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PETITIONER:

KALPAVRUKSHA CHARITABLE TRUST

Vs.

RESPONDENT:

TOSHNIWAL BROTHERS (BOMBAY)

DATE OF JUDGMENT: 12/10/1999

BENCH:

S.Saghir Ahmad, R.P.Sethi

JUDGMENT:

S. SAGHIR AHMAD, J.

This appeal was disposed of by us by our judgment

dated 12th August, 1999.

Mr. R.N. Keswani, appearing on behalf of the

appellant, has filed the instant Application stating that he

was the only counsel appearing on behalf of the appellant on

12.8.1999, but since he was busy in some other Court when

the matter was taken up by us, he could not come and argue

the appeal. He also stated that the counsel who was deputed

to make a mention that he (Mr. R.N. Keswani) was busy in

some other Court was not entitled to argue the appeal.

The appeal was heard by us in detail and elaborate

arguments were made on behalf of the appellant also, but

having regard to the fact that Mr. Keswani was the only

counsel in the appeal and he has stated that the other

counsel was not entitled to argue the appeal, we have heard

Mr. Keswani as also Mr. S.P.Mithal.

The main reliance on behalf of the appellant has been

placed on the decision of this Court in Laxmi Engineering

Works vs. P.S.G. Industrial Institute (1995) 3 SCC 583 in

support of the contention that the appellant was a

"consumer" within the meaning of the definition set out in

the Consumer Protection Act, 1986. The definition was

considered by us and it was held that since the machinery in

question was installed by the appellant for commercial

purpose, it would not be a "consumer".

It is contended by the counsel for the appellant that

the term "commercial purpose" has been considered by this

Court in the case of Laxmi Engineering Works (supra) and the

observation of National Commission that "commercial purpose"

would mean "profit-making activity on a large scale" was

approved and, therefore, the activity of the present

appellant would not be a commercial activity as no

"profit-making on a large scale" is involved. We do not

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agree. This Court in that decision had further held in para

21 as under :

"21. We must, therefore, hold that :

(i) The explanation added by the Consumer Protection

(Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993)

with effect from 18.6.1993 is clarificatory in nature and

applies to all pending proceedings.

(ii) Whether the purpose for which a person has bought

goods is a "commercial purpose" within the meaning of the

definition of expression 'consumer' in Section 2(d) of the

Act is always a question of fact to be decided in the facts

and circumstances of each case.

(iii) A person who buys goods and uses them himself,

exclusively for the purpose of earning his livelihood, by

means of self-employment is within the definition of the

expression 'consumer'."

Applying those tests, the Court in the case of Laxmi

Engineering Works (supra) held that the appellant was not a

`consumer' as the machinery in that case were not purchased

for self-employment, but were purchased for "commercial

purposes."

It is, therefore, clear that in spite of the

commercial activity, whether a person would fall within the

definition of "consumer" or not would be a question of fact

in every case. The National Commission had already held on

the basis of the evidence on record that the appellant was

not a "consumer" as the machinery was installed for

"commercial purpose". We have been again referred to

various documents, including the "Project document",

submitted by the appellant itself to the Bank for a loan to

enable it to purchase the machinery in question, but we

could not persuade ourselves to take a different view.

Learned counsel for the appellant then referred to the

case of Addl. Commissioner of Income Tax, Gujarat vs.

Surat Art Silk Cloth Manufacturers Association (1980) 121

ITR 1 wherein the activity of a charitable institution,

though commercial in nature, was held to be a part of the

charitable activity. This decision does not help the

appellant as it was a decision rendered under the Income Tax

Act and the question which we are considering here had not

arisen in that case.

Learned counsel for the appellant then referred to the

decision of this Court in Commissioner of Income Tax, New

Delhi vs. Federation of Indian Chambers of Commerce &

Industries, New Delhi, 1981 (3) SCR 489, and contended that

if the dominant object of the trust or institution is

charitable, the activity carried on by it would not be

treated as an activity for profit. It is contended on the

basis of the above decision that the activities carried on

by the appellant were not profit- oriented nor was there any

intention or object to carry on those activities to earn

profit. This again was the decision rendered under the

Income Tax Act and is not on the point involved in the

present case whether the appellant was a "consumer" within

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the meaning of the Consumer Protection Act, 1986.

In the instant case, what is to be considered is

whether the appellant was a "consumer" within the meaning of

the Consumer Protection Act, 1986, and whether the goods in

question were obtained by him for "re-sale" or for any

"commercial purpose". It is the case of the appellant that

every patient who is referred to the Diagnostic Centre of

the appellant and who takes advantage of the CT Scan etc.

has to pay for it and the service rendered by the appellant

is not free. It is also the case of the appellant that only

ten per cent of the patients are provided free service.

That being so, the "goods" (machinery) which were obtained

by the appellant were being used for "commercial purpose".

No other point was pressed before us. We, therefore,

maintain our judgment dated 12th August, 1999 even after

having heard Mr. Keswani who insisted for a hearing through

this Application. The Application shall be treated as

disposed of.