Case: LILAVATI KIRTILAL MEHTA MEDICAL TRUST Vs. M/S UNIQUE SHANTI DEVELOPERS

therefore improve the employing entity?s overall productivity. However this is a duty to be shared by all employer organisations and not merely those looking to increase their productivity/profits. This obligation exists irrespective of how much profit or turnover the organization generates in a year, though the degree to which it extends may differ depending upon the financial capacity of the employer. Hence private corporate bodies such as the Appellant trust may engage the services of third parties for the purpose of providing perquisites to their employees. For example, an employer may book flight tickets or train tickets for an employee so as to facilitate their travel in the ordinary course of business. If any negligence occurs resulting in injury to the employee or their property, the airline/railway company cannot disclaim liability on the ground that the activity was carried out for a ‘commercial purpose?. As discussed earlier, if in all such cases the third party service-provider disclaims liability before consumer forums on the ground that the hirer of the service is engaged in trade and commerce, it will open a Pandora?s box wherein the employer as well as the employees will not have any remedy. This would defeat the object of providing a speedy remedy to consumers, as outlined in the provisions of the 1986 Act. Further, setting such a precedent may discourage employers from undertaking to provide any facilities for their employees. Hence, it is necessary to clarify that the provision of such services would not usually be included in the definition of ‘commercial purpose.? 7. To summarize from the above discussion, though a straight- jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is ‘for a commercial purpose?: (i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, ‘commercial purpose? is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities. (ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity. (iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. (iv) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of ‘generating livelihood by means of self- employment? need not be looked into. 8. Applying these principles to the facts of the present case, we find that there is no direct nexus between the purchase of flats by the Appellant trust and its profit generating activities. The flats were not occupied for undertaking any medical/diagnostic facilities within the hospital but for accommodating the nurses employed by the hospital. Moreover, the flats were being provided to the nurses without any rent. It is not the Respondents? case that the Appellant was generating any surplus from occupying the flats or engaging in buying and selling of flats. It may be the case that provision of comfortable hostel facilities to the nurses, generates a feeling of gratitude and loyalty towards their employer and improves their overall efficiency, which indirectly results in the hospital gaining more repute and therefore generating more income. However, this is a matter of conjecture and there is no direct causal chain which can be drawn between provision of accommodation to hospital employees and increase in the Appellant?s profits. The decision in Kalpavruksha Charitable Trust (supra), relied upon by the Respondents, does not support them inasmuch as it was on a different set of facts. In that case, this Court held that the purchase of CT scan machines by a diagnostic centre would be included within the meaning of ‘commercial purpose?. There is an apparent direct nexus between the purchase of the machines, medical equipment, etc. and the running of a diagnostic centre/hospital. The present case does not involve any such purchase. 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. The paramount object of providing such facilities is to cater to the needs of nurses and combat the challenges faced by those who lack permanent accommodation in the city, so as to recompense the nurses for the pivotal role which they play as co-ordinators and custodians of patients? care. Nurses help in the speedy recovery of patients and are a vital resource for hospitals and medical centres inasmuch as they are the only resource available 24/7 for catering to patients? needs. They are directly involved in all aspects of hospital service quality, be it in the form of monitoring patients? recovery, bedside medication management or assistance with surgeries and other major operations. In some situations they are responsible for performing immediate interventions to prevent medical complications. They are on the frontlines of administering and evaluating treatment, and provide invaluable emotional support as they are best placed to understand the complexities and implications of having a serious illness. Hence the provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital so as to maintain the beneficial effects of the curative care efforts undertaken by it. Such a duty exists irrespective of the surplus or turnover generated by the hospital, and hence is not even remotely related to the object of earning profits or for any commercial use as envisaged under Section 2(1)(d). 9. Hence we find that the Appellant trust is a ‘consumer? under Section 2(1)(d) of the 1986 Act for the present transaction under consideration.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the present case, it is not denied that the Appellant has validly taken possession of the flats constructed by Respondent No. 1 and paid consideration for the same, and can therefore be said to have availed of its housing construction services4. Taking into account the material on record and the relevant jurisprudence on this issue, we are of the considered opinion that the purchase of flats by the Appellant for the purpose of providing hostel facilities to the hospital nurses does not qualify as meant for a ‘commercial purpose?. Though the term ‘commercial purpose? as referred to under Section 2(1)(d) has nowhere been defined under the provisions of the 1986 Act, this Court has expounded upon it based on its lateral dictionary meaning in various decisionsApplying these principles to the facts of the present case, we find that there is no direct nexus between the purchase of flats by the Appellant trust and its profit generating activities. The flats were not occupied for undertaking any medical/diagnostic facilities within the hospital but for accommodating the nurses employed by the hospital. Moreover, the flats were being provided to the nurses without any rent. It is not the Respondents? case that the Appellant was generating any surplus from occupying the flats or engaging in buying and selling of flatsIt may be the case that provision of comfortable hostel facilities to the nurses, generates a feeling of gratitude and loyalty towards their employer and improves their overall efficiency, which indirectly results in the hospital gaining more repute and therefore generating more income. However, this is a matter of conjecture and there is no direct causal chain which can be drawn between provision of accommodation to hospital employees and increase in the Appellant?s profitsThe decision in Kalpavruksha Charitable Trust (supra), relied upon by the Respondents, does not support them inasmuch as it was on a different set of factsThe present case does not involve any such purchaseFurther, 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. The paramount object of providing such facilities is to cater to the needs of nurses and combat the challenges faced by those who lack permanent accommodation in the city, so as to recompense the nurses for the pivotal role which they play as co-ordinators and custodians of patients? careNurses help in the speedy recovery of patients and are a vital resource for hospitals and medical centres inasmuch as they are the only resource available 24/7 for catering to patients? needs. They are directly involved in all aspects of hospital service quality, be it in the form of monitoring patients? recovery, bedside medication management or assistance with surgeries and other major operations. In some situations they are responsible for performing immediate interventions to prevent medical complications. They are on the frontlines of administering and evaluating treatment, and provide invaluable emotional support as they are best placed to understand the complexities and implications of having a serious illnessHence the provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital so as to maintain the beneficial effects of the curative care efforts undertaken by it. Such a duty exists irrespective of the surplus or turnover generated by the hospital, and hence is not even remotely related to the object of earning profits or for any commercial use as envisaged under Section 2(1)(d)9. Hence we find that the Appellant trust is a ‘consumer? under Section 2(1)(d) of the 1986 Act for the present transaction under consideration7. To summarize from the above discussion, though a straight- jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is ‘for a commercial(i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, ‘commercial purpose? is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity(iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary(iv) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of ‘generating livelihood by means of self- employment? need not be looked intoThe decision in Kalpavruksha Charitable Trust (supra), relied upon by the Respondents, does not support them inasmuch as it was on a different set of. In that case, this Court held that the purchase of CT scan machines by a diagnostic centre would be included within the meaning of ‘commercial purpose?. There is an apparent direct nexus between the purchase of the machines, medical equipment, etc. and the running of a diagnostic centre/hospital.The present case does not involve any such