3

one side with stair case – one side

2. Replacement of long travel gear boxes – 2 nos. including

drive motors / flexible gear couplings etc.

2.50

3. Cost of wire rope complete 0.25

4. L.T (long travel) railing alignment rectification 1.25

5. Structure columns full welding where ever necessary to

avoid vibrations

0.50

6. End supports 4 nos, cost of material, fabrication,

erection

1.10

7. Centre bay cross arms / supports providing cost of

material, fabrication and erection

1.50

8. Grab wire rope pulleys replacement with pins etc. 0.10

9. Motor guards for all drive units 0.10

10. L.T & C.T. Electrical contracts / units replacement 0.40

11. Dismantling of entire crane re-erection alignment of

columns. L.T. C.T etc with higher cross section

channels / beams / angles

3.50

12. Cost of labour employed for feeding cane into the carrier

manual since the cane un-loader troubles for 2006-

2007 & 2007-08 seasons

Plus

Penalty clause for delayed commissioning of the

equipment.

7.20

Total 19.90

The complainant atlast got issued a notice dt. 18-3-2008 to the respondent to replace

the defective cane unloader. The respondent failed to give reply or rectify the

problems. On 23-4-2008 the complainant again sent a letter demanding to pay

Rs. 10,00,000/- towards cost of material and labour costs. There was no response.

Thus the complaint was filed for Rs. 19,90,000/- towards rectification charges for

rectifying the defects of the cane unloader and cost of the material and labour cost

and Rs. 2,000/- towards costs of the complaint. The respondent erected and fixed

the defective machinery at the complainant. Thus the forum had got jurisdiction.

4. The respondent filed a counter that the complainant was not a consumer

within the definition of section 2 ( 1 ) (d) & (e) of the C.P. Act because the machinery

supplied was for commercial activity, as per purchase order, the invoice and tender

schedule. Any breach of contract between the parties the complainant had to

4

approach the Civil Court. Thus the forum had no jurisdiction. As per clause – 10 of

the agreement / purchase order vide order No. CCS/ Cane Unloader / 2006, dt.

4-9-2006 and clause 24 of tender schedule if any disputes arose in between parties it

would be referred to the Commissioner and Director of Sugar and Cane

Commissioner, Government of Andhra Pradesh for arbitration. As per section 8 of

Arbitration and Conciliation Act when there was any arbitration clause in the

agreement, it had to be referred with the arbitrator. It was a mandatory provision.

There was no deficiency of service at any point of time because cane unloader was

erected, installed and commissioned as per specifications designed approved by the

complainant by following standards, specifications of 2004. There was no problem

during crushing period of 2006-07. As per Clause – 5 of the purchase order the

machinery had to be maintained by the opposite party and accordingly the opposite

party engaged and deputed a skilled technical person during crushing season 2006-

07 and the machinery worked without any obstruction. After completion of the

warranty the problems were rectified as and when arose and training was also

provided to one of the persons of the complainant. As per clause 11 (c) of the

purchase order the entire payment was paid by the complainant on the satisfactory

work of cane unloader. The warranty period was ceased by 16-8-2007. Thus the

complainant was not entitled for any loss or damages.

5. The complaint was filed with a malifide intention to avoid payment in

respect of material supplied. The cane unloader might have given problems during

subsequent crushing season on account of mismanagement handling by the

unskilled persons. It was not maintained properly without using lubricants. The

machinery was not covered from sunlight or rains. The complaint was filed without

any expert opinion regarding nature of damage. The loss of assessment could be

done through a qualified competent person. But the loss claimed was exaggerated

without any document. The cost of equipment was Rs. 34,77,992/-. On his own

statement the complainant assessed Rs. 10,00,000/- as cost of the material and

5

labour charges. After satisfactory working condition the amount was released to the

opposite party. The complainant’s company was sick and hence, the complaint was

foisted with exaggerating amount as claim. As per the invoice supplied to the

complainant it was mentioned that the Hyderabad Courts had only jurisdiction to

entertain any dispute. The forum had no jurisdiction. The Government officials or

Directors of the company were not parties to the proceedings and for non-joinder of

the parties, the complaint ought to have been dismissed. The complainant was a

registered company under Cooperative Societies Act and hence, he ought to have filed

before the Cooperative Tribunal and the complaint may be dismissed with costs.

6. On the basis of the above pleadings the following points are settled for

determination.

i. Whether there is any negligence and deficiency of service on the

part of the respondent?

ii. Whether the complainant is entitled to the relief as prayed for?

iii. To what relief?

7. On behalf of the complainant Ex. A1 to A9 were marked and on behalf of

the respondent RW1 & RW2 were examined and Ex. B1 to B5 were marked. The

respondent filed written arguments also.

8. Point No. 1 & 2 The complainant was Cuddapah Cooperative Sugars

Ltd., represented by its Managing Director, Daulathapuram, Kadaapa District. The

complainant purchased 5 ton capacity Cane un-loader from the respondent under

Ex. A1 Xerox copy of invoice cum delivery challan dt. 9-11-2006 for a total amount of

Rs. 9,81,450/- from the respondent namely M/s Access Equipments, Hyderabad

along with corporate guarantee with validity period upto 31-3-2008. Ex. A1 disclosed

that the complainant purchased design manufacture supply of 5 ton capacity Cane

un-loader related structure for Rs. 7,50,000/- along with excise duty, sales tax,

additional education cess totaling Rs. 9,81,450/-. After supply and fixed at the

complainant’s factory by the respondent company the Cane un-loader did not work

6

properly and the complainant found certain defects in it. Therefore, the complainant

addressed a letter on 28-6-2007 to the respondent that the crushing season of 2006-

2007 was completed on 24-6-2007 and Cane un-loader long travel was not worked

and the same could not be attended to by the respondent on emergency basis

causing much inconvenience and the factory faced lot of cane feeding problems due

to L.T drive problem till closure of the crushing season. The Xerox copy of the letter

addressed by the Managing Director of the complainant was Ex. A2. in which he

refeered an earlier letter dt. 15-6-2007. On 01-3-2008 the complainant addressed a

letter to the respondent that the representatives of the respondent namely Sri Y.

Sathyanarayana and Sri G. Srinivasa Rao had examined the Cane un-loader and

promised to rectify the following defects during their next visit. The defects were 1)

Lifting equipment grab motor / gear coupling gear box problems to be rectified.

Grab wire rope bottom pulley sides observed more gap, due to the defect wire ropes

were getting damaged. 2) Long travel not functioned due to drive gear box / motor

coupling problem further advised to take up civil foundation works for rectification to

the following defects. 3) End supporters column foundation and 4) End supports

would be supplied in due course for erection to arrest ogling. But they had not

turned up for rectification even after laps of 2 months. It caused much

inconvenience to the factory. In the said letter the complainant mentioned that the

respondent had given corporate guarantee valid upto 31-3-2008 with terms agreed to

pay Rs. 10,00,000/- (Rupees Ten lakshs only) against any loss or damage caused or

suffered by the purchaser by reason of any breach of any terms and conditions of the

order. But seller agreed that the purchaser should be the sole judge could deal

whether or not, the seller had committed any breach or breaches of any terms and

conditions of the order extent of loss, damages costs and expenses suffered or

incurred by the purchaser. The respondent filed the Xerox copy of corporate

guarantee for advance dt. 14-8-2007 with validity upto 31-3-2008. Therefore, the

7

complainant requested the respondent to depute the technical personnel to the

factory for rectification of defects. The Xerox copy of letter was Ex. A3.

9. In Ex. A3 the complainant mentioned some more defects found in the

Cane un-loader i.e. 1) hoisting wire rope damage, 2) electrical operating switch board

/ switches with elements not functioned forced to replace total switches and damage

of break system / break shoes, 3) Break thruster winding got burnt causing down

tune. The same was rewinded and utilized 3-2-2008 / 4-2-2008, 4) Long travel drive

couplings teetch damaged. They were renewed. Long travel drive Rg box bearing

gears, pinion shaft teetch got damaged and 5) Causing unserviceable of L.T since

27-2-2008.

10. The complainant wrote another letter on 23-4-2008 mentioned all the

defects faced during the crushing season 2007-2008. They were 1) long travel gear

box – 2 Nos. gave trouble. 2) C.T drive wheel bearings 2 Nos. replaced. 3) Wire rope

got damaged 3 times. They were adjusted and rectified. 4) L.T railing alignment was

improper causing heavy sound while L.T operation. 5) Structure columns were not

full welded causing vibrations, 6) End supporters were not provided. 7) Centre bay

cross arms / supports were not provided. 8) Grab wire pullies were to be replaced to

correct size causing struck up of wire rope frequently. 9) Motor guards were to be

provided. 10) L.T and C.T Electrical contacts were frequently damaged due to over

heating. They were to be replaced. In view of the nonfunctional of the grab

continuously the complainant engaged manual labour in every shift ranging 10 to 15

persons daily throughout the crushing season. In the said letter the complainant

mentioned Rs. 10,00,000/- as cost of the material and labour and requested the

respondent to send Rs. 10,00,000/-. The Xerox copy of letter was Ex. A5. Therefore,

atlast the Commissioner of Sugar and Cane Commissioner, A.P. Hyderabad

addressed a letter to the respondent on 29-1-2008 to rectify the defects for smooth

functioning of the equipment. The Xerox copy of letter was Ex. A6.

8

11. Prior to supply of fixing of Cane Un-loader at the complainant factory,

the complainant released a purchase order for supply of 5 ton capacity grab type

Cane Un-loader after tender notice and negotiations with State level committee on

24-8-2006 for Rs. 47,77,992/-. The Xerox copy of the purchase order of the

respondent was Ex. A7 with specifications for grab type 5 ton Cane Un-loader. The

same was filed by the respondent under Ex. B3. So Ex. A7 and Ex. B3 were one and

same. Ex. A7 had certain terms and conditions for supply of Cane Un-loader. It also

disclosed that the disputes if any should be subject to the jurisdiction of the High

Court of Andhra Pradesh and subordinate courts in Kadapa District only.

12. Under the terms and conditions mentioned in Ex. A7 it was noted that

the supplier i.e. the respondent should design, fabricate, supply and erect and

commission the equipment on turn key basis and it was his responsibility to

synchronize the existing equipment with the new supplies for satisfactory of the

performance. The supplier should handover two copies of the drawing for civil work,

flow diagram and layout plan and all other drawings of the equipment. The supplier

should give guarantee in respect of design, workmanship, fabrication, erection,

standard structural materials of construction, Electro magnetic break thrusters,

heavy duty reduction gears, electrical contact panels, Heavy duty motors for assured

sound performance of the equipment without vibrations while in operation and

further if any defect was found within one full crushing season commencing from the

date of commissioning should be replaced / satisfactorily repaired by the tenderer on

free of cost. The supplier should depute his technical representative without

remuneration for operation of the equipment for one crushing season. The

structures wherever, necessary should be provided with necessary brazing, stiffeners

and tie beams to avoid vibration of the structures. If any specification was not given

in the schedule of the machinery, standard specification of machinery of 2004

specifications would be followed.

9

13. On 10-11-2006 the respondent wrote a letter to the complainant

regarding steel structures for commissioning of Cane Un-loader. The Xerox copy of

letter was Ex. A8. Ex. A9 was another Xerox copy of letter sent by the respondent dt.

7-1-2007 requesting the complainant to release the amount of Rs. 18,03,503/-. As

the respondent failed to attend for rectification of the defects or problems raised by

the complainant, the complainant got issued a notice dt. 18-3-2008 through the

advocate to t h e respondent. The office copy of the notice was Ex. A4. The

respondent contended that there was no deficiency of service because Cane Unloader

was erected, installed and commissioned as per specifications, designed,

approved by the complainant by following standard specifications of 2004 and there

was no problem during crushing season of 2006-07 and the respondent engaged a

skilled technical expert as per purchase order during the crushing season of 2006-07

and the complainant paid the entire payment on the satisfactory of work of the Cane

Un-loader and warranty period was ceased by the end of 16

over the complainant had not maintained the Cane Un-loader properly.

14. The respondent filed I.A. No. 76/2009 for appointment of qualified

Engineer to investigate and assist and get true facts regarding Cane Un-loader and

regarding structural design, access and also working condition of the Cane Unloader.

The I.A. No. 76/2009 was allowed on 31-3-2009 appointing the Chief

Engineer, The Andhra Sugars Ltd., Venkatarayapuram, Tanuku, East Godavari

district as commissioner, who addressed a letter explaining his fees along with other

expenses and later the warrant was returned. Subsequently the respondent filed a

memo on 16-4-2009 requesting the forum to appoint the Chief Engineer,

Sudulugunta Sugars Ltd., Buchinayudukandriga, Chittoor District as Commissioner.

As such the Commissioner was appointed at the instance of the respondent from

among the list submitted by way of memo on 30-3-2009 with four addresses. The

first one was the Andhra Sugars Ltd., Tanuku. 2

10

Ltd., Buchinayudukandriga, Chittoor District. The commissioner filed his report by

post on 01-5-2009.

15. The respondent examined the Commissioner as RW1 and filed his report

as Ex. B1. The Commissioner was Deputy General Manager Engineer, Sudulugunta

Sugars Ltd., Buchinayudukandriga, Chittoor District. The commissioner RW1 visited

the Cane un-loader of the complainant on 29-4-2009. The Commissioner sent the

notice to the respondent herein , who addressed a letter to the Commissioner with

copy to the forum that it was not possible to attend at the time of inspection on

29-4-2009 because they had to gather the structural consultant, mechanical

designer and the advocate. It was not difficult to the respondent to gather the people

because the respondent was a company of Engineers and designers and fabricators

and the designer and consultant were his own men. Therefore, they simply wrote a

letter to the Commissioner with a view to avoid the inspection. The respondent

should not send such type of copy of letter to the forum directly when they have been

represented by a counsel.

16. The RW1 had no necessity to verify the tender schedule and structural

design, mechanical design and civil design and electrical design before execution of

warrant. He verified in General with his past experience of 20 years. The RW1

expressed that the Cane Un-loader functioned during crushing season of 2006-07

and 2007-08. It was not a dispute because it was worked with manual labour.

There was no shed or cover protecting the Cane Un-loader for sunlight and rain.

Periodical maintenance of Cane Un-loader during the crushing season was necessary

in general. The maintenance staff would replace the break shoe, Oil seals and other

important equipment such as bearings and other mechanical items. The Cane Unloader

could be used only on ‘I’ beams and not ‘L’ angles. In the report Ex. B1, it was

noted that the main columns M.S “L angle section fabricated and the present L angle

section columns were not suitable to carry the load as per standard. The entire

11

structure was obbling, vibrating and giving abnormal sounds from the all

components due to the ‘L’ angle fabricated columns. The RW1 tested empty grab

without loading. He admitted that he observed the structure was obbling, vibrating

and giving abnormal sound. The RW1 expressed to arrest vibration of Cane Unloader,

bracings had to be provided to another column and all column had to be

locked with bracings. In the report he expressed the centre bay was not having any

bracings required to arrest vibration for the Cane Un-loader. The gear box had to be

designed by helical gears only. In the report he mentioned the gear box was a nonstandard

make without name plate and specifications plate. There was no scope for

erecting stair cases and the platform to the side of preparatory devise side only.

Mockery ladder had to be provided. There was no difficulty for making platform to

other side of gantry. In general grab required 2.5 to 3 meters length. The un-loader

had only 2 meters length under capacity grab. The conveyor belt capacity of the

complainant factory was 50 to 60 tones per hour. The grab had the capacity of 20

lifts per hour. The wire rope having the grab was 16 mm diameter but it required 19

mm X 6/36 mm diameter construction to carry the load. Since there was no sugar

cane the RW1 did not verify the present grab capacity. He did not verify the rails

with scientific method by using scientific equipment. The RW1 verified with scale.

In the report Ex. B1, the RW1 mentioned the L.T. and C.T rails alignment was not in

a line. It was to be realigned. The entire structure of the unloader inside sections

was done tag weld only. It was to be full welded in order to avoid vibration. In

report Ex. B1 the RW1 at the end mentioned an interrogation of the respondent was

to be required co come to a conclusion. The respondent did not request the

Commissioner to visit the Cane Un-loader once again in their presence to ascertain

some more objections. But the respondent was silent.

17. The respondent sought permission of the forum to examine an

independent witness, who was examined as RW2 in part as per orders in I.A. No.

12

136/2009. He was not examined completely and a memo was filed on 9-7-2009 with

a letter named as return of summons from RW2 by name Tousfeeq Anwar. In view of

the letter styled as return of witness summons of RW2, his evidence was treated as

closed. The RW2 did not enclose the summons. In the said memo styled as return

of witness summons the RW2 requested the forum to furnish the approved design to

give scientific analysis and evidence in advance of 15 days, so that the report would

be prepared and give evidence. The RW2 was an independent witness of the

respondent summoned by the respondent himself and it was look out of the

respondent to furnish any document to his witness before examining him and

witness had no right to ask the forum or court to furnish the documents so that he

would give the evidence and file the report. He was not a commissioner.

18. T h e respondent filed written arguments without mentioning the

Commissioner and the report Ex. B1 and contended that the complaint was not

maintainable because the complainant purchased the machinery or equipment for

commercial purpose. The respondent did not say anything for not continuing the

evidence of his own witness RW2 and not examining himself as witness. The

respondent relied on II (1992) CPJ 630 M/s Rani Food Products Vs. K.P.M. Haneef.

The complainant purchased automatic sealing machine for business and later filed

the complaint as defective and so it was hled that the complainant was not a

consumer because it was for business activity and would not come under the purview

of section 2 ( 1) (d)(i) of the C.P. Act. Similarly in 1999 (2) CPR 437 Fineskin

Leathers and suppliers Co. Pvt. Ltd., Vs. New India Assurance Co. Ltd., The question

was whether the complainant as a company could maintain complaint under the Act

and it was held that the company was not a consumer. In the present case the

complainant was Cuddapah Cooperative Sugars Ltd., It was a Cooperative Sugar

Factory and it was not a company. It was run with the assistance of sugar cane ryots

or farmers. In I (1991) CPJ 56 Jaheed Hussain Vs. M/s Shah And Lohia Auto Pvt.

Ltd., and others. The complainant purchased a truck for commercial purpose was

13

not a consumer. In 2005 (2) CPR 57 (NC) Sree Anantha Grameena Bank Vs. The

Industrial Finance Corporation of India Ltd., the investment for commercial purpose

were out side the jurisdiction of Consumer For a, in view of amendment brought into

effect from 15-3-2003 in definition of Consumer Service under Section 2 (1) (d) (ii) of

C.P. Act.

19. On the other hand the complainant relied upon SC & National

Commission Consumer Law Cases (2005-2008) Super Computer Centre Vs. Globiz

Investment Pvt. Ltd., decided by the Hon’ble National Commission in R.P.No.

1086/2006 on 9-5-2006 under Section 2 (1) (d) of C.P. Act. It was held that

computer was purchased by the company for commercial purpose. The respondent

would be a consumer. In view of the said decision submitted by the complainant,

the rulings submitted by the respondent are not at all applicable. In view of Ex. B2

under clause 25 the Forum at Kadapa has got jurisdiction. It was held in II (1998)

CPJ 353 Kapoor farms Vs. Krishna Fabricators that the machinery was purchased

and installed at Jalandhar. The complaint was filed at Jalandhar as the opposite

parties had no office at jalandhar. However, the District Forum at Jalandhar had

jurisdiction to try the complaint under section 11 (2) (c) of C.P. Act. Therefore, the

forum has got jurisdiction to entertain the complaint.

20. The respondent filed I.A. No. 114/2008 under section 8 Arbitration and

Conciliation Act 1996 to refer the dispute to Commissioner of Sugar and Cane

Commissioner, A.P. Hyderabad as arbitrator and the same was dismissed on

31-12-2008. Against the said order the respondent preferred R.P No. 2/2009 before

the Hon’ble A.P. State Commission, Hyderabad and the said R.P. No. 2/2009 was

dismissed at admission stage on 23-1-2009.

21. The complainant claimed Rs. 19,90,000/- towards loss under various

heads including cost of labour employed for feeding cane into the carrier manually

since the Cane unloader gave troubles for 2006-07 and 2007-08 seasons and penalty

14

clause for delayed commissioning of the equipment. He claimed the cost of labour for

Rs. 7,20,000/-. There was no proper bills or receipts to substantiate the claim of

Rs. 7,20,000/-. No doubt the cane unloader gave troubles and the complainant

engaged manual labour for two crushing seasons. Since there were no receipts or

bills, the complainant is entitled to Rs. 1,00,000/- only to the cost of labour. In view

of the above discussion there was defect in the cane unloader. It was not attended to

by the respondent but giving much inconvenience to the complainant. The

respondent filed a Xerox copy of tender schedule under Ex. B2. Ex. B4 was Xerox

copy of design prepared by the respondent with design calculation. Ex. B5 was Xerox

copy of corporate guarantee valid upto 31-3-2008. The respondent agreed to the

conditions of Ex. B5. The respondent did not file any acceptance letter from the

complainant with regard to Ex. B4. Thus there is deficiency of service on the part of

the respondent towards complainant with regard to the cane unloader. The

respondent had not raised any dispute regarding the amount of calculation under

various heads mentioned in the complaint for total Rs.19,90,000/-. Hence, the

points are answered accordingly.

22. Point No. 3 In the result, the complaint is allowed, directing the

respondent to pay Rs. 13,90,000/- (Rupees Thirteen lakhs ninety thousand only)

towards rectification charges for rectifying the defects of the Cane Unloader and cost

of the material and labour cost and Rs. 1,000/- (Rupees one thousand only) towards

costs, payable within 60 days from the date of receipt of this order.

Dictated to the Stenographer, transcribed by him, corrected and pronounced

by us in the open forum, this the 22

MEMBER PRESIDENT

APPENDIX OF EVIDENCE

Witnesses examined.

For Complainant NIL

For Respondent :

RW1 M. Krishnaiah, dt. 3-6-2009.

RW2 Tousfeeq Anwar, dt. 24-6-2009.

15

Exhibits marked for Complainant : -

Ex. A1 X/c of tax invoice cum delivery challan issued by Aacess Equipments,

Hyderabad, dt. 9-11-2006.

Ex. A2 X/c of letter from complainant to respondent, dt. 28-6-2007.

Ex. A3 X/c of letter from complainant to respondent, dt. 01-3-2008

Ex. A4 X/c of legal notice from complainant’s advocate to respondent,

dt. 18-3-2008

Ex. A5 X/c of letter from complainant to respondent, dt. 23-4-2008.

Ex. A6 X/c of letter from Commissioner of Sugar and Cane Commissioner,

Hyderabad to respondent, dt. 29-1-2008.

Ex. A7 X/c of purchase order of the respondent.

Ex. A8 X/c of letter from respondent to complainant, dt. 10-11-2006.

Ex. A9 X/c of letter from respondent to complainant, dt. 7-1-2007.

Exhibits marked for Respondents: -

Ex. B1 Report from Deputy General Manager (Engineering), Sudalagunta Sugars

Limited, Chittoor to the District Forum, Kadapa dt. 30-4-2009.

Ex. B2 X/c of tender schedule.

Ex. B3 X/c of purchase order of the respondent.

Ex. B4 X/c of design prepared by the respondent with design calculation.

Ex. B5 X/c of corporate guarantee valid upto 31-3-2008.

MEMBER PRESIDENT

Copy to :-

1) Sri P. Subramanyam & Sri G. Trivikramsingh, Advocates.

3) Sri T. Narayana and B. Ramesh, Advocates, H.No. 6-3-788/14,

1

1) Copy was made ready on :

2) Copy was dispatched on :

3) Copy of delivered to parties :

B.V.P. - - -