Consumer Protection Act Protects Interest Of Consumers In “Business To Consumer Disputes”, Not For “Business To Business Disputes”, District Commission Thrissur
The District Consumer Disputes Redressal Commission, Thrissur presided by Sri. C.T. Sabu, Smt. Sreeja. S, (Member) and Sri. Ram Mohan R.(Member) dismissed a complaint filed by Astra Bio Science Ltd seeking refund from M/s Rita Pad Printing Systems for a machine that was not delivered even though the terms and conditions specified the delivery time as 70 days. The Bench held...
The District Consumer Disputes Redressal Commission, Thrissur presided by Sri. C.T. Sabu, Smt. Sreeja. S, (Member) and Sri. Ram Mohan R.(Member) dismissed a complaint filed by Astra Bio Science Ltd seeking refund from M/s Rita Pad Printing Systems for a machine that was not delivered even though the terms and conditions specified the delivery time as 70 days. The Bench held that the Consumer Protection Act was meant to deal with 'business to consumer' disputes, however, in the case of the Complainant, it was of a “business to business” nature and thus the Complainant could not fall under the definition of a 'consumer'.
Background
The Complainant, a Company engaged in the dealing of medical equipments and accessories placed a purchase order from M/s Rita Pad Printing Systems on 24/09/2024 for the manufacture and supply of 'Moelock Special Pad Printing System'. The machinery included MRV 100 Double Colour machine, a flame treatment unit, auto loading and unloading, and the ability to print on a 15 ml centrifuge tube along with an option to attach changed parts. The Complainant and the Opposite Party mutually agreed upon a consideration of Rs. 28,32,000 including GST and delivery charges and the delivery was to be completed within 70 days. As per the Complainant, Rs.10 lakh was paid in advance, however, until September 2021, the Opposite Party did not inform the Complainant if the machinery was ready to be delivered. On 21/09/21, the Complainant received some printed samples which allegedly had printing defects. Thus, the Complainant asked its technicians to inspect the machines at the Opposite Parties' premises and also get training at the same place. As per the Complainant, the machine made heavy noises and the Opposite Party's efforts in curing the defect did not resolve the issue. The machine was not delivered leading in the Complainant facing huge losses. As per the Complainant, work orders worth Rs. 3 crores were made during this time, however, those could not be taken due to the lack of required machinery. Stating that the failure on part of the Opposite Party led to heavy losses, the Complainant filed a Complaint before the District Commission alleging deficiency in service and adoption of unfair trade practice and accordingly sought a compensation of Rs.30 lakhs. Moreover, refusing to take the defected machinery, the Complainant sought refund of Rs.10 lakhs that were paid to the Opposite Party in advance.
The Opposite Party failed to file their written version in time before the Commission leading to ex parte proceedings against them.
Findings of the Commission
The Commission perused the evidence and observed that since the Complainant was already engaged in the business of dealing with medical equipment and the purchase order was made for profit generation of huge magnitude, it could be inferred that the purchase of machinery was made for commercial purpose.
Subsequently, by way of an amended complaint, the Complainant claimed that the business was run for livelihood. The Bench observed that in case the commercial nature of a transaction was evident, the burden of proving as to how the business was run merely for livelihood was on the Complainant. However, it was held that the Company had failed to substantiate the claim and it was evident that the Complainant had placed the purchase order for the machinery from the opposite party for expanding its business profits. Therefore, it was held that the Complainant did not fall under the definition of a 'consumer' under the Consumer Protection Act, 2019.
Moreover, the Commission stated that Section 2(7)(a) of the Consumer Protection Act, 2019 makes an exception only for someone who buys and uses goods solely for self-employment and not for anyone who uses services for commercial purposes. However, in the instant case, the Company could not be brought under such exception as the complaint was made regarding the 'services' and therefore no legal protection could be extended to the Complainant.
Relying on the decision of the Supreme Court in Shrikant G Mantri Vs Punjab National Bank, the Commission held that the Consumer Protection could only protect the interest of the consumers in “business to consumer disputes” and not for “business to business disputes”, or transactions meant to generate huge profits.
Making these observations, the Commission dismissed the Complaint stating that the Complainant would be at liberty to approach an appropriate forum to seek remedy.
Case Title: Astra Bio Science Ltd versus M/s Rita Pad Printing Systems
Counsel for Complainant: By Adv. Laju Lazar
