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

2. The Appellant?s case is that Respondent No. 1/Opposite Party No. 1 had developed two buildings ‘Madhuvan? with thirty two ‘1 BHK? flats in colony ‘Shanti Park? in Thane, Maharashtra. Out of these the Appellant/complainant trust took possession of 29 flats for provision of hostel facilities to nurses employed by Lilavati Hospital, which is run by the Appellant trust. 29 agreements to sell were executed in respect of each flat on 25.11.1995, which were registered on 16.3.1996, and entire consideration amount was paid for the same. The architect issued completion certificate in respect of the flats on 17.2.1997. The flats were used for the purpose of hostel facilities till 2002. However, within 2-3 years of completion of the project, because of alleged poor building quality, the structure became dilapidated. The appellant vacated the flats in 2002 and since 2004, the flats are lying unused. In the meanwhile, an interim Board of Trustees was constituted by this Court by order dated 21.5.2014 in SLP No. 3772/2014, which is a separate litigation concerning dispute over control of the appellant trust between different groups of trustees. The aforesaid interim Board of Trustees called for a structural report from M/s Raje Consultants, which submitted their report in September 2015 finding that the cost of repairs would be more than the cost of reconstruction. The appellant also claims that Respondent No. 1 obtained the occupation certificate for the flats by playing fraud upon the local municipal corporation. Hence the appellant filed Consumer Complaint No. 117/2016 before the National Commission claiming Rs 7,65,95,400/- in compensation on account of annual loss of rent from 2002 to 2015, cost of reconstruction of building ‘Madhuvan? and future loss of rent of Rs 35,00,000/- per year, along with Rs 5,00,000/- in damagesInitially, the National Commission by order dated 1.3.2016 dismissed the complaint as barred by limitation on the ground that cause of action for raising the complaint arose in 2004, the year since when the flats are lying unused; however the complaint was filed in 2016. Under Section 24A of the Consumer Protection Act, 1986 (‘1986 Act?) the period of limitation for filing a complaint is two years, hence the complaint was time-barred. The National Commission further held that the pending litigation between the trustees in SLP No. 3772/2014 (supra) is not sufficient to explain the delay as the dispute concerning constitution of Board of Trustees of the appellant trust arose in 2014 whereas it was not the appellant?s case that there was no competent Board of Trustees in 2004 when the cause of action aroseSubsequently the National Commission in the impugned judgment, hearing Review Application No. 76 of 2016 against the order dated 1.3.2016 (supra), found that it had incorrectly recorded in the aforesaid order that ‘conveyance deeds? of the 29 flats were registered on 16.3.1996, whereas what was registered by the appellants was actually agreements to sell. Hence on account of this error on the face of the record, the National Commission recalled the order dated 1.3.2016. However the National Commission again proceeded to dismiss the complaint, this time on the ground that the appellant trust was not a ‘consumer? within the meaning of Section 2(1)(d) of the 1986 Act as the aforesaid section excludes a person who obtains goods and services for a ‘commercial purpose?; that since providing hostel facility to the nurses is directly connected to the commercial purpose of running the hospital, and is consideration for the work done by them in the hospital, the appellant would not be a ‘consumer? under the 1986 Act. Hence this appeal.

Court's reasoning:
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