• Can a proprietorship firm file case in consumer court for goods imported for commercial purpose

One of my client had imported cargo from Russia by sea in 2013 for which my company had custom cleared the cargo. The cargo was delayed in clearance procedure as there was a discrepancy in the weight of the actual cargo and the weight mentioned on the documents. Now customer has filed the case against us in 2018 in consumer court saying he had to pay demurage charge to shipping line because we didnt take prompt action.This customer is into trading biz. The customer has not only kept my payment of 50k pending but also filed a case against us. my question is, can a proprietorship firm file case in consumer court for the goods /cargo imported for commercial purpose. Does he need to give the court evidence that he has not used the goods for commercial purpose? What are the criteria he needs to produce the court to valida his case in consumer court
Asked 6 years ago in Business Law

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18 Answers

1.  The quantum of Cargo material & weight would prove the "self-use" or "commercial use" of the imported goods.

2. The evidence (income tax records, Bills, Tax records) that imported goods would be sold /traded in the market would constitute that it is a commercial transaction and hence not within the jurisdiction of the Consumer Court, BUT within the jurisdiction of the Civil Court.

 

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

complaint in consumer forum is not maintainable as goods in question was purchased by  the complainant for commercial purpose and the complainant  is not a ''consumer'' under Section 2(d)(i) of the Consumer Protection Act, 1986.

 

2) 

 In Birla Technologies Limited v. Neutral Glass and Allied Industries Limited., (2011) 1 Supreme Court Cases 525, Hon'ble Supreme Court observed thus :

"7. By its order dated 4.3.2004, the State Commission accepted the appellant's preliminary objection and dismissed the complaint. The respondent complainant, therefore filed First Appeal No.218 of 2004 before the National Commission. By its order dated 17.12.2009, which is impugned here, the National Commission reversed the order of the State Commission and held that the "goods" purchased by the respondent from the appellant were being used by the respondent for a commercial purpose and, therefore, the respondent was not a "consumer" within the meaning of Section 2(1)(d)(i) of the Act. However, the National Commission further held that notwithstanding such findings, the respondent was entitled to maintain a complaint under the Act with respect to the deficiency in service during one-year warranty period with respect to the said goods relying on Section 2(1)(d)(ii) of the Act.

12. It seems that the whole error has crept in because of the wrong factual observation that the complaint was filed on 1.8.2000. In that view it has to be held that the complaint itself was not maintainable, firstly, on the count that under Section 2(1)(d)(i), the goods have been purchased for commercial purposes and on the second count that the services were hired or availed of for commercial purposes. The matter does not come even under the Explanation which was introduced on the same day i.e. on 15-3-2003 by way of the amendment by the same Amendment Act, as it is nobody's case that the goods bought and used by the respondent herein and the services availed by the respondent were exclusively for the purpose of earning the respondent's livelihood // 10 // by means of self-employment. In that view, it will have to be held that the complaint itself was not maintainable in toto."

Ajay Sethi
Advocate, Mumbai
99785 Answers
8145 Consultations

Complainant is a person who can be firm whether registered or not. Persons who purchase goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit, will all fall outside the scope of the definition of "consumer".

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

Well, it is for sure that the cargo was imported for commercial purpose and if that is so then deficiency of service arising out of commercial transaction .

In tat event no case before the consumer forum can be filed and it is filed file a petition challenging the maintainability of the proceeding.

Then file a summary suit for recovery of money claiming your 50 Lakhs. 

Devajyoti Barman
Advocate, Kolkata
23655 Answers
537 Consultations

Amendment Act 62/2002 in the Consumer Protection Act, 1982 excluded any person who hires or purchases any goods for resale or for any other commercial purpose from the definition of ‘consumer’ as defined in Section 2 of the Act.

In the case of Laxmi Engineering Works vs. P.S.G Industrial Institute, the Supreme Court held that whether goods bought by a person are for a ‘commercial purpose’ is a question of fact and it should be decided by taking into account all the facts and circumstances in each case. The Supreme Court further observed that if the goods have been used by the purchaser himself for commercial use then he would be considered to be a consumer under this Act but if that person does not use the good himself and engages some other person to operate that particular good then such person will not come under the ambit of the definition of ‘consumer’.

Thus, evidence will have to be led by the Complainant on this factual aspect so as to determine the question whether or not this Consumer Firm will come under the definition of 'Consumer'

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

See for you the customer was taking services and he was customer so the case can be filed though you can contest same on limitation , the product is used for commercial purpose. 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

No. One who purchase goods for commercial purposes is not a consumer under consumer protection act and therefore can not approach the forum for any relief.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

Dear Client,

Case may be files in Consumer Forum for goods brought for personal use not for commercial use.

Jaswant Singh
Advocate, Gurugram
930 Answers
2 Consultations

goods are purchased for resale or for any commercial purpose, the purchaser of such goods is excluded from the definition of consumer.Therefore also, he cannot maintain the consumer complaint under the Consumer Protection Act, 1986

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

No it will be dismissed. Only for personal use then the same can be filed

Prashant Nayak
Advocate, Mumbai
34520 Answers
249 Consultations

No a proprietor ship firm who is purchasing or Imported the product for purpose of trading or manufacture other products cannot file suit in consumer court against the seller of that product.

Trading and manufacturing firm who are purchasing the product for commercial use are excluded from jurisdiction of consumer forum.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

there has to be specific averment in complaint by the complainant 

that goods bought and used by him and services availed by him exclusively for the purpose of earning
his livelihood by means of self employment".

2) in present case you are not liable as

 there was discrepancy in the weight of the actual cargo and the weight mentioned on the documents

Ajay Sethi
Advocate, Mumbai
99785 Answers
8145 Consultations

He is importing goods from outside India, his business may not be on small scale And a pure commercial activity for profit. 

No, consumer remedy to him. And further he is penalize for for misdeclaration of the weight of the cargo, you have no role in this.

 

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

You have valid defence here to defend the case on ground that firstly it is commercial transaction the complaint before the forum has to prove that he is a consumer , secondly the complaint is barred by limitation as services were taken in 2013 and thirdly there was discrepancies in weight and authorities has not allowed cargo through you can file your reply and can contest same.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

No he can not approach consumer forum for the goods purchased by him is not for his end uses but for resale. He is not a consumer to go to the forum. 

As to claim against you for damages and losses, all this disputes to be settled as per terms of agreement between the parties.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

You need to try civil suit consumer court can't entertain the same

Prashant Nayak
Advocate, Mumbai
34520 Answers
249 Consultations

Since he is your customer he will come under the category of consumer.

Therefor he is eligible for filing a case before the consumer forum for deficiency in service against you.

You can challenge the same on the basis of the documentary evidences in your support as well as the merits on your side.

T Kalaiselvan
Advocate, Vellore
89986 Answers
2493 Consultations

You are a service provider hence he found efficiency in your service due to the delay in supplying the cargo to him.

You may fight the case on the basis of the explanation you have provided on the amendments to the act.

This is a matter of argument since the case has already been taken on file by the consumer court.

T Kalaiselvan
Advocate, Vellore
89986 Answers
2493 Consultations

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