If the commercial use is by the purchasers themselves for the purpose of earning their livelihood by means of self-employment, such purchasers of good would continue to be ‘consumers’ under Consumer Protection Act: Supreme Court of India.
(Rohit Chaudhary & Anr Versus M/s Vipul Ltd., Civil Appeal No.5858 of 2015, decided on September 06, 2023)
The Hon’ble Supreme Cout held that persons buying goods either for resale or for use in large scale profit making activity will not be a consumer entitled to protection under the Act, but if the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods would continue to be a ‘consumer’.
In the present case, the appellants had booked a commercial space in the project called ‘Vipul World with the M/s Vipul Ltd who was the Respondent for a sale consideration of Rs.51,51,415. The buyer’s agreement was executed between both Appellant and Respondent. The Respondent had agreed to deliver possession of the premises to the appellants within 24 months from the date of execution of such agreement but the same was not delivered. Aggrieved upon the non-delivery of the possession, the Appellants approached the Hon’ble National Consumer Redressal Commission for seeking refund.
The Hon’ble National Commission dismissed the complaint in limine on the ground of maintainability holding that appellants are not ‘consumers’ as defined under Section 2(1) (d) of the Act as appellants were already carrying on business for the purposes of their livelihood and therefore, it cannot be said that the property which was the subject matter of the complaint before the Commission was being purchased by them exclusively for the purposes of earning livelihood by way of self-employment. The Hon’ble Commission also opined that Commercial space booked by the appellants was for earning profit and not for the purpose of earning livelihood by way of self employment by relying upon the statement of Appellant No.1.
Appellants filed an Appeal before the Hon’ble Supreme Court against the decision of the Hon’ble National Commission.
The Appellants pleaded that the commercial space was booked only for the purpose of earning livelihood by way of self-employment and not for the purposes of reselling or making profit.
While the Respondent contended that Appellants would not fall within the four corners of the definition of ‘consumer’ as defined under Section 2(1)(d) of the Act as commercial space was not booked for the purposes of earning livelihood by self-employment and the statement of the Appellant No.1 recorded on oath by the commission while hearing the maintainability of the complaint, clearly shows that First Appellant was earlier engaged in the business of caustic soda as a dealer of M/S Reliance Industries and presently engaged in the business of investments/dealing in property, and this would indicate that Appellants were already engaged in the business and therefore, the property in question could not be said to be bought exclusively by the appellants for the purpose of earning their livelihood by self-employment.
The Hon’ble Supreme Court allowed the Appeal of the Appellants by making the following observation:
“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. The words ‘for any commercial purpose’ must be understood as covering the cases other than those of resale of the goods. Thus, it is obvious, that Parliament intended to exclude from the scope of 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. Thus, persons buying goods either for resale or for use in large scale profit making activity will not be a consumer entitled to protection under the Act, which would be a plain interpretation of this definition clause.”
“When there is an assertion in the complaint filed before the Consumer Court or Commission that such goods are purchased for earning livelihood, such complaint cannot be nipped at the bud and dismissed. Evidence tendered by parties will have to be evaluated on the basis of pleadings and thereafter conclusion be arrived at. Primarily it has to be seen as to whether the averments made in the complaint would suffice to examine the same on merits and in the event of answer being in the affirmative, it ought to proceed further. On the contrary, if the answer is the negative, such complaint can be dismissed at the threshold. Thus, it would depend on facts and circumstances of each case. There cannot be any defined formula with mathematical precision to examine the claims for non-suiting the complainant on account of such complaint not falling within the definition of the expression ‘consumer’ as defined under Section 2(1)(d).”
The Hon’ble Supreme Court also held that complaint filed before the Commission would indicate that Appellants have specifically pleaded that they were in search of office space “for their self-employment and to run their business and earn their livelihood”.
Read the full Judgment here 
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