the Hon’ble Supreme Court while considering the question of commercial transaction has held:
“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 business-to-business transactions between commercial entities.
The purchase of the good or service should have a close and direct nexus with a profit generating activity”
In light of above mentioned judgment of Hon’ble Apex Court, the complainant who is manufacturer of medical devices and in this particular transaction, purchase of machines in question for manufacturing and selling these devices in market and thus, the purchase of machines was for purely commercial purposes and for this reason, the complainant cannot be considered a consumer.
The complainant has submitted an argument that the machines in question were in warranty period and as per various judgments of Hon’ble Apex Court, if the defect in machines develops within warranty period then even though, the machines were even for commercial purposes. The complainant would be considered as a “consumer” and the complaint should be maintainable under the Consumer Protection Act.
The complainant relied heavily on the judgment of Hon’ble National Commission “Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd., I(1998) CPJ 38 (NC).
On perusal of the said judgment, it reveals that in the case before the Hon’ble NCDRC, an AC unit was purchased for guest house of the company which was used for suit of Managing Director and other executives of the company during their visit to Delhi. The Hon’ble National Commission has held that these AC units were meant for personal use of Managing Director and other executives of the Company and not directly related to the profit generation and it was not a commercial transaction. Further the Hon’ble NCDRC has held that:
“7-RECOMMENDATIONS were also made that it shall not be economical to get the system set right since as per specified rectification replacements are necessary before the system is decommissioned. It is also opined that even after these there is no assurance that the system shall function smoothly since non -standard components have been used. The complainant in its letter dated 23rd May, 1990 after reproducing the expert’s opinion called upon the Appellant to give its comments in the matter. The reminder was issued on 10th July, 1990 followed by another notice dated 5th August, 1991. It is only then somewhere in the end of August, 1991 that reply was given by the Appellant. No specific comment was given to the point raised in the letter dated 23rd April, 1990 pointing out the deficiency based on the report of M/s. Spectral Services Consultants Pvt. Ltd. From this material on record the inference is irresistible that the goods i.e. air-conditioning equipment and machinery supplied were defective and there has been gross deficiency in service.”
The complainant misunderstood that if any goods is under warranty whether it is commercial purposes or not, the purchaser can be considered a consumer but it is clarified that the Hon’ble National Commission given this judgment in the year 1998 when all type of services whether “commercial” or “non-commercial” were covered under the Consumer Protection Act, 1986. The Legislature notices that under the Consumer Protection Act, 1986 goods purchased for commercial purposes cannot be covered under the Consumer Protection Act, this exclusion was not provide for the services and before amendment of 2002 all types of services whether commercial or non-commercial were covered under the Consumer Protection Act. This anomaly was removed by the Consumer Protection Act amendment of 2002 and the exclusion of commercial purposes was also extended to the ‘services’ also, thereafter, by way of the said amendment Act.
The Hon’ble Supreme Court considered this point in the above mentioned judgment of Shrikant G. Mantri vs Punjab National Bank (supra) and clarified in the following manner:
“The legislature further noticed several bottlenecks and shortcomings in the implementation of various provisions of the said Act and with a view to achieve quicker disposal of consumer complaints, and to make the said Act more effective by removing various lacunae, the legislature amended the said Act by the Consumer Protection (Amendment) Act, 2002 (hereinafter referred to as “the 2002 Amendment Act”). One of the objects for bringing out the 2002 Amendment Act was “exclusion of services availed for commercial purposes from the purview of the consumer disputes redressal agencies”. It could thus be seen that the legislature noticed the mischief, that though Section 2(1)(d)(i) of the said Act kept out of its purview the goods purchased for commercial purpose, the said restriction was not found in Section 2(1)(d)(ii) of the said Act. As such, in order to bring Section 2(1)(d)(ii) at par with Section 2(1)(d)(i), the following amendment was effected to in clause (d):
“(c) in clause (d),
(i) in subclause (ii), the following words shall be inserted at the end, namely: “but does not include a person who avails of such services for any commercial purpose”;
(ii) for the Explanation, the following Explanation shall be substituted, namely: ‘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’; ”
In 1998 when the Hon’ble NCDRC passed the judgment Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd. (Supra) at that time, ‘services’ were not covered under the Consumer Protection Act, and the person availed any kind of service whether commercial or non-commercial was under the category of ‘consumer’ as per the Consumer Protection Act, 1986 but after the amendment of 2002, the situation changed and the service provided for commercial purposes were not covered under the Consumer Protection Act and in the judgment of Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd., (supra) the Hon’ble NCDRC has at that time held that “service” under warranty can be considered as consumer transaction and covered under the Consumer Protection Act.
The Hon’ble NCDRC in the above mentioned judgment considered the transaction of service/consumer in respect of the service appended to sale of AC units purchased by the complainant as at the time of passing of judgment in 1998 and before amendment of Consumer Protection Act in 2002 although a purchase of goods for commercial purposes was not covered but on the other hand the services in relation to the maintenance of the purchased goods were considered by the Hon’ble National Commission covered under unamended Consumer Protection Act, 1986.
This ratio of the judgment of the Hon’ble National Commission in Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd. (supra) was further categorically clarified by the Hon’ble NCDRC in Tata Iron and Steel Company Ltd. Vs. Biswanath, III (2013) CPJ 431 (NC).
In this judgment the Hon’ble NCDRC made it clear that in its earlier judgment of Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd. (supra) was for transaction prior to coming into force of the amended provisions. The Hon’ble NCDRC held in the following manner:-
“Underlined words “but does not include a person who obtains such goods for resale or for any commercial purpose” in Sub-clause (i) of Section 2(1)(d) were there from the inception of the Act. The words to the similar effect were not there in Sub-clause (ii) of Section 2(1)(d) of the Act for a person who hired or availed of services for a commercial purpose. Underlined words in Section (2)(1)(d)(ii) “but does not include a person who avails of such services for any commercial purposes” were introduced in this sub-clause by Act 62 of 2002 which came into force w.e.f. 15.3.2003. Persons availing of services for commercial purpose were treated to be ‘consumers’ prior to the amendment of Sub-clause (ii) of Section 2(1)(d) of the Act. Question as to whether the amendment introduced by Act 62 of 2002, would have prospective or retrospective effect, came up for consideration before a Bench of this Commission in Kurji Holy Family Hospital v. Boehringer Mannheim India Ltd., III (2007) CPJ 371 (NC). The Bench after taking into consideration the earlier judgments in the cases of Jay Kay Puri Engineers and Another v. Mohan Breweries & Distilleries Ltd., I (1998) CPJ 38 (NC) and Birla VXL Ltd. v. National Insurance Co. Ltd., III (2003) CPJ 111 (NC)=OP No. 172 of 1995, decided on 29.5.2003, held that the amendment in the definition to Section (2)(1)(d)(ii) to the effect “but does not include a person who avails of such services for any commercial purposes”, do not have retrospective effect and that the amendment was prospective in operation. The relevant observations read as under:
“14. This would mean that prior to the coming into force of the amended provision, a person would be a consumer for the services which are to be rendered for commercial purposes. Admittedly, the complaint was filed in the year 1998, i.e. much prior to the amendment of the Act in the year 2003. ”
The above mentioned case Jay Kay Puri Engineers Vs. Mohan Breweries and Distilleries Ltd. (supra) of the Hon’ble NCDRC does not help the complainant as in this case, the machineries i.e. the goods were purchased for commercial purposes by a business concern for this reason the transaction in question is not covered under the Consumer Protection Act, 2019.
From the above discussions we are of view that the complaint for this particular transaction is not covered under the Consumer Protection Act and therefore, a Forum constituted under the Consumer Protection Act do not have jurisdiction to entertain this complaint. Therefore, the complaint is liable to be dismissed for want of jurisdiction.
ORDER
The complaint is dismissed.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Justice Ashok Kumar) (Vikas Saxena)
President Member
Jafri, PA I
Court 1
