A.P.FOREST DEVELOPMENT CORPORATION LIMITED vs B.S.SUNDARAVADIVEL MUDALIAR And SONS

THESE two appeals arose out of the order of the Khammam District Forum in O.P. No. 114/1994 dated 28.12.1994. F.A. No. 72/1995 was preferred by the opposite parties in that O.P. and F.A. No. 681/1995 was preferred by the complainant.

THE dispute raised by the complainant relates to purchase of beedi leaves by it from the Andhra Pradesh Forest Development Corporation Limited. THEre is no doubt that the complainant at the relevant time was the manufacturer of B.S. Jadi Beedies and the purchase of beedi leaves was made by it for the manufacture of beedies. This is clearly for a commercial purpose. THE District Forum failed to notice this and without adverting to this aspect of the matter allowed the complaint awarding compensation of Rs. 90,000/- towards deficiency in service on the part of the opposite parties because of delay of two months in delivering the beedi leaves rejecting the defence of the opposite parties that there was no delay on their part and that on the other hand, there was delay on the part of the complainant in paying the second instalment which was due on 31.10.1993. THE case of the opposite parties was that, as the complainant did not pay the 2nd instalment by the due date, the agreement was terminated and that thereafter the complainant came to pay the said instalment amount together with the revocation fee and penal interest for delayed payment. THE complainant could pay those amounts on 24.12.1993. THEreafter the complainant had to produce the Income Tax Clearance Certificate and the Sales Tax particulars that he could do only on 29.1.1994 and thereafter the beedi leaves covered by the 2nd instalment were released in January, 1994 itself. The Counsel for the appellant in F.A. No. 681/1995 i.e., the complainant before the District Forum, contends that purchase of beedi leaves for manufacturing beedies did not involve any commercial purpose, because a manufacturing process was involved and beedi leaves were not to be sold as such and a new product was being made out of them i.e., beedies, and that new product was being sold by the complainant. We do not find any merit in this contention. This question is no longer res integra. As long back as 1991 the National Commission held in Ram Gopal v. Managing Director, H.P. State Small Industrial Export Corporation Limited, I (1991) CPJ 415=1991 (2) CPR 109, that purchase of Palm Fatty Oil for manufacture of soap by the appellant (before the National Commission) in his Soap factory was for commercial purpose and that he could not be regarded as ''Consumer'' vis-a-vis his purchase of Palm Fatty Oil. More recently, in Rajeev Metal Works & Ors. v. Mineral and Mental Trading Corporation of India Limited, I (1996) CPJ 20 (SC), =(1996) 9 SCC 422=AIR 1996 SC 1083 the Supreme Court considered the definition of the expression ''Consumer'' in Section 2(1)(d)(i) of the Consumer Protection Act, 1986 (''the Act'' for short) and the scope of the exclusionary clause therein : "but does not include a person who obtains such goods for resale or for any commercial purpose". The question that arose in that case was whether the purchase of G.P. Steel Sheets for manufacture and sale of finished products fell within the exclusionary clause. The Supreme Court held as follows : "It is true as contended for the appellants that the definition requires to be interpreted broadly so as to give effect to the legislative intention envisaged under the Act. But when the legislature having defined the term "consumer'' in broader terms, sought to exclude certain transactions from the purview of the Act what could be the meaning that would be assigned to the exclusionary clause, viz., "but does not include a person who obtains such goods for resale or for any commercial purpose". The intention appears to be that when the goods are exchanged between a buyer and the seller for commercial purpose or for resale, the object of the Act appears to be to exclude such commercial transactions from the purview of the Act. Instead, legislature intended to confine the redressal to the services contracted or undertaken between the seller and the "consumer'' defined under the Act... The goods supplied were required for commercial purpose, i.e., for manufacture and resale as finished goods during the course of their commercial business. Under the circumstances, the appellants intended to purchase these goods for commercial purpose, namely, to manufacture the tin sheets for resale. It is true that the word "resale'' used in the exclusionary clause of Section 2(1)(d)(i) was used in connection with the purchase of goods defined in the Sale of Goods Act for commercial purpose. The ultimate object of the supply of the goods, namely, G.P. Sheets to the appellants was manufacture of finished goods for resale. The goods were intended to be used for commercial purpose. Thus considered, we are of the opinion that the appellants are not consumers by virtue of the exclusionary clause under Section 2(1)(d)(ii)(i). Therefore, they would not come under Section 2(1)(d)(ii)[(i)?] of the Act. Since the object of the supply and purchase of the goods was commercial purpose, it would certainly come within the exclusionary clause of Section 2(1)(d)(ii)[(i)?]."

Even on the merits we do not find any ground for holding that there was any deficiency in service on the part of the opposite parties. The complainant failed to pay the second instalment within time and consequently the agreement was terminated by the opposite parties. The agreement was allowed to be revived on the complainant paying revocation fee and penal interest for delayed payment alongwith the second instalment which the complainant did only on 24.12.1993. The complainant had to produce the Income Tax Clearance Certificate and Sale Tax particulars which he did towards the end of January, 1994 and within a few days thereafter he Was delivered the beedi leaves in question. We may also point out that no rendering of service by the opposite parties was involved. What was involved was only the delivery of goods and the question was whether there was any delay in the delivery of goods amounting to breach of contract for which compensation had to be awarded. This does not give rise to any consumer dispute which can be entertained by the Tribunals under the Act. We therefore find that on this count also the District Forum erred in entertaining the complaint. In the result, the order of the District Forum is set aside and the O.P. is dismissed, and the appeal preferred by the opposite parties i.e., F. A. No. 72/1995 is allowed and the appeal F.A. No. 681/1995 preferred by the complainant is dismissed. No costs to either. Ordered accordingly.