DOF.7/4/2006 DOO. 3/9/2010 IN THE CONSUMER DISPUTES REDRESSAL FORUM, KANNUR Present: Sri.K.Gopalan: President Smt.K.P.Preethakumari: Member Smt.M.D.Jessy: Member Dated this, the 3rd day of September 2010 CC.77/2006 Director, Malabar Cancer Centre, Post Moozhikkara, Thalassery 670 111. (Rep. by Adv.A.M.Viswanath) Complainant Managing Director, M/s.Kraftwork Solar Pvt. Ltd., Adithya, Gandhi Square, Poonithura, Kochi 682317. (Rep. by Adv.K.Gopakumar) Opposite parties ORDER Sri.K.Gopalan, President This is a complaint filed under section 12 of consumer protection act for an order directing the opposite party to replace the defective tank and other accessories and to pay damages at the rate of Rs.3222/- per month from the date of defect noticed together with cost of these proceedings. The nutshell facts of the case of the complainant are that the complainant society is a Charitable Society established with financial assistance of various agencies. This society is not meant for profit making and is not a commercial institution. Complainant as the Director had invited quotation for the supply of the solar water heater system. Negotiation were held with opposite party and decided that the opposite party would supply the solar water heater system, model of 100LPD with 8 solar collectors which recommended as the best suited for the Cancer centre by the opposite party. It was agreed that the opposite party would supply install and commission the same with guarantee against any defect liability for a period of 5 years for a payment of Rs.1, 08,000/- only. It was also agreed that it would be the responsibility of the opposite party to rectify the malfunctioning of the solar water heater due to defects in supply and installation by repairing and replacing any of the parts at the cost and risk of the opposite party during the guarantee period of 5 years. It was also agreed that the guarantee period would be extended by another 5 years on payment of an additional sum of Rs.1000/-. The purchase order NO.490/ES/PUR/SWK/03/MCC dated 22.12.03 was unconditionally accepted by the opposite party as per the letter dt. 10.1.04. Thereafter format agreement was entered into on 3.2.04. System was installed and commissioned on 3.2.04 certain defects were noticed after commission. There was no heating of water at night and early morning. Technician deputed by opposite party could not find out and rectify the defect. Technicians were again deputed by opposite party and they found that the tank had crack at the joint and leaking of water through it. Their attempt to weld and stop the leak failed. Complainant informed this to opposite party as per letter dt.4.11.04. Instead of rectifying the defect by replacing the defective steal tank opposite party attempt to fasten the responsibility on complaint as per letter dt.12.11.04. Opposite party found fault with the complainant to the reason that the water used was inferior quality. As per agreement dated 3.2.04 there was unconditional guarantee. There was no reference to the quality of water to be used. It was not taken as an assurance of the contract and not mentioned in the agreement. If the quality of the water was one of the essences of the contract, it would have been specifically mentioned in the agreement. If the quality of the water to be used was to be soft treated water, it was within the knowledge of the opposite party and it was for the opposite party to suggest the best suited degrade of steel tank to be used and that would have been incorporated in the agreement. The guarantee given, as per agreement was unconditional, irrespective of the quality of water used. The request of complainant to rectify the defect by replacing suitable steel tank was not heeded by the opposite party. The opposite party has to rectify the defects without charging any extra payment as per the agreement. The complainant sent lawyer notice dt.8.11.05, which was replied by notice dated 30.11.05 with false statements, intended to deny the rightful claims of the complainant. Opposite party’s statement in reply notice that the guarantee was depended on the quality of water used is false. A mere reading of the agreement would show that the guarantee was unconditional. There was no reference to the quality of water to be used at all. If it was within the knowledge of the opposite party that the steel tank supplied would not be suitable for use in the hospital work with untreated water, he should have insisted or at least informed that the tank of higher grade should be used for the system and should have insisted for incorporation of this specifically in the agreement. Complainant could not use this system since the defect in the system was noticed on 1.11.04 and has suffered heavy loss. The Malabar Cancer Centre had to depend on conventional method to supply hot water to hospital whereby caused loss estimated to be at Rs.3222/- per month. Opposite party is liable to make good of this loss and also liable to replace the tank with sufficient grade of steel so that the system would smoothly work for the entire guarantee period. Hence this complaint. Pursuant to the notice opposite party entered appearance and filed version denying the main allegation of complainant. The contentions raised by the opposite party briefly stated as follows: The complainant society is not a charitable institution. They are charging fees from the patients. It is a profit making commercial institution so that the complaint is not maintainable. Complainant society had purchased a solar heater manufactured by the opposite party firm. They have invited the quotation after complying with all formalities. Even at the time of negotiations later through Verbal Communications, it was duly intimated the features and specifications and of the various modals of Solar heaters manufactured by the opposite party, further the guarantee depends upon the quality of the water being used in the system. The opposite party had supplied tank made of Ss.304 sheets as per the specification quoted by them. If the water contains low PHG level is acidic in nature it would cause damage to the steel tank by corrosion. Low PHG value/ High iron contents presence of corrosive dissolved salts in water cause corrosion in stainless steel sheet. It is specifically informed that if guarantee is required for the tank it should ensure that the tank will be made with 316 grade and only softened water should be used in the system. But ignoring the technical advice of the opposite party, the complainant-society, had preferred the present model. As per the clause in Para 7 of the purchase order this opposite party has ensured warrantee for the installation only against the manufacturing defects. The technicians deputed by them attend the complaints as found cracks on the joints and consequent leakages happened due to corrosion as a result of inferior quality of the water used in the system. The complainant ought to have installed water treatment plant to soften the water at their own cost to avoid such calamities Damages caused only due to negligence of the complainant. The guarantee was not unconditional. Warrantee ensured only against manufacturing defects. Tue complainant was well aware of the water quality of the premises and they have selected the present model at their own choice since the quality of water is a precondition for the sale, it is not necessary to make reference to the water to be used in the system in the agreement. Hence the agreement was silent about the quality of water. This opposite party is not liable to rectify the defects since the defect alleged would not come within the terms and conditions of the warrantee. Lawyer notice sent by the complainant replied. It is the duty of the customers to choose the system best suited for their finance and their satisfaction. This opposite party was not inclined to accept the complainant’s purchase order dt.22.12.03, but returned with their letter dt.5.1.04. It is quite evident from the corrosion in the pipe line in complainant’s premises that the inferior quality of water has affected the other equipments also. The complainant had not cared to install their water treatment system along with the installation of the solar water heater which was very essential in the premises. If the system is sent for an expert opinion this opposite party will be able to prove the contentions stated above. The loss estimated is imaginary one. If the complainant required water heater sufficiently of higher grade, they have to pay for the same in order to get the suitable model for them. The complaint is false, vexatious with malicious motive to tarnish the reputation of the opposite party firm. Hence to dismiss the complaint. On the above pleadings the following issues have been raised for consideration. 1. Whether the complainant is a consumer and complaint is maintainable? 2. Whether there is any deficiency in service on the part of opposite party? 3. Whether the complainant is entitled to get the remedies as prayed? 4. Relief and cost. The evidence consists of the oral testimony of PW1, PW2, DW 1,CW1 and documentary evidence Exts.A1 to A7, Ext.B1,B1(a),(b) and Ext.C1. Issue Nos.1 Admittedly complainant the Malabar Cancer Centre had purchased a Solar heater manufactured by the firm. The case of the complainant is that the system was installed and commissioned on 3.2.04. Certain defects were noticed after commission. There was no heating of water at night and early morning. Opposite party sent technicians but attempt to rectify the defect did not find fruitful and finally complaint has been filed with a stand that opposite party is liable to make good of this loss and also liable to replace the tank with sufficient grade of steel so that the system would smoothly work for the entire guarantee period. The opposite party took his first contention that the Malabar Cancer centre is not a charitable institution. They are charging fees from the patients since it is a profit making commercial institution the complaint against the opposite party is not maintainable. It can be seen that the complainant has specifically pleaded that there was agreement to the effect that it would be the responsibility of the opposite party to rectify the malfunctioning of the solar water heater due to defects in supply and installation by repairing and replacing any of the parts at the cost and risk of the opposite party during the guarantee period of 5 years. It was also agreed that the guarantee period would be extended by another 5years on payment of an additional amount of Rs.1000/-.Ext.A4 is the agreement executed on3rd February 2004 between M/s.Kraft Solar Pvt.Ltd., No.29/286, ADITHYA and Malabar Cancer Centre. Clause 1-B of the agreement speaks that” the contractor hereby guarantees that the said goods would continue to conform to the description and quality aforesaid for the period of 5 years from the date of successful commissioning of the said equipments and also agreed to extend the guarantee period for 5 more years with an additional payment of Rs.1000/- by MCC and that notwithstanding the fact that the MCC may have inspected and /or approved not conform to the description and quality aforesaid or have deteriorated(and the decision of the MCC in that behalf will be final and conclusive) the MCC will be entitled to reject the said goods or such portion thereof as maybe discovered not to conform to the description and quality”. Ext.A4 reveals that there is 5 year guarantee and 5 years more on additional payment. The system commissioned on 3.2.04. Defects were noticed after commission and informed the same to opposite party on 4.11.04.There is no doubt that the defects occurred within the guarantee period and the same informed the opposite party within 9 months of the commission of the system. The nature of business that is conducted by Malabar Cancer centre is not a commercial activity since the purchase of goods not intended to sell further to earn profit. The decision sited in 2009 CTJ 794 SCDRC derived at a conclusion that “thee is distinction between commercial activity and commercial purpose. If a professional engaged in the business or profession purchase any goods for his own use or for earning his livelihood, such purchase of goods does not fall within the ambit of commercial purpose. Commercial activity is one when a person purchases goods to sell further to earn profit”. Here the reselling of the purchased goods does not arise at all. It is for the use of hospital for the purpose of supply of hot water to the patients admitted and undergoing treatment. It is understandable that an institution like this expected to have such facilities as it is an essential requirement and it cannot be seen that this offer or facility has been afforded with profit motive. The Hon’ble National Commission held in the famous case Harrolia Motors Vs. National Insurance Co. Ltd., that “the warranty is a service agreement and as such in respective of the commercial activity involved in the nature of business firm or company. Complaint for supply of defective goods is maintainable and the firm or the company can be a consumer”. This is a clear petition to be depended upon to hold that the complainant herein, the Malabar Cancer centre is a consumer and the complaint is maintainable. The Hon’ble National Commission in the latest case Larson and Turbo Ltd. Vs. Krishnan reported in 2009(I) CPC(NC0461 has taken the view that even if the machinery is sold for commercial purpose the purchaser will be ‘consumer’ under section 2(1)(d)(1) during the period of warranty. It can be seen that the defects of the system in the case in hand started within the period of warranty as also admitted by the opposite party. Moreover Ext.A1, the Memorandum of Association makes it clear that the contention of opposite party that the complainant is not a charitable institution is baseless and unsustainable. Sub clause(a) to (s) of clause 3 which details the objects and particulars shows it is aimed at training personal who will combine the highest technical/medical competence with broad human sympathy as well as practical outlook and awareness of the necessity of good medical facilities especially in the field of cancer prevention, treatment, rehabilitation and research. Sub clause ® of clause 3 also stated as its Aims and objects for the society to provide accommodation and other facilities for a charitable society meant for granting financial assistance to/and understanding rehabilitation programme for poor and needy cancer patients. So also sub cause (q) of clause 3 stated thus “to raise funds and assist the needy patients in their treatment expenses”. Opposite party did not challenged Ext.A1 or its object by adducing convincing evidence. Complainant deposed in cross examination that “Malabar Cancer centre societies Act {]Im-cT Register sNbvX Hcp Øm]-\-am-Wv. NnIn-Õn-¡p¶ Fà tcmKn-I-fn \n¶pT {]Xn-^-eT ssI¸-äm-dn-Ã. ]s£ ssI¸-äm-dp-v. kmT-]-¯n-I-ambn Ign-hn-Ãm¯ tcmKn-I-fn \n¶p kuP-\-y-am-bpT kmT-]-¯nI Ign-hp-f-f-h-cn \n¶p \ma-am-{X-amb XpI-bpT am{Xta CuSm-¡m-dp-ffp“. Complainant is thus succeeded improving that Malabar Cancer centre is a charitable society on producing Ext.A1 memorandum of association and adducing oral evidence. Opposite party on the other hand did not discharge the burden to disprove the same by adducing evidence. Thus the above complainant is a consumer and the complaint is maintainable. Thus issue No.1 is found in favour of complainant. Issue Nos. 2 to 4 Admittedly complainant, Malabar Cancer Centre society purchased a solar heater manufactured by the opposite party firm. Ex.tA4 is the agreement. The system was installed and commissioned on 3.2.2004. The case of the complainant is that certain defects found after the commissioning of the system i.e. there was no heating of water at night and early morning. The technician deputed by opposite party could not rectify the defect. Technician subsequently deputed on 4.11.04 found that the tank had crack at the joint and water was leaking through it. They tried to rectify the defect but could not succeed. Complainant informed opposite party this as per letter dt.4.11.04. But opposite party replied that the defect was due to the reason that the water used was inferior quality. Opposite party contended that it was specifically informed that if guarantee is required for the tank it should ensure that the tank will be made with 316grade and only softened water should be used in the system. Cracks on the joint and consequent leakage happened due to corrosion as a result of inferior quality of the water used in the system. It is further contended that the complainant ought to have installed water treatment plant to soften the water at their own cost to avoid such calamities. Warrantee ensured only against manufacturing defects. Clause 1(B) of Ext.A4 reads thus: The contractor hereby declares that the goods sold to the buyer under this contract shall be of the best quality and workmanship and shall be strictly in accordance with the specifications and particulars contained in the copy of the order attached here with and the contractor hereby guarantees that the said goods would continue to conform to the description and quality aforesaid for the period of 5 years from the date of successful commissioning of the said equipments and also agreed to extend the guarantee period for 5 more years with an additional payment of Rs.1000/- by MCC may have inspected and/or approve the said goods if during the aforesaid of 5years the said goods be discovered not to conform to the description and quality aforesaid or have deteriorated( and the decision of the MCC in that behalf will be final and conclusive) the MCC will be entitled to reject the said goods or such portion thereof as may be discovered not to conform to the said description and quality. On such rejection the goods will be at the contractors risk and all the provisions herein contained relating to rejection of goods shall apply. The contractor shall, if so called upon to do replace the good etc. or such portion thereof as is rejected by MCC. Otherwise the contractor shall pay to the MCC such damages as may arise by reason of the breach of the condition herein contained. Nothing herein contained shall prejudice any other right of the MCC in that behalf under this contract or otherwise’. The above condition cause I(B) of the contract Ext.A4 makes it clear that opposite party is liable to maintain the equipments for the period of 5 years from the date of commission that is from 3.2.04 onwards. Ext.A4 doesn’t contain any condition insisting that the tank will be made with 316 grades and only softened water should be used in the system as contended by the opposite party. Opposite party has not adduced any evidence to that affect. It is not seen that opposite party has pointed out this aspect at any time before the fault is found.No such condition stipulated anywhere in the agreement If such conditions are not seen stipulated in the agreement it cannot be assumed that those requirements were specifically informed to the complainant. If it is specifically informed or else felt to inform without fail in order to make assure that such essential requirements are available and be repaid without which the proper and successful performance cannot be assured, it would have been definitely found place as a stipulation in the agreement Ext.A4. What is the purpose of using the word “specifically informed”? That means what is informed is specially pointed out information relating to particular subject matter which is expected to be take care vigilantly that cannot be avoided at any rate. Such an important condition if not form part of agreement can it be called ignorance? Can it be considered as raised seriously during the time of negotiation and avoided purposefully when stipulations are selected so as to keep it aside as a secret understanding? Opposite party has to bring, those facts when and where it was discussed before the Forum. Can it be relied on the mere statement that it was informed through verbal communication at the time of negotiations? The very purpose of negotiation is to discuss with a view to reaching an agreement naturally forming important aspects as stipulations. If anything left behind or excluded that only means those aspect has not been considered to be accepted to form as part of the agreement. In away it can only be taken as rejected. Hence there is no substance in the contention of opposite party that it was specifically informed that if guarantee is required for the tank it should ensure that the tank will be made with 316 grade and only softened water should be used in the system. Another point arise is that whether opposite party has taken precaution to make ascertain the tank is 316 grades and water used is soft water. Opposite party had supplied tank made of SS 304 sheet. If it is unfit opposite party could have pointed out then and there. At that time he was not particular about his specific information. It is difficult to believe that opposite party has made aware of the complainant about the grade. As per Ex.tA4 it was declared that the goods sold to the buyer under this contract shall be of best quality and workmanship and shall be strictly in accordance with the specifications and particulars contained in the copy of the order attached herewith. It is again guaranteed that the said goods continue to conform to the description and quality aforesaid for the period of 5 years. It has to be taken into account that all these guarantee with respect to the quality and workmanship is to make assure that the hospital can be supplied with hot water necessary. If the hot water supply is paralyzed due to the fault of the system there is no meaning in any sort of guarantee, what ever may be the ink used to put it in black and white. The legal principle that the buyer beware has no application to this case. Thus it is crystal clear that there is breach on the part of opposite arty that amounts to deficiency in service. Smt.Daya Krishnankutty, Astt. Prof, Dept. of civil Engineering, Kannur who was appointed as expert commissioner inspected the site of the solar water heater at Malabar Cancer centre, in the presence of Mr.Gopakumar counsel for the opposite party and Mr.Chandran.K. The supervisor of the complainant establishment, submitted the repot Ext.C1 draw the following inferences. i. The PH level of both samples is below the acceptable value. ii. Because of the low PH, the water is acidic in nature. iii. The iron content in sample 1 is below the acceptable value while in sample 2 are slightly above this value. However the presence of high iron content will not cause corrosion of the stainless steel tank. The above inference have been made by the expert commissioner based after obtaining the results of the samples she had collected from the site, from quality control Regional Laboratory, Kannur. The expert opinion makes it clear that the presence of high iron content will not cause corrosion of the stainless steel tank. Though it is challenged by the opposite party there is no contra evidence to right away reject the inference. Whatsoever, the contention of opposite party that the low P.H. value is the cause of corrosion is not proved. Opposite party did not adduce evidence to prove if the water contains law PH value is acidic in nature it would cause damage to the steel tank by corrosion. Opposite party has not produced any relevent document to substantiate this contention. Expert commissioner adduced evidence as CW1. She has deposed that “stainless steel  t{Iman-bT Df-f-Xp-sIm Xpcp-T]v hcnÓ.This opinion is quite acceptable since she is qualified experience professor. She has also deposed that because of the reason of low PH value of water acidic in nature will not cause corrosion even if stainless steel is not having appropriate grade. Hence the contention of opposite party that “if the water contains low PH level is acidic in nature it would cause damage to the steel tank by corrosion has no substance. This contention has not been supported by scientific reasoning. Commissioner also deposed that “tank\v leak hcm³ Imc-WT tanksâ quality Ipd-ª-Xp-sIm-m-bn-cn-¡mT‘. The quality of tank though not proved this opinion can be taken to consideration to value the evidence in Toto. In the cross examination of the complainant CW1 also made it clear that stainless steel is also known as corrosion resistance which is a very material point which cannot be discarded at all since the expert commissioner is an experienced professor of Department of Civil; Engineering DW1 in his cross examination has deposed that “negotiation ka-b¯v Fs´m-s¡-bmWv ]d-ª-sX¶p F\n¡v t\cn-«-dn-hn-Ã.“.But he kept silent to the following questionwhich is put to his mouth as agreement s\ kT-_-Ôn¨ FÃm Imc-y-§-fpT Malabar Cancer centre \S-¯n-bn-«p-v. AXn ]dª Imc-y-§Ä\S-¯m³ Ccp-Iq-«-cpT _m²-y-Ø-cmWv “.Anyhow the contention of opposite party that specific information has been given to complainant with respect to grade and all stands not proved. DW1 is quite ignorant of what was told at the time of negotiation. In the light of the above discussion on the basis of available documents and oral evidence we are of considered view that the opposite party has failed to discharge the contractual obligation and thereby committed the deficiency in service. The opposite party is liable to meet the loss sustained by the complainant. The opposite party has liability to replace the defective tank and other accessories of the system by replacing with a defect free sufficient grade tank suitable for use of water available at the premises or else opposite party has to pay the price of the tank paid by the complaint with interest at the rate of 12% from the date of payment till the realization of the amount. Complainant is also entitled for compensation since they have suffered further expense for alternative arrangements for the purpose of distributing hot water. The evidence adduced by PW1 by way of affidavit in lieu of chief examination states that they are suffering a loss of Rs.3222/- per month for the distribution of hot water. In the cross examination PW1 deposed that“ Ct¸mÄ Ic-v- D-]-tbm-Kn-¨mWv shf-fT NqSm-¡p-¶-Xp. Ce-Iv{Sn-knän _nÃnsâ ASn-Øm-\-¯n-emWv 3,222 cq] \jvST amkT sh¨v IW-¡m-¡n-b-Xv. loäÀ Dt].-bm-Kn-¡p-¶-Xnsâ sshZ-yp-Xn-I-W-¡m-¡n-bmWv _nÃpT IW-¡m-¡p-¶Xv“. But complainant did not produce any documents to support his oral evidence. But it can be assumed that there will certainly be a minimum expense of Rs.1500/- per month. Taking into account all other aspect we feel that an amount of ³s.30, 000/- as compensation will meet the ends of justice. Complainant is also entitled for an amount of Rs.1000/- as cost of these proceedings. The issues 2 to 4 are also answered infaovur of the complainant. In the result, the complaint is allowed directing the opposite party to replace the defective tank and other accessories of the system, by replacing a defect free tank with sufficient grade suitable for the use of water available at the premises with same guarantee or else to refund the price of the system paid by the complainant with an interest of 12% p.a from the date of payment till realization of the amount. Opposite party is also directed to pay an amount of Rs.30, 000/- (Rupees Thirty thousand only) as compensation together with an amount of Rs.1000/- (Rupees One thousand only) as cost of this proceedings to complainant within one month from the date of receipts of this order, failing which the complainant is entitled to execute the order as per the provisions of consumer protection act. Sd/- Sd/- Sd/- President Member Member APPENDIX Exhibits for the complainant A1.Copy of memorandum of Association A2.Copy of the letter dt.22.12.03 sent to OP A3.Copy of the letter dt.10.1.04 sent by OP A4.Copy of the Agreement A5.Copy of the lawyer notice dt.8.11.05 sent to OP A6.Copy of the reply notice sent by OP A7. Authorisation letter dt.27.5.09. Exhibits for the opposite party: B1.Authorisatin letter dt.17.9.09 Exhibits for the court C1.commissionreport Witness examined for the complainant PW1.Chandran PW2.K.Ratnakaran Witness examined for the opposite parties DW1. Manoj.P.S Witness examined for the court CW1. Daya Krishnankutty /Forwarded by order/ Senior Superintendent Consumer Disputes Redressal Forum, Kannur. Senior Superintendent
| | [HONORABLE PREETHAKUMARI.K.P] Member[HONORABLE MR. GOPALAN.K] PRESIDENT[HONORABLE JESSY.M.D] Member | | 
