ABBEY CHEMICALS (P.) LTD. vs KANTIBHAI D.PATEL

THE Complainant-Company wanted to install some machineries for the manufacture of Dietho Dibenzoic Acid in District Vadodara (Gujarat State). The Complainant-Company made enquiries from the Respondent, who posed himself as the manufacturer of the machineries required by the Complainant-Company. Relying upon the assurance given by the Respondent as manufacturer, the Complainant booked the order for machineries. The Respondent had assured delivery of some of the machineries within 30 days and for the remaining within 60 days. The Complainant paid an advance of Rs. 4,25,000/- to the Respondent. The Respondent did not deliver the machineries in time and the delay in the supply caused a lot of inconvenience and loss to the Complainant-Company. The grievance of the Complainant is that though the Respondent had assured and took the order as a manufacturer of the required machines but instead of supplying the same as manufacturer, he purchased them from some other party and then resold them to the Complainant. Moreover, the machines manufactured for the Complainant were manufactured by a manufacturer who was neither skilled nor qualified to manufacture such machines and was also not a manufacturer approved by any competent authority in India. Further, the machines supplied by the Respondent after the prescribed period were neither complete nor were they as per the requirements of the Complainant. When the Complainant found some irregularities in the machines they asked a Chartered Engineer to give his comments on the machineries supplied by the Respondent. The report of the Chartered Engineer points out many defects in those machineries. The Complainant brought to the notice of the Respondent the defects in the machineries. The Respondent sent his mechanic-employees for effecting the repairs to the machineries but they could not repair them properly as there were lots of manufacturing defects which were beyond repairing capacity of those machines. The Complainant again brought to the notice of the Respondent, the defects in the machineries. Instead of replacing the machineries, the Respondent concocted some dispute. The Complainant, therefore, filed this complaint in which he has prayed that the Respondent be directed to replace the machineries. The Complainant had also claimed compensation exceeding over Rs. 1.00 crore on various grounds.

IT is necessary to give in detail the counter version of the Respondent. Suffice it to say that he has taken a formidable objection to the maintainability of this claim-petition. It has been pleaded that the Complainant-Company does not fall within the definition of ''consumer'' as defined in Section 2(1)(d) of the Consumer Protection Act, 1986 (for short the Act), as they purchased the various products (machineries) such as reactors, process tanks, vacuum pumps, etc. to be used for commercial purpose. On merits it was pleaded that the machineries supplied were to the full satisfaction of the Complainant-Company which did not make full payment as agreed upon. In fact, one of the cheques issued by the Complainant for an amount of Rs. 3.00 lakhs had bounced in respect of which a notice under Section 138 of the Negotiable Instruments Act was issued to the Complainant on 18.12.1991. Another notice dated 12th March, 1992 was also issued to the Complainant to make payment of the amount of Rs. 10,22,457/- with interest @ 24% per annum. Thereafter, the Complainant is said to have obtained the alleged report of the Chartered Engineer and filed the present complaint. The Complainant filed a rejoinder to the counter filed by the Respondent traversing the allegations of the Respondent. About the preliminary objection taken by the Respondent, the plea of the Complainant is that the machineries cannot be said to have been purchased for commercial purpose as no commercial activity has been started so far with the use of the machineries under dispute. Moreover, the Respondent had not rendered ''service'' as the machineries supplied had not been repaired and had not been made functional. Further, as a part of service the Respondent was under legal obligation to provide certain certificates regarding the safety of the machinery etc.

AFTER hearing to parties, we are of the opinion that in the present case the machineries were purchased for commercial purpose. According to the allegation in the Complaint, the Complainant-Company was formed as Non-Resident of India unit, the share contribution of which was made in foreign exchange. The Company wanted to install the machineries for manufacturing of Dietho Dibenzoic Acid. The machinery purchased from the respondent was worth much more than Rs. 10.00 lakhs. Therefore, it is clear that the machineries were purchased for starting manufacturing activity on a large scale. ''Consumer'' has been defined in Section 2(1)(d)(i) of the Act as follows : "any person who buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose."

Of course, the contention of the Complainant is that the present complaint also fall under next part of the definition of the expression ''consumer'' contained in Sub-Clause (ii) of Section 2(1)(d) of the Act but that contention will be discussed later on. ''Commercial activity'' has been discussed in detail by this Commission in case titled Synco Textiles Pvt. Ltd. v. Greaves Cotton and Co. Ltd. (1991) 1 CPR as follows :

"Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression ''consumer'' any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making profit. As already indicated since resale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words "for any commercial purpose" must be understood as covering cases other than those of resale of the goods. It is thus obvious that Parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for resale but also those who purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit making activity will not be ''consumers'' entitled to protection under the Act. It seems to us clear that the intention of Parliament as can be gathered from the definition Section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It would thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that the exclusion clause should apply it is however necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit."

In the present case the machineries purchased from the Respondent have a direct and close nexus with the large scale commercial activity of the Complainant-Company which intended to carry on to earn large profits. Therefore, it is clearly a case where the machines have been purchased by the Complainant for commercial purpose and consequently the Complainant-Company is not a ''consumer'' falling within the definition as given in the Act.

IT was feebly argued on behalf of the Complainant that the present case falls within the expression of hiring of service and therefore the Complainant-Company is a ''consumer''. This argument has only to be stated for its being rejected. Even according to the Complainant the machines supplied by the Respondent have manufacturing defects and in spite of repairs is could not be made functional. It is not the case of the complainant that the Respondent refused to carry out the repairs. It is the further contention of the Complainant that the Respondent was to provide some certificate about safety of the machinery. No such plea has been taken in the complaint. In the rejoinder also it has not been mentioned as to what sort of certificate the Respondent was required to supply to the Complainant. Therefore, we are not inclined to hold that the present dispute between the parties also involves hiring of the service to be rendered by the Respondent.

AS we have held above that the Complainant-Company is not a ''consumer'' falling within the definition as given in the Act, the present complaint is not maintainable. Accordingly, we dismiss the Original Petition with costs which we assess at Rs. 3,000/-. I agree in the light of the majority order in Synco Textiles Pvt. Ltd. v. Greaves Cotton & Co. Ltd. (First Appeal No. 22 of 1989 decided on 6th April, 1990.