Charitable Trust Is A 'Consumer'; Non-Domestic Electricity Connection Not Automatically 'Commercial Purpose': Delhi State Consumer Commission - 2025-08-03

Charitable Trust Using Non-Domestic Electricity is a 'Consumer,' Not a Commercial Entity: Delhi State Commission

New Delhi: In a significant ruling, the Delhi State Consumer Disputes Redressal Commission has held that a charitable trust using a non-domestic electricity connection does not automatically fall under the "commercial purpose" exclusion of the Consumer Protection Act. The Commission, presided over by Justice Sangita Dhingra Sehgal (President) and Ms. Pinki (Member, Judicial) , set aside a District Commission order and remanded the matter for a fresh hearing on merits.

The decision clarifies that the nature of the activity, not the tariff category of the connection, is the determining factor. The onus is on the service provider to prove that the service is being used for a profit-generating activity.

Case Background

The appeal was filed by the S.B.I. Dharamshala Dharmarth Trust against Tata Power Delhi Distribution Limited (TPDDL). The Trust had obtained a new electricity connection for its Dharamshala after a previous connection, in the name of a housing society, was disconnected due to non-payment of dues. TPDDL subsequently disconnected the new connection as well, citing the existence of the old connection and an ongoing internal dispute within the society over the management of the Dharamshala.

The Trust filed a complaint with the District Consumer Commission, which was dismisse on two primary grounds:

1. The dispute involved complex facts and legal rights concerning the Trust's management, making it unsuitable for the summary procedure of a consumer forum.

2. The electricity connection was of a Non-Domestic (NDLT) nature, which the District Commission deemed a "commercial purpose," thus excluding the Trust from the definition of a 'consumer' under the Act.

Arguments Presented

• Appellant (The Trust): Argued that it is a registered public charitable trust and does not engage in any commercial or profit-making activity. It contended that TPDDL arbitrarily disconnected the supply and that the District Commission erred in classifying its use as commercial merely based on the NDLT tariff category.

• Respondent (TPDDL): Maintained that the connection was for a commercial purpose and that the Trust had concealed material facts about an existing connection and internal management disputes when applying for the new one. They also raised a preliminary objection that the appeal was barred by limitation.

Commission's Analysis and Ruling

The State Commission focused on the central legal question: whether the Trust qualifies as a 'consumer' under Section 2(7) of the Consumer Protection Act, 2019.

The bench observed that an activity is considered for a "commercial purpose" only when it has a "close and direct nexus with a profit-generating activity." Citing the Supreme Court's judgment in Shrikant G. Mantri Vs Punjab National Bank , the Commission reiterated the principle:

"What is relevant is the dominant intention or dominant purpose for the transaction and as to whether the same was to facilitate some kind of profit generation for the purchaser and/or their beneficiary."

Applying this principle, the Commission noted that the appellant is a Religious Public Charity Trust using electricity for its day-to-day operations, not for any commercial venture.

In a pivotal excerpt from the judgment, the Commission stated:

"The onus to prove whether the transaction was commercial in nature lies on the Respondent. However, in the instant matter, the Respondent has not placed on record any cogent material or evidence to show that the Appellant is involved in using the said electricity connection for any commercial purpose."

Final Decision

The State Commission concluded that the District Commission had erred in its finding. It held that in the absence of evidence to the contrary, the Trust is squarely covered under the definition of a 'consumer.'

Consequently, the appeal was allowed, and the District Commission's order dated August 4, 2023, was set aside. The case has been remanded to the District Commission for a fresh adjudication on its merits, with the first hearing scheduled for March 5, 2025.