Consumer Protection Act, 1986 – s.2(1)(d) – “consumer” – When not – Complainant-appellant (Company) filed complaint before the State Commission claiming deficiency in service stating that it purchased a software from the respondent but the software did not function properly; sought refund of the entire amount paid to the respondent – State Commission held that the complaint was not maintainable as the complainant was not a “consumer” as per s.2(1)(d) since purchase of the software license was for a commercial purpose – Order affirmed by National Commission – Correctness: Held: Complainant is a commercial entity – The purchase of goods/services (i.e., software) from the respondent was with a view to automate the processes of the company which were linked to generation of profit inasmuch as automation of business processes is undertaken not just for better management of the business but to reduce costs and maximise profits – Thus, the transaction of purchase of goods/services (i.e., software) had a nexus with generation of profits and, therefore, qua that transaction the appellant cannot be considered a consumer as defined in s.2(1)(d) – State Commission as well as the National Commission were justified in holding that the goods/services purchased/availed by the appellant were for a commercial purpose and therefore the appellant is not a “consumer” as per s.2(1)(d). [Paras 27, 28] Consumer Protection Act, 1986 – Explanation to s.2(1)(d) – “Commercial purpose”; “Self-employment” – An activity or transaction of purchase of goods/services availed, if for a commercial purpose or personal use – Determination: Held: The identity of the person making the purchase, or the value of the transaction, is not conclusive to determine whether the transaction or activity is for a commercial purpose – What is to be seen is the dominant intention or dominant purpose for the transaction i.e. whether it is to facilitate some kind of profit generation for the purchaser(s) and/or its/ their beneficiary – If it is found that the dominant purpose behind purchasing goods or services is for personal use and consumption of the purchaser, or is otherwise not linked to any commercial activity, the question whether such purchase is for generating a livelihood by means of self-employment need not be looked into – However, where the transaction is for a commercial purpose then it might have to be considered whether it is for generating livelihood by means of self-employment or not – There is a difference between a self-employed individual and a corporation – The goods purchased by a self-employed individual for self-use for generating livelihood would fall within the explanation even if activity of that person is to generate profits for the purpose of its livelihood – But where a company-complainant purchases a software for automating its processes, the object is to maximise profits and, therefore, it would not fall within the explanation of s.2(1)(d) of the 1986 Act. [Paras 16, 18]
Consumer Protection Act, 1986 – s.2(1)(d), s.2(1)(m) – “consumer”; “person”:
Held: Definition of “person” in s.2(1)(m) is inclusive and not exhaustive – Therefore, even an incorporated company could be a consumer within the meaning of s.2(1)(d) read with s.2(1)(m) of the 1986 Act. [Para 14]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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