BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE
Dated this the 15th of November 2010
PRESENT
SMT. ASHA SHETTY : PRESIDENT
SMT.LAVANYA M. RAI : MEMBER
SRI. ARUN KUMAR K. : MEMBER
COMPLAINT NO.22/2010
(Admitted on 23.01.2010)
Fr.Muller s Charitable Institutions,
Fr.Muller s Road,
Kankanady, Mangalore 575 002,
A Registered Society under Society s
Registration Act 1860,
Represented by its Secretary Cum
Director Rev. Fr.Patrick Rodrigues,
Aged about 58 years,
So. Raymond Rodrigues,
RA. Kankanady,
Mangalore 575 002. …….. COMPLAINANT
(Advocate for the Complainant: Sri. M.P. Noronha).
VERSUS
Sri. Sumith S. Rao,
Proprietor,
Olympus Refrigeration Inc.,
Post Box No.1006,
Yeyyadi Industrial Estate,
Mangalore 575 008. ……. OPPOSITE PARTY
(Advocate for the Opposite Party: Sri.K.Prithviraj Rai).
***************
ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:
1. This complaint is filed under Section 12 and 13 of the Consumer Protection Act alleging defect in goods against the Opposite Party claiming certain reliefs.
The brief facts of the case are as under:
The Complainant is a Charitable Institution, registered under the Karnataka Societies Act. The Complainant has been running Hospital, Medical College, Nursing College and other allied activities.
It is stated that, the Opposite Party is engaged in the field of manufacturer of Refrigeration and Air Conditioning units and they also make Mortuary units. The Complainant intended to purchase four body mortuary and that time the Opposite Party approached the Complainant and assured the Complainant that their mortuaries are with micro processor based control panels with digital temperature indicators, completely aseptic stainless steel inner chambers mortuary trays with pre-coated exterior panels and supplied a quotation dated 22.06.2009 along with the silent features of the mortuary units. The Complainant had placed a purchase order dated 24.06.2009 for four body mortuary unit with silent features stated in the quotation by paying Rs.1,75,000/- through Demand Draft. The Complainant submitted that, after receipt of the purchase order the Opposite Party promised to supply the unit within 3-4 weeks from the date of order but the Opposite Party supplied the said unit to the Complainant on 13.08.2009 a delay of one month. It is stated that, the Opposite Party had not turned to install the said unit, there are various defects like variation in dimension, internal and external body are not covered by S.S. Sheet. The cooling unit is turned to ice instead of cool air, the design is capillary system instead of thermostatic expansion valve and the outer body of the cabinet becomes wet as installation is done in an ordinary thermacol and there is loss of cooling inside. After noting the above, the Complainant informed the same to the Opposite Party by issuing a letter dated 27.08.2009. After receipt of the said letter, the Opposite Party without inspection issued a false justification. After much persuasion the Opposite Party took the unit for repair and reinstalled on 03.10.2009 stating that all the defects were rectified but even after allegedly rectifying the unit, the same was not properly as the temperature goes to the level of 10 degree Celsius and it is not safe to keep the dead body in such mortuary. So the Complainant was fed up with the service and issued a letter dated 15.10.2009 requesting them to refund the advance amount. There were various correspondences between the Complainant and the Opposite Party, despite of that the Opposite Party not complied the demand made there in. It is contended that, the unit supplied by the Opposite Party suffered from manufacturing defects which is not repairable and defective in nature. Hence the above complaint is filed under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party to refund the sum of Rs.1,75,000/- along with interest at 18% p.a. from 25.06.2009 till the date of payment and also claimed Rs.1,00,000/- as damages for mental agony, inconvenience and hardship and Rs.3,000/- per day from 13.08.2009 till Opposite Party take back the unit and also claimed cost of the proceedings.
2. Version notice served to the Opposite Party by RPAD. Opposite Party appeared through their counsel filed version and raised a first plea that, the Complainant is not a consumer and does not come under the definition of 2(d) of the Consumer Protection Act.
The Opposite Party admits the quotation dated 22.06.2009 and also admitted the purchase order dated 24.06.2009 was placed by the Complainant for four body mortuary unit. It is stated that, as per the quotations the maintenance of the unit can be had by the Complainant through annual maintenance contract after the warranty period. No such annual maintenance contract has been entered into. It is denied that, the Opposite Party has promised that the unit will be supplied in 3-4 weeks but the Opposite Party assured that the unit will be supplied before the end of August 2009.
It is stated that, the Opposite Party has explained to the Complainant various facts in the said letter but the Complainant did not co-operate with the Opposite Party to examine the unit and hence the Opposite Party had requested as per its letter dated 16.10.2009 and subsequently after much persuasion this Opposite Party was allowed to take the unit back to its workshop to examine the unit once again convinced the Complainant that it is according to the specifications. The Opposite Party has supplied the mortuary unit according to the specifications and it is defect free. It is stated that, on 10.11.2009 the Opposite Party wrote a letter to the Complainant to provide best service but the Complainant refused.
The Complainant failed to inform the Opposite Party about the inspection of the unit by the persons from NITK, Surathkal and has obtained a report without giving an opportunity to the Opposite Party to explain the technical aspects at the time of inspection. This Opposite Party denied the allegations made in the letters written by the Complainant as well as in the complaint filed by the Complainant.
It is stated that, the Complainant has not paid the price of the unit which is supplied to it by this Opposite Party. As per the guarantee letter dated 13.08.2009 provides that “if any payment is kept pending, as a policy of the Company, further service cannot be given and the guarantee becomes null and void”.
It is further stated that, this Opposite Party is prepared to hold a joint inspection of the unit and in the alternative the Opposite Party is prepared for the inspection of the unit by a competent third party expert who will conduct the inspection of the unit. As per the guarantee, he has prepared to set-right the defects if any pointed out to him by the Complainant. It is stated that, the Complainant has rushed with the above complaint without giving an opportunity to the Opposite Party to discharge his promise given in the guarantee and stated that there is no deficiency and there is no defect in the goods/units sold by the Opposite Party and prayed for dismissal of the complaint.
3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
- Whether the Complainant is a consumer and the complaint is maintainable?
- Whether the Complainant proves that the mortuary units purchased by him on 13.08.2009 from the Opposite Party proved to be defective?
- If so, whether the Complainant is entitled for the reliefs claimed?
- What order?
4. In support of the complaint, Rev. Fr. Vincent Vinodh Saldanha (CW1) – Assistant Administration of the Complainant filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him. One Dr.T.P.Ashok Babu (CW2) - Professor and Head, Mechanical Engineering Department, NITK, Surathkal Mangalore – summoned witness of the Complainant was examined and cross-examined by the learned counsel for the parties. Ex C1 to C13 were marked for the Complainant as listed in the annexure. One Sri.Sumith S. Rao (RW1), filed counter affidavit and answered the interrogatories served on him. Ex R1 and R2 were marked for the Opposite Party as listed in the annexure. Both parties produced notes of arguments along with citations.
We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:
Point No.(i): Negative.
Point No.(ii) to (iv): As per the final order.
Reasons
5. Point No. (i) to (iv):
In the instant case, the first plea has been raised on the point of Law by the Opposite Party that, the Complainant is not a consumer and placed several citations in support of their contention.
The counsel for the Opposite Party vehemently argued that, the Complainant is not a consumer as defined under Section 2(d) of the C.P. Act and our attention was drawn towards para 10 of the complaint filed by the Complainant and also the evidence of the Complainant at para No.10 of the chief examination by way of affidavit filed by the CW1 in this case. However, the Complainant in the above case at para 10 of the complaint has stated that, at the time of supplying the morgue unit, the Opposite Party has induced the Complainant to part with Rs.1,75,000/- assuring them of supplying the good quality morgue. But the Complainant found that the unit supplied to them is of defective quality. On account of that the Complainant has suffered loss in their business, hence the Complainant is entitled for a sum of Rs.3,000/- per day and apart from that the CW1 in his evidence deposed in para No.10 that, the above said unit found defective on account of that the Complainant has suffered loss in their business.
However, it would be appropriate to deal with a question of law first rather discussing the points on merits. In the instant case, what is to be considered is whether the Complainant is a consumer within the meaning of the Consumer Protection Act 1986 and whether the goods in question obtained by them for resale or for any commercial purpose? The Section 2 of the Consumer Protection Act, 1986 dealing with the definitions, in sub-clause (d) defines a ‘consumer’ as under:-
(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.
From the above definition, it is very clear that after the Amendment Act 62 of 2002, which came into effect from 15th of March 2003, any person who buys any goods or avails any service for a consideration, if it relates to a commercial purpose, except on the ground of earning his livelihood by means of self employment, would not fall within the definition of a consumer and therefore, any such dispute would not be a consumer dispute and the Consumer Forum would have no jurisdiction to entertain any such complaint for such dispute.
Admittedly, the Complainant in his complaint in para No.10 has stated supra and also in para No.6 of the complaint and the Ex C6 i.e., a letter issued by the Complainant to the Opposite Party dated 15.10.2009 at para No.4 called upon the Opposite Party to pay loss of income of Rs.1,89,000/- suffered by them from the date of the supply of the unit at Rs.3,000/- per day which is the current charges for keeping the body in the mortuary. That means, the Complainant using the mortuary unit for commercial purpose to generate profit. No doubt, the Complainant is a Charitable Institution recognized by the Government. When a person purchased goods for resale or for any commercial purposes such person is not a consumer. That the Charitable Institution recognized by the Government are not entitled to share any benefits but the amount will be exclusively used for charitable purposes but in the instant case, the question is with regard to the mortuary purchased by the charitable institution is used for commercial purpose. It is manifest to note that, though the Complainant is a charitable institution but the mortuary purchased by them is used for carrying on the business of keeping a dead body in the said mortuary in a large scale and earning profit from the said units. The Section 2(d)(i), the expression ‘consumer’ in Section 2(d), a consumer means in so far as is relevant for the purpose of this complaint;
- A person who buys any goods for consideration, it is immaterial whether the consideration is paid or promised or partly paid and partly promised or whether the payment of consideration is deferred.
- A person who uses such goods with the approval of the person who buys such goods for consideration;
- But does not include a person who buys such goods for resale or for any commercial purpose.
The expression ‘resale’ is clear enough. Controversy has, however, arisen with respect to meaning of the expression ‘commercial purpose’. It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. ‘Commercial’ denotes pertaining to commerce, it means connected with, or engaged in commerce, mercantile, having profit as the main aim, whereas, the word ‘commerce’ means financial transactions especially buying and selling of merchandise, on a large scale. The National Commission held in a case that, where 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(d)(i) of the Act. Further, 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. For example, if the purchaser himself works on typewriter or plies the car as a taxi he does not ceased to be a consumer. But in the instant case, the Complainant purchased the unit for his charitable institution but we have noticed that, the charitable institution i.e., Fr. Muller’s Charitable Institution using the Mortuary not only for their use but for making profit out of the said mortuary by taking an amount from the public. When an activity directly intended to generate profit, under that circumstances, one cannot say that it is a charitable institution and the same is used for earning livelihood or by way of self employment. In the instant case, the purpose for which the charitable institution has bought the mortuary is for a commercial purpose.
In the instant case, we are of the considered opinion that, the facts and circumstances of this case is concerned, we must hold that having regard to the nature and character of the machine/mortuary and the material on record that, it is not goods which the Complainant purchased for use by himself exclusively for the purpose of earning their livelihood by means of self employment as explained herein above. [Section 2(d)(iii)].
In view of the above discussion, we hold that from the facts narrated in the complaint, the same has been made us very clear that the Complainant purchased the above mortuary for commercial purpose and purchase for commercial purpose is excluded under Section 2(1)(d)(i) of the C.P. Act. Likewise, the service of the warranty for commercial purposes are also excluded for commercial purpose under Section 2(1)(d)(ii) with effect from 15.03.2003.
In support of the above said view, we relied the following case Laws:
The Hon’ble Supreme Court of India in its ruling reported in 1995 AIR 1428 in the case of Laxmi Engineering Works Vs. P.S.G. Industrial Institute has clearly held that, the definition of the expression ‘consumer’ in the clause (d) of Section 2 of the Consumer Protection Act (with effect from 18.06.1993) excludes from its purview a person who obtains such goods for resale or for any commercial purposes. It also held that, commercial denotes pertaining to commerce; it means “connected with or engaged in commerce; mercantile; having profit as the main aim”. The ruling also laid down that a person who purchases goods for carrying on any activity on a large scale for the purpose of earning profit will not be a consumer.
The Hon’ble Supreme Court further confirmed the principle laid down in the above case, in a subsequent ruling reported in 1999 AIR 3356 in the case of Kalpavruksha Charitable Trust Versus Shniwal Brothers. In the said case the Complainant claimed to be a charitable institution and filed a complaint for the supply of defective CT Scanner, wherein it is held that, who takes advantage of the CT scan has to pay for it and the service rendered by them is not free. That being so, the goods (machinery) which are obtained by the Complainant were being used for commercial purposes.
The National Consumer Disputes Redressal Commission New Delhi in its order dated 09.07.2010 in the case of Rajasthan State Industrial Development and Investment Corporation Limited Versus M/s.Diksha Enterprises has held that any person who buys any goods or avails any service for a consideration, if it relates to a commercial purpose, except on the ground of earning his livelihood by means of self employment, would not fall within the definition of a ‘consumer’ and, therefore, any such dispute would not be a consumer dispute and the Consumer Forum would have no jurisdiction to entertain any complaint for such dispute.
The National Consumer Disputes Redressal Commission New Delhi in its order dated 20.04.2010 in the case of Billagi Sugar Mill Limited Versus M/s.Kessels Engineering Works (P) Limited has held that the services of the warranty for commercial purposes are also excluded under Section 2(1)(d)(ii) of the C.P. Act with effect from 15.03.2003. The National Commission after scrutiny of large number of judgments, which actually pertain to the pre-amendment period i.e., before 15.03.2003 in Meera Industries Vs. Modern Construction held that - “a consumer who buys goods for commercial purposes cannot be considered to be a consumer even for the purpose of services during the warranty period in view of the amendment to Section 2(d)(ii) of the Act, which came into effect from 15.03.2003. In view of this, the Complainant cannot be held to be a consumer with reference to the services attached to the warranty and the reference to the services attached to the warranty and the complaint is not maintainable”. The view taken by the Commission in the Meera Industries case has been approved by the Full Bench of Commission in the case of Sanjay D. Ghodawat Versus R.R.B. Energy Limited (CC No.155 of 2008); M/s.Radhe Enterprise Versus Suzlon Energy Limited (C.C. No.38 of 2009); and M/s.Neutral Glass and Allied Industries Limited Versus Birla Technologist Limited (F.A. No.218 of 2004 decided on 17.12.2009).
Similarly in the instant case, in view of the above, we do not find that Complainant qualifies to be a consumer within the scope and ambit of Section 2(1)(d) of the C.P. Act. In view of this, complaint cannot be entertained and is hereby dismissed. The Complainant is free to seek remedy available to it in accordance with law.
Since the complaint is not maintainable, discussing the rest of the points does not arise.
6. In the result, we pass the following:
ORDER
The complaint is dismissed. The Complainant is free to seek remedy available to it in accordance with Law. No order as to costs.
The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.
(Page No.1 to 15 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 15th day of November 2010.)
PRESIDENT MEMBER MEMBER
ANNEXURE
Witnesses examined on behalf of the Complainant:
CW1 – Rev. Fr. Vincent Vinodh Saldanha – Assistant Administration of the Complainant.
CW2 – Dr.T.P.Ashok Babu - Professor and Head, Mechanical Engineering Department, NITK, Surathkal Mangalore – summoned witness of the Complainant
Documents produced on behalf of the Complainant:
Ex C1 – 22.06.2009: Copy of the quotation.
Ex C2 – 24.06.2009: Copy of the purchase order.
Ex C3 – 27.08.2009: Copy of the letter issued by the Complainant.
Ex C4 – 03.09.2009: Copy of the letter issued by the Opposite Party.
Ex C5 – 16.10.2009: Copy of the letter issued by the Opposite Party.
Ex C6 – 15.10.2009: Copy of the letter issued by the Complainant.
Ex C7 – 16.10.2009: Copy of the letter issued by the Opposite Party.
Ex C8 – 23.10.2009: Copy of the letter issued by the Complainant.
Ex C9 – 23.10.2009: Copy of the letter issued by the Opposite Party.
Ex C10 – 16.11.2009: Report of Assessment/technical evaluation of Morgue issued by the Department of Mechanical Engineering, NITK, Surathkal.
Ex C11 – 16.11.2009: Letter issued by NITK, Surathkal.
Ex C12 – 28.11.2009: Letter issued by the Complainant to the Opposite Party.
Ex C13 - : Letter of authorization.
Witnesses examined on behalf of the Opposite Party:
RW1 – Sri.Sumith S. Rao – Opposite Party.
Documents produced on behalf of the Opposite Party:
Ex R1 – 13.08.2009: Guarantee letter and terms.
Ex R2 – 27.01.1990: Degree certificate given to Sumith S. Rao by the Mangalore University.
Dated:15.11.2010 PRESIDENT
