Many of you would be aware that only a consumer as defined in the Consumer Protection Act 1986 can file a complaint in the consumer forum and as per Section 2(1)(d) of the Consumer Protection Act 1986 any person who buys any goods for resale or for any commercial purpose is not a consumer.
Hitherto, the legal position which
existed was that if the vehicle is purchased by the company for use of its
directors or officers, it amounted to purchase for a commercial purpose and
hence the company could not file a complaint in the consume forum for any
defect or deficiency in service by the dealer or manufacturer of vehicle.
The Two Member Bench in General
Motors Pvt. Ltd. v. G.S. Fertilizers Pvt. Ltd. [First Appeal No. 723 of 2006]
decided on 07.02.2013 held that purchase of a car by a company for use of its
Managing Director amount to commercial purpose and hence company can not file a
consumer complaint. Another Two Member Bench in Controls and Switchgear Company
Ltd. v. Daimler Chrysler India Pvt. Ltd. and T and T Motors Ltd. MANU/CF/0188/2007 :
IV (2007) CPJ 1 (NC) had held that purchase of car by a company for use of its
directors is not a commercial purpose.
Noticing an apparent conflict in
the said decisions, the following issue was referred to the larger Bench, for
decision :
"Whether the purchase of a
car or any other goods by a company for the use/personal use of its Director
amounts to purchase for a commercial purpose, within the meaning of Section 2(1)(d) of
the Consumer Protection Act, or not."
The larger bench of 3 Members of
the National Consumer Disputes Redressal Commission (NCDRC) (Bench of D.K. Jain,
J. (President), V.K. Jain, J. (Member) and Dr. B.C. Gupta), by its
decision of 8th July 2016 in Crompton Greaves Limited Vs Daimler Chrysler India
Private Limited, Consumer Case No. 51 of 2006 has now settled the legal
position by holding that purchase of car by a company for personal use of
directors does not amount to purchase for a commercial purpose and hence the
company can file and maintain a complaint in consumer forum for any defect or
deficiency in the car.
The National Commission observed thus
:
“4. Going by the dictionary
meaning, a car or for that matter any goods obtained and the services hired or
availed by a company can be said to have been obtained or hired or availed for
a commercial purpose, only if the said goods or services are intrinsically
connected with, or related to the business or commerce in which the company is
engaged. The acquisition of the goods or the hiring or availing of services, in
order to bring the transaction within the purview of section 2 (1) (d) of
the Consumer Protection Act, therefore, should be aimed at generating profits
for the company or should otherwise be connected or interwoven with the
business activities of the company. The purpose behind such acquisition should
be to promote, advance or augment the business activities of the company, by
the use of such goods or services. As observed by the Hon'ble Supreme Court in Laxmi
Engineering Works v. P.S.G. Industrial Institute [MANU/SC/0271/1995 :
1995 (3) SCC 583], it is not the value of the goods but the purpose for which
the goods are brought or put to use, which is relevant to decide whether the
goods were obtained for a commercial purpose or not. The same would be the
position, where services are hired or availed by a company. If the business
activities of a company cannot be conveniently undertaken without the goods
purchased or the services hired or availed by a company, such purchase or
hiring/availing as the case may be, would be for a commercial purpose, because
the objective behind such purchase of goods or hiring or availing of the
services would be to enable the company to earn profits by undertaking and
advancing its business activities.
5. If a car or other goods are
purchased or the services are hired or availed by a company for the personal
use of its directors or employees, the purpose behind such acquisition is not
to earn profits or to advance the business activities of the company. The
purpose is to make certain facilities and amenities available to the directors
and employees of the company as a part of the incentive offered to them by the
company, as a reward or remuneration for the work which they are expected to
perform for the company. It is not as if a company cannot run its business
without providing such facilities and amenities to its directors and employees.
It is not necessary for the business of the company, to provide such facilities
and amenities to its directors and employees. Providing such facilities and
amenities only motivates them to perform their work in an efficient and
congenial environment, besides serving as an incentive aimed at eliciting
better performance. The company does not earn profit merely by making a car or
certain other goods or services available to its directors and employees.
Therefore, it would be difficult to say that such goods are purchased or the
services are hired or availed by the company for a commercial purpose”.
The National Commission finally
held :
"(a) If a car or any other
goods are obtained or any services are hired or availed by a company for the
use/personal use of its directors or employees, such a transaction does not
amount to purchase of goods or hiring or availing of services for a commercial
purpose, irrespective of whether the goods or services are used solely for the
personal purposes of the directors or employees of the company or they are used
primarily for the use of the directors or employees of the company and
incidentally for the purposes of the company.
(b) The purchase of a car or any
other goods or hiring or availing of services by a company for the purposes of
the company amount to purchase for a commercial purpose, even if such a car or
other goods or such services are incidentally used by the directors or
employees of the company for their personal purposes."
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