Order Date: Not Specified
Order Name: Jadar Group Coop. Jin Mill Limited Vs. Prakashchandra Suthar
Case No.: F.A. No. 833/2015
The National Consumer Disputes Redressal Commission (NCDRC), led by Dr. Inder Jit Singh, recently made an important ruling. The commission emphasized that the primary intent behind a transaction should be considered when determining if it serves a commercial purpose. Additionally, it clarified that a cooperative society, which operates as a welfare organization rather than a profit-driven entity, qualifies as a consumer under the Consumer Protection Act.
Case Background
In this case, the complainant was a cooperative society registered under the Gujarat Cooperative Societies Act, 1961. The society collects cotton from its farmer members, processes it into bales, and sells it on their behalf without aiming for profit. They ordered a Hydraulic Automatic Revolving Double Box Press from Vishwakarma Engineering Works, as quoted for Rs. 32,00,080. However, after making full payment and having the press installed, the society discovered that the delivered press did not match the quoted specifications. Instead, they received a Hydraulic Manual single-box press with lower capacity. Despite several requests for rectification, the manufacturer did not replace or fix the press. This led the society to file a complaint with the State Commission of Gujarat, which dismissed the complaint. The society then appealed to the National Commission.
Manufacturer’s Argument
The manufacturer contended that the cooperative society mentioned in its complaint to the State Commission that it was involved in the business of processing and selling cotton bales for agricultural purposes. Based on this, the State Commission ruled that the society did not qualify as a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986. The State Commission also noted that the society did not claim the machine was for self-employment or livelihood purposes. Since the cooperative society was engaged in business activities, it was argued that it could not be considered a consumer.
National Commission’s Observations
The National Commission referred to the Supreme Court’s decision in National Insurance Company vs. Harsolia Motors & Ors., which clarified that the nature of a transaction as commercial depends on the specific context and circumstances of each case. It also cited Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers, which held that a transaction aimed primarily at personal use or self-employment does not count as commercial. In Shriram Chits (India) Private Limited, the Court ruled that the burden of proving a transaction’s commercial intent lies with the service provider. Additionally, in Rohit Chaudhary & Anr. vs. Vipul Ltd., it was emphasized that a person qualifies as a consumer if goods are bought primarily for personal use or self-employment rather than for large-scale profit-making.
Judgment
The National Commission allowed the appeal and ruled that the cooperative society should be considered a consumer under the Consumer Protection Act because it operates as a welfare organization and not as a profit-driven entity. Consequently, the State Commission’s dismissal of the complaint was incorrect. The case was sent back for a fresh review on its merits.
Takeaway
This judgment underscores the importance of the primary intent behind a transaction when determining if it serves a commercial purpose. Even organizations involved in some form of business can be considered consumers if their primary purpose is welfare and not profit.
