Buyer not a 'consumer' when car is bought in proprietorship's name, observes panel
Chandigarh, Feb. 14 -- The UT District Consumer Disputes Commission-II, has dismissed a complaint filed against Mercedes-Benz India Pvt Ltd and its authorised dealer Joshi AutoZone Pvt Ltd in Industrial Area Phase 2, observing that a car purchased in the name of a proprietorship is for commercial purpose and the buyer is not a consumer as they do not fall within the definition of a "consumer" under the Consumer Protection Act.
The complaint was filed by Rajeev Goyal, proprietor of RLCR Super Market, Sector 7, who had purchased a Mercedes E-220d Expression car in June 2019 from the dealership. Goyal alleged that despite limited use of the vehicle, it developed recurring defects in the front left door mechanism, including issues with the soft-close motor, window motor, door lock and related electrical components. He also cited problems with the sunroof and battery, and claimed that the repeated faults pointed to manufacturing defects.
The manufacturer and dealer contested the allegations, asserting that all reported issues had been duly attended under warranty and that the defects were operational in nature, arising out of normal wear and tear. They further argued that there was no expert evidence on record to substantiate claims of manufacturing defects.
However, before examining the merits of the alleged defects, the Commission addressed the "foremost issue" which it observed was whether the complainant qualified as a "consumer" under Section 2(7) of the Act.
As per the Act, the definition of consumer excludes persons who purchase goods or avail services for "commercial purpose", except where such goods are used exclusively for earning livelihood through self-employment. It noted that the vehicle had been purchased in the name of "Rajeev Goyal, Prop RLCR Super Market", a proprietorship concern engaged in commercial activity.
"A proprietorship concern has no separate legal identity from its proprietor and any asset purchased in the name of the proprietorship is deemed to be purchased for the business/commercial activities of the proprietor unless specifically proved otherwise" the commission observed.
Citing the Supreme Court's ruling in Laxmi Engineering Works vs PSG Industrial Institute decided in 1995 and Shrikant G Mantri vs Punjab National Bank decided in 2022, the Commission reiterated that business-to-business transactions fall outside the ambit of consumer disputes.
The commission also observed that the complainant has not filed a copy of the registration certificate of the car in order to hide the same from the Commission. The Commission dismissed the complaint as not maintainable. It however granted liberty to the complainant to approach a civil court or other competent authority for appropriate relief....
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