Case: Laxmi Engg.Works Vs. Psg Industrial Institute

THE FACTUAL MATRIX :3. The appellant, Laxmi Engineering Works, is a proprietary concern established under the Employment Promotion Programme. It is registered as a small scale industry with the Directorate of Industries, Maharashtra and has also obtained financial assistance from Maharashtra State Finance Corporation in the form of term loan amounting to Rs. 22.10 lakhs besides financial assistance from certain other sources. The appellant placed an order with the respondent - P.S.G. Industrial Institute for supply of PSG 450 CNC Universal Turning Central M The appellants case is that the respondent not only supplied the machinery six months beyond the stipulated date but supplied a defective machine. Soon after it was installed and operated, several defects came to light which the appellant brought to the notice of the respondent. A good amount of correspondence took place between the parties and though the respondent sent some persons to rectify the defects, the machine could not be put in proper order. The appellant states that he was suffering serious financial loss on account of the defective functioning of the machine and accordingly he lodged a complaint (No. 116 of 1992) before the Maharashtra Consumer Disputes Redressal Commission claiming an amount of Rs. 4, 00, 000/- on several counts from the respondent. The respondent appeared before the State Commission and denied the appellants claim. Inter alia, it raised an objection that since the appellant has purchased the machine for commercial proposes he is not a consumer within the meaning of the said expression as defined in Section 2(1)(d) of the Act. The Commission allowed the appellants claim partly, directing the respondent to pay to the appellant a sum of Rs. 2.48 lakhs within 30 days failing which the said amount was to carry interest at the rate of 18% per annum. The respondent filed an appeal before the National Commission which allowed the said appeal on 7th December, 1993 on the only ground that the appellant is not a "consumer" as defined by the Act. The National Commission observedthe facts appearing on record it is manifest that the complainant is carrying on the business of manufacture of machine parts on a large scale for the purpose of earning profit and significantly one single item of machinery in respect of which the complaint petition was filed by him before the State Commission itself is of the value of Rs. 21 lakhs and odd. In the circumstances, we fail to see how the conclusion can be escaped that the machinery in question which is alleged to be defective was purchased for a commercial purpose. Hence, the complainant is not entitled to be regarded as a consumer and the complaint petition filed by him was not maintainable before the State Commission. The order passed by the State Commission is set aside. The complaint petition is dismissed."National Commission, however, observed that their order does not preclude the appellant from pursuing his remedy by way of ordinary civil suit.

Court's reasoning:
11. A review of the provisions of the Act discloses that thebodies/authorities/agencies created by the Act known as District Forums. State Commissions and the National Commission are not Courts though invested with some of the powers of a Civil Court. They aretribunals brought into existence to render inexpensive and speedy remedies to consumers. It is equally clear that these Forums/Commissions were not supposed to supplant but supplement the existing judicial system. The idea was to provide an additional forum providing inexpensive and speedy resolution of disputes arising between consumers and suppliers of goods and services. The forum so created is uninhibited by the requirement of court fee or the formal procedures of a court. Any consumer can go and file a complaint. Complaint need not necessarily be filed by the complainant himself; any recognized consumers association can espouse his cause. Where a large number of consumers have a similar complaint, one or more can file a complaint on behalf of all. Even the Central Government and State Governments can act on his/their behalf. The idea was to help the consumers get justice and fair treatment in the matter of goods and services purchased a hem in a market dominated by large trading and manufacturing bodies. Indeed, the entire Act revolves round the consumer and is designed to protect his interest. The Act provides fordisputes and not fordisputes. This scheme of the Act, in our opinion, is relevant to and helps in interpreting the words that fall for consideration in thisthere is certainly some logic in the said submission it cannot be accepted in view of the language of the Explanation. We are also of the opinion that the definition of the expression "person" in Section 2(1)(m) as including a firm (whether registered or not), a Hindu Undivided Family, asociety or any other association of persons (whether registered under the Societies Registration Act, 1860 or not) makes no difference to the above interpretation. If a firm purchases the goods, the members of the firm should themselves ply, operate or use the goods purchased. Same would be the case of purchase by Hindu Undivided Family,society or any other association of persons. Reference in this behalf may be made to the definition of the expression "consumer" in Section 20(6) of the Consumer Protection Act, 1987 of Unitedvirtue of Section 18 the procedure prescribed in Section 13 applies to the State Commission as well. From the above provisions, it is clear that the orders of the District Forum, State Commission and National Commission are final as declared in Section 24 and cannot be questioned in a Civil Court. The issues decided by the said authorities under the Act cannot bein a Civil Court. The said provisions make it equally clear that the Forums created by the Act fall in the second category of Tribunals mentioned in TheQueen v. Commissioner for Special Purposes of the(1888)21 Q.B.D. 313 at p. 319)which decision has been repeatedly affirmed and applied by this Courtwhich means that the Forums/Commissions under the Act have jurisdiction to determine whether the complainant before them is a "consumer" and whether he has made out grounds for grant of relief. Even if the Forum/Commission decides the said questions wrongly, their orders made following the procedure prescribed in(1) and (2) of Section 13 cannot be questioned in a Civil Courtexcept of course, in situations pointed out in Dhulabhai v. State of M.P., 1968 (3) SCR 662. They can and must be questioned only in the manner provided by the Act.THE EXPLANATION IS CLARIFICATORY :16. Yet another clarification : the Explanation, in our opinion is only explanatory; it is more in the nature of a clarificationa fact which would become evident if one examines the definition (minus the explanation) in the context and scheme of the enactment. As indicated earlier, the Explanation broadly affirms the decisions of the National Commission. It merely makes explicit what was implicit in the Act. It is not as if the law is changed by the said Explanation; it has been merely made clearer.