NDLI: Lilavati Kirtilal Mehta Medical Trust Vs. M/s Unique Shanti Developers & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Consumer Protection Act ’Commercial Purpose’ under 1986 Explanation to s.2(1)(d)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Consumer Protection Act,1986– Explanation to s.2(1)(d) – ’Commercial Purpose’ under – When an activity/transaction is not for said purpose – Agreements to sell executed for 29 flats in 1995– Appellant-Trust took possession of said flats, constructed by respondent no.1, for providing hostel facilities to nurses employed by the Hospital run by the appellant – However, the structure became dilapidated and the appellant vacated the flats in 2002 – Complaint filed by the appellant before the National Commission– Initially, dismissed as barred by limitation– In review, the order was recalled, however the Commission again dismissed the complaint on the ground that the appellant was not ‘consumer’ u/s.2(1)(d) as the said section excludes a person who obtains goods and services for ‘commercial purpose’ – On appeal, held: Explanation clause to s.2(1)(d) was added by way of Ordinance No.24 of 1993 (subsequently replaced by Amendment Act No.50 of 1993) –Said Amendment Act also added ‘housing construction’ to the definition of ‘service’ u/s.2(o) – In the present case, the appellant validly took the possession of the flats constructed by respondent no.1 and paid consideration and can therefore be said to have availed of its housing construction services– Explanation to s.2(1)(d) is clarificatory in nature and only re-affirms the definition of ‘consumer’ as it already exists – Ultimately, whether or not a person is consumer or whether an activity is meant for commercial purpose will depend upon the facts and circumstances of each case – It is not the identity of the person but the purpose for which the transaction is made which is relevant – Hence, private corporate bodies such as the appellant may engage the services of third parties for the purpose of providing perquisites to their employees – If in all such cases the third party service-provider disclaims liability on the ground that the hirer of the service is engaged in trade and commerce, it will open Pandora’s box wherein the employer as well as the employees will not have any remedy – Purchase of the good/service should have close and direct nexus with profit-generating activity – There is no direct nexus between the purchase of flats by the appellant trust and its profit generating activities – Further, applying the dominant purpose test, it cannot be said that the provision of such hostel facilities is integral to the appellant trust’s commercial activities– Purchase of flats by the appellant for providing hostel facilities to the nurses is not even remotely related to the object of earning profits or for any commercial use as envisaged u/s.2(1)(d) and hence, does not qualify as meant for ‘commercial purpose’ – Appellant is ‘consumer ’ u/s.2(1)(d) for the present transaction under consideration– Impugned judgment set aside – Appeal restored before the National Commission, who is to decide the matter expeditiously.
Judge	Hon'ble Mr. Justice Mohan M. Shantanagoudar
Neutral Citation	2019 INSC 1243
Petitioner	Lilavati Kirtilal Mehta Medical Trust
Respondent	M/s Unique Shanti Developers & Ors.
SCR	[2019] 14 S.C.R. 563
Judgement Date	2019-11-14
Case Number	12322

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