Punjab

StateCommission

CC/10/23

M/s Mahadev Cattle Feed Industries - Complainant(s)

Versus

MKS Industrial Solutions - Opp.Party(s)

Sandeep Bhardwaj

19 Feb 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,  PUNJAB  DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.

 

Consumer Complaint No.23 of 2010                                                 

            Date of institution  :    03.03.2010

Date of decision     :    19.02.2015

M/s Mahadev Cattle Feed Industries, Village Chann, P.O. Ferozepur Kalan, Tehsil Pathankot, District Gurdaspur, Punjab, through its Partners:-

1)      Ms. Sarita Kumari W/o Parshotam Singh;

2)      Smt. Nirmala Devi W/o Naresh Kumar;

3)      Smt. Nishu W/o Karan Singh.

…….Complainants

Versus

1.      M/s MKS Industries Solutions, 329, Gandhi Colony, Jaurasi    Road, Samalkha, Panipat-132101 (Haryana).

2.      M/s MKS Industries Solutions, 329, Gandhi Colony, Jaurasi    Road, Samalkha, Panipat-132101 (Haryana), through      Shailender Sharma, Authorized Signatory.

3.      M/s MKS Industries Solutions, 329, Gandhi Colony, Jaurasi    Road, Samalkha, Panipat-132101 (Haryana), through Ritesh    Kumar, Authorized Signatory.

                                                                    …Opposite Parties 

Consumer Complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986.

Quorum:- 

          Hon’ble Mr. Justice Gurdev Singh, President.

                        Shri Baldev Singh Sekhon, Member.

                        Mrs. Surinder Pal Kaur, Member.

Present:-

   For the complainants        : Shri Sandeep Bhardwaj, Advocate.

   For the opposite parties   : Shri Bhupinder Singh, Advocate.

 

JUSTICE GURDEV SINGH,  PRESIDENT :

 

                    The complainant, which is a partnership firm, has filed the present complaint through its partners, under Section 17(1)(a)(i) of the Consumer Protection Act, 1986 (in short, “the Act”), for the issuance of following directions to the opposite parties:-

 

i)        to refund the sum of Rs.35,85,000/- and take back the    machine or in the alternative to pay repair charges of the           machine, along with the losses suffered towards the loan          account and to refund the cost of the items lying with them, as           mentioned in Annexure C-18;

ii)       to refund the sum of Rs.4,39,604/-, being the price of the oil   purchased by them;         

iii)      to refund the electricity charges to the tune of Rs.23,000/- per          month (approximately) for five months;

iv)      to pay Rs.2,00,000/-, as the expenses incurred by them on     labour; and

v)      to pay a compensation of Rs.5,00,000/- and to pay Rs.51,000/-       as litigation expenses.

 

They have alleged in the complaint that they are engaged in the business of preparing cattle feed (dry gluten) and selling the same in the market, to earn their livelihood. For the manufacture of that cattle feed, they wanted to buy a specific machine, whereas the opposite parties were the manufacturers and sellers of such type of machines. The opposite parties assured that the machines; being manufactured and sold by them, were giving the best results and they narrated the specifications etc. in the quotation dated 09.10.2008. The quotation contained the promises extended by them and which are narrated in Para No.6 of the complaint. The total cost of the product was quoted as Rs.48.45 lacs and the same was ultimately settled at Rs.41.25 lacs plus taxes. They promised to deliver the machinery at an early date to make their plant functional, as early as possible. They paid Rs.50,000/-,  as the token money to the opposite parties. Thereafter, they paid different amounts through bank drafts and details thereof are given in Para No.8 of the complaint.  Though they had made the payments in time, yet the opposite parties took more than one year to supply and install the machine; which was installed in the month of September, 2009. After the machine was installed, they were required to pay Rs.23,000/- towards fixed charges per month in respect of the consumption of the units of electricity.   The insulin of “Hot Air Heater”, which was got by them after a long wait, stopped working after running for about 35-40 hours. The trial product, made during the short span of the working of the machine, was rejected by the buyer. The information was duly given to the opposite parties; whose engineers visited the factory, but remained unsuccessful in repairing the same.  They were advised by the opposite parties to send that part to them for repairs. They wrote a letter dated 05.10.2009 to the opposite parties, informing them about the rejection of that “Hot Air Heater” and asked for the replacement/repairs. Similar complaint was lodged by them regarding the “Ring Dryer Plant”. The “Hot Air Heater” was sent back to them after repairs on 21.10.2009. The Ring Dryer did not work properly and the same failed to produce the proper heat required for the preparation of the feed. On that account, they could not prepare the feed and were unable to dry the same properly and, as such, they failed to comply with the orders received by them for the supply of the feed from their buyers. The monthly progress of the machine was much below than the promised and as described in the quotation. They informed the opposite parties accordingly, but they did not bother to visit their plant to check the functioning of the machine and the deficiency therein. About the losses being suffered by them, they sent a telegram to the opposite parties on 03.12.2009. The plant was installed by them for earning their livelihood and on account of the failure of the running of that plant properly, they suffered the losses and out of them, Smt. Naresh and Smt. Nirmala Devi went into depression and had to be treated by Dr. Sanjeev Mahajan.  The opposite parties again directed them to send the damaged machine back to them at Panipat for replacement and they did the same on 10.12.2009 through Nitco Transport Company. They requested the opposite parties to replace/repair those damaged parts of the machinery within ten days. On 20.01.2010, they received Hot Heater, Burner with accessories, Conveyor with Gear Motor and Filter with Heater for replacement. The opposite parties advised them to get the “Hot Air Heater” from some local supplier and they agreed to borne the expenses thereof. They contacted the suppliers thereof at Jalandhar, who demanded Rs.6,00,000/- and that fact was duly communicated to the opposite parties, vide letter dated 30.01.2010. However, the opposite parties did not bother to look into their grievances in spite of the fact that letter dated 08.02.2010 was written to them.  Even Vinod Kumar, who was appointed as Plant Operator by the opposite parties during the erection and running thereof for two months, gave an affidavit on 09.02.2010 that the required heat of the plant was not being maintained by the Heater/Burner and the plant had stopped due to defective machinery.  The opposite parties were also required to prepare the structure of the machinery, but later on they offered to get that structure made of their own and returned Rs.7,00,000/-. Due to the supply of the defective machinery, they suffered huge losses and could not earn their livelihood even after spending huge amount. On the basis of all these allegations, they prayed for the issuance of above said directions to the opposite parties.

2.           The complaint was contested by the opposite parties, who filed joint written reply. In the written reply, they admitted that they are manufacturers and sellers of the machines, meant for the preparation of the cattle feed and that on the offer made by the complainant to buy such machine, they had submitted their quotation dated 09.10.2008; which included the clauses, as mentioned in Para No.6 of the complaint. They also admitted the receipt of different amounts, as mentioned in the complaint, and the supply of the machine to the complainants. While denying the other allegations made in the complaint, they pleaded that one Naresh Thakur and Purshotam Lal had approached them at Panipat for the purchase of the machinery for the complainants and the payments were also made to them at that place. They had approached for the purchase of one Ring Dryer and quotation was given by them to those two persons at their request. That quotation also included the exclusions, which were not part of the machinery and separate payment was to be made for those works to be done. The delivery of the machine was subject to the payment schedule, mentioned in Annexure C-1 to the written reply. The complainant was required to pay an amount of Rs.41.25 lacs and it was required to pay for the extra works to be done by them. On 21.04.2009, an invoice was raised by them for Rs.8,12,154-60P towards M.S. Structure Fabrication with material; which was specifically excluded from the scope of the work and was extra work done by them. A sum of Rs.5,00,000/- was paid by them to the complainant on 23.04.2009 and the same was duly reflected in the statement of account. An extra amount of Rs.99,000/- was paid and deposited by them in the account of Naresh Thakur, who is husband of Smt. Nirmala Devi, partner of the complainant firm. Receipts dated 31.07.2009, 03.08.2009 and 04.08.2009 for Rs.49,000/-, Rs.25,000/- and Rs.25,000/-,  respectively, were issued in respect of that amount. As per their books of account, a sum of Rs.7,25,433/- is still due from the complainant and the present complaint is the off-shoot of the payment demanded by them repeatedly by writing registered letters. The delay in the delivery of the machinery was on account of the conduct of the complainant itself. There was no fault on their part, if the complainant was made to make payment of the aforesaid bills for its own fault.  The insulation of the “Hot Air Heater” was not included in the actual scope of work and was in the exclusions at the choice of the party, subject to payment. The “Hot Air Heater” stopped working due to non-insulation of the same by the complainant, which further caused damage to the machinery. That insulation was got done from them only on 14.09.2009 and a bill for that work was raised by them. When the heater itself was not working, then there was no need for the complainant to make an attempt to start the same and if any loss has been caused due to that attempt, they are not responsible for the same. The extensive damage had already been caused to the heater by the complainant by the use thereof recklessly without any insulation. The loss, if any, was caused on account of the conduct of the complainant itself. However, the heater was repaired; as a result of good gesture and not due to their warranty or their liability for maintenance. The machinery was properly installed by them and the damage, if any, had been caused due to operational incapability of the complainant. They had clearly told the complainant that the heater sent to them for repairs was beyond repairs, due to the damage caused to it. They also pleaded that the machinery was purchased by the complainant for commercial purpose for the production of the material for sale and, as such, it does not fall in the category of “consumer”, as mentioned in Section 2 (1) (d) of the Act. The only exception to this rule is if there was any warranty for maintenance of the machinery and in the present case, there was no such warranty given by them. No cause of action has accrued within the territorial jurisdiction of this Commission and, as such, it has no territorial jurisdiction to entertain the same. It has no Branch Office within the local limits of the jurisdiction of this Commission and, as such, the complaint could not have been filed in this Commission.  No cause of action has ever accrued to the complainant against them. There was no deficiency in service on their part, nor they indulged in any unfair trade practice. The complaint is not maintainable and is bad for joinder and mis-joinder of relevant parties. They prayed for the dismissal of the complaint with exemplary costs.
3.           To succeed in the complaint affidavits of Sarita Kumari, Nirmala Devi and Nishu were proved on record as Ex.C/A, Ex.C/B and Ex.C/C, respectively. In addition to that, the complainant firm proved on record the documents Ex.C-1 to Ex.C-30.
4.           On the other hand, the opposite parties proved on record the documents Ex.R-1 and Ex.R-2.
5.           We have carefully gone through the averments of the parties, the evidence produced by them in support of those averments and have also heard learned counsel on their behalf.
6.           At the outset, it was submitted by the learned counsel for the opposite parties that the machine, in question, was purchased by the complainant firm/partners for commercial purposes and, as such, they do not fall within the definition of the “consumer”, as contained in Section 2 (1) (d) of the Act. In these circumstances, the complaint should not have been entertained by this Commission and is liable to be dismissed on that ground alone.
7.           On the other hand, it was submitted by the learned counsel for the complainants that the complainants specifically pleaded in their complaint that the machine was purchased by them for earning their livelihood and, as such, they are covered in the explanation appended to Section 2 (1) (d) of the Act. The complaint was correctly entertained by this Commission and is to be decided on merits.
8.           The “consumer’ is defined in Section 2(1) (d) of the Act as under:-

(d)     "Consumer" means any person who, —

 

(i)      buys any goods 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 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

(ii)      hires or avails of any services 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 services 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 services for any commercial purposes.

Explanation.— For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment. 

Admittedly, the machine, so purchased by the complainant firm/partners from the opposite parties, was meant for manufacture of the cattle feed; which was being sold by them to their buyers. Apparently, the machine was purchased for commercial purpose. The only question to be decided is, whether the complainants can still be termed as “consumers”, by virtue of the said explanation?

9.           As per that explanation, if the goods have been purchased exclusively for the purpose of earning the livelihood by way of self employment, then the complainants could have been said to be consumers. No doubt, they alleged in their complaint that they purchased this machine for earning their livelihood, but they never alleged that the same was by way of self employment. It cannot be made out either from the allegations made in the complaint or from the evidence produced by the complainants, that the machine was purchased by them for the manufacture of the cattle feed by way of self employment. It is not their case that they had been operating this machine themselves or that they had been operating this machine with the help of one or two helpers. They also prayed for the direction to the opposite parties to pay expenses incurred by them on labour, amounting to Rs.2,00,000/-. That makes it very much clear that they had been employing a number of labourers for running this plant for manufacture of the cattle feed. In (Laxmi Engineering Works Vs P.S.G. Industrial Institute) (II) (1995) CPJ-1(SC), the definition of “consumer”, “commercial purpose” and the said “explanation” was discussed in detail. Almost all the case laws on the subjects and the relevant judgments were considered. It was held therein that if the buyer of goods, uses them himself i.e. by way of self employment for earning his livelihood, it would not be treated as commercial purpose and he does not cease to be a consumer for the purposes of the Act. The goods bought must be used by the buyer himself by employing himself for earning his livelihood. In that case, the complainant was a proprietary concern, established under the “Employment and Promotion Programme”, and was registered as a small scale industry. It placed an order with the opposite party for the supply of a machine. The case of the complainant was that the opposite party failed to supply the machine within the promised period of six months and the machine, so supplied, was defective and soon after the same was installed and operated, several defects came to light. In spite of good amount of correspondence between the parties, the machine could not be put in proper order. Thereafter, the complainant filed the complaint under the Act. An objection was raised by the opposite parties that since the complainant purchased the machine for commercial purpose, he was not a consumer. The complainant took up the plea that the machine was purchased for the purpose of earning the livelihood, as he was holding diploma in engineering and had proposed to start a small scale industry. After discussing the case law on the point and taking into consideration a number of authoritative judgments, it was held by the Hon’ble Supreme Court; having regard to the nature and character of the machine and the material on record, that it is not goods which the complainant purchased for use by him exclusively for the purpose of earning his livelihood by means of self employment. He was not held to be a consumer.
10.           Keeping in view the ratio of this judgment, it cannot be held in the present case that the complainants fall under the definition of “consumer”. They purchased the machine for commercial purposes and, as such, they are not consumers within the meaning of the above said definition.
11.           In the result, the complaint filed by them is dismissed, without prejudice to their rights to seek their remedy in respect of the subject matter of the complaint before the appropriate court of law.
12.           The arguments in this case were heard on 13.02.2015 and the order was reserved.  Now, the order be communicated to the parties.
13.           The complaint could not be decided within the statutory period due to heavy pendency of court cases.

 

 

                                                        (JUSTICE GURDEV SINGH)

                                                                       PRESIDENT  

                                                         

 

                                                        (BALDEV SINGH SEKHON)

                                                                         MEMBER                                            

 

 

                                                      (MRS. SURINDER PAL KAUR)

February 19, 2015                                       MEMBER

(Gurmeet S)