State Consumer Disputes Redressal Commission
M/S Hindustan Motors Limited vs M/S National Insurance Co. Ltd on 22 February, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.1018 of 2007
Date of institution : 20.7.2007
Date of decision : 22 .2.2012
M/s Hindustan Motors Limited through its authorized signatory, having its
registered office at 9/1 R. N. Mukherjee Road, Kolkata 700 001.
.......Appellant
Versus
1. M/s National Insurance Co. Ltd., having its Registered Office at 3,
Middleton Street, Kolkata and its Regional Office at SCO no.337-340,
Sector 35-B, Chandigarh.
2. M/s Dada Motors Garage through its Partner/Manager, BSF Chowk, GT
Road, Jalandhar City.
3. Mars Motors through its partner Amrinder Singh, D 64, Phase-V, Industrial
Area, Mohali.
......Respondents
First Appeal against the order dated 18.1.2007 of
the District Consumer Disputes Redressal Forum,
Jalandhar.
Before :-
Hon'ble Mr. Justice S.N. Aggarwal President.
Mr. B.S. Sekhon, Member.
Present :-
For the appellants : Shri P.K. Kukreja, Advocate. For respondent No.1 : Shri Nitin Gupta, Advocate for Shri R.C. Gupta, Advocate.
For respondent No.2 : Ex parte.
For respondent No.3 : None.
JUSTICE S.N. AGGARWAL, PRESIDENT:
This order will dispose of two appeals, namely, First Appeal No.393 of 2007 (M/s Mars Motors v. National Insurance Co. Ltd. and others) and First Appeal No.1018 of 2007 (M/s Hindustan Motors Limited v. National Insurance Co. Ltd. and others) as both these appeals are directed against the same impugned order dated 18.1.2007 passed by the District Consumer Disputes Redressal Forum, Jalandhar (in short "District Forum"). The facts are taken from First Appeal No.1018 of 2007 and the parties would be referred to their status in this appeal. First Appeal No.1018 of 2007. 2 VERSION OF RESPONDENT NO.1:
2. M/s National Insurance Company Ltd. were a limited Company with its Head Office at Kolkata, Regional Office in Chandigarh and Divisional Office at Jalandhar.
3. It was further pleaded that respondent No.1 had purchased a new Ambassador 1800 ISZ Petrol car Euro II bearing chassis No.ALC-871167 and Engine No.3ELLC-078480 from M/s Dada Motors Garage respondent No.2 on 7.11.2003 for an amount of Rs.4,02,885/-. The car was got registered with the Registering and Licensing Authority, Chandigarh and its registration certificate number was CH-03-N-4500.
4. It was further pleaded that the car was having manufacturing defect. Ever since the purchase of the car, the same was not running smoothly. The engine in the running condition used to miss frequently. It was also causing knocking, starring and suspension and at times, it did not work properly. There was a noise in the gears and differential. The vehicle was frequently taken to the workshop.
It was taken to the workshop of M/s Mars Motors respondent No.3 for 24 times between 10.1.2004 to 18.7.2005.
5. It was further pleaded that respondent No.1 had been asking the manufacturers i.e. the appellants time and again to replace the vehicle as there was manufacturing defect in it but to no effect.
6. It was further pleaded that the vehicle in question was got inspected by respondent No.1 from the expert i.e. M/s Vinod Bhan & Associates (Surveyors, Loss Assessors and Valuers) on 21.9.2005 and it was found that the engine of the vehicle in the running condition was missing/knocking due to the erratic working of Amplifier Unit (ECM) and allied assemblies. The gears were checked in the running condition. First and reverse gears were making noise. There seemed to be a blacklash in the crown wheel and pinion due to which there was a noise in the First Appeal No.1018 of 2007. 3 differential. The steering and suspension system were quite faulty and needed complete replacement.
7. It was further pleaded that in spite of the repeated requests made by the appellants neither the vehicle could be set right by the experts in the workshop nor it was replaced by the manufacturers nor any compensation was granted to respondent No.1. Hence the complaint for replacement of the defective car with a new one or refund of the purchase price of car. An amount of Rs.1,00,000/- was claimed as compensation for mental agony, harassment and financial loss. Costs were also prayed.
VERSION OF THE APPELLANTS:
8. The appellants filed the written reply. It was pleaded that respondent No.1 was not a 'consumer' as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. Respondent No.1 were a body corporate and they were engaged in the business of insurance and purchased the car in question for commercial purpose.
9. It was further pleaded that the cars are manufactured by the appellants with utmost precision and care and with the best endeavour of the skilled personnel with the object to maintain superior quality, absolute customer satisfaction and honour of the value of money which the esteemed customer had to pay for the purchase of the car. Even before delivery of the car, the car was thoroughly checked by the purchaser. Warranty card, Service Vouchers and General Handbook were also delivered to the customer along with delivery of the car. It was denied if there was any manufacturing defect in the car. Dismissal of the complaint was prayed.
10. Respondents No.2 and 3 were ex parte.
PROCEEDINGS BEFORE THE DISTRICT FORUM:
11. Respondent No.1 filed the affidavit of Vinod Bhan, Surveyor/Loss Assessor/Valuer as Ex.CA and the affidavit of Roshan Lal, Driver as Ex.CB. First Appeal No.1018 of 2007. 4 Respondent No.1 also filed the affidavit of S.L. Phulley, Manager as Ex.C-1. Respondent No.1 also proved documents Ex.C-2 to Ex.C-15.
12. On the other hand, the appellants filed the affidavit of Smt. Preeti Kedia, Manager (Legal) and Secretarial of the appellants as Ex.R1/A. The appellants also proved documents Ex.R-1 to Ex.R-5.
13. Learned District Forum accepted the complaint vide impugned order dated 18.1.2007 and allowed compensation to the tune of Rs.1,00,000/- to respondent No.1 including litigation expenses which were payable by the appellants and respondents No.2 and 3 jointly.
14. Hence the present appeal (FA No.1018 of 2007) has been filed by the appellants. Respondent No.3 also filed an appeal (FA No.393 of 2007). It was prayed that the appeals be accepted and the impugned order dated 18.1.2007 be set aside.
15. Written arguments were also filed on behalf of the appellants. DISCUSSION:
16. Record has been perused. Submissions have been considered.
17. Learned counsel for the appellants placed reliance on the judgment of the Hon'ble National Commission reported as "KINETIC MOTOR CO. LIMITED v. LT. CDR UDAYBIR & ORS." I (2008) CPJ 490 (NC), another judgment of Hon'ble National Commission reported as "JAGRUT NAGRIK & ANR. v. BARODA AUTOMOBILES SALES AND SERVICE & ANR." IV(2010) CPJ 311 (NC) and another judgment of Hon'ble National Commission reported as "CLASSIC AUTOMOBILES v. LILA NAND MISHRA & ANR." I (2010) CPJ 235 (NC).
18. On the other hand, learned counsel for respondent No.1 submitted that respondent No.1 had also filed an appeal against the same judgment dated 18.1.2007 (FA No.327 of 2007) for enhancement in the amount of compensation. It was dismissed by this Commission on 21.3.2007 itself. Hence it was prayed First Appeal No.1018 of 2007. 5 that these appeals be also dismissed in order to maintain uniformity in court orders.
19. Considered.
20. So far as the judgment dated 21.3.2007 passed by this Commission in F.A. No.327 of 2007 is concerned, it was filed by respondent No.1 for enhancement in the amount of compensation. The operative order reads as under:-
" Learned counsel for the appellant could not convince us to interfere in the order of the District Forum for enhancement of compensation. Relief/compensation is granted in every case according to its facts and circumstances. In the present case, it was proved on record that there was some defect in the car due to which the car had to be taken for repairs more than 20 times in one and a half year when it had travelled distance upto 32555 only but it could not be proved by the complainant that there was manufacturing defect in the car to claim replacement of the car. There is no expert report of Automobile Engineer or Mechanical Engineer to hold that there was manufacturing defect in the car. In the facts and circumstances of the present case, the complainant has been fairly and adequately compensated for the harassment suffered and we find no infirmity in the complaint."
21. The perusal of the order dated 21.3.2007 reveals that it was not considered in the aforesaid judgment if respondent No.1 was a consumer or not and if the complaint filed by respondent No.1 was maintainable or not. That appeal of respondent No.1 was only for enhancement of compensation which was dismissed by this Commission for the reason that no such ground for enhancement has been First Appeal No.1018 of 2007. 6 made out. It was dismissed in limine and without notice to the appellants or respondents No.2 and 3. Therefore it was not binding on the appellants.
22. No doubt there will be a little contradiction in the two decisions but since the issue whether respondent No.1 was a consumer or not and whether the complaint was maintainable or not, was not considered in the judgment dated 21.3.2007, therefore, this Commission cannot run away from its duty to apply the law to the facts of this case.
23. The main submission of the learned counsel for the appellants was that respondent No.1 was not a 'consumer' as respondent No.1 had purchased the car for commercial purpose.
24. Section 2(1)(d) of the Consumer Protection Act (in short "the Act") reads as under : -
"2(1)(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) : [hired 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 [hired or avails of] First Appeal No.1018 of 2007. 7 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 purpose 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;]"
25. The words 'commercial purpose' were only a part of Section 2(1)(d)(i) in the Consumer Protection Act. These were also introduced in Section 2(1)(d)(ii) by way of amendment Act No.61 of 2002 which became effective with effect from 15.03.2003. These words have not been defined in the Consumer Protection Act.
26. These words as used in Section 2(1)(d)(i) were interpreted by the Hon'ble Supreme Court in the celebrated judgment reported as "Laxmi Engineering Works v. P.S.G. Industrial Institute, II (1995) CPJ 1 (SC)". The Hon'ble Supreme Court was pleased to observe as under : -
"The National Commission appears to have been taking a consistent view 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(1)(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion - the expression 'large-scale' is not a very precise expression - the Parliament stepped in and First Appeal No.1018 of 2007. 8 added the explanation to Section 2(1)(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression 'commercial purpose' a case of exception to an exception. Let us elaborate: a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others' work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for 'commercial purpose would not yet take the purchaser out of the definition of expression 'consumer'. 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'. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self employment, for earning his livelihood, it would not be treated as a 'commercial purpose' and he does not cease to be a consumer for the purposes of the Act. 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 First Appeal No.1018 of 2007. 9 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 emphasise 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.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer."
27. The words 'commercial purpose' were also considered by the Hon'ble National Commission in the judgment reported as "Harsolia Motors v. National Insurance Co. Ltd., 2005 CTJ 141 (CP) (NCDRC)". The Hon'ble National also considered the judgment of the Hon'ble Supreme Court in Laxmi Engineering Works's case (supra). The Hon'ble National Commission held as under : -
"25. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words First Appeal No.1018 of 2007. 10 'for any commercial purpose' it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose."
28. Admittedly respondent No.1 were a body corporate and they were engaged in the business of insurance. Respondent No.1 purchased and used the car in question for commercial purpose. Therefore, respondent No.1 is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986.
29. In view of the discussion held above, this appeal is accepted and the impugned order dated 18.1.2007 is set aside.
30. However, the liberty is granted to respondent No.1 to resort to any other remedy available to it under the law.
31. The time spent by respondent No.1 from the date of filing of the complaint in the District Forum on 1.12.2005 till today shall not be counted towards limitation in view of the judgment of the Hon'ble Supreme Court reported as "Trai Foods Ltd. v. National Insurance Co. and others" (2004) 13 SCC 656.
32. The appellants had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal on 20.7.2007. This amount of Rs.25,000/- with interest accrued thereon, if any, be refunded by the registry to the appellants M/s Hindustan Motors Ltd. by way of a crossed cheque/demand draft after the expiry of 45 days.
FIRST APPEAL NO.393 OF 2007:
33. For the reasons recorded in First Appeal No.1018 of 2007 above, this appeal is also accepted and the impugned order dated 18.1.2007 is set aside. First Appeal No.1018 of 2007. 11
34. The appellants in FA No.393 of 2007 (M/s Mars Motors) had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal on 16.3.2007. This amount of Rs.25,000/- with interest accrued thereon, if any, be refunded by the registry to the appellants M/s Mars Motors by way of a crossed cheque/demand draft after the expiry of 45 days.
35. The arguments in these appeals were heard on 9.2.2012 and the orders were reserved. Now the orders be communicated to the parties.
36. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
(JUSTICE S.N. AGGARWAL)
PRESIDENT
February 22 , 2012 (BALDEV SINGH SEKHON)
Bansal MEMBER