Per Sri A. Hazarath Rao, President:-

        The complainant filed this complaint under section 12 of Consumer Protection Act seeking Rs.62,000/- being value of ECG machine; together with interest on it from the date of purchase; Rs.1,00,000/- towards loss of business, loss of reputation and mental agony and for costs.

2.  In brief the averments of the complaint are these:

        The 2^nd opposite party is a manufacturer of health care systems to which the 1^st opposite party is an agent at Vijayawada.   The complainant is a self employed lab technician and purchased an ECG machine on 20-02-10 for Rs.62,000/- from the 1^st opposite party.   The complainant paid the entire amount and took delivery of ECG machine with one year warranty.   ECG machine purchased by the complainant began malfunctioning from the day one on several aspects of its required performance.   Several reputed doctors used to send their patients and specimens to the complainant.   Due to malfunctioning of ECG machine sold by the opposite parties the complainant had to face the ire of the doctors and patients.    The opposite parties did not respond when the complainant brought to the notice of malfunctioning of ECG.   The opposite parties did not care to honour the warranty given by them.   The complainant handed over the ECG machine sold by the opposite parties to the 1^st opposite party under written acknowledgment.   The opposite parties did not make any efforts to replace the faulty ECG machine sold by them.  To save his business and retain his customers and good reputation and goodwill the complainant purchased a new ECG machine.   The complainant suffered huge loss of business, loss of reputation and suffered mental agony due to stoic silence, inaction and indifference of the opposite parties.   The complainant estimated the loss of business, loss of goodwill and mental agony at Rs.1,00,000/-.   The opposite parties are bound to reimburse the loss.   The opposite parties did not respond properly to the complainant’s notice dated 29-07-10.   The complaint therefore be allowed.

3.   The 2^nd opposite party remained exparte.

4.    The contention of the 1^st opposite party in brief is hereunder:

        This Forum has no jurisdiction to entertain the complaint.   The complaint is not maintainable under the purview of CP Act being a commercial transaction.   Subsequent to purchase the complainant made a complaint to the 1^st opposite party regarding the functioning of ECG machine. The prime medical systems of Vijayawada sent their service engineer to Guntur for attending repairs and found no fault in the machine.  The service engineer informed the complainant that the trouble was due to poor maintenance and there was no defect in the machine.  After a gap of one week the complainant handed over the ECG machine to M/s Prime Medical systems without intimating to the 1^st opposite party.    The Prime Medical Systems verified the machine and did not find any fault in the machine.    The said Prime Medical System sent a letter to the complainant on 09-06-10 to take back the machine.   But the complainant refused to receive the letter knowing the contents therein.   With an ulterior motto and to defame the               1^st opposite party the complainant filed this case with false averments.     The complaint therefore be dismissed.

5.    Exs.A-1 to A-6 and Exs.B-1 to B-3 on behalf of the complainant and the 1^st opposite party were marked respectively.

6.    Now the points that arose for consideration in this complaint are:

1. Whether the complainant is a consumer within the purview of CP Act?
2. Whether this Forum has no jurisdiction to entertain the complaint?
3. Whether the opposite parties committed deficiency of service?
4. Whether the complainant is entitled to compensation and if so to what amount?
5. To what relief?

7.     Undisputed facts in this case are these:

1. The complainant purchased ECG machine for Rs.62,000/-    on 22-02-10 from the 1^st opposite party (Ex.A-4).
2. The 1^st opposite party is an agent of the 2^nd opposite party.
3. The 2^nd opposite party is the manufacturer of the ECG machine covered by Ex.A-4.
4. The ECG machine under Ex.A-4 was covered by warranty (Ex.A-1).
5. The complainant brought to the notice of the 1^st opposite party regarding mal functioning of the ECG.

8.   POINT No.1:-     The complainant in his complaint mentioned that he established Bharathi X-rays for his self sustenance and for self employment.  The complainant relied on the decisions reported in 1997 (1) CPR 30 (SC), 2007 (2) ALT (1) (CPA) (NC), 2001 (3) CPR 149.

9.    In M/s Chima Engineering Services vs. Rajan Singh 1997 (1) CPR 30 (SC) while dealing with explanation to the definition consumer the Hon’ble Supreme Court held

                “In other words, the explanation excludes from the ambit of commercial purpose in sub-clause (i) of Section 2(1)(d), any goods purchased by a consumer and used by him exclusively for the purpose of earning his livelihood by means of self employment.   Such purchase of goods is not a commercial purpose.   The question is therefore is; whether the respondent has been using the aforesaid machine for self employment?  The word ‘self employment’ is not defined.   Therefore, it is 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 his livelihood without a sense of commercial purpose by employing on regular basis the employee or work men for trade in the manufacture and sale of bricks, it would be for self employment.   Manufacture and sale of bricks in a commercial way may also be to earn livelihood, but “merely earning livelihood in commercial business”, does not mean that it is not for commercial purpose.   Self employment connotes altogether a different concept, namely, he alone use the machinery purchased for the purpose of manufacture by employing himself in working out or producing the goods for earning his livelihood.   ‘He’ includes the members of his family.   Whether the respondent is using the machine exclusively by himself and the members of his family for preparation, manufacture and sale of bricks or whether he employed any workmen and if so, how many, are matters of evidence the burden is on the respondent to prove them”.         

10.   In New Delhi Municipal Corporation vs. Sohanlal Sachdev (dead) represented by M/s Hirendra Sachdev w/o late Sohanlal Sachdev [2002 (2) SCC 494] the Supreme Court considered the meaning of the words commerce and commercial purpose and held

                “The two terms “domestic” and commercial are not defined in the Act or the Rules.   Therefore, the expressions are to be given the common parlance meaning and must be understood in their natural, ordinary and popular sense.   In interpreting the phrases the context in which they are used is also to be kept in mind.   In Stroud’s Judicial Dictionary (5^th Edn.) the term “commercial” is defined as “traffic, and trade or merchandise in buying and selling of goods”.   In the said dictionary the phrase “domestic purpose” is stated to mean use for personal residential purposes.   In essence the question is, what the character of the purpose of use of the premises by the owner or landlord is and not the character of the place of user.   For example, running a boarding house is a business, but persons in a boarding house may use water for “domestic” purposes.    As noted earlier the classification made for the purpose of charging electricity duty by NDMC sets out the categories “domestic” user as contradistinguished from “commercial” user or to put it differently “non-domestic user”.   The intent and purpose of the classification, as we see it, is to make a distinction between purely “private residential purpose” as against “commercial purpose”.   In the case of a “guest house”, the building is used for providing accommodation to “guests” who may be travelers, passengers, or such persons who may use the premises temporarily for the purpose of their stay on payment of the charges.    The use for which the building is put by the keeper of the guest house, in the context cannot be said to be for purely residential purpose.   Then the question is, can the use of the premises be said to be for “commercial purposes”?   Keeping in mind the context in which the phrases are used and the purpose for which the classification is made, it is our considered view that the question must be answered in the affirmative.   It is the user of the premises by the owner (not necessarily absolute owner) which is relevant for determination of the question and not the purpose for which the guest of occupant of the guest house uses electric energy”. 

11.      In M/s Jennifer Alphonse vs. the Managing Director M/s Ind. Auto Limited and another [2001 (1) CPR 149] it was held

                “even assuming that the purchase was for commercial purpose if the defect occurred during the warranty period, the service under the warranty being ‘service’ as per section 2(1)(O) of the Consumer Protection Act, 1986 the complainant has to be treated as a consumer”.     

12.   As against the above decisions, the opposite party relied on the decisions reported in [2003 (4) CPJ 149 (NC)] and [2003 (4) CPJ 150 (NC)].   In Venkatesh Trading Company vs. Secretary, APMC, Karnataka [2003 (4) CPJ 150 (NC)] the question that arose was whether the collapse of roof was on account of use of inferior building materials.   Therefore the above decision is not applicable to the facts of the case on hand.

13.    The decision reported in M/s Lakshmi Engineering Woks vs. PSG Industrial Institute [1995 (2) CPJ (1) (SC)] was followed in Mediview Diagnostic Services (P) Limited and another vs. Philips Medical Systems and others [2003 (4) CPJ 149] and held that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will fall outside the scope of the definition of consumer.   It is not the case of the opposite party herein that the complainant purchased ECG machine for resale.   Under those circumstances the above decision is also distinguishable on facts and as such has no application to the facts of the case. 

14.    The contention of the complainant is that he purchased the disputed ECG machine for his self employment while the contention of the opposite party is that the complainant purchased the said ECG machine for commercial purpose.  

15.   In Polymech Plast Machines Limited and another vs. Apple Plast Private Limited 2004 (4) ALT 19 (CPA)

        “In the affidavit filed by the respondent/complainant before us                   two averments are important; and they are, that:

        (e) There was no employment of labour on regular basis for                      manufacturing large scale manufacturing or processing                      activity carried on for profit.

         (g) This one machine for production of container and other machine for making caps for said containers so produced are meant for one man operation which depended being the only members of the family was entrusted by the member of the family to do the job and as such there was no question of large scale manufacturing or processing activity for profit replying on said single unit of machine.

                From the simple reading of this evidence which has been filed by the way of affidavit it is clear that there is no employment of labour on regular basis and the machine was generally worked by the one man and it has been clearly spelt out that this was for earning their livelihood of which he has given comprehensive details in the affidavit filed by way of evidence.   Since this fact remains unrebutted that it was for self employment and in view the law laid down by the Hon’ble Supreme Court (supra) we have no doubt in our minds in accepting the plea of the respondent/complainant  that he had purchased the machine for his self employment and for earning his livelihood”.  

16.   In his affidavit the complainant mentioned that he is not doing any business only a self employed technician, his unit is a very small one, the income generated is hardly sufficient for his maintenance not an income tax assessee.   The 1^st opposite party have not denied those allegations in his affidavit.   To rebut it the 1^st opposite party did neither file either income tax returns of the complainant nor the records from Labour Department nor from any Commercial Tax Department.   

Taking a clue from the above decisions it can be said that the complainant purchased the ECG machine for self employment.  We therefore answer this point against the opposite parties.   

17.   POINT No.2:-     The contesting 1^st opposite party in his version mentioned that this Forum has no jurisdiction to entertain the complaint.  This Forum has monitory jurisdiction to entertain the complaint as the value of the complaint was below Rs.2,00,000/-.   Regarding territorial jurisdiction the opposite parties 1 and 2 are residents of Vijayawada and Bangalore respectively.  

18.    The complainant in para IV of his complaint mentioned that entire transaction took place at Guntur including delivery and demonstration and installation.   In para I of his complaint the complainant mentioned that the complainant paid the entire amount and took delivery of the ECG machine.   Therefore the averments mentioned in cause of action para cannot be believed.   

19.   In Ex.A-4 invoice it was mentioned that all disputes are subject to Vijayawada jurisdiction.    The 1^st opposite party as already observed is resident of Vijayawada.   Section 11 (2)(b) of Consumer Protection Act deals with territorial jurisdiction.    In Polymech Plast Machines Limited and another vs. Apple Plast Private Limited 2004 (4) ALT 19 (CPA) it was held

                “Thus, it is clear from a plain reading of the above profession that the Consumer Forum will have jurisdiction where the company has a branch office and it is not in dispute that the appellant has a branch office in Kolkata and this office has also played an active role in obtaining the order, receiving part of the money and also at the time of erection of the unit for the complainant’s premises.  Undisputedly, cause of action has arisen in Kolkata.  In view of this, we are unable to sustain the objection raised by the appellant that the West Bengal State Commission has no jurisdiction.

                It is true that in the invoice, it is mentioned that it was subject to Baroda’s Jurisdiction. It has been held several times by this commission that the Consumer Protection Act, 1986, which is a socially beneficial legislation cannot be permitted to be undermined by such contracts.  Section 11 of the Act would determine the jurisdiction.  Hence, the words ‘subject to Baroda jurisdiction’ used in the invoice would not oust the jurisdiction of the Consumer Forum as it would be contrary to aforesaid section 11 (2) of the Act.

                In any case, the words used in the invoice to the effect that ‘subject to Baroda jurisdiction would not oust the jurisdiction of the State Commission wherein the main cause of action arose. In any case, the unilateral condition incorporated in the invoice, apart from the fact that it may not be binding on the respondent, as there was no conscious agreement, would not deprive the Consumer Forum of its power to do justice. The scheme of statute is to provide quicker redressal forums for attending to the grievances of consumers regarding deficiency in service and give finality to the order passed by the agencies. Further, the Consumer Forum is undoubtedly a quasi-judicial body, which is required to observe the principles of natural justice but not absolute technicalities developed under various substantive provisions of law.  The object of the Act, of providing inexpensive and speedy justice in disputes arising between consumers and suppliers for goods and services, would be frustrated if contention of the appellant is accepted.  Hence, in the facts of the case, ousting of the jurisdiction would operate harshly and would be oppressive and unfair to the respondent”.

20.    In the above case cause of action arose in Kolkata.    But in this case no cause of action arose at Guntur.   It is well in settled in law that a parties to a contract can consent for jurisdiction at a place where cause of action arose.   In this case the cause of action arose at Vijayawada under Ex.A-4 and also where the 1^st opposite party is carrying on business.   Therefore the above decision on the aspect of jurisdiction is not applicable to the facts of the case.   We therefore opine that this Forum has no territorial jurisdiction to entertain the complaint.   For the above discussion we answer this point against the complainant.    

21.  POINTS 3 & 4:-  In view of our findings on the aspect of jurisdiction we are of the view that no finding will be given.   Hence these points are answered accordingly.

22.   POINT No.5:-   In view of findings on point No.2 the complaint is returned for presentation to the proper Forum.

        Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 20^th day of              September, 2011.

MEMBER                                 MEMBER                         PRESIDENT

APPENDIX OF EVIDENCE

      DOCUMENTS MARKED

For Complainant:

For 1^st opposite party:   

 PRESIDENT