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Mahesh Kumar v. Shubhankar Marketing Pvt. Ltd.
Summary of Opinion — National Consumer Disputes Redressal Commission (NCDRC)
Factual and Procedural Background
The petitioner, Mahesh Kumar, alleged that he earned his livelihood by drilling/digging bore-wells and purchased a compressor in February 2012 (the opinion also records a Tax Invoice dated 04.02.2013 and, in another place, 04.02.2012) for Rs. 16,25,000/-. According to the petitioner, the compressor manifested defects from the beginning, despite repeated complaints and reminders, and the respondents failed to remove the defects. The petitioner sent a legal notice on 16.09.2013. He claimed he was prevented from earning his livelihood because the machine was, in his view, irreparable.
The respondents filed a joint written statement contending that the compressor was used for commercial purposes and that the petitioner therefore did not fall within the statutory definition of "consumer" under the Consumer Protection Act, 1986. They also asserted that the malfunctioning resulted from improper use and maintenance (for example, use of impure diesel and failure to replace/clean filters), and that complaints were attended to under warranty without charge.
The District Consumer Disputes Redressal Forum, Durg, by an order dated 01.12.2014 dismissed the complaint. The District Forum noted recorded machine-hours and meter readings, and referred to earlier case-law cited by respondents but concluded that those authorities did not assist the respondents; ultimately the District Forum dismissed the claim and directed that parties bear their own costs.
The petitioner appealed to the State Consumer Disputes Redressal Commission (Chhattisgarh). The State Commission, by order dated 01.12.2015, dismissed the appeal on the ground that the compressor was purchased for commercial purposes and therefore the appellant did not qualify as a "consumer" under Section 2(1)(d) of the Act; it found the District Forum's other findings to be just and proper.
The petitioner filed Revision Petition No. 709 of 2016 before the National Commission (NCDRC). The National Commission (Presiding Member Ajit Bharihoke and Member Rekha Gupta) heard the matter and, on 29 Apr 2016, dismissed the revision petition.
Legal Issues Presented
- Whether the petitioner, who purchased and used a compressor for drilling bore-wells, qualifies as a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986 — specifically whether his use was a "commercial purpose" or use for earning livelihood by way of self-employment (the statutory exception to "commercial purpose").
- Whether the National Commission should exercise its revisional jurisdiction under Section 21(b) of the Act to interfere with the concurrent findings of the District Forum and the State Commission (i.e., whether there was a prima facie jurisdictional error warranting interference).
Arguments of the Parties
Petitioner's Arguments
- The compressor was purchased for drilling/digging bore-wells and constituted the petitioner's only source of livelihood.
- The compressor developed snags at the outset and became, in substance, beyond repair; despite repeated complaints and a legal notice dated 16.09.2013, respondents did not redress the grievance.
- The orders of the Fora below are contrary to law and are not sustainable, the petitioner urged setting aside the impugned order(s).
Respondents' Arguments
- The compressor was purchased and used for commercial purposes; therefore the petitioner did not qualify as a "consumer" under the Act.
- The malfunctioning was not due to manufacturing defect or deficient service but due to improper use/maintenance by the petitioner — e.g., use of impure diesel and failure to clean/replace filters as instructed.
- The respondents inspected and serviced the machine from time to time in accordance with warranty obligations and addressed complaints without charging the petitioner.
- The respondents produced machine-hour readings and other records purporting to show extensive use of the machine (the District Forum referred to usage figures such as 1343 hours/1585 hours), which the District Forum did not find rebutted by the complainant.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| V K Balan vs Trasiba Electronics - III (2001) CPJ 189 (Tamil Nadu State Commission) | Cited by respondents before the District Forum (specific rule/principle not detailed in the provided opinion). | The District Forum recorded that these rulings were cited by the non-applicants but stated it could not grant the benefit of those rulings to the non-applicants in the facts of the present case. |
| Vimal Filaments & Others vs Popular Enterprises & Others - II (2003) CPJ 643 (Tamil Nadu State Commission) | Cited by respondents before the District Forum (specific rule/principle not detailed in the provided opinion). | The District Forum noted the citation but indicated these rulings did not afford the respondents the relief they sought in the present facts. |
| N S Ram Krishnan Nayyar vs Star Engineering Industries & Others - III (2005) CPJ 500 (Kerala State Commission) | Cited by respondents before the District Forum (specific rule/principle not detailed in the provided opinion). | The District Forum observed these authorities had been cited but did not accept their applicability to grant relief to respondents. |
| Laxmi Engineering Works v. P.S.G. Industrial Institute - (1995) 3 SCC 583 | Interpretation of the Explanation to Section 2(1)(d)(ii): a purchaser who uses goods himself for earning livelihood by self-employment remains a "consumer"; "commercial purpose" is a question of fact and does not automatically exclude self-employment. | The National Commission relied on this authority to explain that the statutory exception preserves consumer status for buyers who use goods by themselves to earn a livelihood, but emphasized that the buyer must establish such self-employment on the facts. |
| Cheema Engineering Services v. Rajan Singh - (1997) 1 SCC 131 | Clarified that "self-employment" means the purchaser himself uses the machinery to produce goods or services for earning his livelihood (includes family members), i.e., he is the active operator. | The NCDRC cited this decision to support the requirement that the petitioner show he personally employed himself in operating the equipment for earning livelihood; mere supervision or employing others may not suffice. |
| Shakti Engineering Works v. Sri Krishna Coir Rope Industries - 2000 (3) CPJ 13 (NCDRC) | Held that to claim protection under the Explanation to Section 2(1)(d)(ii) the complainant must establish that he himself was engaged in the livelihood-generating activity; acting only in a supervisory capacity is insufficient. | The National Commission applied this principle to find that the petitioner had not established that he himself operated the machine in the manner required by the Explanation. |
| Mrs. Rubi (Chandra) Dutta v. M/s United India Insurance Co. Ltd. - 2011 (3) Scale 654 | On revisional powers of the National Commission under Section 21(b): such powers are to be exercised only where a prima facie jurisdictional error appears in the impugned order; concurrent factual findings by two fora should not be displaced merely by a different view on the facts. | The National Commission invoked this authority to conclude that there was no jurisdictional error or miscarriage of justice in the orders below and therefore no occasion to exercise revisional jurisdiction to disturb concurrent findings. |
Court's Reasoning and Analysis
The National Commission proceeded in a structured manner:
- The bench examined the statutory definition of "consumer" in Section 2(1)(d) of the Consumer Protection Act, 1986, including the Explanation to clause (ii) which excludes persons who avail services for a "commercial purpose" but preserves consumer status where goods/services are used by the buyer himself exclusively for earning livelihood by self-employment.
- The Commission observed that, in the petitioner's affidavit, there was only a bald statement asserting that drilling/digging bore-wells was his business and the only source of livelihood; the petitioner did not expressly state in the complaint that he carried out the business by means of self-employment (i.e., that he personally operated the machine to earn his livelihood).
- The Commission noted an admission by the petitioner's counsel that the petitioner had employed a few persons to assist him in carrying out his business. The court treated this factual matter as material to the question whether the petitioner satisfied the "self-employment" requirement in the Explanation.
- The bench analyzed binding and persuasive precedents (Laxmi Engineering Works; Cheema Engineering; Shakti Engineering Works) that clarify the construction of the Explanation to Section 2(1)(d)(ii): the buyer must ordinarily use the goods himself (though assistance by one or two persons does not necessarily deprive him of consumer status), and the key question is one of fact—whether the purchase was used by the buyer himself to earn his livelihood by self-employment.
- Applying those principles to the record, the Commission concluded that the petitioner had not established that he himself operated the compressor in the manner required by the Explanation; the admitted employment of assistants and the absence of clear factual pleadings showing exclusive self-employment weighed against the petitioner.
- Finally, the Commission considered the scope of its revisional jurisdiction under Section 21(b), citing Mrs. Rubi (Chandra) Dutta to the effect that the National Commission should interfere only in the presence of a prima facie jurisdictional error or miscarriage of justice. The bench found no such jurisdictional error or material irregularity in the orders of the fora below.
The Court did not elaborate additional factual findings beyond those contained in the record; its reasoning focused on statutory interpretation and the application of authorities concerning the "self-employment" exception and the limited scope of revisional review.
Holding and Implications
Holding:
DISMISSED — The National Consumer Disputes Redressal Commission dismissed Revision Petition No. 709 of 2016. The bench held that the petitioner had not demonstrated entitlement to protection under the Explanation to Section 2(1)(d)(ii) (i.e., that the compressor was used by him himself exclusively for earning his livelihood by self-employment), and that there was no prima facie jurisdictional error warranting exercise of revisional powers under Section 21(b) of the Act.
Implications:
- The order of the State Commission (dated 01.12.2015) stands and is not interfered with by the National Commission.
- Direct effect on the parties: the revision petition is dismissed; the National Commission found no infirmity in the State Commission's conclusion that the petitioner did not qualify as a "consumer" under the Act on the facts before it.
- The opinion does not purport to lay down any new legal principle beyond applying settled jurisprudence on the meaning of "consumer" and the limits of revisional jurisdiction; the Court explicitly relied on existing Supreme Court and NCDRC authorities to decide the matter. The opinion states no broader implications beyond these direct effects.
Disposition: Revision petition dismissed. (Order pronounced 29 Apr 2016; Members: Ajit Bharihoke (Presiding Member) and Rekha Gupta (Member)).
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION PETITION NO. 709 OF 2016
(Against the Order dated 01/12/2015 in Appeal No. 02/2015 of the State Commission Chhattisgarh)
1. MAHESH KUMAR
S/O LATE SHRI BAL CHAND JAIN R/O HIG DUPLEX 365,
NEW BORSI,
DISTT. DURG
C.G. ...........Petitioner(s) Versus
1. M/S. SHUBHANKAR MARKETING PVT. LTD. & 3 ORS. AUTHORIZED DEALER (DOOSAN-IR) C/O SINGH HOUSE, SINGH ROADWAYS, 1/4 NEW SHIVAJI NAGAR,
NEW KHUSRIPR, BHILAI
DISTRICT-DURG
C.G.
2. DOORSAN INTERNATIONAL INDIA PVT LTD.
106/10-11, AMRUTHAHALLI, BYATRAYNAPURA,
BELLARY ROAD,
BANGLORE-560092
3. CUMMINS INDIA LIMITED,
KOTHRUD,
PUNE-411038
MAHARASHTRA
4. KARM SALES & SERVICE,
BABA RAMDEO COMPLEX NADI ROAD, GANJPARA
DURG
C.G. ...........Respondent(s)
BEFORE:
HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HON'BLE MRS. REKHA GUPTA, MEMBER
For the Petitioner : Mr Akshat Srivastava, Advocate For the Respondent :
Dated : 29 Apr 2016
ORDER
REKHA GUPTA
This revision is directed against the judgment dated 01.12.2015 of the Chhattisgarh State Consumer Disputes Redressal Commission, Raipur ('the State Commission') in First Appeal no. FA/15/02.
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2. The brief facts of the case as per the petitioner/ complainant are that the petitioner was engaged in the business of drilling/digging bore-wells, which was the only source of his livelihood. The petitioner purchased on February, 2012 a Compressor against the Tax Invoice dated 04.02.2013 quoting the price as Rs.16,25,000/- only and the respondents were responsible. The compressor showed snags in the very beginning itself and despite repeated complaints and reminders thereto during the period gone by the respondents did not remove the defects, the machine could not function, the machine seemed to be beyond repairs. Finding the present machine irreparable and the respondents response bearing no fruit, the petitioner sent them a notice through his lawyer on 16.09.2013, but the respondents did not redress his grievance. The petitioner has been prevented, due to deficient service of the respondents from earning his livelihood despite making on the compressor such a huge expenditure of Rs.16,25,000/- the amount which he had borrowed from the Bank.
3. The respondents filed their joint written statement and averred that the petitioner was engaged in the business of drilling/digging bore-wells and he purchased the compressor and drilling machine for using the same in his business and he was using the same for commercial purpose, therefore, he was not consumer under the Consumer Protection Act, 1986. The present complaint does not come within the jurisdiction of the District Forum and is prima facie liable to be dismissed as not maintainable. The petitioner purchased a Compressor Model No.P.A.230H, Serial No.2011230194 from the respondents (OPs) at the cost of Rs.,16,25,000/- (including tax) on 04.02.2012 and the on that day itself the respondent No.1 Tax Invoice No.S.M.P.L./9023 dated 04.02.2012. The compressor was sold by the respondents to the petitioner was for digging bore-wells in its full capacity from 04.02.2012 till date. The reply of the notice sent by the petitioner was sent by the respondents to the petitioner. The respondents inspected the machine which was sold by them to the petitioner from time to time, as per the general warranty. As and when the respondents received any complaint from the petitioner they immediately removed his grievance without taking any charges. The respondents have also provided instructions to the petitioner regarding maintenance of the machine at the time of inspection, especially the quality of diesel to be used in the machine and also gave instructions to clean the air filter, fuel filter, water separator, and diesel filter. The petitioner was not using pure and clean diesel in the engine and also not cleaning the air filter, fuel filter, diesel filter. Further, the petitioner was not replacing the filters after the specified period and therefore, the machine was frequently stopping and this malfunction did not occur due to any technical or manufacturing defect but this problem was occurring because the petitioner was not using pure diesel and also not cleaning the filter in time. After purchasing the machine the petitioner had used the machine for 242 hours till 07.04.2012. The petitioner called his own technician in his village and reports were prepared as per the desire of the petitioner. The respondents have not committed any deficiency in service therefore, the complaint is liable to be dismissed.
4. The District Consumer Disputes Redressal Forum, Durg, Chhattisgarh ('the District Forum') vide order dated 01.12.2014, while dismissing the complaint observed as under:
"In the above-mentioned situation, this argument of the non-applicants cannot be ignored that the complainant has utilised the said compressor in the digging of tube wells for 1343 hours and according to the reading established in the meter fixed with the said machine it has functioned for about 1585 hours. The aforesaid figures have not
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been objected to or refuted by the complainant. Therefore, it cannot be held that the complainant had received from the non-applicants such a defective compressor machine which could not be repaired/ corrected or the said compressor was a manufacturing defective machine. Therefore, we do not find any appropriate ground to accept the claim of the complainant; although the non-applicants have advanced an argument that the alleged compressor was purchased for commercial purpose, but it is an argument of the complainant that the said compressor was the source of his earning livelihood. Therefore, in such a situation, we do not find this objection of the non-applicants acceptable to the effect that the complainant had purchased the said compressor for commercial purposes.
Resultantly, we cannot grant benefit to the non-applicants of the following ruling so cited:
V K Balan vs Trasiba Electronics - III (2001) CPJ page 189 (Tamil Nadu State Commission)
1.
Vimal Filaments and Others vs Popular Enterprises and Others - II (2003) CPJ 643 (Tamil Nadu State Commission)
2.
N S Ram Krishnan Nayyar vs Star Engineering Industries and Others - III (2005) CPJ 500 (Kerala State Commission).
3.
Resultantly, according to the above-mentioned critical appreciation we do not find any appropriate ground to accept the claim of the complainant and dismiss the claim. Looking to the facts and circumstances of the matter, the parties shall bear their own expenses".
5. Aggrieved by the order of the District Forum, the petitioner filed an appeal before the State Commission. The State Commission vide order dated 01.12.2015 while dismissing the appeal held that:
20. On the basis of above facts, it appears that the Compressor was not purchased by the appellant (complainant) for his personal use or livelihood, but it was purchased for commercial purpose, therefore, the appellant (complainant) did not come within purview of "consumer" as defined in Section 2(1)(d) of the Consumer Protection Act, 1986.
21. In view of above discussions, we are of the firm view that the appellant (complainant) purchased the Compressor for commercial purpose, therefore, the finding recorded by the District Forum regarding "consumer", is erroneous and is not sustainable in the eye of law. So far as rest part of the impugned order is concerned, it is just and proper and we find that the District Forum, is not exceeded it's jurisdiction.
22. Therefore, the appeal filed by the appellant (complainant) being devoid of any merits, deserves to be and is hereby dismissed. No order as to the cost of this appeal".
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6. Hence, the petitioner has filed the present revision petition before us.
7. We have heard the learned counsel for the petitioner and have gone through the record. The Counsel for the petitioner has contended that the impugned order should be set aside as is contrary to law. The compressor was purchased for drilling/ digging bore-wells for the petitioner's livelihood. The order passed by the Fora below hence, is not sustainable.
9. Before adverting to the matter, it would be useful to have a look at section 2 (1) (d) of the Consumer Protection Act, 1986, wherein Section 2 (1) (d) of the Act defines the term
"Consumer" as under:
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys 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 for resale or for any commercial purpose; or
(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose] ; {Explanation - For the purposes of this clause, "Commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment}.
10. Though the petitioner in his affidavit has made a bald statement that he was engaged in the business of drilling/ digging bore-wells which was the only source of livelihood, he has nowhere stated in this compliant that he was carrying out the said business for means of self- employment. In fact, the counsel for the petitioner has admitted that the petitioner had employed few persons to assist him in carrying out his business.
11. The Apex Court in the matter of Laxmi Engineering Works Vs. P S G Industrial Institute - (1995) 3 SCC 583 had an occasion to analyse the scheme of the Act wherein Hon'ble Supreme Court while interpreting the Explanation to Section 2 (1) (d) (ii) has observed as under:
"The explanation excludes certain purposes from the purview of the expression
"commercial purpose" - a case of exception to an exception. Let us elaborate: a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others' work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however
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clarifies that in certain situations, purchase of goods for "commercial purpose" would not yet take the purchaser out of the definition of expression "consumer". If the commercial use is by the purchaser himself for the purpose of earing his livelihood by means of self-employment, such purchaser of goods is yet a
"consumer". In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self- employment, for earning his livelihood, it would not be treated as a "commercial purpose" and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood. A few more illustrations would serve to emphasis what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto- rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions "used by him", and "by means of self- employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words."
12. In Cheema Engineering Services V Rajan Singh - (1997) 1 SCC 131 Hon'ble Supreme Court has explained the term self-employment by observing thus:
"Self-employment connotes altogether a different concept, namely, he alone uses the machinery purchased for the purpose of manufacture…. by employing himself in working out or producing the goods for earning his livelihood. 'He' includes the members of his family."
13. The issue came up before the Coordinate Bench in the matter of Shakti Engineering Works Vs. Sri Krishna Coir Rope Industries - 2000 (3) CPJ 13 (NC), wherein coordinate bench has held that in order to have protection of Explanation to Section 2 (1) (d) (ii), one must establish that he himself was engaged in the activity which generates livelihood. Acting in supervising capacity would not satisfy the requirement of explanation.
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14. From the above judgments, it is clear that complainant in order to avail shelter of Explanation to Section 2 (1) (d) (ii) is required to establish that he availed of the services exclusively for earning livelihood by way of self-employment.
15. The Hon'ble Supreme Court in Mrs Rubi (Chandra) Dutta vs M/s United India Insurance Co. Ltd., 2011 (3) Scale 654 has observed:
"Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."
13. In view of the above, we find no merit in the revision petition warranting our interference in exercise of powers under Section 21 (b) of the Act. The order of the State Commission does not call for any interference nor does it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is dismissed.
......................J
AJIT BHARIHOKE
PRESIDING MEMBER
......................
REKHA GUPTA
MEMBER
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