1. The present First Appeal has been filed under Section 58(3) of the Consumer Protection Act, 2019 (“the Act”) against the Order dated 21.01.2020 passed by the West Bengal State Consumer Disputes Redressal Commission, Kolkata, (“the State Commission”) in Consumer Complaint No.469 of 2019. The said complaint, filed by the Appellant, was dismissed by the State Commission, which ruled that the Appellant, being a private limited company, engaged in commercial activities, does not fall within the purview of a consumer under section 2(1)(d) of the Consumer Protection Act, 1986. The relevant excerpt of the impugned Order dated 21.01.2020 is provided below: “Complainant is a private limited company and the commercial activities carried out by it cannot be for its earning livelihood by means of self-employment. Company has to act through somebody and the question of livelihood and self-employment under these circumstances would not arise. Company has judicious identity and it can be sued through a person. Company does the commercial activities for its shareholders. Question of earning livelihood by means of self-employment would not arise. Therefore, considering the facts and circumstances, we are constrained to hold that the complainant company cannot be categorised as ‘consumer’ as defined in Section 2 (1) (d) of the Act. Accordingly, it would be an idle parade to proceed with the complaint further. In view of the above, the complaint is rejected. However, this order will not prevent the complainant company to approach the appropriate Forum/Court in accordance with law.” 2. Being aggrieved, the Complainant (Appellant herein) filed the instant Appeal No. 892 of 2020. 3. Heard the learned counsel for both the parties and perused material available on record. 4. The only question to be determined is whether the Appellant qualifies as a 'consumer' within the scope of the Consumer Protection Act, 1986, and Consumer Protection Act, 2019, based on the nature of the transactions and the activities carried out by the Appellant. 5. Undisputedly, on 17.10.2013 the Appellant/Complainant Company had entered into an agreement for the sale of a flat measuring 2151 Sq Ft at Unit No. 19 LB in Block-DN, encompassing the ground and 1st floor, inclusive of the right to park one car at the designated space on the ground floor in ‘Duplex Natura’ at Mouza-Bajetaraf, P.S.-Rajarhat, Dist- North 24 Parganas, within the local jurisdiction of Chandpur Gram Panchayat. The total consideration was Rs.66,68,100/- and the purpose of acquiring this property was to provide accommodation for Directors of the company, who would be responsible for overseeing the company's day-to-day operations. However, upon inquiry, the Appellant/ Complainant submitted a resolution of the company dated 06.08.2013, indicating that the apartment in question was intended to be purchased as Guest House for the company, exclusively for use of Directors and Staff as required. 6. The learned Counsel for the Appellant/Complainant argued that that the ruling and approach adopted by the State Commission diverge from the legal precedent established by a larger bench of this Commission in the case of Crompton Greaves Ltd. & Ors. v. Daimler Chrysler India Pvt. Ltd. & Ors., recorded as CC No. 51 of 2016, decided on 08.07.2016. In this landmark case, the following legal principle was enunciated: “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.” 7. The learned Counsel for the Petitioner asserted that the present Appeal be allowed and the matter be remanded to the State Commission for a reconsideration of the case on its merits. 8. On the other hand, the learned Counsel for the OP/Respondent vehemently argued that the Appellant, identified as a private limited company, is engaged in activities related to building completion, which indicates its involvement in commercial endeavours. Despite being involved in commercial activities, the Appellant entered into an Agreement to sell with the Respondent for the purchase of a flat in the "Duplex Natura" project on 17.10.2013. The Appellant's issuance of a legal notice dated 13.07.2017 seeking refund of earnest money, four years after the Agreement to Sell, is noteworthy. However, it is essential to emphasize that the mere service of a legal notice does not extend the limitation period, as established by the Hon'ble Supreme Court in the case of Sukhbiri Devi vs. Union of India [(2012) SCC OnLine SC 1322/ para 19. Additionally, the Counsel for the OP/Respondent relied on the judgment of this Commission dated 05.12.2022 in Debdas Biswas vs. Sourav Sinha and Ors. (CC/956/2015). He further argued that the Appellant failed to disclose crucial information regarding a previous Consumer Complaint filed before the State Commission at West Bengal vide CC No. 672 of 2017 wherein the State Commission observed that the Appellant, being a private limited company, did not provide sufficient grounds to qualify as a "consumer" under Section 2(1)(d) of the Act. Consequently, the complaint was rejected. Despite the rejection of the initial complaint, the Appellant filed a new complaint on 04.06.2019 without seeking condonation of delay, which was ultimately rejected by the State Commission on 21.01.2020. The State Commission rightly noted the contradictory statements made by the Appellant and rejected their complaint, emphasizing that commercial activities of the Appellant did not constitute earning a livelihood by means of self-employment, rendering them ineligible to be categorized as a "consumer." The Appellant's filing of the present appeal before this Commission is false, frivolous, and concocted, aiming to prolong the litigation and create obstacles for the Respondent. Further, there is a delay of 10 months in filing the present appeal, without seeking condonation of delay. The appeal is liable to be dismissed. The learned Counsel further emphasized that the Appeal has not progressed beyond the preliminary stage of maintainability. Therefore, the Respondent has not replied on merits. The Appellant requests the liberty of the Commission to file a response on the merits and make submissions accordingly when directed to do so. Further, he relied on M/s. Purusharth Associates Pvt. Ltd. v. Mis. Uppal Housing Ltd. Plaza & Anr., III (2012) CPJ 300 (NC), upheld by the Hon'ble Supreme Court vide order dated 07.01.2013. This case emphasized that flats used by company officers could indeed engage in commercial activities, reinforcing the Respondent's stance. Additionally, reliance was placed on Alfa Therm Ltd. vs. Unitech Ltd. (09.12.2015 - NCDRC): MANU/CF/1285/2015 and Unisource Trading (India) Pvt. Ltd. vs. Continental Airline Cargo and Ors. (15.03.2017-NCDRC): MANU/CF/ 0142/2017, further supporting the Respondent's position in the matter. In light of these arguments, the Counsel for the OP/Respondent sought dismissal of the Appeal and reserved the right to respond to any further submissions on the merits of the case. 9. The learned State Commission in its Order considered the question as to whether the appellant is a “Consumer” and observed that the Appellant, being a private limited company, engaged in commercial activities and is not intended for earning livelihood by means of self-employment. Consequently, the State Commission concluded that the Appellant could not be categorized as a 'consumer' under Section 2(1)(d) of the Act. Therefore, the Commission dismissed the complaint filed by the Appellant. 10. As regards the issue whether the Appellant is a 'consumer' under the Act, Hon’ble Supreme Court in Rohit Chaudhary & Anr. Vs. M/s. Vipul Ltd. 2023 INSC 807, has held as under: - “11. A plain reading of the expression “consumer” indicates that any person who buys any goods for consideration which has been paid or promised or partly paid and partly promised under any system of deferred payment and includes any user of such goods other than the person who buy such goods. 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 or services for resale or for any commercial purpose. It is amply clear from the above definition that the Parliament has excluded from the scope of ‘Consumer’ for igniting proceedings under the Act, a person who obtains goods or services for re-sale or for any commercial purpose. 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. The words ‘for any commercial purpose’ must be understood as covering the cases other than those of resale of the goods. Thus, it is obvious, that Parliament intended to exclude from the scope of 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. Thus, persons buying goods either for resale or for use in large scale profit making activity will not be a consumer entitled to protection under the Act, which would be a plain interpretation of this definition clause. The intention of the 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. 12. The expression ‘commercial purpose’ has not been defined under the Act. In the absence thereof we have to go by its ordinary meaning. ‘Commercial’ denotes “pertaining to commerce” (chambers 20th Century dictionary); it means ‘connected’ with or engaged in commerce; mercantile; “having profit as the main aim” (Collin’s English Dictionary); relate to or is connected with trade and traffic or commerce in general, is occupied with business and commerce. The Explanation (added by Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance of 24 of 1993 w.e.f. 18.06.1993) 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’. This court in the case of Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers (supra), has held that a straight jacket formula cannot be adopted in every case and the broad principles which can be curled out for determining whether an activity or transaction is for a commercial purpose would depend on facts and circumstances of each case. Thus, if the dominant purpose of purchasing the goods or services is for a profit motive and this fact is evident from record, such purchaser would not fall within the four corners of the definition of ‘consumer’. On the other hand, if the answer is in the negative, namely if such person purchases the goods or services is not for any commercial purpose and for one’s own use, it cannot be gainsaid even in such circumstances the transaction would be for a commercial purpose attributing profit motive and thereby excluding such person from the definition of ‘consumer’. When there is an assertion in the complaint filed before the Consumer Court or Commission that such goods are purchased for earning livelihood, such complaint cannot be nipped at the bud and dismissed. Evidence tendered by parties will have to be evaluated on the basis of pleadings and thereafter conclusion be arrived at. Primarily it has to be seen as to whether the averments made in the complaint would suffice to examine the same on merits and in the event of answer being in the affirmative, it ought to proceed further. On the contrary, if the answer is the negative, such complaint can be dismissed at the threshold. Thus, it would depend on facts and circumstances of each case. There cannot be any defined formula with mathematical precision to examine the claims for non-suiting the complainant on account of such complaint not falling within the definition of the expression ‘consumer’ as defined under Section 2(1)(d).” 11. In the case of Rohit Chaudhary (Supra) the Hon'ble Supreme Court provided significant clarity as regards definition of a 'consumer' under the Consumer Protection Act. It established that the primary determinant for categorizing an entity as a 'consumer' is the nature of the transaction rather than the identity or status of the entity itself. This means that if a transaction involves the purchase of goods or services for personal use, the entity making the purchase can be considered a 'consumer,' regardless of whether they are an individual or a company. 12. Applying this principle to the present case, it becomes evident that the Appellant's transaction with the Respondent, involving the purchase of a flat for the accommodation of its directors and staff, falls within the ambit of personal use. Therefore, the Appellant could be considered a 'consumer' under the Consumer Protection Act, as the transaction in itself does not pertain to commercial activity. It is the contention of the Complainant that the firm is a consumer under the Act due to the nature of the transactions of the company, which is his livelihood through self-employment. Based on the analysis provided and considering the interpretation of the definition of a 'consumer' under the Consumer Protection Act, the Appeal is allowed. 13. The order of the learned State Commission dated 21.01.2020 is set aside. The case is remanded to the learned State Commission for further consideration with opportunity to the Opposite Party to contradict the contention of the status of the Complainant as a consumer, condonation of delay and, as may be necessary, adjudication of the case on the merits. 14. Considering the circumstances of the case, there shall be no orders as to costs. 15. All pending Applications, if any, shall stand disposed of accordingly. 16. Both the parties are directed to appear before the learned State Commission on 30.05.2024. |
