DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Vivek High School, through its Chairman, H.S. Mamik, Sector 38-B, Chandigarh.

              ---Complainant

Vs

Harness Overseas Marketing Private Limited, through its Director, Lalit Chopra, SCO No. 381, Sector 37-D, Chandigarh.

---- Opposite Party

BEFORE:    SH. LAKSHMAN SHARMA             PRESIDENT

MRS.MADHU MUTNEJA               MEMBER

           SH.JASWINDER SINGH SIDHU        MEMBER

Argued By:    Sh. Inderjit Kaushal, Counsel for Complainant.

Sh. I.S. Ratta, Counsel for Opposite Party.

PER MADHU MUTNEJA, MEMBER

1.        The Complainant had invited tenders for installation of a Sound Reinforcement System & Audio Visual facilities for its School Auditorium, which included supply, installation, testing and commissioning of Sound Reinforcement System & Audio Visual facilities. The Architects of the Complainant had recommended the installation of JBL Speakers of the following specifications: -

           (a)  SRX-715 as FOH Speaker

           (b)  SRX-715 as Sub Woofer

The Complainant has stated that the Opposite Party had submitted a draft proposal for the design, supply and installation of OHM Sound System with a condition that in case the OHM Sound System was found unsatisfactory, it would be replaced by JBL Sound System, within 20 days after the receipt of written intimation without any extra cost. The Complainant placed an order with the Opposite Party on 6.2.2008 and paid a sum of Rs.4,70,041/- as 25% advance vide Cheque (Annexure         C-2). The Complainant has stated that despite receipt of the advance, the Opposite Party did not deliver the Speakers within 45 days and kept on delaying the installation on technical pretexts. The Opposite Party also raised various bills for releasing the payment and accordingly the Complainant made full payments in accordance with the bills raised. According to the Complainant a total sum of Rs.7,91,400/- has been paid. The complete system was eventually installed in January, 2010. It has been stated that after installation, the Chairman of the School immediately communicated to the Opposite Party on 6.5.2010 that they were not satisfied with the OHM Speakers and requested for replacement. However, despite various requests by the complaint, the Speakers were not replaced. A legal notice dated 10.08.2010 was then served on the Opposite Party to replace the Speakers. Eventually, the Complainant requested the Opposite Party to take back the Equipment supplied and refund the amount received vide letter dated 1.12.2010, as the Complainant had already purchased JBL Speakers from another company. Opposite Party refused to refund the amount and instead offered replacement vide letter dated 30.10.2010 (Annexure C-14). The Complainant has thus filed the instant complaint with a prayer that the Opposite Party be directed to refund the amount paid along with interest and compensation for deficiency in service and unfair trade practice.  

2.        Notice of the complaint was sent to Opposite Party seeking their version of the case.

3.        The Opposite Party in reply has taken preliminary objection to the effect that the product supplied to the Complainant was of a far more superior quality than the one requested for. Also, the Complainant has withheld payment of Rs.1.90 lacs.

          On merits, Opposite Party has contested the position of Sh. H.S. Mamik as Chairman of the Trust or the powers vested in him to pursue the instant complaint. Opposite Party has stated that as per records Vivek High School had placed on order for supply of OHM Sound Systems worth Rs.12,20,850/- and stage lightening system worth Rs.8,22,000/- totaling Rs.20,42,850/-. A special discount of 11.50% i.e. Rs.2,35,000/- was offered to the Complainant. Thus, the value of the total order was Rs.18,80,164/-. The following note had been incorporated in the Order: -

“As per your offer & discussion, if the working of the OHM Sound System is found unsatisfactory then it will be replaced by JBL Sound Systems (as per our tender specs) within 20 days after receipt of written intimation without extra cost.”  

Opposite Party has stated that they were obligated to replace the Sound System only in case the Sound System so supplied was of inferior quality or performance and not at the whims and fancies of Sh. H.S. Mamik. Opposite Party has admitted the receipt of Rs.4,70,041/- as advance. Opposite Party has also submitted that installation of equipment was delayed as the construction of the building was delayed. Nevertheless, Opposite Party had supplied the material worth Rs.16,27,385/- vide Invoice dated 29.11.2008. The actual price of the material supplied was Rs.17,22,100/- and a special discount of 11.50% had been offered. An additional discount of 4.5% was also given later. Opposite Party has further admitted receipt of payment of Rs.9,40,082/- vide Cheque dated 18.12.2008 for other materials. Opposite Party has referred to more payments after discount received from the Complainant for the equipment supplied, which have not been detailed by the Complainant against different bills/ invoices raised. Details of these are from Para 6.3 to 6.7 of the reply.

          As per the Opposite Party, a sum of Rs.1.90 lacs is still due from the Complainant and when the Opposite Party pressed the Complainant for payment, the Complainant started raising his bogey of replacement of the sound system with that of JBL.  All other material contentions of the complaint were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint.

4.        In response to the reply filed by the Opposite Party, an additional affidavit of Sh. H.S. Mamik dated 24.08.2011 was filed on behalf of the Complainant. It has been stated in the affidavit that the School is a consumer within the definition of the Act and the complaint has been filed due to deficiency in service and unfair trade practice by the Opposite Party in not refunding the amount of Rs.7,91,400/-. The product supplied by the Opposite Party was of inferior quality. As per the recommendations of the Technical Consultant, JBL Speakers were to be installed in the School Auditorium in accordance with the specifications for sound reinforcement system. Despite agreement for replacement within twenty days after the receipt of written intimation the Opposite Party had initially delayed the installation of equipment and has later refused to replace the equipment. The Complainant has also stated that they have not withheld any amount of the Opposite Party as alleged and have never used the defective OHM Speakers installed by the Opposite Party.  

5.        During the course of proceedings, a suggestion was made by this Forum for a compromise between both the Parties. A consensus was reached for refund of the amount actually paid by the Complainant.

6.        The Opposite Party later filed an affidavit dated 19.9.2012 of Sh. P.S. Sandhu, Director, M/s Harness Overseas Marketing (P) Ltd., in additional evidence, showing the mauled condition of Audio/ Music Equipment which was to be returned by the Complainant to the Opposite Party in the event of the Opposite Party paying the agreed sum of Rs.5,85,637/-.  As per this affidavit, the Opposite Party has alleged that the Complainant has used the equipment for a period of two years and the damage to the equipment is so extensive as if it had been dumped at a place without any protection from rains and other climatic vagaries and had been used without any care. Hence, the equipments have been damaged badly and is beyond repairs. It is also mentioned in the affidavit that after protracted parleys interse the parties, the amount payable by the Opposite Party to the Complainant was mutually settled at Rs.5,85,637/-. But before making the payment, Opposite Party had repeatedly requested the Complainant to produce the returnable Audio/ Music Equipment so as to enable it to verify the condition and workability. The Complainant did not allow the Opposite Party to inspect the equipment. Later when access was allowed, the representative of the Opposite Party Sh. K.K. Massey was shocked to find that the equipment was in a very bad shape and condition. Photographs of the equipment taken with the mobile phone camera have been attached at Annexures R-10 to R-13 colly. Hence, according to the Opposite Party the equipment has no use or marketable worth now.

          In reply to the aforesaid affidavit, the Complainant filed an affidavit dated 15.10.2012 of Sh. H.S. Mamik, Chairman, Vivek High School, wherein the Complainant has denied that that the speaker system was in mauled condition. It has been stated in the affidavit that the speakers were hanging in the School Auditorium and the equipment is safely protected in a room. It has also been stated that the Complainant School was forced to purchase the JBL speakers vide bill dated 23.10.2010 by spending a huge amount (Bill Annexure C-12). Also, the equipment was to be replaced within 20 days after receipt of written intimation without any extra cost and was to be delivered within 45 days from the date of placing the confirmed purchase order. The Opposite Party took two years to install the defective speakers and has not yet complied with the request for replacement. The Complainant had thus eventually purchased the required speakers from another agency. The Opposite Party is well aware of this fact, that is why they had offered vide letter dated 30.11.2010 to replace the speakers and not return the money. Also, the statement of account attached by the Opposite Party at Annexure R-9 has no relevance now. The Opposite Party had visited the School premises for seeing the equipments, but later on clicked the photographs from their mobile phone without getting electric lights on in the Auditorium in order to show the bad condition of the speakers. It is submitted by the Complainant that the speakers installed by the Opposite Party are still lying in the same condition and the equipments are properly stored in order to seek refund from the Opposite Party.    

7.        The Opposite Party had also filed written submissions. The legal status of the School has been questioned, as well as the capacity of Sh. H.S. Mamik to file the present complaint has again been questioned. Also, it has been stated that there is no defect in the material supplied and it was of a better quality and value than the specifications mentioned in the agreement. As per the claim of Rs.7,19,400/-, the Accountants of both the Complainant and Opposite Party reconciled their accounts and it was found that the maximum due was Rs.5,85,637/-. Also, the material lying with the Complainant is in very bad shape as the Complainant has not taken due care to keep it in good condition.

8.        Parties led evidence in support of their contentions.

9.        We have heard the learned counsel for the parties and have perused the record, along with written submissions filed by the Opposite Party.

10.       The dispute involves dis-satisfaction of the Complainant with regard to an audio system provided by the Opposite Party to the Complainant as per the specifications. The Complainant’s case is that the Opposite Party has not provided right equipment and on requested to change the equipment, there was no compliance. Later when the Complainant requested for refund, the Opposite Party has not paid the money. The Opposite Party has taken the stand that the equipment provided was of very good quality and no fault could be found. However, during the course of proceedings the Opposite Party had agreed to refund the amount actually received in accordance with the terms and conditions. The contract between the parties, if any, is not in record, except the offer/ booking letter dated 06.02.2008 and written notings/ acceptance thereon. 

11.       The allegations of the Complainant with regard to an acceptance by the Opposite Party that in case the equipment is not found satisfactory, there would be a replacement is only discernible from the order dated 06.02.2010 and the OP's letter dated 30.11.2010. There is no commitment for refund on record. The equipment has been supplied in January, 2010 and by the Complainant’s own averment, the request for replacement has been made in May, 2010. The equipment is still with the School and is installed on the walls as per the own averment of the Complainant; hence, even though other equipment may also have been installed, it is not possible that this equipment is not in use. Even in the absence of the commitment of the Opposite Party for refund, an offer was made, as already stated above for conciliation as per the facts on record. A sum of Rs.5,85,637/- was agreed to be refunded, but when the Opposite Party actually verified the physical condition of the equipment, they were not satisfied and did not wish to pay the agreed amount at Annexure R-9. There is no bill/ document on record to show that the cost of equipment was Rs.7,91,400/- as claimed. However, as the equipment has been lying with the Complainant for over two years now, and has suffered normal wear and tear whether in use or not and whether kept carefully or not. Hence, a reasonable amount of depreciation should be given to the Opposite Party in lieu of the time elapsed on the amount actually paid.

12.       Keeping in view the foregoings, we allow a reasonable depreciation of 10% p.a. from the date of installation of equipment on the amount actually paid by the Complainant. Opposite Party has said that the amount agreed for refund without depreciation was Rs.5,85,637/-. This has not been denied by the Complainant. Hence, depreciation @ 5% p.a. on Rs.5,85,637/- on reducing balance be deducted by the Opposite Party from 1 Jan. 2010, till the date of this order. The remaining amount so arrived at be refunded by the Opposite Party to the Complainant. The Complainant must return the equipment forthwith on receipt of payment. 

13.       This order shall be complied by the Opposite Party within 45 days from the date of its receipt, failing which Opposite Party will be liable for an interest @12% per annum on the determined amount, from the date of this order, till it is paid. Opposite Party will also pay Rs.7,000/- as cost of litigation.

14.       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

26^th November, 2012.                                            

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

 MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER