Purpose Of Purchase, Not Value Determines Consumer Status: NCDRC

Brief Facts of the Case

The complainant purchased new bakery equipment from Fire Tech Bakery/manufacturer. The complainant secured a loan from the Indian Overseas Bank, and the bank issued three demand drafts totaling Rs.27,81,270 to the manufacturer. Despite multiple requests, the equipment was not delivered. The complainant issued a legal notice demanding either the equipment delivery or a refund but received no response. Indian Overseas Bank also requested immediate delivery or the return of the demand drafts. The manufacturer proposed depositing Rs.15,50,000 into the complainant's Corporation Bank account, asking him to withdraw and hand over the amount, promising delivery of the equipment. However, after receiving the money, the manufacturer neither delivered the equipment nor refunded the amount, indicating a deficiency in service. The complainant approached the State Commission with a complaint, but the complaint was dismissed, citing non- maintainability. Consequently, the complainant appealed to the National Commission.

Contentions of the Opposite Party

The manufacturer argued that the appeal was neither legally nor factually maintainable and should be dismissed with costs. The manufacturer claimed the complainant had withheld important information and did not approach the consumer commissions in good faith, making them ineligible for relief. They supported the State Commission's decision to dismiss the complaint, stating that the complainant was not a consumer under Section 2(d) of the Consumer Protection Act, 1986, and therefore could not invoke the Act's provisions. It was argued that the equipment was purchased for commercial purposes, supplying bakery items to a chain of outlets for profit rather than for self-employment to earn a livelihood.

Observations by the National Commission

The National Commission observed that the primary issue was whether the goods purchased by the complainant were for commercial purposes or his livelihood. The complainant had placed an order worth Rs. 27,81,270 for equipment intended for manufacturing bakery items. Reliance was placed on Shrikant G. Mantri vs. Punjab National Bank, which held that if goods were purchased for carrying out an activity on a large scale for profit, the purchaser would not be a consumer under Section 2(d)(i) of the Act. It was emphasized that the purpose for which goods are bought, not their value, determines whether the purchaser is a consumer. The goods must be used by the buyer himself to earn his livelihood. However, in Paramount Digital Colour Lab vs. AGFA India (P) Ltd., the Supreme Court clarified that “commercial purpose” does not include goods bought and used exclusively for earning a livelihood through self-employment. It was further held that whether a purchaser falls within the definition of a consumer depends on the facts of each case, as “Self-employment” includes earning for oneself. Hence, the commission did not concur with the State Commission's decision that the complaint was not maintainable and highlighted that the complainant was a consumer under the Act.

Furthermore, the complainant alleged that the manufacturer proposed depositing Rs. 15,50,000/- into the complainant's Corporation Bank account, expecting the same amount in cash. The complainant claimed to have returned the amount in cash but provided no concrete evidence, such as bank statements, to support this claim. The manufacturer, however, provided a bank statement showing that the amount was withdrawn in the complainant's name and transferred to his account. The complainant failed to prove that the manufacturer had not refunded the amount, while the manufacturer proved that Rs. 15.50 lakh had been refunded.

Therefore, the commission dismissed the complaint.

Case Title: Range Gowda Vs. M/S. Fire Tech Bakery Equipments

Case Number: F.A. No. 712/2020