NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
FIRST APPEAL No. 855 of 2003
(From Order dated 03.11.2003 in CC No. 113 of 1999 of the Andhra Pradesh
State Consumer Disputes Redressal Commission,
1. Viewtech Imaging Equipment Pvt. Ltd., Appellants
(Through Shri Shashank Jain, Managing Director)
2. Viewtech Imaging Systems,
(Through Shri Shashank Jain, Proprietor/Partner)
1. CMC Ltd., Respondents
2. M/s Dayaram Metharam Marketing,
HON’BLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER
HON’BLE MR. ANUPAM DASGUPTA, MEMBER
For the Appellants Mr. S. S. Ray, Advocate
Ms Rakhi Ray, Advocate
For Respondent No. 1 Mr. Shraman Sinha, Advocate
ANUPAM DASGUPTA, MEMBER
is a first appeal against the Order dated 03.11.2003 of the Andhra Pradesh
State Consumer Disputes Redressal Commission,
2. The relevant facts of the case are:
(i) CMC, a Central public sector undertaking at the relevant time, placed a purchase order dated 10.05.1998 for an imported (Philips) LCD projector (model 4600 A) costing Rs. 3.6 lakh with the second (proforma) respondent in this appeal, which was the authorised dealer of such equipment supplied by the first appellant. The projector was delivered to CMC on 01.07.1998 and carried an explicit written warranty of unspecified scope for 12 months from that date (vide document marked Exhibit A-4 filed by CMC before the State Commission, a copy of which was filed by the appellants along with its appeal memorandum). In March 1998, CMC had purchased a projector of the same make and model from the second respondent, which had been delivered in early June 1998 – undisputedly; this first projector functioned without any hitch.
second projector stopped functioning in January 1999. After some correspondence
with the second respondent and the first appellant, CMC handed over the
projector (in use at the Kolkata centre of CMC) to the first appellant at
(iii) As the repaired projector was not delivered by 19.05.1999, CMC, Hyderabad wrote a letter of even date to the second appellant stating inter alia that (a) the repaired projector had not been received back till that date, (b) CMC, Kolkata had already spent a sum of Rs. 50,000 on hiring a projector from the market and (c) CMC, Hyderabad would send to the second appellant a debit note for hiring charges of a projector @ Rs. 2,000 per day from 20.05.1999 till the return of the repaired projector, as agreed to by the second appellant in its letter dated 10.05.1999. There was no reply to this letter.
(iv) CMC sent a legal notice dated 06.08.1999 to the first appellant and the second respondent asking for (a) refund of the price of the projector (Rs. 3.6 lakh), (b) damages of Rs. 50,000 being the expenditure incurred by CMC, Kolkata on hiring a projector till May 1999 and (c) further damages @ Rs. 2,000 per day (from – date unspecified) till the refund of the sum of Rs. 3.6 lakh, all within 7 days, failing which, the notice added, CMC would take appropriate legal recourse. There was no reply to this legal notice either. Finally, CMC filed consumer complaint no. 113 of 1999 on 05.10.1999 before the State Commission, as already noted, and claimed a sum of Rs. 6.48 lakh (being the total of Rs. 3.6 lakh towards the cost of the projector and Rs. 2.88 lakh as damages @ Rs. 2000 per day till the date of filing the complaint).
projector was admittedly returned to the office of CMC,
3. We have heard the parties at some length.
(a) The main contentions of the learned counsel for the appellants are as under:
(i) CMC, itself a commercial organisation, used this projector for a clearly ‘commercial purpose’. Hence it was not a “consumer” within the meaning of section 2 (1) (d) of the Consumer Protection Act, 1986 (hereafter, the ‘Act’) and its complaint to the State Commission was not maintainable ab initio. This view was in accord with the ruling of the Apex Court in the case of Kalpavruksha Charitable Trust versus Toshniwal Brothers (Bombay) Pvt. Ltd. [(2000) 1 SCC 515].
(ii) As averred in the counter affidavit dated 29.02.2000 of Shri Shashank Jain, Managing Director, Viewtech Imaging Equipment Pvt. Ltd. (first appellant here), CMC took delivery of the projector only after satisfying itself “with the working condition of the LCD projector” and the equipment was with CMC and being used by it.
(iii) The appellants, in any case, attended to the complaint of CMC regarding non-functioning of the projector as soon as the latter was sent to their notice; carried out the necessary repairs; disclosed candidly the reasons for delay in repairs by their letter dated 10.05.1999; and returned the projector to CMC as soon as it was repaired satisfactorily. Hence there was no case of ‘deficiency in service’, as alleged.
(b) As against this, the learned counsel for CMC argued:
(i) Though the second appellant had assured of a country-wide network for servicing/repairs of the equipment – particularly, that M/s Vision Enterprises, Kolkata, their authorised dealer there, would provide after sales service “whenever required” to CMC, Kolkata (by their letter dated 22.07.1998) - CMC had to send the projector from its Kolkata office to Secunderabad at the appellant’s insistence. This resulted in the defective projector lying unused with CMC, Kolkata till March 1999 though it had stopped functioning in January 1999.
(ii) Despite assuring, by letter dated 10.05.1999, that the projector would be returned “in perfect working condition on 14.05.1999 without fail”, the projector was not returned till 11.06.1999 and that too delivered at the gate of CMC’s office in Hyderabad, without any prior intimation or demonstrating to the officers concerned that the projector was now working well, after repairs. The projector was, in fact, not repaired at all.
(iii) Again, inspite of agreeing in writing to reimburse the cost of hiring another projector “beyond” 14.05.1999 @ Rs. 2000 per day, no such payment was offered or actually made to CMC. The appellants also did not bother to respond to CMC’s legal notice of 06.08.1999.
(iv) The projector carried a written warranty of 12 months from 21.07.1998 under the purchase order dated 04.05.1998, accepted and endorsed by the Hyderabad-based dealer of the appellants (second respondent here). The complaint was, therefore, maintainable under the Act in view of a catena of judgments of this Commission, viz., (a) M/s Jay Kay Puri Engineers & Another versus Mohan Breweries and Distilleries Ltd. [II (1997) CPJ (NC)], (b) M/s Amtrex Ambience Ltd. versus M/s Alpha Radios and Another [1986-96 CONSUMER 1999 (NS)] and (c) M/s Olympic Zippers Pvt. Ltd. versus K. C. Cherian and Another [1986-02 CONSUMER 5657 (NS)]. In each of these decisions, it was held by this Commission essentially to the effect that (a) even if an equipment / machine is (purchased and) used by a buyer for a commercial purpose, the buyer would be treated as a ‘consumer’ under section 2 (1) (d) (ii) if the equipment / machine carried a warranty (for repairs / replacement and / or after-sales service) and a defect in the said equipment / machine, noticed during the period of warranty, was not set right by the seller,/,supplier to the satisfaction of the buyer; in other words, in such cases, the seller / supplier could be liable, based on the facts and circumstances of each such case, to be held guilty of deficiency in service under the Act and dealt with accordingly.
4. The first point which, therefore, needs to be answered is whether CMC can be treated as a ‘consumer’ under the Act, given the fact that the projector in question bought by CMC was actually used for a ‘commercial purpose’, viz., as a visual aid for training courses for which CMC charged fees.
(i) It needs to be first noted in this context that the Act was amended with effect from 18.06.1993 to exclude from the purview of “commercial purpose” (vide sub-clause (i) of clause (d) of sub-section (1) of section 2 of the Act defining a “consumer” in the context of “goods”) goods purchased by a buyer if such goods were “bought and used by him ... ... exclusively for the purposes of earning his livelihood by means of self-employment.” This was by way of an Explanation inserted below sub-clause (i) of the clause (d), which defined a “consumer” only of goods. Thus, sub-clause (ii) of clause (d) which defined a “consumer” (availor) of a “service” and did not ab initio include any exclusion for use of such service for a “commercial purpose”, remained unaltered; the only restrictions / exclusions in the case of “service” were those provided originally in the definition of “service” in clause (o) of section 2 (1) of the Act, viz., “... ... (the rendering of) any service free of charge or under a contract of personal service.”
(ii) It is against this background that for nearly ten years thereafter (i.e., till the wide-ranging amendments effective from 15.03.2003), this Commission (and the Consumer Fora below) continued to deal with complaints alleging “deficiency in service” from persons / entities who / which availed of services even for commercial purposes. In the context of goods bought and used for commercial purposes, the above-mentioned view was extended to cover cases where the goods carried a warranty, treating such a warranty as a paid “service” and the seller of such goods (or its agent) as the service provider.
(iii) The Act was again comprehensively amended in 2002 and the amendments were made effective from 15.03.2003. Of interest in this case is the amendment which made the Explanation below sub-clause (i) of clause (d) of section 2 (1) of the Act thereafter applicable to both the sub-clauses (i) and (ii), i.e., to both goods and services. As a result, all buyers / availors of goods / services were excluded from the definition of “consumer” if the goods / services were used for any commercial purpose, except those who bought / availed of goods / services and used them exclusively for the purposes of earning livelihood through self-employment.
(iv) It is also noteworthy that the Act did not (and does not still) define either “livelihood” or “self-employment”.
(v) Section 24 of the Act clearly provides that the orders of, inter alia, the National Commission attain finality if no appeal is preferred against such orders. Neither party has shown or contended that any of the three judgments / orders of this Commission in the cases mentioned in paragraph 3 (b) (iv) supra has been challenged before the Apex Court and the Apex Court has ruled contrary to the ratio of these judgments / orders of this Commission. Thus, the view held by this Commission (viz., that in case of defects in goods carrying a warranty not being satisfactorily rectified by the seller during the period of warranty, the buyer would continue to be treated as a consumer in respect of the service assured by way of the warranty inspite of the use of such goods for commercial purpose and the said buyer would be entitled to relief for deficiency in service as found to be admissible under the Act by the competent Consumer Forum) would have to be treated as final, at least till the amendment to clause (d) brought about by the Amending Act (No. 62 of 2002) became effective, i.e., from 15.03.2003. This appeal is squarely covered by the ratio of the judgments of this Commission in the cases mentioned above as well as the period over which the Act permitted holding the said view.
also respectfully note that the ratio of the judgment of the Apex Court in the
case of Kalpavruksha Charitable Trust
versus Toshniwal Brothers (Bombay) Pvt. Ltd. (supra) would not come in the
way of what we have observed in paragraph 5 above. First, in the said case,
referring to the Court’s decision in the case of Laxmi Engineering Works versus P. S. G. Industrial Institute [(1995)
3 SCC 583] the Apex Court affirms, inter
alia, the test, “Whether the purpose
for which a person has bought good is a ‘commercial purpose’ within the meaning
of the definition of the expression ‘consumer’ in section 2 (1) (d) of the Act
is always a question of fact to be decided in the facts and circumstances of
each case”. Secondly, this judgment of the
(vii) In conclusion and limiting ourselves to the appeal on hand, we answer in the affirmative the question posed at the beginning of this discussion, i.e., in this case, CMC is a ‘consumer’ within the definition of that term under sub-clause (ii) of clause (d) of section 2 (1) of the Act, as it stood during the period 18.06.1993 and 14.03.2003.
the facts and circumstances of the case, as discussed above (as well as by the
State Commission in the impugned order), the finding of the State Commission
that in this case the appellants are guilty of gross deficiency in service
during the period of warranty for the projector in question is fully justified.
We would like to add that in this appeal, the appellants have tried, unsuccessfully,
to cloud the issue of liability between the first appellant and the second by
resorting to a make-believe distinction between the “public limited company”
named “Viewtech Imaging Equipment Pvt. Ltd.” and the “partnership firm” named
“Viewtech Imaging Systems“. Suffice it to note that each record of some
significance produced before the State Commission and relied upon in the case
is signed by one and the same person, namely, Shri Shashank Jain, either as
Managing Director or whatever else. The office addresses of the “two entities”
(??) are also the same. Moreover, there is not an iota of evidence on record to
show that the projector in question was actually repaired during the period 11th
6. However, the State Commission’s order is not what can be upheld in its entirety. It has granted to CMC reliefs which were not quite prayed for in the complaint. With its complaint dated 05.10.1999, CMC did not produce even a scrap of evidence to show that it had actually hired another similar projector from the market, spent a sum of Rs. 50,000/- as of 19.05.1999 on such hire and also sent a detailed and vouched debit note to any of the appellants (or, respondent no.2 here) for hire charges after 19.05.1999, as it stated in its letter of that date. In its complaint, however, it claimed damages of Rs. 2.88 lakh and “further damages @ Rs. 2000/- per day from the date of filing the complaint till realisation thereof”, in addition to the cost of the projector, i.e., Rs. 3.6 lakh. The State Commission proceeded to award interest @ 24 per cent per annum on the cost of the projector from 14.05.1999 till its realisation and also “hiring charges” @ Rs. 1,000/- per day from 14.05.1999 till payment and costs of Rs. 10,000/-. As noted, there is no evidence on record regarding CMC actually paying any hiring charges. Nor is the grant of interest at a rate as high as 24 per cent per annum on the full cost of the projector for the period mentioned in the impugned order justified by any stretch of imagination. The State Commission also held the two appellants as well as the dealer (respondent no. 2 here) jointly and severally liable for the payments ordered by it. This too is not tenable, in respect of the dealer.
7. We, therefore, partly modify the impugned order of the State Commission and direct the two appellants here to jointly pay to CMC the full cost of the projector, i.e., Rs. 3.6 lakh along with interest @ 9 (nine) per cent per annum on Rs. 3.6 lakh from April 1999 (i.e., beginning of the month following the month of handing over the projector to the appellants) till payment. This will compensate CMC adequately. The appellants, in turn, would be entitled to withdraw the sum of Rs. 2 lakh, deposited with the State Commission in accordance with our order dated 14.12.2004, along with interest, if any, accrued on the said deposit. The parties shall bear their own costs throughout the proceedings - here and before the State Commission. There shall be no liability on the second respondent.
8. This appeal is disposed of accordingly.
[R. C. JAIN, J]