JUDGMENT

B. P. JEEVAN REDDY, J. :—Leave granted.

2. The definition of the expression "consumer" in clause (d) of Section 2 of the Consumer Protection Act, 1986 excludes from its purview "a person who obtains such goods for resale or for any commercial purpose". The question that arises in this appeal is what is the meaning and ambit of the expression "any commercial purpose" in the said definition. By Ordinance 24 of 1993 (which has since been replaced by Amendment Act 50 of 1993) an explanation has been added to the definition of the expression "consumer" with effect from 18-6-1993. The explanation reads : "For the purposes of sub-clause (i) "commercial purpose" 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". The complaint herein was, however, made before the adding of the said explanation. It would be appropriate to read to definition at this stage.

"(d) "consumer" means any person who, -

(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 service 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."

THE FACTUAL MATRIX:

3. The appellant, Laxmi Engineering Works, is a proprietary concern established under the Employment Promotion Programme. It is registered as a small scale industry with the Directorate of Industries, Maharashtra and has also obtained financial assistance from Maharashtra and has also obtained financial assistance from Maharashtra State Finance Corporation in the form of term loan amounting to Rs.22.10 lakhs besides financial assistance from certain other sources. The appellant placed an order with the respondent - P. S. G. Industrial Institute for supply of PSG 450 CNC Universal Turning Central Machine on May 28, 1990. The appellants case is that the respondent not only supplied the machinery six months beyond the stipulated date but supplied a defective machine. Soon after it was installed and operated, several defects came to light which the appellant brought to the notice of the respondent. A good amount of correspondence took place between the parties and though the respondent sent some persons to rectify the defects, the machine could not be put in proper order. The appellant states that the was suffering financial loss on account of the defective functioning of the machine and accordingly he lodged a complaint (No. 116 of 1992) before the Maharashtra Consumer Disputes Redressal Commission claiming an amount of Rs. 4,00,000/- on several counts from the respondent. The respondent appeared before the State Commission and denied the appellants claim. Inter alia, it raised an objection that since the appellant has purchased the machine for commercial purposes he is not a consumer within the meaning of the said expression as defined in Section 2(d) of the Act. The commission allowed the appellants claim partly, directing the respondent to pay to the appellant a sum of Rs. 2.48 lakhs within 30 days failing which the said amount was to carry interest at the rate of 18 per annum. The respondent filed an appeal before the National Commission which allowed the said appeal on 7th December,