State Consumer Disputes Redressal Commission
Dev Bhumi Cold Chain vs Vishkarma Enterprises on 3 July, 2023
FA NO.16/2019
M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution:10.01.2019
Date of hearing:08.05.2023
Date of Decision: 03.07.2023
FIRSTAPPEAL NO.16/2019
IN THE MATTER OF
M/S. DEV BHUMI GOLD CHAIN LTD.
17 & 18, New Sabji Mandi,
Azadpur, Delhi -110033
...Appellant
(Through: None)
VERSUS
1. MANAGER,
M/S. VISHKARMA ENTERPRISES
B-134, DDA Sheds, Okhla Industrial Area,
Phase-I, New Delhi -110020.
...Respondent No.1
(Through: None)
2. CARRIER AIRCONDITIONING &
REFIGERATION PVT. LTD.
Narsinghpur, Kherki, Daula Post,
Gurgaon -12200
...Respondent No.2
(Through: Mr. Prem Prakash Kanwar, Advocate)
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE MS PINKI, MEMBER (JUDICIAL)
MR. J.P. AGRAWAL, MEMBER
DISMISSED PAGE 1 OF 15
FA NO.16/2019
M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
Present: None for the parties.
PER: HON'BLE JUSTICE SANGITA DHINGRA
SEHGAL,PRESIDENT
JUDGMENT
1. The facts relevant that disbursal of the case as per the District Forum regard as under:
"The complainant is a company duly incorporated under the Companies Act, 1956. The complainant is running cold storages and also has vehicles having refrigerated plants on them which are used for its own purpose of maintaining a cold chain for the produce that the company trades in as well as for its own purposes in maintaining the complete cold chain for services provided to others. The complainant maintains the cold chain from the time of procurement of fruits and vegetables till those reach the end user.
The case of the complainant is that it purchased two identical refrigeration plants from OP-2 which are meant for storage of fruits and vegetables in the vehicles of the complainant. The said refrigeration plants are not meant for commercial use but for own use of the complainant therefore the complainant is a consumer and this complaint is maintainable. One refrigeration plant was purchased on 28.01.2005 for a sum of Rs.2,18,875/- and other refrigeration plant was purchased on 22.04.2005 for a sum of Rs.2,18,874/- and the same were fitted on vehicles bearing No.DL- 1LE-9282 and DL-1LE-9622 respectively.
It is stated that OPs had been providing adequate service and maintenance of the refrigerated vehicles till 02.04.2007. On
02.04.2007 the vehicle bearing No.DL-1LE-9622 was sent to the workshop of OP-1 for service and maintenance as at that time refrigeration plant in the said vehicle was not functioning. OP replaced some defective parts with new one and then delivered the vehicle to the complainant after a very long time as a result the complainant suffered heavy losses. Again the refrigeration plant of the said vehicle did not work. It was again taken to the DISMISSED PAGE 2 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
workshop. Repair was carried out after lot of time. Similarly the other vehicle was also sent for service and maintenance. The complainant is a cold chain company and its business and trading is based on that. Due to the gross, negligent and malafide behaviour of OPs, none of the complainant's remunerative acts could be fulfilled as the cold chain of the complainant was broken causing huge loss of business of the complainant. It is stated that the complainant suffered a total loss of Rs.9,78,440/-. The complainant sought this amount as well as compensation and litigation expenses.
2. The said complaint filed by the complainant under Section 12 of the Consumer Protection Act, 1986 was dismissed by the District Commission, vide order dated 20.08.2018 whereby it held as under:
"We have gone through the case file carefully.
We are of the view that the complainant is not a consumer. Section 2(1)(d) of Consumer Protection Act 1986 defines 'consumer' as under:-
"(d) 'consumer', means 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 party 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 resale or for approval of such person but does not include a person who obtains such goods for resale or for any commercial purpose; or hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any DISMISSED PAGE 3 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the service for consideration paid or promised, or partly paid or party promised, or under any system of deferred payment, when such services are availed of with the approval of first mentioned person, but does not include a person who avails of such services for any commercial purpose.
[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.]"
Reference in this regard is placed on judgment of Hon'ble National Commission in case of M.T. James Vs P.M, Baburajan and Ors. - 1(2015) CJ 654 (NC) - where a diesel generator set was used for hospital for providing steady and uninterrupted electric supply. It was held that the generator set was purchased for commercial purposes hence the complainant is not a consumer.
The Hon'ble National Commission relied upon the judgment of Hon'ble Supreme Court in case of Birla Technologies Ltd. Vs Neutral Glass and Allied Industries Ltd., IX (2010) SLT 396=1 (2011) CPJ 1 (SC)= (2011) 1 SCC 525 - wherein it was held as under:-
"8. We have gone through the impugned judgment, wherein there is a clear cut finding that the software in question amounted to sale of goods by the appellant to the respondent for commercial purpose and as such the respondent would be excluded for being considered as a 'consumer' under Section 2(1)(d)(i) of the Act..........."
In view of the above judgments, the complainant is not a consumer. Hence the present complaint is dismissed.
3. Aggrieved by the aforesaid order of the District Commission, the Appellant/Complainant has preferred the present appeal, inter-alia, DISMISSED PAGE 4 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
contending that the District Commission failed to appreciate that the Complainant was a consumer within the definition of Section 2(d) of the Act as the refrigeration units purchased were meant to be used by the Appellant; failed to give finding that complainant has obtained the goods for commercial purpose and failed to appreciate the evidence and contentions of the Complainant.
4. Respondent has filed reply to the appeal while denying the contents of the appeal has contended that Appellant is not a consumer and the subject units were purchased for running his business which makes him the commercial user and that an expert report is of an extreme important if manufacturing defect has to be proved and the onus to prove such manufacturing defect and to bring the expert report is on the complainant.
5. We have perused the material on record carefully. The main issue before us is whether the refrigeration units purchased taken by Appellant/Complainant, for a commercial enterprise, amounts to hiring of services for a "commercial purpose", which is excluded from the purview of the definition of a "consumer" under Section 2 (1)(d) of the CP Act?
6. There is no denying the fact that the Appellant/Complainant purchased two refrigeration plants from Respondent No.2, where were meant for storage of fruits and vegetables in the vehicles of the Appellant/Complainant. There is also no dispute that the Appellant/Complainant is a company duly incorporated under the Companies Act, 1956 and is running cold storages; and also has vehicles having refrigerated plants on them which are used for its own purpose of maintaining a cold chain for the produce that the DISMISSED PAGE 5 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
company trades in as well as for its own purposes in maintaining the complete cold chain for services provided to others. The Appellant/Complainant maintains the cold chain from the time of procurement of fruits and vegetables till those reach the end user.
7. The law on the subject has been examined by the Hon'ble Supreme Court in Laxmi Engineering Works v. P.S.G. Industrial Institute reported at 1 (1995) 3 SCC 583 wherein it was held that "commercial purpose" is to be looked into, in the facts and circumstances of each case to consider the purpose for which the goods and services are bought or availed. If it is availed with a view to carrying out large scale commercial activity with profit motive, then the buyer would not qualify as a consumer and the Act, 1986 would not be applicable.
8. While dealing with the aforesaid issued the Hon'ble Supreme Court discussed and held as under:
16. Yet another clarification; the Explanation, in our opinion is only explanatory; it is more in the nature of a clarification a fact which would become evident if one examines the definition (minus the explanation) in the context and scheme of the enactment. As indicated earlier, the explanation broadly affirms the decisions of the National Commission. It merely makes explicit what was implicit in the Act. It is not a.-, if the law is changed by the said explanation; it has been merely made clearer. RELEVANT DECISIONS:
17.In Lucknow Development Authority v. M.K. Gupta (1904 (1) SCC 243). the question was whether a public authority engaged in constructing and selling houses can be said to be rendering a Services and whether the person purchasing such houses can be called a "consumer" within the meaning of the said definition. While answering the question in the DISMISSED PAGE 6 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
affirmative, a Bench of this court (Kuldip Singh and R.M. Sahai, JJ.) also examined the scheme and object of the Act and the ambit of the definition of the expression "consumer". The following observations arc apposite:
"To begin with the preamble of the Act which can afford useful assistance to ascertain the legislative intention, it was enacted, 'to provide for the protection of the interest of consumers'. Use of the word 'protection' furnishes key to the minds of makers of the Act. Various definitions and provisions which elaborately attempt to achieve this objective have to be construed in this light without departing from the settled view that a pre- amble cannot control otherwise plain meaning of a provision. In fact, the law meets long felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons has become illusory....... The word 'consumer' is a comprehensive expression. It extends from a person who buys any commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services. In Oxford Dictionary a consumer is defined as, "a purchaser of goods or services". In Black's Law Dictionary it is explained to mean, "one who consumes. Individuals who purchase, use, maintain, and dispose of products and services. A member of that broad class of people who are affected by pricing policies, financing practices, quality of goods and services, credit reporting debt collection, and other trade practices for which State and Federal consumer Protection Laws are enacted.
"
The Act opts for no less wider definition. It reads as under:
" 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 DISMISSED PAGE 7 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
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)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 die first mentioned person;
[Explanation.-- For the purposes of sub-clause
(i), 'commercial purpose' does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self- employment;]" It is in two parts. The first deals with goods and the other with services. Both parts first declare the meaning of goods and services by use of wide expressions. Their ambit is further enlarged by use of inclusive clause. For instance, it is not only purchaser of goods or hirer of services but even those who use the goods or who are beneficiaries of services with approval of the person who purchased the goods or who hired services arc included in it. The legislature has taken precaution not only to define 'complaint', 'complainant', 'consumer' but even to mention in detail what would amount to unfair trade practice by giving an elaborate definition in clause (r) and even to define 'defect' and 'deficiency' by clauses (f) and
(g) for which a consumer can approach the Commission. The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services."
DISMISSED PAGE 8 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
18.In Morgan Stanley Mutual Fund v. Kartick Das (1994 (4) SCC 225), a Bench of this Court (M.N. Venkatachaliah, CJ, S. Mohan and Dr. A.S. Anand, JJ.) stated the meaning of the expression "consumer" in the following words:
"The consumer as the terms implies is one who consumes. As per the definition, consumer is the one who purchases goods for private use or consumption. The meaning of the word 'consumer' is broadly stated in the above definition so as to include anyone who consumes goods or services at the end of the chain of production. The comprehensive definition aims at covering every man who pays money as the price or cost of goods and services. The consumer deserves to get that he pays for in real quantity and true quality. In every society, consumer remains the centre of gravity of all business and industrial activity. He needs protection from the manufacturer, producer, supplier, wholesaler and retailer. "
19.It must, however, be said that in both the above cases, the question arising herein was not in issue. In Morgan Stanley, the question was whether a prospective investor in the shares of a company is a "consumer" as defined in Section 2(f). It was held that he was not.
20.Reference to the decisions cited by the learned counsel for the parties would be in order at this stage. In Synco Textiles Private Limited v. Greaves Colton and Co. Ltd. (1991 (1) CPJ 499), the appellant purchased from the respondent three generating sets at a total cost of Rs.5,53,000/ - for use in his factory. His case was that the generating sets supplied by the respondent-company were defective and that on that account he suffered substantial business losses. He applied to the State Commission for recovery of the cost of the machines as well as a sum of Rupees four lakhs by way of damages. The State Commission first took up the question whether the complainant can be called a "consumer" as defined in the Act. (The case arose before the explanation was added by the 1993 Amendment Act.) The State Commission held that DISMISSED PAGE 9 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
since the generators were purchased by the appellant for generating electricity in its factory to be used for operating the machinery in the factory for the purpose of commercial production, the appellant cannot be called a "consumer".
When the matter came to the National Commission by way of appeal, Balakrishna Eradi, J., President, dealt with the meaning of the words "for any commercial purpose" in the following words (majority opinion):
"Since cases of resale have been separately referred to, it becomes obvious that the words "for any commercial purpose" are intended to cover cases other than those of resale of the concerned goods. The words "for any commercial purpose" are wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profit. According to the meaning given in standard dictionaries, the expression commercial' means-
"connected with, or engaged in commerce. mercantile; having profit as the main aim,, (See Collins English Dictionary). "Pertaining to commerce: mercantile" (See Chamber's Twentieth Century Dictionary) The of the expression 'commerce' as given in the dictionaries is:
"exchange of merchandise, especially, on a large scale" (See the Concise oxford Dictionary) "interchange of merchandise on a large scale between nations or individuals: extended trade or traffic" (See Chambers Twentieth Century Dictionary) Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression ' consumer' any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making Profit. As already indicated since resale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words "for any commerce purpose" must be understood as covering cases other am DISMISSED PAGE 10 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
those of resale of the goods. it is thus obvious that Parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for resale but also those who purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit activity will not be 'consumers' entitled to protection under the Act. It seems to us clear that the intention of Parliament as can be gathered from the definition section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It would thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit % ill all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that exclusion clause should apply it is however necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit. "
21.One of the members of the Commission, Sri Y. Krishan, however, took a different view. The learned Member was of the opinion that:
"...... the word used in Sec.2(l)(d)(i) "for commercial purpose" have to be given a precise and restrictive meaning:
commercial purpose has to be distinguished from commercial production and commercial activity. The sub- section 2(1)(d)(i) and (ii) of the Consumer Protection Act have to be interpreted harmoniously. The interpretation of the words "Commercial purpose" in Sec.2(l)(d)(i) must be logical and equitable so as to avoid patent anomalies and inconsistencies in the application of the law. Viewed in this DISMISSED PAGE 11 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
background the various tests for determining whether the goods have been purchased for a commercial purpose would be:
(i) the goods are not for immediate final consumption but that there is only transfer of goods. i.e. resale.
(ii) there should be a direct nexus between the purchase of goods and the profit or loss from their further disposal. Such a direct nexus is absent when the goods or services are converted for producing other goods or services. After conversion there is no direct nexus between the kind of goods purchased and the kind of goods sold.
(iii) there is nexus of form and kind between the goods purchased and the goods sold. Such a direct nexus of form and kind ceases when the goods undergo transformation or conversion.
In brief the immediate purpose as distinct from the ultimate purpose of purchase, the sale in the same form or after conversion and a direct nexus with profit or loss would be the determinants of the character of a transaction-whether it is of a "commercial purpose" or not. Thus buyers of goods or commodities for "self consumptions" in economic activities in which they are engaged would be consumers as defined in the Act."
22. Secretary, Consumer Guidance and Research Society of India v. M/s. B.P.L. India Lid. (1992 (1) CPJ 140), follows and affirms the decision in Synco Textiles and another decision in Oswal Fine Arts v. M/ s. H.M. T. Madras (1991 (1) CPJ 330). In this case, one Mrs. Shanta Manuel had purchased one paper copier from the respondent and installed the same in her premises. The National Commission dealt with the case in the following words:
"In the case now before us, it is clearly established by the materials on record that the purpose of the purchase of the paper copier by Mrs. Shanta Manuel was only to enable to DISMISSED PAGE 12 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
earn her livelihood by the process of self employment. Such being the factual position Mrs. Shanta Manuel cannot be said to have purchased the machine for a 'commercial purpose' inasmuch as the basic prerequisite of large scale trading or business activity for purpose of making profit is totally absent. We hold that the view concurrently expressed by the District Forum and the State Commission that the complainant is not 'consumer' entitled to invoke the jurisdiction of the consumer forum is incorrect and the said finding will stand set aside.
23.Though rendered earlier to the 1993 Amendment, these decisions are broadly in accord with the amended definition. CONCLUSIONS:
24.We must, therefore, hold that (i) the explanation added by The Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 18.6.1993 is clarificatory in nature and applies to all pending proceedings.
(ii)Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.
(iii)A person who buys goods and use them himself, exclusively for the purpose of earning his livelihood, by means of self employment is within the definition of the expression "consumer".
25.So far as the present case is concerned we must hold (in agreement with the National Commission), having regard to the nature and character of the machine and the material on record that it is not goods which the appellant purchased for use by himself exclusively for the purpose of earning his livelihood by means of self employment, as explained hereinabove.
DISMISSED PAGE 13 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
26.The appeal accordingly fails and is dismissed but without costs. If the appellant chooses to file a suit for the relief claimed in these proceedings, he can do so according to law and in such a case he can claim the benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting the proceedings under the Consumer Protection Act, while computing the period of limitation prescribed for such a suit.
9. Having regard to the discussion done and the legal position explained, we of the considered view that the Appellant/ Complainant indulged in large scale commercial activities and generating profit by using the refrigeration units; and it is the admitted case of the Appellant/Complainant that refrigeration units were used for maintaining the cold chain from the time of procurement of fruits and vegetables till they reach the end user. Further, there is no averment in the complaint that the refrigeration units were used for earning livelihood by means of self- employment in terms of the sub-clause (i) 'commercial purpose', as such the Appellant/Complainant is not a consumer as defined under the Consumer Protection Act, 1986. Accordingly, we dismiss the appeal being devoid of merit with no order as to costs.
10. Application(s) pending, if any, stand disposed of in terms of the aforesaid judgment.
11. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
DISMISSED PAGE 14 OF 15 FA NO.16/2019 M/S. DEV BHUMI GOLD CHAIN LTD. V. MANAGER, M/S. VISHKARMA ENTERPRISES & ORS.
12. File be consigned to record room along with a copy of this Judgment. Record of the District Commission, if any, be returned forthwith.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) (J.P. AGRAWAL) MEMBER Pronounced On:
DISMISSED PAGE 15 OF 15