Laxmi Engineering Works v. PSG Industrial Institute

This article is written by Anushka Singh, a second-year student, pursuing BBA-LLB at Unitedworld School of Law, Karnavati University. This article examines the case of Laxmi Engineering Works v. PSG Industrial Institute (1995). This case was a landmark judgement on Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 18th June, 1993.

Case Number

Civil Appeal No. 4193 of 1995

Equivalent Citation

1995 SCC 3 583

Bench

Justices B.P. Jeevan Reddy and Mrs. Sujata V. Manohar

Decided on

4^thApril 1995

Relevant Act/ Section

Societies Registration Act, 1860
Section 2- Consumer Protection Act, 1986
Sections 3, 9, 13 and 20(6)- Consumer Protection Act, 1987.

Brief Facts

Laxmi Engineering Works (appellant) placed an order for supply of PSG 450 CNC Universal Turning Central Machine with the respondent. The respondent took 6 extra months to deliver. Once it was delivered and installed, several defects of the machine came into light.

The appellant brought this to the notice of the respondent who sent people to repair. However, the repair was not satisfactory and the machine broke down again. The appellant then filed a case against the respondent in the Consumer forum.

The respondent succeeded in the lower forum on the grounds of appellant not being covered under the definition of the consumer as given under section 2 (d) of the Consumer Protection Act, because Appellant bought the machines for commercial purposes.

The plaintiff filed an appeal in the SC to challenge the forum’s decision.

Issue before the Court

What is the meaning and ambit of the expression for any commercial purpose as used in section 2(d) of the Consumer Protection Act,1986?

Decision of the Court

SC held the following-

The explanation added by The Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 18.6.1993 is clarificatory in nature and applies to all pending proceedings.
The purpose for which an individual has purchased goods and if it is for commercial purpose or within the meaning of the definition of consumer given in Section 2(d) of the Act is always a question of fact which will have to be decided in the circumstances of every case individually.
An individual who purchases goods to use them by himself, and only for the purpose of earning his livelihood, by means of self-employment falls within the scope of definition of consumer under the Act.

Further, it was added (in agreement with the consumer forums decision) that after observing the nature and character of the machine bought by the appellant. It can be concluded that this does not fall under goods which the appellant purchased to use by himself, exclusively for the purpose of earning his livelihood by means of self-employment. Therefore, the appeal was dismissed without any costs.

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