MADHU CHAWLA vs R.K.ENGINEERING CO.(P) LTD.

THIS Revision Petition has arisen out of the order dated 13.11.90 of the State Commission, Delhi reversing the order dated 9.2.90 of the District Forum, Delhi and holding that the Complainant is not a ''consumer'' within the meaning of the Consumer Protection Act, 1986.

THE facts in the nutshell as found are these. M/s. R.K. Engineering Co. (P) Ltd., the Opposite Party introduced themselves as the authorised distributors of M/s. Kirloskar Oil Engines Ltd. and one of the leading suppliers of "Kirloskar Diesel Generating Sets from 2 K.V.A. to 75 K.V.A." After obtaining quotations from the Opposite Party and after arranging bank loan, the Complainant placed an order on 20th January, 1988 on the Opposite Party for a "10 K.V.A.: Kirloskar Generating Set". The generating set was installed in the Complainant''s factory at a cost of Rs. 42,240/- on 5.2.88. The generating set started giving trouble and did not work at all as it was of substandard quality. The Complainant approached M/s. Kirloskar Oil Engines Ltd. for rectification of the defects in the generator. They informed the Complainant in their letter dated 27.6.89 that Opposite Party is not their authorised original equipment assemblers and the engine supplied with the 10 K.V.A. generating set is not of Kirloskar make. The Complainant then filed a complaint before the District Forum, Delhi claiming Rs. 56,246.90 towards the costs, installation, interest charged by the Bank and repair charges. The Opposite Party remained absent despite service of notice. The District Forum vide its order dated 5.2.90 directed the Opposite Party to pay Rs. 56,246.90 with interest at the rate of 18% from the date of th Order till the date of payment. The Opposite Party filed an appeal before the State Commission, Delhi. The main submission of the Appellant was that the generating set had been purchased by the Complainant for commercial purpose and thus the Complainant is not a ''consumer''. The State Commission recorded that it is not disputed that the generating set has been fixed in the factory premises and it is being used for providing light to the workers and operating fans therein when there is break down In electricity by DESU and thus the generating set is being used for the workers of the factory. The State Commission opined that if the electricity is used for the purpose of helping the labour in carrying on the work of the factory, it is as good a commercial purpose as that of using the energy for running machinery. On the request of the Opposite Party, the Complainant filed balance sheet as on 31st March, 1990 wherein it is shown that her capital in business is more than Rs. 3.50 lakhs and she had received loan to the tune of Rs. 25.00 lakhs. Her current liabilities at that time wefe of more than Rs. 13.00 lakhs and her export sales were of more than Rs. 50.00 lakhs. It was also found that the Complainant has claimed the depreciation on the use of the generating set in the business. On the basis of the material before the State Commission, it came to the conclusion that if a person buys goods for earning profit on a large scale by their use, he will be deemed to be carrying one commercial activity and cannot be termed as a consumer.

MR . H.D. Shourie, appearing for the Petitioner herein (the Complainant) with great emphasis at his command submitted that there was no direct nexus between the use of electricity generated by the generator and the production of the garments in the units for exports. According to him as found by the State Commission the generator was installed only as a stand by for providing light and fans for the workers in the event of interruption and break down of electricity which are caused in Delhi and Okhla Industrial Estates, but no manufacturing or processing activity was carried out by the Complainant with the electricity generated by the generating set. These submissions cannot stand close scrutiny.

THIS Commission has been taking consistent view that where a person purchases goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit he will not be a consumer within the meaning of Section 2(d)(i) of the Act. The similar question arose before the Supreme Court in Laxmi Engineering Works v. P.S.G. Industrial Instituted= II (1995) CPJ 1 (SC) (Civil Appeal No. 4193 of 1995 decided on 4th April, 1995) and the view taken by this Commission was approved. The Parliament had in the meantime stepped in and added the explanation to Section 2(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression "commercial purpose". The Supreme Court ruled : "We must, therefore, hold that (i) the explanation added by the Consumer Protection (Amendment Act 50 of 1993 replacing Ordinance 24 of 1993) with effect from 18.6.93 is clarificatory in nature and applies to all pending proceedings. (ii) Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case. (iii) A person who buys goods and use them himself, exclusively for the purpose of earning his livelihood by means of self-employment is within the definition of the expression "consumer". The Supreme Court considered the decision of this Commission in Synco Textiles Pvt. Ltd. v. Greaves Cotton & Co. Ltd., I (1991) CPJ 499 and approved the view taken by the majority of this Commission. Mr. Y. Krishan, however, took a different view. He was of the opinion that there should be a direct nexus between the purchase of goods and the profit or loss from their further disposal. This view of Mr. Krishan has been specifically noticed by the Supreme Court but not approved when coming to the conclusion quoted above. As already noticed, the State Commission has found that the Complainant purchased the generator for the purpose of being used in the commercial activity carried on by the Complainant on a large scale for the purpose of making profit. The purchase of goods was thus for commercial purpose and the Complainant is thus not a consumer within the meaning of the definition of expression ''consumer'' in Section 2(d)(i) of the Act. The Revision Petition accordingly fails and is dismissed leaving the parties to bear their respective costs throughout.