LILAVATI KIRTILAL MEHTA MEDICAL TRUSTversusM/S UNIQUE SHANTI DEVELOPERS & ORS.

                          [2019] 14 S.C.R. 563                            563


        LILAVATI KIRTILAL MEHTA MEDICAL TRUST                             A
                                  v.
         M/S UNIQUE SHANTI DEVELOPERS & ORS.
                  (Civil Appeal No. 12322 of 2016)
                       NOVEMBER 14, 2019                                  B
           [MOHAN M. SHANTANAGOUDAR AND
                  AJAY RASTOGI, JJ.]
       Consumer Protection Act,1986– Explanation to s.2(1)(d) –
’Commercial Purpose’ under – When an activity/transaction is not
                                                                          C
for said purpose – Agreements to sell executed for 29 flats in 1995–
Appellant-Trust took possession of said flats, constructed by
respondent no.1, for providing hostel facilities to nurses employed
by the Hospital run by the appellant – However, the structure
became dilapidated and the appellant vacated the flats in 2002 –
Complaint filed by the appellant before the National Commission–          D
Initially, dismissed as barred by limitation– In review, the order was
recalled, however the Commission again dismissed the complaint
on the ground that the appellant was not ‘consumer’ u/s.2(1)(d)
as the said section excludes a person who obtains goods and
services for ‘commercial purpose’ – On appeal, held: Explanation
clause to s.2(1)(d) was added by way of Ordinance No.24 of 1993           E
(subsequently replaced by Amendment Act No.50 of 1993) –Said
Amendment Act also added ‘housing construction’ to the definition
of ‘service’ u/s.2(o) – In the present case, the appellant validly took
the possession of the flats constructed by respondent no.1 and paid
consideration and can therefore be said to have availed of its            F
housing construction services– Explanation to s.2(1)(d) is
clarificatory in nature and only re-affirms the definition of
‘consumer’ as it already exists – Ultimately, whether or not a person
is consumer or whether an activity is meant for commercial purpose
will depend upon the facts and circumstances of each case – It is
not the identity of the person but the purpose for which the              G
transaction is made which is relevant – Hence, private corporate
bodies such as the appellant may engage the services of third
parties for the purpose of providing perquisites to their employees
– If in all such cases the third party service-provider disclaims
liability on the ground that the hirer of the service is engaged in
                                                                          H
                                 563
564            SUPREME COURT REPORTS                       [2019] 14 S.C.R.


A     trade and commerce, it will open Pandora’s box wherein the
      employer as well as the employees will not have any remedy –
      Purchase of the good/service should have close and direct nexus
      with profit-generating activity – There is no direct nexus between
      the purchase of flats by the appellant trust and its profit generating
      activities – Further, applying the dominant purpose test, it cannot
B     be said that the provision of such hostel facilities is integral to the
      appellant trust’s commercial activities– Purchase of flats by the
      appellant for providing hostel facilities to the nurses is not even
      remotely related to the object of earning profits or for any
      commercial use as envisaged u/s.2(1)(d) and hence, does not
C     qualify as meant for ‘commercial purpose’ – Appellant is
      ‘consumer ’ u/s.2(1)(d) for the present transaction under
      consideration– Impugned judgment set aside – Appeal restored
      before the National Commission, who is to decide the matter
      expeditiously.

D           Allowing the appeal, the Court
             HELD: 1.1 The purchase of flats by the Appellant for the
      purpose of providing hostel facilities to the hospital nurses does
      not qualify as meant for a ‘commercial purpose’. Though the term
      ‘commercial purpose’ as referred to under Section 2(1)(d) has
E     nowhere been defined under the provisions of the Consumer
      Protection Act, 1986, Supreme Court has expounded upon it
      based on its lateral dictionary meaning in various decisions. It
      is true that the said decisions were rendered in the context of
      deciding whether the goods or services availed of in the facts
      of those cases were for a commercial purpose or exclusively for
F     the purpose of self-employment. This does not mean, however,
      that in every case a negative test has to be adopted wherein any
      activity that does not fall within the ambit of ‘earning livelihood
      by means of self-employment’ would necessarily be for a
      commercial purpose. Respondent No.1’s argument is rejected
G     in this regard. Explanation clause was added to Section 2(1)(d)
      by way of Ordinance No. 24 of 1993 (subsequently replaced by
      Amendment Act No. 50 of 1993). Amendment Act No. 50 of 1993
      also added ‘housing construction’ to the definition of ‘service’
      under Section 2(o) of the 1986 Act. In the present case, it is
      not denied that the Appellant has validly taken possession of the
H     flats constructed by Respondent No. 1 and paid consideration
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                565
                      SHANTI DEVELOPERS


for the same, and can therefore be said to have availed of its          A
housing construction services. The Explanation clause to Section
2(1)(d) of the 1986 Act is only clarificatory in nature. Therefore
the Explanation clause only re-affirms the definition of
‘consumer’ as it already exists. Ultimately, whether or not a
person is a consumer or whether an activity is meant for a
commercial purpose will depend upon the facts and                       B
circumstances of each case. It may be the case that a person
who engages in commercial activities has purchased a good or
availed of a service for their personal use and consumption, or
for the personal use of a beneficiary, and such purchase is not
linked to their ordinary profit-generating activities or for creation   C
of self-employment. Such a person may still claim to be a
‘consumer.’ If there is any deficiency in service, the service-
provider cannot claim that merely because the person availing
of the service is a profit-generating entity, and because such
transaction does not relate to generation of livelihood through
self-employment, they do not fall under the definition of a             D
‘consumer.’ A commercial entity may also be a consumer
depending upon the facts of the case. It is not the identity of
the person but the purpose for which the transaction is made
which is relevant. [Paras 3-5] [570-E-F; 571-F-G; 574-H; 575-
A-D-G]
                                                                        E
      1.2 Private corporate bodies such as the Appellant trust
may engage the services of third parties for the purpose of
providing perquisites to their employees. If the third party
service-provider disclaims liability before consumer forums on
the ground that the hirer of the service is engaged in trade and
commerce, it will open a Pandora’s box wherein the employer             F
as well as the employees will not have any remedy. This would
defeat the object of providing a speedy remedy to consumers,
as outlined in the provisions of the 1986 Act. Further, setting
such a precedent may discourage employers from undertaking
to provide any facilities for their employees. Hence, it is             G
necessary to clarify that the provision of such services would
not usually be included in the definition of ‘commercial purpose.’
Though a straight-jacket formula cannot be adopted in every
case, the following broad principles can be culled out for
determining whether an activity or transaction is ‘for a
commercial purpose’: (i) The question of whether a transaction          H
566            SUPREME COURT REPORTS                    [2019] 14 S.C.R.


A     is for a commercial purpose would depend upon the facts and
      circumstances of each case. However, ordinarily, ‘commercial
      purpose’ is understood to include manufacturing/industrial
      activity or business-to-business transactions between
      commercial entities. (ii) The purchase of the good or service
      should have a close and direct nexus with a profit-generating
B     activity. (iii) The identity of the person making the purchase or
      the value of the transaction is not conclusive to the question of
      whether it is for a commercial purpose. It has to be seen
      whether the dominant intention or dominant purpose for the
      transaction was to facilitate some kind of profit generation for
C     the purchaser and/or their beneficiary. (iv) If it is found that the
      dominant purpose behind purchasing the good or service was
      for the personal use and consumption of the purchaser and/or
      their beneficiary, or is otherwise not linked to any commercial
      activity, the question of whether such a purchase was for the
      purpose of ‘generating livelihood by means of self-employment’
D     need not be looked into. Applying these principles to the facts
      of the present case, there is no direct nexus between the
      purchase of flats by the Appellant trust and its profit generating
      activities. The flats were not occupied for undertaking any
      medical/diagnostic facilities within the hospital but for
E     accommodating the nurses employed by the hospital. Moreover,
      the flats were being provided to the nurses without any rent.
      Further, applying the dominant purpose test, it cannot be said
      that the provision of such hostel facilities is integral to the
      Appellant trust’s commercial activities. Hence the provision of
      hostel facilities to nurses so as to facilitate better medical care
F     is a positive duty enjoined upon the hospital so as to maintain
      the beneficial effects of the curative care efforts undertaken by
      it. Such a duty exists irrespective of the surplus or turnover
      generated by the hospital, and hence is not even remotely
      related to the object of earning profits or for any commercial use
      as envisaged under Section 2(1)(d). Hence the Appellant trust
G     is a ‘consumer’ under Section 2(1)(d) of the 1986 Act for the
      present transaction under consideration. The matter is
      remanded to the National Commission for consideration in
      accordance with law. The appeal is restored before the National
      Commission, and the impugned judgment is set aside, in the
H     aforesaid terms. The parties are relegated to record their
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE             567
                      SHANTI DEVELOPERS


evidence before the National Commission, and the National            A
Commission is requested to hear the matter on merits and
decide the same expeditiously, at an early date. [Paras 6-9] [576-
B-H; 577-A-D; 578-A-E-G]
     Kalpavruksha Charitable Trust v. Toshniwal Brothers
     (Bombay) Pvt. Ltd. (2000) 1 SCC 512 : [1999] 3 Suppl.           B
     SCR 619 – distinguished.
     Spring Meadows Hospital v. Harjol Ahluwalia through
     K.S. Ahluwalia, I (1998) CPJ 1 (SC) ; Laxmi
     Engineering Works v. P.S.G. Industrial Institute (1995)
     3 SCC 583 : [1995] 3 SCR 174 ; Paramount Digital                C
     Colour Lab v. Agfa India Private Limited (2018) 14
     SCC 81 – relied on.
     Cheema Engineering Services v. Rajan Singh (1997)
     1 SCC 131 : [1996] 8 Suppl. SCR 340 ; Synco Textiles
                                                                     D
     Pvt. Ltd. v. Greaves Cotton and Company Limited
     (1991) 1 CPJ 499 – referred to.
                     Case Law Reference
[1995] 3 SCR 174                 relied on           Para 3
                                                                     E
(2018) 14 SCC 81                 relied on           Para 3
[1996] 8 Suppl. SCR 340          referred to         Para 3
[1999] 3 Suppl. SCR 619          distinguished       Para 3
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 12322          F
of 2016.
      From the Judgment and Order dated 25.10.2016 of the National
Consumer Disputes Redressal Commission in Review Application No.
76 of 2016.
                                                                     G
     Guru Krishna Kumar, Ms. Sangeeta Bharti, Ms. Anubha Dhulia,
Ms. Prerna Mehta, Advs. for the Appellant.
     Ms. Kiran Suri, Sr. Adv., S.J. Amith, Ms. Aishwarya Kumar,
Dr. (Mrs.) Vipin Gupta, Ms. Abha R. Sharma, Advs. for the
Respondents.                                                         H
568            SUPREME COURT REPORTS                         [2019] 14 S.C.R.


A           The Judgment of the Court was delivered by
            MOHAN M. SHANTANAGOUDAR, J.
            1. This appeal arises out of judgment of the National Consumer
      Disputes Redressal Commission (‘National Commission’) dated
      25.10.2016 dismissing the Appellant’s Review Application No. 76/2016
B     against the order dated 1.3.2016 by which the National Commission
      dismissed the Appellant’s Consumer Complaint No. 117/2016.
             2. The Appellant’s case is that Respondent No. 1/Opposite Party
      No. 1 had developed two buildings ‘Madhuvan’ with thirty two ‘1 BHK’
      flats in colony ‘Shanti Park’ in Thane, Maharashtra. Out of these the
C     Appellant/complainant trust took possession of 29 flats for provision of
      hostel facilities to nurses employed by Lilavati Hospital, which is run
      by the Appellant trust. 29 agreements to sell were executed in respect
      of each flat on 25.11.1995, which were registered on 16.3.1996, and
      entire consideration amount was paid for the same. The architect issued
D     completion certificate in respect of the flats on 17.2.1997. The flats
      were used for the purpose of hostel facilities till 2002. However, within
      2-3 years of completion of the project, because of alleged poor building
      quality, the structure became dilapidated. The appellant vacated the flats
      in 2002 and since 2004, the flats are lying unused.
E            In the meanwhile, an interim Board of Trustees was constituted
      by this Court by order dated 21.5.2014 in SLP No. 3772/2014, which
      is a separate litigation concerning dispute over control of the appellant
      trust between different groups of trustees. The aforesaid interim Board
      of Trustees called for a structural report from M/s Raje Consultants,
      which submitted their report in September 2015 finding that the cost of
F     repairs would be more than the cost of reconstruction. The appellant
      also claims that Respondent No. 1 obtained the occupation certificate
      for the flats by playing fraud upon the local municipal corporation. Hence
      the appellant filed Consumer Complaint No. 117/2016 before the National
      Commission claiming Rs 7,65,95,400/- in compensation on account of
G     annual loss of rent from 2002 to 2015, cost of reconstruction of building
      ‘Madhuvan’ and future loss of rent of Rs 35,00,000/- per year, along
      with Rs 5,00,000/- in damages.
             Initially, the National Commission by order dated 1.3.2016
      dismissed the complaint as barred by limitation on the ground that cause
H     of action for raising the complaint arose in 2004, the year since when
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                    569
     SHANTI DEVELOPERS [MOHAN M. SHANTANAGOUDAR, J.]


the flats are lying unused; however the complaint was filed in 2016.        A
Under Section 24A of the Consumer Protection Act, 1986 (‘1986 Act’)
the period of limitation for filing a complaint is two years, hence the
complaint was time-barred. The National Commission further held that
the pending litigation between the trustees in SLP No. 3772/2014 (supra)
is not sufficient to explain the delay as the dispute concerning
                                                                            B
constitution of Board of Trustees of the appellant trust arose in 2014
whereas it was not the appellant’s case that there was no competent
Board of Trustees in 2004 when the cause of action arose.
       Subsequently the National Commission in the impugned judgment,
hearing Review Application No. 76 of 2016 against the order dated
                                                                            C
1.3.2016 (supra), found that it had incorrectly recorded in the aforesaid
order that ‘conveyance deeds’ of the 29 flats were registered on
16.3.1996, whereas what was registered by the appellants was actually
agreements to sell. Hence on account of this error on the face of the
record, the National Commission recalled the order dated 1.3.2016.
However the National Commission again proceeded to dismiss the              D
complaint, this time on the ground that the appellant trust was not a
‘consumer’ within the meaning of Section 2(1)(d) of the 1986 Act as
the aforesaid section excludes a person who obtains goods and services
for a ‘commercial purpose’; that since providing hostel facility to the
nurses is directly connected to the commercial purpose of running the       E
hospital, and is consideration for the work done by them in the hospital,
the appellant would not be a ‘consumer’ under the 1986 Act. Hence
this appeal.
      3. Section 2(1)(d) of the 1986 Act defines ‘consumer’ as follows:
      “(d) “consumer” means any person who—                                 F

             (i) buys any goods for a consideration which has been paid
                 or promised or partly paid and partly promised, or
                 under any system of deferred payment and includes
                 any user of such goods other than the person who buys
                 such goods for consideration paid or promised or partly    G
                 paid or partly promised, or under any system of
                 deferred payment when such use is made with the
                 approval of such person, but does not include a person
                 who obtains such goods for resale or for any
                 commercial purpose; or                                     H
570            SUPREME COURT REPORTS                          [2019] 14 S.C.R.


A                  (ii) hires or avails of any services for a consideration
                        which has been paid or promised or partly paid and
                        partly prom-ised, or under any system of deferred
                        payment and includes any beneficiary of such services
                        other than the person who ‘hires or avails of the
                        services for consideration paid or promised, or partly
B                       paid and partly promised, or under any system of
                        deferred payment, when such services are availed of
                        with the approval of the first mentioned person but does
                        not include a person who avails of such services for
                        any commercial purposes.
C           Explanation.— For the purposes of this clause, “commercial
            purpose” does not include use by a person of goods bought and
            used by him and services availed by him exclusively for the
            purposes of earning his livelihood by means of self-employment.”
                                                           (emphasis supplied)
D
            The above Explanation clause was added to Section 2(1)(d) by
      way of Ordinance No. 24 of 1993 (subsequently replaced by
      Amendment Act No. 50 of 1993), with effect from 18.6.1993.
      Amendment Act No. 50 of 1993 also added ‘housing construction’ to
      the definition of ‘service’ under Section 2(o) of the 1986 Act.
E            In the present case, it is not denied that the Appellant has validly
      taken possession of the flats constructed by Respondent No. 1 and paid
      consideration for the same, and can therefore be said to have availed
      of its housing construction services. This Court has held in Spring
      Meadows Hospital v. Harjol Ahluwalia through K.S. Ahluwalia, I
F     (1998) CPJ 1 (SC), that the person who hires the service for a
      beneficiary can also be included in the definition of ‘consumer’ under
      Section 2(1)(d)(ii). Though that case was in the context of parents hiring
      the services of a hospital for their minor child, the same principle may
      also be extended to a case such as the present one where an employer
      such as the Appellant trust hires certain services for the welfare of its
G     employees. Hence, though possession of the flats was acquired for the
      purpose of providing housing facility to the hospital nurses, the Appellant
      is entitled to claim against Respondent No. 1 as a consumer.
            The only issue which arises for our consideration
      therefore is whether the purchase of flats for the purpose of providing
H     accommodation to nurses employed by the Appellant trust’s hospital
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                        571
     SHANTI DEVELOPERS [MOHAN M. SHANTANAGOUDAR, J.]


qualifies as a ‘purchase of services for a commercial purpose’; and             A
consequently whether the Appellant is excluded from the definition of
‘consumer’ under Section 2(1)(d) of the 1986 Act?
      Learned senior counsel for the Appellant, Mr. Guru Krishna
Kumar argued in reliance upon this Court’s decisions in Laxmi
Engineering Works v. P.S.G. Industrial Institute, (1995) 3 SCC 583,             B
and Paramount Digital Colour Lab v. Agfa India Private Limited,
(2018) 14 SCC 81, that the Court has to look at the dominant purpose
for which the purchase is made in order to decide whether it was for
a ‘commercial purpose.’ In this case, the dominant purpose for
purchasing the flats was to provide housing to the nurses and was not
linked to the commercial operations of the hospital.                            C

       Per contra, learned senior counsel for the Respondents Ms. Kiran
Suri argued that under the Explanation to Section 2(1)(d), only goods
and services availed “exclusively for the purpose of earning livelihood
by self-employment” are excluded from the ambit of ‘commercial
purpose’. In the present case, the hostel facilities in the flats constructed   D
by Respondent No. 1 were for the purpose of providing comfortable
accommodation to the nurses, which in turn would increase their
efficiency and lead to provision of better services to the hospital. Hence
the flats were indirectly connected to the commercial purpose of
increasing profits for the hospital. Such a purchase would not fall in          E
the category of ‘earning livelihood by self-employment’. Learned senior
counsel relied on this Court’s decisions in Laxmi Engineering (supra),
Cheema Engineering Services v. Rajan Singh, (1997) 1 SCC 131,
and Kalpavruksha Charitable Trust v. Toshniwal Brothers (Bombay)
Pvt. Ltd., (2000) 1 SCC 512, to buttress her argument.
                                                                                F
        4. Taking into account the material on record and the relevant
jurisprudence on this issue, we are of the considered opinion that the
purchase of flats by the Appellant for the purpose of providing hostel
facilities to the hospital nurses does not qualify as meant for a
‘commercial purpose’. Though the term ‘commercial purpose’ as
referred to under Section 2(1)(d) has nowhere been defined under the            G
provisions of the 1986 Act, this Court has expounded upon it based on
its lateral dictionary meaning in various decisions.
      In Laxmi Engineering (supra), which is one of the leading
authorities on this point, a two-Judge Bench of this Court elucidated
upon the meaning of ‘commercial purpose’ as follows:                            H
572      SUPREME COURT REPORTS                         [2019] 14 S.C.R.


A     “10. A review of the provisions of the Act discloses that the quasi-
      judicial bodies/authorities/agencies created by the Act known as
      District Forums, State Commissions and the National Commission
      are not courts though invested with some of the powers of a civil
      court. They are quasi-judicial tribunals brought into existence to
      render inexpensive and speedy remedies to consumers…The idea
B     was to help the consumers get justice and fair treatment in the
      matter of goods and services purchased and availed by them in
      a market dominated by large trading and manufacturing bodies.
      Indeed, the entire Act revolves round the consumer and is
      designed to protect his interest. The Act provides for “business-
      to-consumer’ disputes and not for “business-to-business”
C
      disputes. This scheme of the Act, in our opinion, is relevant to
      and helps in interpreting the words that fall for consideration in
      this appeal.
      11. Controversy has, however, arisen with respect to meaning
      of the expression “commercial purpose”. It is also not defined
D     in the Act. In the absence of a definition, we have to go by its
      ordinary meaning. “Commercial” denotes “pertaining to
      commerce” (Chamber’s Twentieth Century Dictionary); it means
      “connected with, or engaged in commerce; mercantile; having
      profit as the main aim” (Collins English Dictionary) whereas the
      word “commerce” means “financial transactions especially
E
      buying and selling of merchandise, on a large scale” (Concise
      Oxford Dictionary). The National Commission appears to have
      been taking a consistent view that where a person purchases
      goods “with a view to using such goods for carrying on any
      activity on a large scale for the purpose of earning profit” he
F     will not be a “consumer” within the meaning of Section 2(d)(i)
      of the Act…
      …The explanation reduces the question, what is a “commercial
      purpose”, to a question of fact to be decided in the facts of each
      case. It is not the value of the goods that matters but the purpose
      to which the goods bought are put to. The several words
G     employed in the explanation, viz., “uses them by himself”,
      “exclusively for the purpose of earning his livelihood” and “by
      means of self-employment” make the intention of Parliament
      abundantly clear, that the goods bought must be used by the
      buyer himself, by employing himself for earning his livelihood.”
H                                                   (emphasis supplied)
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                     573
     SHANTI DEVELOPERS [MOHAN M. SHANTANAGOUDAR, J.]


       In the aforementioned discussion in Laxmi Engineering, this           A
Court relied upon Synco Textiles Pvt. Ltd. v. Greaves Cotton and
Company Limited, (1991) 1 CPJ 499. In Synco Textiles, a 4 Member-
Bench of the National Commission headed by V. Balakrishna Eradi J.,
expounded upon the meaning of the term ‘commercial purpose’, prior
to the insertion of the Explanation clause to Section 2(1)(d) of the 1986    B
Act:
      “3…The words “for any commercial purpose” are wide enough
      to take in all cases where goods are purchased for being used
      in any activity directly intended to generate profit…
      4. Going by the plain dictionary meaning of the words used in          C
      the definition section the intention of Parliament must be
      understood to be to exclude from the scope of the expression
      ‘consumer’ any person who buys goods for the purpose of their
      being used in any activity engaged on a large scale for the
      purpose of making profit. It is obvious that Parliament intended       D
      to restrict the benefits of the Act to ordinary consumers
      purchasing goods either for their own consumption or even for
      use in some small venture which they may have embarked upon
      in order to make a living as distinct from large scale
      manufacturing or processing activity carried on for profit. In order
      that exclusion clause should apply it is however necessary that        E
      there should be a close nexus between the transaction of
      purchase of goods and the large scale activity carried on for
      earning profit.
      6. There is a close and direct nexus between the purpose of
      purchase of the generating sets and the commercial activity of         F
      manufacturing of edible oils for trade carried on by the appellant
      company, since the generating sets were intended to be used, as
      and when the need arose, for generating electric current for
      manufacture of edible oils for the purpose of trade. We do not,
      therefore, find any reason to interfere with the view taken by         G
      the State Commission that the appellant is not a ‘consumer’.”
       Recently, a two-Judge bench of this Court, comprising of one of
us, in Paramount Digital Colour Lab (supra) has re-emphasized the
importance of there being a ‘close nexus’ between the purpose for
which the good or service is availed of and a large-scale profit activity    H
574            SUPREME COURT REPORTS                         [2019] 14 S.C.R.


A     in order to classify such a transaction as commercial in nature, as
      illustrated below:
            “12…It is therefore clear, that despite “commercial activity”,
            whether a person would fall within the definition of “consumer”
            or not would be a question of fact in every case. Such question
B           of fact ought to be decided in the facts and circumstances of
            each case.
            17. Since there is nothing on record to show that they wanted
            the machine to be installed for a commercial purpose and not
            exclusively for the purposes of earning their livelihood by means
C           of self-employment, the National Commission was not justified
            in concluding that the appellants have utilised the services of an
            operator or a helper to run a commercial venture. One machine
            does not need many operators or helpers to complete the work
            entrusted. Since the appellants were two partners, they must have
D           been doing the work on their own, of course, may be with the
            aid of a helper or an operator. The machine would not have been
            used in a large-scale profit-making activity but, on the contrary,
            the appellants purchased the machine for their own utility, personal
            handling and for their small venture which they had embarked
            upon to make a livelihood. The same is distinct from large-scale
E           manufacturing or processing activity carried on for huge profits.
            There is no close nexus between the transaction of purchase of
            the machine and the alleged large-scale activity carried on for
            earning profit. Since the appellants had got no employment and
            they were unemployed graduates, that too without finances, it is
F           but natural for them to raise a loan to start the business of
            photography on a small scale for earning their livelihood.”
             Therefore this Court in Paramount Digital Colour Lab (supra)
      held that the purchase of a machine for appellants’ photography
      business, which was a small-scale business meant for earning their
G     livelihood, would not be interpreted as being for a ‘commercial purpose.’
             5. It is true that the aforementioned decisions were rendered in
      the context of deciding whether the goods or services availed of in the
      facts of those cases were for a commercial purpose or exclusively for
      the purpose of self-employment. This does not mean, however, that in
H     every case a negative test has to be adopted wherein any activity that
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                       575
     SHANTI DEVELOPERS [MOHAN M. SHANTANAGOUDAR, J.]


does not fall within the ambit of ‘earning livelihood by means of self-        A
employment’ would necessarily be for a commercial purpose. We reject
Respondent No. 1’s argument in this regard. The Explanation clause
to Section 2(1)(d) of the 1986 Act is only clarificatory in nature, as was
highlighted by this Court in Laxmi Engineering (supra):
      “14. Yet another clarification; the Explanation, in our opinion is       B
      only explanatory; it is more in the nature of a clarification a fact
      which would become evident if one examines the definition
      (minus the explanation) in the context and scheme of the
      enactment. As indicated earlier, the explanation broadly affirms
      the decisions of the National Commission. It merely makes
      explicit what was implicit in the Act. It is not as if the law is        C
      changed by the said explanation; it has been merely made
      clearer.”
        Therefore the Explanation clause only re-affirms the definition
of ‘consumer’ as it already exists. Ultimately, whether or not a person
is a consumer or whether an activity is meant for a commercial purpose         D
will depend upon the facts and circumstances of each case. It may be
the case that a person who engages in commercial activities has
purchased a good or availed of a service for their personal use and
consumption, or for the personal use of a beneficiary, and such purchase
is not linked to their ordinary profit-generating activities or for creation   E
of self-employment. Such a person may still claim to be a ‘consumer.’
       For example, a large corporation may hire the services of a
caterer or a 5-star hotel for hosting a function for its employees and
their families. If there is any deficiency in service, the service-provider
cannot claim that merely because the person availing of the service is         F
a profit-generating entity, and because such transaction does not relate
to generation of livelihood through self-employment, they do not fall
under the definition of a ‘consumer.’ A commercial entity may also be
a consumer depending upon the facts of the case. It is not the identity
of the person but the purpose for which the transaction is made which
is relevant.                                                                   G
       6. With regard to goods and services availed of by employers
for the benefit of their employees, it is particularly important to note
that we live in a socialist economy, wherein the ethos dictates that
employers are obligated to make provisions for the welfare of their
employees. No doubt, welfare measures undertaken by employers may              H
576            SUPREME COURT REPORTS                          [2019] 14 S.C.R.


A     increase workers’ health and efficiency, and therefore improve the
      employing entity’s overall productivity. However this is a duty to be
      shared by all employer organisations and not merely those looking to
      increase their productivity/profits. This obligation exists irrespective of
      how much profit or turnover the organization generates in a year, though
      the degree to which it extends may differ depending upon the financial
B
      capacity of the employer.
             Hence private corporate bodies such as the Appellant trust may
      engage the services of third parties for the purpose of providing
      perquisites to their employees. For example, an employer may book
      flight tickets or train tickets for an employee so as to facilitate their
C
      travel in the ordinary course of business. If any negligence occurs
      resulting in injury to the employee or their property, the airline/railway
      company cannot disclaim liability on the ground that the activity was
      carried out for a ‘commercial purpose’.
             As discussed earlier, if in all such cases the third party service-
D
      provider disclaims liability before consumer forums on the ground that
      the hirer of the service is engaged in trade and commerce, it will open
      a Pandora’s box wherein the employer as well as the employees will
      not have any remedy. This would defeat the object of providing a speedy
      remedy to consumers, as outlined in the provisions of the 1986 Act.
E     Further, setting such a precedent may discourage employers from
      undertaking to provide any facilities for their employees. Hence, it is
      necessary to clarify that the provision of such services would not usually
      be included in the definition of ‘commercial purpose.’
            7. To summarize from the above discussion, though a straight-
F     jacket formula cannot be adopted in every case, the following broad
      principles can be culled out for determining whether an activity or
      transaction is ‘for a commercial purpose’:
                 (i) The question of whether a transaction is for a
                     commercial purpose would depend upon the facts and
G                    circumstances of each case. However, ordinarily,
                     ‘commercial purpose’ is understood to include
                     manufacturing/industrial activity or business-to-business
                     transactions between commercial entities.
                 (ii) The purchase of the good or service should have a close
H                     and direct nexus with a profit-generating activity.
     LILAVATI KIRTILAL MEHTA MEDICAL TRUST v. M/S UNIQUE                       577
     SHANTI DEVELOPERS [MOHAN M. SHANTANAGOUDAR, J.]


           (iii) The identity of the person making the purchase or the         A
                 value of the transaction is not conclusive to the question
                 of whether it is for a commercial purpose. It has to be
                 seen whether the dominant intention or dominant purpose
                 for the transaction was to facilitate some kind of profit
                 generation for the purchaser and/or their beneficiary.
                                                                               B
          (iv) If it is found that the dominant purpose behind purchasing
               the good or service was for the personal use and
               consumption of the purchaser and/or their beneficiary,
               or is otherwise not linked to any commercial activity, the
               question of whether such a purchase was for the purpose
                                                                               C
               of ‘generating livelihood by means of self-employment’
               need not be looked into.
       8. Applying these principles to the facts of the present case, we
find that there is no direct nexus between the purchase of flats by the
Appellant trust and its profit generating activities. The flats were not       D
occupied for undertaking any medical/diagnostic facilities within the
hospital but for accommodating the nurses employed by the hospital.
Moreover, the flats were being provided to the nurses without any rent.
It is not the Respondents’ case that the Appellant was generating any
surplus from occupying the flats or engaging in buying and selling of
flats.                                                                         E

       It may be the case that provision of comfortable hostel facilities
to the nurses, generates a feeling of gratitude and loyalty towards their
employer and improves their overall efficiency, which indirectly results
in the hospital gaining more repute and therefore generating more
income. However, this is a matter of conjecture and there is no direct         F
causal chain which can be drawn between provision of accommodation
to hospital employees and increase in the Appellant’s profits.
       The decision in Kalpavruksha Charitable Trust (supra), relied
upon by the Respondents, does not support them inasmuch as it was
on a different set of facts. In that case, this Court held that the purchase   G
of CT scan machines by a diagnostic centre would be included within
the meaning of ‘commercial purpose’. There is an apparent direct nexus
between the purchase of the machines, medical equipment, etc. and
the running of a diagnostic centre/hospital. The present case does not
involve any such purchase.                                                     H
578             SUPREME COURT REPORTS                           [2019] 14 S.C.R.


A            Further, applying the dominant purpose test, it cannot be said that
      the provision of such hostel facilities is integral to the Appellant trust’s
      commercial activities. The paramount object of providing such facilities
      is to cater to the needs of nurses and combat the challenges faced by
      those who lack permanent accommodation in the city, so as to
      recompense the nurses for the pivotal role which they play as co-
B
      ordinators and custodians of patients’ care.
             Nurses help in the speedy recovery of patients and are a vital
      resource for hospitals and medical centres inasmuch as they are the
      only resource available 24/7 for catering to patients’ needs. They are
      directly involved in all aspects of hospital service quality, be it in the
C     form of monitoring patients’ recovery, bedside medication management
      or assistance with surgeries and other major operations. In some
      situations they are responsible for performing immediate interventions
      to prevent medical complications. They are on the frontlines of
      administering and evaluating treatment, and provide invaluable emotional
D     support as they are best placed to understand the complexities and
      implications of having a serious illness.
              Hence the provision of hostel facilities to nurses so as to facilitate
      better medical care is a positive duty enjoined upon the hospital so as
      to maintain the beneficial effects of the curative care efforts undertaken
E     by it. Such a duty exists irrespective of the surplus or turnover generated
      by the hospital, and hence is not even remotely related to the object of
      earning profits or for any commercial use as envisaged under Section
      2(1)(d).
            9. Hence we find that the Appellant trust is a ‘consumer’ under
F     Section 2(1)(d) of the 1986 Act for the present transaction under
      consideration. In light of the above discussion, we consider it appropriate
      to remand the matter to the National Commission for consideration in
      accordance with law. The appeal is allowed and restored before the
      National Commission, and the impugned judgment is set aside, in the
      aforesaid terms. The parties are relegated to record their evidence
G     before the National Commission, and the National Commission is
      requested to hear the matter on merits and decide the same
      expeditiously, at an early date.


      Divya Pandey                                                   Appeal allowed.
H