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Judgment
This petition has been filed under section 21(b) of the Act 1986 in challenge to the State Commission's Order dated 05.11.2009 in appeal no. 2300 of 2007 arising out of the District Commission's Order dated 26.06.2007 in complaint no. 94 of 2006.
We have heard the learned counsel and have perused the material on record including inter alia the District Commission's Order dated 26.06.2007, the State Commission's impugned Order dated 05.11.2009 and the petition.
The complainants (the respondents herein) are a stone crushing firm and its two partners. The opposite parties (the petitioners herein) are a company supplying generator sets and its chief executive officer cum managing director. The complainants' allegation was that they had contracted with the opposite parties for buying a generator set of a particular specifications, in its stead the opposite parties supplied a generator set of different specifications which could not be put to use and was lying idle.
The District Commission appraised the case and vide its Order dated 26.06.2007 determined that in fact the opposite parties supplied a generator set of different specifications and that the same was lying idle. Holding it to be unfair trade practice, the District Commission vide its Order dated 26.06.2007 allowed the complaint and directed the opposite parties to refund the price of the generator set i.e. Rs. 11.50 lakh with interest at the rate of 12% per annum w.e.f. 03.02.2006 (i.e. the date on which payment was made) till realisation along with lumpsum compensation of Rs. 1.50 lakh and cost of litigation of Rs. 5 thousand.
The opposite parties appealed before the State Commission.
The State Commission re-appreciated the evidence and vide its impugned Order dated 05.11.2009 dismissed the appeal filed by the opposite parties ("No merit. Dismissed.").
The opposite parties then preferred the instant revision before this Commission.
In so far as the merits of the case are concerned, both the fora below have returned concurrent findings of fact, that the opposite parties supplied a generator set of different specifications than the one contracted and paid for and that the same was lying idle.
We may observe that supplying a generator set of different specifications than the one contracted and paid for is an unfair and deceptive act, and clearly qualifies as 'unfair trade practice' within the meaning of section 2(1)(r) of the Act 1986.
Learned counsel for the opposite parties submits that the opposite parties are not challenging the findings in so far as supplying a generator set of different specifications than the one contracted and paid for is concerned. The principal ground for revision is that the complaint was not maintainable before the District Commission since the complainants were not 'consumer' within the meaning of Section 2(1)(d)(i) of the Act 1986. Another argument in the alternative is that even if the complainants were 'consumer' and the complaint was maintainable, the award made by the District Commission is not just and equitable but is unreasonably and arbitrarily high.
The issue of maintainability has been duly examined by the District Commission in its Order of 26.06.2007. The relevant extract from its appraisal is quoted below:
Third point raised by the learned counsel for the opposite parties is with regard to commercial use of the generator set. Explanation to section 2(d) of the Consumer Protection Act is reproduced below:-
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.
Section 2(d)(i)(ii) of the Consumer Protection Act reads as under:
(i) "any person who 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) Any person who (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 purpose)."
Generator set was not purchased for resale rather the same was purchased for ancillary gain for running his stone crushing unit to earn his livelihood. It is small scale industry and not at all a big unit. Thus, in view of the definition of consumer, we are of the considered view that purchase of generator set is not covered by the definition of commercial purpose as enshrined in section 2 of the Consumer Protection Act, 1986. Learned counsel for the opposite parties has relied upon IV (2005) CPJ 259. The said judgment is not applicable to the facts of the present case. He has also relied upon II (2006) CPJ 449. Though we are in respectful submission with the ratio of the said judgments, in the said case the vehicle was purchased for commercial purpose for carrying children and staff to school. The vehicle was used for gain and profit. Complainant was not consumer. In the instant case, the complainant has not purchased the Gen Set for hire or resale. Livelihood cannot be construed in narrow sense. sometimes livelihood means only to earn bread. Some times it means to earn bread with cloth and shelter. It may differ from person to person. Only on this count the opposite parties can not dislodge the claim of the complainants.
Learned counsel for the opposite parties argues that the complainants herein are a stone crushing firm and its two partners. The stone crushing business had a turnover on the higher side and fair number of staff had been engaged by the two partners. Profit generation was the purpose and fairly high profit was earned. Submission is that it was a pure commercial activity, which was clearly precluded from the definition of 'consumer' given in Section 2(1)(d)(i) of the Act 1986. It has been sought to be argued that the District Commission had erred in holding the complainants to be 'consumer' under the Act 1986.
In rebuttal learned counsel for the complainant argues that the use of the goods bought i.e. the generator set was exclusively for the purposes of earning livelihood by means of self-employment, and as such the complainants were 'consumer' in accordance with the Explanation to Section 2(1)(d) of the Act 1986. The turnover was just reasonable, and reasonable staff to assist in earning livelihood by means of self-employment was engaged. According to learned counsel reasonable and dignified profit was earned. It was pointed out that one of the partners was himself the manager of the stone crushing firm and the other partner was in-charge of its day-to-day affairs. Much emphasis was laid on the fact that a specific assertion had been made in the averments of the complaint that the stone crushing unit was installed by the partners for earning their livelihood "solely by generating self-employment" and that this assertion has been denied by the opposite parties in their written version only "for want of knowledge". A bald assertion has also been made in the written version that the generator set "has also resale" and therefore the complainants were not 'consumer'. But it is an admitted fact that the generator set was not for re-sale and neither was the stone crushing firm in the business of generator sets. The opposite parties cannot go outside their own pleadings. The submission is that the District Commission has already examined this issue and has correctly decided it in favour of the complainants. Learned counsel further argues that the opposite parties have not even raised this issue in their arguments in appeal before the State Commission as there is no mention of this issue in the State Commission's impugned Order. The submission is that whether or not the stone crushing unit was exclusively for the purpose of earning livelihood by means of self-employment is purely a question of fact and the same should have been appropriately raised and argued by the opposite parties before the forum of appellate jurisdiction and cannot now be raised in revision before this Commission.
We have carefully examined the record in the light of the rival submissions made on behalf of the two sides. 'consumer' as defined in Section 2(1)(d)(i) does not include a "person" who obtains "goods for resale or for any commercial purpose". The Explanation thereto excludes "use by a person" "exclusively for the purpose of earning his livelihood by means of self-employment." 'person' as defined in Section 2(1)(m) "includes" "a firm whether registered or not". As such if the stone crushing firm was established by its partners exclusively for earning livelihood by means of self-employment, the complainants would fall within the definition of 'consumer' under the Act 1986.
Whether or not the purpose for which a person has bought the subject goods was exclusively for earning his livelihood by means of self-employment is a question of fact, to be determined in the facts and circumstances of each case.
In the instant case an explicit assertion has been made in the complaint that the said stone crushing unit was installed by "all the partners . . . for earning their livelihood by generating self employment". In rebuttal only a bald denial for want of knowledge has been made by the opposite parties in their written version ("That the contents of para no. 1 of the complaint are denied for want of knowledge"). An unsubstantiated and unfounded assertion has also been nebulously formulated in their written version that "the complaint is not covered under the definition of 'consumer' and the complainant purchased generator set for commercial purpose . . . and further opposite parties has also re-sale the generator set under consideration and so complainant is not a consumer and this complaint is not maintainable.".
The District Commission has made its appraisal of this issue and has given its reasoned findings that the complainants were 'consumer' as defined in the Act 1986. It has determined that the generator set was never purchased for hire or re-sale, the purpose was to earn livelihood by means of self-employment. It has concluded that "on this count the opposite parties can not dislodge the claim of the complainants".
The State Commission has not touched upon this point, which leads to a reasonable conclusion that this question was not raised in the arguments made on behalf of the opposite parties before the State Commission.
Whether an enterprise has a "large" or "small" turnover or whether it employs "many" or "few" staff or whether it generates "high" or "low" profit could be some of the factors to be taken into account. But the actual question is whether the purpose is exclusively for earning livelihood by means of self-employment. Even a relatively small enterprise with little staff and relatively low profit may not be exclusively for earning livelihood by means of self-employment, depending upon the facts and circumstances, and a comparatively larger enterprise with comparatively more staff and comparatively higher profit can still be exclusively for earning livelihood by means of self-employment, again depending upon the facts and circumstances. Earning livelihood by means of self-employment obviously implies that the enterprise will generate some profit. Profitability again does not appear to be conclusive yardstick. The 'purpose' per se is the touchstone, with the same being a pure question of fact to be determined in the facts and circumstances of each case.
In the present case, having regard to the submissions made by the learned counsel, and considering the material on record, the pleadings, the findings of the District Commission, the issue not being argued before the State Commission, we do not find any good ground to interfere in the findings of the District Commission in this regard. We may add that we are also conscious of the ambit and scope of the revisional jurisdiction of this Commission. We do not hesitate to interfere if we find from the record that a forum below has exercised its jurisdiction illegally or with material irregularity, but we are loathe to make the revisional proceedings before this Commission into a means for re-opening original jurisdiction or for re-exercising appellate jurisdiction de novo .
In respect of the second argument made by the learned counsel for the opposite parties, that the award made by the District Commission is unreasonably and arbitrarily high, we note that the District Commission has ordered refund of the amount paid by the complainants i.e. Rs. 11.50 lakh with interest at the rate of 12% per annum w.e.f. 03.02.2006 (i.e. the date of making payment) till the date of actual realisation. It has also ordered for lumpsum compensation of Rs. 1.50 lakh and cost of litigation of Rs. 5 thousand. Admittedly the generator set of different specifications which was provided to the complainants has not been returned by the complainants to the opposite parties. And it is nobody's case that the generator set was dysfunctional, the case is that it was of different specifications than contracted and paid for. It appears just and appropriate that the refund of the amount paid should be at a fair and reasonable rate of interest, and there appears little justification for awarding lumpsum compensation in addition. We feel a rate of interest of 9% per annum to be fair and reasonable in the facts and specificities of the case.
Learned counsel for the complainants fairly agrees that a rate of interest of 9% per annum would meet the ends of justice and that the lumpsum compensation in addition may be dispensed with.
We, thus, find the following award to be just and equitable in the facts and specificities of the case:
The opposite parties shall refund the amount paid by the complainants i.e. Rs. 11.50 lakh with interest at the rate of 9% per annum from the date of payment i.e. 03.02.2006 till realisation along with cost of litigation of Rs.5 thousand.
The modified award shall be made good within four weeks from today, failing which the District Commission shall undertake execution, for ' Enforcement ' and for ' Penalty ', as per the law.
So disposed.
The Registry is requested to send a copy each of this Order to all parties in the revision and to the District Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.