1. WE are proceeding to dispose of both these complaints with common judgment, the reason being that the O.Ps. in both the complaints are
common. The factual aspects such as nature of grievances and relief claimed are also identical except minor variations with regard to the quantums.
Few relevant facts :
2. THE complainants in both the complaints claim to be consumers being self-employed on the Projects for the issue of Computerised PVC
Laminated Driving Licences in the Office of Regional Transport Office situated in Tardeo in Central Mumbai, have filed these respective
complaints alleging the O.Ps. having supplied defective equipments purchased by them for the purpose of their projects as also poor services
thereafter.
The complainants in Complaint Nos. 467/1998 and 468/1998 will be hereinafter referred to as ""1st complainant"" and ""2nd complainant"" for
brevity''s sake.
The first complainant has claimed a sum of Rs. 10,00,000/- as compensation for defective supply of machinery with 21% interest, a sum of Rs.
1,65,000/- as loss suffered by her towards profit, Rs. 4,00,000/- towards mental agony, Rs. 2,00,000/- towards supply of defective consumables
by the O.P. for her project.
3. WHEREAS the complainant in the second complaint has claimed compensation etc. of the same amounts as claimed by the first complainant
noticed hereinabove under the respective heads. Few relevant facts :
The complainants claimed to be self-employed lady entrepreneurs and by availing of the assistance extended by the Government of Maharashtra
through Statutory Body constituted by the Government viz. Mahila Arthik Vikas Maha Mandal Ltd. (in short MAVIM) decided to undertake a
project of issuance of laminated PVC Driving Licences to be issued by the Regional Transport Office of the Government (in short R.T.O.), to
which MAVIM vide letter dated 17.10.1995 agreed to provide. The O.Ps. herein are hereinafter referred to as ""O.Ps."".
4. IT is the case of both the complainants that before purchase of the appliances for the commencement of the project the issue was discussed with
the O.Ps. and they were appropriately appraised of the nature of the process of project etc. There were series of discussions prior to launching of
the project with the O.Ps. in presence of the Officials of MAVIM and R.T.O. Authorities. The complete idea of the project was made known to
the O.Ps. and this was done according to the complaints that the O.Ps. properly understood and are made known the precise requirements of the
complainants and type of machinery and appliances required by them.
After such negotiations and series of discussions, the O.Ps. agreed to supply the appliances etc. which would conform to the requirements of the
projects of the complainants as also requisite services thereafter.
It is the case of the complainants that on finalisation of the projects requirements etc., both the complainants approached the I.C.I.C.I. Bank for
the purpose of sanction of loan for their purchase including the cost of appliances and equipments, materials etc. The loan facility was to be
guaranteed by the Dena Bank.
5. THE complainants after completing the formalities for procurement of loan, payments were made to both the O.Ps. for the purchase of
equipments.
6. THEREAFTER the O.Ps. on 16.11.1995 vide their respective Invoices, in the names of the complainants, supplied the equipments with one
year guarantee and copies of the Invoices are at Exhibit ''D'' to each of the complainants. Both the complainants also signed the necessary Hundis
and other agreements with the Bank i.e. Dena Bank who agreed to act as a guarantor to I.C.I.C.I. Bank. The amount of Invoices for various
equipments and appliances in both the complaints are Rs. 6,99,000/- each. The said amounts were released by the I.C.I.C.I. Bank to the O.Ps.
Thereafter the O.Ps. with the assistance of their Supervisors and other Technicians installed the equipments at separate places of each of the
complainants at Tardeo in the preceint of R.T.O. Office.
However, the complainant state that when they undertook the project, the equipments supplied by the O.Ps. did not function satisfactorily and
what they have recounted in paras 13 and 14 of the complaints (both the complaints) is reproduced to prove precise nature of their grievance.
However, the equipment supplied by the opposite party has never performed satisfactorily from the beginning. Despite every effort on the part of
the complainant the equipment could not produce more than 120/50 cards in a normal working day resulting into huge losses, despite having good
response from the public at large. The service being provided by the opposite party was of poor quality and there were frequent delays and the
general attitude of the opposite party was of non-cooperation and confrontation. There were frequent breakdowns in the system forcing the
complainant to suspend the operation. Most of the breakdowns were on account of the print-head which is the most critical part of the printer. The
complainant states that there were as many as 11 such breakdowns during the first 12 months of operation necessitating replacement of the print-
head. The price of each print-head is stated to be approx. Rs. 40,000/-. Further the complainant submits that the very fact that a critical and costly
part of the equipment breaks down frequently made clear that the equipment supplied by the opposite party was material defective. It is also
relevant to state here that the opposite party has changed the Print Head without locating the defect in the machine provided by them and have
never satisfied the complainant as to why the machine has been failing so frequently. The opposite party has never allowed the complainant to get
introduced to the principal Company manufacturing the said product nor have ever communicated that the said product is an agency sale of the
opposite party. The frequent breakdown of the print-head made the complainant apprehensive about the fate of the project particularly after the
expiry of the warranty period. The complainant made a number of oral and written submissions to the opposite party to replace the printer.
However, the complainant submits that despite the requests the printer was not replaced till 15.11.1996 and the opposite party went on attending
to each breakdown on an ad hoc basis without solving the main problem. The sole idea of the opposite party was to somehow cover their
warranty period.
7. THUS, it will be noticed that both the complainants have been repeatedly making grievances that print-head supplied by the O.Ps. to their
project was not functioning satisfactorily which resulted in frequent breakdowns disrupting of its operation which eventually affected their business.
We will note the defence of the O.Ps. The O.Ps. have raised preliminary points to the effect that the dispute as filed are not maintainable as
consumer disputes since the appliances have been acquired for commercial purpose. The second point of limitation has also been urged. On merits
it is asserted that the complainants did not show any cause of action since the claims of the complainants are based on alleged loss of business
which has not been guaranteed by the O.Ps. The second point of merits that has been raised is that the premises where the appliances were
installed had no proper infrastructure and environmental conditions. The appliance fixed in both the cases were in two small rooms without there
being proper hygiene safety and protection needed for the operation of the appliances as obtained in the matters herein. The climate was not
suitable and constant use of entrance doors required frequent openings, which was not conducive.
8. FURTHER point urged is that no particulars in support of the claim of compensation have been furnished.
The points which would arise for consideration are :
(1) Whether the complainants prove that they are consumers and as such complaints filed are maintainable ? (2) Whether the complainants prove
that appliance and equipments supplied to them by the O.P. are defective ? (3) Whether complainants are entitled to compensation etc. as claimed
?
Our findings on the aforesaid points are as under- 1. Yes. 2. Yes. 3. Yes.
9. REASONS : Point No. 1 : On these points both the parties made submissions. It was asserted on behalf of the complainants that the
complainants, as stated by them in the complaints, have taken up the projects in question as and by way of means of self-employment and as such
were in a small scales. It was also pointed out on behalf of the complainants that they have been assisted by MAVIM in the project which a
statutory body established by the State Government for rendering assistance and encouraging the Graduate entrepreneurs like the complainants
and that being so, they are consumers within the meaning of Section 2(1)(d) of Consumer Protection Act,1986.
10. ON careful consideration of the rival contentions, particularly arguments made on behalf of O.Ps., it must be stated that the project for
business involved in the matters herein, from figures made known and which has been also furnished by the O.Ps. such as cost of the project and
appliances, it can be said that same does not involve heavy commercial stakes as such. Taking assistance of couple of technicians for running the
projects, in our view will not be construed as carrying out commercial activities as sought to be asserted various authorities referred to by and on
behalf of O.Ps. we are of the view are unnecessary to be referred to since the factual aspects involving such decisions clearly reveal that the
businesses carried on were on large scale on business basis. Where-as, this is not the position in the matter herein. Even the nature of operation
would also establish the said fact. That being so, we do not find any merits in the objection raised on behalf of O.Ps. as far as this point is
concerned.
Point No. 2 : The complainants have detailed experience they had in operation of the equipment and appliances supplied to them by the O.Ps.
almost right from the day one the same were installed by the O.Ps. Frequent failure of the print-heads, one of the most vital and crucial parts, had
been repeated grievances of the complainants all throughout. It is even conceded by the O.Ps. that they were required to attend to the calls on and
off.
The O.Ps. have tried to put forth that the real cause for such failure was lack of requisite infrastructural atmosphere at the places where the
equipments were installed. It needs however to be stated and as the material clearly bears out that the O.Ps. were involved in the processes much
prior to the dates when the appliances were installed at the places. The material clearly shows that O.Ps. knew where the appliances were to be
installed. There were series of prior meetings and discussion that the complainants and O.Ps. had along with the Officers of MAVIM and R.T.O.
and the record clearly bears out the same. It is not suggested or indicated anywhere nor any material shows the O.Ps. having pointed out the
unsuitability of the premises where equipments were to be fixed. On the other hand, it clearly bears out, knowing fully the place where the
equipments were to be installed, the O.Ps. had proceeded to instal the same without any protest or objection. It indeed the place were not suitable
as also infrastructural conditions, for the purpose of business, as is asserted by O.Ps. then, it would have been at that stage that the O.Ps. should
have taken precautions. Particularly when they were under warranty of services to maintain the same for a period of one year from the date of
installations. If such problems were to arise, then, knowingly that the O.Ps. would have to attend to the same. They would have certainly not
agreed for installation at such places, should the unsuitability of place was the reason.
11. THAT being so, the contentions raised about unsuitability of the premises and lack of infrastructure and environment etc. as cause of problems
appears to be done at the belated stage as by and way of lame excuses and we are not impressed by the same.
There is one more factor which would also attract the position amply clear that there was a meeting held on 12.8.1997 which is soon after the
commencement of the project which was attended by the Hon''ble Minister, then President of Grahak Kalyan Samiti and various other Officials of
Government, MAVIM, R.T.O., complainants herein and Mr. Vijay Gabha, the Director of the O.Ps. in which the issues about unsatisfactory
functioning of the project was discussed at great length as it reflected in the minutes which forms part of the compilation of the complaint and as
recorded therein, the O.Ps. even agreed to make good the loss suffered by the complainants. It is however to be stated that the offers made by the
O.Ps. to that effect did not materialise for certain reasons. However, what transpired in the said meeting and the outcome thereof as reflected in the
said meeting and commitments made by the O.Ps. for making good the loss to the complainant would speak a volume while judging the rival
contention of the parties before us. To be precise what has reflected in the meeting certainly lends support to the cases of the complainants and as
such claims made by them in respective complaints.
12. IN view of the discussion above, we are inclined to accept the grievances of the complainants about defective supply of appliances. The O.Ps.
being experts in the field have not explained in a satisfactory manner about frequent failure of the equipments. As a matter of fact such frequent
failures, considering the operations to be carried out on the equipments, on the face of material made available by the complainant would show that
the appliances and equipments supplied were not to the mark. That being so, the findings on point No. 2 are in favour of the complainants.
Point No. 3 : Since vide point No. 2 the defect in supply of appliances as also deficiencies in services and the O.Ps. have been proved and
established by the complainants, as provided under Section 14 of the Consumer Protection Act, 1986 the complainants become entitled to the
award of compensation.
In the instant case it is noticed that right from the day one of installation, the instruments have not functioned satisfactorily.
13. THE evidence shows that it was to the knowledge of the O.Ps. that the complainants have taken up the projects and which were patronised by
MAVIM. Furthermore they had procured loan facilities from ICICI guaranteed by Dena Bank, on payment of interest at competent rate. As
stated the O.Ps. were aware of such predicaments of the complainants. THE complainants were to repay the loan by doing business on the project
which was frustrated on account of defective supply of equipments and appliances by the O.Ps.
14. ALTHOUGH it is a fact that the complainants have claimed compensation on the basis of loss of profits they would have earned, which would
be in the realm of speculation, and submissions at considerable length were advanced by and on behalf of O.Ps. in that behalf.
However, all said and done, to the knowledge of O.Ps. the complainants have arranged to pay cost of equipments as mentioned herein above and
is reflected from the invoices issued by the O.Ps., by procuring loans. They had to repay the amounts with interest to the financial institution.
It is, therefore, reasonable as also profitable that the complainants are compensated by the payment of cost they have paid, respectively, with
interest at reasonable rate for equipments to the O.Ps. giving reasonable allowance by way of depreciation.
15. IN our view 20% total depreciation on the amounts of costs, paid by the respective complainants will be fair and reasonable.
A sum of Rs. 25,000/- as compensation will be also reasonable in the circumstances to each of the complainants as also cost of the complaint
proceedings. Hence the order. ORDER Complaint No. 467/1998
1. O.Ps. are ordered and directed to pay a sum of Rs. 6,99,000/- to the complainant being cost of equipments etc. with interest at the rate of 12%
p.a with effect from 17.11.1995 i.e. date of invoice supplied till realisation, minus 20% total depreciation. 2. O.P. shall pay compensation to the
complainant quantified to Rs. 25,000/-. 3. O.P. shall pay cost to the complainant quantified at Rs. 10,000/-. 4. The complainant shall return the
equipments and appliances in question to the O.Ps. on compliance of the above. 5. On request of O.Ps.'' Advocate, eight weeks'' time from today
is granted to the O.Ps. for compliance of the order. 6. Office to furnish copies of the order to the parties.
Complaint No. 468/1998
1. O.Ps. are ordered and directed to pay a sum of Rs. 6,99,000/- to the complainant being cost of equipments etc. with interest at the rate of 12%
p.a. with effect from 17.11.1995 i.e. date of invoice supplied till realisation minus 20% total depreciation. 2. O.P. shall pay compensation to the
complainant quantified to Rs. 25,000/-. 3. O.P. shall pay cost to the complainant quantified at Rs. 10,000/-. 4. The complainant shall return the
equipments and appliances in question to the O.Ps. on compliance of the above. 5. On request of the O.Ps.'' Advocate eight weeks'' time from
today is granted to the O.Ps. for compliance of the order. 6. Office to furnish copies of the order to the parties.
Complaints disposed of.