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Every consumer has the right to be safeguarded against unfair practices and deficiencies. The case of Madan Kumar Singh (Dead) through Legal Representative v. District Magistrate, Sultanpur& Ors.broadened the interpretation of the term ‘consumer’ under Section 2 (1)(d) of the Consumer Protection Act,1986.Buyers of goods or commodities for self-consumption in commercial activities come under the ambit of the term ‘consumer’.This case saw a clear distinction being made between the immediate purpose and the ultimate purpose of the object purchased. The aggrieved party in the case was Mr. Madan Kumar Singh, who died during the pendency of the case and was represented through his legal representative thereafter. Having purchased a truck during an auction, he had to wait for six months for the delivery of the truck, which he was unable to ply due to the non-delivery of necessary documents and thus, unable to earn a livelihood through the use of the truck. This case attempted to explore the term ‘consumer’ with respect to earning livelihood through self-employment.
The facts of the case state that the appellant was declared as the highest bidder for a truck that was put to an auction sale, on account of default in payment committed by its previous owner Iqbal. The bid had been accepted by the respondents. He had deposited the initial money as well as the balance of the consideration. The bank had entrusted the respondents with the job of conducting the auction in its full spirit. However, the truck was only handed over to him after six months from the date of the auction with no plausible reasons.Due to the non-delivery of necessary documents to transfer the vehicle in his name, he was deprived of its economic benefit. On persistent requests, the relevant papers were handed over, but only after a lapse of more than five years. The aggrieved party claimed to have suffered a grave loss with respect to financial, mental and social injuries. The factual matrix revealed that the respondents had not been restrained to deliver the documents of the truck to the appellant. As a consumer, Madan Kumar’s rights were violated by the service providers who had a duty to ensure timely delivery and prevent deficiency in services.
- District Consumer Forum
The appellant had approached the District Consumer Forum for the deficiency in services committed by the respondents. The Forum dismissed the complaint holding therein that the appellant does not come under the term ‘consumer’ within the Act.
- State Consumer Disputes Redressal Commission, Uttar Pradesh
Aggrieved by the above decision, the appellant filed an appeal before the State Consumer Disputes Redressal Commission where it was decided that such matters are not cognizable by it under the Act. However, the appellant was given the option to file a copy of the order before the District Magistrate for the timely delivery of the documents of the truck.
- District Magistrate, Sultanpur
After the submission of the aforementioned representation to the District Magistrate, the respondents were continuously reminded to deliver the relevant papers to enable the appellant to utilize the truck for commercial activities. However, the respondents failed to deliver the documents.
- National Consumer Disputes Redressal Commission, New Delhi
Against the order of the State Consumer Disputes Redressal Commission, the appellant proceeded to file a Revision Petition before the National Consumer Disputes Redressal Commission. The said petition was dismissed and the complaint filed by the appellant was partly allowed given the long delay. Damages to the extent of Rs. 25,000 along with the cost of Rs.5000 were payable to the appellant. Furthermore, the District Magistrate was directed to conduct an inquiry and fix the responsibility. The relevant papers were delivered in January 2005, after five long years.
- Supreme Court of India
The auction purchaser, aggrieved by the order, preferred a Special Leave Petition whereas the respondents also preferred a Special Leave Petition against the appellant. Madan Kumar died during the pendency of the appeal and his legal representative was brought on record.
Whether the appellant can be said to be a ‘consumer’ within the definition of Section 2(1)(d) of the Act? Whether there has been a deficiency in service by the respondents as contemplated under Section 2(1)(g) of the Act?
Summary of the decision and judgment
The Apex Court observed that the conduct, behaviour and attitude of the respondents, from the auction till the delivery of the documents, was highly reprehensible. The appellant, being a consumer, had deposited the amount for the purchase of the truck and fulfilled his obligations. As a consequence, he was entitled to have possession of the truck as well as the necessary documents of the vehicle. For reasons unknown to the appellant and the Court, the papers were delivered after five years, following the persistent efforts of the appellant. This clearly showed the mala fide intentions of the respondents. The respondents had pleaded that the bank delayed in delivering the papers; however, no action was taken by the respondents to ensure the delivery. Therefore, the respondents could not escape the liability for deficiency in services as contemplated under Section 2(1)(g). In lieu of the financial loss suffered by the appellant, an amount of Rs. 1,00,000 with an interest rate of 6% p.a. was payable to meet the end of justice.
There is a fine line which differentiates the use of goods and services for commercial activities and earning a livelihood by means of self-employment. The two terms ‘commercial purpose’ and ‘earning a livelihood by means of self-employment’are not exclusively defined under Section 2(1)(d) of the Consumer Protection Act that lays down the definition of a consumer. Hence, the interpretation of these two terms is left to the respective forums. The Court’s decision is similar to the decision in Super Engineering Corporation v. Sanjay Vinayak Pant & Anr., wherea consumer purchased a printing machine for the purpose of earning livelihood through self-employment.
The District Forum and the State Commission had established ‘commercial purpose’ since the end use of the truck was for economic benefit. However, the National Commission accepted the appellant’s plea that the truck was to be used for earning livelihood through self-employment. The Consumer Protection Act enjoys unchecked flexibility that may go against the very purpose of its enactment. The lack of clarity as to the scope of a consumer has produced numerous judgments where at the slightest hint of commercial activity, the complainant fails to be considered as a consumer. In this case, justice was served to the appellant at the end, however, Madan Kumar did not get to reap the benefits for which he ran pillar to post, year after year.
The facts and circumstances of a case assist in ultimately determining who falls under the ambit of a consumer. However, leaving it up to the Court without providing a proper definition leads to grave injury and loss to the consumer and defeats the purpose of consumer protection. The unwarranted discretion that Consumer Forums enjoy often leaves the complainant in a vulnerable state as was observed in this case. Ten years later, in Sunil Kohli & Anr. v. M/s. Purearth Infrastructure Ltd., the Honorable Court had once again dealt with this matter and rendered the same decision, correcting the National Commission’s error.It is high time that Courts work toward developing a precedent to implement a straightjacket formula to define and differentiate commercial activities from activities that are undertaken for earning a livelihood through self-employment. This will untangle the web of ambiguity within the statute and safeguard the rights of consumers.
The Consumer Protection Act, 1986, No. 68, Acts of Parliament, 1986, Section 2 (1)(d).
Madan Kumar Singh (Dead) through Legal Representative v. District Magistrate, Sultanpur & Ors., (2009) 12 SCR 1186, para. 6.
Id. at para 9.
Id. at para 11.
Id. at 12.
Id. at 13.
Id. at 15.
Madan Kumar Singh (Dead) through Legal Representative v. District Magistrate, Sultanpur & Ors., (2009) 12 SCR 1186, para. 17.
Id. at 23.
Id. at 33.
The Consumer Protection Act, 1986, Section 2 (1)(g).
Id. at Section 21(d)
Super Engineering Corporation v. Sanjay Vinayak Pant & Anr., (1992) 1 CPJ 95 (NC).
Madan Kumar Singh (Dead) through Legal Representative v. District Magistrate, Sultanpur & Ors., (2009) 12 SCR 1186, para. 11.
Sunil Kohli & Anr. v. M/s. Purearth Infrastructure Ltd.,(2019) 9 SCC 1.