9911796707
TMI Blog2016 (7) TMI 1700X X X X Extracts X X X X X X X X Extracts X X X X ..... generating profits for the company or should otherwise be connected or interwoven with the business activities of the company. The purpose behind such acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or services. As observed by the Hon'ble Supreme Court in Laxmi Engineering Works [ 1995 (4) TMI 294 - SUPREME COURT ], it is not the value of the goods but the purpose for which the goods are brought or put to use, which is relevant to decide whether the goods were obtained for a commercial purpose or not. The same would be the position, where services are hired or availed by a company. If the business activities of a company cannot be conveniently undertaken without the goods purchased or the services hired or availed by a company, such purchase or hiring/availing as the case may be, would be for a commercial purpose, because the objective behind such purchase of goods or hiring or availing of the services would be to enable the company to earn profits by undertaking and advancing its business activities. If a car or other goods are purchased or the services are hired or availed by a company for the personal use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 2. In Controls and Switchgear Company Ltd. (supra), a complaint alleging defects in two Mercedes Benz, cars purchased by the complainant company for the use of its directors, was filed before this Commission. The complaint was resisted inter-alia on the ground that the cars were purchased for a commercial purpose. Rejecting the contention, this Commission inter-alia held as under: In our view, there is no substance in the aforesaid contention, because: Company is a legal entity and is entitled to file complaint; The cars are purchased for the use of the Directors and are not to be used for any activity directly connected with commercial purpose of earning profit. Cars are not used for hire but are for the personal use of the Directors. Hence, it cannot be said that the complainant company has purchased the cars for commercial purpose. An appeal against the above-referred decision is pending before the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on a large scale with a view to make profit will 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. Since the instant case pertains to the purchase of goods admittedly for 'commercial purposes' since the vehicle was purchased by a private limited company for its Managing Director, this case is squarely covered by the above judgment of the Hon'ble Apex Court. The State Commission erred in not taking note of this important fact while deciding the complaint. 3. Section 2(1)(d) of the Consumer Protection Act which defines the term 'consumer', to the extent it is relevant, reads as under:-- consumer means any person who-- (i) buys any g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otection Act, therefore, should be aimed at generating profits for the company or should otherwise be connected or interwoven with the business activities of the company. The purpose behind such acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or services. As observed by the Hon'ble Supreme Court in Laxmi Engineering Works (supra), it is not the value of the goods but the purpose for which the goods are brought or put to use, which is relevant to decide whether the goods were obtained for a commercial purpose or not. The same would be the position, where services are hired or availed by a company. If the business activities of a company cannot be conveniently undertaken without the goods purchased or the services hired or availed by a company, such purchase or hiring/availing as the case may be, would be for a commercial purpose, because the objective behind such purchase of goods or hiring or availing of the services would be to enable the company to earn profits by undertaking and advancing its business activities. 5. If a car or other goods are purchased or the services are hired or availed by a company for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors and employees primarily for the purposes of the company and used by them mainly for the purposes of the company but incidentally also for their personal purposes. For instance, a vehicle purchased for being used as a staff car or a delivery van, but sometimes also used for the personal purposes of the directors or employees, unrelated to the business of the company. 7. As far as the goods and services falling in category (a) are concerned, there can be no dispute that since such goods were purchased or the services were hired or availed by the company and made available to its directors and employees for the purposes wholly unrelated to the business activities of the company, such an acquisition cannot be said to be for a commercial purpose. No commercial purpose of the company is achieved by purchasing such goods or hiring or availing such services and then making them available to its directors and employees. 8. In our opinion even if such goods or services are incidentally used by the directors or employees of the company for the purposes of the company, that would not lead to the conclusion that the acquisition of such goods or services was for a commercial purpose. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he opposite party that the purpose behind enactment of Consumer Protection Act was to provide a speedy remedy to the small consumers and the Act is not intended for the benefit of large business entities such as corporates. We, however, find nothing in the judgment which would indicate that a company will not be a consumer within the meaning of the Act even if the goods are obtained or the services are hired or availed by it, for a purpose which by no means, can be said to be a commercial purpose. The Apex Court itself emphasised that for the exclusion to apply, there has to be a close nexus between the transaction of purchase of goods and the large scale activity, carried for earning profit. Therefore, if a transaction of purchase of goods or hiring or availing of services is not aimed at earning profits or advancing the business activities of the purchaser, such a transaction will not be out of the purview of the Consumer Protection Act. The learned counsel for the opposite party relying upon the decision of a two Members Bench of this Commission in Duggirala Prasad Babu v. M/s. Skoda Auto India Pvt. Ltd. [Revision Petition No. 428 of 2013] decided on 4.3.2014, contended that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
