Commercial entities can now seek the help of consumer forums for complaints about goods purchased or services hired by them for personal use by their directors or employees.
A full bench of the national consumer commission — comprising president DK Jain and members VK Jain and Dr BC Gupta — held last week that goods and services purchased by a company for personal use by its directors or employees, do not amount to purchase for a commercial purpose.
The bench said it was immaterial whether the goods or services were used solely for personal purposes or used primarily for personal purposes and incidentally for company purposes.
The Consumer Protection Act’s definition of a consumer excludes people who purchase goods for commercial purposes. Earlier therefore, consumer complaints lodged by commercial entities like a company, firm or shop were immediately turned down by consumer forums, which termed the transactions “commercial.” The bench changed this approach. It had been deciding a case referred to it after the conflicting views of two different benches of the commission itself came up for consideration in a complaint lodged by Crompton Greaves Limited against Daimler Chrysler India Private Limited.
“If the dominant purpose behind acquiring goods and services is to provide amenities to the directors or the employees, it cannot be said that the company was seeking to make a profit or advance its business by such an acquisition,” said the bench. “The subsidiary and incidental uses cannot override the dominant purpose for which they were acquired,” it said.
The bench however, clarified that the purchase of goods or services by a company primarily for its own purpose would amount to purchase for a commercial purpose, even if such goods or such services are incidentally used by the directors or employees for their personal purposes.