LILAVATI KIRTILAL MEHTA MEDICAL TRUST versus M/S UNIQUE SHANTI DEVELOPERS & ORS.

Citation: [2019] 14 S.C.R. 563 · Decided: 14-11-2019 · Supreme Court of India · Bench: MOHAN M. SHANTANAGOUDAR · Disposal: Appeal(s) allowed

Cited by 9 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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LILAVATI KIRTILAL MEHTA MEDICAL TRUST
v.
M/S UNIQUE SHANTI DEVELOPERS & ORS.
(Civil Appeal No. 12322 of 2016)
NOVEMBER 14, 2019
[MOHAN M. SHANTANAGOUDAR AND
AJAY RASTOGI, JJ.]
Consumer Protection Act,1986– Explanation to s.2(1)(d) –
’Commercial Purpose’ under – When an activity/transaction is not
for said purpose – Agreements to sell executed for 29 flats in 1995–
Appellant-Trust took possession of said flats, constructed by
respondent no.1, for providing hostel facilities to nurses employed
by the Hospital run by the appellant – However, the structure
became dilapidated and the appellant vacated the flats in 2002 –
Complaint filed by the appellant before the National Commission–
Initially, dismissed as barred by limitation– In review, the order was
recalled, however the Commission again dismissed the complaint
on the ground that the appellant was not ‘consumer’ u/s.2(1)(d)
as the said section excludes a person who obtains goods and
services for ‘commercial purpose’ – On appeal, held: Explanation
clause to s.2(1)(d) was added by way of Ordinance No.24 of 1993
(subsequently replaced by Amendment Act No.50 of 1993) –Said
Amendment Act also added ‘housing construction’ to the definition
of ‘service’ u/s.2(o) – In the present case, the appellant validly took
the possession of the flats constructed by respondent no.1 and paid
consideration and can therefore be said to have availed of its
housing construction services– Explanation to s.2(1)(d) is
clarificatory in nature and only re-affirms the definition of
‘consumer’ as it already exists – Ultimately, whether or not a person
is consumer or whether an activity is meant for commercial purpose
will depend upon the facts and circumstances of each case – It is
not the identity of the person but the purpose for which the
transaction is made which is relevant – Hence, private corporate
bodies such as the appellant may engage the services of third
parties for the purpose of providing perquisites to their employees
– If in all such cases the third party service-provider disclaims
liability on the ground that the hirer of the service is engaged in
   [2019] 14 S.C.R. 563
563
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SUPREME COURT REPORTS
[2019] 14 S.C.R.
trade and commerce, it will open Pandora’s box wherein the
employer as well as the employees will not have any remedy –
Purchase of the good/service should have close and direct nexus
with profit-generating activity – There is no direct nexus between
the purchase of flats by the appellant trust and its profit generating
activities – Further, applying the dominant purpose test, it cannot
be said that the provision of such hostel facilities is integral to the
appellant trust’s commercial activities– Purchase of flats by the
appellant for providing hostel facilities to the nurses is not even
remotely related to the object of earning profits or for any
commercial use as envisaged u/s.2(1)(d) and hence, does not
qualify as meant for ‘commercial purpose’ – Appellant is
‘consumer’ u/s.2(1)(d) for the present transaction under
consideration– Impugned judgment set aside – Appeal restored
before the National Commission, who is to decide the matter
expeditiously.
Allowing the appeal, the Court
HELD: 1.1 The purchase of flats by the Appellant for the
purpose of providing hostel facilities to the hospital nurses does
not qualify as meant for a ‘commercial purpose’. Though the term
‘commercial purpose’ as referred to under Section 2(1)(d) has
nowhere been defined under the provisions of the Consumer
Protection Act, 1986, Supreme Court has expounded upon it
based on its lateral dictionary meaning in various decisions. It
is true that the said decisions were rendered in the context of
deciding whether the goods or services availed of in the facts
of those cases were for a commercial purpose or exclusively for
the purpose of self-employment. This does not mean, however,
that in every case a negative test has to be adopted wherein any
activity that does not fall within the ambit of ‘earning livelihood
by means of self-employment’ would necessarily be for a
commercial purpose. Respondent No.1’s argument is rejected
in this regard. Explanation clause was added to Section 2(1)(d)
by way of Ordinance No. 24 of 1993 (subsequently replaced by
Amendment Act No. 50 of 1993). Amendment Act No. 50 of 1993
also added ‘housing construction’ to the definition of ‘service’
under Section 2(o) of the 1986 Act. In the present case, it is
not denied that the Appellant 

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