Tosoh India Pvt. Ltd... v. Ram Kumar And Others...

The complainant / respondent No.1 namely Shri Ram Kumar is running a Pathology Laboratory at two locations, and claims to be earning his livelihood from the income of the said laboratory. He purchased an instrument called 'Lumax' from the petitioner company for the price of Rs.3,79,250/-. A chemical kit for being used in the said instrument was also purchased by the complainant, for a price of Rs.1,20,000/-. Alleging defects in the instrument purchased by him, the complainant approached the concerned District Forum, seeking refund of the price which he had paid for the instrument and for the chemical kit with interest etc. The purchase having been made through respondent No.2 Sharda Enterprises, the aforesaid firm was also impleaded as one of the opposite parties in the consumer complaint.

2. The complaint was resisted by the petitioner, inter-alia on the ground that the complainant was not a consumer he having purchased the instrument for a commercial purpose.

3. The consumer complaint was dismissed by the District Forum holding that the complainant was not a consumer within the meaning of Consumer Protection Act.

4. Being aggrieved from the order passed by the District Forum, the complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 25.5.2018, the State Commission allowed the appeal holding that the complainant was a consumer within the meaning of the Consumer Protection Act and remitted the complaint to the District Forum for being decided on merits. Being aggrieved from the order passed by the State Commission, the petitioner is before this Commission by way of this revision petition.

5. The term 'consumer' has been defined in Section 2(1)(d) of the Consumer Protection Act, which to the extent it is relevant for the purpose of this petition means a person who buys goods or hires or avails services for consideration but does not include a person who obtains goods for resale or who purchases goods or avails services for any commercial purpose. As per the explanation, inserted with effect from 15.3.2003, for the purpose of the above referred clause, commercial purpose does not include use of the goods or services exclusively for the purpose of the earning livelihood by means of self-employment.

6. In Synco Textiles Pvt. Ltd. Vs. Greaves Cotton & Company Ltd. I (1991) CPJ, 499 (NC), which was a decision rendered before the amendment of the Act, the Hon'ble Supreme Court observed that in relation to the transaction of purchase of goods the words " for any commercial purpose" are wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profit. In this context the Hon'ble Supreme Court inter-alia held as under:

"5. ……………… It is thus obvious that Parliament wanted to exclude from the scope of the 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. On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit making activity will not be 'consumer' entitled to protection under the Act. It seems to us clear that the intention of 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. It would

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thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of 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."

7. In Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, which came to rendered after amendment with effect from 18.6.1993 but before the amendment with effect from 15.3.2003, the Hon'ble Supreme Court, while interpreting the expression 'consumer' inter-alia observed as under:

"11. ……………… The National Commission appears to have been taking a consistent view that where a person purchases goods 'with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit' he will not be a 'consumer' within the meaning of Section 2(d(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion - the expression "Large scale" is not a very precise expression - Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance / Amendment Act, 1993. 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 clarifies that in certain situation, 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 earning his livelihood by means of self-employment, such purchaser of goods is yet a 'consumer'. ……..

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."………….

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."

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"14. Yet another clarification, the explanation, in our opinion is only explanatory, it is more in the nature of a clarification - fact which would become evident if one examines the definition (minus the explanation) in the context and scheme of the enactment. As indicated earlier, the explanation broadly affirms the decision of the National Commission. It merely makes explicit what was implicit in the Act. It is not as if the law is changed by the said explanation, it has been merely made clearer."

8. In Cheema Engineering Services Vs. Rajan Singh (1997) 1 SCC 131, The complainant had been using a machine for clay preparation etc. for earning his livelihood. It was contended by the appellant before the Hon'ble Supreme Court that the complainant was not a consumer within the meaning of the Consumer Protection Act. Upholding the plea, the Hon'ble Supreme Court inter-alia held as under:

"6. ……….. The word "self-employment" is not defined. Therefore, it is matter of evidence. Unless there is evidence and on consideration thereof it is concluded that the machine was used only for self-employment to earn his livelihood without a sense of commercial purpose by employing on regular basis the employee or workmen for trade in the manufacture and sale of bricks, it would be for self-employment. Manufacture and sale of bricks in a commercial way may also be to earn livelihood, but "merely earning livelihood in commercial business", does not mean that it is not for commercial purpose. 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. Whether the respondent is using the machine exclusively by himself and the members of his family for preparation, manufacture and sale of bricks or whether he employed any workmen and if so, how many, are matters of evidence. The burden is on the respondent to prove them."

9. In Madan Kumar Singh (Dead) through L.R. Vs. District Magistrate, Sultanpur & Ors. (2009) 9 SCC 79, the appellant had purchased a truck in an auction sale. It was held by the Hon'ble Supreme Court that he would be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act even if he was to employ a driver for running the truck since even then he would have continued to earn his livelihood from it and of course by means of self-employment.

10. In Paramount Digital Colour Lab & Ors. Vs. Agfa India Private Limited & Ors. (2018) 14 SCC 81, the appellants who were unemployed graduates decided to start photography business in partnership for self-employment and for their livelihood. They purchased a Mini Lab machine for developing the photographs by use of Digital Technology for a consideration of Rs.62.00 lacs. Alleging defect in the said machine, they filed a consumer complaint before the State Commission. The complaint was partly allowed by the State Commission. The appeal preferred by the opposite party before this Commission having been allowed, the complainants approached the Hon'ble Supreme Court by way of an appeal by

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Special Leave. Dealing with the question as to whether the appellants were consumers as defined in Section 2(1)(d) of the Act, the Hon'ble Supreme Court inter-alia observed and held as under:

"12. …………………. If a person purchased the goods for consideration not for any commercial purpose, but exclusively for the purposes of earning his livelihood by means of "self-employment", such purchaser will come within the definition of 'consumer'. If a person purchases the goods for a 'commercial purpose' and not for the purposes of earning his livelihood by means of 'self-employment', such purchaser will not come within the definition of 'consumer'.

13. "Self-employment" necessarily includes earning for self. Without earning generally there cannot be "self-employment".

In the matter on hand, the quality of ultimate production by the user of the machine would depend upon the skill of the person who uses the machine. In case of exigencies, if a person trains another person to operate the machine so as to produce the final product based on skill and effort in the matter of photography and development, the same cannot take such person out of the definition of 'consumer."

17. The word 'purchaser' means and includes members of his family also. The machine in question was purchased by two partners, both were unemployed graduates. They started a firm, namely, M/s. paramount Digital Colour Lab at Varanasi, U.P. afresh. The appellants have specified that they are unemployed graduates, they planned to start a business of photography for self-employment and for their livelihood, for which they contracted Respondents 2 and 4, which means that they had not planned to start their business of photography till they planned to purchase the machine in question."

11. The following legal propositions emerge from the above referred decisions of the Hon'ble Supreme Court:

(a) Only a person engaged in large scale commercial activities for the purpose of making profit is not a consumer;

(b) There should be a direct nexus between the large scale commercial activities in which a person is engaged and the goods purchased or the services hired or availed by him, before he can be excluded from the purview of the term 'consumer'. Therefore any goods purchased or the services hired or availed even by a person carrying on business activities on a large scale for the purpose of making profit will not take him out of the definition of the term 'consumer', if the transaction of purchases of goods or hiring or availing of services is not intended to generate profit through the large scale commercial activity undertaken by him and does not contribute to or form an essential part of his large scale commercial activities.

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(c) What is crucial for the purpose of determining whether a person is a 'consumer' or not is the purpose for which the goods were purchased or the services were hired or availed and not the scale of his commercial activities.

(d) The explanation below Section 2(1)(d) of the Consumer Protection Act is clarificatory in nature

(e) A person purchasing goods or hiring or availing services for a consideration, for the purpose of earning his livelihood by way of self- employment is a 'consumer' within the meaning of Section 2(1)(d) of the Consumer Protection Act.

(f) It is not necessary that a person should be working alone in the commercial activity undertaken by him for earning his livelihood and his family members and / or a few employees can assist him in his commercial venture. Such assistance by his family members or by a few employees engaged by him does not convert his business or profession into a commercial activity on a large scale, for the purpose of making profit and therefore, does not exclude him from the purview of the term 'consumer'.

12. Applying the above referred legal propositions to the present case, the affidavit filed by the complainant on the direction of this Commission shows that though he has two work places, only two employees have been engaged by him, only one of whom is a technically qualified person. Thus, only one technically qualified person is assisting the complainant in analyzing the blood samples collected by him. At one location, some tests are carry out by the technician employed by the complainant whereas at the other place, the complainant himself analysis such samples. In Paramount Digital Colour Lab (supra), the Hon'ble Supreme Court inter-alia held that if a person trains another person to operate the machine so as to produce a final product based on skill and effort in the matter of photography and developing the same, cannot take such person out of the definition of 'consumer'. Applying the aforesaid proposition to the present case, engagement of only one technically qualified person for analyzing the blood samples would not take the complainant out of the definition of 'consumer', when he himself is a technically qualified person and is engaged in analysis the blood samples so collected, and there is no evidence of such activity being carried by the complainant on a large scale. The quality of the analysis of a blood sample would depend not only on the analyzer used by the pathologist but also on the qualification and quality of the pathologist himself. Therefore, it would be difficult to dispute that the complainant who is himself engaged in analyzing the blood samples albeit with the help of the technician engaged by him, would be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.

13. For the reasons stated hereinabove, we find no merit in the revision petition, which is accordingly dismissed, with no order as to costs.

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R.K. AGRAWAL

PRESIDENT

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V.K. JAIN

MEMBER

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M. SHREESHA

MEMBER

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