Case: GMMCO LIMITED Vs. ECOVINAL INTERNATIONAL PRIVATE LIMITED

1. Leave granted. The Respondent purchased a 250 KVA Cat Diesel Generator Set from the Appellant on 09.12.2005. When the afore-stated generator set was installed at the factory premises of the Respondent at Kunigal, it was found to be defective. The Respondent brought the defects in the generator set to the notice of the Appellant, and asked the Appellant to either repair the same or to replace the generator set. The communication addressed by the Respondent to the Appellant did not receive any response from the Appellant. It is therefore, that the Respondent issued a legal notice to the Appellant on 17.05.2006. The Appellant did not respond to the legal notice. 2. The Respondent thereafter initiated proceedings under the Consumer Protection Act, 1986 (hereinafter referred to as the Act) before District Consumer Disputes Redressal Forum, Bangalore, (hereinafter referred to as the District Forum). Despite notice having been served of the said complaint on the Appellant, the Appellant did not enter appearance before the District Forum. The District Forum accordingly passed an order dated 2.11.2006 allowing the complaint of the Respondent. The District Forum directed the Appellant to replace the diesel generator set within two months, alternatively, the Appellant was directed to pay a sum of Rs. 11,50,000/- together with interest at the rate of 9% per annum from January, 2006 till the realization of the same. The Respondent was also awarded litigation cost of Rs. 5,000/-. 3. Dissatisfied with the order passed on 2.11.2006 by the District Forum, the Appellant approached the Karnataka State Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as the State Commission). The appeal preferred by the Appellant before the State Commission, was dismissed by an order dated 11.1.2007. The Appellant then assailed the orders passed by the District Forum and the State Commission through a revision petition before the National Consumer Disputes Redressal Commission, New Delhi, (hereinafter referred to as the National Commission). The National Commission, having taken into consideration the fact, that the Appellant had not appeared before the District Forum in-spite of service on it, and had been proceeded against ex-parte before the District Forum, and because, the Appellant had not controverted the averments made in the complaint by leading evidence to show, that the diesel generator set had been purchased by the Respondent for commercial purposes, declined to interfere with the orders passed by the District Forum, and the State Commission. 4. Dissatisfied with the order passed by the National Commission dated 18.01.2012, the Appellant approached this Court. 5. It was the contention of the learned counsel for the Appellant, that it was not necessary for the Appellant to have controverted the averments made by the Respondent before the District Forum. In this behalf, it is sought to be submitted, that the Respondent, in the pleadings before the District Forum, had itself acknowledged that it had purchased the 250 KVA CAT Diesel Generator set, for commercial purposes. Insofar as the instant aspect of the matter is concerned, learned counsel for the Appellant invited our attention to the pleadings in the complaint filed by the Respondent before the District Forum, wherein the complainant had inter alia averred as under: 3. The complainant submits that the complainant Company place an order under Invoice No. 0206 dated 9.12.2005 for supply of 250 KVA CAT DG Set. On the basis of the same the opposite party has supplied D.G. Set engine serial number IR 005288 Model No. 3306, somewhere in the month of January, 2006 by receiving Rs. 11,65,000/- (rupees Eleven Lakhs Sixty Five thousand) from the complainant company and the opposite party have issued an invoice for having accepted the said amount and the said D.G. Set installed by its engineers at the complainants plant at Kunigel. The copy of the invoice and the purchase order is at Document No. 1 and II respectively. 6. The complainant company is using this engine to its factory for the supply of current in round the clock basis, since the consumption of oil and diesel is very high it consumes 25 litres within 25 hours of its running. Thus, the complainant is losing every day Rs. 1,000/- being the additional usage oil and diesel in addition to loose of production. Thus, the opposite party has rendered service in deficiency of service and has caused mental agony to the complainant company and as such the complainant has filed the above complaint towards the services rendered by the opposite party deficiency of service. Hence the complainant is entitled is as follows. (emphasis is ours) Based on the afore-extracted pleadings, it was the contention of the learned counsel for the Appellant, that the Respondent had acknowledged in the complaint filed by it, that the diesel generator set purchased by the Respondent, was put to use in the factory premises of the Respondent. This acknowledgment, according to the learned counsel for the Appellant, establishes that the diesel generator set purchased by the Respondent was to be used for commercial purposes. 6. It was the contention of the learned counsel for the Appellant, that provisions of the Act are inapplicable in respect of any commercial activity other than for self-employment, and for earning an individual livelihood. It was submitted, that the pleadings from the complaint filed by the Respondent clearly establish, that the diesel generator set purchased by the Respondent was neither for self-employment nor for earning an individual livelihood. 7. Insofar as the instant aspect of the matter is concerned, learned counsel for the Appellant has placed reliance on the decision rendered by this Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute, AIR 1995 SC 1428 : (1995) 84 CompCas 121 : (1995) 3 JT 433 : (1995) 2 SCALE 626 : (1995) 3 SCC 583 : (1995) 3 SCR 174 : (1995) 2 UJ 253 . We have perused the aforesaid judgment. We are satisfied, that this Court, while interpreting the explanation under Section 2(d) of the Act, arrived at the express conclusion, that the above judgment declares the legal position, as has been expressed by the learned counsel for the Appellant. In the present case, the activity to which the Respondent had put the diesel generator set purchased from the Appellant, must be deemed to be a commercial activity, not limited to the earning of an individuals livelihood, by means of self-employment.

Decision reasoning: 1[ds]We are satisfied, that this Court, while interpreting the explanation under Section 2(d) of the Act, arrived at the express conclusion, that the above judgment declares the legal position, as has been expressed by the learned counsel for the Appellant. In the present case, the activity to which the Respondent had put the diesel generator set purchased from the Appellant, must be deemed to be a commercial activity, not limited to the earning of an individuals livelihood, by means of self-employment.