Charitable Trust Vs. Toshniwal Brothers (Bombay)  INSC 383 (12 October
Ahmad, R.P.Sethi S. SAGHIR AHMAD, J.
appeal was disposed of by us by our judgment dated 12th August, 1999.
R.N. Keswani, appearing on behalf of the appellant, has filed the instant
Application stating that he was the only counsel appearing on behalf of the
appellant on 12.8.1999, but since he was busy in some other Court when the
matter was taken up by us, he could not come and argue the appeal. He also
stated that the counsel who was deputed to make a mention that he (Mr. R.N. Keswani)
was busy in some other Court was not entitled to argue the appeal.
appeal was heard by us in detail and elaborate arguments were made on behalf of
the appellant also, but having regard to the fact that Mr. Keswani was the only
counsel in the appeal and he has stated that the other counsel was not entitled
to argue the appeal, we have heard Mr. Keswani as also Mr. S.P.Mithal.
main reliance on behalf of the appellant has been placed on the decision of
this Court in Laxmi Engineering Works vs. P.S.G. Industrial Institute (1995) 3
SCC 583 in support of the contention that the appellant was a
"consumer" within the meaning of the definition set out in the Consumer
Protection Act, 1986. The definition was considered by us and it was held that
since the machinery in question was installed by the appellant for commercial
purpose, it would not be a "consumer".
contended by the counsel for the appellant that the term "commercial
purpose" has been considered by this Court in the case of Laxmi
Engineering Works (supra) and the observation of National Commission that
"commercial purpose" would mean "profit-making activity on a
large scale" was approved and, therefore, the activity of the present
appellant would not be a commercial activity as no "profit-making on a
large scale" is involved. We do not agree. This Court in that decision had
further held in para 21 as under :
We must, therefore, hold that :
The explanation added by the Consumer Protection (Amendment) Act 50 of 1993
(replacing Ordinance 24 of 1993) with effect from 18.6.1993 is clarificatory in
nature and applies to all pending proceedings.
Whether the purpose for which a person has bought goods is a "commercial
purpose" within the meaning of the definition of expression 'consumer' in
Section 2(d) of the Act is always a question of fact to be decided in the facts
and circumstances of each case.
A person who buys goods and uses them himself, exclusively for the purpose of
earning his livelihood, by means of self-employment is within the definition of
the expression 'consumer'." Applying those tests, the Court in the case of
Laxmi Engineering Works (supra) held that the appellant was not a `consumer' as
the machinery in that case were not purchased for self-employment, but were
purchased for "commercial purposes." It is, therefore, clear that in
spite of the commercial activity, whether a person would fall within the
definition of "consumer" or not would be a question of fact in every
case. The National Commission had already held on the basis of the evidence on
record that the appellant was not a "consumer" as the machinery was
installed for "commercial purpose". We have been again referred to
various documents, including the "Project document", submitted by the
appellant itself to the Bank for a loan to enable it to purchase the machinery
in question, but we could not persuade ourselves to take a different view.
counsel for the appellant then referred to the case of Addl. Commissioner of
Income Tax, Gujarat vs. Surat Art Silk Cloth Manufacturers Association (1980)
121 ITR 1 wherein the activity of a charitable institution, though commercial
in nature, was held to be a part of the charitable activity. This decision does
not help the appellant as it was a decision rendered under the Income Tax Act
and the question which we are considering here had not arisen in that case.
counsel for the appellant then referred to the decision of this Court in
Commissioner of Income Tax, New Delhi vs. Federation of Indian Chambers of
Commerce & Industries, New Delhi, 1981 (3) SCR 489, and contended that if
the dominant object of the trust or institution is charitable, the activity
carried on by it would not be treated as an activity for profit. It is
contended on the basis of the above decision that the activities carried on by
the appellant were not profit- oriented nor was there any intention or object
to carry on those activities to earn profit. This again was the decision
rendered under the Income Tax Act and is not on the point involved in the
present case whether the appellant was a "consumer" within the
meaning of the Consumer Protection Act, 1986.
instant case, what is to be considered is whether the appellant was a
"consumer" within the meaning of the Consumer Protection Act, 1986,
and whether the goods in question were obtained by him for "re-sale"
or for any "commercial purpose". It is the case of the appellant that
every patient who is referred to the Diagnostic Centre of the appellant and who
takes advantage of the CT Scan etc.
pay for it and the service rendered by the appellant is not free. It is also
the case of the appellant that only ten per cent of the patients are provided
being so, the "goods" (machinery) which were obtained by the
appellant were being used for "commercial purpose".
other point was pressed before us. We, therefore, maintain our judgment dated 12th August, 1999 even after having heard Mr. Keswani
who insisted for a hearing through this Application. The Application shall be
treated as disposed of.