ELECTRO DYNAMICS vs MANAGING DIRECTOR, HALASIDHANATH SAHAKARI SAKKARE KARKHANE LTD.

THIS appeal, by O.P. No. 1, is directed against the order dated 4.1.1992, passed by the District Forum, Belgaum, in Complaint No. 170/90 directing O.P. No. 1 to pay a sum of Rs. 42,154/- together with damages of Rs. 10,000/- to the complainant. The facts, briefly stated, are as follows: 1. The complainant-respondent No. 1 herein, is a Sugar Factory, known as "Sri Halasidhanath Sahakari Sakkare Karkhane Ltd., Nipani". The complainant called for tenders for installing Intercom System in the factory premises and the offer of O.P. No. 1-the appellant herein, was accepted. O.P. No. 1, installed Intercom System in 17 lines at the factory premises in the month of October 1989, for which he collected a sum of Rs. 42,104/- from the complainant.

THE said Intercom System failed within a period of 3 months. Inspite of several requests the defects were not rectified by O.P. No. 1 and so he sought the refund of the price paid by the complainant to Opp. Party No. 1. O.P. No. 1, filed its version, and admitted the installation of Silver Intercom System. O.P. No. 1 averred that the system did properly work till the middle of January, 1990, but due to some manufacturing defects, snags developed and they were rectified by sending a technician.

O.P. No. 1, further averred that the defect was not due to any mal-functioning of the said set but due to coming in contact of the power line with the intercom system line.

O.P. No. 2, averred that O.P. No. 1 was their dealer for Bangalore District only and he was not authorised to sell the products beyond Bangalore District. O.P. No. 2, further contended that O.P. No. 1, might have committed some mistake in laying the cables improperly under .ground for which O.P. No. 2 was not liable for any damages. During enquiry, the complainant examined P.W./l, its Purchase Officer, and got Exs. P-l to P-9 marked in evidence. The Opp. Parties did not lead the evidence nor got any documents marked. The District Forum, appreciating this material placed on .ecordby the parties, held that the Intercom System installed by O.P. No. 1 in the factory premises of the complainant was of defective in quality and in that view directed to refund the price collected from the complainant and also the compensation in a sum of Rs. 10,000/- by O.P. No. 1-the appellant to the complainant.

WE have called for the records and received. WE have perused the records and also heard the learned Counsel for the parties., The learned Counsel for O.P. No. 1-the appellant, argued that the complainant must be deemed to have been purchased the Intercom System for a "commercial" purpose and, therefore, the complainant-factory, is not a "consumer" within the meaning as defined in Clause 2(1)(d) of the Consumer Protection Act. According to the said definition of ''Consumer'' in relation to goods means any person who buys any goods for 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.

IN the present case, the question to be , considered is, whether the purchase of INtercom System by the complainant-factory was for a commercial purpose?

IT is not disputed that the complainant is a co-operative sugar factory and for facilitating the work of the administration of the factory, the Intercom System became necessary and for which the Intercom System was purchased and got installed. Such a question came up for consideration before the National Commission, in M/s. Larsen and Tubro Ltd. v. Pophele Nursing Home and Another reported in Volume-II (1992) CPJ page 366 (NC) wherein at para 7 of its order, while considering the decision in Synco Textiles v. Greaves Cotton & Co. Ltd., it was observed, as under: "7. Here, we may refer to Synco Textiles Pvt. Ltd. v. Greaves Cotton & Co. Ltd., I (1991) CPJ 499 (NC), a case decided by this Commission. In our order, we defined "commercial activity" 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 processing activity carried on for profit. In order that 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.'' On the basis of facts found in the present case it will have to be held that the Electronic Telephone System was purchased by the complainant for a "commercial" purpose and hence it is not a "consumer" as defined in the Act. Consequently the complaint was not maintainable under the Act."

In the said case, the Electronic Telephone System was purchased for a Nursing Home. Having regard to these facts, it was held that the purchase was for ''commercial purpose'' as it was bought for earning profit on a large scale.

EVEN in the present case, the purchase of Intercom System was not for the purpose of earning livelihood by means of a ''self-employment''. It was clearly a purchase for commercial purpose for earning profit at a large scale, because the complainant is a sugar factory and intercom system was purchased for the factory premises. Having regard to these facts and in the circumstances of the case, the complainant cannot be classified as a ''consumer'' under the provisions of the Consumer Protection Act, 1986, that is under Section 2(1)(d) of the Act. In that view, the complaint itself is untenable.

THE District Forum, did not consider this material aspect of the matter and so came to an erroneous conclusion in allowing the complaint. ORDER In the result, therefore, this appeal is allowed. THE order dated 4.1.1992, recorded by the District Forum, Belgaum, is Complaint No. 170/90, is set aside and the complaint filed by the complainant is dismissed. THE parties are directed to bear and pay their own costs in this appeal. Appeal allowed.