Self-employed can also be a consumer

Dr Ram Kumar, a pathologist, ran two labs. He purchased a Lumax instrument for Rs 3,79,250 and its chemical kit costing Rs 1,20,000 manufactured by Lilac Medicare (now named Tosoh India).

Kumar alleged that the instrument was defective and sought a refund. Since the company did not agree, Kumar filed a complaint before the District Forum against Lilac as the manufacturer and Sharda Enterprises as the seller. The manufacturer contested the complaint and questioned its maintainability on the ground that the equipment had been purchased for commercial purpose.

The Forum upheld the objection and dismissed the complaint. Kumar appealed to the Haryana State Commission, which overturned the Forum's judgement and held the complaint to be maintainable, and remanded it back for adjudication on merits. Feeling aggrieved, the manufacturer questioned the decision by filing a revision before the National Commission.

A three-member bench of the National Commission comprising Justice R K Agrawal, Justice V K Jain and M Shreesha considered the issue. The Bench noted that even though goods purchased for commercial purpose are excluded from the ambit of the Consumer Protection Act, there is a proviso that if the purchase is for earning livelihood through self-employment, a complaint would be maintainable.

The Bench considered various Supreme Court decisions where the Apex Court had observed that the purchase of goods for resale or for generating profits is excluded from the purview of the Act. In contrast, if the buyer himself uses the goods (with or without the assistance of one or two other persons) for earning his livelihood through self-employment, he would be a consumer.

Interpreting the various rulings of the Apex Court, the National Commission concluded that a person engaged in commercial activities on a significant scale to make a profit would not be a consumer. Also, when there is a direct nexus of the goods purchased being utilised for large-scale commercial activity, he would not be considered a consumer. The test to determine whether a person is a consumer is the purpose for which the goods are bought, regardless of value.

The National Commission applied these principles to Dr Kumar's case. It observed that he had laboratories at two locations, one of which was looked after him and the other by a technician. Since only one technically qualified person was engaged in running the laboratories, the National Commission held Dr Kumar to be a consumer who had purchased goods for earning his livelihood.

Accordingly, by its order of January 6, 2020, delivered by Justice V K Jain on behalf of the Bench, the National Commission dismissed the revision. It upheld the order directing the District Forum to adjudicate the complaint on merits.

The writer is a consumer activist