Synco Textiles Pvt. Ltd.
Vs.
Greaves Cotton & Company Ltd.

      This is an appeal filed by the appellant against the Order of the State Commission, Rajasthan dated September 16, 1989 dismissing his complaint-petition on the ground that the appellant is not a 'consumer' within the meaning of Section 2 (1) (d)(i) of the Consumer Protection act, 1986 (hereinafter called the Act) inasmuch as the purchase of the goods in question had been made by him for a 'commercial purpose'.

      The appellant company operates an oil mill to produce edible oils and oil cake from oil seeds. The plant and machinery in his factory are used for conversion of raw materials into finished goods. On August 19, 1986, the appellant purchased from the respondent company three generating sets for a total cost of Rs. 5,53,000/-. The grievance put forward in the complaint is that the generating sets supplied by the respondent company were found to be defective, in that one of the engines had an undersizod crank shaft and the rubber rings (gaskets) used in the three generating sets were of inferior quality, as a consequence of which water had entered into the engines. Since correspondence with the respondent company for replacement of the defective crank shafts and rubber rings/parrts etc. didnot yield any results, the complainant approached the State Commission with a claim for recovery of Rs.5,53,000/- being the amount paid by way of costs of the three enginees, Rs.10,000/- being the expenditure incurred by the complainant on repairs as well as a further sum of Rs.4 lakhs being the loss suffered by him as a result of equipment having to be kept idle for about five months.

      The state Commission considered at the outset the question whether the appellant is  a 'consumer' entitled to seek redressal under the provisions of the Act. It was held by the State Commission that since the purchase of the generating sets by the appellant was for a commercial purpose, namely for generating electricity in the appellants factory to be used for operating the machinery in the factory for purpose of commercial production, the appellant can not be regarded as a 'consumer' as per the definition of the said expression contained in Section 2(1)(d)(i) of the Act. The correctness of this conclusion is called in question in this appeal.

      In Section 2 (1) (d)(i), it is down that 'consumer' means -

"any person who buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or patly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose".

      The next part of the definition of the expression 'consumer' contained in sub-clause (ii) of Section 2 (1)(d) is of no relevance in this case as it relates to caes of hiring of services for consideration.

      From the definition extracted above, it is clearly seen that in relation to transactions of purchase of goods, Parilament has excluded from the scope of the definition any person who obtains goods for resale or for any commercial purpose. Since cases of resale have been separately referred to, it becomes obvious that the words "for any commercial purpose" are intended to cover cases other than those of resale of the concerned goods. The words 'for any commercial purpose' are wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profit. According to the meaning given in standard Dictionaries, the expression 'commercial' means -

"connected with, or engaged in Commerce ; mercantile; having profit as the main aim" (see Collins English Dictionary).

"Pertaining to commerce ; mercantile" (See Chamber's Twentieth Century Dictionary).

      The meaning of the expression 'commerce' as given in the dictionaries is :

"exchange of merchandise, especially on a large scale" (See the Concise Oxford Dictionary).

"interchange of merchandise on a large scale between nations or individuals : extended trade or traffic" (See Chambers Twentieth Century Dictionary).

      Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression 'consumer' any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making profit. As already indicated since resale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words "for any commercial purpose" must be understood as covering cases other than those of resale of the goods. It is thus obvious that Parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for resale but also those who purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit making activity will not be 'consumer entitled to protection under the Act. It seems to us clear that the intention of Parliament as can be gathered from the definition section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It  would thus follow that cases pf purchase of goods for consumption or use in the manugacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that the exclusion clause should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit.

      In the appeal-petition of the complainant it has been clearly averred that "the business of the appellant to earn money is by trading and dealing in edible oils, oil seeds and oil cakes. Plant and machinery are used  for conversion of raw materials into finished goods... the appellant bought and installed plant and machinery to consume them as a consumer by using them to produce an item to be traded for earning profit".

      The purchase of the generating sets was thus clearly for enabling the appellant company to carry on its commercial activity of manufacturing edible oils on a large scale for purposes of  trade. It was submitted before us on behalf of the appellant compaby that the generators were only intended as a "stand-by arrangement". In our opinion, even if this be so, it would not make any difference because their purchase was nonetheless for the purpose of being used to generate electricity for running the expeller machinery in the factory for commercial production of edible oils. There is a close and direct nexus between the purpose of purchase of the generating sets and the commercial activity of manufacturing of edible oils for trade carried on by the appellant company, since the generating sets were intended to be used, as and when the need arose, for generating electric current for manufacture of edible oils for the purpose of trade. We do not, therefore, find any reason to interfere with the view taken by the State Commission that the appellant is not a 'consumer'.

      The appeal accordingly fails and is hereby dismissed.