State Consumer Disputes Redressal Commission
M/S. Krishna Knits vs Sunil Butani Proprietor M/S Grace ... on 19 March, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.1027 of 2007
Date of Institution : 25.07.2007
Date of decision : 19.03.2012
M/s. Krishna Knits, carrying on business at Batala Road, Opposite Arora Forms,
Amritsar through Sh.Rajiv Sharma, Proprietor.
...Appellant
Versus
1. Sunil Butani Proprietor M/s Grace Embroideries, 9, Anand Avenue,
Amritsar having his workshop at Batala Road, Gali Murgi Khana, Amritsar.
2. Shiv Kumar c/o M/s Grace Embroideries, Batala Road, Gali Murgi Khana,
Amritsar.
...Respondents
First Appeal against the order dated 17.5.2007 of
the District Consumer Disputes Redressal Forum,
Amritsar.
Before:-
Hon'ble Mr.Justice S.N.Aggarwal, President.
Sh.Baldev Singh Sekhon, Member.
Present:-
For the appellant : Sh.S.K.Mahajan, Advocate.
For the respondents : Ex-parte. JUSTICE S.N. AGGARWAL, PRESIDENT VERSION OF THE APPELLANT
Rajiv Sharma was the proprietor of M/s Krishna Knits. He was running his business in this name.
2. It was further pleaded that the appellant purchased one Creative Embroidery machine for an amount of Rs.9,95,800/-. The appellant firm was a partnership firm earlier, but after the partnership was dissolved, it became the exclusive proprietorship of Rajiv Sharma.
3. It was further pleaded that one part of machine known as Stepping Motor Drive Card become out of order, on which the appellant contacted respondent No.1. Respondent No.1 had represented to the appellant that respondent No.1 was competent to make proper repairs of the parts and Shiv Kumar respondent No.2 was deputed to repair the machine. It was told by the respondents to the First Appeal No.1027 of 2007 2 appellant that they have got training from China to set the spare parts right by making necessary repairs. The parts became out of order on 9.10.2005. The machine was China make and its spare part was Dhao make MS OIA.
4. It was further pleaded that respondent No.1 had sent respondent No.2 for the purpose of making repair of defective part. Respondent No.2 had taken away the said part on 9.10.2005. Thereafter the appellant had been making enquiries from the respondents and the respondents were promising to return the said part by making proper repair, but they did not return the same. The respondents wasted huge time of the appellant.
5. It was further pleaded that ultimately the respondents told the appellant that he should fix new part in the machinery. Finding no other alternative, the appellant purchased a new part and made the payment of Rs.30,000/-. The new part was purchased on 22.10.2005. The appellant had made payment of Rs.25,000/- in cash while Rs.5000/- were paid through cheque in the name of Sunil Butani respondent No.1.
6. It was further pleaded that on 22.10.2005 the respondents supplied other part stating the same to be new one, but the appellant told them that this part was not in proper working condition. It was not of the same specification which was told to the appellant, nor it corresponded to the specifications of the earlier part which was fitted in the machine at the time of its purchase. After the appellant told these facts to the respondents, the respondents assured the appellant that this part was genuine and it would remain fully operational. Accordingly, the appellant inserted the spare part in the machinery but the machinery did not work properly. The appellant told about it to the respondents and asked them to change the spare part with another spare part of the specifications, which could fit in the machine, but the respondents failed to do so. On 26.12.2005 this part stopped working and it was returned to the respondents by the appellant. Thereafter, the respondents neither delivered new part nor changed the old spare part nor returned the money.
7. It was further pleaded that the appellant could not give production due to non supply and non delivery of necessary part of the machine. The appellant got First Appeal No.1027 of 2007 3 inserted new spare part about one month after and the machinery remained non operative and non productive due to deficiency in service on the part of the respondents.
8. The appellant suffered loss to the tune of Rs.50,000/- on account of non operation of machinery and he further suffered a loss of Rs.60,000/- as the price of spare part. The appellant was entitled to recover these amount from the respondents with interest at the rate of 12% per annum. The appellant had suffered mental tension and harassment. Therefore, he was also entitled to compensate on that account. Hence the complaint for recovery of Rs.1,50,000/-. Compensation, interest and costs were also prayed. VERSION OF RESPONDENT NO.1
9. Respondent No.1 filed written reply. It was denied that if the appellant had purchased the machinery from the respondents or if he had ever approached respondent No.1 for any such act. On the other hand, respondent No.1 is not conducting any such repair work and he has no concern with respondent No.2. It was also denied that if respondent No.1 had deputed respondent No.2 for effecting any repairs. The appellant has no locus standi to file the present complaint.
10. It was further pleaded that the appellant was running a commercial unit and he was using the machinery for commercial purpose. Therefore, the appellant was not a consumer. Therefore, the District Forum did not have jurisdiction to entertain the complaint.
11. It was also denied if any delay was caused by respondent No.1 or if the appellant had any transaction with respondent No.1 relating to money or if he has any concern with the appellant or if the appellant had ever contacted respondent No.1 for repair of machinery. All other facts were denied and dismissal of the complaint was prayed.
VERSION OF RESPONDENT NO.2
12. Respondent No.2 also filed written reply. It was pleaded by him that complaint was barred by limitation and the appellant had no locus standi to file the complaint against respondent No.2. It was denied if respondent No.2 had First Appeal No.1027 of 2007 4 ever served the appellant at any point of time. It was also denied, if respondent No.2 was ever deputed by respondent No.1 for any such work to repair the machinery of the appellant at any point of time. Respondent No.2 has no business relation with respondent No.1, nor respondent No.1 ever assured the appellant of making any repairs to his machinery. It was pleaded that respondent No.2 has been dragged into litigation by the appellant without any basis. Dismissal of the complaint was prayed.
PROCEEDINGS BEFORE THE DISTRICT FORUM:
13. Rajiv Sharma appellant filed his affidavit dated 24.2.2006 Ex.C1. The appellant also produced documents Ex.C2 to Ex.C11. On the other hand, Sunil Butani has filed affidavit Ex.R1, while Shiv Kumar filed his affidavit Ex.R2.
14. The learned District Forum dismissed the complaint vide impugned order dated 17.5.2006.
15. Hence the appeal.
DISCUSSION:
16. The appellant is running the business under the name and style of M/s Krishna Knits. The respondents have taken the plea that the appellant was running his business for commercial purpose and therefore, he was not a consumer. Hence the complaint was not maintainable in the District Forum.
17. The appellant has placed on file the bill dated 26.7.2002 as Ex.C2 which reveals that machinery was purchased from M/s Spintex Corporation, New Delhi for an amount of Rs.9,95,800/-. The appellant has also produced certificate given by Oriental Bank of Commerce dated 26.7.2006 that cheque dated 12.11.2005 for Rs.5000/- favouring respondent No.1 was got encashed by Sunil Butani and was debited in the account of Krishna Knits on 14.11.2005 (Ex.C3). The appellant has also proved High Seas Sales Agreement as Ex.C4, which reveals that M/s Om Knits were the buyer and they had purchased the computerised embroidery machines from China. This certificate was also issued by Spintex Corporation (Ex.C4).
18. The very fact that the appellant was running the business of embroidery and had purchased the machine for that purposes, clearly reveals that he was First Appeal No.1027 of 2007 5 running the business for commercial purpose. The complaint was filed by the appellant on 7.3.2006. The word consumer has been defined in Section 2(i) (d) of Consumer Protection Act 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] 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;]"
First Appeal No.1027 of 2007 6
19. 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.
20. These words have not been defined in the Consumer Protection Act.
21. 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 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 First Appeal No.1027 of 2007 7 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 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 First Appeal No.1027 of 2007 8 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."
22. Although the matter before the Hon'ble Supreme Court related to the provisions of Section 2(1)(d)(i) of the Act and at that time, the words 'commercial purpose' were not existing in Section 2(1)(d)(ii) of the Act but the Hon'ble Supreme Court in this judgment had given the meaning of the words 'commercial purpose'. These very are the words introduced in 2(1)(d)(ii) of the Act with effect from 15.3.2003. Therefore, the meaning of words 'commercial purpose' for the purpose of Sections 2(1)(d)(i) and 2(1)(d)(ii) of the Act is the same.
23. Therefore, the interpretation of the words "commercial purpose" given by the Hon'ble Supreme Court in Laxmi Engineering Works's case (supra) would also be applicable to the words 'commercial purpose' as used in Section 2(1)(d)(ii) of the Act.
24. 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 '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 First Appeal No.1027 of 2007 9 which is not directly intended to generate profit, it would not be commercial purpose."
25. The latest judgment of the Hon'ble Supreme Court defining the limits of the words 'commercial purpose' is reported as "Economic Transport Organization v. Charan Spinning Mills (P) Ltd. & anr. I (2010) CPJ 4 (SC)" in which it was held by the Hon'ble Supreme Court as under : -
"25. We may also notice that Section 2(d) of Act was amended by Amendment Act 62 of 2002 with effect from 15.3.2003, by adding the words "but does not include a person who avails of such services for any commercial purpose" in the definition of 'consumer'. After the said amendment, if the service of the carrier had been availed for any commercial purpose, then the person availing the service will not be a 'consumer' and consequently, complaints will not be maintainable in such cases. But the said amendment will not apply to complaints filed before the amendment."
26. Therefore, the appellant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. Therefore, the complaint was not maintainable in the District Forum.
27. Accordingly this appeal is dismissed.
28. However, the appellant would be at liberty to resort any other remedy available to him under the law.
29. The period spent by the appellant from the date of filing of the complaint in the learned District Forum i.e. on 7.3.2006 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.
30. The arguments in this case were heard on 9.3.2012 and the order was reserved. Now parties be communicated about the same First Appeal No.1027 of 2007 10
31. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Justice S.N.Aggarwal) President (Baldev Singh Sekhon), Member March 19 , 2012.
Davinder