BIOMEX INSTRUMENTS PVT. LTD. vs AJAY MADAN

THIS appeal has been filed by Biomex Instruments Private Limited, 907, Industrial Area, Phase-II, Chandigarh through its Managing Director against the order passed by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh on 24.2.2000 in Complaint Case No. 433 of 1996 filed by the respondent/complaiannt Dr. Ajay Madan practising near Jagadhari Gate, Ambala City and running Madan Ultra Sound and IVF Centre.

THE complainant did his post graduation in medical profession and started his private practice in the City of Ambala. He had set up the said Madan Ultra Sound and IVF Centre at T.B. Hospital Road near Jagadhari Gate. As per the averments made in the complaint, the complainant placed an order for purchasing Ultra Sound Scanner and other attachments with the appellant/opposite party in the complaint case. THE appellant Biomex Instruments (P) Ltd. submitted its quotation for supplying the said Ultra Sound Scanner and other attachments on 28.7.1994. THE copy of the quotation has been filed in the complaint as Appendix-A. As per the quotation aforesaid, the complainant was required to deposit the sum of Rs. 1,75,000/- as 25% advance and the balance amount of Rs. 5,25,000/- was to be paid subsequently and then the said machine was to be despatched to the complainant. THE appellant assured one year guarantee against any manufacturing defect in the equipment supplied to the complainant against his order. THE complainant sent a bank draft for a sum of Rs. 1,75,000/- drawn at Allahabad Bank, Ambala City. A photostat copy of the bank draft has been filed as Appendix-C. On receipt of the bank draft, the appellant Biomex Instruments (P) Ltd. issued a receipt Appendix-D in respect of aforesaid bank draft of Rs. 1,75,000/-. THE aforesaid equipment was manufactured in the United States of America by M/s. U. Tech Products, INC, Post Box 3966, Albany, New York. Vide letter Appendix-E, the appellant wrote to the respondent M/s. Madan Ultra Sound & I.V.F. Centre that the Ultrasound machine is ready for despatch with their principals M/s. Utech Products, U.S.A. and as such the 75% of the price of the machine, being the balance amount be deposited immediately so as to enable the appellant to retire the documents from the Bank to pay customs duty, etc. and to avoid demurrage. It was assured that the unit will be despatched within 48 hours from the date of receipt of 75% payment. Another letter Appendix-F was sent to the complainant on 15.8.1994 by the Biomex Instruments (P) Ltd. intimating that the Ultra Sound Machine was ready for despatch. Placing reliance on the assurance of Biomex Instruments (P) Ltd. (appellant), the complainant applied for loan to the Haryana Financial Corporation, Ambala City for the purchase of Ultra Sound Machine. The loan was sanctioned to the complainant for the said purpose. The Haryana Financial Corporation issued a Draft No. 537352 for a sum of Rs. 5,25,000/- in favour of Biomex Instruments (P) Ltd. The said draft was deposited by the Biomex Instruments (P) Ltd. in its account at Chandigarh on 17.8.1994.

The grievance of the complainant was that the respondent failed to deliver the Ultra Sound Machine within the period assured. The complainant contacted the respondent several times and also personally visited its office a number of times requesting him to deliver the Ultra Sound Machine. The delivery of Ultra Sound Machine was delayed on one pretext or the other and this led the complainant to ask the respondent either to deliver the Ultra Sound Machine or to refund the entire amount deposited by him alongwith interest and compensation. The complainant alleged that he spent a sum of Rs. 6,000/- on personal visits and telephone calls and also lost his business during this period. The Haryana Financial Corporation charged interest from the complainant @ 19% per annum and the complainant unnecessarily suffered loss of interest. Apart from it, the complainant also spent huge amount on the advertisements of IVF Centre and the reputation of the complainant was also badly affected and he lost his goodwill in the market. A sum of Rs. 30,000/- was claimed as loss of business and Rs. 70,000/- as loss of goodwill from the respondent for failing to supply the Ultra Sound Machine within time. It was eventually on 2.12.1994 that the complainant received the Ultra Sound Machine with bill and receipt Appendix-G & H. The complainant accepted the delivery of the Ultra Sound Machine and started using the same in connection with his profession. He, however, found that the Transvaginal Probe was not functioning properly. The respondent was summoned by the complainant to inspect the same. The respondent visited the Centre of the complainant and after examination of the machine supplied, found the following defects : (i) Transvaginal Probe was not functioning properly. (ii) The image was distorted and gradually it diminished and it was completely out of function. Consequently, the respondent took away the T.V. Probe with him for replacement as per the guarantee assured by the respondent.

DESPITE several attempts Transvaginal Probe which had been taken away for replacement was not replaced. According to averment made in the complaint, the said equipment i.e., Ultra Sound Machine was rendered useless without the T.V. Probe. It has further been contended that as per letter Appendix-J received from the manufacturers, the printer costing 600 U.S. Dollars and Multiformate Camera costing 500 U.S. Dollars were sent but the respondent did not supply the same alongwith the machine. The complainant was put to the loss of 1100 U.S. Dollars for non-supply of the aforesaid two items. On these averments, the complainant claimed a total sum of Rs. 4.5 lacs as compensation. The appellant Biomex Instruments Pvt. Ltd. put in appearance before the District Forum after receiving the notice of the complaint and filed written statement. The preliminary objection was taken that the complaint was not cognizable by the District Forum inasmuch as the complainant was not a consumer as defined under the Consumer Protection Act. It was alleged that the complainant was using the machine for commercial purpose. The other preliminary objection taken was that the complaint filed against the individual S.K. Aggarwal of M/s. Biomex Instruments (P) Ltd. was not maintainable inasmuch as the order was booked by Biomex Instruments (P) Ltd. and not by Shri S.K. Aggarwal. The appellant in the written statement further contended that the complainant had filed a case against Biomex Instruments (P) Ltd. with Ambala Police which filed the case after verifying the facts. The Biomex Instruments (P) Ltd. has filed a civil suit claiming damages of Rs. 1 lac against the complainant which is pending in the Court of Senior Sub-Judge (Incharge), Chandigarh. Another case was pending against the complainant filed by Biomex Instruments (P) Ltd. in the same Court which is for recovery of sum of Rs. 1,81,500/- against the supply of instrument to the complainant. Yet another case is pending in the Court of Shri A.K. Jain at Chandigarh against the complainant filed by Biomex Instruments (P) Ltd. On these preliminary objections, it has been contended that the complaint should be dismissed as being not maintainable. On merits, it was contended that the machine was ready with the principals of the respondent but the delivery of the same was delayed on account of non-availability of the bookings for air cargo at the end of the principals of the respondent. It was denied that there was any such condition agreed between the complainant and the opposite party that the machine would be delivered within 48 hours of the receipt of the amount. It was also denied that any such assurance was made by the respondent to the complainant. According to the averment made in the written statement, no such assurance could be given by the respondent as the air cargo itself took many days to reach India from U.S.A. and thereafter it takes minimum 3 to 4 weeks for clearance at customs. The sufferance of damages by the complainant on the publicity and advertisement was denied and it was contended that as per the normal practice in business, the advertisement is made only about the services available with the business concern. The claim of the complainant, it was alleged, was totally baseless and did not fall within the purview of the Consumer Protection Act. It was further denied that any part of the machine was withheld by the opposite party. It was also submitted that the printer was not indicated to be supplied alongwith the machine as per Proforma Invoice dated 1.8.1994 attached with the complaint as Annexure-B and therefore, there was no question of its supply. The camera was however given to the complainant after obtaining due receipt.

THE parties filed evidence in the shape of affidavits and documents. THE District Forum after hearing both the sides held that there was deficiency in service on the part of the appellant/opposite party which has failed to deliver the two items to the complainant. Accordingly, the complaint was allowed with consolidated costs of Rs. 5,000/- which included compensation for harassment and expenses. Apart from it, following directions were issued to the appellant/opposite party : (i) To pay interest at the rate of 12% p.a. on the amount paid by the complainant w.e.f. 1.10.1994 till 2.12.1994. (ii) To refund the cost of T.V. Probe. (iii) To pay Rs. 44,000/- as money equivalent to 1100 U.S. Dollars at the rate of Rs. 39.62 rounded to Rs. 40/- to the complainant the cost of printer and camera. Interest @ 12% per annum was allowed from the date of complaint till payment. Feeling aggrieved against the order of the District Forum, the opposite party i.e., Biomex Instruments (P) Ltd. has filed this appeal. After receiving the notice of this appeal, the respondent/complainant Dr. Ajay Madan put in appearance and contested the appeal. Record of the complaint case of the District Forum was summoned. We have heard the learned Counsel for the appellant and the learned Counsel for the respondent and carefully perused the judgment of the District Forum under appeal and the record of the case.

THE learned Counsel for the appellant submitted arguments mainly on the following points : (i) THE complainant/respondent Dr. Ajay Madan was not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. (ii) THE complaint was not maintainable in the absence of the manufacturer of the Ultra Sound Machine and no liability can be fastened in the absence of the manufacturer on the appellant. (iii) THE complainant did not place order regarding the supply of the Printer alongwith the Ultra Sound Machine and other equipments. (iv) THE Camera was supplied alongwith the Ultra Sound Machine against the receipt issued by the complainant/respondent but the District Forum has fastened the liability on the appellant to pay for the price of the Camera as well. Mr. Pardeep Bedi, Advocate, learned Counsel for the appellant contended that the complainant was engaged in commercial activity by setting up the IVF Centre at Ambala and was thus making profits on large scale. In order to appreciate the submissions of the learned Counsel for the appellant, we consider it appropriate to refer to the provisions as contained in Section 2(1)(d) of the Consumer Protection Act. Section 2(1)(d) defines the consumer as under : "(d) "consumer" means any person who,- (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person. [Explanation-For the purposes of Sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;]"

THE main emphasis of the learned Counsel for the appellant was on the last lines in Section 2(1)(d)(i) beginning with the words "but does not include a person who obtains such goods for resale or for any commercial purpose". It was urged that the complainant in the instant case is a person who has obtained the aforesaid Ultra Sound Machine for commercial purpose. According to Mr. Bedi, the case of the complainant is not covered under the Explanation appended to Section 2(1)(d), inasmuch as the complainant had not purchased the Ultra Sound Machine exclusively for the purpose of earning his livelihood by means of self-employment. THE learned Counsel for the respondent/complainant, on the other hand, submitted that the case of the complainant/respondent was duly covered by the Explanation appended to Section 2(1)(d) of the C.P. Act. According to him, the complainant Dr. Ajay Madan was carrying on his private medical practice which undisputedly is a self-employment. He contended that the purchase of the Ultra Sound Machine with equipments as aforesaid was considered necessary for efficient discharge of the medical practice by the complainant and for appropriately diagnosing the diseases of the patients coming to the private clinic of the respondent/complainant. He has also submitted that due to the Ultra Sound Machine being defective, the complainant/respondent could not even use the same for treating his patients much less the complainant/respondent made large or huge profits so as to cover his case under the commercial purposes. THE learned Counsel for the appellant placed reliance on the judgment of the Hon''ble Supreme Court of India in the case of M/s. Cheema Engineering Services v. Rajan Singh, reported in VI (1998) SLT 20=1997 (1) CPC 231. THE Hon''ble Supreme Court was dealing with a case of Brickman Machine purchased by the appellant for running his business of Brickiln. After noticing the provisions contained in Section 2(1)(d) of the Consumer Protection Act, the Hon''ble Supreme Court referred to the Explanation appended to Section 2(1)(d)(i) in Para 5 and observed, inter alia, as under : "In other words, the Explanation excludes from the ambit of commercial purpose in Sub-clause (i) of Section 2(1)(d), any goods purchased by a consumer and used by him exclusively for the purpose of earning his livelihood; by means of self-employment. Such purchase of goods is not a commercial purpose. THE question, therefore, is : whether the respondent has been using the aforesaid machine for self-employment ? THE word "self-employment" is not defined. THErefore, it is a matter of evidence. Unless there is evidence and on consideration thereof it is concluded that the machine was used only for self-employment to earn his livelihood without a sense of commercial purpose by manufacture and sale of bricks, it would be for self-employment. Manufacture and sale of bricks in a commercial way may also be to earn livelihood, but "merely earning livelihood in commercial business", does not mean that it is not for commercial purpose. Self-employment connotes altogether a different concept, namely, he alone uses the machinery purchased for the purpose of manufacture by employing himself in working out or producing the goods for earning his livelihood. "He" includes the members of his family..." It may be pointed out that the business of brickiln per se is a commercial activity and use of a brick machine by a Brickman for brick preparation, brick moulding, brick drying and brick burning is a only a step towards the commercial activity. In the instant case, the complainant/respondent Dr. Ajay Madan was to use the Ultra Sound Machine purchased by him for better diagnosis for treatment of the patients coming to his clinic, which obviously distinguishes his case from the case of a Brickiln owner. Apart from this, the learned Counsel for the appellant could not refer to any evidence led before the District Forum to show that the respondent/complainant was using the said machine on a large scale and earning huge profits. As a matter of fact, the machine supplied through the agency of the appellant was found to be defective and non-functional. THErefore, there is no merit in the contention that the respondent/complainant had purchased the said machine for using it on large scale and to earn huge profits out of it. The other case relied on by the learned Counsel for the appellant is reported in 1997 (2) CPR 1996, K.S. Dabas, Prop. of Amazon Consultant Engineers v. Rajender Kumar Chhabra Nursing and Maternity Home. This case related to Nursing Home where the complainant intended to establish X-Ray Plant for the purpose of setting up X-Ray machine. He got the licence from Small Scale Industry, Haryana. The X-Ray machine was supplied to the complainant by the opposite party at the cost of Rs. 88,000/- and the X-Ray plant was installed. The total payment of Rs. 1,03,833.40 was made for the installation of the X-Ray plant. The X-Ray machine was found defective and the complainant approached the opposite party for rectification/replacement. He did not get satisfaction and filed a complaint before the District Forum praying for the replacement of the machine as well as damages and business losses of Rs. 3.50 lacs. In these facts, the Hon''ble National Commission held that the complainant as doing medical and clinical business with the X-Ray machine on a large scale which was for commercial purpose and not for mere self-employment and consequently the jurisdiction of the Consumer Forum was held to be barred. The facts of the instant case are clearly distinguishable from the facts of the case K.S. Dabas (supra). Here in the instant case, the respondent/complainant was not running a Nursing Home and as noticed earlier there was no material placed to show that he was earning huge profits by using the said machine. The last authority cited by the learned Counsel for the appellant in this regard is the case decided by the Kerala State Consumer Disputes Redressal Commission in M/s. Rani Food Products v. K.P.M. Haneef, II (1992) CPJ 630. In the case before the Kerala State Consumer Commission, the complainant was summoned, as would appear from perusal of Para 3 of the judgment, and was asked by the Commission about the use of machine in question. Referring to the deposition given by the complainant, the Kerala State Consumer Commission observed, inter alia, as under : "...The complainant, when asked by us, deposed that this was a business venture aimed at making profit and that the machine in question was purchased as an asset to be applied in his business of processing and selling spices and curry powders."

The Kerala Consumer State Commission in these facts and circumstances held that where the evidence disclosed with the primary objective for purchasing particular machine is to make profit then the complaint is to be held to use the machine for commercial purpose. Dealing with this question, the State Commission observed, inter alia, as under in Para 3 : "In a number of cases the National Commission as well as the various State Commissions including ours had elaborately discussed and decided the question of jurisdiction of the Consumer Disputes Redressal Agencies over disputes on goods which include machinery used in business activities where the purpose is to make profit. The decisions have uniformly been that such disputes fall outside the jurisdiction of the District Redressal Agencies under the Consumer Protection Act, 1986 as the aggrieved person does not come under the purview of the definition of the consumer as per Section 2(1)(d)(i)."

Referring to the decision of the National Commission and also of the Kerala State Consumer Commission in Para 5, it was held, inter alia, as under : "Applying the norms laid down by the various Consumer Disputes Redressal Authorities, we are constrained to declare that the complainant does not fit himself into the definition of Consumer as envisaged by the Consumer Protection Act, 1986."

In the instant case, there is no such evidence on record or the statement of the complainant that his primary object in purchasing the Ultrasound machine was to earn profit. In the absence of any such evidence, it is difficult to hold that the respondent/complainant intended to purchase the Ultrasound machine only to earn profits and not for the object of using the machine for proper diagnosis of the patients and for prescribing proper treatment based on such diagnosis. We are of the considered opinion that the appellant has failed to show that the respondent/complainant did not fall within the definition of Consumer as defined under Section 2(1)(d) of the Consumer Protection Act. The case of the respondent/complainant, according to our view, is amply covered by the Explanation appended to Section 2(1)(d) of the C.P. Act.

So far as the next submission of the learned Counsel for the appellant about the complaint being not maintainable in the absence of the manufacturer of the Ultra Sound Machine and no liability can be fastened in the absence of the manufacturer on the appellant, is concerned, may be pointed out that the respondent/complainant had placed his order with the appellant-Biomex Instruments Pvt. Ltd. who was working as an agent for the manufacturer, the payment for the supply of the machine was accepted by the appellant and it was the appellant who supplied the machine when the same arrived from the manufacturer. Apart from it, when the complainant/respondent as dis-satisfied with the performance of the machine so supplied, it was the appellant who inspected the machine and took the defective parts for repair/replacement. In nutshell, the complainant/respondent was dealing primarily with the appellant-Biomex Instruments Pvt. Ltd. and not directly with the manufacturer of the machine namely U-Tech. Products, U.S.A. In this connection, reference will be made to Appendix-A which is the quotation submitted by the appellant-Biomex Instruments Pvt. Ltd. to the respondent/complainant. Appendix-B which is Proforma Invoice submitted by the appellant to the respondent/complainant Madan Ultrasound & IVF Centre, Jagadhari Gate, Ambala City. Appendix-C is the photo-copy of the Bank Draft for a sum of Rs. 1,75,000/- issued in the name of Biomex Instruments Pvt. Ltd. Appendix-D is the receipt for the said amount of Rs. 1,75,000/- issued by the appellant-Biomex Instruments Pvt. Ltd. Appendix-E a letter sent by the appellant to the respondent/complainant asking for the payment of the balance amount of the cost of the machine ordered to be supplied and giving an assurance that the Unit will be despatched within 48 hours from the date of receipt of 75% payment. Appendix-F is another letter written by the appellant on August 5, 1994 to the respondent/complainant regarding the supply of Ultra Sound Machine and informing the complainant that the principals of the appellant from New York have informed that Ultra Sound Machine is ready for despatch and further that the appellant shall instruct their principals to airlift the machine soon after the receipt of payment in this behalf. Appendix-G is the bill regarding the supply of the said machine which is for a sum of Rs. 7 lacs. Appendix-H is a No Lien Certificate issued by the appellant-Biomex Instruments Pvt. Ltd. regarding the supply of one Ultrasound Machine RT. 3600, to M/s. Madan Ultra Sound & I.V.F. Centre vide Bill No. 05 dated 2.12.1994 and certifying that full and final payment against the bill had been received. The appellant was not having any lien on this machine. These documents amply show that it was primarily and solely the appellant who dealt with supply of Ultra Sound Machine right from submitting the quotation upto supply of the machine against the cash payment made by the respondent/complainant. We have thus no hesitation in holding that the appellant was the only proper party to be arrayed as opposite party in the complaint filed before the District Forum and there was no need for the complainant/respondent to implead the manufacturer of the Ultra Sound Machine referred to above. The manufacturer of the Ultra Sound Machine is not a necessary party to the complaint. The submission of the learned Counsel for the appellant in this regard has no substance and the same is not accepted.

THE learned Counsel for the appellant submitted that the complainant did not place order regarding the supply of Printer alongwith Ultra Sound Machine and other equipments. From perusal of the quotation submitted by the appellant-Biomex Instruments Pvt. Ltd. (Appendix-A) on record of the complaint filed before the District Forum, it will appear that the description of the Ultra Sound Machine in the quotation referred to above was as under : "Ultrasound Machine. G.E. make, Model RT-3600 with 3 Probes Linear, Sector and Transviginal with Biopsy Guide with Camera."

THE combined price quoted against this Ultrasound Machine was Rs. 7 lacs. THE respondent/complainant placed his order according to his quotation and paid a sum of Rs. 7 lacs for the supply of Ultrasound Machine. It is thus evident that the complainant/respondent had not placed order for the supply of the Printer and in the absence of placing the order for the supply of the Printer, the complainant cannot make a grievance of non-supply of the Printer merely on the basis of the Printer having been mentioned in the description of the machine supplied by the manufacturer in Appendix-J. It appears from perusal of Appendix-J that the Ultrasound Machine, Model RT-3600 which was to be supplied to Madan Ultrasound & IVF Centre, T.B. Hospital Road, Jagadhari Gate, Ambala City, India was refurnished with standard accessories, MFG : GE, YR:1987 against the cost of 7500 US Dollars. THEn Printer costing 600 US Dollars. THEn Multiformate Camera costing 500 US Dollars. THE total cost of these accessories and the Ultrasound Machine was quoted as 8600 US Dollars. It appears that the Ultrasound Machine supplied by the manufacturer, U-Tech Products, USA included in the accessories a Printer also but in the absence of any reliable evidence to show that the respondent/complainant had specifically placed an order for the supply of the Printer, it is difficult to hold that the appellant Company wrongfully withheld the Printer supplied with the Ultrasound Machine by the manufacturer and did not deliver the same to the respondent Company. THE learned Counsel for the respondent was unable to show from any evidence on record that he has specifically placed order for supply of Printer as an accessory alongwith Ultra Sound Machine. THE District Forum in our considered view lost sight of this fact and has wrongly held the appellant liable to pay the cost of the Printer to the complainant/respondent. THE contention of the learned Counsel for the appellant in this regard has considerable merit. The last contention of the learned Counsel for the appellant was that the Camera was duly supplied to the complainant/respondent alongwith the Ultrasound Machine against a receipt issued by the complainant/respondent. The learned Counsel for the appellant, however, fairly conceded that the receipt referred to above was not produced by the appellant before the District Forum. In the absence of the receipt alleged to have been issued by the respondent/complainant, it cannot be said with any amount of certainty that the appellant had in fact delivered possession of the Camera aforesaid to the respondent/complainant. In our considered view, the finding of the District Forum in this regard is correct and is liable to be affirmed.

IN view of the foregoing discussion, we find that the order of the District Forum deserves to be modified insofar as the cost of the Printer is concerned and it is held that the appellant is not liable to pay the price of the Printer valued at 600 US Dollars. The order of the District Forum in other respects is liable to be upheld with further modification that the liability of the appellant would be to pay the cost of the TV Probe and Camera in terms of the INdian currency at the current rate of exchange with US Dollar. The appeal is partly accepted and the order of the District Forum is modified to the extent indicated above. Appeal partly allowed.