Consumer Dispute Over Photo Lab Machines Dismissed: Commercial Use Disqualifies Complainant.


26 November 2024 Civil Appeals >> Civil & Consumer Law   |   Consumer Protection Act >> Consumer Rights  

The National Consumer Disputes Redressal Commission (NCDRC) has dismissed two appeals filed by M/s. Nitesh Colour Lab, challenging the dismissal of their complaints against M/s. Jindal Photo Film Ltd. & Ors. The core issue revolved around the purchase and alleged defects of two digital mini lab frontier machines, and whether the complainant qualified as a "consumer" under the Consumer Protection Act.

The complainant had purchased the machines, which were imported from Japan, for their photo development business. Shortly after the purchase, they reported malfunctions and defects, leading to customer complaints. Despite attempts at rectification by the supplier, the issues persisted. Subsequently, the complainant filed complaints with the State Consumer Dispute Redressal Commission, Delhi, seeking repair, replacement, or compensation for the defective machines.


 

 

However, the State Commission dismissed the complaints, citing that the machines had been sold by the complainant during the pendency of the proceedings. This sale, according to the Commission, precluded any determination of manufacturing defects and rendered the complainant ineligible for relief.

The NCDRC, in its recent ruling, upheld the State Commission’s decision. The pivotal question before the NCDRC was whether the complainant's purchase of the machines constituted "commercial purpose" or "self-employment." The court applied a two-fold test, determining whether the goods were purchased for resale or commercial use, or if the services were availed for commercial purposes.

The NCDRC noted that the complainant operated a partnership business, utilizing the machines in a substantial commercial setup, including a large operational capacity and a dedicated workforce. This, coupled with the fact that the machines were sold as part of a settlement with a financial institution before the Debt Recovery Tribunal, indicated a clear commercial intent.

The NCDRC referenced the Hon’ble Supreme Court’s interpretation of "commercial purpose" and "self-employment" in previous cases. It highlighted that while self-employment for livelihood qualifies as consumer use, large-scale commercial operations do not. In this instance, the complainant’s business model and operational scale clearly fell under the commercial purpose category.

Furthermore, the NCDRC emphasized the absence of any expert evaluation of the machines to substantiate the complainant's claims of manufacturing defects. The sale of the machines, as ruled by the state commision, made it impossible to conduct such an evaluation.

The NCDRC also cited precedents where complainants who disposed of goods during proceedings were deemed ineligible for relief under the Consumer Protection Act.

Consequently, the NCDRC dismissed the appeals, affirming that the complainant did not qualify as a "consumer" under the Act. The court, however, granted the complainant the liberty to pursue their grievances in appropriate legal forums, with potential benefits under the Limitation Act for the time spent in the consumer court proceedings.

This ruling underscores the importance of distinguishing between commercial use and self-employment in consumer disputes, and the impact of disposing of goods during legal proceedings on the complainant’s eligibility for relief.


Section 13, CONSUMER PROTECTION ACT - 2019

Consumer Protection Act, 1986

Section 14, Limitation Act - 1963  

Limitation Act, 1963