B.S.GABA vs STEEL AUTHORITY OF INDIA LTD.

THE true import of the words of Sub-clause (i) of Clause (a) of Section 1.2 of the Consumer Protection Act, 1986, prescribing the pecuniary original jurisdiction of the State Commission to entertain complaints is the threshold question in this case. Equally at issue is the somewhat ticklish question whether in a contract of sale of goods simpliciter, a mere delay in delivery thereof beyond the agreed date, would be a "deficiency" in "service" within the meaning of the Act aforesaid?

SINCE this complaint must found against both the aforesaid preliminary questions, it suffices to notice the facts relevant thereto with relative brevity. Dr. B.S. Gaba (through the National Consumer Awareness Group) has preferred the complaint on the allegation that he had approached M/s Steel Authority of India Limited (Respondent No. 1) for the supply of 18 Metric Tons of steel TOR for the construction of his hospital and after completion of requisite formalities, deposited a sum of Rs.1,53,800/- on 21st May, 1990 by Bank Draft. Consequent thereto, respondent No. 1 issued a delivery order on M/s Lauls Private Limited, Faridabad (Respondent No. 2) to deliver the goods. When the complainant approached the said respondent on the 23rd May, 1990. the latter asked him to wait for one week as the particular quality of steel was not ready for delivery at that time. Thereafter the complainant visited the said respondent for as many as six times, ending with the 9th September, 1990, but the goods were not delivered and no adequate response was either forthcoming to the registered letters written by him to both the respondents. On the aforesaid brief facts, the complainant claimed considerable loss in terms of interest on the deposited amount from the 21st May, 1990 at the rate of 18% till the date of the filing of the complaint on the 7th November, 1990, and further loss occasioned by harassment to the complainant due to the negligent, deficient and defective service. For the purposes of jurisdiction, it has been averred that the subject matter of the dispute is more than Rs. 1 lakh, but the specific prayer for compensation is the amount of interest on Rs. 1,53,800/- at the rate of 18% per annum, from the 21st May, 1990 till the delivery of the goods, and further compensation of Rs. 50,000/- on account of loss caused due to negligent service. In the reply to the complaint. Respondent No. 1 has raised a number of preliminary objections, to which reference is not necessary. On merits it is highlighted that 8 mm (Tor Steel) was not available with respondent No. 2, but an offer was made to lift the available quantity of 10 mm and 12 mm of Tor Steel forthwith and the balance later, which was, however, declined by the complainant on the ground that the whole supply should be made in a single lot. It is averred that there was a break-down in the mills of Respondent No. 2 in the month of July, 1990, rendering it beyond their control to make the supply, and even though the complainant was offered to take a refund against the surrender of the delivery order, yet he refused to do so. To accommodate the complainant, respondent No. 1 changed the source of delivery from respondent No. 2 to M/s A.K. Rolling Mills, Faridabad, and, ultimately, the complainant took the delivery of 15.055 Metric Tons (M.T.) against the 18 M.T. on the 7th December, 1990 and 19th December, 1990, and, thereafter addressed a letter to respondent No. 1 dated 22nd December, 1990 merely asking for a refund of the balance amount, which was duly made by cheque dated 29th December, 1990 and encashed by him. In view of the said delivery of material and the accepted refund amount, the complaint is alleged to have now become infructuous. It is also the stand that the jurisdiction of this Commission has been wrongly invoked by the complainant, and further there is no negligent, deficient or defective service warranting a relief under the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act'') by this Commission.

In the reply of Respondent No. 2 specific preliminary objections are raised on the issue of jurisdiction and the very maintainability of the complaint. It is first highlighted that on his own showing the complainant seeks compensation of Rs. 50,000/- only, which being less than Rs. 1,00,000/-, the same cannot be entertained by this Commission, being far less than the pecuniary jurisdiction prescribed under Section 17 of the Act. Secondly, it is pointed out that even on the plain reading of the complaint, there is not even any allegation of defect in the goods supplied, and, therefore, the Slate Commission has no jurisdiction to grant any compensation or relief. It is elaborately pleaded that in the supply of steel, no element of service in relation to the goods was involved, and, consequently, the relief claimed is beyond the scope of Section 14 of the Act. On merits it is pointed out that the delivery order issued by Respondent No. 1 did not prescribe any fixed period of delivery, nor in the contract of supply of goods time was the essence thereof. The stand taken by Respondent No. 1 is more or less reiterated by highlighting that the complainant took a needlessly rigid attitude in refusing to take pan delivery of the goods, and further that the steel of 8 mm was unavailable due to circumstances, wholly beyond the control of the respondents, occasioned by a strike in their mills etc. The offer to surrender the delivery order and accept the refund or to make purchases from any other source of those goods was also declined by the complainant. Lastly, it is alleged that the allegations of deficient and defective service or negligence are totally misconceived, and an omnibus claim of compensation to the tune of Rs. 50,000/-, without indicating the specific loss etc., is unwarranted.

IN the replication filed on behalf of the complainant, the earlier stand has inevitably been reiterated with an attempt to introduce fresh facts and figures in order to stretch the quantum of compensation. However, even after this somewhat unwarranted enhance- ment, the total compensation claimed still remains below Rs. 1 lakh at the figure of Rs. 92,000/- and odd. On the aforesaid pleadings, the threshold objection against the very jurisdiction of this State Commission to entertain the complaint has been strenuously pressed on behalf of Respondent No. 2. Mr. A.S. Chadha, their learned Counsel, contended that on the averments in the complaint itself, the express amount of compensation claimed is no more than Rs. 50,000/-. Consequently, it is submitted that any complaint cannot possibly come within the ambit of Section 17(1)(a)(i) unless the compensation claim was in excess of Rs. 1 lakh. The Counsel''s firm stand was that in all cases where, apart from the value of goods and services, a claim of compensation is expressly laid, then the sum must also exceed the minimum limit of Rs. 1 lakh in order to be cognizable by the Stale Commission. Wherever this is not so, the matter must be adjudicated at the foundational level before the District Forums.

ON the other hand, Mr. Sharma, learned Counsel for the complainant, took up a diametrically opposite stand. He contended that where the value of goods or services is placed above Rs. 1 lakh, the matter would fall squarely within the jurisdiction of the Commission. According to him, the claim of compensation and its quantum then become totally irrelevant to the issue. In essence, the contention was that the solitary and the only criterion governing jurisdiction is the value of goods or services involved and nothing else. It would be somewhat plain from the above that the true construction to be placed on Section 17(1)(a)(i) becomes a matter of considerable significance under the Act. This is so because on the sound canons of construction this provision in the statute is not to be read in isolation, but in consonance with its related provisions and the larger scheme of the Act itself. It is by now well-known and is indeed manifest from the Act that it creates a hierarchical structure of the Redressal Agencies in the shape of the District Forum at the base, the State Commission at the intermediate level and the National Commission at the apex. Concerned we primarily are with the question of jurisdiction to entertain complaints, it is significant that the District Forum can entertain complaints of the pecuniary value of Rs. 1 lakh; the State Commission where the same is above Rs. 1 lakh but does not exceed Rs. 10 lakh; and the National Commission where it exceeds Rs. 10 lakh, without any upper limit. This jurisdiction has been prescribed and spelt out in Sections 11, 17 and 21, respectively, with regard to original pecuniary jurisdiction to entertain complaints. The language employed in all the three sections is in pari materia with each other. Conse- quently, whatever construction is placed on the language of Section 17(1)(a)(i), would equally govern the identical language employed in Sections 11 and 21 as well. That is why the issue before us assumes somewhat considerable and added significance. Inevitably the question before us must necessarily turn on the particular language of the provisions of Section 17 read with the nature of reliefs which can be granted by the Redressal Forums under Section 14 of the Act. The relevant parts of these Sections may be noticed for facility of reference at the very outset: - "17. Jurisdiction of the State Commission- Subject to the other provisions of this Act, the State Commission shall have jurisdiction, - (a) to entertain - (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one lakh but does not exceed rupees ten lakhs;... (ii) .................."

"14. Finding of the District Forum- (1) If, after the proceeding conducted under Section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to take one or more of the following things, namely: - (a) to remove the defect pointed out by the appropriate laboratory from the goods in question: (b) to replace the goods with new goods of similar description which shall be free from any defect; (c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant; (d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party."

IT might well be noticed at the very beginning that somewhat surprisingly the question before us appears to be res integra despite the passage of nearly four years since the enforcement of the Act. In any case, no authority either directly covering the point or even by way of analogy could be brought to our notice by the learned Counsel for the parties despite adequate opportunity given to them. Consequently, the question herein has to be decided primarily on principle and the particular language of the statute.

FOCUSING oneself rather minutely on the language of Sub-clause (i) of Clause (a) of Section 17(1), it is plain that the legislature has fixed two criteria for the purposes of jurisdiction to entertain original complaints. Firstly is the value of goods or services involved. Secondly, the compensation, if any, has been claimed. Pointed attention has to be drawn to the words "if any" deliberately employed in the statute at this very stage, though the matter will be elaborated hereinafter. It is significant to recall that by virtue of the definition of a ''complaint'' in Section 2(1)(c) it has necessarily to be related either to the goods purchased or to the services hired. The value of such goods or services is thus an elementary foundational factor because no complaint can come within the ambit of the afore-mentioned definition in particular and even the Act in general, unless it has relevance to either of these two things. However, the question of compensation in every complaint is not an integral factor, and, it is, therefore, that the statute employs the words "if any" in Sub- clause (i) aforesaid in connection with the claimed compensation. To put it plainly in a consumer complaint, compensation may or may not arise, and, consequently, might or might not be claimed. Indeed compensation under the Act in Section 14(1)(d) can be awarded only to the consumer for any loss or injury suffered by him due to the negligence of the opposite party. In view of the above, one can well visualise a complaint where no claim for compensation is expressly made. Reference may be made to Clauses (a), (b), and (c) of Sub-section (1) of Section 14 wherein the relief to be granted is confined to matters other than compensation. The consumer may be seeking nothing more than, to remove the defect in the goods supplied and so disclosed by the appropriate laboratory; to replace the goods with new goods of similar description; or to return to the complainant the price of the goods or the charges for the services hired. Clearly in such a situation where no compensation is claimed, then the only criterion applicable under Sub-clause (i) would be the value of goods or services.

The crucial issue, however, is that in a complaint where compensation has been claimed in express terms, then is the question thereof a factor wholly irrelevant to the question of jurisdiction? We do not think so. On the contrary, it appears to us that the complaints wherein compensation has in fact, been claimed, then both the language of the statute and the principle as well mandate that the quantum of said compensation must also exceed Rs. 1 lakh to bring the matter within the jurisdiction of the State Commission. The pecuniary value of the compensation claimed far from being wholly irrelevant becomes an equally governing factor for the purpose of determining jurisdiction.

THE true approach to the problem is that one must keep in mind that the foundational jurisdiction to entertain complaints first lies with the District Forum. THE exclusion of his jurisdiction is envisaged by the Act only when the value of goods or services and compensation, if any, claimed exceed the designated figure of Rs. 1 lakh. It is in this context that one has to recall the settled canon of interpretation that no word in a statute is deemed to be redundant and each one has ordinarily to be given a meaning. On the construction advocated by Mr. Anil Sharma, the compensation and its quantum is wholly irrelevant once the value of goods or services is in excess of Rs. 1 lakh. Such a construction appears to us as plainly contrary to sound principles. If jurisdiction was to be governed entirely by the value of goods and services then the legislature would not have been ill-advised as to introduce the claim of compensation in Section 17(1)(a)(i). Indeed it is the compensation claimed, which is directly connected to the words "exceed Rs. 1 lac" in the aforesaid provision. It is not easy to fracture the language of the statute and take the issue of compensation altogether out of the consideration in Clause (1) and to disrupt it from the statutory prescription that the same must exceed Rs. 1 lakh. If the contention of Mr. Sharma were to be accepted then in effect Clause (i) would simply read as :- "(a) to entertain (i) complaints where the value of goods or services exceeds rupees one lakh but does not exceed rupees ten lakhs."

THE construction aforesaid would render totally nugatory and redundant, the words "and compensation if any claimed" in the statute. It bears repetition that the legislature does not waste its words and meaning has to be prescribed to every one of them and an interpretation which renders a substantial part of the statute as otiose has unnecessarily to be avoided. Yet again it appears to us that the criteria of the value of goods and services on the one hand and compensation wherever claimed on the other are to be read conjunctively and no disjunctively in Section 17(1)(a)(i). Where both of them exist, then both of them must exceed or cross the hurdle of Rs. 1 lakh. It is not that one of them may be above the said figure and the other far below it. Both are to be governed by the same yard-stick. It deserves highlighting that the legislature has advisedly used the word "and" and not "or" in joining the value of goods or services and compensation, if any, claimed. If the contentions of the learned Counsel for the complainant were to be accepted, then in essence one would be substituting the word "and" designedly employed by the legislature in Sub-clause (i) with "or" in its place. We are not unaware that in a situation where it becomes absolutely necessary and in order to avoid grave public mischief, the word "and" may be read as "or" and vice versa in the statutory provisions. However, no such compulsions arise here, and have not in the least been pointed out or projected to us by the learned Counsel for the complainant. We, therefore, find no warrant in reading the word "and" in Sub-clause (i) as "or" and would give each one of them their plain dictionary meaning. In practical terms it means that in order to exclude the District Forum and to clothe the Stale Commission with jurisdiction, both the value of goods and services as also of compensation, where expressly claimed, must exceed Rs. 1 lakh.

THE matter may also be viewed from another refreshing angle. Assume that in a particular complaint the value of goods may be marginally above Rs. 1 lakh, but the only relief claimed by the consumer by way of compensation may be not more than Rs. 100/-. Would a complaint where the solitary relief sought is a paltry amount of Rs. 100/- claimed as compensation be thrust into the jurisdiction of the State Commission? THE answer appears to us as being plainly in the negative. Without being totally hypothetical one may even take the facts of the case in hand herein. THE primal claim of compensation is rested on the late delivery of the Tor Steel to the complainant. Supposing the goods were delivered only after a week of the agreed date and were accepted, then the loss or injury suffered by the complainant would obviously be minuscule. Would the complainant in such a situation insist that merely because the price of the steel ordered by him was slightly above Rs. 1 lakh, the State Commission must entertain the complaint, even though the loss or injury suffered and the consequent compensation claimed for a marginal delay in delivery may be not more than a few hundred rupees as such. As was said earlier, it is the quantum of compensation claimed which requires a superior form and is not only relevant but an equally governing factor wherever such a claim has been made. Of course, where no compensation at all has been claimed in a consumer complaint the only remaining criteria of the value of goods and services would remain, and obviously govern such a situation. In the light of the aforesaid discussion, we are of the view that Section 17(1)(a)(i) visualises two distinct situations. Where no claim or compensation has been made, then the value of goods and services is the sole criteria for determining jurisdiction and the same should exceed Rs. 1 lakh. However, where a specific claim for compensation has also been laid, then equally the said claim must also satisfy the same test or yard-stick. In short, where in terms a claim of compensation is pleaded in a consumer complaint, then both the value of goods and services and the said claim have to cross the same hurdle of the pecuniary jurisdiction of Rs. 1 lakh in order to exclude the District Forum. The true import of the words of Sub-clause (i) of Clause (a) of Section 17 of the Act appears to us as being in the terms above said. In the light of the aforesaid finding, it is undisputed that herein the complainant himself had valued his claim of compensation at not more than Rs. 50,000/- only. Even if as a matter of liberality the claim of interest on the amount was also added thereto, and also the other embellishment made in the replication, the total still remains far below Rs. 1 lakh. Consequently on the true construction of Section 17, the present complaint is not within the cognizance of the State Commission. It is the District Forum which would have jurisdiction to adjudicate the list.

ORDINARILY the aforesaid finding on the threshold issue of jurisdiction would have concluded the matter against the complainant. However, having had the benefit of detailed arguments on both sides, we do not wish to pointlessly drive the complainant into a futile chase for relief in any lower forum. This is so because we are convinced that the present complaint as laid and the case as projected on the complainant''s behalf does not disclose a cause of action which can come within the ambit of any relief under the Act

AS is manifest from the pleadings themselves, the core of the complainant''s grievance pertains to the delay in delivery of Tor Steel, which he had contracted to purchase and against which he had deposited its price. Putting his case at the highest, the whole claim is that after the deposit of Rs. 1,58,880/- on the 21st May, 1990, the complainant was entitled to the delivery of goods within a reasonable time therefrom. On the uncontroverted pleadings, it is plain that substantial relief has already accrued to the complainant after he preferred the present complaint. Admittedly, on his own volition, he has accepted delivery of 15 MT of steel in two lots on the 7th December, 1990 and the 19th December, 1990. Not only that, he has further willingly accepted the refund of the balance of the deposited amount by a cheque, which has apparently by now been encashed. This being so, as of now, the issue boils down only to this. Whether the delay, if any, in the delivery of contracted goods, is by itself alone a subject-matter of relief under the Act? Mr. Anil Sharma, faced with the uphill task of coining a cause of action, which may be cognizable under the Act, was compelled to make a somewhat ingenious submission. Knowing fully well that herein there was not even an allegation of any defect in goods supplied, he fell back to contend that a delay in the delivery of goods beyond the appointed date by itself was, in fact, a deficiency in service, as spelt out under the Act, and, consequently, capable of relief herein. Reliance was primarily laid on U.P. Avas Evam Vikas Parishad (Housing & Development Board) v. C.P. Sharma & Others, I (1991) Consumer Protection Judgments 7 (NC).

On the other hand, Mr. A.S. Chadha. appearing for the respondents, has taken up the firm stand that herein is a case purely of the sale of goods in the shape of TOR Steel. There is no question of any aftersale service with regard to such goods. The contract being purely one of the sale of goods and not the least hint having been raised about any defect therein, the question of any hiring of services and .a consequent deficiency in their performance does not arise at all. The larger stand was that all contractual disputes prior to the actual delivery of goods simpliciter were matters purely of breach of contract because therein no question of a defect in goods is involved, and, consequently, no consumer dispute could arise in such a situation. Pithily put, pre-purchase disputes or issues of delayed supply of goods simpliciter are, therefore, beyond the ken of the Act. He further contended that ticklish questions whether lime was the essence of contract in this particular case; whether the delay in delivery had been waived by the subsequent acceptance of the said goods; whether the complainant had mitigated the loss arising from the alleged breach of contract; are all matters and issues which are beyond the purview of the Consumer Redressal Agencies.

TO appreciate the rival stands of the parties, one has necessarily to go back to the basic provisions of the statute. A close look at the scheme of the Act would indicate that a consumer may make a complaint with regard to two distinct things. It may either pertain to the goods purchased for consideration or in the alternative relate to the hiring of services for a consideration. The definition of the "complaint" in Clause (c) of Sub-section (1) of Section 2 and of the "consumer" in Clause (d) of the same would leave no manner of doubt that the primal subject-matter of a consumer dispute has either to be a defect in the goods purchased (barring cases of unfair trade practice or over-charging of price) or a deficiency in the services hired. This is further highlighted when reference is made to Clauses (f) and (g) of the aforesaid section, which expressly define ''defect'' and ''deficiency'' separately, but in a very wide-ranging terms. Viewing these provisions together, it would be somewhat plain that a defect arises in relation to any goods purchased, while a deficiency arises in relation to any services hired. However, notice has to be taken of a hybrid or a composite contract whereby a purchase of goods has integrally annexed to it a further obligation to render after sale service. For instance the sale of a motor vehicle may carry a warranty and a free after sale service for a limited period therefrom. Barring contracts of this kind, where after sale service is part and parcel of purchased goods, in all other cases the defect in the goods sold and the deficiency in the performance of services hired are things which are distinct and apart

IN the light of the above, the acid test herein is whether the purchase of TOR Steel carried any stipulation of after sale service. Plainly enough that is not even remotely the case of the complainant himself nor is it even possible to visualise any such service in the context of goods like steel and iron to be used for construction purposes. It must, therefore, be held that herein the subject-matter of the contract was purely a sale of goods simpliciter. No element of after sale service could possibly enter herein. Now once it is so, it seems elementary that the bottom is knocked out of the complainant''s case in so far as relief under the Act is concerned. Herein no defect in the goods purchased is remotely alleged. The whole grievance is with regard to a matter, i.e., even prior to such goods being delivered and accepted in December, 1990. Mere delay in delivery beyond the appointed date cannot possibly be styled as a defect in the goods. Equally, once it is a contract of sale of goods simpliciter (i.e. with no condition of aftersale service), no question of any hiring of services arises or any consequential deficiency in performance thereof. In the light of the terms of art employed by the statute with the precise definitions of "service" and "deficiency", it seems futile to contend, as has been done on behalf of the complainant that a mere delay beyond the appointed date of the delivery of goods simpliciter (involving no after-sale service) would convert the same into a deficiency in service. We find no option but to disagree with the basic submission of Mr. Anil Sharma in this context. The solitary case attempted to be relied upon by Mr. Sharma in support of his stand is patently distinguishable. In U.P. Avas Evam Vikas Parishad''s (Housing & Development Board) case (supra) there was no question of any sale of goods simpliciter. It was held therein that the Housing and Development Board were clearly engaged in rendering services for consideration to the public. That being so, the delay in providing the contracted services by the Board or refunding the amounts due were plainly matters of deficiency in the performance of those services. In relying upon this case, the learned Counsel merely begs the question, which is in issue. The case has little or no relevance in the context of a pure contract of sale of goods simpliciter.

TO conclude on this aspect, the answer to the second question posed at the outset is rendered in the negative. It is held that in a contract of sale of goods simpliciter mere delay in delivery thereof beyond the agreed date, would not convert it into a deficiency of service within the meaning of the Act.

THE aforesaid finding finally concludes the matter against the complainant. Even assuming entirely as a matter of argument that this Commission has the jurisdiction to entertain the complaint (without at all holding so), it has to be held that the complaint does not disclose a cause of action justifiable within the four corners of the Act. THE same has, consequently, to be dismissed, and is ordered accordingly. As has been repeatedly noticed above, substantial if not total relief has been accorded to the complainant subsequent to the filing of the complaint. The material parts of the contracted goods have been accepted by the complainant already and the balance of the amount deposited has been duly refunded. Any further grievance or relief therefore in this context can only be agitated and adjudicated upon under the ordinary law before the Civil Courts. Appeal dismissed.