BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

FA 502 of 2013   against CC 177 of 2011  on the file of the District Consumer Forum, Ranga Reddy District

Between:

My Home Industries Ltd

a/k/a My Home Cement Industries Ltd

rep by its General Manager

My Home Hub

Hi-tech City, Madhapur

Hyderabad                                                         ..Appellant/opposite party

And

Narla Srinivas,

S/o late Chandramouli

Aged 45 years, occ ; LIc agent

R/o H. No. 1-1-113/2/B, Kalalpura

Opp: Sumangali Gardens

Karimnagar – 505 001                          ..      Respondent/complainant

Counsel for the Appellant                      :       M/s. P. Kishore Kumar

Counsel for the Respondent                   :       M/s. D. Devender Rao

QUORUM:  

HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT

AND

SRI  R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER

Wednesday, the Eleventh  Day of June, TWO THOUSAND FOURTEEN

Oral Order :   ( As per Sri R. Lakshminarasimha Rao , Hon’ble Member )

1.The opposite party is the appellant.  The appeal is directed against the order of the District Forum which allowed the complaint and directed the appellant to return the amount of Rs.10 lakhs with interest @ 18% pa and for payment of Rs.5,000/- towards costs. The respondent filed complaint seeking direction to the appellant to supply 500 bags of cement or in the alternative for refund of the sum of Rs.10 lakhs with interest @ 18% pa from 25.01.2011 till payment and a sum of Rs.50,000/- towards costs.

2.The respondent requisitioned the appellant for supply of 5000 bags of cement for construction of house at Karimnagar and paid a sum of Rs. 5 lakhs each through two Demand drafts bearing No. 118810 and 118811 dated 25.01.2011. In his letter the respondent mentioned the place for cement bags to be supplied was at Karimnagar. The appellant encashed  the demand drafts and failed  to supply the cement bags whereon the respondent addressed a letter dt. 6.2.2007 and got issued notice on 12.02.2011 for which there was no response from the appellant

3.The appellant resisted the claim on the  premise that the cement manufactured by them was being sold through their stockiest/dealers in various districts and States in the Country. The respondent has not submitted any requisition/application for supply of 5000 bags of cement.  The demand drafts were encashed by M/s. Shree Cement company, Secunderabad  which is the dealer of the appellant company.  The letter or notice said to have been sent by the respondent has not been received by the appellant company.  The respondent being resident of Karimnagar, he could have submitted application to the Area Sales Manager, Karimnagar which has to be approved the Director ( Marketing), Madhapur, Hyderabad.

4.The appellant has contended that the proprietor M/s. Shree Cement Company, Santhoshkumar assured the appellant that he would sort out the issue with the respondent and he remitted  the amount covered under the  demand drafts from the credit of his Account to the running Account of the appellant company.  The appellant has contended that there is no privty of contract between it and the respondent and that the respondent is not consumer and the complaint is not maintainable. The appellant prayed for dismissal of the complaint.

5.The respondent  filed his affidavit and Ex. A1 to A-10 and the manager of the appellant company filed  his affidavit  and Ex. B1 & B2.

6.The District Forum allowed the complaint on the premise that the appellant had received the sum of Rs.10 lakhs through its authorized dealer and failed to supply the cement or return the amount which it held to be deficiency in service on the part of the appellant/company. 

7.Aggrieved by the order of the District Forum, the appellant has filed appeal contending that the complaint is not maintainable and the act of the agent does not bind the principal company.  The appellant has contended that the District Forum misread the documents  filed on behalf of the respondent and it failed to consider that the demand drafts were drawn in the name of the dealer M/s. Shree Cement company Limited.  The appellant has contended that there is no privity of contract between the complainant and it and there is no invoice for the requisition filed by the respondent. 

8.The appellant has contended that after fulfilling the required formalities only the cement can be supplied and there is no concluded contract and indent raising of invoice and acceptance to supply of the cement.  The appellant has submitted that Ex. A1 and A4 are fabricated for the purpose of the case.  The District Forum has wrongly come to the conclusion that the Karimnagar area dealer had sent the demand drafts which was encashed by the appellant company.  Further, the appellant has contended that there was no cause of action for the complainant to file the complaint.

9.The point for consideration is whether the order of the District  Forum is vitiated by any misappreciation of facts or law ?

10.The respondent in support of his claim that he paid a sum of Rs.10 lakhs to the dealer of the appellant company for supply of the cement by the appellant, produced two demand drafts dated 25.01.2011.  The demand drafts were drawn in favour of M/s. Shree Cement Trading Company, Thirumalgiri, Secunderabad.  The learned counsel for the appellant contends that there is no privity of contract between the respondent and the appellant.  He has submitted that one of the demand drafts contains the name of M/s. Shree Cement and the appellant had supplied the cement bags to M/s. Shree Cement Trading Company. 

11.              The learned counsel for the respondent has submitted that the demand drafts were purchased in the name of the appellant company and the amount covered there-under was received by the appellant.  He has submitted that the appellant for the first time before the District Forum had taken the plea that the appellant supplied the cement bags to the dealer and to the effect the appellant had not adduced evidence.  The learned counsel contends that in case the appellant supplied the cement bags to M/s. Shree Cement Trading Company, it is between the dealer and the appellant and the respondent has no concern and even if it is presumed that the appellant had supplied the cement bags to its dealer, the appellant has not explained as to what prevented it from taking steps to  implead its dealer as a party to the proceedings. 

12.              Admittedly, M/s. Shree Cement Trading Company credited the amount of Rs.10 lakhs from its Account to the running Account of the appellant company and the appellant company had received the amount.  The appellant or its dealer failed to supply the cement of 5000 bags to the respondent.  The mentioning of the name of M/s. Shree Cement Trading Company in one of the demand drafts does not by itself is a fact to consider that  payment of the amount of Rs.10 lakhs was made by the dealer of the appellant company. 

13.              It is not the case of the appellant that the respondent has not paid any amount for supply of 5000 cement bags either to it or to its dealer.  The respondent paid the amount to the appellant through its dealer and the appellant has admitted receipt of the amount.  Thus, the onus would shift on the appellant to show its authority to retain the amount.  The appellant has not given reply to the letter of the respondent and the notice issued on his behalf.   The appellant has failed to establish that it had supplied 5000 cement bags to its dealer.  All the facts would consequently establish the purpose of receipt of the amount by the appellant from its dealer was to supply 5000 cement bags to the respondent.  In the circumstances, the appellant cannot contend that there was no privity of contract between the respondent and it and that the appellant is not liable to return the amount to the respondent. 

14.              As rightly contended by the learned counsel for the respondent, even if it is presumed for argument sake that the appellant had supplied 5000 cement bags to its dealer, the liability of the appellant  does not cease and any dispute between the appellant and its dealer has to be resolved between them.    The appellant cannot disown its liability under the guise of supply of cement bags to its dealer. 

15.              The contention of the learned counsel for the appellant that the demand drafts were drawn in favour of M/s. Shree Cement Company Limited and as such it is not liable to answer the claim of the respondent is not tenable for the reason that the amount was credited to the account of the appellant by its dealer .  Having not received, the cement requisitioned for, the respondent addressed a letter on 6.2.2011 and got issued notice on 12.02.2011 requesting the appellant to deliver the 5000 bags  of cement. The appellant has failed to give reply or  supply the cement agreed for. 

16.As such, failure of the appellant to return the amount or supply the cement constitutes  deficiency in service on its part.

17.The respondent paid a sum of Rs.10 lakhs on 25.01.2011through demand drafts and the appellant received the amount through its dealer on 28.01.2011.  The District Forum awarded refund of the amount with interest @ 18% pa thereon.  In sofar as the rate of interest awarded is concerned, the respondent except stating that he made requisition for supply of 5000 cement bags, he had not mentioned anywhere the grade of cement and the consequences of non-supply of the cement by the appellant. The respondent has not shown as to whether he had got arranged the cement from others for the purpose of construction of his house.  The respondent has also not mentioned either in his letter dated 6.2.2011 or in the notice dated 15.2.2011 the grade of the cement requisitioned for and such being the position, the award of interest at 18% pa appears to be on higher side and the same is liable to be scaled down to 12% pa.  The other reliefs granted does not warrant any intervention.

18.In the result, the appeal is allowed. The order of the District Forum is modified.  The appellant/opposite party is directed to pay to the respondent/complainant an amount of Rs.10 lakhs (  Rupees Ten Lakhs only ) with interest @ 12%  pa from 28.01.2011 till payment together with costs of Rs.5,000/-. There shall be no order as to costs in the appeal. Time for compliance four weeks.

                                                                                      PRESIDENT

                                                                                      MEMBER

                                                                                      Dt: 11.06.2014.