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Shambasiv (n/a)     06 October 2007

Who is a Consumer?

Can any one please explain in detail with examples regarding the term, ""Consumer"" under the provisions of the Consumer Protection Act?


 3 Replies

Shambasiv (n/a)     06 October 2007

Who is a consumer?

Section 2(d) of the Consumer Protection Act says that consum­er means any person whoΓÇö

(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 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;

Explanation.ΓÇöFor the purposes of the sub-clause (i), ΓÇ£commercial purposeΓÇ¥ does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his liveli­hood, by means of self-employment.

yedhash (n/a)     06 October 2007

[font=tahoma]Consumer of goods - The provision reveals that a person claiming himself as a consumer of goods should satisfy thatΓÇö[/font]

[font=tahoma] [/font][font=tahoma]THE GOODS ARE BOUGHT FOR CONSIDERATION - There must be a sale transaction between a seller and a buyer; the sale must be of goods; the buying of goods must be for consideration. The terms sale, goods, and consideration have not been defined in the Consumer Protection Act. The meaning of the terms ΓÇÿsaleΓÇÖ, and ΓÇÿgoodsΓÇÖ is to be construed according to the Sale of Goods Act, and the meaning of the term ΓÇÿconsiderationΓÇÖ is to be construed according to the Indian Contract Act.[/font]

[font=tahoma] [/font][font=tahoma]ANY PERSON WHO USE THE GOODS WITH THE APPROVAL OF THE BUYER IS A CONSUMER - When a person  buys goods, they may be used by his family members, relatives and friends. Any person who is making actual use of the goods may come across the defects in goods. Thus the law construes users of the goods as consumers although they may not be buyers at the same time. The words ΓÇ£....with the approval of the buyerΓÇ¥ in the definition denotes that the user of the goods should be a rightful user.[/font]

[font=tahoma]Example : A purchased a scooter which was in BΓÇÖs possession from the date of purchase. B was using it and taking it to the seller for repairs and service from time to time. Later on B had a complaint regarding the scooter. He sued the seller. The seller pleaded that since B did not buy the scooter, he was not a con­sumer under the Act. The Delhi State Commission held that B, the complainant was using it with the approval of A, the buyer, and therefore he was consumer under the Act. [Dinesh Bhagat v.  Bajaj Auto Ltd. (1992) III CPJ 272][/font]

[font=tahoma]Note : This is an exception to the general rule of law that a stranger to a contract cannot sue.[/font]

[font=tahoma]ANY PERSON WHO OBTAINS THE GOODS FOR ΓÇÿRESALEΓÇÖ OR COMMER­CIAL PURPOSESΓÇÖ IS NOT A CONSUMER - The term ΓÇÿfor resaleΓÇÖ implies that the goods are brought for the purpose of selling them, and the expression ΓÇÿfor commercial purposeΓÇÖ is intended to cover cases other than those of resale of goods. When goods are bought to resell or commercially exploit them, such buyer or user is not a consumer under the Act.[/font]

[font=tahoma]Examples :[/font]

[font=tahoma]  1.  A jeep was purchased to run it as a taxi. The question was whether the buyer of the jeep was a consumer under the Act. The Rajasthan State Commission held that to use the jeep as a taxi with the object to earn profits was a commercial purpose, and therefore, the buyer/user was not a consumer within the meaning of the Act. [Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229].[/font]

[font=tahoma]  2.  L Ltd. purchased a computer system from Z. The computer system was giving  constant trouble and Z was not attending it properly. L Ltd. filed a complaint against Z with the National Commission. Z contended that L Ltd. was not a consumer under the Act because computer system was used for commercial purposes. L Ltd. argued that computer system was not directly used of commer­cial purposes rather it was used to facilitate the work of the company. The Commission rejected the argument on the grounds that the system made part of the assets of the company, and its ex­penses were met by it out of business income. Thus the said purchase was a purchase for commercial purposes and L Ltd. was held not to be a consumer under the Act.[/font]

[font=tahoma]One thing is plain and clear from the decided cases that what is important to decide is - Whether a particular good is used for commercial purposes. If it is the buyer/user is not a consumer and if it is not - the buyer/user is a consumer.[/font]

[font=tahoma] [/font][font=tahoma]PERSON BUYING GOODS FOR SELF EMPLOYMENT IS A CONSUMER - When goods are bought for commercial purposes and such purchase satisfy the following criteria :[/font]

[font=tahoma]    -  the goods are used by the buyer himself;[/font]

[font=tahoma]    -  exclusively for the purpose of earning his livelihood;[/font]

[font=tahoma]    -  by means of self-employment,[/font]

[font=tahoma]then such use would not be termed as use for commercial purposes under the Act, and the user is recognised as a consumer.[/font]

[font=tahoma]Examples :[/font]

[font=tahoma]  1.  A buys a truck for plying it as a public carrier by himself, A is a consumer.[/font]

[font=tahoma]  2.  A buys a truck and hires a driver to ply it, A is not a consumer.[/font]

[font=tahoma]  3.  A has one cloth shop. He starts another business of a photocopier and buys a photocopy machine therefor. He hasnΓÇÖt bought this machine exclusively for the purpose of earning live­lihood. He is not a consumer under the Act.[/font][font=tahoma] [/font]

[font=tahoma]Note : That this is an exception to the rule that a buyer of commercial goods is not a consumer under the Act.[/font][font=tahoma] [/font]

[font=tahoma]The intention of the legislature is to exclude big business houses carrying on business with profit motive from the purview of the Act. At the same time it is pertinent to save the inter­ests of small consumers who buy goods for self employment to earn their livelihood, like a rickshaw puller buying rickshaw for self employment, or a farmer purchasing fertilizer for his crops, or a taxi driver buying a car to run it as a taxi, etc.[/font][font=tahoma] [/font]

[font=tahoma]Example : A was running a small type institute to earn his live­lihood. He purchased a photocopy machine-canon NP 150. It proved defective. He sued the seller who contended that A is not a consumer under the Act as he purchased the photocopier for com­mercial use. The Commission held that by no stretch of imagina­tion it can be said that the photocopier would bring large scale profits to A. It was a part of his small scale enterprise. He was construed as consumer under the Act.[/font][font=tahoma] [/font]

[font=tahoma]However, if such a buyer takes assistance of two or more persons to help him in operating the vehicle or machine, etc., he does not cease to be a consumer[/font][font=tahoma].[/font]

[font=tahoma]Examples :[/font]

[font=tahoma]  1.  A buys a truck, ply it himself and hires a cleaner who accompany him all the time and at times drives also when A is busy otherwise, A is a consumer.[/font]

[font=tahoma]  2.  P, an eye surgeon, purchased a machine from R for the hospital run by him. The machine was found to be a defective one. R contended that P was not a consumer under the Act as the ma­chine was bought for commercial purposes. The National Commis­sion rejected this contention and held that P is a medical prac­titioner, a professional working by way of self employment by using his knowledge and skill to earn his livelihood. It was not proved by any evidence that P is running a huge hospital. Thus the purchase of machinery is in the nature of self employment. [Rampion Pharmaceuticals v. Dr. Preetam Shah (1997) I CPJ 23 (NCDRC)].[/font][font=tahoma] [/font]

[font=tahoma]A person is a consumer of services if he satisfy the following criteria :[/font][font=tahoma] [/font]

[font=tahoma]SERVICES ARE HIRED OR AVAILED OF - The term ΓÇÿhiredΓÇÖ has not been defined under the Act. Its Dictionary meaning is - to procure the use of services at a price. Thus the term ΓÇÿhireΓÇÖ has also been used in the sense of ΓÇÿavailΓÇÖ or ΓÇÿuseΓÇÖ. Accordingly it may be understood that consumer means any person who avails or uses any service.[/font][font=tahoma] [/font]

[font=tahoma]Example : A goes to a doctor to get himself treated for a frac­ture. Here A is hiring the services of the doctor. Thus he is a consumer.[/font]

[font=tahoma]What constitutes hiring has been an issue to be dealt with in many consumer disputes. If it is established that a particular act constitutes hiring of service, the transaction falls within the net of the Consumer Protection Act, and vice-versa.[/font][font=tahoma] [/font]

[font=tahoma]Examples :[/font]

[font=tahoma]  1.  A passenger getting railway reservation after payment is hiring service for consideration.[/font]

[font=tahoma]  2. A landlord neglected and refused to provide the agreed amenities to his tenant. He filed a complaint against the land­lord under the Consumer Protection Act. The National Commission dismissed the complaint saying that it was a case of lease of immovable property and not of hiring services of the landlord. [Smt. Laxmiben Laxmichand Shah v. Smt. Sakerben Kanji Chandan [1992] 1 Comp. LJ 177 (NCDRC)].[/font]

[font=tahoma]  3.  A presented before the Sub-Registrar a document claim­ing it to be a will for registration  who sent it to the Collec­tor of Stamps for action. The matter remain pending for about six years. In the meantime A filed a complaint under the Consumer Protection Act alleging harrassment by the Sub-Registrar and Collector and prayed for compensation. The National Commission held the view that A was not a ΓÇ£consumerΓÇ¥ under the CPA. Because there was no hiring of services by the complainant for considera­tion and because a Government official doing his duty as func­tionary of the State under law could not be said to be rendering a service to the complainant. [S.P. Goel v. Collector of Stamps (1995) III CPR 684 (SC)].[/font]

[font=tahoma]CONSIDERATION MUST BE PAID OR PAYABLE - Consideration is regarded necessary for hiring or availing of services. However, its payment need not necessarily be immediate. It can be in instal­ments. For the services provided without charging anything in return, the person availing the services is not a consumer under the Act.[/font][font=tahoma] [/font]

[font=tahoma]Examples :[/font]

[font=tahoma]  1.  A hires an advocate to file a suit for recovery of money from his employer. He promises to pay fee to the advocate after settlement of the suit. A is a consumer under the Act.[/font]

[font=tahoma]  2.  A goes to a Doctor to get himself treated for a frac­ture. The Doctor being his friend charged him nothing for the treatment. A is not a consumer under the Act.[/font]

[font=tahoma]  3.  B issued an advertisement that a person could enter the contest by booking a Premier Padmini car. S purchased the car and thus entered the contest. He was declared as winner of the draw and was thus entitled to the two tickets from New Delhi to New York and back. S filed a complaint alleging that the ticket was not delivered to him. The National Commission held that S was not a consumer in this context. He paid for the car and got it. B was not liable so far as the contract of winning a lottery was con­cerned. [Byford v. S.S. Srivastava (1993) II CPR 83 (NCDRC)].[/font][font=tahoma] [/font]

[font=tahoma]The Direct and Indirect taxes paid to the State by a citizen is not payment for the services rendered.[/font]

[font=tahoma]Example : T was paying property tax for his house to the local corporation. This corporation was responsible for proper water supply to the premises under its work area. T raised a consumer dispute over the inadequacy of water supply by the corporation. The National Commission held that it was not a consumer dispute as water supply was made by the corporation out of its statutory duty and not by virtue of payment of taxes by T. - Mayor, Calcut­ta Municipal Corporation v. Tarapada Chatterjee (1994) 1 CPR 87 (NCDRC).[/font][font=tahoma] [/font]

[font=tahoma]BENEFICIARY OF SERVICES IS ALSO A CONSUMER - When a person hires services, he may hire it for himself or for any other person. In such cases the beneficiary (or user) of these services is also a consumer.[/font][font=tahoma] [/font]

[font=tahoma]Example : A takes his son B to a doctor for his treatment. Here A is hirer of services of the doctor and B is beneficiary of these services. For the purpose of the Act, both A and B are consumers.[/font][font=tahoma] [/font]

[font=tahoma]Note : This is an exception to the rule of privity to the con­tract.[/font]

[font=tahoma]Note that in case of goods, buyer of goods for commercial purpose ceases to be a consumer under the Act. On the other hand, a consumer of service for commercial purpose remains a consumer under the Act[/font][font=tahoma].[/font]

[font=tahoma]Example : S applied to Electricity Board for electricity connec­tion for a flour mill. There was a delay in releasing the connec­tion. S made a complaint for deficiency in service. He was held a consumer under the Act. - Shamsher Khan v. Rajasthan State Elec­tricity Board (1993) II CPR 6 (Raj.)[/font]


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Anuj Jain (Lawyer)     21 February 2011

Customer closed his bank account and latter on he wants to file a complaint against the bank fo previous defecinecy in his bank account. Can he claim himself as a conumer under CPA1986? any case law in this regard?? 

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