11/05/2025, 22:52 M/S M.P.M. Steels vs M/S Telco & Anr.

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State Consumer Disputes Redressal Commission

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11/05/2025, 22:52 M/S M.P.M. Steels vs M/S Telco & Anr. on 8 August, 2023

FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023

IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL

Date of Institution : 02.08.2016

FIRST APPEAL NO. 364/2016

IN THE MATTER OF
M/S M.P.M STEELS
THROUGH ITS PARTNER MR.AMIT MUDGAL
16-B, ASAF ALI ROAD
NEW DELHI
(Through:, Mr. Nikhil Kataria, Advocate)
...Appellant
VERSUS
1. M/S TELCO
THROUGH ITS CHAIRMAN-CUM-MANAGING DIRECTOR
24, HOMI MODY STREET, FORT, MUMBAI
(Through: Mr. Deepak Joshi, , Advocate)
2. A-ONE MOTORS/MIRKANA ENGINEERING PVT.LTD
A-19. MCIE, MATHURA ROAD
NEW DELHI-110044
(Through: Mr.Kunal Jagga & Mr. Mohit Thareja, Advocates)

...Respondents

ALLOWED PAGE 1 OF 13
FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023

CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
HON'BLE MR. J.P. AGRAWAL, MEMBER (GENERAL)

Present: Mr. Nikhil Kataria, counsel for the Appellant.

PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

JUDGMENT

1. The Brief facts of the case as per District Commission record are:

"In brief the case of the case of the complainant is that it is a partnership firm under the name and style of M/s M.P.M.
Steels specialist in stainless steel pipes and pipes fitting, industrial walves and stockist in sheets, plates, rodes/wires etc.
Complainant purchased Telco Indica Diesel DLX V2 Bharat Stage II Diesel driven fuel efficient vehicle Saphire Gold
Car for Rs.4,21,424/- vide invoice No.13041 dated 15.4.02 through OP- 2, an authorized dealer of OP-1. Complainant
found to its dismay that the car was not performing to its optimum. This fact was brought to the notice of OP-1 and the
car was taken to the workshop of OP-2 number of times. However the defects were not rectified. Complainant has prayed
that OP-1 be directed to replace the car and in case OP does not replace the car, then ALLOWED PAGE 2 OF 13
FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023 OP-1 be directed to refund a sum of
Rs.4,21,424/- with interest @ 24% p.a. and also to pay a sum of Rs.2 lakhs for compensation and Rs. 25,000/- for
litigation expenses.

2. The District Commission after taking into consideration the material available in record, passed the order dated 06.05.2016
whereby it held as under -

"We are not convinced with the contention of Ld. Counsel for complainant. There is no doubt that partnership is also a
person but the fact is that the car was purchased by a firm which is engaged in commercial purposes. Section 2(1) (d) of
Consumer Protection Act 1986 which defines 'consumer' as under:-

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"(d) 'consumer', means any person whobuys any goods for a consideration which has been paid or promised or partly paid
and partly promised, or under any system of deferred payment and includes any user of such goods other than the person
who buys such goods for consideration paid or promised or partly paid or party promised or under any system of deferred
payment when such use is made with the approval of such person but does not include a person who obtains such goods
for resale or for any commercial purpose; or resale or for approval of such person but does not include a person who
obtains such goods for resale or for any commercial purpose; or hires or avails of any services for a consideration which
has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any
beneficiary of such ALLOWED PAGE 3 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D:
08.08.2023 services other than the person who hires or avails of the service for consideration paid or promised, or partly
paid or party promised, or under any system of deferred payment, when such services are availed of with the approval of
first mentioned person, but does not include a person who avails of such services for any commercial purpose.

[Explanation For the purposes of this clause, 'commercial purpose' does not include use by a person of goods bought and used
by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment.]"

It is useful to refer to case of General Motors India Pvt. Ltd. - Appellant Vs G.S. Fertilizers (P) Ltd. & Anr. -Respondents
- wherein para -9, Hon'ble National Commission held as under:-

"Para-9 - We have heard learned Counsel for both parties and have gone through the evidence on record. We note that in
his complaint before the State Commission the Respondent- Complainant had clearly stated that the vehicle was
purchased for the use of its Managing We agree with Appellants' contention that this clearly amounts to its purchase for a
commercial purpose' since the Managing Director of a private limited company would obviously not use this vehicle for
self-employment to earn his livelihood but for 'commercial purposes' as a perk of his office.

ALLOWED PAGE 4 OF 13
FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023

Counsel for the Respondent-Complainant has sought to challenge this contention by pointing out that since the present
case pertains to 1999 and the amendment referred to was made only in 2002, it was not applicable in the instant case. We
are unable to agree with this contention as well because the 2002 Amendment to the Act pertains to Section 2(1)(d) (ii) of
the Act relating to hiring or availing of services for a consideration and not to section 2(1)(d)

(i) of the Act relating inter alia to purchase of goods has been well settled by the Hon'ble Supreme Court as far back as in
1995 in its judgment in Laxmi Engineering Works V. P.S.G. Industrial Institute, II(1995) CPJ 1(SC)=1995(3) SCC583,
wherein the Hon'ble Apex Court has ruled as follows:-

On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit-
making activity will not be 'consumers' entitled to protection under the Act. It seems to us clear that the intention of
Parliament as can be gathered from the definition section is to deny the benefits of the Act to persons purchasing goods
either for purpose of resale or for the purpose of being used in profit-making activity engaged on a large scale. It would
thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a
large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament
intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or
ALLOWED PAGE 5 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023 even for use
in some small venture which they may have embarked upon in order to make a living as distinct from large scale
manufacturing or processing activity carried on for profit. In order that exclusion clause should apply it is however
necessary that there should be a close nexus between the transaction of purchase of goods and the large-scale activity
carried on for earning profit."

It is nowhere averred in the entire complaint that vehicle in question was purchased by the firm to earn livelihood. The
complaint is not maintainable hence the same is dismissed. Copy of order be sent to the parties, free of cost, and
thereafter file be consigned to record room."

3. Aggrieved by the aforesaid order of the District Commission, the Appellant has submitted that the District Commission
failed to appreciate that the Appellant/Complainant is a consumer under the Consumer Protection Act, 1986. It is submitted that
the District Commission overlooked the fact that the car in question was not purchased for any commercial purpose. Rather it
was used only for the personal use of the partner, and as such the Appellant is very well covered under the definition of
Consumer under the Consumer Protection Act, 1986. Pressing the aforesaid contentions, the Appellant has prayed that the
Imougned Order be set aside. Reliance has been placed upon Crompton Greaves Limited and Ors. vs. Daimler Chrysler India
Private Limited and Ors. reported in IV (2016) CPJ 469 (NC).
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4. The Respondent No.1 has filed its reply and has stated therein that the Appellant is not a consumer as defined under the
Consumer Protection ALLOWED PAGE 6 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D:
08.08.2023 Act,1986. It is submitted that the Appellant purchased the vehicle in question in the name of the firm 'M/S M.P.M
STEEL' and not in his individual name. It is further submitted that even the funds for purchase of the vehicle were utilized
from the said firm and as such, the Appellant falls outside the purview of the definition of 'consumer' as defined under the
Consumer Protection Act,1986. Pressing the aforesaid contentions, the Respondents have prayed that the Appeal be dismissed
with exemplary costs. Reliance has been placed upon the decision passed by the this Commission in Asha Lugani Vs. Premier
Automobiles Ltd. (III 1992 CP ) 61500)

5. The Respondent No.2 has filed its reply to the Appeal and has stated therein that the Impugned Order does not suffer from
any infirmity and the present Appeal is liable to be dismissed.

6. We have perused the material on record and heard the counsels for the parties at length.

7. The only question that falls for our consideration is whether the District Commission erred in holding that purchase of the
vehicle in question in the name of 'M/S M.P.M STEEL' amounts to commercial purpose and that the Complainant/Appellant
being a partnership firm cannot be a consumer.

8. To resolve this issue, we deem it appropriate to refer to Section 2 (1) (d) of the Consumer Protection Act,1986:

"Section 2(1)(d) Consumer" means any person who- i. buys any goods for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such
goods other ALLOWED PAGE 7 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023
than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any
system of deferred payment when such use is made with the approval of such person, but does not include a person who
obtains such goods for resale or for any commercial purpose; or ii. hires or avails of any services for a consideration
which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and
includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid
or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed
of with the approval of the first mentioned person [but does not include a person who avails of such services for any
commercial purpose.

Explanation - For the purpose of this clause, "commercial purpose" does not include use by a person of goods bought and
used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-
employment;

9. We further deem it appropriate to refer to the decision of the Hon'ble Supreme Court in Karnataka Power Transmission
Corporation & Ors vs Ashok Iron Works Pvt Ltd 2009 (3) SCC 240 wherein the issue before the Supreme Court pertained to
whether a private company purchasing electricity for commercial purpose can be included within the ambit of term consumer
under the Consumer Protection Act. The Apex Court while ALLOWED PAGE 8 OF 13 FA/364/2016 M/S M.P.M STEEL VS
M/S TELCO & ANR D.O.D: 08.08.2023 held that company can be a consumer within the definition of Section 2(1)(d)(i) of the
Consumer Protection Act, 1986 as under -

"Section 2(1)(m) which enumerates four categories namely,

(i) a firm whether registered or not; (ii) a Hindu undivided family; (iii) a co-operative society; and (iv) every other
association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not while defining
`person' cannot be held to be restrictive and confined to these four categories as it is not said in terms that `person' shall
mean one or other of the things which are enumerated, but that it shall `include' them.

Section 2(1)(m), is beyond all questions, an interpretation clause, and must have been intended by the Legislature to be taken
into account in construing the expression `person' as it occurs in Section 2(1)(d). While defining `person' in Section 2(1)(m),
the Legislature never intended to exclude a juristic person like company. As a matter of fact, the four categories by way of
enumeration mentioned therein is indicative, categories

(i), (ii) & (iv) being unincorporate and category (iii) corporate, of its intention to include body corporate as well as body un-
incorporate. The definition of `person' in Section 2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of
any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly"

ALLOWED PAGE 9 OF 13
FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023

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10. Therefore, the Hon'ble Apex Court has not left any room for confusion by widening the definition of "consumer" and has
included within its ambit corporate bodies. Thus, we are of the view that it is an established position of law that a corporate
body and a body un-incorporate can be a consumer as defined under the Consumer Protection Act, 1986.

11. In the present case, it is the contention of the Respondent that the vehicle in question has been purchased in the name of the
firm 'M/S M.P.M STEEL' and not in an individual partner's name, therefore the Appellant is not a consumer. However, in light
of the aforesaid discussion, it is clear that a firm can very well fall within the purview of a consumer as defined under the
Consumer Protection Act,1986. Therefore, the contention raised on behalf of Respondent is answered in the negative.

12. We further deem it appropriate to refer to Crompton Greaves Limited and Ors. vs. Daimler Chrysler India Private Limited
and Ors. reported in IV (2016) CPJ 469 (NC), wherein the National Commission held as under:

"4. Going by the dictionary meaning, a car or for that matter any goods obtained and the services hired or availed by a
company can be said to have been obtained or hired or availed for a commercial purpose, only if the said goods or
services are intrinsically connected with, or related to the business or commerce in which the company is engaged. The
acquisition of the goods or the hiring or availing of services, in order to bring the transaction within the purview of
section 2 (1) (d) of the Consumer Protection Act, therefore, should be aimed at generating profits for the company or
should otherwise be connected or interwoven with the business activities of the company. The purpose behind such
acquisition should be to promote, advance or augment the business activities of the company, by the use of such goods or
services. As observed by the Hon'ble Supreme Court in Laxmi Engineering Works (supra), it is not the value of the goods
but the purpose for which the ALLOWED PAGE 10 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR
D.O.D: 08.08.2023 goods are brought or put to use, which is relevant to decide whether the goods were obtained for a
commercial purpose or not. The same would be the position, where services are hired or availed by a company. If the
business activities of a company cannot be conveniently undertaken without the goods purchased or the services hired or
availed by a company, such purchase or hiring/availing as the case may be, would be for a commercial purpose, because
the objective behind such purchase of goods or hiring or availing of the services would be to enable the company to earn
profits by undertaking and advancing its business activities.

5. If a car or other goods are purchased or the services are hired or availed by a company for the personal use of its
directors or employees, the purpose behind such acquisition is not to earn profits or to advance the business activities of
the company. The purpose is to make certain facilities and amenities available to the directors and employees of the
company as a part of the incentive offered to them by the company, as a reward or remuneration for the work which they
are expected to perform for the company. It is not as if a company cannot run its business without providing such
facilities and amenities to its directors and employees. It is not necessary for the business of the company, to provide such
facilities and amenities to its directors and employees. Providing such facilities and amenities only motivates them to
perform their work in an efficient and congenial environment, besides serving as an incentive aimed at eliciting better
performance. The company does not earn profit merely by making a car or certain other goods or services available to its
directors and employees. Therefore, it would be difficult to say that such goods are purchased or the services are hired or
availed by the company for a commercial purpose."

13. Relying on the above settled law, we hold that the Appellant is a "Consumer‟ under the Consumer Protection Act, 1986, as
the said car was purchased for the personal use of the partners and the dominant purpose behind such purchase was not to earn
profits or to advance the business ALLOWED PAGE 11 OF 13 FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR
D.O.D: 08.08.2023 activities of the firm. The Respondents have not placed on record any cogent material or substantiated
evidence to show that the dominant purpose behind such purchase had a direct and close nexus with any activity geared
towards commercial gain. Mere bald averments that the car was purchased for commercial purpose devoid of any substantiated
evidence cannot be the ground to decide a claim against the Appellant. Therefore, the contention raised on behalf of
Respondent is answered in the negative.

14. Therefore we hold that the District Commission erred in holding that the vehicle was purchased for commercial purpose
and that the Complainant/Appellant being a partnership firm cannot be a consumer. As discussed in para supra, the
Complainant/Appellant falls in the category of consumer as provided by the Consumer Protection Act, 1986.

15. In view of aforesaid discussion, the Appeal is allowed and order dated 10.05.2022 passed by District Consumer Disputes
Redressal Commission-X, Udyog Sadan, C-22 & 23 Institutional Area, in Consumer Complaint No.571/2005 titled 'M/S
M.P.M. STEELS VS M/S TELCO & ANR' is set aside.

16. The matter is remitted back to the District Commission-X, Udyog Sadan, New Delhi to decide the Consumer Complaint
afresh, in accordance with the law. Both the parties are directed to appear before the said Commission on 20.09.2023.

17. Application(s) pending, if any, stand disposed of in terms of the aforesaid judgment.

18. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.

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ALLOWED PAGE 12 OF 13
FA/364/2016 M/S M.P.M STEEL VS M/S TELCO & ANR D.O.D: 08.08.2023

19. File be consigned to record room along with a copy of this Judgment.

JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT) PINKI MEMBER (JUDICIAL) J.P. AGRAWAL MEMBER
(GENERAL) Pronounced on:

08.08.2023 ALLOWED PAGE 13 OF 13

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