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TMI Blog2024 (7) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose behind purchasing the goods was for the personal use and consumption of the purchaser and/or their beneficiary, or was 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. Again, the said determination cannot be restricted in a straitjacket formula and it has to be decided on case-to-case basis. Purchase of two cars for the use by its Whole-time Executive Directors as part of their perquisites - whether the high-priced luxurious car was purchased by the respondent no. 1 for its commercial purpose ? - HELD THAT:- People do not purchase the high-end luxurious cars to suffer discomfort more particularly when they buy the vehicle keeping utmost faith in the supplier who would make the representations in the brochures or the advertisements projecting and promoting such cars as the finest and safest automobile in the world. The respondentcomplainant having suffered great inconvenience, discomfort and also the waste of time and energy in pursuing the litigations, the impugned order passed by the National Commission of awarding the compensation by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to purchase for commercial purpose within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 (now re-enacted as Consumer Protection Act, 2019)? 2. The CA No. 353 of 2008 has been filed by the appellant - M/s Daimler Chrysler India Pvt. Ltd., now known as Mercedes Benz India Pvt. Ltd. (original opponent no. 1) arising out of the Original Petition No. 09 of 2006 filed by the respondent no. 1 - M/s Controls and Switchgear Company Ltd. (original complainant), challenging the impugned judgment and order dated 17.09.2007 passed by the National Consumer Disputes Redressal Commission (hereinafter referred to as the National Commission), in the said O.P. No. 9/2006. 3. The CA Nos. 19536-19537 of 2017 have been preferred by the appellant - Mercedes Benz India Pvt. Ltd. and Anr. (original opponent nos. 1 and 2) arising out of the Consumer Case No. 51 of 2006 filed by the respondent no. 1 - CG Power and Industrial Solutions Ltd. and Mr. Sudhir M. Trehan, M.D. of respondent no. 1, (original complainants), challenging the impugned orders dated 08.07.2016 and 11.09.2017 passed by the National Commission in the said C.C. No. 51/2006. The cross appeal being no. CA No. 2633 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (NC) in which it was held inter alia that the vehicle purchased by a company for its Managing Director would amount to its purchase for a commercial purpose, the matter was referred to the three-member Bench of the National Commission. The three-member Bench in the Consumer Complaint No. 51 of 2006 vide the impugned judgment and order dated 08.07.2016 held as under: 11(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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 25,000/- as the cost of litigation to complainant No.1. (v) The payment in terms of this order shall be made and the directions contained herein will be complied within three months from today. 8. As stated earlier, the said two orders 08.07.2016 and 11.09.2017 passed in Consumer case no. 51 of 2006 have been challenged by the appellants-Mercedes Benz by way of C.A. No. 19536-19537 of 2017. The Cross Appeal being C.A. No. 2633 has been preferred by M/s CG Power and Industrial Solutions Ltd. (original complainant), being aggrieved by the judgment and order dated 11.09.2017 passed by the National Commission. 9. The common bone of contention raised by the learned counsels appearing for the appellants - M/s Daimler Chrysler India Pvt. Ltd., (now Mercedes Benz India Pvt. Ltd.) in their respective Appeals is that the purchase of car/vehicle by a company for the use/personal use of its directors could not be said to be the purchase of vehicle for self-employment to earn its livelihood, but it has to be construed as the purchase of vehicle for commercial purposes , and therefore such company would fall outside the purview of the definition of consumer within the meaning of Section 2(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose is understood to include manufacturing/industrial activity or business-tobusiness transactions between commercial entities. 19.2. The purchase of the good or service should have a close and direct nexus with a profit-generating activity. 19.3. 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. 19.4. If it is found that the dominant purpose behind purchasing the good 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. 13. Further in the case of Shrikant G. Mantri vs. Punjab National Bank (2022) 5 SCC 42 , this Court observed thus- 50. It is thus clear, that this Court has held that the question, as to whether a transaction is for a commercial purpose would depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r commerce in general, is occupied with business and commerce. 16. The Explanation [added by Consumer Protection (Amendment) Act 50 of 1993 replacing Ordinance 24 of 1993 w.e.f. 18-6-1993] excludes certain purposes from the purview of the expression commercial purpose a case of explanation to an exception to amplify this definition by way of an illustration would certainly clear the clouds surrounding such interpretation. For instance, a person who buys a car for his personal use would certainly be a consumer, but if purchased for plying the car for commercial purposes, namely, as a taxi, it can be said that it is for a commercial purpose. However, the Explanation clarifies that even purchases in certain situations for commercial purposes would not take within its sweep the purchaser out of the definition of expression consumer . In other words, 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 continue to be a consumer . 17. This Court in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers [Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers, (2020) 2 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said high priced luxury cars were in fact being used by them for their personal use and for the use of their immediate family members. It was strenuously urged by the learned senior counsel Ms. Arora for the appellant that if the car in question was purchased by the respondent no. 1 for the personal use of its Director, it must carry a requisite form attested by the Chartered Accountant along with the Income Tax returns of the concerned Director, and since such document or form having never been submitted and produced before the Commission, it was required to be presumed that the car was purchased by the respondent no. 1- company for its commercial purpose. Such a submission could not be accepted. It is trite to say that when a consumer files a complaint alleging defects in the goods purchased by him from the opponent seller, and if the opponent-seller raises an objection with regard to the maintainability of the consumer complaint on the ground that the goods in question were purchased by the complainant-buyer for its commercial purpose, the onus to prove that they were purchased for commercial purpose and therefore, such goods would fall outside the definition of consumer contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to be the dealer of the appellant required the complainant company with regard to the center hump to keep it under observation over a longer distance and to report the matter in case of any abnormalities, had confirmed that the AC control unit was found to be defective. Thereafter, on the respondent-company having made the complaint of excessive heating on the center hump more prominently on long drives out of station, the car was once again inspected by the engineers of the appellant-company, who had informed the respondent-complainant vide letter dated 03.12.2004 that on account of the catalytic converter fitted underneath the car, these cars do heat a lot , and advised that the matter could be resolved by adjusting the rear air-conditioning vents suitably . It appears that thereafter repeated requests/complaints having been made by the respondent complainant, the respondent no. 2 wrote vide the letter dated 22.12.2004 that the exhaust pipe of the car needed replacement. The respondent-complainant again wrote to the appellant vide the letter dated 23.12.2004 that though they were offering to replace the exhaust pipe, it was not only the center portion which was heating up but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the parties, the Local Commissioners had travelled on 07.10.2006 in the car in question for more than 300 kms. towards Rishikesh side, and submitted the report regarding the temperature of the running car at a distance of every 50 kms. as under: S. No. Time Km. Temp. gauge 1 of DCIPL (Degree) Temp. gauge 2 of C S (Degree) Ambient (Degree) 1. 8.30 AM 43649 33.2 39 25.5 2. 9.45 AM 43699 38.6 46 30.5 3. 10.45 AM 43749 38.6 47 32 4. 11.05 AM 43759 39.5 47 34 5. 12.40 PM 43799 38.6 46 32 6. 1.55 PM 43850 37.3 47 32 Return Journey 7. 4.00 PM 43866 35.7 39 35 8. 5.00 PM 43899 37.3 47 33 9. 6.00 PM 43950 38.1 46 29 10. 7.50 PM 44000 38.1 45 29.5 11. 9.00 PM 44050 37 44 30 12. 10.00 PM 44083 38.2 46 29.5 The Local Commissioner in his report dated 09.10.2006, had made following note with regard to the car in question: - 1. The sensor gauge fixed by the opposite party was 1 mm above while the sensor gauge provided by the complainant was fixed on the mat. The same can be seen with the help of photographs taken by the parties. 2. While traveling in the car the temperature recorded by the sensor gauges generally showing the increasing tendency. 3. There is a variation of 5 - 9 degree temper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional insulation to the effect that the warm surface of hump/tunnel was a natural physical characteristic of the car and hence could not be altered to a large extent and that the additional insulation could be fitted by a minor modification. The said statements in the said applications read with the other materials/documents on record as also the reports of the Local Commissioner appointed by the National Commission, has led us to come to an irresistible conclusion that the inherent defect of overheating of the car in question had persisted despite the appellant having provided the rectification measures like providing additional insulation in the car, which had caused great inconvenience and discomfort to the passengers seated in the car in question. The advice given by the technical expert of the appellants that the overheated portions of the rear cabin of the car should be cooled by directing the draft from the air-conditioning vents towards the said portion, was not only an illogical advice but was an absolute improper advice given to conceal the defect in the car. 24. Considering the affidavits, correspondences, reports and the other material on record, we have no hesitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Solutions Ltd., (Original Complainant No.1) arising out of Consumer Complaint No. 51/2006 are concerned, as stated hereinabove, after the challenge of the order dated 08.07.2016 passed by the National Commission in the said case, before this Court by way of filing C.A. No.10410/2016, this Court had disposed of the said Appeal by directing the National Commission to adjudicate the dispute between the parties finally, leaving it open for the appellant Mercedes Benz to challenge the order on maintainability as well as the final order. Accordingly, the final order having been passed by the Commission, the appellant has challenged the order dated 08.07.2016 as well as the final order dated 11.09.2017 by way of instant appeals, and the cross appeal has been filed by the respondent-complainant against the order dated 11.09.2017. 27. In the instant case, the respondent nos. 1 and 2 (Original Complainants) had filed the complaint being Consumer Complaint No. 51/2006 before the National Commission, alleging inter alia that in October 2002, the appellants (original opponents) had launched a new Mercedes Benz, E-Class - E 240 petrol version (hereinafter referred to as the car in question) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent, not only that respondent no.2 had suffered grave injuries, agony and mental trauma, his family members and the respondent-company itself, had suffered lot of inconvenience and financial loss. It appears that lot of correspondence had ensued between the parties, and ultimately the respondents-complainants had filed the complaint seeking compensation under the various heads. 29. On the maintainability of the complaint, though the learned Senior Advocate Mr. Dhruv Mehta had strenuously urged that the purchase of the car by the respondent no. 1 company for the use of the respondent no.2 i.e., its director would tantamount to purchase for commercial purpose, the said submission cannot be accepted in view of the elaborate discussion and reasonings recorded by us hereinbefore while dealing with the issue in C.A. No. 353/2008. In this case also the appellants had failed to bring on record any material to show that the dominant purpose or dominant use of the car in question was for commercial purpose or that the purchase of the car had any nexus or was linked with any profit generating activity of the respondent no. 1 company. We therefore confirm the finding recorded by the three-mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the rear passengers. According to him, since the owner s manual did not contain accurate and complete information as regards the safety measure of airbags, and the appellants having misrepresented about the safety measures at the time of the promotion of the car, it was rightly construed as an unfair trade practice on the part of the appellants by the Commission, however, the Commission had committed an error in not awarding exemplary damages to the respondents-complainants. 32. In the instant case, there are certain undisputed facts as transpiring from the record, like that the purchase of the car was by the respondent no.1 for the respondent no. 2 its Managing Director. The occurrence of the accident on 17.01.2006 is not disputed. It is also not disputed that at the time of accident, the driver of the car was wearing the seat belt, whereas the respondent No. 2 who was sitting on the rear left side seat did not wear the seat belt. It is also not disputed that neither the airbags on the front side nor the airbags on the side of the respondent no. 2 had opened at the time of accident, as a result thereof, the respondent no. 2 sustained grievous injuries, and the driver sustaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were provided in the vehicle. 10. As far as the front airbags are concerned, it is stated in the Manual that they are triggered if (i) a front-end impact occurs (ii) if collision happens at a force exceeding a predetermined level. The Manual however, does not disclose as to what the said predetermined level was. If the front airbags were not to deploy in every accident resulting in front end impact, the opposite parties, in my view, ought to have disclosed to the buyers as to what the predetermined level necessary to trigger the front passenger airbag were. In the absence of such a disclosure in the Owner s Manual, as far as the functioning of the front passenger airbags are concerned would be deficient, on account of its not providing the requisite information to the buyer. Section 2(1)(r) of the Consumer Protection Act, 1986 to the extent it is relevant provides that unfair trade practice means a trade practice which for the purpose of promoting the sale, use or supply of any goods adopts any unfair method or unfair or deceptive practice including that the goods are of a particular standard and quality. It is alleged in the complaint that the opposite parties at the time of lau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e airbags would deploy only when the seat belt was fastened by the passenger, in the instant case admittedly, the frontal airbags of the car were not deployed though the driver had already fastened the seat belt. Thus, the defect in the car was clearly established so far as non-deployment of frontal airbags was concerned. 37. Incomplete disclosure or non-disclosure of the complete details with regard to the functioning of the airbags at the time of promotion of the car, has rightly been considered by the National Commission as the unfair trade practice on the part of the appellants, and awarded a sum of Rs. 5 lakhs towards it. The National Commission has also rightly balanced the equity by awarding Rs. 5 lakhs only towards the deficiency in service on account of the frontal airbags of the car having not deployed at the time of accident. 38. Since the National Commission has considered in detail the evidence and the material on record adduced by the both the parties, in our opinion the well-considered judgment dated 11th September 2017 passed by the National Commission does not warrant any interference. 39. It is needless to say that a trade practice which for the purpose of promoti ..... 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