In a recent case, National Consumer Dispute Redressal Commission (NCDRC) questioned whether, for a particular purpose, a company could be termed a consumer. As per the Commission, the question has to be determined after examining the case’s facts and specificities.
In the instant case, the complainant had filed a complaint u/s 58(1) r/w Section 59 of the Consumer Protection Act,2019.
Issues before the Court:-
Whether the complainant company was a consumer as per the Act?
The Commission opined that a company is included in the definition of a ‘person’ as contained u/s 2(31) of Consumer Protection Act. For particular purposes, it meets the requirements of a ‘consumer’ as defined u/s 2(7) of Act,2019. The Commission also clarified the following:-
- A housing construction under the definition of service as per Section 2(42) cannot include constructing a commercial complex for commercial gains/activity.
- A commercial space, located in a commercial complex, of a company engaged in profit-making, is used commercially.
The Commission further opined that a direct reading of Section 7(ii) and Section 2(42) of 2019 Act that if a company has purchased commercial space for building a commercial complex cannot be defined as a ‘consumer’ Act of 2019.
To reach this conclusion, the Commission placed reliance on Lilavati Kirtilal Mehta Medical Trust vs Unique Shanti Developers wherein the Supreme Court held that if a company wants to file a case in the consumer fora, then the Court has to determine whether the company is a consumer or not based on facts of the case. There is no straight-jacket formula to determine the same.
While addressing another vital aspect of the case, the Bench added that a company purchasing a commercial space for its commercial complex is different from a company indemnifying its raw material, goods, lands etc.
In such cases, the purpose is indemnification against perils and directly related to its profit-generating activity; the ‘dominant purpose’ is not linked with its commercial activity. Therefore, it falls within the meaning of ‘consumer’ per Section 2(7).
Therefore, the Commission held that the company was not a consumer as per the 2019 Act, and therefore, the complaint was not maintainable.