KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 183/2020

JUDGMENT DATED: 20.11.2020

(Against the Order in C.C. 92/2020 of CDRF, Thiruvananthapuram)

PRESENT:

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN              : PRESIDENT

SRI.T.S.P. MOOSATH                                                       : JUDICIAL MEMBER

SRI.RANJIT. R                                                                   : MEMBER

SMT. BEENA KUMARY. A                                              : MEMBER

SRI. K.R. RADHAKRISHNAN                                        : MEMBER

APPELLANTS:

1. M/s Future Foundations Pvt. Ltd., having its registered office at Future House, Temple Road, Sasthamangalam, Thiruvananthapuram-695 010 represented by its Managing Director Harikumar.

2. Managing Director, M/s Future Foundations Pvt. Ltd., having its registered office at Future House, Temple Road, Sasthamangalam, Thiruvananthapuram-695 010.

(By Advs. S. Reghukumar & Threya J. Pillai)

                                                Vs.

RESPONDENTS:

1. Johnson Lifts Pvt. Ltd., Door No. TC (KP) IX/933, AKG Nagar 216 (A), Peroorkada, Thiruvananthapuram represented by its Branch Head.

2. The Regional Manager, Johnson Lifts Pvt. Ltd., Regional Office, Ernakulam, X/132, Seaport-Airport Road, Irumpanam P.O, Thrippunithura, Ernakulam-680 025.

3. Johnson Lifts Pvt. Ltd., No. 1, East Main Road, Anna Nagar, Western Extension, Chennai-600 101 represented by its Managing Director.

4. The Managing Director, Johnson Lifts Pvt. Ltd., No. 1, East Main Road, Anna Nagar, Western Extension, Chennai-600 101.

                    (By Advs. Enoch David Simon Joel, S. Sreedev& Rony Jose) 

JUDGMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT

             The complainants in C.C. No. 92/2020 of the Consumer Disputes Redressal Forum, Thiruvananthapuram (hereinafter referred to as the District Forum for short) have filed this appeal before us against an order dated 29.06.2020 dismissing the complaint as being not maintainable.  The complaint has been dismissed holding that the appellants were pursuing a commercial venture and therefore were not entitled to invoke the remedies available under the Consumer Protection Act, 1986.  The appellants vehemently contend that the complaint was perfectly maintainable and that the District Forum has fallen into error in dismissing the same.  The complaint was filed in the circumstances summarized below:

             2. The appellants are builders engaged in the process of constructing an apartment complex by name M/s Future Leisure Homes, Kovalam.  The 1^st appellant is a company incorporated under the Indian Companies Act and the 2^nd appellant is its Managing Director.  As part of the project, the appellants wanted to provide a lift facility for the movement of the inmates to the different floors.  According to them the lift facility forms an integral part of the project and is only an amenity for the convenience of the inmates.  The said amenity is not meant to be used for generation of profits.  The lift is an amenity that is necessary for the proper enjoyment of the facilities offered by the apartment complex of the appellants.  Since no profit is generated from the use of the lift, it is not meant for a commercial purpose.

             3.  In accordance with the requirements of the project the respondents gave an offer on 11.08.2017 and a work order was issued for the supply and installation of a lift with capacity to carry 6 persons (408 kgs) to be completed within 70 days from the date thereof.  The work order was issued by the appellants on 02.09.2017.  The total consideration agreed upon was Rs. 8,50,000/-, which was promptly paid in accordance with the payment schedule, by the appellants. 

4.  The complaint was filed by the appellants alleging that there was negligence and deficiency in service, in installing and completing the work of the lift by the respondents.  However, the complaint has been dismissed by the District Forum holding that since the 1^st appellant is an incorporated company and a legal entity formed by a group of individuals to conduct business enterprises, such a company was not entitled to invoke the beneficial provisions of the Consumer Protection Act, 1986.  It has further been held that the appellants are in the process of implementing a project of construction of an apartment complex, meant for sale to prospective purchasers.  Therefore, the project is also commercial in nature.  Since the complaint has originated out of a commercial activity the complaint has been held to be not maintainable and has been dismissed.  It is the said order that is challenged in this appeal. 

5.  According to Advs. S. Reghukumar and Threya Pillai who appear for the appellants, the District Forum has fallen into error in dismissing the complaint in limine.  According to the learned counsel, a complainant cannot be declined jurisdiction for the only reason that it is an incorporated company.  Placing reliance on the decision in “Karnataka Power Transmission Corporation and Another Vs. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC 240”, it is contended that, the Supreme Court has interpreted Sec. 2(1)(d) and Sec. 2(1)(m) of the Consumer Protection Act 1986 to hold that a company incorporated under the Companies Act is a ‘person’ within the meaning of the said provisions. 

6.  The decision in “Security Hi Tech Graphics Pvt. Ltd., Vs. S.O.T.C Holiday India Pvt. Ltd. & others 2018(2) CPR 623 (NC)” is relied upon to contend that, it is not necessary for all the activities of an incorporated company to be commercial in nature.  With respect to its non-commercial activities, even a company would be entitled to seek the protection offered by the Consumer Protection Act, 1986.  Two judgments of this Commission rendered in C.C. No. 06/2007 dated 29.10.2009 and in C.C. No. 07/2006 dated 28.03.2017 are also relied upon to contend that relief had been granted in similar circumstances to others, the complainants in the said cases being the Kerala State Electricity Board.  It is therefore contended that, the order of the District Forum requires to be interfered with and set aside. 

7.  We have given our careful and anxious consideration to the contentions of the counsel for the appellants.  As rightly pointed out by the counsel for the appellants, in Karnataka Power Transmission Corporation case (supra) the Supreme Court has held that though an incorporated company is not directly listed as a ‘person’ in Sec. 2(1)(d) of the 1986 Act, a company would also come within the scope of the expression ‘person’ and would therefore be considered as a ‘consumer’.  While accepting that an incorporated company would also be a consumer under the 1986 Act, it cannot be lost sight of the fact that the exclusion regarding ‘commercial purpose’ would apply to all transactions irrespective of whether the same was undertaken by a natural person or an incorporated body.  Therefore, it would have to be examined next, whether the transaction in question is commercial or not. 

8.  In “Laxmi Engineering Works Vs. PSG Industrial Institute (1995) 3 SCC 583” while considering the expression ‘commercial purpose’, the Supreme Court has held that the issue of commercial purpose would have to be determined in the facts and circumstances of each case.  This is for the reason that, all the activities of a company cannot be presumed to be of commercial nature.  Therefore, the relevant aspect to be considered would be whether the activity here was a commercial one or not.  The counsel for the appellants has placed reliance on the decision of the National Commission in Security Hi Tech Graphics Pvt. Ltd. case (supra) to point out that in the said case the company was held to be a consumer.  In the said case the company had booked a tour package for its staff members to visit Jammu & Kashmir.  A substantial amount was also paid as advance.  But later on, the tour had to be cancelled.  The respondents contended that the advance amount would not be returned and that they had a right to appropriate the same.  In the said case it has been held that all activities of a company need not be commercial in nature.  Booking of a tour package for its officers cannot be said to be related to the company’s commercial activities in any way. 

9.  In “Harsolia Motors Vs. National Insurance Company Ltd. & others 2005 (1) CPR (NC")” on which reliance is placed by the counsel, it has been held that in a case where goods are purchased or services are hired in an activity which is not directly intended to generate profit, it would not be a commercial purpose.  Placing reliance on the above decision, it is contended by the counsel for the appellants that the facility of a lift is not an integral part of the project that they are implementing, which is construction of an apartment complex.  It is only a convenience or an amenity meant for the use of the inmates who may ultimately occupy the individual apartments.  However, we are not able to agree with the above contention.

10.  Admittedly the appellants are in the process of constructing a multi-storied apartment complex.  It cannot be disputed that the construction of an apartment complex which contains apartments meant to be sold to prospective purchasers for a profit is a commercial venture.   Since the apartment complex is multi-storied proper means of access to the various floors of the building would have to be provided by the builder.  Such access which earlier used to be through staircases is now provided through lifts.  Therefore, staircases and lifts are integral parts of an apartment complex without the existence of which access to the various floors of the building would be impossible. An apartment complex without lift facility would also not attract any prospective purchasers. In view of the above, the provision for providing a lift cannot be viewed in isolation or taken separately as an amenity of the apartment owners, as sought to be canvassed by the counsel for the appellants.  The provision of providing a lift, like the provision for providing a staircase is an integral and inseparable part of a multi-storied apartment complex.  Therefore the provision for providing a lift is also part of the commercial enterprise that is being pursued by the appellants. 

11.  In the two decisions of this Commission on which reliance is placed by the counsel for the appellants, the Kerala State Electricity Board was the complainant.  In both cases the issue involved related to the deficiency in service caused by the faulty functioning of the lifts installed in the Vydyuthi Bhavan, Pattom, Thiruvananthapuram.  In those cases, the building in which the lifts were installed was being used by the Kerala State Electricity Board as its office establishment.  In stark contrast, the apartment complex that is being constructed by the appellants is comprised of individual apartments meant to be sold to prospective purchasers for profit.  Therefore, in the present case the lift is being installed as part of a commercial purpose. 

We have gone through the order of the District Forum.  The District Forum has considered the issue in the proper perspective and has rightly dismissed the complaint.  We find no grounds to interfere with the same.  For the foregoing reasons, this appeal fails and is accordingly dismissed. 

We make it clear that the dismissal of this appeal shall be without prejudice to the rights of the appellants to pursue other legal remedies available in law. 

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                       T.S.P. MOOSATH   : JUDICIAL MEMBER

RANJIT. R                : MEMBER

                                                                        BEENA KUMARY. A         : MEMBER

K.R. RADHAKRISHNAN  : MEMBER

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