IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 25th day of May, 2022
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 158/2020 (filed on 08-10-2020)
Petitioner : BST Air Conditioning and Refrigeration Pvt. Ltd. M.C. Road,
Manipuzha, Kottayam
Rep. by its Director Saiju Thomas,
S/o. V.T. Thomas, Valel House,
Amayanoor P.O.
Manarcaud, Kottayam – 686025. (Adv. Akash K.R.)
Vs.
Opposite parties : (1) Meridian Moto,
A Unit of Intrepid Works Pvt. Ltd.
Near Govt. Guest House,
Arattuvazhi P.O. Alappuzha – 688007.
Rep. by its Manager.
(2) Mahindra and Mahindra Ltd.
Gateway Buildings,
Appllo Bunder, Mumabi – 400001.
Rep. by its Managing Director
(Adv. Saji Mahtew and Adv. Denu Joseph)
(3) ICICI Bank Limited,
Kallupalam Legacy,
CMS College Road, Opposite Deepika Office,
Kottayam – 686001.
Rep. by its Manager.
(Adv. D. Zaibo)
O R D E R
Sri. Manulal V.S. President
This complaint is filed under section 35 of the Consumer Protection Act, 2019
Brief of the complaint is as follows:
Complainant is a private limited company engaged in the business of sales and service of air conditioners. The directors are the husband and wife who run the business as a sole means for their livelihood. The complainant booked a Mahindra and Mahindra made Crew Cab (YoM2020) which was manufactured by the second opposite party, with the first opposite party who is the authorized dealer of the second opposite party. For the purchase of the said vehicle, the complainant entered into a hire purchase agreement with the third opposite party and on 29-01-2020 the third opposite party issued a delivery order to the first opposite party and on 30-1-2020 issued a D.D in favour of the first opposite party for an amount of Rs.6,84,883/-. The first EMI for the said loan is deducted from the account of the complainant on 25-2-2020 and till the date the complainant had paid the monthly instalments of Rs.15540/- without any default. It is submitted in the complaint that the entire amount due to the first and second opposite parties from the complainant other than the down payment is paid by the complainant to the first opposite party by availing the finance form the third opposite party. It was promised that the vehicle would be delivered within 10 days from the date of receiving DD from the third opposite party but till the date second opposite party has not delivered the vehicle. After paying the amount, on several occasions the complainant contacted the first opposite party for the delivery of the vehicle but the first opposite party evaded from the same on lame excuses. On 12-3-2020 the first opposite party informed the complainant that the BS4 vehicle was booked by the complainant was out of stock and they would serve the complainant with the BS6 model of the same vehicle at the earliest and the complainant agreed the said proposal on 15-3-2020. Though the first opposite party agreed to deliver the vehicle purchased by the complainant as early as possible till this date has not delivered the vehicle. It is averred in the complaint that it is evident that the second opposite party has intentionally given false promise to the complainant and deceived the complainant and caused the complainant to arrange finance for a vehicle which the first opposite party knows that they are unable to deliver. The complainant has to repay the loan amount along with the interest. Due to the non
delivery of the vehicle by the first and second opposite parties the complainant had to depend on hired vehicle for his needs and caused him an amount of Rs.1,45,000 in 8 months. The opposite parties are liable to compensate the complainant for the loss suffered by him and the complainant estimates his damage to the tune of Rupees Three lakhs. According to the complainant in rendering the service the first and second opposite parties have adopted an unfair trade practice and deficiency in service. Hence this complaint is filed by the complainant praying for an order directing the first and second opposite parties to deliver the vehicle or to refund Rs.6,84,883/- with interest and compensation of Rs.3 lakhs and cost .
Notice was duly served to all opposite parties. Though the notice was received by the first opposite party they did not appear before the Commission. Hence first opposite party was set ex party. Separate version is filed by the second and third opposite parties.
Version of the first opposite party is as follows:
The Mahindra and Mahindra Ltd is a public limited company incorporated under the companies Act with limited liability. The employees working with the company cannot be fastened with any liability for any transaction of the company. Therefore the complainant as against the second opposite party is liable to dismiss. The second opposite party is not involved in the booking process by the dealers and neither accepted any booking from the complainant nor accepted any consideration from the complainant. Second opposite party manufacturers the
vehicle and sells the same through the authorized dealers by raising invoices on receipt of payment. The acceptance of booking, retail sales of the vehicle including temporary registration and delivery etc are in the exclusive domain of the dealer. It is further submitted that the transaction between the first and second opposite parties are on principal to principal basis. First opposite party used to place orders for vehicles and the second opposite party supplies vehicles subject to the availability and receipt of invoice amount. The second opposite party does not know about the ultimate user of the vehicle at the time of sale to the dealer. There is no privity of contract between the complainant and the second opposite party.
It is submitted in the version that on enquiry that the dealer had made clear to the complainant at the time of booking that they are unsure of the availability of BS4Imperio as this was during the time of BS6 transition, when the production was cut down. There was no free stocks in either plant or the dealer ships at the time of alleged booking and hence the dealer was not in a position to give the 10 days delivery committed as alleged. It is averred in the version that the issue came to the second opposite party on 12-3-2020 and the response clearly was that ImperioBS4 is out of stock all over India and there is no clarity on production plan of BS4 Imperio and hence the customer was requested by the dealer to cancel their order.
According to the second opposite party it is informed by the dealer that the complainant reverted adamantly and they require the non-available vehicle and also instructed their financier not to provide the required details to the dealer for refund purpose.
The second opposite party is not responsible for the loan or interest. The mere booking of a vehicle or part payment to a dealer cannot be considered as purchase of a vehicle. The second opposite party never offered any vehicle to the
complainant nor accepted any amount from the complainant or on his behalf. There was no transaction of sale and purchase between the complainant and the second opposite party. The second opposite party had no obligation to deliver the vehicle to the complainant as alleged and that no such vehicle was available at that time. The complainant company is carrying on commercial activities in large volumes and not a consumer under the consumer protection act. There is no unfair trade practice or deficiency in service from the side of the second opposite party and the second opposite party is not liable to refund the amount or to pay any compensation to the complainant.
Third opposite party filed version contending as follows:
The complainant will not come under the definition of consumer and the dispute is not consumer dispute. The complainant company had applied and availed a commercial loan of Rs.7,07,000 from the third opposite party for the purchase of the Imperio vehicle manufactured by the second opposite party. The complainant had agreed to repay the loan amount with interest in 63 equated monthly instalments of Rs.15,540/- each and entered into the loan agreement. As per the request of the complainant the third opposite party disbursed the loan amount of Rs,7,07,000/- to the first opposite party through cheque but so far the complainant did not produce the RC book for noting the hypothecation. The dealer also has not submitted the invoice to the third opposite party. There is no cause of action against the third opposite party and the third opposite party has not committed any deficiency in service to the complainant.
Complainant filed proof affidavit in lieu of chief examination and exhibits A1 to A5 series were marked. One Kanteppa Patted DGM customer care of Mahindra and Mahindra filed proof affidavit for second opposite party. No documentary evidence from the side of the second and third opposite parties.
On evaluation of complaint, version and evidence on record we would like to consider the following points.
- Whether the complaint is maintainable?
- Whether there is any deficiency in service or unfair trade practice on the part of the opposite parties?
- If so what are the reliefs?
For the sake of convenience we would like to consider point number 1 to 3 together.
Admittedly the complainant is a private limited company engaged in the business of sales and service of air conditions. Complainant company is represented by one of its directors. Another director is his wife. According to them they were running the business of the company as the sole means of their livelyhood. The second and third opposite parties contended that the complainant company is carrying on commercial activities in large volumes and not a consumer under the consumer protection act. Exhibit A1 udyog Adhar Memorandum proves that the complainant company is a private limited company. On perusal of A1 we can see that the complainant company is engaged in service of repair of computers and personal and household goods, house hold appliances including refrigerators, stoves, washing machines, clothes room air conditioners, and garden equipment and manufacturing of air conditioning supply, steam and air conditioning supply and the production and distribution of cooled air and chilled water for cooling purpose.
Section 2 (7) of consumer protection Act 2019 defines consumer as follows:
“Consumer means any person who-
- buys any goods for a consideration which has been paid or promised or partly paid or partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
- hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose’
Explanation – For the purposes of this clause, -
- the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
- the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.
In Laxmi Engineering Works v. P.S.G. Industrial Institute –
1995 AIR SCW 2114, AIR 1995 SC 1428, (1995) 3 SCC 583, 84 Comp Case 121 (SC), has defined the word ‘commercial’ as connected with or engaged in commerce having profit as the main aim. Any person buying goods for purpose of being used in any activity on a large scale for making profit is not a ‘consumer’.
The Hon’ble Supreme Court in Lilavati Kirtilal Mehta Medical Trust Vs. Unique shanti Developers & Ors., IV (2019) CPJ 65 (SC) has given certain parameters to examine whether a particular purchase or availment of a service will be treated as for commercial purpose. The Hon’ble Supreme Court has observed the following:-
“7. To summarize from the above discussion, though a strait-jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is ‘for a commercial purpose’.
(i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, ‘commercial purpose’ is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities.
(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity.
(iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.
(iv) If it is found that the dominant purpose behind purchasing the goods or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of ‘generating livelihood by means of self- employment’ need not be looked into’. Here in case on hand the opposite parties did not adduce any evidence to prove that the booking of the car by the complainant company has direct nexus with a profit making activity.
Exhibit A2 resolution proves that there were only two directors for the complainant company. The opposite parties failed to prove that the complainant company has engaged in large scale commercial activities and the directors of the company have other source of income for their livelihood. Thus we are of the opinion that the complainant company is a consumer as defined in the consumer protection Act. The second opposite party admits that the first opposite party which is a division of Intrepid works Pvt ltd is a dealer of the second opposite party. It is submitted in the version of the third opposite party that company had availed a commercial loan of Rs.7,07,000 from the third opposite party for the purchase of the Imperio vehicle manufactured by the second opposite party.
It is further submitted in the version of the third opposite party that they disbursed the loan amount of Rs.7,07,000/- to the first opposite party through cheque. Exhibit A4 is the cheque bearing no. 626705007949 dated 30-01-2020 for an amount of Rs.684,883 which is issued by the third opposite party in the name of the Intrepid works Pvt Ltd.
According to the complainant though he had paid full amount through the cheque the first and second opposite party failed to deliver the Crew Cab (YoM20200 which was booked by him. Second opposite party admits in the version as well as in the proof affidavit that at the time of booking that they were not sure of the availability of ImperioBS4 as this was during the time of BS6 transition, when the production was cut down and there was no free stocks in either plant or the dealer ships at the time booking. It is further submitted by the second opposite party that the dealer was not in a position to give 10 days for delivery committed as alleged. Exhibit A5 series are the email communications between the complainant and the first and second opposite parties. On perusal of exhibit A5 (b) we can see that the first opposite party on 12-3-2020 intimated the
complainant that they received the payment from third opposite party only on 30th February and they have awaited for the balance payment from the complainant. It is further stated in the said communication that there were 3 vehicles in stock at the plant and it is very difficult to hold back more than this .Moreover first opposite party in exhibitA5(b) stated that the said vehicles were lost because some other dealer fetched the vehicle with payment. They offered a Bs6 vehicle at the earliest to the complainant. However exhibit A3 and A4 proves that the third opposite party had disbursed Rs.6,84,883/- to the first opposite party on 30-1-2020. There is no contrary evidence before us to prove that the first opposite party has not received any amount till the last day of February. Thus we are of the opinion that after receiving the price of the vehicle the first opposite party failed to deliver the vehicle which was booked by the complainant to him and that amounts to deficiency in service on the part of the first opposite party.
The specific contention of the second opposite party being the relationship between the first and second opposite party as principal to principle basis they were not liable to the act of the first opposite party.
The Supreme Court observed that a manufacturer will not be liable for the fault of the dealer, unless it is proved that the manufacturer was aware of the deficiency of the dealer, in cases where the relationship between them is on “
principal to principal basis’. [Tata Motors Ltd v Anonio Paulo Vaz and Another].
It is pertinent to note that the complainant vide exhibit A5 (e) bring the deficient act of the first opposite party to the second opposite party on 12-3-2020. After receiving exhibit A5(e) e- mail communication from the complainant the second opposite party sent reply to the complainant on 13-3-2020 expressing their regret and further informed the complainant that the issue is referred to their area sales manager . Thus we cannot accept the contention of the second opposite party that the second opposite party was not aware about the transaction between the complainant and the first opposite party and the second opposite party is not liable for any act done by their dealer. Moreover the second opposite party has not adduced any evidence before us to prove that steps have been taken by them to resolve the grievances of the complainant. Though the second opposite party submitted in the version as well as in the proof affidavit that during the booking of the vehicle Imperio BS4 the production was cut down as this was during the time of BS6 transition; the second opposite party did not adduce any evidence to show that they have informed the first opposite party not to receive any booking
of Imperio BS4 vehicle at that time . Hence the second opposite party cannot escape from the their liability by raising a contention that they were not aware regarding the booking of the vehicle. Moreover in exhibit A5(C) the first opposite party has stated that they had getting calls from the second opposite party regarding the booked vehicle. This exhibit was not disputed by the second opposite party.
Section 2 (11) of the consumer protection act 2019 defies deficiency as
“deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is requied to be maintained by or under any law for the time being in iforce or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes –
- any act of negligence or omission, or commission by such person which causes loss or injury to the consumer; and
- deliberate withholding of relevant information by such person to the consumer.
On the basis of the above discussion we are of the opinion that the complainant had established the deficiency in service on the part of the first and second opposite parties. No relief was sought against the third opposite party. Though the complainant had claimed a damage to the tune of Rs. 3 lakhs he did not adduce
any evidence to substantiate his claim on this aspect. No doubt the complainant had suffered much loss and hardship due to the deficient act of the first and second opposite parties and they are jointly and severally liable for the same.
Considering the nature of the case we allow the complaint and pass the following order.
- We hereby direct the first and second opposite parties to pay Rs.6,84,883 to the complainant with 9% interest from 30-1-2020 till realization.
- We hereby direct he first and second opposite parties to pay Rs.1,00,000/- to the complainant as compensation for the deficient service committed by the first and second opposite parties.
- We hereby direct the first and second opposite parties to pay Rs.5,000/- to the complainant towards the cost of this litigation.
Order shall be complied within 30 days from the date of receipt of this order in default the compensation amount will carry 9% from the date of order till the realization. First and second opposite parties are jointly and severally liable to pay the award amounts to the complainant.
Pronounced in the Open Commission on this the 24th day of May, 2022
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R. Member Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 – Copy of Udyog Aadhar Memorandum of complainant
A2-Certified true extract of the resolution dtd.06-08-2020
A3 – Copy of delivery order dtd.29-01-2020
A4 – Copy of DD No.589104 of ICICI Bank
A5 series – E-mail communications (6 nos.)
Exhibits marked from the side of opposite party
Nil
By Order
Assistant Registrar
