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Introduction
Section 2(1)(d) of the Consumer Protection
Act, 1986 (COPRA) defines a consumer as a person who:
(i) 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; or
(ii) Hires or avails of
any services 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 beneficiary of such services
other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly
promised, or under any system of deferred payment, when such
services are availed of with the approval of the first mentioned
person but does not include a person who avails of such services
for any commercial purpose.
A reading of the above
definition of the term consumer makes it clear the Parliament
wanted to exclude from the scope of the definition the persons who
obtain goods for resale and also those who purchase goods with a
view to using such goods for carrying on any activity for earning.
The immediate purpose as distinct from the ultimate purpose of
purchase, sale in the same form or after conversion and a direct
nexus with profit or loss would be the determinants of the
character of a transaction-whether it is of a "commercial purpose"
or not. Thus buyers of goods or commodities for "self consumption"
in economic activities in which they are engaged would be
consumers as defined in the Act.
In Laxmi
Engineering Works V. PSG Industries, AIR 1995 SC 1428 the
Supreme Court laid down the test as close and direct nexus with
the commercial activity. It is not the value of goods but the
purpose for which it was purchased that matters.
The intention of Parliament is
to deny the benefits of the Act to persons purchasing goods either
for the purpose of resale or for the purpose of being used in
profit making activity engaged on a large scale. Thus the persons
who 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 of consumer.
The National Commission held that 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 :Super
Engineering Corpn. (Huf) - Vs. - Sanjay Vinayak Pant & Anr.1992-CPJ-1-95-NC.
In H.C.L.
Ltd. - Vs. - Krishna Nanu Naik 1993-CPJ-2-174-NC ;
1993-CTJ-1-101-NC ; facts revealed that the purchase of the
computer system was for a commercial purpose, and it had close
nexus with the commercial activity of the respondent company and
also the respondent company was found to be a large commercial
organization. Relying on the judgement rendered by it in
Synco Textiles Pvt. Ltd. v. Greaves Cotton &
Co. Ltd. 1991-CPJ-1-499-NC the National Commission held
that those two points would decide the question of commercial
purpose.
But there are circumstances
where in spite of the purchaser purchasing the goods for
commercial purpose he is treated as the consumer for the purpose
of granting relief under the COPRA.
In C. P.
Moosa - Vs. - Chowgle Industries Ltd. 2001-CPJ-3-9-NC ;
2001-CPR-2-92-NC ; the appellant had purchased EPBAX system for
his hotel with warranty and annual maintenance contract. There was
deficiency of service during warranty period and AMC period. The
National Commission held that case falls under Section 2(1)(d)(ii)
and appellant entitled to compensation.
In Dr.
Vijai Prakash Goyal Petitioner v. The Network Limited
Respondent1998-CPJ-1-31-NC the revision was filed against
the order dated 15.7.1998 of Consumer Disputes Redressal
Commission Uttar Pradesh, Lucknow allowing appeal against the
majority judgment dated 16.11.1996 of a District Forum and
dismissing complaint filed by the petitioner. The complaint was
dismissed on the ground that the petitioner was not a consumer.
Petitioner filed complaint, inter alia, alleging that he along
with his wife has been running a maternity home at 10/60, Katar
Madari Khan, Agra. Petitioner placed an order on 22.2.1994 for
supply of Ultrasound Scanner Model 212 on the respondent opposite
party. Respondent supplied the machine on 31.3.1994. Warranty was
of one year. It was alleged that after installation, the machine
went out of order. Engineer deputed by the respondent on checking
found that the machine needed to be replaced, it being defective.
Respondent had not replaced/repaired the machine despite repeated
requests including service of legal notice dated 5/8.12.1994 by
the petitioner. Respondent contested the complaint by filing
written version. Purchase of Ultrasound Scanner model 212 by the
petitioner was not denied. However, it was pleaded that petitioner
is not a consumer as defined in Consumer Protection Act, 1986. The
said notice dated 5/8.12.1994 which was replied to by the
respondent was got served through Counsel by the petitioner during
the warranty period of one year which was to expire on 17.4.1995
itself. Reiterating its earlier judgments in Jay Kay Puri
Engineers and Others v. Mohan Breiveries & Distilleries, I (1998) CPJ 38 (NC) and many other decisions, the National Commission held
that purchaser of a machine would be a consumer if the defect in
machine develops within warranty period even though the machine
was purchased for commercial purpose.
In yet another recent case the
complainant a company had purchased computer system along with
related accessories from the opposite party. The intellifax
machine, which was supplied with the computer, was not giving
performance up to the mark and the same was defective. When the
dispute went to the reddressal forum under the COPRA the opposite
party contended that the complainant was not a consumer as the
computer and the machine were purchased by the company for
business purpose i.e. for commercial purpose. However the defect
in the machine was intimated to the opposite party within the
warranty period. The National Commission held that the purchaser
of the machinery would certainly be a consumer in respect of
defect in machine during period of warranty:
Super Computer Centre V. Globiz Investment Pvt.Ltd. III
(2006) CPJ 265 (NC).
Thus it is clear from a series
of judgments that even the person who purchases goods for
commercial purpose is also a consumer if the defects in the goods
purchased are found during the warranty period.
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Purchaser
for Commercial Purpose:
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The
author can be reached at: nandikol@legalserviceindia.com /
