Transactions Arising From A Public Auction Do Not Establish A Consumer-Service Provider Relationship:NCDRC

Brief Facts of the Case

The complainant purchased various items, including bamboo, wood, and flagstone, through an auction from the Forest Division office/Office/Opposite Party in Rewa. Although some materials were delivered, the office failed to provide the remaining items despite having received full payment. Additionally, when the complainant visited the Forest Division to collect the materials, the Forest Ranger denied access and acted secretively. Feeling aggrieved, the complainant filed a Consumer Complaint with the District Forum, seeking compensation amounting to Rs. 4,96,145, the current value of the undelivered materials. The District Forum ruled in favor of the complainant, instructing the office to deliver the entire quantity of purchased items as per the auction terms. If the materials could not be provided, the Forum ordered the office to refund the corresponding amount to the complainant.

Being aggrieved by the District Forum order the Office then appealed to the State Commission of Madhya Pradesh, wherein, the state Commission directed the office to refund the amount collected from the Complainant. Aggrieved by this, the complainant has brought the case before this Commission through a Revision Petition.

Contentions of the Opposite Party

The division office denied the allegations in the complaint, stating that the complainant was supposed to collect the purchased materials within a specified timeframe. The complainant, however, only collected a portion of the materials and failed to retrieve the rest. As a result, in accordance with the terms of sale, the complainant's payment was deposited into the State Government Treasury. The office further argued that the dispute originated from the auction process and was therefore time-barred, justifying the dismissal of the complaint.

Observations by the Commission

The Commission observed that the main issue in the case was whether the complainant qualifies as a consumer under the Consumer Protection Act, 1986 and whether the Forest Department failed to deliver goods purchased by the complainant through auction in a timely manner, thus committing a deficiency in service. The complainant had purchased forest produce from the respondent through an auction, which was the core of the dispute. The Supreme Court, in a similar case (UT Chandigarh Administration & Anr. Vs. Amarjeet Singh & Ors., 2009), ruled that a public auction purchaser is not considered a consumer, and the owner is neither a trader nor a service provider. Therefore, grievances from such transactions do not qualify as consumer disputes, and consumer forums lack jurisdiction in these matters. The National Commission, after considering submissions from both sides, concluded that the lower forums acted without jurisdiction in entertaining the complaint and appeal. Given the admitted fact that the complainant was an auction purchaser, the transaction did not establish a consumer-service provider relationship. Therefore, the commission dismissed the present Revision Petition and the original complaint filed before the District Forum.

Case Title: Mohd Siddique Khan Vs. Forest Division Officer

Case Number: R.P. No. 454/2019