Case: Lourdes Sty.Snehanjali Girls Hostel&amp;Anr Vs. M/S H &amp; R Jhonson(I) Ltd

a consumer in terms of the definition under Section 2(d) of the Consumer Protection Act, 1986 as the purchase of tiles and laying in the same in the rooms of the girl?s hostel run by the appellant-Society is clearly not for any commercial purpose. The decision in M/s Kusumam Hotels Pvt. Ltd. case (supra) has no application to the present fact situation for the reason that in the said case complainant was a hotel and the tiles purchased by the hotel were for commercial purpose as the hotel business involves the act of profit making, whereas in the instant case the girl?s hostel in question is run by the appellant-Society as one among its various charitable activities for the benefit of adivasi students. The appellant-Society is supporting adivasi/tribal girls to pursue their education by providing hostel facilities. The expenses for the food and electricity are being paid by the inmates of the hostel. The appellant-Society is maintaining the hostel free of cost and no charges in the form of rent, repairs and maintenance are collected from the inmates. Thus, the appellant-Society cannot be considered as any commercial establishment striving for profit.21. Further, the National Commission while passing the impugned order has ignored certain facts which throws light on callous attitude on the part of the respondents viz., when the defect in the tiles were brought to the notice of the respondents by sending various letters, there was no action on their part. Later a local agent on behalf of the respondent no.1-Company visited the premises of the girl?s hostel and verified that the said tiles were defective and damaged. However, no proper attention was paid by the respondents towards the issue. Further, to assess the damage caused to the appellant-Society by the use of the said defective tiles, a registered architect and interior designer, J.M. Vimawala was hired by the appellant-Society, who in his report declared the tiles to be defective and assessed the damage to the appellant-Society to the tune of Rs.4,27,712.37. Thereafter, the appellant-Society made a demand of the said amount as damages from the respondents vide legal notice dated 12.08.2002. But the respondents did not pay any heed to the said notice as well. Because of such irresponsible and indifferent attitude on the part of the respondents, the appellant-Society was compelled to file Consumer Complaint No. 743 of 2002 before the District Forum.22. The District Forum, after appreciating the pleadings and evidence on record has rightly awarded Rs. 2 lakhs as damages to the appellant-Society towards defective tiles supplied by the respondents along with compensation towards mental harassment and cost of present proceedings with interest @9% p.a. from the date of complaint till its recovery. In concurring with the findings of the District Forum, the State Commission, after proper re-appreciation of the facts and evidence on record has rightly exercised its jurisdiction by dismissing the appeal of the respondents. The National Commission should not have interfered with the concurrent findings of fact recorded in the judgment impugned before it particularly having regard to the nature of the jurisdiction conferred upon it by Section 21 of the Consumer Protection Act, 1986. Section 21 of the aforesaid Act reads thus: ?21. Jurisdiction of the National Commission.? Subject to the other provisions of this Act, the National Commission shall have jurisdiction? (a) to entertain? (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore; and (ii) appeals against the orders of any State Commission; and (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.? 23. The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons. The National Commission has reversed the order passed by the State Commission by wrongly applying the decision of M/s Kusumam Hotels Pvt. Ltd. case (supra) to the set of facts in the present case. In the said case, the complainant was a hotel, it was considered to be a commercial entity and therefore, it was kept out of the purview of the definition of ?consumer? under Section 2(d) of the Consumer Protection Act, 1986. However, the National Commission has failed to appreciate the fact that in the present case, the appellant-Society is not a commercial establishment rather a registered society helping the adivasi students in their education by providing hostel facilities. The charges, if any, for accommodation in the hostel are for maintaining the hostel and not for making profit. Thus, the appellant-Society is consumer within the meaning of the term ?consumer? under Section 2(d) of the Consumer Protection Act, 1986. The National Commission has erroneously accepted the contention urged on behalf of the respondents in the revisional proceedings that supply of tiles to the appellant-Society by respondent no. 1 through its local agent is for commercial purpose. The said finding is based on the decision in M/s Kusumam Hotels Pvt. Ltd. case (supra), which case absolutely has no application to the fact situation.24. Therefore, the concurrent finding of fact recorded by the District and the State Commission has been erroneously interfered with by the National Commission by passing the impugned order, which is liable to be set aside. For the aforesaid reasons, the appeal of the appellant-Society must succeed.

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

Explanation:
1[ds]19. The facts of the instant case clearly reveal that the National Commission has erred in observing that theis a commercial establishment by completely ignoring the Memorandum of Association and byelaws of theBoth the District Forum as well as the State Commission have rightly held that theis a charitable institution and not a commercial entity.The National Commission has erred by applying the decision in M/s Kusumam Hotels Pvt. Ltd. case (supra) in holding that theis not a consumer in terms of the definition under Section 2(d) of the Consumer Protection Act, 1986 as the purchase of tiles and laying in the same in the rooms of the girl?s hostel run by theis clearly not for any commercial purpose. The decision in M/s Kusumam Hotels Pvt. Ltd. case (supra) has no application to the present fact situation for the reason that in the said case complainant was a hotel and the tiles purchased by the hotel were for commercial purpose as the hotel business involves the act of profit making, whereas in the instant case the girl?s hostel in question is run by theas one among its various charitable activities for the benefit of adivasi students. Theis supporting adivasi/tribal girls to pursue their education by providing hostel facilities. The expenses for the food and electricity are being paid by the inmates of the hostel. Theis maintaining the hostel free of cost and no charges in the form of rent, repairs and maintenance are collected from the inmates. Thus, thecannot be considered as any commercial establishment striving for profit.21. Further, the National Commission while passing the impugned order has ignored certain facts which throws light on callous attitude on the part of the respondents viz., when the defect in the tiles were brought to the notice of the respondents by sending various letters, there was no action on their part. Later a local agent on behalf of the respondentvisited the premises of the girl?s hostel and verified that the said tiles were defective and damaged. However, no proper attention was paid by the respondents towards the issue. Further, to assess the damage caused to theby the use of the said defective tiles, a registered architect and interior designer, J.M. Vimawala was hired by thewho in his report declared the tiles to be defective and assessed the damage to theto the tune of Rs.4,27,712.37. Thereafter, themade a demand of the said amount as damages from the respondents vide legal notice dated 12.08.2002. But the respondents did not pay any heed to the said notice as well. Because of such irresponsible and indifferent attitude on the part of the respondents, thewas compelled to file Consumer Complaint No. 743 of 2002 before the District Forum.22. The District Forum, after appreciating the pleadings and evidence on record has rightly awarded Rs. 2 lakhs as damages to thetowards defective tiles supplied by the respondents along with compensation towards mental harassment and cost of present proceedings with interest @9% p.a. from the date of complaint till its recovery. In concurring with the findings of the District Forum, the State Commission, after properof the facts and evidence on record has rightly exercised its jurisdiction by dismissing the appeal of the respondents. The National Commission should not have interfered with the concurrent findings of fact recorded in the judgment impugned before it particularly having regard to the nature of the jurisdiction conferred upon it by Section 21 of the Consumer Protection Act, 1986.The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons. The National Commission has reversed the order passed by the State Commission by wrongly applying the decision of M/s Kusumam Hotels Pvt. Ltd. case (supra) to the set of facts in the present case. In the said case, the complainant was a hotel, it was considered to be a commercial entity and therefore, it was kept out of the purview of the definition ofunder Section 2(d) of the Consumer Protection Act, 1986. However, the National Commission has failed to appreciate the fact that in the present case, theis not a commercial establishment rather a registered society helping the adivasi students in their education by providing hostel facilities. The charges, if any, for accommodation in the hostel are for maintaining the hostel and not for making profit. Thus, theis consumer within the meaning of the termunder Section 2(d) of the Consumer Protection Act, 1986. The National Commission has erroneously accepted the contention urged on behalf of the respondents in the revisional proceedings that supply of tiles to theby respondent no. 1 through its local agent is for commercial purpose. The said finding is based on the decision in M/s Kusumam Hotels Pvt. Ltd. case (supra), which case absolutely has no application to the fact situation.24. Therefore, the concurrent finding of fact recorded by the District and the State Commission has been erroneously interfered with by the National Commission by passing the impugned order, which is liable to be set aside. For the aforesaid reasons, the appeal of the