LexLAXMI ENGINEERING WORKS versus P.S.G. INDUSTRIAL INSTITUTE
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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LAXMI ENGINEERING WORKS
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P.S.G. INDUSTRIAL INSTITUTE
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[B.P. JEEVAN REDDY AND SUJATA.V. MANOHAR, JJ.]
Consumer Protection Act; 19.86 :. , .. J
Section· 2( d)-<:onsumer-Definition of-Exclusion of Per.rons quyif!C
goods for resale and commercial purpose-A person who buys goods lllld UJf'e
C exclusively for earning his livelihood is not excluded from the de/inido,;,·~f
Consumer-'Commercial Putpose'-Determinati.Qn depem1.J:Mfuctl 'of each
case-{]niversal Turning Central Machine-Purchase for manufacture of
machine parts-Held on facts that purchase was not for earning livelihhod /Jy
means of self cmploymen~uyer Held noi Consumer.
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Explanation to S.2(d) (As inserted by Amendment Act 50 of 1993~
Held clarificatory in nature and applicable to all pending proceedings-Held
Law is not changed by the Explanation.
Sections 3, 9, 13, 15, 17, 18, 19, 21, 23, 24 and 25.
Forums created undei-Nature of-Held Quasi Judicial Tribunals and
not Courts.
District Forums-State and National Consumer Commissions-Orders
passed by-Finality-{ssues decided by these forums cannot be adjudicated
F in Civil Cou1ts-They can be questioned only in the manner provided by the
Act.
Tde appellant-concern, a small scale industry established under the
Employment Promotion Programme, purchased one PSG 450 • CNC
Universal Turning Central Machine from tLe respondent for carrying on
G business of mannfactnre of machine parts. It filed a complaint in the
Maharashtra Consumer Disputes Redressal Commission against the
respondent and claimed an amount of Rs. 4 lakhs alleging that it had
suffered serious financial loss on account of defective functioning or the
machine. Subsequent to the filing or the complaint an Explanation was
H added to Section 2(d) or the Consumer Protection act, 1986 by Amendment
174
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LAXMIENGG.v. P.S.G.INDL.
175
Act 50 of 1993 which stated that "for the purposes of such-clause (i) A
'commercial purpose'. does not include use by a consumer of goods bought
. and used by him exclusively for the purpose of earning his livelihood, by
means of self-employment". The respondent contested the case stating that
the appellant purchased the machine for commercial use and it was not a
consumer within the meaning of S.2(d) of the Act. However, the Commis-
sion allowed the claim in part i.e. for Rs. 2.48 lakbs. On respondent's
appeal the National Consumer Commission held that the complainant
purchased the machinery for commercial purpose and it was carrying on
the business on a large scale for the purpose of earning profit, therefore
it was excluded from the purview of the definition of Consumer.
In appeal to this Court it was contended that (i) the appellant
purchased the machinery for the purpose of livelihood; therefore the
purpose for which the machine was purchased cannot be called a 'commer-
cial purpose'; (ii) the appellant cannot be said to be carrying on business
of manufacture of machine parts on a large scale.
Dismissing the appeal, this Court
HELD : 1. The definition of the expression 'consumer' in Section
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2(d) of the Consumer Protection Act, 1986 does not include a person who
buys goods for resale or for any commercial purpose. The expression E
"resale' is clear enough. Controversy bas, however, arisen with respect to
meaning of the expression "commercial purpose". It is also not defined in
the Act. "Commercial" denotes "pertaining to commerce". It means "con-
nected with, or engaged in commerce; mercantile; having profit as the
main aim" whereas the word "commerce" means "financial transactions
especially buying and selling of merchandise, on a large scale". The
National Commission appears to have been taking a 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"
be will not be a "consumer' within the meaning of Section2(d)(i) of the
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Act. Broadly affirming the said view and more particularly with a view to G
obviate any confusion - the expression "large· scale" is not a very precise
expression - the Parliament stepped in and added the explanation, to
Section 2(d)(i) by Amendment Act, 1993. The explanation excludes certain
purposes from the purview of the expression "commercial purpose" · a
case of exception to an exception. Therefore, a person who buys goods and
uses them himself, eExcerpt shown. Read the full judgment & AI analysis in Lexace.