An amendment to the Consumer Protection Act, 2003, re-classified the individuals who could classify as a consumer, by leaving outside the Act’s purview those individuals purchasing a product for resale or commercial purposes. The explanation in the Act itself reads ,”for the purpose of this clause "commercial purpose" does not include use by any person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment”
It is an interesting topic due to the sheer cluelessness surrounding it, which we will now witness with the help of a few notable cases.
Laxmi Engineering Works v PSG Industries [1]lay down demarcation between what classifies as commercial purposes and what doesn’t. The main point of differentiation between the two is based on what the goods purchased are to be used for, rather than the value of them. However, it is not as simple as it seems. The terms commercial purposes, livelihood and self-employment have not been explicitly defined in the Act, and thus is open to the interpretation of the judges, with respect to the facts of the case. As we can see from the case Bhupendra Guna v Regional Managers,[2] purchase of commodity for livelihood purposes does not amount to commercial use. In the case, the purchase of a tractor by a farmer to till his own land did not amount to commercial purpose, despite it being used for the purpose of growing crops, which would then be sold. Juxtapose this with Suzuki Motorcycles India v Nagana Roadlines,[3] where in the 26 crank shaft lines (used in the process of making their bikes), and subsequently (inadvertently) destroyed in an accident, was deemed to be purchased for “commercial purposes” by Suzuki. The line differentiating the two is very thin indeed.
A general rule that can be formed is that irrespective of the purpose of use of the products purchased, if there is a deficiency during the warranty period, the complainant’s complaint will fall within the purview of the Consumer Protection Act. In E.P Moosa v Chowgle Industries,[4] the EPBAX system purchased by the complainants for their hotel. In Super Computer Centre v Globiz Investment,[5]computers purchased from the opposite party by the complainant for the latter’s business, were not deemed to be purchased for commercial purpose by the court due to the defects occurring during the warranty period. However, just as one thinks one has found an aspect that is uniform in an otherwise ambiguous topic, one is sadly mistaken. In the case Meera industries v Modern Constructions,[6] the Court held that the defect occurring in a product purchased for commercial purpose could not be a consumer even if the defects were detected within the period of warranty. Ambiguity and un-uniformity once again prevail.
Thus, perhaps the only thing that is clear to a reader of this essay is how unclear the realm of goods purchased for “commercial purpose” is with respect to Consumer Protection. The judgment in Laxmi v PSG, although seeks to clear uncertainty, does anything but. The statement in the judgment that these cases will be decided on a case by case basis, is itself worrisome. Judgments have been contradictory, to say the least. It has been 13 years since years since the amendment to Section 2 of the Act took effect, yet we are no further in understanding where the law stands on this issue. A good place to start, certainly, would be to amend the Consumer Act to define the terms commercial purposes, livelihood and self-employment.
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