Even if a person is self-employed, when he utilises products and services for personal use he becomes a consumer

Though a person who avails himself of services or buys goods for commercial purposes will not come under the definition of ‘consumer’, the Consumer Protection Act provides an added explanation which states that “commercial purpose” would not include use by a person of goods bought and used by him and service availed of by him exclusively for earning his livelihood by means of self-employment.

In Cheema Engineering Services vs. Rajan Singh, the meaning of the expression self-employment is explained by the Supreme Court. “The word self-employment is not defined. Therefore, it is a matter of evidence. Unless there is evidence and on consideration thereof, it is concluded that the machine was used only for self-employment to earn purchaser’s livelihood, without a sense of commercial purpose of having employees on regular basis for manufacture or sale, it would be for self-employment. Self-employment connotes an altogether different concept, namely, the purchaser alone uses the machinery he purchased for the purpose of manufacture, by employing himself in working out or producing goods for earning his livelihood. Thus, whether the purchaser is using the machine exclusively by himself or with help from his family or employed other workmen are matters of evidence and the burden of proof would lie with the purchaser,” the Court said.

There are many disputes handled by the consumer fora, where, the purchaser would claim that the purchase was made for self-employment while the manufacturer would claim that the purchase was made for commercial purpose and therefore would not fit the definition of ‘consumer’ as defined under the CP Act. The fora analyse the issues based on evidence and decide accordingly.

In one such case that came up before the National Commission, the complaint was that the opposite party had delivered a truck of different model from the one booked by the complainant at a higher price. The truck also had manufacturing defects. The State Commission, on the basis of evidence produced before it, held that the truck was purchased for self-employment and therefore the complainant was covered within the meaning of ‘consumer’ under the Act. This was upheld by the National Commission.

In another instance, the complainant’s husband had purchased a photocopier from the opposite party for doing job work for earning his livelihood. The machine was defective and there was a claim for refund. The forum held that since the machine was purchased for earning livelihood, it cannot be said that it was bought for commercial purpose.

However, in another case where the builder purchased a car for carrying on his business, it was held that the complainant was not a consumer as the car was purchased for commercial purpose.

Similarly, in one other complaint, the complainant, who was a medical practitioner, had purchased an ultra-sound machine for his clinic. He alleged defects in the machine purchased by him. The complaint was resisted on the ground that the purchase was made for commercial purpose. It was proved that the complainant already had one ultra-sound machine. Therefore, it was held the complainant was not a consumer as he had purchased the machine for commercial purpose.

Whether the purchase is made for self-employment or commercial purpose would be decided based on evidence produced and the provision is meant to benefit the common man.

(The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details / queries contact 2491 4358 / 2446 0387 or helpdesk@cag.org.in)


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