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Lourdes Society Snehanjali Girls Hostel and ANR Vs M/s. H & R Johnson (India)

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. The brief facts of the case in nutshell are as under:-

The appellant 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 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.

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. 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 claim of the said amount.

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 that the tiles were having manufacturing defect. 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. Being Aggrieved, the respondents filed First Appeal No. 741 of 2006 before Gujarat State Consumer Dispute Redressal Commission, Ahmedabad the said order of District Forum urging various grounds. 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.

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 questioning the validity and correctness of the order passed by the District Forum and the State Commission. On 12.03.2012, the appellant-Society also made an application being I.A. No.1847 of 2013 in Revision Petition No. 4047 of 2006 to the National Commission for invoking the powers under Sections 14(d) and 14(hb) of the Consumer Protection Act, 1986 and for awarding sufficient amount of compensation in addition to amount already awarded by the District Forum.

The National Commission vide its order dated 23.09.2013 reversed the findings of the District Forum and the State Commission holding that the appellant-Society has failed to establish that it is a consumer within the meaning of Section 2(d) of the Consumer Protection Act, 1986. In support of their case, the learned counsel appearing on behalf of both the parties made the following submissions. Mr. Ashok Panigrahi, the learned counsel on behalf of the appellant-Society contended that the National Commission has erred in coming to the conclusion that the appellant-Society is a commercial establishment and thus, not covered by the definition of the term 'consumer' under Section 2(d) of the Consumer Protection Act, 1986.

The appellant- Society is supporting adivasi/tribal girls to pursue their education by providing hostel facilities. The expenses for the food and electricity are being paid by the inmates of the hostel. The appellant-Society is maintaining the hostel free of cost and no charges in the form of rent, repairs and maintenance are collected from the inmates. Thus, the appellant- Society cannot be considered as any commercial establishment striving for profit.

Further, the National Commission while passing the impugned order has ignored certain facts which throws light on callous attitude on the part of the respondents viz., when the defect in the tiles were brought to the notice of the respondents by sending various letters, there was no action on their part. Later a local agent on behalf of the respondent no.1-Company visited the premises of the girl's hostel and verified that the said tiles were defective and damaged. However, no proper attention was paid by the respondents towards the issue.

The charges, if any, for accommodation in the hostel are for maintaining the hostel and not for making profit. Thus, the appellant-Society is consumer within the meaning of the term 'consumer' under Section 2(d) of the Consumer Protection Act, 1986. The National Commission has erroneously accepted the contention urged on behalf of the respondents in the revisional proceedings that supply of tiles to the appellant-Society by respondent no. 1 through its local agent is for commercial purpose.

For the reasons stated above, the Supreme Court allowed the appeal, and set aside the impugned order of the National Commission and restored the order of the District Forum which was affirmed by the State Commission. The matter was under litigation for the last fourteen years, therefore, the Supreme Court directed the respondents to pay or deposit the amount so awarded by the District Forum along with interest @9% p.a. within six weeks from the date of receipt of the copy of the judgment. The costs of Rs.50,000/- of the proceedings were also awarded in favour of the appellant-Society.

Case Facts

Lourdes Society Snehanjali Girls Hostel and ANR. Vs. M/s. H & R Johnson (India) Ltd. & Ors.
[Civil Appeal No. 7223 of 2016 arising out of SLP (C) No. 36918 of 2013] J..CJI. [T.S. THAKUR, J. [V. GOPALA GOWDA, J. [R. BANUMATHI] Decided on: 2nd August, 2016

Divya Patwal

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