MADHUSUDAN TEXTILES vs DARBI TEXTILES LTD.

THIS is a complaint filed by M/s. Madhu Sudan Textiles, Bhilwara under Sec. 12 read with Sec. 17(a)(i) of the Consumer Protection Act, 1986 ("the Act") against M/s. Darbi Textiles Ltd., Jodhpur on 11.6.91 praying that the opposite party may be directed to pay Rs. 1,95,302.85 as compensation as detailed in Schedule A together with interest @ 18% p.a. Costs of the complaint were also claimed. Compensation for mental tension was also prayed for. The complainant has alleged that it placed an order with the opposite party on 15.12.90 for supply of yarn of G.D.L. H.D. x H.D. quality of N.T. & R.T. type. On the basis of which vide bill No. 206 dated 18.12.90 and bill No. 235 dated 28.12.90 yarn weighing 900 and 1050 kms respectively were supplied. The cost of the yarn was Rs. 1,13,984.65. The complainant got prepared cloth of that yarn after paying labour charges which was Rs. 4,476.50 per mtrs. The cloth was got processed from the Hindustan Processors Ltd., Bhilwara. The details of the expenses have been given in Schedule A. The case of the complainant is that the yarn supplied was not of that quality for which the order was placed for and it was low quality and on account of that the cloth manufactured from it was of bad quality. The complainant who is a business man even could not sell that cloth at a low rate of Rs. 8/- per mtr. and so 4500 mtrs. cloth was lying unsold. Had the quality of the yarn of the standard quality then, the cloth manufactured from it would have been sold at Rs. 41.50 p. mtr. in which there is margin of profit of Rs. 2.50 per mtr. As the opposite party had adopted unfair trade practice and deliberately supplied yarn of low quality, the complainant has suffered loss and mental tension. He, therefore, filed the complaint. Alongwith the complaint photostat copy of the invoices of the yarn purchased, letter and various other documents were submitted.

THE opposite party filed the version of the case contesting the complaint on merits. It raised an objection that as per averments made by the complainant in the complaint, the yarn was purchased for commercial use and, therefore, the complainant is not a consumer under 2(1)(d)(i) of the Act and the complaint should be dismissed. It was also submitted that the complainant purchased the yarn and after manufacturing cloth wanted to sell it again and even so on that ground the complaint was also not maintainable. It is not necessary to mention other defences taken by the opposite party. 31.10.91 Mr. R.C. Parashar, Clerk of Shri S.N. Derashri, Advocate appeared. On that day version of the case filed on behalf of the opposite party was taken on record and its copy was delivered to Mr. Parashar. A direction was given on 23.1.192 for filing of the affidavits by the parties. In terms of the order dated 23.1.92, as nobody had appeared either on behalf of the complainant or on behalf of the opposite party. On 6.3.92 nobody appeared for the complainant and learned Counsel for the opposite party appeared. On that day a direction was made at the request of the learned Counsel for the opposite party allowing him time to file the affidavits within 15 days from that date after delivering their copies to the complainant and thereafter a date for arguments was to be fixed. On 25.4.92 the opposite party did not file the affidavits and it was recorded that on behalf of the complainant affidavits have not been filed. The complaint, was fixed for arguments. As nobody appeared on behalf of the complainant, we were left with no alternative but to hear Mr. Satish Purohit, learned Counsel for the opposite party.

Having gone through the record we have come to the conclusion that the complaint filed by the complainant is not maintainable as the complainant is not a consumer within the meaning of Sec. 2(1)(d)(i) of the Act. Sec. 2(1)(d)(i) is as follows: - "(d) "consumer" means any person who - (i) buys any goods for a consideration which has been paid or promised or 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; or"

IT is clear from the averments made in paras 4 & 5 of the complaint that the yarn was purchased by the complainant from the opposite party for preparing the cloth which he got prepared from M/s. Khemkha Textiles Private Ltd., Bhilwara after paying the charges and the cloth so prepared was processed by M/s. Hindustan Processors Ltd., Bhilwara. According to the complainant the yarn was of inferior quality and that resulted in the low quality of the cloth. The complainant has claimed Rs. 1,13,894.65 the cost of the yarn paid by him and the other items mentioned in the complaint for the cloth processing etc. A sum of Rs. 10,850.75 as profit at the rate of 2.50 per mtr. for which averments are made in para 5 of the complaint were also claimed. These averments show that the yarn was purchased for commercial purpose. The National Commission in Synco Textiles (Pvt.) Ltd. v. Greaves Cotton and Company I (1991) CPJ 499 (NC) has held as under: - "5. 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 form large scale manufacturing or 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.

The purchase of the generating sets was thus clearly for enabling the appellant company to c any on its commercial activity of manufacturing edible oils on a large scale for purpose of trade. IT was submitted before us on behalf of the appellant company that the generators were only intended as a "stand-by arrangement". In our opinion, even if this be so, it would not make any difference because their purchase was nonetheless for the purpose of being used to generating sets and the commercial activity of manufacturing of edible oils for trade carried on by the appellant company, since the gener-ating sets were intended to be used, as and when the need arose, for generating electric current for manufacture of edible oils for the purpose of trade. We do not, therefore, find any reason to interfere with the view taken by the State Commission that the appellant is not a ''consumer''.

The yarn was purchased by the complainant for preparing the cloth and after getting it processed for he was to sell it for his business on a large scale for the purpose of making profits. We have no hesitation to say that the complainant is not a consumer under Sec. 2(1)(d)(i) of the Act and as such he is not entitled to maintain the complaint. In view of this conclusion, it is not necessary to examine the merits of the complaint.

THE complaint is dismissed as not maintainable on the limited ground stated above. In the circumstances of the case there will be no order as to costs. Complaint dismissed.