BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA<br /> <br /> PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President,<br /> <br /> 2. M.N.MANOHARA, B.A., LLB., Member,<br /> <br /> 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, <br /> <br /> ORDER<br /> <br /> Complaint No.MDF/C.C.No.79/2008<br /> Order dated this the 15th day of December 2008<br /> <br /> COMPLAINANT/S Sri.Siddappaji<br /> Proprietor of Gurudeva Spring & Body Builders, Sugar Factory Circle, M.C.Road, Mandya.<br /> (By Sri.K.V.Sheshadri., Advocate)<br /> -Vs-<br /> OPPOSITE PARTY/S 1. Assistant Executive Engineer, 32, Hemavathi Left Nala Sub-Division, Cauvery Neeravari Nigama, Basaralu, Mandya Taluk.<br /> <br /> 2. Executive Engineer, No.7, Hemavathi Left, Bank Channel Division, Cauvery Neeravari Nigama, Nagamangala. <br /> (By Sri.B.Mayanna., Advocate for O.P.1 & <br /> Sri.L.K.Manjunatha., Advocate for O.P.2)<br /> <br /> Date of complaint 14.08.2008<br /> Date of service of notice to<br /> Opposite parties 25.08.2008 <br /> Date of order 15.12.2008<br /> Total Period 3 Months & 20 Days<br /> Result The complaint is dismissed with liberty to approach the Civil Court for the relief sought for. There is no order as to costs.<br /> <br /> Sri.Siddegowda,<br /> President<br /> <br /> 1. This complaint is filed under section 12 of the Consumer Protection Act 1986, against the Opposite parties for delivery of the auctioned materials and to pay damages of Rs.2,00,000/-, incidental charges of Rs.3,300/- and another Rs.59,000/-.<br /> 2. The brief facts of the complaint are that as per public information, by depositing Rs.5,000/-, the complainant participated in public auction with respect to unserviceable machinery parts which are in the custody of the 1st Opposite party and sub-ordinate official of 2nd Opposite party, on 17.06.2008 and the complainant is the highest bidder for 19 items auction and the bid was accepted by 2nd Opposite party. After calculating the VAT tax on the auctioned amount, as per the information of 2nd Opposite party, the complainant deposited Rs.58,501/-. The 2nd Opposite party ought to have delivered the materials auctioned to the complainant immediately as per the terms of the public auction to the complainant. But inspite of several reminders, 2nd Opposite party postponed the delivery for one reason or the other for which the complainant issued a reminder letter on 01.07.2008 to Opposite parties and marking copy to Superintending Engineer, Holenarasipura and Chief Engineer, Gorur. To the surprise of the complainant, the 2nd Opposite party issued a paper notification in Andolana newspaper on 02.07.2008 for auction of the same materials which were auctioned already on 17.06.2008. In order to avoid the multiplicity of the proceedings, the complainant also issued a public notice through the same Andolana paper on 03.07.2008 informing the public about the earlier auction. For this, the complainant paid Rs.1,000/-. The complainant has also issued legal notice dated 02.07.2008 to 2nd Opposite party and higher authorities not to arrange the public bid of the same materials. In the meanwhile, the complainant also filed a bare Injunction suit in O.S. 105/2008 on the file of Civil Judge (Jr.Dv.) Nagamangala to direct the Opposite parties not to proceed with the proposed auction. As per oral requisition of the 1st Opposite party, the complainant incurred expenses of Rs.30,000/- for construction of zing sheets over angular frame and poles in front of Ganesha Temple at the office of 1st Opposite party, apart from Rs.4,000/- for repairs of departmental jeep and Rs.25,000/- to some other machinery repairs. In spite of legal notice, the Opposite parties have not complied. The complainant is a consumer and Opposite parties have committed deficiency in service. Therefore, the complaint is filed for the above relief.<br /> 3. Notice of the complainant was served on the 1st & 2nd Opposite parties. The 2nd Opposite party has filed the version and 1st Opposite party is the Subordinate Officer and has not filed version. It is pleaded by the 2nd Opposite party that the complainant is not a Consumer and hence, the complaint is not maintainable. It is admitted about the auction of 19 items and the complainant is a highest bidder in public auction. The Opposite party has not accepted the bid of the complainant for the reason that value of the machineries is higher then the bid amount of Rs.58,501/-. Though the complainant has deposited the highest bid amount, the Opposite party wrote a letter to higher authority seeking order either to accept the bid of the complainant or to conduct the auction afresh and the higher authority cancelled the bid of the complainant and directed the 2nd Opposite party to conduct separate bid with respect to the machineries and materials. Therefore, 2nd Opposite party cannot deliver the machineries to the complainant. The other allegations are denied. The complainant is not entitled to any monetary relief and for delivery of the machineries, since no auction was conducted by Opposite parties on 11.07.2008. The prayer of the complainant in the original suit before civil court for injunction became infructous. The Opposite party made it clear that the complainant is at liberty to receive back his bid amount from the office of the Opposite party at any moment. Therefore, the complaint is liable to be dismissed with costs. <br /> 4. During trail, the complainant is examined and documents Ex.C.1 to Ex.C.11 are produced. On behalf of the Opposite parties, 2nd Opposite party is examined and produced the documents Ex.R.1 to R.9. <br /> 5. We have heard both sides.<br /> 6. Now the points that arise for our considerations are:-<br /> 1) Whether the Opposite party has committed deficiency in service in not delivering the auctioned items?<br /> 2) Whether the complainant is a consumer and the complaint is maintainable?<br /> 3) Whether the complainant has spent Rs.59,000/- for works in the Ganesh Temple and repair of the departmental jeep and machinery?<br /> 4) Whether the complainant is entitled to the compensation of Rs.2,00,000/- with incidental charges of Rs.3,300/-?<br /> 5) What order?<br /> 7. Our findings and reasons are as here under:-<br /> 8. POINT No.1:- The undisputed facts are that the 2nd Opposite party issued a public notification as per Ex.R.1 advertising the auction of 17 items of unusable machinery. On 17.06.2008 with certain conditions and likewise Ex.R.2 in respect of two items. Accordingly on 17.06.2008, the materials were auctioned and as per Ex.C.1 there were 5 bidders and the complainant is the highest bidder for Rs.36,100/- and including VAT at 12.5% totally amount is Rs.40,613/- in respect of 17 items and is the higher bidder for Rs.17,888/- for other items and totally he deposited Rs.58,501/- and the 1st Opposite party has issued the receipt as per Ex.C.2. In Ex.C.1, the 2nd Opposite party has directed to deposit the amount and obtaining the receipt, to take the auctioned materials and he has sent copy of the auction proceedings Ex.C.1 to his higher officers. It is admitted fact that the auctioned materials were not delivered to the complainant. It is also admitted fact that the complainant issued a letter dated 01.07.2008 demanding the delivery of the materials. It is also admitted fact that again the Opposite party issued public advertisement for auction of the said materials on 11.07.2008 as per Ex.C.6 and the complainant file Original Suit in OS.No.105.2008 before the Civil Judge (Jr.Dv.) Nagamangala for a Bare injunction to direct the Opposite parties not to proceed with the proposed auction on 11.07.2008 and the suit is pending. The complainant has also got issued a public notice to the public not to participate in proposed auction as per Ex.C.7. On the ground those materials were already auctioned by the Opposite parties. The complainant has also got issued legal notice Ex.C.5 dated 02.07.2008 and for that legal notice there is no reply. <br /> 9. The contention of the complainant is that the Opposite parties have not delivered the auctioned items and therefore, they committed deficiency in service. But the contention of the 2nd Opposite party is that the highest bid of the complainant is not accepted and he sought for the orders of the higher authority to accept the bid or to conduct the auction afresh and in that connection the higher authority cancelled the bid of the complainant as the value of the machinery is above Rs.58,501/- the bid amount of the complainant and therefore to avoid substantial loss to the department, 2nd Opposite party declined to deliver the machineries. <br /> 10. Though the Opposite party has taken contention that the higher authority did not approve the highest bid of the complainant and therefore the auction materials were not delivered, but with respect to item number 1 to 17 mentioned in Ex.R.1, as per Ex.R.3, 2nd Opposite party has sent letter to the complainant without any date that the higher authorities have approved to deliver the item no.1 to 17 mentioned in Ex.R.1. According to the complainant, he has not received any such letter. So according to this letter Ex.R.3, 2nd Opposite party is ready to deliver the item no.1 to 17. So it appears that the process has taken place after filing of the complaint, because Ex.R.3 letter is not at all dated and copy of this letter is sent to the advocate appearing for 2nd Opposite party and no acknowledgement for having sent to the complainant is produced. In support of the letter Ex.R.3, the Opposite party has produced Ex.R.4 dated 24.09.2008. The Opposite party has produced Ex.R.5 the copy of the letter said to have been sent to the complainant stating that higher authorities have cancelled the auction in respect of two items for Rs.15,900/- and including Vat totally Rs.17,888/-. But this letter is dated 05.11.2008 copy is sent to the advocate for the 2nd Opposite party and this letter is after the filing of the complaint. The Opposite party has mainly relied upon Ex.R.9 a circular issued by the department. It is contended that the auction sale proceedings shall be approved by the Chief Engineer of Central Mechanical Organisation, but this circular is dated 15.06.1991 and during 1993 the Executive Engineer W & M Division, Gorur has sent the copy to AEE No.1 W & M Sub-Division, Gorur and No.2 W & M Sub-Division, Rajajinagar, Bangalore, No.3 W & M Sub-Division, Mysore and Mechanical Sub-Division, Shimoga for information and necessary action and earlier it was addressed to the Executive Engineer W & M Division, Gorur, Hunsagi, Bheemarayanagudi and Naviluteertha for information and necessary action. But if we read this circular Ex.R.9, we do not know whether this circular is in force or not and further particularly this circular is applicable to tender cum auction sale proceedings.<br /> 11. Admittedly in this case, it is not a case of tender cum auction sale. It is a direct open auction. The terms and conditions of the auction are mentioned in Ex.R.1 and R.2 and the same conditions are mentioned for the fresh auction on 11.07.2008. No.1 of the condition is very clear that the decision of accepting or rejecting the bid is left to 2nd Opposite party. There is no condition that this public auction highest bid should be approved by the higher authority of 2nd Opposite party. If that was the condition, 2nd Opposite party would not have issued the letter Ex.C.1 and another letter for two items to deposit the bid amount and would not have accepted the bid amount and issued the receipt Ex.C.2 for Rs.58,501/- totally. Therefore, the contention of the Opposite party that as per the direction of the Superior Authorities the highest bid of the complainant was rejected and the materials were not delivered to the complainant is un-sustainable and therefore, Opposite party has committed deficiency in service.<br /> 12. POINT NO.2:- The Opposite party has taken the contention that the complainant is not a consumer and the complaint is not maintainable. The complainant has relied upon a decision reported in 1993(1) CPJ 25 in the case of S.P.Jayagopal –Vs- Managing Director, Tamil Nadu Industrial Investments Corporation rendered by the Tamil Nadu State Commission, wherein it is held that auction purchaser is a consumer. On the other hand it is contended by the learned counsel for 2nd Opposite party that there is no pleading and evidence by the complainant that he is running that business for his livelihood but the purchase of unusable machineries is for resale after effecting repairs and therefore it is for commercial purpose and hence the complainant is not a consumer. He has relied upon the decision reported in II (2008) CPJ 210 (NC) in the case of Wimco Limited –Vs- Ashok Sekhon, in that decision the examples given by the Supreme Court in AIR 1995 SC 1428, which reads thus; <br /> “The National Commission appears to have taken 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 will not be a “consumer” within the meaning of Section 2(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion – the expression “large-scale” is not a very precise expression – the Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression “commercial purpose” – a case of exception to an exception. Let us elaborate : a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing other’s work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situation, purchase of goods for “commercial purpose” would not yet take the purchaser out of the definition of expression “consumer”. If the commercial use is by the purchaser himself for ‘he purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a “consumer”. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self-employment, for earning his livelihood, it would not be treated as a “commercial purpose” and he does not cease to be a consumer for the purposes 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 employed in the explanation, viz, “uses them by himself, “exclusively for the purpose of earning his livelihood” and “by means of self-employment” made the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself by employing himself for earning his livelihood. A few more illustrations would serve to emphasise what we say. A person who purchases a autorickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathy machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathy machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expression “used by him”, and “by means of self-employment” in the explanation. The ambiguity in the meaning of the words “for the purpose of earning his livelihood” is explained and clarified by the other two sets of words.” (Emphasis supplied)<br /> <br /> 13. The Hon’ble National Commissioner has also observed in para-12 that “Therefore every person engaged in any economic activity of including agriculture and horticulture, manufacture, distribution and sale, is engaged in a commercial activity for the purpose of obtaining profit or making a living irrespective of the sale of the operations.”<br /> 14. In the decision of the Tamilnadu State Commission, the complainant was the highest bidder in respect of the lorry and the complainant has hired the service of Opposite parties by depositing the bid amount. It was not considered whether it was for commercial purpose or for eeking his livelihood.<br /> 15. The complainant has not pleaded that he is running the business under the name Gurudeva Spring and Body Builders for eeking his livelihood. Even in the affidavit, he has not whispered. The purchase of unserviceable machinery and parts should have been for resale by altering them for profit and not for self consumption and according to the pleading itself, the complainant has constructed the zing sheet over angler frame and poles in front of the Ganesha Temple and got repaired the departmental jeep and also other machinery repairs. Therefore, the complainant is doing number of machinery works and therefore, the purchase of the machinery parts in the public auction is not for self-use or not for small business for eeking his livelihood. Therefore, the decision of the Tamilnadu State Commission is not applicable to the facts of the case and in view of the decision of the Hon’ble National Commission, it is not proved that the complainant is a consumer as defined under Section 2(1)(d) of the C.P. Act. Therefore, we answer point no.2 against the complainant. <br /> 16. POINTS NO. 3 TO 5:- In view of our finding on point no.2, there is no necessity to consider whether the complainant is entitled to the compensation and other amount claimed in the complaint and it is open to the complainant to get the delivery of the auctioned items 1 to 17 as per letter produced by 2nd Opposite party and in respect other two items and other compensation he can agitate in the suit already filed by the complainant. Even though, that suit is for bare injunction, it is open to the complainant to get the amendment of the prayer. Admittedly before filing this complaint, the complainant has filed a suit with respect of same subject matter and our State Commission in III (1999) CPJ 134 in the case of V.P.Somashekar –Vs- The Secretary, APMC Yard, has held that suit when a filed before regular Civil Court for the same relief on same cause of action, litigant is not entitled to take a chance by initiating parallel proceedings and cannot seek the benefit of Section 3 of the Consumer Protection Act. This is also supported by the decision reported in III (2008) CPJ 186 by Maharashtra State Commission. When the complainant has already filed a suit for the same subject matter, the complaint is not maintainable. <br /> 17. In the result, we proceed to pass the following order;<br /> ORDER<br /> The complaint is dismissed with liberty to approach the Civil Court for the relief sought for. There is no order as to costs.<br /> <br /> (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 15th day of December 2008).<br /> <br /> (PRESIDENT)<br /> (MEMBER) (MEMBER)