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Does Consumer Protection Apply to Car Purchased By Company For VP's Personal Use

In DARCL Logistics Ltd. v. Mercedes Benz India (P) Ltd., complaint was filed against Mercedes Benz India Private Limited and T&T Motors Limited.

The complainant 1 had purchased a ‘Mercedes Benz C 220’ Car from OP 2 for the personal use of Complainant 2, being Vice president of the company. The said car broke down during the rainfall in Delhi and was sent to OP 3 for repair.

However, till the finding of the present complaint, the complainants received more than five estimates for repair of the said car from the opposite parties, which in total amounted to more than the value of the car.
The car was not delivered by the OPs even after the lapse of 3 months due to which the complainants raised grievances to the OPs, alleging manufacturing defect in the vehicle resulting in deficiency of service and unfair trade practice.

OPs contended that the complainants cannot be stated to be a consumer under the Consumer Protection Act 1986 as the said car was purchased by the company for its Vice president and the same amounted to commercial purpose. Further, it was added that the vehicle was used in violation of the instructions contained in Owner’s manual and due to negligence, the car broke down. Cause for delay in repairing was due to the late approval by the Insurance company.

On the issue of the question whether the Complainant is a consumer or not, the State Commission referred 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 that, 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 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.

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.

Relying on the above settled law, we hold that the complainants are consumer under the Consumer Protection Act, 1986 as the said car was purchased for the personal use of the complainant no. 2 and the purpose behind such purchase was not to earn profits or to advance the business activities of the company. Therefore, the contention raised by the opposite parties that the complainants are not consumer holds no merit and hence dismissed.

On the issue of deficiency of service, the Commission observed that the fact that the complainant had purchased the vehicle in question on 26.11.2012 from opposite party no. 2 is not in dispute from the material on record. It is further clear from the record that the said vehicle broke down on 20.07.2013 and was taken to the garage of the opposite party no. 2 on the same day.
On perusal of record before us, it is clear that the said car was delivered by the opposite party no. 2 to the complainants after around 4 months from the date of the incident i.e. 20.07.2013. It is evident from the material before us that the opposite party no. 2 raised a bill of Rs. 10,51,565/-, which was paid by the insurance company but the complainants had to pay Rs. 12,565/- towards repair.
The opposite parties have failed to show any documentary evidence to this commission which shows that the car broke down on 20.07.2013 due to the negligence on the part of complainants or due to the violation of instructions contained in Owner’s manual. Mere bald statement of the opposite parties will not justify their action of delivering the said vehicle to the complainants after 4 months. Therefore, we are in consonance with the contention of the complainants that the said car suffers from some manufacturing defects which were suppressed by the opposite parties.
It is evident from the record before us that the vehicle in question was under warranty at the relevant time and some major defect was there that took 4 months for the opposite party no. 2 to resolve the issue. In our opinion, therefore, the complainant no. 2 was put to great inconvenience and remained without a vehicle for 4 months. There is no denying of the fact that the complainant no. 2 was at senior position and was the Vice President of the complainant no. 1.
Accordingly, we deem it proper that the complainants must get compensated for the deficient acts of the opposite party no. 2 and therefore, we direct the opposite party no. 2 to pay Rs. 2,50,000/- to the complainants as compensation for inconvenience, mental agony and harassment faced by the complainants and Rs. 50,000/- as litigation costs within three months from today.
 

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