JUDGMENT
Syed Bashir-ud-Din, J.
1. In this appeal order dated 14-8-1997 of Jammu and Kashmir State Consumers Protection Commission, (hereinafter for short State Commission), established under the provisions of Jammu and Kashmir Protection Act, 1987 (hereafter referred as Act) of dismissal of complaint of Appellant for recovery of cost of X-Ray Plant supplied by Respondent No. 1 to Appellant (with charges incurred in transportation) or return of this alleged defective plant and for compensation.
2. The factual matrix of the case necessary for our present purposes, follow hereafter.
3. Z.S. Traders, a Pharmaceutical distributing concern with its principal place of business at Municipal Road, Srinagar (facing District Police Lines, Srinagar) through its proprietor, on discussions and understanding with one Mr. Muzaffer Iqbal, Respondent No. 2, Engineer-cum-Representative of SIEMENS Ltd. Respondent 1, placed an order with Respondent No. 1 on 27-8-1994 for supply of X-Ray Plant 300 MA (Polyskop II) including Spot Film Device Kit and other accessories. The plant was to be handed over at Srinagar on the basis of home delivery and installation was to be carried out by the SIEMENS Ltd. In all cost of plant along with accessories was Rs. 5.00 lacs, to which Rs. 25,000/- was to be added as additional cost of Spot Film Device Kit and in all the bargain was struck at Rs. 5.25 lacs.
4. It was a condition of sale that before the X-Ray Plant was supplied and installed, the whole amount of Rs. 5.25 lacs was to be paid in advance. The Appellant made payment of Rs. 1.35 lacs and Rs. 4.11 lacs by drafts, acknowledged by opposite party. Vide purchasers order dated 27-3-1994 and letter dated 12-10-1994, the Respondent No. 1 Informed the Appellant that the equipment has been booked on door delivery basis through M/s. Patel Roadways Ltd. As the Appellant did not receive the plant, therefore, he approached the Transport Co. He was informed that as the Transport Co. had no office at Srinagar therefore, declined to carry the equipment to Srinagar. Petitioner/Appellant proceeded to Jammu and got the equipment transported from Jammu to Srinagar, after collecting it from M/s. Patel Roadways
Ltd., Jammu, This was in violation of the conditions of the agreement and contravened the terms of purchase/sale of the equipment and the petitioner was to pay transport charges in the sum of Rs. 1000/- on account of carriage of equipment to Srinagar. Besides, the petitioner was made to pay demurrage, wages to employees for running the activity for the said Unit and other expenses including tax, rent etc. of the Unit. Rupees 50000/- was spent on these counts. The equipment and plant was physically available at Srinagar on 2-12-1994.
5. One Mr. Bakshi, Engineer of Respondent was contacted. Mr. Bakshi rendered his service to instal X-Ray Plant. He took about 25 days, yet the plant was not functional. Mr. Bakshi found that the plant was gassy and accessories like Spot Filming Device, carriage for taking files, handle load sheet and M. A. Meter were missing. The matter was taken up with Respondent No. 1, who failed to send any team from Delhi to make the plant functional. The operation and commissioning of the plant was delayed and finally the plant was commissioned and made operational after the accessories and the tube were sent by Respondent No. 1.
6. The Appellant/complainant tendered a formal notice on 10-3-1995 to Respondent No. 1 claiming damages of Rs. 1,15,000/- and other charges for transportation and cost of Spot Film Device Kit in the order of Rs. 35,000/-. As there was no response, the petitioner approached the State Commission and complained that he has been supplied a defective X-Ray Plant which the O.P. may be directed to take back and return cost thereof in addition claiming compensation of Rs. 1,15,000/- and other charges in the sum of Rs. 50,000/-.
7. The State Commission issued notice to Respondent No. 1. The Respondent, O.P. forwarded its objections by post to the Commission Office in terms admitting the sale of X-Ray equipment and its installation at Srinagar at the complainants business premises. Receipt of the amount of Rs. 5.25 lacs is admitted. However, it is denied that the equipment was in any manner defective. It is also admitted that the equipment was to be handed over on door delivery basis at Srinagar, but in the given disturbed conditions in valley, no transporter was found to deliver the equipment at Srinagar, Patel Roadways Ltd. was entrusted with carriage of
the equipment to Jammu with request to deliver the goods to the complainant. On 13-11-1994, the complainant informed the O.P. that the equipment has been lifted and brought to Srinagar and request for making arrangements for installation of the equipment was also received. The O.P. made arrangements with Mr. Bakshi of Ajay Service Centre to carry out the installation work. After hearing further from the complainant of his displeasure at the delay in installation of the equipment and the requirement pointed out by Mr. Bakshi, the Respondent No. 2 asked Mr. Bakshi and instructed him to do the needful urgently. Mr. Bakshi the Engineer engaged by O.P. on contractual basis was sent two other accessories and eventually the plant was made functional to the satisfaction of the complainant. The receipt of the notice through counsel of complainant, took the Company completely by surprise. The problems connected with installation of the equipment on complainants premise were purely teething in nature and the equipment and the unit was perfectly functional by December, 1994. The complainant is not entitled to any damage or compensation or other charges muchless to the recovery of paid cost of X-Ray Plant sought to be recovered from O.P. under the Act.
8. So much on the facts, the O.P. also took the stand before the Commission, that as the X-Ray equipment was meant and run for a commercial purpose by the complainant and that the same was installed at the business premises and centre of complainant, a pharmaceutical distributor concern, therefore, complainant is not a consumer as defined by Section 2(d) of the Act. If so, the State Commission lacked ab-initio jurisdiction to entertain and take cognisance of the complaint. The State Commission on examining the matter, scrutinizing the respective versions of the parties and on consideration held that the plant (X-Ray equipment) was purchased for commercial purposes and therefore, complainant in this case cannot be said to be a consumer, within the meaning of Section 2(d) of the Act and hence the State Commission had no jurisdiction to entertain the complaint. The Commission refused to proceed further and dropped the proceedings.
9. This order of 24-8-97 is impugned in this Appeal on the ground that the appellant is a consumer within the meaning of the Act and that the Commission cannot drive the
appellant to a Civil Court on the facts and circumstances, of this case and the order is passed on conjectures and surmises as detailed out in the memo of appeal.
10. The learned counsel for respondents has resisted and contested the appeal.
11. The counsel submits that the State Commission of Jammu and Kashmir has no jurisdiction to entertain and take cognisance of the complaint for the reason that the respondent/opposite party has its registered office at Bombay, with Regional Office outside the State of Jammu and Kashmir and that the purchase order has been accepted as part of agreement to supply X-Ray Plant at Bombay. The cause of action has arisen at Bombay. Besides, under Clause 9 of General Condition of Supply, the sale contains an arbitration clause providing in terms that in case of dispute or difference, arbitration shall take place in Bombay. In support he has referred to (1993) 2 CPJ 737 and also AIR 1996 SC 2654.
12. The counsel for appellant has canvassed that as the equipment as per sale transaction has been supplied and installed at Srinagar pursuant to an agreement between the appellant and representative-cum-Engineer of the Respondents, therefore, cause of action has arisen at Srinagar. The requirement of territorial jurisdiction is laid only with regard to Divisional Consumers Redressal Forum under the Act and not for State Commission insofar as Section 9 of the Act providing for jurisdiction of the Divisional Forum, has not been made applicable to State Commission. The arbitration clause referred to as part of General Condition of Sale is-excluded by the Act insofar as the provisions of the Act are supplemental to and do not negate the provision of other laws for the time being in force.
13. Section 3 of the Act clearly provides
that the provisions of the Act “shall be in
addition to and not in derogation of the
provisions of any other law for the time being
in force.”
14. Section 3 authorises the Forum provided in the Act to deal with a complaint in accordance with the provisions of the Act rather than to proceed with the matters in accordance with terms of contract or provisions of other laws in force. The reason appears to be to promote and to secure economical, inexpensive and expeditious con-
sumer redressal mechanism. The Act provides an additional remedy to be pursued and establishes an adjudicatory, forms for resolution/settlement of consumer complaints in the manner and mode provided by the Act consistent with the purpose sought to be achieved by the Act.
15. Section 9 deals with jurisdiction of the Divisional Forum. The Section inter alia provides :–
“…….
(2) A complaint shall be instituted in a Divisional Forum within the local limits of whose jurisdiction :
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business, or personally works for gain;
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business, or personally works for gain, provided that in such case either the permission of the Divisional Forum is given or the opposite parties who do not residue or carry on business, or personally work for gain, as the case may be, acquiesce in such institution, or;
(c) the cause of action wholly or in part, arises.”
16. Section 10 provides the manner in which the complaint has to be made before the Consumer Disputes Redressal Forum.
Section 11 provides procedure on receipt of the complainant; and
Section 12, makes provision regarding finding of the Divisional Forum.
Section 16, of the Act expressly applies the procedure as specified in Sections 10, 11 and 12 to complaints/proceedings before the State Commission. It is seen that the provision of Section 9 dealing with the jurisdiction of Divisional Forum has not be applied to proceedings/complaints before the State Commission. In other words the limitation and fetter on jurisdiction of the Divisional Forum under the Act has been done away with in case of State Commission. Of course the limit as to pecuniary jurisdiction is expressly provided in Section 15 of the Act. This being so, there is no bar for State Commission to entertain a complaint subject to other conditions applying, notwithstanding conditions attached to sale or the plant where the purchase order is accepted to complete the sale.
17. The decision of National Commission in Bhagwati Chandwani’s case, (1993) 2 CPJ 737, that the Court at Banglore alone has jurisdiction under the Act in view of the agreed condition at the time of looking of Car (as in that case) that dispute then too will be decided by a Court having jurisdiction and situated at Bangalore and that State Commission a Redressal Forum of Rajasthan, has no jurisdiction does not seem to be with respect, correct.
18. The counsel for respondent has cited AIR 1996 SC 2664 to support his case. In this authority, their lordships while taking note of observation of National Consumers Dispute Redressal Commission that the question of pricing does not legitimately fall within the purview of adjudication by the Consumers Redressal Forum, but regard being had to the facts and circumstances of that case, the order of the State Commission upholding the right of Panchayat to the benefit of subsidy of 25 paisa per unit in respect of Electricity consumed was maintained. Their Lordships observed :–
………
4. We find this very difficult to appreciate. If a Court does not have jurisdiction, it does not have jurisdiction, regardless of the fact that one of the parties involved is Gram Panchayat or the period involved is very short of the amount involved is very small. If a Court does not have Jurisdiction, it is the obligation of the Appellate Court so to hold and to set-aside the order. The law laid down as such, has no application to the facts and circumstances of this case.
19. In Fair Air Engineers Pvt. Ltd. v. N. K. Modi, AIR 1997 SC 533. their Lordships considered the nature of adjudicatory Forums and the proceedings under the Act and held that the Forums have all the trapings of the Civil Court and judicial authorities and the proceedings before them are legal proceedings. It was further held that keeping in view scheme and object of the Act and the social purpose the Act is to serve, the provisions of the Act have to be construed widely.
20. Section 3 envisages that the provisions of the Act are in addition to and not in derrogation of any other provision of other law. The Act provides the additional remedy independent of provisions of other laws like
Arbitration Act, Contract Act and Section 9 of the C.P.C.
21. The consentient Arbitration enforceable under the Arbitration Act or the Civil action in a suit regulated by Code of Civil Procedure is a remedy which does not create any embargo on the execution of powers by judicial authorities under the Act. It is in this context laid down :–
“……. .we hold that though the District
Forums, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.”
22. Considering the matter from the aforesaid perspective, the Supreme Court in the above case held that the dispute before the State Commission regarding recovery of compensation for alleged deficiency in service on the part of appellant’s in carrying out work of installation of Centrally Air Conditioned Plant cannot be referred to an Arbitration under Clause 12 of the agreement between the parties and the matter could be decided on merits by the State Commission itself.
23. It is obvious from the jurisdictional point of view that an arbitration clause attached to an agreement or sale excluding jurisdiction of other forums and confining the adjudicatory jurisdiction to few Courts at a particular place, cannot be said to be applicable to complaints and proceedings before the Consumer Redressal Forums under the Act. Apart from unhindered general jurisdiction of the State Commission, it would be seen that the State Commission within statutory limits can take cognizance of claim and complaint in so far as the goods (X-Ray Unit with Spot Film Device Kit) has been
supplied, transported and installed in the State at Srinagar. As per the terms and conditions, the installation has been done by the O. P. In terms of conditions of the deal. Obviously, apart from the negotiations, understanding and correspondence between the parties, preceding the sale of the X-Ray Unit, the cause of action and in any case part of cause of action, arises at Srinagar within the local limits of State Commission at Srinagar/Jammu.
24. With the result; We are of the view and hold that the State Commission under the provisions of J. and K. State Consumers Protection Act has jurisdiction and is legally competent to entertain, take cognisance or proceed with the complaint under the provisions of the Act.
25. Next learned counsel for the Respondent/opposite party further contends that the complainant in the facts and circumstances of the case does not answer the description of Consumer within the meaning of Section 2(d)(i) of the Act insofar as the X-Ray Plant has been purchased for commercial purpose and the service of installation has been rendered without charges. The X-Ray Plant has been installed at the business premises of the appellant where the appellant is engaged in the business as pharmaceutical distributor. The machine is installed to earn additional income with profit motive and not for earning livelihood by a self employed person. He has supported the finding of State Commission on that count resulting in droppage of proceedings and closure of the case by the State Commission. In support of his arguments the counsel has cited (1994) 2 CPJ 33 (NC) and AIR 1995 SC 1428.
26. The counsel for the Appellant has contended that the finding of the State Commission is hyper-technical and the complainant is a consumer within the meaning of Section 2(d)(i) of the Act, insofar as Plant was purchased by appellant to earn additional income by its use. The respondents having been guilty of deficiency in service may be for commercial purposes, the respondent is liable for damages.
27. For the State Commission to have jurisdiction under the Act, it is a must that the complaint allegation in writing has to be by a person who is a Consumer. Consumer as defined under Section 2(d) is a person who buys any goods for consideration. The
consideration may be paid or promised or partly paid and partly promised or can even be deferred. It also includes user of such goods with approval of the person who buys such goods for the said consideration. It also covers a person who hires, any service for consideration paid or promised or partly paid and partly promised or under any system of deferred payment and includes beneficiary of such service with approval of the person who has availed such services for consideration.
28. It is expressly provided that a person who buys the goods as above for resale or for any commercial purpose is not a consumer. The person obtaining the goods for resale or for any commercial purpose falls in the excluded category of consumers. Admittedly, it is not the case of resale. In the context of definition of consumer in Section 2(d) of the Act, the meaning of ‘commercial purpose’ is of paramount importance.
29. The Apex Court in AIR 1995 SC 1428, considered this aspect of the matter and on comprehensive consideration of the term came to the conclusion that the expression is a question of fact to be decided in the facts of each case. The purpose for which the goods are purchased, is immaterial and the value of the goods does not matter. It further observed (At p. 1432, para 12) :–
“…… The National Commission
appears to have been taking a consistent view that where a person purchases goods “with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit” he will not be a “consumer” within the meaning of Section 2(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion — the expression “large-scale” is not a very precise expression — the Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/ Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression “commercial purpose”– a case of exception to an exception. Let us elaborate a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer, but a person who buys a typewriter or a car for typing other’s work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however, clarifies that in certain situations, purchase of goods for “commercial purposes” would not yet take the purchaser out of the definition of expression “consumer”. If the commercial use is by the purchase himself for the purpose of earning his livelihood by means of self employment, such purchaser of goods is yet a “consumer”. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e. by self-employment, for earning his livelihood, it would not be treated as a “commercial purpose” and he does not cease to be a consumer for the purposes of the Act.”
30. The National Consumer Disputes Redressal Commission in (1994) 2 CPJ 33 (NC) noted that the respondent, a Pvt. Ltd. Co. purchased a defective X-Ray Machine for Diagnostic Laboratory and engaged Doctors, Professional Radiologists and Pathologists, on ultimate analysis it held and ruled that respondent was Commercial clinic and not a Consumer defined under the Consumer Protection Act of 1986.
31. Now in this case, it is fairly seen from the allegations on which the claim for compensation is based and as laid before the State Commission that M/s. Z. S. Traders (Appellant) has pleaded that the intentional late delivery and despatch of equipment by Co. has resulted in recurring loss to the business of appellant as he has raised financial assistance for purpose of equipment and for that he has to pay the interest over and above the expenses to be spent on the employees whose services were hired by appellant for carrying out the activities of said unit. Besides, money contended in the form of taxes, boarding, lodging and transport charges etc. is to be met by the Respondent Co.
32. The alleged complainant has no where mentioned or stated that the X-Ray Unit purchased by him is for earning his livelihood to be operated by himself. He has also nowhere based his case on the claim that he has purchased the Unit and is running the unit as part of self-employment to earn income by its use. Instead, from record it is seen that his case throughout is that he is a pharmaceutical distributor and is dealing in the trade name “Z. S. Traders”. It is also made out from record that he has been running the Unit with the assistance of its
employees. Even, in the memo of appeal the appellant has fairly admitted of being a pharmaceutical distributor and purchased the plant for earning additional income by using it for commercial purpose.
33. The contention that petitioner has hired the service of Respondent No. 1 for installation and making the Unit functional is not correct. The installation of the X-Ray Unit with equipments supplied along with the Simple Spot Film Device is not the subject of a separate contract and is covenanted to be carried at no extra charge, meaning thereby that there has been no separate consideration for hiring the service of installation of the equipments in question.
34. We are of the opinion that the conclusion of the State Commission that the petitioner is not ‘consumer’ as the goods in question (X-Ray Plant) is obtained for commercial purpose is based on material and on correct interpretation of the law within the contours of the term “Consumer” as defined by Section 2(d) of the Act.
35. With the result and for the aforesaid reasons, the appeal is dismissed.