Kerala

Idukki

CC/73/2020

Prince cyriak - Complainant(s)

Versus

SAPP Paper Technique - Opp.Party(s)

Adv: km Sanu

14 Jun 2022

ORDER

DATE OF FILING : 10.6.2020

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 14^th  day of   June, 2022

Present :

                   SRI. C. SURESHKUMAR                  PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.73/2020

     Between

Complainant                                       :   Prince Cyriac,

                                                               Munjanattu House,

                                                               Cheenikkuzhi P.O.,

                                                               Udumbannoor, Thodupuzha.

     (By Adv: K.M. Sanu)

        And

Opposite Party                                    :   The Manager / Propreitor,

                                                               SAPP Paper Technique,

                                                               Perumal Kovil Street,

                                                               Vadavalli, Coimbatore – 641 041.

 (By Adv: D. Sekar Annadurai &Shiji Joseph)

 

O R D E R

 

SRI. C. SURESHKUMAR, PRESIDENT

 

1. This is a complaint filed under Section 12 of the Consumer Protection Act, 1986 (the Act, for short). Case of complainant is briefly narrated hereunder :

 

          Complainant was a Gulf returnee and an unemployed person.  In 2018, he had decided to start a unit for manufacturing tissue paper napkins and paper cups as a means of self-employment.  After making enquiries over net and otherwise, complainant had gathered details about the machinery necessary for the unit.  He had then, made enquiries about the same with opposite party also, who was the proprietor of a machine making industry in Coimbatore.  Opposite party had informed him that the machine would cost Rs.13,86,500/-.  That the price is to be paid in  3 instalments  and  the  machine had  a warranty for one year against manufacturing defects. That it is capable of manufacturing                                                                                                                      (cont….2)

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500 to 600 pieces per minute.  That one shift involving manufacture of napkins from 27 X 27 cm size paper would yield a profit of Rs.2609/- and that of a napkin manufactured from 22X 22 cm paper size would give a profit of Rs.2185/- per shift.  Believing this, complainant had accepted the quotation submitted by opposite party for the machine, on 1.1.2019 for Rs.13,86,500/-.  Thereafter complainant had availed a loan under PMEGP scheme of Central Government for self-employment, after pledging his property with Thodupuzha branch of Canara Bank, of Rs.12,61,125/-.  Out of this, Rs.5,87,125/- was margin money available to the complainant from Industrial Department.  Despite having the facility to pay price of machine  in 3 instalments, complainant had paid entire cost of Rs,13,86,500/- on 30.3.2019 by bank transfer.  The unit would cost an investment of Rs.20 lakhs.  While making enquiries on  functioning of the unit, complainant had unexpectedly come to know more details about the machine purchased by him.  He had come to know that the cost of machine was not as paid by him, but much lower. Its production capacity was also lower than that represented by opposite party.  He has also come to know that the profit yielding margin was considerably lower than what was represented to him by opposite party.  Upon coming to know that he was misinformed by opposite party with regard to the machine, its cost and profitability, he had contacted the opposite party and asked him to cancel the order.  Though opposite party had agreed to cancel the order, he had not transferred the amount back, stating some technical glitches in GST.  Complainant had also informed the bank about the cancellation of project.  He had also given intimation that margin money and further loan amounts are not required.  Thereafter, despite repeated requests, made personally and by e-mail, for return of the price paid by him, opposite party had not returned the amount.  Opposite party had obtained the order for machine from complainant by misrepresentation of facts.  This amounts to unfair trade practice.  Opposite party is bound to return Rs.13,27,500/-  with 18% interest and also to compensate the complainant.  Complainant claims machine cost with interest as above, Rs.2 lakhs as compensation for unfair trade practice and Rs.10,000/- as litigation cost from opposite party.

 

          2.  Opposite party had entered appearance and filed written version.  Its contentions are briefly discussed here under :

 

          According to opposite party, it had given a proforma invoice / quotation, upon request by complainant for two tissue napkin machines, bearing No.3052 dated 1.1.2019.  One  was a fully automatic Bandsaw 300 mm high speed tissue      napkin machine with single colour printing and single embossing unit costing Rs.6 lakhs.  2^nd one was a 210 mm high speed machine with single colour printing and single embossing unit costing Rs.5,75,000/-.  Total cost come to Rs.11,75,000/- with GST at the rate of 18% coming to                                                                                                            (cont…3)

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Rs.2,11,500/-,thereby making  total cost payable with GST at Rs.13,86,000/-.  One year warranty was given for manufacturing defects.  As per terms of contract, advance made is not refundable and wide jurisdictional clause, dispute and claims are to be preferred before authorities within Coimbatore.  Complainant had availed subsidy of Rs.5,87,125/- from Industrial Department.  Opposite party admits that Rs.13,86,500/- was transferred to its account by complainant through its bankers, Canara Bank, Thodupuzha branch.  It is incorrect to say that complainant had made enquiries and gathered information that machine supplied by opposite party will not have a manufacturing capacity as mentioned in the quotation or in the statement given.  It is incorrect to say that complainant received information that profit margin is less than what was represented.  All these are blatant lies.  In fact complainant had approached opposite party in person and sought for return of cost of the machine paid by him less GST with the intention of defrauding the Government and pocketing subsidy. Opposite party had refused to do so. Machine was made on order as per specifications given by complainant and therefore the order could not be cancelled, since customized machinery could not be sold across the counter.  Opposite party is prepared to deliver the machine as per the terms of contract to the complainant even today.  Cancellation of order by   complainant was without any reasonable cause or justification.  Allegations  that opposite party had  misrepresented  facts regarding the machine are totally false.  Further allegations that machine was excessively priced are also incorrect.  Complainant was at liberty to make enquiry about the machines and  statement given by opposite party with regard to its production capability and profit earning capacity with other manufacturers.  Despite repeated requests, complainant had not chosen to take trial runs of the machines from premises of opposite party to verify working and production capacity of machine.  He had refused to take delivery as promised and instead demanded refund of money for the purpose of getting invoices for bank purposes. As complainant has not come with clean hands and is guilty of corrupt practice, he is not entitled for any of the reliefs prayed for.  No unfair trade practice was practiced by opposite party.  There is no cause of action for this complaint.  Since opposite party is having place of business at Coimbatore and further since as per the contract, disputes are to be submitted before authorities within the limit of Coimbatore, complaint is not maintainable before this Forum.  Complainant had suppressed material facts.  Therefore, complaint is to be dismissed with exemplary costs.

 

          3. After filing of written version, case was posted for evidence after affording sufficient opportunity to both sides to take steps.  On the side of complainant, he himself was examined as PW1 and Exts.P1 to P8 were marked.  one document, purportedly statement prepared by the Chartered Accountant of complainant,  was not admitted as it                                                                                                             (cont….4)

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was a mere statement of complainant’s Chartered Accountant; besides the Chartered Accountant was not preferred as a witness either.  Proprietor of opposite party concern was examined as RW1.  Ext.R1 series 3 in numbers, photographs of the machine were marked through her.  Thereafter evidence was closed and both sides were heard.  Now Points which arise for consideration are :

1)  Whether complaint is maintainable ?

2)  Whether there was any misrepresentation of facts amounting to unfair

 trade practice ?

3)  Whether complainant is entitled for return of costs of the machine with

interest and compensation ?

4) Reliefs and litigation costs  ?

 

4.  Point Nos.1 to 3 are considered together :

 

          Learned counsel for complainant would submit that along with quotation, opposite party has submitted Ext.P3 profit calculation statement and convinced complainant that profit per shift from machine cutting 27 x 27 cm tissue would be Rs.2609/- per shift.  That from the 2^nd machine using 22 x 22 cm paper, it was Rs.2185/-.  It was on the basis of this representation that the complainant has accepted quotation given by opposite party and ordered the machine.  However, he had later came to know that  production cost of the machine was higher than what has been shown in the statement and further that profit yield was very low. Purchase of both machines at a cost demanded by opposite party + installation expenses would make the profit margin lesser than shown in Ext.P3 and the venture eventually would turn out to be non-profitable also.  It was for these reasons that complainant had cancelled the order and sought refund of the price paid by him for the machines.  Bank from which loan was taken was duly informed that no further loans are required and margin money received from Central Government was refunded.  Contentions that complainant had approached opposite party and requested refund of cost of machines less GST paid, for the purpose of getting margin money from  Government without starting the unit are incorrect.  No  such  demands  were  made.   Opposite  party  was  legally  bound  to  accept           cancellation of order and return the price amount.  Admittedly, machines have not been taken delivery of.  These facts are admitted by RW1 in box also.  It could be seen from the photographs of the machine given along with Ext.P1 that it is completely different from Ext.R1 series photographs.  Even if there were not to be any cancellation, it could be seen that machine was not ready for delivery within the period it was supposed to be delivered.  Complainant was not informed that the machines were ready for delivery and asked to collect the same.  That apart, it was the                                                                                                              (cont….5)

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sellers’ duty to deliver the machinery at the premises of complainant.  This was not done.  Under these circumstances, it is to be taken that opposite party in fact was not prepared to deliver the machine in time.  Secondly, upon cancellation of the order, he was duty bound to return the cost of machine obtained from complainant.

 

          Learned counsel for opposite party would submit that machine was manufactured as per the specification given by complainant.  It was made on order.  Machine could not be kept by opposite party in her manufacturing unit as it could not be sold across the counter.  No reason is given for  cancellation of the order.  It was the complainant who had come to opposite party with a demand for  2 paper napkin and paper cup manufacturing machines with specifications regarding their size.  As requested by complainant, opposite party had given quotation for machines as per specification demanded by complainant.  A profit yielding statement on the basis of cost of raw material and production capacity of machines was calculated and given to complainant.  After understanding the same, he had accepted the quotation given by opposite party and placed an order for the machines.  Though he was only supposed to pay the total cost in 3 instalments, complainant had paid the entire price and had thus confirmed his order.  Cancellation was after manufacture of the machines was over.  Since machines was built as per specification of complainant, cancellation could not be done.  Complainant was informed about this.  Yet he has not taken delivery.  Present case projected during evidence that opposite party has to deliver the machines at the premises of complainant is without any merits.  As per Ext.P2 quotation, terms and conditions included F.O.R. at Coimbatore.  It was the duty of complainant to take delivery of machines from Coimbatore.  It was Freight On Recipient.  It is incorrect to say that complainant was not informed about machines being ready for delivery or asked to take delivery of the same.  Instead he had refused to take delivery and had cancelled the order.  Opposite party is prepared to deliver the machines even today.  No evidence was tendered to show that machines were defective in any respect.  Non-taking of delivery of machines by complainant was without any reason.  Complainant is not entitled for refund of the cost of machines or compensation.

 

          Thus, these are the rival contentions.  It is seen from the pleadings and evidence  that complainant had accepted the quotation submitted by opposite party for purchase of 2 paper cutting / napkin / paper cup manufacturing machines of certain specifications.  As per the complaint, after placing the order on 30.3.2019, complainant had paid the entire cost amounting to Rs.13,86,500/- by bank transfer to opposite party.  Thereafter complainant alleges that he had made enquiry regarding machines and had come to know that cost of machines claimed and obtained by opposite party was in excess than actual                                                                                                                 (cont….6)

 

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cost of these machines.  Opposite party has given only one year warranty.  However, complainant had come to know that warranty for longer periods is given for such machines.  He had also  come to know that profit yielding capacity of both machines was less than what was proposed by opposite parties.  Complainant does not specify the persons with whom he had made these enquiries.  He does not even say whether his enquiries were with persons experienced  or experts in the field.  Complainant also does not say what was the longer period of warranty offered for similar machines by other persons or concerns.  He has also not stated what was the actual profit yield capacity of similar machines as per his enquiry.  Apparently he has come to a conclusion regarding low productivity and lower profit yielding capacity on the basis of the calculation statement given by his Chartered accountant which he had attempted to admit in evidence at the time of his examination.  This Commission found that the calculation statement as such was provided by his Chartered Accountant and this will not constitute evidence, but only a statement.  Further the so called Chartered Accountant was not cited as a witness.  There is nothing in the evidence of the complainant to show that the Chartered Accountant had examined manufacturing process of napkin and paper cup machines of similar capacity.  The so called statement of Chartered Accountant is, in all probabilities, based upon his own conjunctures and assumptions.  Complainant has not  proved that the machines ordered by him were costing less than machines purchased by him from opposite party.  He has also not adduced sufficient evidence to prove that production cost is higher and  profit yielding capacity of machines was less than what is mentioned in Ext.P3.  In fact evidence of opposite party which is not challenged would go to show that the complainant has not even cared to conduct trial runs of machines after completion. There is no manufacturing defect or any deficiency in service with regard to manufacture of the machines as per order placed by  complainant.  It is specific case of opposite party that both machines were made as per the specification given by complainant.  Since machines were custom made, it will not be possible for opposite party to sell them across the counter to other customers.  Cancellation of order after paying the entire price for machines by complainant was apparently without any justification or reason.  Complainant has no case that the machines were defective in any respect.  His only apprehension was that of it is having high production costs and low profit yield contrary to what is mentioned in Ext.P3. His apprehension was not well founded. He should have made proper enquiries with regard to the machines proposed to be purchased by him before placing orders for the same with opposite party.  After having placed an order for the machineries which are to be custom made and which carry a high price tag and after manufacturing process is complete or passes a stage from where it is irreversible, he                                                                                                                  (cont….7)

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cannot turn around and cancel the order stating that profit yielding capacity shown for the machines is inflated.  That being so, we find that complainant cannot claim refund of cost paid for the machineries which were already manufactured as per the order placed by him.  In so far as question of delivery is concerned, complainant has not pleaded in complaint that there was any latches on the part of opposite party in informing him that the machines were ready for delivery or that delivery was to be effected by opposite party at its cost.  Though we would disagree with the evidence tendered by RW1 to the effect that FOR means free on recipient considering the actual expansion of short form which is Free On Road as per P2 at Coimbatore, it is clear that responsibility of the seller was only to deliver the machineries by placing them / loading them in a lorry or public carrier at a given place in Coimbatore.  Transportation from there to the premises of complainant was to be done by complainant himself and not by opposite party.  It is true that as per terms, installation of  machineries was to be done by opposite party.  However, evidence would reveal that the order itself was cancelled before trial runs. For these reasons , we find that complainant is not entitled to cancel the order for machineries and getting refund of the cost paid for the same to opposite party as there is no deficiency in service.  Complainant is not entitled for any compensation either.  Point Nos.1 to 3 are answered accordingly.                                                                                               

 

5.  Point No.4 :

 

          In the result, this petition is dismissed, considering the circumstances, without costs.

 

                   Pronounced by this Commission on this the    14^th   day of June, 2022

 

 

                                                                             Sd/-

SRI. C. SURESHKUMAR, PRESIDENT

 

                             Sd/-

  SMT. ASAMOL P.,MEMBER

 

                        Sd/-

SRI. AMPADY K.S., MEMBER

                                                                                                          (cont….8)

 

 

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APPENDIX

Depositions :

On the side of the Complainant :

PW1         -   Prince Cyriac

On the side of the Opposite Party :

DW1        -  Premalatha J.

Exhibits :

On the side of the Complainant :

Ext.P1      -   Proforma invoice / quotation No.3052 dated 1.1.2019.

Ext.P2      -  terms and conditions of order.

Ext.P3      -  production details given by opposite party.

Ext.P4      -  letter dated 30.3.2019 issued by opposite party.

Ext.P5      - letter dated 25.7.2019 issued by Canara bank, Thodupuzha to OP.

Ext.P6      -  statement of account.

Ext.P7      - letter dated 16.11.2019 issued by Canara bank, Thodupuzha to Complainant.

Ext.P8      -  details from website.

On the side of the Opposite Party :

Ext.R1     -  photographs – 3 Nos.

 

 

 

                                                                             Forwarded by Order,

 

 

                                                                          ASSISTANT REGISTRAR