‘Body Corporate’ and ‘Commercial purpose’ under Consumer Protection Act-

Interpretations by Supreme Court

Supreme Court announced a new judgment on 23^rd March 2024 defining Commercial purpose in the matter of a corporate entity stating complaint maintainable under consumer protection act 1986 in spite of the fact Body Corporate word was not included in the old act.

The case in hand is M/S Koziflex Matter Pvt Ltd v/s SBI General insurance co. Ltd &others

There are two important points discussed in the case-

1.     Company is not a ‘person ’as defined under the act 1986

2.     Company is indulged in commercial purpose hence is not a consumer.

On the fist issue SC held that company is a person under the old act even if specific word body corporate was not included in the old act. In number of cases SC has already interpreted that corporate is an artificial person represented through its head whenever fulfils other criteria of being a consumer. SC further explains that body corporate word has been included to avoid questions on its entitlement to file consumer complain and for more clarity .it certainly does not mean that absence of this word makes any difference in both the acts

Second question of company having commercial purpose is also not agreeable to SC IN the insurance matter. It is well settled law by now that insurance taken by an individual or by company, in both the cases it is for indemnification of loss and not for either further sale or for gain.

In the above case company had taken ‘standard perils policy (material damage)

The similar issue was decided This case was decided in appeal by SC |

There was yet another case decided by Supreme court in 13 April 2023 stating therein hat a commercial Enterprise can raise Consumer dispute in relation to goods or services unconnected to profit and gain  also in the matter of   on  National Insurance Co. Ltd. v. Harsolia Motors And Ors.| 2023.This issue was decided as back as on 03.12.2004 in a case by National commission when for the first time it was made clear that taking insurance is a service and industrial set up is not barred to raise question against insurance company if it refuses to indemnify the loss.

The Court observed that what is of utmost importance is the transaction in relation to which the complaint has been filed under the Consumer Protection Act, 1986 claiming to be a ‘consumer’. The Court held that - “...there is no such exclusion from the definition of the term “consumer” either to a commercial enterprise or to a person who is covered under the

There was yet another case of  Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and Others wherein court held

“Such a purchase may claim to be a consumer. Particularly, the bench referred to the 2019 judgment which held that provision of hostels for nurses by a hostel won't be a commercial activity within the meaning of the Consumer Protection Act.”

 

Previous

Next