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2016 Supreme(Online)(SC) 626

SUPREME COURT
, J, , CJ
Lourdes Society Snehanjali Girls Hostel – Appellant
Versus
M/s Neycer India Ltd. – Respondent
Civil Appeal | Special Leave | 4047 of 2006



Advocates:
For the Appellants/Petitioners: Ashok Panigrahi
For the Respondents: Sudhir K. Makkar

A charitable institution purchasing goods for operational use qualifies as a consumer under the Consumer Protection Act, 1986.

Headnote:This judgment concerns a civil appeal against an order of the National Consumer Disputes Redressal Commission which reversed lower findings regarding the appellant's status as a consumer under the Consumer Protection Act, 1986. The court determined the appellant, a charitable society, was not a commercial establishment as defined by S.2(d), validating the lower courts' decisions. The appeal was allowed, restoring the District Forum's order and directing compensation for damages. The Court emphasized the relevance of the appellant's Memorandum of Association and the definition of 'consumer'.

Table of Content
1. defective tiles lead to consumer complaint. (Para 2 , 3 , 4 , 10 , 22)
2. commercial vs. charitable institution definition under law. (Para 12 , 19 , 20 , 24)
3. court examines legal status as consumer. (Para 13 , 14 , 15 , 17)

1. Leave granted.

2. This civil appeal by special leave is directed against the impugned judgment and order dated 23/09/2013 passed by the National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 4047 of 2006 whereby it has allowed the revision petition filed by respondent nos. 1-4 and set aside the order dated 12/10/2006 passed by the Gujarat State Consumer Disputes Redressal Commission, Ahemdabad in Appeal No. 741 of 2006.

3. The brief facts of the case in nutshell are as under:
The appellant no. 1 - Lourdes Society Snehanjali Girls Hostel is a society registered under the Societies Registration Act vide society registration no. Guj / 525 / Surat and also a trust registered, vide its Trust registration no. F / 430 / Surat. The appellant - Society is a charitable institution running a girls hostel at Surat for the benefit of Adiwasi children. On 02/02/2000, the appellant - Society purchased vitrified glazed floor tiles from respondent no. 5 (since deleted from the array of parties vide Court's order dated 01/04/2015) who was a local agent of respondent no. 1 - Company for a sum of Rs.4,69,579/-. The said tiles, after its fixation in the premises of the hostel, gradually developed black and white spots. The appellant no. 1 wrote several letters to respondent no. 4 i.e., Sales Executive of respondent no. 1 - company, informing about the inferior and defective quality of the tiles. Thereafter, the respondent no. 5 - local agent visited the spot but failed to solve the issue.

4. An architect J. M. Vimawala was appointed by the appellant - Society to assess the damage caused due to defective tiles. The architect assessed the loss to the tune of Rs.4,27,712.37 which included price of the tiles, labour charges, octroi and transportation charges. Thereafter, the appellant - Society served a legal notice dated 12/08/2002 to the respondents making a demand of the said amount but no response was shown by the respondents.

5. The said inaction on the part of the respondents made the appellant - Society to file a Consumer Complaint No. 743 of 2002 against the respondents before the District Consumer Disputes Redressal Forum at Surat (for short "the District Forum") for claim of the said amount.

6. The District Forum appointed a Court Commissioner to examine and find out the manufacturing defects in the tiles as claimed by the appellant - Society. After examination, the Court Commissioner submitted a report dated 21/09/2004 stating therein that the tiles were having manufacturing defect.

7. The District Forum vide its order dated 31/12/2005 held that the tiles supplied by the respondents had manufacturing defect. The respondents committed an unfair trade practice by supplying such defective tiles. By holding the respondents jointly and severally liable, the District Forum directed the respondents to pay to the appellants a sum of Rs.2,00,000/- along with interest @9% p.a. from the date of complaint i.e., 31/10/2002 till its recovery. The respondent no. 1 was directed to pay the above amount to the appellant within a period of 30 days from the date of order of the District Forum.

8. Being Aggrieved, the respondents filed First Appeal No. 741 of 2006 before Gujarat State Consumer Dispute Redressal Commission, Ahmedabad (for short "the State Commission") challenging the said order of District Forum urging various grounds.

9. The State Commission dismissed the said First Appeal of the respondents by its order dated 12/10/2006 and confirmed the order passed by the District Forum.

10. Having become unsuccessful before the State Commission, the respondents filed Revision Petition No. 4047 of 2006 before the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to
























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