BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH ======== Complaint Case No : 540 of 2009 Date of Institution : 21.04.2009 Date of Decision : 12.01.2011 Paul Merchants Limited, SCO No. 829-830, Sector 22-A, Chandigarh, through its Company Secretary. ….…Complainant V E R S U S [1] Otis Elevator Co. (India) Ltd., 504-505, Rectangle One, D-4 Saket Place, Saket, New Delhi-110 017, through its Senior Area Manager. [2] Otis Elevator Co. (India) Ltd., SCO No. 223, 1st Floor, Sector 37-C, Chandigarh, through its Ar5ea Manager/ Incharge. [3] Otis Elevator Co. (India) Ltd., Magnus Towers, 9th Floor, Mindspace, Link Road, Malad (West), Mumbai, through its Managing Director. ..…Opposite Parties CORAM: SH.ASHOK RAJ BHANDARI PRESIDING MEMBER DR.[MRS.]MADANJIT KAUR SAHOTA MEMBER PRESENT: Sh.J.P.S. Ahluwalia, Adv. for Complainant. Sh.N.P.Sharma, Adv for OPs. PER ASHOK RAJ BHANDARI, MEMBER Succinctly put, the OPs agreed to install One “Otis Electric Traction Seven Passenger Machine Room Less Elevators” as per the terms and conditions contained in the Offer Letter dated 31.3.2007 and other documents for a total consideration for complete furnishing and installation of the lift for Rs.9,95,000/-. Both the parties have duly signed on all pages of the Offer Letter in token of acceptance of the proposal, terms & conditions including payments and conditions of contract. An advance of Rs.2,98,500/- equal to 30% amount of the total contract price was paid to OP at the time of acceptance of the proposal after deducting TDS of Rs.6698/- (Net paid Rs.291802/-) and 60% of the total price i.e. Rs.5,97,000/- after deducting TDS of Rs.13528/- net paid Rs.583472/- was paid to OPs after receiving letter dated 11.9.2007 from them. The elevator was to be commissioned within the period mentioned in the agreement i.e.28 weeks. However, the OPs failed to install the lift in the building of the complainant within the scheduled time of 28 weeks giving one reason or other. Aggrieved by the inaction of OPs, a lot of correspondence as well as talk took place between the parties for commissioning of the elevator at the earliest but ultimately OPs refused to commission the same elevator on the ground that some material for commissioning of the lift has been stolen from the premises where it was kept vide e-mail dated 22.11.2008. It is averred that from the storage place, the representatives of OP used to lift the material under their supervision, the material was transported by OPs to the site in the sealed boxes and OP people on the site as per their own requirement opened all the boxes without any interference by the complainant. After taking over the custody of the material, the OP people never handed over the material to the complainant as they used to open the boxes and use the material themselves at the site. It is also averred that in a meeting held between the parties, the complainant made it clear that if at all, any material had been misplaced at the site, the same could not be attributed to the complainant and further the same should have been covered under the Marine-cum-Erection Policy by the OP and a claim with the Insurance Company should have been lodged by the OP. However, in spite of all that as well as exchange of correspondence, the OP failed to complete the job of installation at the site of the complainant till date and thus is negligent and deficient in rendering proper service. The OPs had left the work in between. In these circumstances, the present complaint has been filed praying that OPs be directed to complete the installation work of the lift at the office premises of the complainant at the earliest without charging anything in addition to the agreed contract price of Rs.9,95,000/-. It is also prayed that the OPs be directed to pay Rs.10.00 lacs on account of compensation for causing both mental and physical harassment to the complainant as well as Rs.20,000/- as cost of litigation and interest at the rate of 18% p.a. on the amount of Rs.5.00 lacs spent on civil works undertaken in its premises by the complainant for the purpose of installation of the lift. 2] Notice of the complaint was sent to OPs seeking their version of the case. 3] In the reply filed by OPs, the factual matrix have been admitted. It is stated that total cost of the Elevator was pegged at Rs.9,95,000/- out of which the complainant till date has only paid off a consolidated sum of Rs.8,95,000/- only. It is submitted that the complainant itself failed to complete the preparatory work well before the arrival of the material and it took the complainant a timeline which started on 25.4. 2007 to get the Architrave Work finally completed only on 22.11.2008 thus wasting a period of over 19 months to accomplish the preparatory work list so that further installation and commissioning work could commence. However, as soon as the preparatory work was found completed the OP found material worth Rs.2,27,000/- missing or pilfered from the site in question qua which the complainant and OPs held a Joint Inspection on 22.11.2008 followed by the raising of the X-order seeking payment of the said amount which was resisted by the complainant leading to further delay in the completion of the work contract. It is denied that the OP could have completed the entire work contract in the stipulated 28 weeks period as alleged by the complainant. It is denied that Op ever gave any frivolous reasons to the complainant for the delay, however, it was the complainant who did not cooperate, which lead to the delay. Denying rest of the allegations, it is prayed that the complaint be dismissed. 4] Parties led evidence in support of their contentions. 5] We have carefully gone through the entire case thoroughly, including the complaint and the relevant documents tendered by the complainant / OPs. We also heard the arguments put forth by the learned counsel for the parties. As a result of the detailed analysis of the entire case, the following points/issues have clearly emerged and certain conclusions/arrived at, accordingly:- i] The basic facts of the case in respect of the Complainant Company having placed an order with the OPs for installation of one OTIS Electric Traction Seven Passenger Machine Room Less Elevator”, as per terms & conditions contained in the offer letter dated 31.03.2007 and on the basis of certain other documents, for a total consideration for complete furnishing and installation of the lift at Rs.9.95 lacs, have all been admitted. It is also a fact that both the parties have duly signed all the pages of the offer letter in token of acceptance of the proposal, terms & conditions, including payments and other conditions of contract. Further, an initial advance of Rs.2,98,500/-, representing 30% of the amount of the total contract price was paid by the Complainant to the OPs at the time of acceptance of the proposal, after deducting TDS of Rs.6698/- i.e. the net amount of Rs.2,91,802/- was paid accordingly. Subsequently, 60% of the total price i.e. Rs.5.97 lacs, after deducting TDS of Rs.13,528/- i.e. the net amount payable was Rs.5,83,472/-, which was paid by the Complainant to the OPs after receiving a letter from them on 11.09.2007. As per the terms & conditions of the contract, the elevator was to be fully commissioned within a period of 28 weeks from the date of receipt of the order in the shape of signed proposal form, advance payment, layout approval and settlement of all technical details. The balance amount of 10% of the total price was to be released to the OPs at the time of completion and installation of the lift. In accordance with the terms of the contract, the Complainant completed its part of the duty i.e. it paid 90% of the consideration price, signed the proposal form, provided the approved layout and settled all other technical details. It is also true that the OPs, as admitted by them, had in fact, initially started the erection work of the lift at the premises of the Complainant and dispatched the entire lift material, which was sent by their Bangalore Office and the same was received and stored in the storage space provided by the Complainant under the supervision and advice of the representatives of the OP at Chandigarh. Since, the preparatory erection work and other jobs were in progress at the site of the Complainant, the Complainant kept the materials in packed and sealed condition in its storage place located in Sector 21, Chandigarh and the same was being guarded by Security Guard and Officials of the OPs, who were lifting the required material from the Storage Site from time to time in sealed and intact condition as and when needed for carrying out the erection work at the site of the Complainant. ii] The main grievance of the Complainant against the OPs is that the OPs failed to complete the installation work of the lift in the building of the Complainant within the stipulated time period of 28 weeks, despite the fact that there was a categorical covenant in the agreement, listed as Condition No. 26, and despite the fact that all payments, as agreed, were released by the Complainant to the OPs, as scheduled and well within time. To hide its deficiency, the OPs made all kinds of excuses and also gave frivolous reasons for not completing the work. Another plea taken by the Complainant against the OPs for non- completion of work is that without giving any reasons, some time in July, 2008 i.e. after about one year of placing the order with them, it suspended the installation work of the lift any further and sent an e-mail on 22.07.2008 to them, stating that one M/s Ramesh Steels was to fix the vertical support channels and asked the Complainant to get the channels fixed at its own level, so that the remaining installation work could be re-started by the OPs. The Complainant categorically told the OPs that it was none of its business to undertake such work and that it was not dealing with any such M/s Ramesh Steels and also that the entire responsibility for installing the lift in toto lay with the OPs alone and nobody else. Later on, the OPs themselves contacted M/s Ramesh Steels and the work was re-started by them accordingly. Subsequently, in November, 2008, as per the Complainant, the OPs cited one more reason for delaying the completion of installation of lift, saying that certain material of the lift was missing from the site and that the same was to be obtained afresh by the Complainant from OPs on paying additional cost of Rs.2.27 lacs, which as per the OPs was either missing or pilfered from the site in question and for which OPs held a Joint Inspection with the Complainant on 22.11.2008 and subsequently, demanded the payment of the said amount from the Complainant. Another reason given by the OPs for non-completion of the full installation of the lift has been that the Complainant did not cooperate with the OPs and that led to further delay in the complete installation of the lift. All these allegations made by the OPs have been denied by the Complainant, by saying that after the receipt of the lift material, and its storage in Sector 21, Chandigarh, the representatives of the OPs, on their own, used to lift the material under their own supervision and the material in question was always transported by the OPs themselves to the site of commissioning of the lift in sealed boxes and the said boxes were opened by the OP people on the site as per their requirement, without any express knowledge or interference by the Complainant. During all this period, the OP people never handed over any part of the material to the Complainant at any stage and therefore, even if some material was misplaced or found missing, it is not due to the fault of the Complainant. Thereafter, a lot of correspondence took place between the Complainant and the OPs, but nothing concrete came out to sort out the issue. The Complainant has also taken another plea in support of its case by saying that as per Clause 19 of the Conditions of Contract, it is categorically provided that the equipment and materials involved in the execution of the erection work shall be covered against risk during transit, storage and erection at site by a “MARINE-CUM-ERECTION” policy and, therefore, the OPs were within their rights to file insurance claim with the insurance company and that the Complainant had informed the OPs through a letter dated 17.12.2008 accordingly (Annexure C-8). iii] In its joint written statement/ reply by way of affidavit, the OPs have taken some preliminary objections, stating briefly that the present complaint has been filed by a Commercial Company and that the lift in question was to be installed in the Corporate House Building of the Complainant Company, which in itself is a juristic person, essentially created with the intent of generation of profit by way of widespread commercial activities and, therefore, the present Complainant is not a consumer. The OPs have cited a number of judgments in support of the preliminary objections taken by them, stating that the present Complainant is not a Consumer under Consumer Protection Act, 1986; whereas, the Complainant has also cited certain judgments and especially, the one titled as Karnataka Power Transmission Corpn. & Anr. Versus Ashok Iron Works Pvt. Ltd., reported as III (2009) CPJ 5 (SC), which incidentally was also cited by the OPs in support of their case. The head note of which is reproduced hereinbelow:- III (2009) CPJ 5 (SC) SUPREME COURT OF INDIA Markandey Katju & R.M. Lodha, JJ. KARNATAKA POWER TRANSMISSION CORPN. & ANR. ---- Appellants Versus ASHOK IRON WORKS PVT. LTD. ---- Respondent Civil Appeal Nos. 1879 of 2003, 7784 of 2000 – Decided on 9.2.2009. (i) Consumer Protection Act, 1986 – Sections 2(1) (d), 2 (1) (g), 2 (1) (m), 2 (1) (o), 3 – Electricity (Supply) Act, 1948 – Section 49 – Electricity – Supply delayed – Damages claimed – complaint dismissed by District Forum – Order set aside in appeal – State Commission held, Complainants consumers, complaints maintainable – Order upheld by National Commission – Civil appeal filed – contention, Complainant company not person, not consumer under Act of 1986 – Contention not acceptable – Definition of person in Section 2(1) (m), inclusive, not exhaustive – Company is person within meaning of Section 2 (1) (d) r/w Section 2 (1) (m) – complaints maintainable – Order of State and National Commission upheld – Matter remanded to District Forum for disposal in accordance with law. [Paras 11, 18, 25, 28]” In addition to the above said head note, the judgment itself also clarifies the same thing stating that the Company is person within the meaning of Section 2(1)(d) r/w Sec.2(m) of the Consumer Protection Act, 1986. As such, the Complainant in this case is surely and definitely a Consumer under Consumer Protection Act, 1986 and therefore, the present complaint is maintainable. Further, the Complainant in this case is not getting the lift installed in its premises with a view to sell/ purchase the said machine and further, it is not in the business of purchasing and selling of lifts. It is surely obtaining the same for it day-to-day use and for convenience of its customers and staff. iv] In its reply on merits, some parts of which are also part and parcel of the preliminary objections, the OPs have admitted that the work of commissioning the lift was to be completed within a period of 28 weeks from the date of placing the order and completion of other formalities. One of the reasons stated by the OPs for non- completing the work in time is that as per Cl.14 of the Contract between the parties, the Complainant was to provide the mandated 50 sq. meter weather proof and lockable storage area on site well before the arrival of the elevator equipment, so that the material delivered by the OPs could be securely stored and that such locational advantage would accelerate the erection work. But the same was not done by the Complainant and instead, the lift material had to be stored at a place far off from the actual site of commissioning, which not only led to considerable delay in the installation of the elevator, but also the pilferage of certain vital parts of the material subsequently. The plea taken by the OPs is falsified by their own admission that the work of commissioning the lift had already been started by them after the supply of the material at the storage space provided by the Complainant and that the material in question was being constantly lifted from the storage space to the site as and when required. Therefore, this is not a material justification due to which the work could be stopped or delayed and moreover, there is no such clause in the contract that in the absence of such prescribed storage area, the work of commissioning the lift shall not be done. Last, but not the least, the OPs have at no stage taken any objection to the quality and appropriateness of the storage space provided by the Complainant till the date of filing of this complaint. So far as the pilferage of the lift material amounting to Rs.2.27 lacs from the site is concerned, it is quite clear that the material in question was always in the active custody and supervision of the OPs and most of the time, it was in sealed boxes which were always handled/ opened by the OPs only. In any case, there was already a clause in the Contract that the material in question would be adequately insured by the OPs. The said clause 19 of the Contract is reproduced hereinbelow:- “19. The equipment and materials involved in the execution of this Works Contract will be covered against risks during transit, storage and erection at site by a ‘marine-cum-erection’ policy and our liabilities will be restricted to the terms and conditions, warranties and exclusions specified in the insurance policy. The insurance cover will be valid for the period mentioned in the delivery clause of this contract or six months from the first shipment of materials to site whichever is later. In case the insurance cover has to be extended because of delay in erection due to reasons attributable to you or because of force majeure conditions, the additional premium will be to your account.” It is, thus, crystal clear that perhaps the OPs did not take care to obtain an appropriate ‘marine -cum- erection’ insurance policy and instead tried to shift the entire onus of financial loss incurred on account of pilferage of lift material to the Complainant, for which the Complainant is not to be blamed. As rightly pointed out by the Complainant, if at all, there was any loss or pilferage of the lift materials, the entire responsibility for recouping the same lay with the OPs and not with the Complainant. More so, the OPs after providing the misplaced/ pilferaged lift material to the Complainant afresh, could have recovered the loss from the insurance company. All this has not been done by the OPs, which itself shows their indifferent attitude and careless & casual handling of the entire matter. 6] From the above detailed analysis of the entire case, it is quite clear that the OPs inspite of having received 90% of the price of the lift and also fulfillment of all necessary formalities by the Complainant, have failed to commission the lift in full at the site of the Complainant within the stipulated period of 28 weeks or even afterwards for a period of 03 years or so. The preliminary objections taken by the OPs, have been duly answered by the Complainant supported by appropriate case law. Similarly, in its reply on merits, the OPs have only taken some lame and unjustified excuses and given frivolous and completely extraneous reasons for non-commissioning of the elevator, attributing the enormous delay in completing the commissioning of the installation of the lift by first saying that the Complainant had failed to provide 50 Sq. Meter of weather proof lockable area. Even, if this contention of the OPs is accepted for a minute, in that case, the OPs should not have allowed to store the lift material at any other place at all. But as a matter of fact, not only the OPs agreed to store the lift material at the storage area as provided by the Complainant, but also started using the said material for erection of the lift, which shows and proves that the storage area provided by the Complainant was acceptable to them and that it carried their due approval. In addition to this, after about 10 months’ from the date of placing the order, the OPs stopped the work all of sudden and midway of the job, again making another excuse that one M/s Ramesh Steels was to fix the vertical supporting channels; whereas, the Complainant had nothing to do with the said M/s Ramesh Steels and eventually, when the Complainant protested and insisted upon the OPs to get the said work done at their own level, they themselves got the same done. Finally, after putting all kinds of unjustified excuses, the OPs shifted the entire blame for the misplacement/ pilferage of certain vital parts of the lift material amounting to Rs.2.27 lacs and they wanted the Complainant to pay this amount before the remaining work of the installation of the lift could be resumed. This demand on the part of the OPs was wholly illegal and totally uncalled for, as the entire lift material had all through remained with them only and also under their supervision and security. Since the sealed boxes of the lift material were being repeatedly opened by the persons of the OPs, it was not possible for the Complainant to know which parts were being used and which still remained inside the boxes for their use later on. It is also obvious that perhaps the misplacement/ pilferage of lift material took place only because of inordinate delay caused by the OPs in completing the installation of the lift by stopping or delaying the work in question every now & then and without any justifiable reasons whatsoever. Even otherwise, installation of an elevator is a highly sophisticated and technical job and no layman could understand the intricacies of the job in question and least of all, the OPs who are ordinary businessmen. It was entirely upto the OPs to explain to the Complainant if there were any difficulties with respect to the storage area or the safety and security of the lift materials at any point of time. There is no document on record in the entire file, showing that the OPs had ever taken any objection in respect of the quality and standard of the storage area or any lapse of security on the part of the Complainant, where the lift items were stored or at the site of the lift. Lastly, even if it is admitted that there was a loss of Rs.2.27 lacs in respect of the missing parts, once again, the responsibility lay with the OPs to have obtained a “marine-cum-erection” policy with some reputed insurance company and then they could have recouped the loss sustained by them by filing a claim with the said insurance company. Whatever may be the case, the OPs had no business to ask the Complainant to pay the said amount of Rs.2.27 lacs and that only then, they would resume the work of commissioning the elevator at the site of the Complainant. It is also observed that the order for installing the lift was placed in March, 2007 and a period of about 4 years has since elapsed, but the Complainant is still without the lift and as such, it has been put to a lot of inconvenience & harassment and it has also been deprived of the facility to use the lift, especially by their clients and the staff members, including elderly and sick people. Moreso, the sum of Rs.8.95 lacs which consists of 90% of the total payment made by the Complainant has also been blocked with the OPs without obtaining any material return on the said sum, resulting in huge financial loss to the Complainant, apart from harassment. 7] In view of the above said discussions, we are of the considered opinion that the present complaint has a lot of merit, weight and substance and it must succeed. As such, we decide the complaint in favour of the Complainant and against the OPs. 8] The OPs shall, jointly and severally, do the following in favour of the Complainant:- (i) The OPs shall install “OTIS Electric Traction Seven Passenger Machine Room Less Elevator” forthwith, complete in all respects, being fully functional, within a period of 04 months from the date of receipt of the certified copy of this order, at the prescribed site of the Complainant company. The OPs shall also furnish guarantee of 12 months for the proper and efficient working of the elevator from the date of complete installation and commissioning of the lift, after its handing over by them to the Complainant Company. (ii) The OPs shall pay a compensation of Rs.5,00,000/- to the Complainant Company for deficiency in service, physical harassment and financial losses suffered by it for a period of about 4 years or so. (iii) The OPs shall pay Rs.7,000/- as litigation costs to the Complainant. 9] However, on complete installation of the said elevator at the site of the Complainant Company and the same being fully functional i.e. ready for use and its formal handing over to it, the Complainant shall, after due inspection of the elevator for its proper working, pay the balance amount of Rs.1,00,000/- i.e. 10% of the total price of the lift, to the OPs, so as to make the total payment of Rs.9.95 lacs to the OPs. 10] The aforesaid order be complied with by the OPs, jointly and severally, within a period of four months from the receipt of its certified copy, failing which OPs shall pay the sum of Rs.5,00,000/-, along with interest @18% per annum from the date of filing of the present complaint i.e. 21.04.2009, till the date of realization, besides complying with the order as at (i) in the foregoings and also paying the costs of litigation as Rs.7,000/- to the Complainant. 11] Certified copy of this order be communicated to the respective parties, free of any charge. After compliance, file be consigned to record room. Announced 12.01.2011 Sd/- (ASHOK RAJ BHANDARI) PRESIDING MEMBER Sd/- (DR.[MRS.]MADANJIT KAUR SAHOTA) MEMBER
| | DR. MRS MADANJIT KAUR SAHOTA, MEMBER | MR. A.R BHANDARI, PRESIDING MEMBER | , | |
