1. This Complaint Petition has its genesis in the transaction of purchase of a Mercedes Benz car of E 250 D model by the Complainant, M/s Techno Mukund Constructions on 5.9.1998, from Opposite Party-2, M/s Trans Cars India (P) Ltd, Chennai. The case of the Complainant is that shortly after this purchase, he was shocked to find “bubbles all over the body of the car and discolouration on the doors and rear hatch back. In fact, the paint had peeled off on the hatch back. Further the tape recorder in the car was malfunctioning. The complainant was shocked and surprised to notice such flaws and defects which were unheard of in a premium car.” 2. Rectification done by OP-2 was not to the satisfaction of the Complainant, who then wrote to OP-1, M/s Mercedes Benz, India Ltd, Pune on 21.1.1999. More correspondence and more measures to rectify the defects, followed. The Complainant claims that in the mean while he came to learn from “reliable sources that the car delivered to them as a new car was in fact a used car which had met with an accident necessitating complete repairs and painting.” He therefore asked the OPs to replace the car with a new one. According to the complainant, in his letter 11.4.1999 addressed to opposite party No.1 he accused the company of delivering a used car, which had met with an accident and for palming off the same as a new car to the Complainant. A month later, he received a letter from opposite party No.1 dated 10.5.1999, wherein it was categorically admitted that the car sold to the complainant was in fact used as demo car by the second opposite party. However, the letter also stated that the Complainant was aware of this fact. 3. It is also alleged by the Complainant that the OPs have not registered the vehicle nor had they handed over the relevant documents required for the same. In short, the case of the Complainant is that having paid a purchase price of Rs.27,49,000/- he was cheated by the supplier palming off a used, defective and an accidented vehicle as a new one. Therefore, it is claimed as a clear case of deficiency in service on the part of the OPs for which he has sought replacement of the car by a new one along with a compensation of Rs.50 lakhs. 4. In a nutshell, the case of the complainant is that: 1. “Selling a demonstration car to him as a brand new one was a fraud played upon him by Opposite Party-2. 2. The car had met with an accident before it was delivered to him. 3. The vehicle suffered from serious manufacturing defects and therefore needed to be replaced by another vehicle. 4. Despite payment of Rs.3000/-, the registration papers of the car had not been delivered to him by the vendor.” 5. Counter affidavits have been filed by Ops 1 and 2, who have also filed replies to the interrogatories of the Complainant. On the other side, interrogatories on behalf of the OPs have been answered by the Complainant. We have perused the entire records and pleadings of this case. Counsel for the two parties have also been heard with reference to the same. 6. The question whether the car in question was a new one or a used one, can be answered clearly on the basis of a letter written by OP-1 to the Complainant. This letter of 10.5.1999, signed by two Managers of OP-1 states clearly “ As we come to know from the report that the above mentioned vehicle which was sold to you was used as a demo vehicle by M/s Trans Cars.” It is thus accepted by OP-1 that it was a demonstration car, as claimed by the Complainant. The question that arises here is whether the Complainant/purchaser was aware of this fact or not. According to the complainant, it was sold to him by the vendor/OP-2 as a new car. In the course of the arguments before us, counsel for the Complainant categorically claimed that before this letter of 10.5.1999 from OP-1, the purchaser was not aware of the fact that it was a used car. 7. This claim of the complainant is questioned by the OPs on the basis of the contents of the same letter of OP-1, which states in clear terms that:- “We understand that the mileage during the delivery of the vehicle to you was 3690 kms. and you were well aware of all these facts. Also we could learn from the report that you were fully satisfied while taking the first delivery of the vehicle and had no complaints” 8. On this claim that the vehicle had already run 3690 kms. at the time of delivery, we have on record two copies of the DELIVERY ACKNOWLEDGEMENT NOTE of 5.9.1998. The copy filed by the dealer/OP-2 mentions 3300 kms (not 3690 as mentioned in the letter of OP-2) while the other, filed by the complainant, does not mention any kilometers. The copy filed by the complainant mentions invoice No.TC1998, while the copy filed by the dealer mentions it as TC1998/38 dated 5.9.1998. These two changes indicate the possibility of a subsequent interpolation in the copy of the DELIVERY ACKNOWLEDGEMENT NOTE with the Vendor/OP-2. 9. In support of their claim that the complainant had knowingly purchased a demo car, the OPs have filed copy of the invoice of another car of the same model sold to another purchaser M/s. Nadi Air Technics, who were sold another car of the same model for Rs.30,78,794/- as against the price of Rs.28,29,161/- quoted to the complainant. Both vehicles are of identical model with automatic transmission, as per the two invoices. According to the OPs, the difference between the prices of the two cars, sold within a gap of one month, represents the price concession given to the Complainant. However, the Complainant has countered this claim of the OPs, stating that the invoice did not show that the actual price was more and he was being given a concession. Counsel for the Complainant also pointed out that OP-1 had served an interrogatory on the Complainant in which questions 9 and 10 were designed to get the Complainant to commit to a price concession in this deal, which were disallowed by the National Commission. 10. The counsel for the complainant also stressed that the entire correspondence between the complainant and the OPs starting on 20.1.1999, on the subject of the defects in the car does not any where mention it was a demo car, till this was raised and admitted in the letter of 10.5.1999 from Opposite Party- 1. Even the delivery acknowledgment note given to him did not indicate that it was a used car, as per the complainant. 11. We, therefore, conclude that while it is established that the purchaser was sold a used car and not a new one, the OPs have not been able to substantiate their claim that the Complainant had accepted the car with this knowledge. This being the case, the conduct of the OPs will amount to an “unfair trade practice”, within the meaning of Section 2(1)(r) (1)(iii) of the Consumer Protection Act. This provision prohibits false representation of any re-built, second-hand, renovated, reconditioned or old goods as new goods. 12. It is also alleged by the complainant that the papers of the car have not been delivered to him for more than one year. The relevant para of the complaint petition reads as follows:- “It is pertinent to point out that even though the car was delivered to the Complainant on 05.09.1998, OPs had not given the Complainant the necessary papers for registration of the car with Road Transport Authority, on several occasions the Complainant had approached OPs requesting OPs for the papers in order to complete the formalities regarding registration. The Complainant even addressed letters in this regard to both of OPs on 09.08.1999 informing OPs about the same and reminding OPs that the complainant had paid a sum of Rs.3,000/- as registration service fee to you” 13. This apparently refers to the letter of 9.8.1999 addressed by the Complainant to OP-2. However, this claim of the Complainant is in direct conflict with some other documents on record. The OPs have produced a letter from the complainant/Techno Mukund Constructions, Chennai addressed to OP-2, on record as Annexure-C before us. The contents of the letter are as follows:- “WE HAVE TAKEN THE DELIVERY OF AN E-250-D SOLID BLACK, MERCEDES BENZ CAR BEARING ENGINE NO.60591262002460, CHASSIS NO.2100106447570 IN GOOD CONDITION. AS WE ARE TAKING THE DELIVERY OF THE CAR IN THE UNREGISTERED CONDITION, WE ARE DOING WHOLLY AT OUR OWN RISK.” 14. Veracity of this document is not questioned by the Complainant. In fact, it is fully in line with the letter of the Complainant himself addressed on 15.3.1999 to Mr. Faria of Mercedes Benz, Pune. In this letter, after detailing his complaints and reiterating his demand for replacement of the car, the complainants writes “I have for your information not registered this car until date, as I am confident that a Company of your repute and standards would ensure complete customer satisfaction.” 15. It is thus clear from the records that at least for a period of six months i.e. from accepting delivery on 5.9.1998 till the above mentioned letter of 15.3.1999, the Complainant has deliberately not registered the car in his name, expecting it to be replaced by the vendor with another one. It is, therefore, not open to the Complainant to put the blame for non-registration on the OPs. 16. Coming to the nature of defects in the car, the complaint petition states that “ever since the purchase of this car, the complainant had been put to tremendous hardship, disappointment, mental agony and torture. Shortly after purchase of the said car, the complainant noticed bubbles all over the body of the car and discoloration on the doors and rear hatch back. In fact, the paint had peeled off on the hatch back. Further, the tape recorder in the car was malfunctioning. The complainant was shocked and surprised to notice such flaws and defects, which were unheard of in a premium car.” It is also alleged that the car had met with an accident before it was delivered to the purchaser/complainant. It has been accepted on behalf of OPs that the accident mentioned by the complainant was actually a minor dent on the left hand side of the rear bumper rail and fender of the car while taking it from the showroom to the workshop. 17. The complaints in relation to the usability of the vehicle have been directly or indirectly accepted by the OPs. Thus, the complaint in relation to the peeling paint of the car, was called “minor discoloration” by the OPs. But, at the same time, the car was repainted without any charge to the Complainant. Similarly, in response to the complaint of malfunctioning of the music system, it was eventually replaced by a new one, at the cost of the vendor. Going by the these, it is clear that it is not a case of deficiency in service, as alleged by the Complainant. 18. Finally, while responding to the claim of the complainant that the car should be replaced and he should be paid a compensation of Rs.50,00,000/-, OPs have raised issues concerning the extent of use of the car and the locus of the Complainant to invoke the jurisdiction of the National Commission. It is pointed out that if the car had such manufacturing defects as could render it un-useable, the complainant could not have used it for nearly 1.85 lakh kilometers in eleven years i.e. by 22.9.2009. In this period, as pointed out by the OPs, the Complainant has claimed depreciation of Rs.24 lacs. Consequently, the written down value of the car is claimed to be only Rs.360,444 as on 31.3.2009. 19. In this context, Counsel for the OPs has cited the decision of this Commission in Maruti Udyog Ltd. Vs. Hasmukh Lakshmichand (RP No. 827/2004) decided on 26.5.2009. It was held-- “ The vehicle was sold to the complainant in the year 1998. When the matter had come up before the State Commission, the vehicle had already run 20,000 Kilometers. At the time of filing the revision petition, it was stated in the “Grounds of Revision Petition” that the vehicle had run 80,000 Kilometers. Today in the court, learned counsel for the petitioner contended that the vehicle is still running and it had already run approximately 120,000 Kilometers. This shows that the vehicle is in running condition and is being used by the complainant on regular basis. It also shows that there was no “manufacturing defect” in the car in question. Had there been a “manufacturing defect” the car could not have run for nearly 11 years and covered approximately 120,000 Kilometers. It seems that the complainant is only interested in getting the vehicle replaced but such request/wish cannot be granted.” 20. On this point, facts of the case before us are fairly similar. The car has been used for nearly 1.85 lakh Kms. Therefore, it cannot be called a vehicle suffering from manufacturing defects. Consequently, the plea for its replacement by another vehicle cannot stand and must fail. 21. However, besides this similarity, the facts of the two cases are very different from each other on a significant point. The case of the present Complainant is also that he has been sold a used car and this fact was not informed to him at the time of purchase. 22. Significantly, the OPs have also claimed that the car was sold by them to the Complainant who is a commercial company and it has been used for a commercial purpose. The Complainant has been claiming depreciation for it in its Income Tax returns. It is, therefore, alleged that the Complainant is not a consumer. The Complainant accepts in his Written Submission that “ The car in question is used by the Mr Mukund Reddy who is the Managing Partner of M/s Techno Mukund Constructions. It is being used for his going and coming to his place of work and home and besides it is for his use for activity of the firm.” In support of their claim that the Complainant is not a consumer, OPs have cited the ruling of this Commission in Interfreight Services Pvt. Ltd. Vs. Usha International 1(1995) CPJ 128 (NC). It was a case of purchase of fans for installation in his commercial office. The National Commission rejected the plea that the fans were not used for any commercial purpose and observed “It appears to us to be perfectly clear that the intention of parliament in excluding persons purchasing goods for commercial purpose from the definition of the expression “consumer” is to impose a restriction that the special remedy before the Consumer Forum can be invoked only by ordinary consumers purchasing goods for their private and personal use and consumption and not business organizations buying goods for commercial purpose.” 23. However, we note that the term “commercial purpose” appears as an exclusion clause in the definition of “consumer” under Section 2(1)(d). Since cases of resale have been separately referred to in this clause, it becomes obvious that the words “commercial purpose” are intended to include any commercial activity, other than resale, where goods are purchased for being used in any activity directly intended to generate profit. The word “commercial” is defined as exchange of merchandise, especially on a large scale. In a commercial activity, generation of profit is the main aim. Therefore, the National Commission had held in Synco Textiles Pvt. Ltd. Vs. Greaves Cotton & Co. Ltd. That— “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…….The purchase of the generating sets was thus clearly for enabling the appellant company to carry on its commercial activity of manufacturing edible oils on a large scale for purposes of trade. It was submitted before us on behalf of the appellant company that the generators were only intended as a “stand-by arrangement.”. In our opinion, even if this be so, it would not make any difference because their purchase was nonetheless for the purpose of being used to generate electricity for running the expeller machinery in the factory for commercial production of edible oils. There is a close and direct rexus between the purpose of purchase of the generating sets and the commercial activity of manufacturing of edible oils for trade carried on by the appellant company, since the generating sets were intended to be used, as and when the need arose, for generating electric current for manufacture of edible oils for the purpose of trade.” 24. Thus, buyers of goods or services for self consumption in economic activities in which they are engaged would be consumers as defined in the Consumer Protection Act. Accordingly, in the following cases the purchase has been held by the Apex Court/ the National Commission to be for a commercial purpose— i. Power generator to run expellers in an oil mill, ii. Moulding machine in a plastic-ware manufacturing industry, iii. Air pollution control system in a ultra-blue producing industry, iv. Photo type-setting machine in a printing press, v. Oxygen plant in a hospital, vi. Purchase of a vehicle by a taxi service agency. Per contra, the following have not been considered as transactions with commercial purpose— i. purchase of a photocopier by a Typing School, ii. insurance policy taken by a commercial undertaking. 25. This matter again came up before the National Commission in a recent case, in the specific context of purchase of a motor vehicle by a commercial undertaking in Controls & Switchgear Company Ltd. Vs. Daimler-Chrysler India Pvt. Ltd. & Anr., IV (2007) CPJ 1 (NC). M/s. Controls & Switchgear Company had filed a complaint alleging that two Mercedes Benz cars purchased by them were having manufacturing defects. They had prayed that the car should be replaced by vehicles of the same brand, or alternatively, the price paid should be refunded with interest and compensation. One of the grounds on which the respondent contested this claim was that these car were purchased for commercial purpose and therefore, the purchaser was not a consumer. It was alleged that the complainant company had been claming depreciation on these car, had used corporate resources for their purchase, the operational and maintenance expenditure was being incurred by the company and the enhanced mobility had direct bearing on profit earned. 26. The National Commission held that there was no substance in these contentions because- “(i) Company is a legal entity and is entitled to file complaint, and (ii) 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” . 27. This view of the matter has been reaffirmed by the National Commission in M/s. Panex Overseas Vs. Mercedes Benz in OP NO. 353 of 2001 decided on 05.01.2010. We, therefore, reject the plea of the OPs in the present case that the purchaser M/s. Techno Mukund Constructions is not a consumer. We accordingly, hold that the purchase of the car in question by the Complainant is not a case of purchase for commercial purpose. 28. Coming to the merits of the case, we conclude, on the basis of the examination in the forgoing paragraphs, that it is not a case of a vehicle suffering from such manufacturing defects as would make it unusable. Admittedly, the vehicle has already been used for over 1.85 lakh kms. Complaints in relation to the paint of the car and the music system have been appropriately attended to by the OPs through repainting and replacement of the music system, without any cost to the Complainant. Hence, the plea of deficiency in service raised by the complaint is held to be devoid of any merit and is rejected. However, it is established that the complainant was supplied not a new car but a car which had been used as demonstration vehicle. The OPs have claimed that the complainant had accepted the car with this knowledge. We hold that the OPs have not been able to substantiate their claim. 29. Under these circumstances, the conduct of the OPs amounts to an unfair trade practice within the meaning of Section 2 (1) (r) (1) (iii). Under this provision, any false representation of rebuilt, second-hand, renovated, reconditioned or old goods as new goods, for the purposes of promoting sail thereof, amounts to an unfair trade practice. As the victim of this unfair trade practice the Complainant, deserves to be compensated by the Respondents/OPs. Accordingly, the OPs are directed to pay a compensation of Rs.2,00,000/- to the complainant with interest calculated at 9% per year from the date of the complaint. | 
