Services Rendered For Commercial Purposes Cannot Be Entertained, NCDRC Allows LG Electronics’ Appeal

Brief Facts:

Shree Jagannath Hospital & Research Centre ordered an LG Multi Power System (MPS) Tropical Plus Air Conditioning System from LG Electronics India Pvt Ltd. The order was placed in February 2010, with LG expected to complete the installation within 40 days after the approval of drawings. However, more than 1.5 years passed, and the system was still not properly installed, causing problems for the hospital. In response, the hospital filed a consumer complaint, seeking a refund of Rs. 7 lakhs, along with interest, compensation for mental distress, and litigation costs.

LG argued that the hospital did not qualify as a 'consumer' under the Consumer Protection Act and that the matter should be resolved through arbitration due to an arbitration clause in their agreement. LG claimed that the delay was due to the hospital's failure to make advance payments and frequent changes in layout drawings.

The State Commission ruled that the hospital was indeed a consumer and partly allowed the complaint, stating that LG had failed to install the agreed air conditioning system despite receiving an advance payment of Rs. 7 lakhs. Consequently, LG filed an appeal against the State Commission's decision before the NCDRC.

Observations by the Commission:

The main issue before the NCDRC was whether the installation of the air-conditioning system in the hospital's operation theatre served a purely comfort-oriented purpose or if it was an essential requirement for surgical procedures aimed at generating profits. NCDRC requested both parties to provide relevant instructions from the medical authority regarding the necessity of air-conditioning in the operation theatre. In response, the hospital submitted guidelines issued by the National Accreditation Board for Hospitals and Healthcare Providers in 2018. These guidelines outlined specific requirements for air-conditioning in operation theatres, differentiating between two types: Type A (Super Specialty) and Type B (General), each with specific requirements for air changes per hour, air velocity, positive pressure, air filtration, temperature, and humidity.

Based on these guidelines and the hospital's own acknowledgment in their original complaint, it was evident that the air-conditioning system was essential for maintaining specific conditions inside the operation theatre to ensure patient safety and prevent infections. Therefore, the installation served a commercial purpose, as it was necessary for safe surgeries and generating revenue. The NCDRC also considered previous decisions and concluded that the installation of the air-conditioning system was indeed for commercial purposes, as it was an integral part of the hospital's surgical services, for which they charged patients. Consequently, the hospital did not qualify as a 'Consumer' under the Consumer Protection Act.

In conclusion, the NCDRC allowed LG Electronics' appeal and set aside the State Commission's order, holding LG liable.

Case Title: L.G. Electronics India Pvt. Ltd. vs Jaganath Life Care Pvt. Ltd. and Anr.

Case No.: First Appeal No. 123 of 2016

Advocate for the Appellant: Mr Gajinder Kumar and Mr Chandra Shekhar

Advocate for the Respondent(s): Mr Rohini Kumar (For Respondent 1) and Nemo (For Respondent 2)

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