BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 21/05/2010

Date of Order : 29/02/2012

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 306/2010

Between

And

O R D E R

Paul Gomez, Member.

1. The complainant is induced to file this complaint by dint of the following facts :

The complainant purchased Backhoe loader from the 2^nd opposite party for Rs. 21,97,000/- (Rupees Twenty one lakhs and ninety seven thousand only). The complainant found his livelihood by operating this machine. The equipment had a warranty for one year or 2000 operating hours. He could became the pround owner of this machine only by availing loan form M/s. Muthoot Vehicle & Asset Finance Limited. Rs. 53,500/- is the EMI for the loan. But his expectations were believed by the mal-functioning of the machine which made him to take it to the workshop off and on. The machine had been taken to the workshop for repairs for as many as 30 occasions within the warranty period of 2000 hrs. Hence the machine could be on service barely for 1000 hours, making the arrears to the financial institution mount without leaps and bounds. The 2^nd opposite party has collected Rs. 49,626/- towards price of the spare parts used for repairing even if the repairs were conducted within the warranty limit. The machine manufactured by the 1^st opposite party is having substantial manufacturing defect which has caused the huge loss to the complainant due to its mal-functioning. The complainant could not repay the loan regularly because of the mishap, the liability has mounted to Rs. 27,15,932/- as on 21-09-2009. The complaint is concluded with the prayer to direct the opposite parties to pay Rs. 19,50,000/- (Rupees Nineteen lakhs and fifty thousand only) along with costs of the proceedings.

2. Both the opposite parties filed separate versions. The 1^st opposite party denied that the machine was purchased for earning the livelihood by the complainant and the machine is being operated on a commercial basis for earning profits on a large scale. The defects that surfaced were not due to manufacturing defect and they were because of the wear and tear of the party. Though the warranty for the machine had expired on 12-06-2009, the 1^st opposite party had provided service under warranty upto 26-08-2009 by which time the machine had been operated for 2696 hours. The backhoe arm which had developed a crack had been replaced free of cost on 03-07-2009 as a gesture of goodwill. The complainant had earned handsome net profit for the year of warranty when the machine was used for 2354 hours. The 1^st opposite party is not responsible for the default in loan repayment. Whereas there is no manufacturing defect in the machine, the demand for compensation and costs is devoid of merit.

3. The 2^nd opposite party also by and large reiterates the contentions put forth by the 1^st opposite party. The 2^nd opposite party is an unnecessary party in the complaint and hence the complaint is bad for misjoinder of party. The repairs that were done is ordinary repairs usually done to such heavy vehicle. Wear and tear items that were replaced have been charged in terms of warranty conditions. It is submitted that by 12-06-2009 the date of expiry of the warranty the loader of the complainant had already been operated for 2354 hours. Warranty was provided in such a manner that such machine could be operated for 2000 hours in one year. A rough calculation for the hours operated would give the conclusion that complaint had made a net profit of 1,44,636/-. Therefore, there is no meaning and merit in the complaint alleging manufacturing defect for the machine. Hence, it is urged to dismiss the complaint with costs.

4. The complainant was examined as PW1. Exts. A1 to A7 were marked on his side. Witnesses for opposite parties examined as DW1 and DW2. Exts. B1 and B2 were marked on their side. The learned counsel on both sides were heard.

5. The following points require settlement :-

1. Whether the vehicle is having manufacturing defects?

2. What are the reliefs, if any?

6. Point Nos. i. and ii. :- In this complaint, the relief sought by the complainant is lumpsum compensation of Rs. 19,50,000/- along with interest @ 15% p.a. and costs of the proceedings on account of having been supplied with a defective machine called Backhoe loader. The machine was purchased with the finance support from a financial concern called M/s. Muthoot Vehicle & Asset Finance Limited. It has come out in evidence that the vehicle was seized by the financier, when the complainant's dues fell in arrears.

6. The crux of the complaint is that the transaction proved to be heavy burden upon the complainant, because he could not tap the potentialities of the machine in its entirety since it was defective machine which is borne out by the Ext. A1 series service report. According to the complainant, the vehicle was taken to the workshop for as many as 30 occasions in one year. As the machine was limbing from the very inception due to several defects, the complainant describes them as congenital defects attributing more specifically manufacturing defects.

7. But the opposite parties are of the view that there is nothing unusual about it in taking such a heavy machine for repairs so often. There was no inherent defect with the machine. Repairs were necessitated by wear and tear. As a goodwill gesture when a crack developed to backhoe arm, it was replaced free of cost as a mark of goodwill. Moreover, the manufacturer has granted warranty for one year or 2000 hours implying that in a normal situation, the machine was expected to provide efficient functioning for 2000 hours only. The machine under dispute has well surpassed that limit Ext. B2 warranty certificate has been produced by the 1^st opposite party. The 1^st opposite party the manufacturer stayed absent from the proceedings.

8. In this factual setting, the 1^st and 2^nd opposite parties attack the contention of the complainant that the machine is inherently defective. He contends that the frequency of repairs required to be done to the vehicle was enough to show that it was in and out of the service centre so often. The complainant produced Ext. A1 series service report in support of the above contention. Ext. B1 series corresponds with Ext. A1 series. Even though frequency of repairs prima-facie entails an impression that the defects were chronic, but no rulings have been cited by the complainant in support of the proposition that in the event of repairs frequently being done, that would lead one to the conclusive finding that the vehicle under dispute was suffering from manufacturing defect. In this context, we think the finding made by the Hon'ble State Commission in K.C. Johny Vs. Manager, M/s. Telco Construction Equipments can be profitably referred and easily distinguished in as much as His Lordship Justice Udayabhanu heavily relies upon the opinion of the Expert Commissioner for the just disposal of the matter whereas the complainant has failed to produce any such evidence to tilt the scale in his favour. The 1^st and 2^nd opposite parties have cited several decisions by the Hon 'ble Supreme Court and the Hon'ble National Commission to reiterate the significance of independent expert evidence in such occasions. Even if it assumed for a moment that the vehicle was suffering from manufacturing defect, because it was in the workshop on and off, the complainant has not made even a whisper of argument that the same defects were recurring. Moreover, the consumer had received the vehicle from the service centre with satisfaction which is borne out by his signature affixed on the service report. In that view of the matter, we cannot safely conclude that the complainant has succeeded in convincing the Forum with the support of cogent proof that the disputed vehicle was suffering from manufacturing defect.

9. The opposite parties have made a three-pronged attack against the complaint. The first limb is that the complainant is not a consumer because the vehicle under dispute was purchased for commercial purpose. They have cited the ruling of Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (II (1995) CPJ 1 (SC). The Hon' ble Supreme Court has conclusively held as follows :

“(ii) Whether the purpose for which a person has bought goods is a “commercial purpose” within the meaning of the definition of expression “consumer” in Section 2 (d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.

(iii) A person who buys goods and uses them himself, exclusively for the purpose of earning his livelihood, by means of self-employment is within the definition of the expression “consumer” .

Obviously, the expression “commercial purpose” desires its meaning from the facts and circumstances of each case. Eventhough their Lordships have cited the examples of typewriter and taxi car being used exclusively by its owners respectively, much water has been flown under the bridge, since this pronouncement, now it is conceded that if the commercial activity is carried on with the support or assistance from others in a limited manner, that will not derogate from the concept of commercial purpose for earning ones livelihood. In the instant case, the equipment has been operated with the help of driver and a helper. The opposite parties have no case that the complainant has any other business other than this to bank on for his livelihood. Nor have they produced any material to support such a point. In that view of the matter, the contention that complainant is not a consumer remains to be bald statement.

10. The next challenge on the maintainability of the complaint is founded on the ownership of the vehicle when the complaint is filed. Eventhough, the complainant has conceded that the vehicle was seized by the financier on default of loan amount in time, he has cleverly not disclosed that the same has been sold out to a third party under auction by the financier. Thus, at the relevant time, the complainant had with him neither the possession nor the ownership of the vehicle. In support of the aforesaid contention, the 1^st and 2^nd opposite parties have cited the ratio laid down by the Hon'ble National Commission in Anil V. Pandey Vs. National Insurance Co. Ltd. (III (2005) CPJ 21 (NC), where it was observed as follows :

“That apart, it is admitted by the petitioner that the said Tata Sumo was hypothecated by him with respondent No.3 Bank to secure repayment of the loan advanced and was repossessed and thereafter sold by the Bank. As ownership of vehicle vested with respondent No.3, the petitioner did not have locus standi to file complaint as rightly held by the District Forum.”

We think the finding in the said decision by the Hon'ble National Commission squarely applies in the present situation and finally clinches the matter. The only conclusion that can be reached in the light of the above dictum is that, the complaint is not maintainable in the Forum for want of ownership with the disputed vehicle by the complainant at the time of filing the complaint. No decision has been cited by the complainant to controvert the contention of the opposite parties. In that view of the matter, the complaint cannot be entertained in the Forum.

11. On an overall view of the matter, the complaint is dismissed for the reasons stated as aforesaid.

Pronounced in open Forum on this the 29^th day of February 2012

Sd/- Paul Gomez, Member.

Sd/- A. Rajesh, President.

Sd/- C.K. Lekhamma, Member.

Forwarded/By Order,

Senior Superintendent.

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-

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