F.A.No.874/2005 AGAINST C.D.No.148/2000, DISTRICT CONSUMER FORUM,

SRIKAKULAM.

Between-

1. ELGI EQUIPMENTS LIMITED

    Represented by its Regional

    Manager, having its office

    At No.1-8-611, Air Port Plaza,

    III floor, “B”, Opposite  to Airport,

    Begumpet, Hyderabad.

2. Elgi Equipments Limited,

    Elgi Industries Complex,

    Singanallur, Coimbatore-641005,

    Represented per Regional

    Manager, Hyderabad.                                                      Appellants/opp.parties 1 and 2

And

M/s.KRANTHI GRANITES

Represented by its Proprietor,

Dr.K.Rama Mohan Rao,

Temburu Road (VandM),

Tekkali, Srikakulam Dist.,

Andhra Pradesh.                                                                   Respondent/Complainant

Counsel for the Appellants- M/s. N.Raghavan.

Counsel for the Respondent--Mr.M.Venkataramana Reddy

QUORUM-THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT

SMT.M.SHREESHA, MEMBER

AND

SRI G.BHOOPATHI REDDY, MEMBER.

MONDAY, THE EIGHTEENTH DAY OF FEBRUARY,

TWO THOUSAND EIGHT

Oral Order-(Per Smt.M.Shreesha, Hon’ble Member)

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Aggrieved by the order in C.D.No.148/2000 on the file of District Forum, Srikakualm,  opposite parties  preferred this appeal.

The brief facts as set out in the complaint are that the complainant intended to purchase ELGI Diesel Powered Screw Air Compressor (TR) from opposite parties and contacted them over telephone and addressed a letter to opposite parties to supply the same and paid Rs.1,03,000/- by cheque towards initial payment.  The complainant submitted that the opposite parties sent Diesel Powered Screw Air Compressor to him through invoice No.S11/903909 dated 30-9-1999 worth Rs.4,12,000/- through Kalpaka Transport Company Limited and it was delivered to him at Tekkali.  The complainant submitted that immediately after receipt of the equipment, he paid the balance amount due to the opposite parties and they have also issued guarantee card guaranteeing the equipment for a period of 12 months or 2000 running hours and undertook to rectify the defects, if any, within the guarantee period, free of cost, and undertook to replace the equipment if  not possible for rectification.  The complainant submitted that the Engineers of the opposite parties arrived at Tekkali and installed the same in the premises of the complainant and it was the case of the complainant that the said Air Compressor did not function immediately after 15 days of its purchase and he complained the same to opposite parties and they sent a Service Engineer on repeated demands made by him.  The complainant submitted that the Service Engineer of the opposite parties had not rectified the defects and stated that he will contact their Service Engineer and rectify the defects.  The complainant submitted that again the said compressor developed several defects and consumed high quantity of engine oil and emitted noise and heavy smoke and ultimately stopped functioning.  Thereafter the complainant again contacted opposite parties over telephone and once again they sent their Engineer, who tried to rectify the defects but failed to do so and started blaming the complainant.  Therefore, the complainant got issued a registered notice to opposite parties on 20-5-2000 to rectify the defects in the equipment and also to pay compensation for which the opposite parties issued reply denying the contents of the notice and had not chosen to send the Service Engineer for rectification of the defects.  Hence the complaint praying for a direction to the opposite parties 1 and 2 to replace the old diesel powered Air Screw Compressor (TR) with the same model and capacity with a new one or in the alternative direct the opposite parties to repay the cost of the equipment i.e. Rs.4,12,000/- with interest and compensation of Rs.30,000/-.

            Opposite parties filed counter and submitted that they sold ELGI Diesel Powered Screw Air Compressor on the order initially given to Hyderabad and directed to Coimbatore and therefore submitted that the transaction took place at coimbatore office and on the instructions of the complainant delivered the equipment at Tekkali and the complainant paid CST which shows that inter-state transaction took place and the consignment was dispatched through invoice dated 31-9-1999 through M/s.Kalpaka Transport Company Limited, Coimbatore.  They submitted that the terms and conditions incorporated in the invoice itself are subject to Coimbatore jurisdiction and submitted that the District Forum, Srikakulam has no jurisdiction to entertain the complaint.  Opposite parties submitted that the compressor was supplied at concessional CST of 4 percent which established that the order was placed at Coimbatore office and submitted that the guarantee was with respect of Air Compressor alone and spare parts and items like engine manufactured by M/s.Ashok Leyland Ltd., and other parts like Oil seals, Gas cuts, rubber items are not covered under the guarantee.  They submitted that on receipt of the complaint, the Service Engineer by name Mr.S.S.Murthy advised M/s.Srinivasa Engineering Service, who are their Service Engineers to depute their mechanic to the site of the complainant on 21-4-2000 and rectify the defects, if any, in the air compressor.  Opposite parties submitted that the service engineer found that the engine was very badly maintained contrary to the obligation to maintenance and found that oil seal is leaking which is not covered under the warranty rules of M/s.Ashok Leyland Ltd., and explained the same to the complainant and the complainant himself wrote to M/s.Ashok Leyland Ltd., and obtained their permission to attend the engine by M/s.Srinivasa Engineering Service and therefore the mechanic from Srinivasa Engineering Service was sent on 10-1-2000, 13-1-2000 and 15-4-2000 to attend repairs and they found the performance of the compressor satisfactory.  Opposite parties also submitted that they advised the complainant to maintain guidelines and in May, 2001 i.e. on 16-5-2000 when the mechanic was attending the engine, he found that the radiator was filled with mud which is obviously due to the negligence of the complainant in maintaining it and instructed the complainant to get the radiator serviced so that he could attend the engine further.  They further submitted that radiator being one of the parts of the engine, there is no guarantee and the same has to be maintained by the purchaser himself and thereafter the mechanic of M/s.Srinivasa Engineering Services promptly  approached and enquired with the complainant as to whether the radiator was serviced but the complainant requested the mechanic to service the radiator for which he is not entitled and submitted that if the radiator is not serviced and if the complainant puts the compressor into use, it would cause over heating of engine, for which the manufacturer of the engine, i.e. M/s.Ashok Leyland Ltd., cannot be blamed.  Opposite parties submitted that apart from 12 months guarantee period, the compressor is subject to three free mandatory services to be done to the engine and the complainant  had not come forward for free mandatory services and failed to utilize the mandatory services which would have given an opportunity to the Service Engineer of the opposite parties for checking the engine as well as compressor during free services.  Opposite parties further submitted that even though the complainant gave a go by to the three mandatory services, the service mechanic of M/s.Srinivasa Engineering Service visited the premises of the complainant but the supervisor of the complainant did not allow the service mechanic to attend the engine and the service mechanic noted that the engine was put to work for 120 hours without 1^st and 2^nd services and therefore the complainant cannot ask for any benefit or privilege under warranty clause.  Opposite parties further submitted that the compressor was operated by unskilled persons, who do not know how to operate the engine and unit and submitted that there is no defect in the compressor supplied by the opposite parties and that the manufacturer of the engine is M/s.Ashok Leyland Ltd., and they have appointed M/s.Srinivasa Engineering service to attend and take care of the spares, sales and services.  Opposite parties further submitted that the Service engineer of M/s.Srinivasa Engineering service rectified the defects created by the complainant due to failure to maintain the equipment.  They submitted that the equipment was purchased by the complainant for commercial purpose and hence do not come under the purview of Section 2D of C.P.Act, 1986 and prayed for dismissal of the complaint.

            Based on the evidence adduced i.e. Exs.A1 to A6 and B1 to B10 and the pleadings put forward, the District Forum  allowed the complaint directing opposite parties 1 and 2 to replace the New Diesel Power Air Screw Compressor (TR) of the same model and capacity in the place of defective one within two months or in the alternative pay Rs.4,12,000/- together with interest at 12 percent p.a. from 20-5-2000 til the date of realization  together with compensation of Rs.20,000/- and costs of Rs.1,000/-.

            Aggrieved by the said order, opposite parties preferred this appeal.

            The learned counsel for the appellants/opposite parties submitted that delivery of the equipment took place at Srikakulam District and the entire transaction including payment of the money took place at Coimbatore and the invoice clearly states that any dispute is subject to jurisdiction at Coimbatore and therefore the District Forum, Srikakulam does not have any jurisdiction to entertain the complaint.  The learned counsel further contended that the appellants manufacture only the air compressor while the engine is manufactured by Ashok Leyland Limited and therefore the guarantee was given to the air compressor and one of the clauses for the guarantee reads as follows-

            “We do not stand guarantee for Electricals, Electric Motor, Engine,

            Fan Belts and Shut Off valves”.

            “We do not stand Guarantee for the defects due to wear and tear,

            Accident, improper adjustment, misuse, (including use of dirty

            or insoluble oil) and or negligence of maintenance etc.”

The appellants submit that the complainant did not maintain the engine and did not use lubricating oil and did not avail three mandatory free services and that the respondent/complainant alone is liable for the non-function of the air compressor.  He further submitted that there is no deficiency of service on their behalf since their technicians and service men went to Tekkali for giving service and also because the guarantee offered by the appellants is only for spare parts which are manufactured by him and which relate to the compressor.

            We have perused the material on record.  Addressing ourselves to the question of territorial jurisdiction, we hold that  Section 11 (c) of Consumer Protection Act, 1986 reads as under-

 Territorial Jurisdiction-

A complaint shall be instituted in a District Forum within the local limits

of whose jurisdiction--

c) the cause of action, wholly or in part arises.

In the instant case, the respondent/complainant had placed an order to the appellants through letter from Tekkali and the machine was delivered at Tekkali and that part of cause of action arose at Tekkali and therefore the District Forum, Srikakulam has jurisdiction to entertain the complaint.

Ex.A1 is the sales invoice dated 30-9-1999 issued by the appellants in favour of the respondent/complainant for an amount of Rs.4,12,000 for Diesel Screw Power Compressor.  Ex.A2 is the Elgi Equipments Manufacturers Guarantee in which it is stated as follows-

            ‘We guarantee the following equipment for a period of Twelve 12 months from

            the date of supply or Two Thousand (2000) running hours whichever is earlier

            against defective material and bad workmanship and is valid only when the

            product is used in accordance with the manufacturer’s instructions.

Ex.A2 does not state that the compressor is manufactured by Elgi and that the engine is manufactured by Ashok Leyland and therefore the compressor is only under guarantee and not the engine, however on the overleaf, it is stated that we do not stand guarantee for Electricals, Electric Motor, Engine, Fan Belts and Shut Off valves” and it is pertinent to note that there is no privity of contract between the respondent/complainant and Ashok Leyland.  Ex.B2 to B7 are service reports filed by the service engineers which clearly state that the pump is not working and the control system is mal-functioning.  This malfunctioning of the unit is within 4 to 5 months of its purchase and in Ex.B8 letter dated 18-5-2000, the mechanic noted that on 16-5-2000, the radiator is filled with mud and advised the respondent/complainant to get it serviced.  The contention of the appellants that the respondent/complainant did not avail the first three services and therefore is responsible for the malfunctioning of the unit is unsustainable on the ground that it is the duty of the appellants 1 and 2 to see that these three mandatory services are effected by their mechanics, keeping in view that the machine in question is of large size and immovable and it is up to the mechanic of the appellants to go to the respondents premises and effect the free services.  There is no documentary evidence to state that the respondent/complainant had refused to take the free services and we are also of the view that the radiator is a part and parcel of the machine and contributes for smooth functioning of the diesel power compressor and therefore the appellants having given the warranty for a period of one year or 2000 running hours cannot now take umbrage that the warranty is only for the compressor when it is apparent on the face of record that there is no privity of contract between the respondent/complainant and Ashok Leyland Limited.  The respondent/complainant purchased the machinery in its entirety from the appellants/opposite parties and therefore it is their duty to see that in the warranty period, the machine functions smoothly.  However, we are of the considered opinion that since the respondent/complainant had utilized the machine and this appeal is being disposed of in the year 2008 and the respondent/complainant purchased the machine in the year 1999 and now directing the appellants to replace the air compressor is against the principles of natural justice and therefore, we are of the considered view that for the deficiency of service by the appellants in supplying the defective machinery, the respondent/complainant is entitled to a sum of Rs.3,00,000/- and the appellants are directed to take back the machinery within four weeks.  Since the District Forum has already awarded compensation of Rs.20,000/- together with costs of Rs.1,000/-, we are of the view that interest at 12 percent p.a. on the awarded amount can be set aside.

            In the result the appeal is allowed in part and the order of the District Forum is modified by setting aside the direction to replace the New Diesel Power Air Screw Compressor (TR) of the same model and capacity in the place of defective one and directing the appellants to pay Rs.3,00,000/- instead of Rs.4,12,000/- and also to take back the machinery within four weeks and pay compensation of Rs.20,000/- and costs of Rs.1,000/- and the direction to pay interest on the awarded amount at 12 percent p.a. is also set aside.  Time for compliance six weeks.

                                                   PRESIDENT.   LADY MEMBER.    MALE MEMBER.

JM                                                                               Dated 18-2-2008