Kerala

Idukki

CC/246/2017

Jayan T V - Complainant(s)

Versus

Manager Quality Machine and spares - Opp.Party(s)

Adv.Shiji joseph

31 Mar 2022

ORDER

DATE OF FILING : 22.11.2017

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 31^st day of March, 2022

Present :

SRI. C. SURESHKUMAR PRESIDENT

SMT. ASAMOL P. MEMBER

SRI. AMPADY K.S. MEMBER

CC NO.246/2017

Between

Complainant : Jayan T.V., S/o. Vasu Achari,

Thenganakunnel House,

Pandippara P.O.,

Idukki.

(By Adv: Shiji Joseph)

And

Opposite Parties : 1. The Manager,

Quality Machine and Spares,

JS Complex, Opposite Temple,

Valanjambalam, Chittoor Road,

Ernakulam – 682 016.

(By Adv: Binu K.S.)

2. The Managing Director,

Oshan Engineering Work Pvt. Ltd.,

G.T. Road, Ram, Talai,

Amritsar – 143 006, Panjab.

O R D E R

SRI. C. SURESHKUMAR, PRESIDENT

 

1. This is a complaint filed under Section 12 of Consumer Protection Act, 1986 (the Act, for short). Complainant’s case is briefly discussed hereunder :

 

Complainant is a carpenter. 1^st opposite party is a dealer in heavy industrial machines and 2^nd opposite party is manufacturer of equipments necessary for running a sawmill. Complainant had, with a view to expand his business, applied for and obtained a licence for functioning a sawmill from Forest Department. (cont.....2)

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Thereafter he had invested a total amount of Rs.17 lakhs for establishing his sawmill, out of which Rs.10 lakhs was taken as loan from Vyttila Branch of Union Bank of India. Complainant had,then, called for quotations from 1^st opposite party for requisite machineries to be installed in the sawmill. Accordingly, 1^st opposite party had given quotations and agreed to supply the necessary machinery and allied equipments. He had also agreed to provide expert labourers to erect the machinery under supervision of his technical expert. On 19.5.2017, 1^st opposite party had given a quotation for Rs.12,83,874/- towards supply of machinery and equipments. Complainant had paid Rs.50,000/- as advance as mentioned in the quotation. 2^nd opposite party had supplied machinery on behalf of 1^st opposite party at the premises of the complainant situated at Pandippara in Idukki District. Thereafter 1^st opposite party had sent an expert, namely, Mr. Jayaraj, Soorya Machine Works, Kayamkulam for installing machinery. Complainant had paid Rs.10,36,115/- to 1^st opposite party for installing machinery. The amount was transferred from Vyttila Branch of Union Bank of India to 1^st opposite party. For the purpose of erecting the machinery, complainant had dug a pit having 3 metre width, 100 ft. Length and 2.5 ft. Depth. It was filled up with concrete as per the size of machinery. Complainant had spent Rs.2.5 lakhs for concreting the pit for installing machinery. However, before installing machinery, the rails on which logs are to be pulled, motor, motor pulley, housing pulley, saw packing, study bed and sliding bed along with other parts of the machinery were damaged. When informed, 1^st opposite party had replaced damaged motor and rail. He had not replaced other damaged parts of machinery or repaired them. Hence after installing machinery, it could not be run. Opposite parties had supplied low quality equipments and machinery made up of substandard components. Parts supplied by opposite parties were old, cracked and rusted. Despite repeated demands, opposite parties had not replaced the defective components. Complainant submits that supply of defective machinery after receiving huge amount as consideration for the same is deficiency in service from the part of opposite parties. Owing to defect in the components of machinery, complainant was unable to operate the mill. He lost his livelihood and could not repay the loan also. Besides, he had spent Rs.2.5 lakhs for installing machinery. He had incurred expenses towards labour which is amounting to Rs.40,000/- and other sundry expenses of Rs.20,000/-. Due to financial loss sustained, complainant had suffered severe mental agony. Complainant hence prays for an order directing opposite parties to take back the defective machinery or in the alternate to pay Rs.11,21,115/- towards its cost to the complainant, which amount includes expenses for installation of

(cont....3)

 

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machinery also. Complainant further seeks a compensation of Rs.3 lakhs for pain and sufferings undergone by him and a sum of Rs.10,000/- as litigation costs.

 

2. Complaint was taken on file. Upon notice, 1^st opposite party alone had appeared and filed written version. Case of 1^st opposite party is briefly narrated below :

 

According to O.P.1, complaint is not maintainable in law or upon facts. This Commission has no jurisdiction to entertain the complaint. Complainant has admitted that purchase of machinery was for the purpose expanding his business. Thus, it is clear that purpose of purchase was commercial. That being so, complaint is not maintainable. It is to be returned to the complainant for filing before proper Forum. It is incorrect to say that, 1^st opposite party had agreed, to supply machinery at Pandippara, to provide expert labour for erection of machinery and also to provide experts for supervising installation of machinery. In fact, complainant had come in person to the office of 1^st opposite party along with some of his colleagues who claimed to be experts in the field. They have after examining machinery and components, took quotations for a heavy duty Bandsaw machine, field machine, tools and accessories for a wood work unit. Thereafter complainant took delivery of machinery and other equipments from 1^st opposite party. Before taking delivery, he had carried out a thorough check up of each and every item. He himself had arranged for transportation and installation of machinery. Complainant had not taken quotation from 1^st opposite party on 19.5.2017 for Rs12,83,874/-. Quotation issued on 19.5.2017 was for a sum of Rs.9,89,024.53/-. After acceptance of quotation, which was approved by complainant, when Bandsaw machine arrived from the manufacturer, complainant had again changed the items to his choice at the time of taking delivery. He had also returned certain items after delivery and finally the transaction was closed for a sum of Rs.10,07,142.88/- after discount and credit notes. Further averments in complaint that 2^nd opposite party supplied machinery at complainant’s premises in Pandippara and that 1^st opposite party had sent an expert Mr. Jayaraj, Soorya Machine Work, Kayamkulam for erection of the machinery and that the complainant had paid Rs.10,36,115/- for installation of machinery are totally false. Heavy duty Bandsaw machines require expert technician for installation. it will take 30 to 45 days for completion of erection work and costs would be approximately Rs.75,000/-. Installation expenses are not included in the quotation. 1^st opposite party had only given a reference of a person named Mr. Raman, Sree Lakshmi Engineering, Allappra, Perumbavoor, who is well experienced (cont....4)

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in installation of Bandsaw machines. Complainant may have found Mr. Raman to be expensive and therefore he may have obtained the assistance of other techniciansknown to him for erecting the machinery. This is why installation charges were not in quotation or invoice. Before taking delivery, complainant and his colleagues had carefully checked and verified machinery, each and every item of accessories supplied along with it. Finally, he had taken delivery after being full satisfied that the machinery and accessories taken by him are free of defects. Those machines will not suffer any damage unless they are carelessly or negligently handled. Apart from all the cash discounts and credit notes, complainant was allowed to take an addition of 3 rails each having 60 ft. Length, costing Rs.24,000/- from the godown of 1^st opposite party, free of charges. He was also given a new 25 HP electric motor as per invoice No.0282 dated 11.9.2017 for changing the 20 HP motor which had burnt out owing to overload. Payment of this motor is yet to be received. It is incorrect to say that the sawmill could not be run due to supply of substandard components with old rusted and cracked parts. Complainant had taken delivery of brand new Bandsaw machine and its components, against approved quotation. Nothing required replacement or repayment of cost, no such demand or request was made by complainant either. In 2017 September, complainant had approached 1^st opposite party and returned aforesaid 20 HP motor which had burnt off due to overload. This was replaced by a 25 HP motor as mentioned above. Neither the 1^st opposite party or the 2^nd opposite party had supplied defective machines or components to complainant. Further averment that the complainant had lost his livelihood and was unable to repay the loan due to non-operation of mill which was owing to defective machinery are also false. His claim of having spent Rs.2.5 lakhs for installing machinery, Rs.45,000/- towards labour charges and Rs.20,000/- towards sundry expenses are also false. Complainant is not entitled for any compensation for alleged mental agony and pain which he claimed to have suffered owing to supply of defective products. In fact machinery and accessories supplied to complainant were new and free of defects. Complainant had purchased numerous machines from 1^st opposite party manufactured by different manufactures. Only one of such machine, namely, Bandsaw machine costing Rs.3,41,000/- was manufactured by 2^nd opposite party. Other manufacturers are not in the party array. They are necessary parties as the complainant has alleged that apart from Bandsaw machine, other components were also defective. Complaint is bad for non-joinder also. Complainant is not entitled for any of the reliefs claimed by him. Complaint is to be dismissed with compensatory costs.

(cont....5)

 

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3. During the course of these proceedings, upon application by complainant, an expert Commissioner was deputed for inspection of the machinery and its allied components to ascertain whether those are defective or could not be operated owing to such defects or shortcomings in their assembly. Able Commissioner had after inspecting the machinery, submitted a report accompanied with photographs, taken by him, of the defective components and machinery. Case was then posted for evidence after affording sufficient opportunity to both sides for taking steps. Opposite party has filed objections against Commission Report. During trial, complainant himself and 2 witnesses were examined on his side as PWs1 to 3 respectively and Exts.P1 to P11, C1 and C1(a) were marked. On the side of respondents, 1^st opposite party was examined as RW1. Thereafter evidence was closed. Both sides have filed argument notes. Now the points which arise for consideration are :

1) Whether the complaint is maintainable ?

2) Whether machinery and components supplied by opposite parties are defective in nature or whether there was improper/ defective workmanship in it’s installation by 1^st O.P.?

3) Whether complainant is entitled for any of the relief claimed by him ?

4) Reliefs and costs ?

 

4. The Point No.1 :

 

In the written notes submitted from the side of complainant, it is seen contended that complainant is a carpenter by profession. Thathe has never pleaded a case that Bandsaw purchased is to be used for sawing wood brought by public. Instead his case is that it was purchased for sizing wood for the purpose of making furniture. Reliance is pressed upon judgement rendered by National Commission in Consumer Judgement 2022, page 163, wherein it is observed that a person engaged in a commercial activity can buy goods or services for his personal use and therefore said purchase for personal use would be coming within the definition of the term ‘consumer’ as defined in the Act. It is also mentioned that opposite party has no case that Bandsaw machine is being used or intended to be used for sawing logs / timber brought by public. That being so, it cannot be termed as a commercial activity. Reliance is placed upon decision of Apex Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute [1995 SCC (3) 583]. In reply argument notes of opposite party No.1, it is mentioned in paragraph No.2 that the complainant had specifically pleaded that purchase of machinery was for the purpose of expanding his business and therefore purpose is commercial and hence outside the ambit of Section 2(d) of the Act. (cont....6)

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We have gone through the respective pleadings and contentions advanced by both sides in their respective notes in this regard. As pointed out in the notes submitted from the side of 1^st opposite party, there are specific pleadings in the complaint that complainant who is a carpenter by profession had, with a view to expand his business, applied for and obtained licence from Forest Department on 7.4.2017. Thereafter he had applied for a loan for Rs.10 lakhs from Vyttila branch of Union Bank of India to start or rather to expand his existing business, which as per notes is that of furniture manufacturing and had also put in Rs.7 lakhs into the venture. Though it is specifically stated in the complaint that his intention was to start a sawmill, it is clear from Ext.P1 licence and also from the notes submitted from the side of complainant that the intention was to begin/expand a furniture manufacturing unit. It is also contended by the complainant that Ext.P1 licence itself would reveal that the business activity was small and therefore case of the complainant that the purpose was for his livelihood is to be taken as proved. We find it difficult to agree with the complainant in this regard. It is seen from Ext.P1 that it is a licence issued in Form No.II B by DFO, Kottayam, which is necessary for starting a sawmill or any other wood based industrial unit. In Ext.P1, unit was shown as a small scale furniture unit. In column No.7 of the licence, details of machineries and power sanctioned is also given. Total power required for running 4 items of machinery shown in the licence would only be 8.5 HP. Annual consumption of wood shown in column No.8 is 50 M3. As against this it would be pertinent to note what would be the actual figure in the light of evidence tendered by complainant in this regard. It has came out in evidence that the complainant had purchased a 20 HP motor along with other machinery and equipments from 1^st opposite party as per the invoices produced and proved from his side. All the invoices are seen marked as Ext.P8. In the invoice bearing No.RS/18/0666 dated 30.6.2017, 1^st item purchased is Kirloskar Electric Motor of 20 HP. Items 2to 4 are 3 Electric Motors each of 1 HP capacity. Item numbers 9 and 11 are 2 Motors with capacity of 2 and 1.5 HP respectively. Item No.11 in invoice No.RS/18/0664 dated 30.6.2017 is a Chain Mortiser which is supplied complete with 3 PH Electric Motor. There are altogether 6 invoices and total items of machinery and components including electric motors mentioned above and components fitted with motor, would be 51. Item No.1 in invoice No.RS/18/0664 is a Bandsaw machine along with power lifting system which is shown to be evaluated at Rs.4,41,000/-. It would be interesting to note that only 4 items of machineryconsuming in total 8.5 HP of power are mentioned in Ext.P1 licence. P1 licence is not seen renewed showing actual number of machinery and (cont....7)

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subsidiary components with actual figures of power consumption. Pleadings would reveal that P3 quotations including that of bandsaw machine costing Rs3,41,000/- were obtained soon after taking P1 licence. It is abundantly clear that complainant had concealed his real intentions to commence a new industrial unit or to expand his existing unit into a large scale full fledged furniture industrial unit for the purpose of obtaining licence for his furniture unit from the Forest authorities. That being so, Ext.P1 cannot be taken as evidence to prove that only a very small concern is functioning in the premises of the complainant. On the other hand, Ext.P8 invoice would prove that the complainant had started a large furniture manufacturing unit under the guise of a small scale unit. He himself has stated that an investment of Rs.17 lakhs was made for the purpose of expansion of his business, which is furniture making. It is difficult to believe that he has bought a band saw machine as shown in Ext.P8 for his personal use. He himself has no case that he had intended to use Bandsaw machine only for the purpose of sawing timber to be brought by the public. Admittedly, the purpose is to size wood for the purpose of making furniture. As mentioned earlier, has specifically pleaded that he had intended to expand his business. He does not have a case that the business was intended exclusively for the purpose of earning his livelihood. The very case that the purpose was to expand his business would indicate that the purpose of expanding the unit was purely commercial. We did notice that he had claimed of having lost his livelihood due to non functioning of unit, but then he does not say what were his earnings or expected earnings if the unit were to function and whether he has other sources of income or not. He also does not say whether he had to fend for himself or whether he has dependants or not. In other words it is not possible to ascertain from his complaint as to whether the goods bought or services availed were exclusively for the purpose of earning his livelihood. These are matters which complainant ought to have brought to the notice of this commission, at least, in evidence, as burden was upon him, squarely, to prove that his case would come within the ambit of S.2(d) of the Act. Evidence tendered, that is, his chief examination affidavit is, more or less, a replica of his complaint and does not augment his case any further. Hence mere plea that he has lost his livelihood will not suffice to bring his case within the scope of explanation to S.2(d) of the Act.

 

In this context, it would be useful to refer to the decision of Hon’ble Supreme Court cited in the argument notes submitted by the complainant himself. Judgement of the Supreme Court covered case of a concern which was registered as a small scale industry. Total amount of term loan obtained by the concern was (cont....8)

• 8 -

Rs.22.10 lakhs and some financial assistance from other sources. The said concern had placed an order to the respondent therein for the supply of a Universal Turning Central machine. As alleged in the case at hand, several defects were alleged by the appellant for the machine purchased. Some defects came into light when the machine was initially operated. Appellant approached the State Commission alleging that he was supplied with a defective machine. Though the State Commission allowed the claim of the appellant, National Commission had reversed the Order of State Commission and held that appellant was not a consumer as defined in the Act. Hon’ble Supreme Court had reaffirmed the findings of National Commission and dismissed the case of the appellant and held that having regard of the nature and character of the machine and materials on record, goods purchased by the appellant were not for his exclusive use for the purpose of earning his livelihood by self employment. The scope of explanation which was subsequently added to S.2(d) of Act was, according to the Apex Court, only curative in nature and hence applied to all pending cases. In other words, the question whether purchase was intended exclusively for the purpose of earning livelihood by means of self employment was also considered in that decision.

 

According to us, this decision squarely applies to facts of the case. Considering the nature and character of the machinery, large number of its auxiliary parts and also Ext.P8 invoice along with evidence of PW1 himself, we find that purchase of the machinery along with its components and auxiliary machineries was for commercial purpose and not for the exclusive purpose of earning livelihood by means of self employment. For these reasons, complainant cannot be considered as a consumer as defined in Section 2(d) of the Act. That being so, we are of the view that the complaint is not maintainable. Point No.1 is answered accordingly.

 

5. Point No.2 :

 

We have found while considering point no.1 that complainant is not a consumer as defined under S.2(d) of the Act. That being so there is inherent lack of jurisdiction in this commission to consider the question of alleged defect in goods or deficiency in service. Further discussions in this aspect would be an unnecessary exercise as the complainant can pursue his remedy before an appropriate civil court subject to the law of limitations. Point is answered accordingly.

 

 

(cont...9)

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6. Point No.3 :

 

In view of our findings on earlier points, we further find that complaint is only to be rejected.

 

7. Point No.4 :

 

In the result, this complaint is rejected. No costs.

 

Pronounced by this Commission on this the 31^st day of March, 2022

 

Sd/-

SRI. C. SURESHKUMAR, PRESIDENT

 

Sd/-

SMT. ASAMOL P., MEMBER

 

Sd/-

SRI. AMPADY K.S., MEMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(cont....10)

 

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APPENDIX

Depositions :

On the side of the Complainant :

PW1 - Jayan T.V.

PW2 - Gopi. M.

PW3 - Jayaraj. P.

On the side of the Opposite Party :

DW1 - P.K. Pradeep.

Exhibits :

On the side of the Complainant :

Ext.P1 - Licence of the Saw Mill issued by Forest Department.

Ext.P2 - Licence of the mill issued by the kamakshi Grama Panchayath.

Ext.P3 - Proforma invoice of 1^st opposite party.

Ext.P4 - loan sanction letter issued by the Union Bank of India, Vyttila branch.

Ext.P5 - Receipts issued by Sri. Jayaraj. P., for the service charge.

Ext.P6 - Statement of account for the period from 21.7.2017 to 1.10.2018.

Ext.P7 - Tax invoice dated 24.8.2017.

Ext.P8 - Retail invoice dated 30.6.2017.

Ext.P9 - Photographs – 20 Nos.

Ext.P10 - Objection to Commission Report filed by 1^st opposite party.

Ext.P11 - Receipts issued by 1^st opposite party dated 21.7.2017 and 25.8.2017.

Ext.C1 & C1(a) - Commission report dated 7.11.2018 with photographs.

On the side of the Opposite Party :

Nil.