Company's luxury car purchase for directors' personal use lacks commercial purpose nexus under Consumer Protection Act

The SC held that purchase of goods for commercial purpose under Consumer Protection Act, 1986 requires close nexus with profit-generating activity, determined by dominant intention behind transaction. A company's purchase of luxury cars for directors' personal use as perquisites does not constitute commercial purpose. The court upheld National Commission's finding of unfair trade practice regarding incomplete airbag disclosure, awarding compensation. However, considering the complainant retained the vehicle for seventeen years, the refund amount was reduced from Rs. 58 lakhs to Rs. 36 lakhs while allowing retention of the car, balancing equity and justice.

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Issues Involved:
1. Whether the purchase of a vehicle by a company for the use/personal use of its directors amounts to a purchase for "commercial purpose" under Section 2(1)(d) of the Consumer Protection Act, 1986.
2. Whether the National Consumer Disputes Redressal Commission's orders regarding the replacement of a defective car and compensation for non-deployment of airbags were justified.

Issue-wise Detailed Analysis:

1. Definition of "Commercial Purpose":
The core issue was whether the purchase of a vehicle by a company for the use or personal use of its directors amounts to a purchase for "commercial purpose" under Section 2(1)(d) of the Consumer Protection Act, 1986. The court analyzed the definition of "consumer" and "commercial purpose" under the Act. It noted that the definition does not include a person who obtains goods for resale or any commercial purpose. The court referred to several precedents, including *Laxmi Engineering Works vs. P.S.G Industrial Institute (1995) 3 SCC 583*, which concluded that whether a purchase is for commercial purposes is a question of fact to be decided based on the circumstances of each case. The court reiterated that the dominant intention or purpose of the transaction must be examined to determine if it was for profit generation.

2. Civil Appeal No. 353 of 2008:
The appellant argued that the car was purchased for the personal use of the company's director and should be considered a commercial purpose. The court held that the onus to prove that the purchase was for commercial purposes lies with the opponent-seller. The court found no evidence that the car was used for commercial purposes or linked to any profit-generating activity. Thus, the purchase was not for a commercial purpose, and the complainant-company was entitled to file a complaint.

Regarding the defects in the car, the court reviewed the correspondence between the parties and the reports from engineers and local commissioners. It concluded that the car had an inherent defect of overheating, causing discomfort to passengers. The court upheld the National Commission's order directing the appellant to refund Rs. 36 lakhs instead of Rs. 58 lakhs, considering the car's usage for about seventeen years.

3. Civil Appeal Nos. 19536-19537/2017 and 2633/2018:
The issue was whether the non-deployment of airbags in a car purchased by a company for its director amounted to a deficiency in service and unfair trade practice. The court confirmed that the purchase was not for commercial purposes, as there was no evidence linking it to profit-generating activities.

On the merits, the court found that the airbags did not deploy during an accident, causing injuries to the director. The court noted that the owner's manual did not disclose the predetermined level for airbag deployment, constituting a deficiency in service and unfair trade practice. The National Commission's order awarding compensation of Rs. 5 lakhs for deficiency in service and Rs. 5 lakhs for unfair trade practice was upheld.

Conclusion:
The court concluded that the purchase of the car by the company for the use of its director was not for commercial purposes. It upheld the National Commission's orders regarding compensation for the defective car and non-deployment of airbags. The appeals were dismissed, and the appellant was directed to refund Rs. 36 lakhs to the respondent-complainant.

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