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

3. The brief facts of the case in nutshell are ases Society Snehanjali Girls Hostel is a society registered under the Societies Registration Act vide society registration no.Guj/525/Surat and also a trust registered, vide its Trust registration no. F/430/Surat. Theis a charitable institution running a girls hostel at Surat for the benefit of Adiwasi children. On 02.02.2000, thepurchased vitrified glazed floor tiles from respondent no.5 (since deleted from the array of parties vide Court?s order dated 01.04.2015) who was a local agent of respondentfor a sum of Rs.The said tiles, after its fixation in the premises of the hostel, gradually developed black and white spots. The appellant no.1 wrote several letters to respondent no.4 i.e., Sales Executive of respondentinforming about the inferior and defective quality of the tiles. Thereafter, the respondentagent visited the spot but failed to solve the issue.4. An architect J.M. Vimawala was appointed by theto assess the damage caused due to defective tiles. The architect assessed the loss to the tune of Rs.4,27,712.37 which included price of the tiles, labour charges, octroi and transportation charges. Thereafter, theserved a legal notice dated 12.08.2002 to the respondents making a demand of the said amount but no response was shown by the respondents.5. The said inaction on the part of the respondents made theto file a Consumer Complaint No. 743 of 2002 against the respondents before the District Consumer Disputes Redressal Forum at Surat (for short ?the District Forum?) for claim of the said amount.6. The District Forum appointed a Court Commissioner to examine and find out the manufacturing defects in the tiles as claimed by theAfter examination, the Court Commissioner submitted a report dated 21.09.2004 stating therein that the tiles were having manufacturing defect.7. The District Forum vide its order dated 31.12.2005 held that the tiles supplied by the respondents had manufacturing defect. The respondents committed an unfair trade practice by supplying such defective tiles. By holding the respondents jointly and severally liable, the District Forum directed the respondents to pay to the appellants a sum of Rs.2,00,000/along with interest @9% p.a. from the date of complaint i.e., 31.10.2002 till its recovery. The respondent no.1 was directed to pay the above amount to the appellant within a period of 30 days from the date of order of the District Forum.8. Being Aggrieved, the respondents filed First Appeal No. 741 of 2006 before Gujarat State Consumer Dispute Redressal Commission, Ahmedabad (for short ?the State Commission?) challenging the said order of District Forum urging various grounds.9. The State Commission dismissed the said First Appeal of the respondents by its order dated 12.10.2006 and confirmed the order passed by the District Forum.

Court's reasoning:
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