National Consumer Disputes Redressal
Landmark Cars Pvt. Ltd. vs Frostees Export (India) Pvt. Ltd. & 5 ... on 30 June, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 594 OF 2020 (Against the Order dated 20/02/2020 in Appeal No. 47/2019 of the State Commission West Bengal) 1. LANDMARK CARS PVT. LTD. ...........Petitioner(s) Versus 1. FROSTEES EXPORT (INDIA) PVT. LTD. & 5 ORS. ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. Sujoy Chatterjee, Advocate For the Respondent :
Dated : 30 Jun 2020 ORDER
JUSTICE V.K.JAIN (ORAL)
The case of the complainant in nutshell is that it purchased a pre-owned Audi Car for a consideration of Rs.61,50,000/- for the use of its Directors. This is also the case of the complainant that though the car had been manufactured in the year 2015, it was represented to it in the documents that the car had been manufactured in the year 2016. The complainant, therefore, engaged the services of a valuer M/s Vision Squad Service Pvt. Ltd. who assessed the valuation of the said car at Rs.44 lakhs. The complainant, therefore, suffered a loss of Rs.17,50,000/-. The complainant thus approached the concerned District Forum by way of a consumer complaint.
2. The petitioner did not appear before the District Forum and its right to file the written version, therefore, was closed. The District Forum having allowed the consumer complaint, the petitioner approached the concerned State Commission way of an appeal. Vide impugned order dated 20.2.2020, the State Commission dismissed the appeal thereby maintaining the order of the District Forum directing the petitioner to pay the difference in the value of the car, i.e., Rs.17,50,000/- alongwith interest @ 9% p.a. and also awarded compensation of Rs.20,000/-. Being dissatisfied, the petitioner is before this Commission.
3. The submissions of the learned counsel for the petitioner are twofold. His first submission is that the complainant company was engaged in the business of purchasing and selling pre-owned cars as would be evident from the legal notice which the complainant had sent. His second submission is that the car was purchased from another company, namely, M/s Land Mark Pre-owned Cars Pvt. Ltd. which is an entity different from the petitioner company.
4. As far as his first submission is concerned, the case of the complainant is that the car in question was purchased by it for the use of its Directors. If the car was purchased for the personal use of the Directors of the company it cannot be said to be that it was purchased for the commercial purpose. A reference in this regard can be made to the decision of a Three-Member Bench of this Commission in CC No. 51/2006 Crompton Greaves Ltd. and Anr. Vs. Daimler Chrysler India Pvt. Ltd. & Ors. and the following view was taken:-
"Noticing an apparent conflict in the decisions rendered by this Commission in Controls and Switchgear Company Ltd. Vs. Daimler Chrysler India Pvt. Ltd. and T and T Motors Ltd. IV (2007) CPJ 1 (NC) and General Motors Pvt. Ltd. Vs. G.S. Fertilizers Pvt. Ltd. [First Appeal No. 723 of 2006] decided on 07.02.2013, both rendered by Benches comprising two Members, the following issue was referred to this larger Bench, for decision:-
Whether the purchase of a car or any other goods by a company for the use/personal use of its Director amounts to purchase for a commercial purpose, within the meaning of Section 2(1)(d) of the Consumer Protection Act, or not.
11. For the reasons stated hereinabove, the issue referred to the larger Bench is answered as follows:-
(a) If a car or any other goods are obtained or any services are hired or availed by a company for the use/personal use of its directors or employees, such a transaction does not amount to purchase of goods or hiring or availing of services for a commercial purpose, irrespective of whether the goods or services are used solely for the personal purposes of the directors or employees of the company or they are used primarily for the use of the directors or employees of the company and incidentally for the purposes of the company.
(b) The purchase of a car or any other goods or hiring or availing of services by a company for the purposes of the company amount to purchase for a commercial purpose, even if such a car or other goods or such services are incidentally used by the directors or employees of the company for their personal purposes.
5. The broader issue was re-examined by another Three-Member Bench of this Commission recently in CC No. 349 of 2017 Springdale Core Consultants Pvt. Ltd. Vs. Pioneer Urbandland and Infrastructure Ltd. and the following view was taken:-
8. It would thus be seen that the legal status of the buyer be it a company, a partnership firm, a society, an Association of Persons or an individual is not relevant for deciding whether the buyer is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act or not, the relevant factor being the purpose for which the residential plot / house is bought or booked by the buyer. If a house / residential plot is booked or purchased by a company for the personal residential use of the employees of the company, the purchase / booking is not linked to the regular profit generating business activities of the company, and therefore it cannot be said that the residential plot/house is bought or booked by the company for a commercial purpose. A company purchasing or booking a residential plot / house will be out of the purview of Section 2(1)(d) of the Consumer Protection Act only if there is a close and direct nexus between the purchase / booking of the house / residential plot and the regular business activities of the said company. The view taken by the Hon'ble Supreme Court in respect of the purchase of residential house by a Trust for its employees working in a Hospital being run by a Trust as a part of its commercial activities shall equally apply to the residential plot / house purchased / booked by a company for the residential use of its Directors, the determining factor being the purpose behind such purchase / booking and the legal status of the purchaser being immaterial. Though, a company is not obliged by law to provide residential accommodation to its Directors, the same being the legal position with respect to its employees, it would be wholly immaterial whether the residential plot / house is intended to be used for the residence of the employees or of the Directors of the company.
The acquisition of a residential plot or house by a company, for being used as a residence of its directors or employees does not have a close and direct nexus with the regular business activities of the company, is not essential for the business activities of the company, does not aid, assist or promote its business and does not generate any business revenue or profit for the corporate. It is only a perquisite provided by the company to its Directors or employees, and may or may not form an integral part of their terms of employment or appointment, as the case may be.
9. However if a residential plot / house is purchased / booked by a company as a part of its regular profit generating commercial activities and not for being used as the residence of its Directors / or employees such a purchase / booking would be for a commercial purpose and therefore, the company would not be a consumer, as far as such a purchase / booking is concerned.
10. For the reasons stated hereinabove, and in view of the decision of the Hon'ble Supreme Court in Lilavati Kirtilal Mehta Medical Trust (supra), the reference is answered as follows:
1. It is the purpose for which the residential plot / house is booked / purchased, which is material for determining whether the purchaser is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. The legal status of the purchaser, be it an individual, a partnership, an Association of Persons, a Trust, a Society or a Company is immaterial for such determination.
2. If a house / residential plot is booked / purchased by a company for the residential use of its Directors / employees the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking / purchase is concerned.
3. If a house / residential plot is bought / booked by a company as a part of its business activities and such purchase / booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act as far as such a purchase / booking is concerned."
The view taken by this Commission in Springdale Core (Supra) would equally apply to the purchase of a vehicle by a company or a partnership firm."
5. As regards the second submission, admittedly the petitioner is a group company since two shareholders of the petitioner company are stated to be also the shareholders of other company, namely, M/s Land Mark Pre-owned Cars Pvt. Ltd. The petitioner having not filed any written version and having not taken any objection in this regard, I am not inclined to entertain this plea at the stage of revision petition. In any case, nothing prevents the petitioner from paying to the complainant and then recovering the money from the other company, both of them being a company belonging to the same group.
6. The seller of the car misrepresented to the complainant by claiming that the car had been manufactured in the year 2016 whereas it was manufactured in the year 2015. Obviously, the complainant would not have paid the same price for the car had it known that the car had been manufactured in the year 2015 and not in the year 2016. A valuer had thereafter assessed the value of the car sold to the complainant and the said valuation has gone unrebutted, the petitioner having not contested the consumer complaint by filing the written version.
6. For the reasons stated hereinabove, I find no merit in the revision petition which is hereby dismissed with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER