Commercial transaction for livelihood comes under Consumer Protection Act

The Consumer

Protection

Act excludes from its purview goods and services for commercial purposes. The only exception to this rule is when goods are purchased or services are availed for earning livelihood.

In order to get the benefits of getting their grievances redressed under the

Consumer

Protection Act, even those who indulge in large scale commercial activity try to camouflage it as a business for earning livelihood. Consequently, consumer forums sometimes hastily jump to a conclusion that every complaint involving any commercial purposed is not maintainable.

Case

Study: Vimal Mehra of Delhi had booked a shop from Bhasin Infotech & Infrastructure Pvt. Ltd.. As there was a problem in getting possession, she file a complaint before the Delhi State Commission against the company and its authorized signatory Sarabjeet Singh Sahni.

The State Commission did not entertain the complaint and immediately rejected it, holding that Mehra was not a consumer and so the complaint was not maintainable. The reason for arriving at this conclusion was that Mehtra was earlier in clothes business which had closed down in the year 1972, so it could not be believed that the booking was for the purposes of earning livelihood by self‑employment. Besides, Mehra was a senior citizen, so it would not be expected that she would run the shop single‑handedly. The extent of area showed that the booking was for commercial purpose. Mehra appealed against this order.

The National Commission observed that it was wrong of the State Commission to reject the complaint right at the threshold, when Mehra had specifically stated that the shop was booked for earning livelihood. The entire gamut of the facts must be considered in totality instead of throwing out the complaint by unmindful repetition of the law regarding the exclusion in respect of transactions involving commercial purpose. Since Mehra had categorically stated that she wanted to acquire the shop for running a small showroom for selling clothes in the shopping complex in order to earn respectable livelihood by self‑employment, it was wrong to disregard this statement and brush it aside without even waiting for a response from the builders.

The National Commission refused to express any opinion on the issues of “commercial purpose” and “livelihood”, as these were questions of fact which would have to be decided on the basis of the pleading and evidence of both the parties.

By its order of August 2 delivered by the bench of Justice D.K. Jain and M. Shreesha, the National Commission remanded the case back to the State Commission with a direction to adjudicate in on merits as well as on maintainability after giving an opportunity to all the parties substantiate their respective contentions.

Conclusion: Whether a transaction is for large scale commercial activity, or for earning livelihood, is a question of fact which has to be decided on a case to case basis, as observed by the Supreme Court in Laxmi Engineering Works v/s P.S.G. Industrial Institute in Civil Appeal No. 4193 of 1995. If a consumer has averred that a transaction, though commercial in nature, is for earning livelihood, the question should be left open to be determined when the complaint is finally decided.

(The author is a consumer activist and has won the Govt. of India's National Youth Award for Consumer Protection. His e‑mail is jehangir.gai.columnist@outlook.in)


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