Virender Singh vs M/S. Darshana Trading Company & Anr

Prem Narain, Presiding Member

This appeal has been filed by the appellant Virender Singh against the order dated 04.05.2018 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, (in short 'the State Commission') passed in Complaint No.25 of 2011.

Brief facts of the case as alleged by the complainant are that appellant/Complainant is the proprietor of B.N. Chemicals & engaged in business of manufacturing dye. In August 2009respondent No.3/ OP2 (Ekhlakh Ahmed) who is a local agent of respondent No.1/OP1 assured complainant that with the help of HSLC machine manufacturing of dye will be done at a cheaper cost & quotation of model M.P.S. G-D 1212-300W for Rs.31,95,225 was sent by OPs. With the help of OP2, a loan of Rs. 25 lakh for complainant was approved from SIDBI by mortgaging his & his wife's property. The machine was delivered to OP1 in Mumbai on 26.3.2010 from China & the same was delivered to complainant on 2.4.2010 by extracting Rs.50,000 more in the name of transportation although it was included in the above quotation. After several requests to OPs for installation, Chinese engineer was sent who tried to start the machine but could not run it. Later on, complainant contacted Suresh Indu Laser Pvt. Ltd, Pune who informed the complainant that the machine is of 100W & for manufacturing of dye 300W is required and there is difference of 15lakh in cost of both machines. Complainant submitted that the quotation sent by the OPs was with regard to 300W machine and the machine which was imported from China was also of 300W and it seems that after taking the delivery in Mumbai, the OPs changed the motor from 300 W to 100 W and cheated the complainant. Complainant sent legal notice to OPs to rectify the error but no response was given. Complainant then filed a consumer complaint and made the prayer in the complaint for awarding a sum of Rs.31,95,225.00 with 24% p.a. interest or to direct the OPs to install the machine in question with original motor of 300 W. None appeared for OPs & the matter proceeded ex-parte before the State Commission. The State Commission has noted that in this case, it transpires that an FIR under section 420, 465, 467, 468, 471 IPC in case crime no.322 of 2011 was filed and the case was pending in the court of CJM, Varanasi and Ekhlakh Ahmad, the OP no.2 had filed a writ petition wherein a Stay order was passed by the Hon'ble Allahabad High Court on 10.7.2013 whereby the Hon'ble High Court has passed the order that till the next date of listing no coercive action shall be taken against applicant in case no.19875 of 2012 (case crime no.322 of 2011) under section 420, 465, 467, 468, 471 IPC, PS Sigra District Varanasi pending before CJM, Varanasi. So from the aforesaid order, a copy of which has been filed, it is clear that no coercive action was to be taken against the OP no.3 Ekhlakh Ahmad. However, there is no stay so far as the proceedings of this case are concerned. However, the State Commission dismissed the complaint on the ground that complainant was involved in the business for making profit for which he purchased the machine & therefore complainant did not fall under the category of consumer.

Hence, appeal has been filed by the complainant against the order of the State Commission on the ground that State Commission while passing the order failed to consider the fact as settled by Supreme Court in many cases that even if the purchaser of goods is in the nature of commercial purpose but 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 would be covered in definition of consumer.

Heard the learned counsel for the appellant at the admission stage. The learned counsel for the appellant stated that the State Commission has dismissed the complaint on the ground that the complainant is not a consumer because the complainant has purchased the machine in question from the opposite parties for commercial purpose. The learned counsel stated that the complainant is the proprietor of B.N. Chemicals and the new machine has been purchased for self-use for earning livelihood of the complainant. It is true that the complainant is involved in the commercial activity of making dyes and selling them. However, purchase of modern machine is aimed at increasing efficiency of the unit as well as for improving the quality of the product. Learned counsel relied upon the following judgments:-

Action Construction Equipment Ltd. & Anr. Vs. Bablu Mridha, IV (2012) CPJ 245 (NC). It has been held that:

"12. ...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 self- employment" 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. A few more illustrations would serve to emphasis what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer..."

M/s. Gati Limited vs. R. Ramesh, 2015(1) CPR 760 (NC). It has been held that:-

"6. However, we are of the view that the case of the complainant is covered with the explanation appended to Clause '(d)', which clearly shows that the commercial purpose does not include 'use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of his self employment'. There is not an iota of evidence which may go to show that the complainant is doing the business for commercial purpose as such. He is a proprietor of a company. His firm is neither a partnership firm nor a company private or public. Consequently, the arguments urged by the learned counsel for the petitioner/opposite party must be left out of consideration."

The opposite parties were proceeded ex-parte before the State Commission and even the written statement was not filed. Thus, no evidence was produced by the opposite parties before the State Commission to prove that the complainant was having some other means of livelihood. In fact, complainant is the proprietor of a proprietorship concern and therefore, is self-employed. The machine has not been used for letting it out to some other parties or to allow other parties to work on the machine on payment basis. Thus, no commercial purpose is envisaged in purchase of the said machine. Even if no mention is made in the complaint that the machine has been purchased for earning livelihood by means of self-employment, the fact remains that the machine has been purchased for self-use and to be used by the complainant for making dyes. Thus, clearly, no commercial purpose is involved in purchasing the machine.

I have carefully considered the arguments advanced by the learned counsel for the appellant and have examined the record. The complainant is the proprietor of B.N. Chemicals a proprietorship concern and is involved in manufacturing of dyes. The Hon'ble Supreme Court in Lilavati Kirtilal Mehta Medical Trust Vs. Unique shanti Developers & Ors., IV (2019) CPJ 65 (SC) has observed the following:-

"7. To summarize 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':

(i) 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.

(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity.

(iii) 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.

(iv) If it is found that the dominant purpose behind purchasing the goods 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 self- employment' need not be looked into."

I have examined the present case on the basis of the above judgment, it is seen that the present case is covered under point (ii) & (iii) of the above principles laid down by the Hon'ble Supreme Court. It will be seen that in the present case, the machine has been purchased to earn profit as the machine was to dispose of jobs in less time. The basic purpose of purchasing the machine was to increase efficiency to earn more profit as in every commercial activity. However, if that commercial activity is pursued for earning livelihood by means of self-employment then person pursuing the commercial activity comes under the definition of consumer. However, in the present case, the complainant is already earning his livelihood and he wants to further spread his business for earning more profit. Thus, on the basis of the touch stone as given by the Hon'ble Supreme Court in Lilavati Kirtilal Mehta Medical Trust Vs. Unique shanti Developers & Ors. (supra) and otherwise also the complainant cannot be called a consumer as he has not purchased this machine for earning his livelihood by means of self-employment. As he has already been engaged in pursuing a commercial activity as well as the business and is earning his livelihood, therefore, based on the above discussion, I do not find any merit in the first appeal No.1209 of 2018 and the same is accordingly dismissed at the admission stage. Liberty is granted to the complainant to seek remedy in a civil court if so advised.