Purchases For Earning Livelihood Qualify As Commercial Purposes If Operated Solely By Others: NCDRC

Brief Facts of the Case

The complainant purchased two digital mini-lab machines with scanner/image processor/laser units designed for various printing functions. The machines were imported by the opposite party and manufactured by another party. They were financed through a bank, which agreed to take over the machines and recover dues if defects arose. The machines became defective within two months, causing frequent client complaints. Despite repairs by mechanics and engineers, issues like malfunctioning gears and repeated dryer belt replacements persisted. Multiple complaints to the opposite party which yielded no solution, prompting the complainant to file an appeal before the State Commission of Delhi. The State Commission dismissed the complaint, following which the complainant appealed to the National Commission.

Contentions of the Opposite Party

The manufacturer argued that the machines were bought for commercial use to earn profits, so the complainant did not qualify as a consumer under the Act. It claimed the complaint involved factual disputes requiring adjudication by a civil court. The manufacturer also blamed the complainant for storing the machines in dusty conditions and not maintaining proper temperatures. The bank and another party argued they were wrongly included, as the allegations were only against the manufacturer, and they had no contract with the complainant.

Observations by the National Commission

The National Commission observed that the primary issue to be determined is whether the complainant is a consumer. The Supreme Court in National Insurance Co. Ltd. v. Harsolia Motors and Ors., provided a two-fold test to determine if goods or services are availed for commercial purposes. Goods used for profit generation are for commercial purposes, excluding cases where they are used for livelihood through self-employment. The same principle applies to services. Furthermore, the Supreme Court in Laxmi Engineering Works v. P.S.G. Industrial Institute, (1995) 3 SCC 583, clarified that purchases for earning a livelihood through self-employment qualify as non-commercial unless operated solely by others. However, the complainant operated in a partnership business, using machinery with significant commercial capacity, managed by multiple employees. The complainant admitted to selling the machine during debt recovery proceedings. This established its use for business purposes, disqualifying the complainant as a consumer under the Act. No expert evaluation under Section 13 of the Act supported claims of a manufacturing defect.

Consequently, the National Commission dismissed the appeal and upheld the State Commission's order.

Case Title: M/S. Nitesh Colour Lab Vs. M/S. Jindal Photo Film Ltd. & 5 Ors

Case Number: F.A. No. 642/2017

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