JUSTICE V.K. JAIN, PRESIDING MEMBER

          On 01.9.1990, an advertisement was issued by the Ministry of Home Affairs in the newspapers, inviting tenders for the supply of the Ni-Cd batteries 10.8 Volt for use in 3 Watt VHF Radio Set RC-2203, manufactured by Uptron. The tender documents dated 20.8.1990 expressly stipulated that the battery discharge time should be 3-4 hours. It was further stated in the tender documents that the National Security Guard, which had issued the said document would like to conduct user trial at its premises at no cost, no commitment basis and the tender should provide two sample batteries for users’ trials, on tender opening date.  It was further stated that the approved suppliers / contractors shall be deemed to have carefully examined the conditions and qualitative requirements of the goods to be supplied and if there was any doubt, he should qualify the same with the Group Commander, HQ NSG, before submitting his tender.  The appellants submitted their tender vide letter dated 11.10.1990, offering to supply the required batteries.  It was stated in the said letter that after-sale-service will be for 12 months with no cost, but not for damaged ones.  The appellant thus accepted an order for supply of batteries, as per the specifications given in the tender documents, which expressly required that the discharge time of the batteries should be 3-4 hours, whereas its recharging time should be 4-6 hours.  The appellant having supplied 1303 batteries, full payment for the said supply was released to it and later the security deposit made by the appellant was also released.  The case of the complainant / respondent No.1 Union of India is that the batteries supplied by the appellant were defective.  Vide letter dated 14.10.1991, the appellants were informed by the complainant that the batteries supplied by them were functioning to the optimum efficiency, few defective batteries had been brought to the workshop for replacement if required.  The appellant responded vide its letter dated 23.10.1991, stating therein that the action had been initiated by them with a view to sort out the matter and they expected the Chief Technical Operator of the manufacturing unit to be with them on 28.10.1991, by which date they would make their service available to the entire satisfaction of the users.  A joint inspection of the defective batteries was then carried out on 02.12.1991 by the appellant, along with a representative of the Hindustan General Industries Ltd. and they attributed the below standard performance of the batteries to thin connecting strips, defective foil of cells and poor quality of terminals.  Vide letter dated 14.1.1992, the appellants informed the complainant that they had deputed a representative to the manufacturing unit at Hyderabad to come back with three amended batteries and that to reinforce the confidence of the complainant they were extended the guarantee period from 12 months to 15 months.  Since the needful was not done, another joint meeting was held on 13.9.1992, in which the representatives of the appellant as well as the manufacturing unit were present.  It was decided in the said meeting that the defective batteries be sent to factory of Hindustan General Industries at Gurgaon for repair and modification, they being the collaboration or affiliated office of the Hyderabad based manufacturer of the batteries.  Pursuant thereto, 1296 batteries were sent to the unit at Gurgaon out of which 532 batteries were able to meet the requirement of the complainant after repairs / modifications, whereas the remaining 764 batteries remained with the appellants.  The said 764 defective batteries were not replaced.  According to the complainant, vide their letter dated 22.5.1992, the appellant requested the complainant to provide 12 chargers at the place where the batteries were undergoing charging exercise  for the purpose of undergoing amendments / rectifications etc.  This is the case of the complainant that though some batters were repaired / modified by the appellants, 763 defective batteries were still lying with them and had not been repaired / modified.    The complainant therefore approached the concerned State Commission by way of a consumer complaint, seeking an amount of Rs.5,23,517.04 that being the cost of the defective batteries still held by the supplier / manufacturer alongwith compensation.    

2.     The complaint was resisted by the appellants, who admitted the order placed upon it.  It was inter-alia stated in its reply filed before the State Commission that the delivery of batteries was taken after proper inspection and only then the payment was released.  It was further alleged that the batteries functioned properly for quite some time, where after, certain defects took place due to improper use / or misuse by the officials of the complainant.  Despite that the appellants undertook to repair the batteries within the after sale service period of twelve months but there can be no question of replacement of the batteries or refund of the amount paid by the complainant.  It was further stated in the reply that vide certificate dated 18.6.1991, the complainant had informed that the batteries had been working satisfactorily.  It is also pointed out that the security deposit of the opposite party was also released by the complainant on 31.8.1991.  It was pleaded in the reply filed by the opposite party that the complaint was bad for non-joinder of Hyderabad General Industries Limited and Hyderabad Power Packs Private Limited.  1303 batteries, according to the appellants were supplied in March and April, 1991, after the samples given on 12.11.1990 were tested and approved.  The tender was accepted only thereafter on 02.01.1991.  The stand taken in the reply was that the fault in the batteries had developed as the field staff did not know how to use them properly.  The damages, according to the opposite party could occur for several reasons, including batteries not being properly charged, deep discharge, discharge at a higher current rates repeatedly for long duration, short-circuit in storing handling and transportation, battery charger being rusty and non-functional and misuse / improper handling.  It was also alleged that the chargers of the complainant were defective and required calibration.  It was also stated in the written version filed by the opposite party that in order to resolve the issue they had considered to provide thicker strips with a view to combat misuse / mishandling by the untrained field staff and as a gesture of goodwill they had also persuaded the manufacturer to do the needful in this regard.  According to them, two batteries were provided with thicker strips and delivered to the complainant but there was no response from the complainant, despite repeated reminders.  The appellants have however, admitted having extended the  after sale service period from 12 months to 15 months.  This is also their case that the batteries were tested and charged in the factory of the manufacturer, 532 batteries responded and could be duly charged.  The said 532 batteries were accordingly sent back to the complainant.  It is also alleged that remaining 764 batteries did not respond to the chargers even after repeated cycling and therefore, they were brought to the factory of the manufacturer and it was found that the damages had occured due to fault of the users.  It was also claimed that the batteries were dismantled by the technical staff of the complainant in the workshop.  They took back some batteries, leaving 626 batteries in dismantled condition.

3.     The State Commission vide impugned order dated 01.6.2006, directed the appellant M/s. Projects & Equipment Services and its Chief Executive Amarnath to pay,  to the complainant, the price of 636 batteries at the rate of Rs.823.14 per battery, along with compensation quantified at Rs.20,000/-.  No interest however, was awarded to the complainant.  Being aggrieved from the order passed by the State Commission, the appellants are before this Commission by way of this appeal.

4.     As per terms and conditions of the tender enquiry dated 20.8.1990, the batteries were required to have discharge time of 3-4 hours and the batteries recharging time should have been 4-6 hours.  It was also stipulated that the batteries should be able to undergo 600 cycles of charge / discharge.  It was expressly stated in Clause 3 of the above referred document that the approved supplier shall be deemed to have carefully examined the conditions and qualitative requirements of the goods to be supplied.  In case of any doubt, he could clarify the same with Group Commander (COMN) HQ NSG.  There is no technical evidence to prove that the batteries supplied by the opposite party to the complainant had the discharge time of 3-4 hours and recharging time of 4-6 hours.  It is true that the samples supplied by the opposite party before acceptance of its tender were tested and accepted by the complainant, but, that by itself would not prove that all the batteries other than the samples also confirmed to the prescribed specifications.  It is quite possible that the sample batteries did confirm to the prescribed specifications whereas the remaining batteries or some of them did not confirm to the said prescribed specifications.  A perusal of the defect report dated 14.9.1991 prepared by Major Anand Solanki and sent to HQ NSG, to the extent it is relevant reads as under:

        “9.    Drop in voltage when put on load. The batteries were initially charged for 15 hours and the voltage without load were found to be between 11.64V and 12.19 V.  When measured on load, the voltage drops down to between 9.5V and 11V whereas specified voltage for the RS RC-2203 is 10.8V.

        10.   Battery life.    When put on load in the radio set and transmission made at the ration of 1:9 (i.e. ^Rx:^Rx ratio). The  batteries lasted from 40 min to 1 h 30 min.  The specified life under similar condition is 4 hours. 

        11.   Bending of contract plate The metal plates used for providing electric contract in the radio set gets bent inwards during use and charging.  This results in loose electric contact when fitted in the radio set.

        12.   Melting of body material during charging   The body material covering the battery has melted in one case at the location where it separates +ive and ^–ive terminal plates.  This indicates that the body material may not last over the life expectancy during repeated charging. 

        13.   Blackening of contact plates        In some of the batteries the contact plates have blackened. This might have resulted in poor electric contact too.

        Recommendation

        14.   The complaints received from units and actual trials carried out have confirmed that the batteries are of substandard and unfit for usage.  In any case units cannot expected to change the batteries every half hour in live operations. 

        15.   It is therefore, recommended that the batteries be withdrawn from the units forthwith and suitable replacement provided on emergent basis.” 

5.     Trial results of as many as sixteen batteries supplied by the appellants to the complainant, to the extent the same appear to be relevant read as under:

6.     It would thus be seen that the discharge time of none of the batteries was 3-4 hours, which was the specifications prescribed in this regard in the tender document.

7.     The letter dated 08.10.1991, written by Support Group of NSG to its Directorate General would show that in the fresh batteries taken from DG Pool Store, the performance varied from 4 hours to 1 hour, the sample battery started with 4 hours 50 minutes and dipped in between to 1 hour life though it improved thereafter.  The average life of batteries varied between 131 minutes to 220 minutes.  As regards the batteries received from communication group, the performance varied from 2 hours 10 minutes to 10 minutes, the residual voltage in most of the batteries was high enough and the average life of the batteries varied from 17 minutes to 117 minutes.  It was also reported that the batteries charged for fifteen hours did not show any appreciable improvement and even the battery charger did not make any appreciable improvement in the charging.  The battery terminal was getting blackened and dents also appeared.  It was therefore recommended that the defective batteries be sent for free replacement.

8.     Vide letter dated 19.3.1991 sent by the appellants to Hindustan General Industries Ltd., the appellants had informed them that on visiting the apartments they had learnt that the payment could not be processed since batteries lacked complete charging circles.  The addressee was requested to withhold the cheque issued by the appellant to it.

9.     In their letter dated 07.1.1992, the appellants themselves referred to the decision that in view of the user rugged use a thicker connecting strips would be provided to eliminate the leakage and improper charging.    15-20 days’ time was sought for this purpose.

10.   Vide letter dated 30.1.1992, sent by Sqn. Comdr. of NSG, it was noted that in the joint meeting held with the supplier firm on 28.1.1992, it was inter-alia decided that the batteries which were not giving the required output would be returned to the supplier for rectification and the firm would replace the batteries, which could not be repaired / modified by them. 

11.   A joint meeting was held in the office of NSG on 13.2.1992.  The Chief Executive of the supplier firm attended the said meeting.  The defects found in the batteries were enumerated in the Minutes of the Meeting and it was jointly decided that the batteries would be returned to the supplier, and the same would be collected only after due checking and ensure proper performance.  It was further decided in the joint meeting that the batteries, which were not been the standard, would be left behind for replacement by the supplier.

        The above referred Minutes recorded pursuant to meeting attended by the Chief Executive of the supplier firm leaves no doubt that the batteries were not in fact defective and therefore, the supplier had agreed to analysis the defect under his supervision and ensure their proper performance.

12.   Vide letter dated 18.5.1992, sent to the appellants Mr. J.L. Kapoor, Group Commander of NSG inter-alia stated that out of 1303 batteries, 532 batteries had been collected by them and the remaining 764 were found unserviceable and were being held by Hindustan Industries Ltd., Gurgaon since April, 1992.  The appellants were asked to replace those batteries and were reminded that they had promised to do the needful in this regard by 20.5.1992. 

13.   Vide letter dated 26.7.1992, sent to the National Security Guards, the appellants themselves stated as under:

        “Since there has been no significant progress in the case of repair / modification of the defective batteries, it is felt appropriate to take over these batteries to my own workshop and carry out repairs / modifications under my personal supervision.

        Hence, it is requested that the material / batteries delivered to M/s. Hindustan General Industries Ltd., Gurgaon by you may be collected and handed over to the undersigned at the earliest to proceed further.”

        The above referred letter is also an admission of the batteries being defective and the appellants having agreed to carry out the necessary repairs / modifications before the same could be collected by the complainant.  Earlier, vide their letter dated 24.4.1992, also the appellants had informed NSG that they would be trying to ensure delivery of the pending batteries after necessary recharge / repairs.

14.   The learned counsel for the appellants drawn my attention to a Note dated 25.3.1992 submitted by a Commander of NSG to his superior DIG (Communication) recommending that the 2 hour life of battery at 1:9 ratio was acceptable and sought approval to the said recommendation.  However, DIG Communication did not approve the said recommendation and directed asking for technical opinion.  The above referred noting in my view is of no help to the appellants since (i) the recommendation made by the Commander was never accepted by the competent authority in NSG and secondly the recommendation made by him was not in conformity with the specifications prepared in the tender documents, whereas the appellants were required to supply batteries confirming strictly to the prescribed specifications. 

15.   The learned counsel for the appellant also drew my attention to a letter dated 18.6.1992 issued to the appellants by a Sqn. Leader of NSG confirming therein that the batteries supplied by the appellants had been working satisfactory and relying upon the said letter contended that there was no defect in the working of the batteries supplied by them to NSG.  However, the said contention cannot be accepted for two reasons, firstly, the extensive evidence produced by the complainant coupled with the admissions contained in the documents filed by the appellants themselves and in the joint meeting attended by their Chief Executive, it cannot be disputed that the batteries in fact, had not performed as per the prescribed specifications and (ii) the extensive trials conducted by the user units of NSG overwhelmingly prove that the batteries were defective since they did not confirm to the prescribed specifications. 

16.   Relying upon the statement of Col. J.L. Kapoor, witness of the complainant it was contended by the learned counsel for the appellants that the specifications prescribed by the complainant were not correct and the batteries confirming to the all those specifications were technically impossible.  In his cross-examination, Col. J.L. Kapoor inter-alia stated that technically it was not possible for the batteries with the prescribed specifications to give discharge time of eight hours.  Mr. Kapoor also stated in his cross examination that they had realised technically during March, 1992 that the batteries could give a maximum of 1.67 hours and minimum of 1 hr. 40 minutes.  The admission made by Col. J.L. Kapoor is of no help to the appellants since they had submitted a tender document for supply of batteries as per the prescribed specifications, which stipulated discharge time of 3-4 hours and the evidence produced by the complainant leaves no doubt that the batteries were not giving the discharge hours prescribed in the tender document.  If the appellants felt that the specification prescribed by the complainant were impossible or technically not feasible, they ought not to have submitted their tender or they ought to have requested NSG to modify the specifications prescribed by it.  That having not been done, and the appellants having entered into a contract to supply the batteries as per the prescribed specifications, they are liable to refund the price which they received for the batteries which did not confirm to the prescribed specifications and were not accepted by the complainant. 

17.   A reference in this regard may be made to Section 65 of the Indian Contract Act, which provides that where an agreement is discovered to be void or becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it.  Therefore, the appellants must necessarily refund the payment received by them for 636 batteries, even if it is presumed that it was impossible for them to supply the batteries of the prescribed specifications.   In fact Section 56 of the Contract Act, obligates the promisor to even compensate the promiser where he has promised to do something which he knew or with reasonable diligence might have known but which the promisee did not know to be impossible.

18.   As far as the case of the appellants that they being only supplier and not manufacturer of the batteries supplied by them to the complainant, it is the manufacturer who should compensate them or refund the price of the defective batteries to the complainant.  I find no merit in the submission since there is no privity of contract between the complainant and the manufacturer.

        Section 230 of the Indian Contract Act, to the extent it is relevant provides that in the absence of any contract, an agent is not personally bound by the contract executed by him.  However, the existence of contract envisaged in Section 230 of the said Act is presumed, where the agent does not disclose the name of his Principal.  In the present case, the appellants did not enter into supply agreement with the complainant as an agent to the manufacturer of the batteries.  The said contract was entered into by them as Principal. No-where did they disclose to the complainant, at the time of submitting the tender, that they were only an agent of M/s. Hindustan General Industries, who were the manufacturers of the batteries.  Therefore, it would be difficult to say that the appellants were acting only as an agent of the manufacture and therefore, it is for the manufacturer to refund the price of the batteries to the complainant.  If the appellants have any grievance against the manufacturer or its associates for the batteries purchased by hi, for supply to the complainant, they can avail such remedy against the manufacturer and / or its associates, as may be open to them in law.  

19.   Though, the appellants have claimed that the batteries had got damaged as the users mishandled / misused the same, on account of they did not know how to use them properly.  There is no evidence to prove the said allegation, which remains wholly unsubstantiated and therefore, cannot be accepted. 

20.   Though, it is alleged in the reply to the consumer complaint that the batteries could be damaged due to several other reasons such as batteries not being properly charged, deep discharge, discharge at a higher current rates repeatedly for long duration, short-circuit in storing handling and transportation battery charger being rusty and non-functional.  There is no evidence of the batteries having actually got damaged for any of the above stated reasons.

21.   The learned counsel for the appellants also pointed out that not only full payment was made to the appellants even their security deposit was released, which shows that the complainant was satisfied with the quality of the batteries. However, I find no merit in the said contention, since release of the performance security did not relieve the appellants of their obligations to ensure that the batteries supplied by them were as per the prescribed specifications.  Moreover, they had also given a free after sale service of twelve months, which was later extended by them to fifteen months.   The after sale service, in my opinion, would also require replacement of the defective product which cannot be repaired.  Since as many as 636 batteries could not be repaired even after the same having remained with the appellants for a long period, they were duty bound to replace them with the batteries confirming strictly to the prescribed specifications.  Since they did not even offer to replace those 636 batteries with batteries confirming to all the prescribed specifications, including the discharge time of 3-4 hours, the complainant was rightly held entitled to the refund of the amount which they had paid to the appellants towards price of the batteries.

22.   For the reasons stated hereinabove, I find no ground to interfere with the order passed by the State commission, which I note, did not award any interest to the complainant on the price of 636 batteries.  The compensation of Rs.20,000/- awarded to the appellants was at best a token compensation considering the defect in the batteries supplied by the appellants to National Security Guards.

23.   For the reasons stated hereinabove, the appeal is hereby dismissed with costs assessed at Rs.25,000/-.