CADILA HOSPITAL PRODUCTS LTD. vs DELTA RUBBER And PLASTIC PRODUCT

THE complainant is engaged in the business of manufacturing and marketing medical appliances and products for pharmaceutical and is registered as 100 per cent export oriented Unit. In order to fulfill its obligations to export the prescribed minimum quantity of product, viz. hand gloves which are manufactured from rubber, a plant was required and since the complainant was in need of a plant commercially known as automatic Dipping Plant which is a highly sophisticated equipment and had to be fitted with an automatic system and different equipments, whereby the moulds of the gloves which continuously get dipped in melted rubber solution and are pulled out, and removed from the moulds and, again, the moulds get dipped in the solution. This according to the complainant, is a continuous process and various doors and other equipments are fitted in the said plant for ensuing production of quality products which need to confirm to the high standards as required in the international market. According to the complainant, different equipments like equipment for continuous feeding of raw materials, chemical stirrer, mixing machine and storage tank, dryer, packing machine, platform for packing, quality control and heating equipments for testing mechanical stability of talex, ball-mill, etc., are part of the said plant. It is then the case of the complainant that the said plant is not commonly available in India and is generally being imported. However, since the present opponent who is engaged in the business of manufacturing various rubber and plastic products and machineries and equipments, the opposite party, having come to know of the complainant''s requirements of such plant, approached the complainant and offered to supply the said plant as per the specifications and requirements of the complainant and also assured to supply, erect and commission the said plant for manufacture of hand gloves of international standard. It is then the case of the complainant that the offer was ultimately negotiated and after suitable modification, the same was accepted by the complainant vide purchase order dated February 21,1989. THE opposite party was to complete, supply and erect and commission as also demonstrate the plant as per the specifications, on or before May 1989. THE opposite party having failed to fulfill its commitment and on account of deficiency of the services, the complainant Cadila Hospital Product has come before us praying for the reliefs as sought in paragraph 6 of the complaint, namely, for an order against the Respondent asking them to perform its obligations and promises as per the purchase order; as also for an order to pay to the complainant Rs. 8,00,000/- as compensation and costs.

IN pursuance to our Summons, the opposite party M/s. Delta Rubber & Plastics INdustries, appeared and filed its version, denying the averments made in the complaint, in toto. According to the opposite party, they were called by the Director of the complainant company and discussed with the representative of the opposite party about the automatic dipping plant and had placed order for one plant with a capacity to produce 4000 RP PH and had paid advance amount for the same. He had also visited Taiwan. It has been admitted that on August 18,1989, the complainant had placed a formal order for the plant and for the terms of payment, it has been clearly written in the letter that the advance and balance against the delivery. According to the opposite party, the plant was in accordance with the contract and that they were entitled to get the balance against the delivery. According to the opposite party, the plant was ready for production; that the opposite party was ready to install the delicate parts for level and control; but before that, as per the terms of the contract, the complainant had to deposit the entire amount with the Commission; and as soon as the plant starts working, that amount should be paid over to the opposite party. On June 6,1990, both the parties moved a joint application, stating that before going for the trial of the matter, they intend to make an effort for solving their rights and contentions involved in this complaint, and for that purpose, the parties have arrived at interim arrangement pending the decision of the complaint. The gist of the arrangement so arrived at is as under- (a) that the opposite party, on or before July 1,1990, shall complete the commissioning of the plant and demonstration of the trial production of gloves conforming to product specifications and plant''s performance specifications mentioned in Annexure ''A'' to the order. The said demonstration can be given in presence of the Complainant and Mr. Shirishbhai P. Mehta of Swastik Industries, Ambavadi, who is connected with the rubber industry since many years and also rubber technologist of repute and known to both the parties. The Commission shall depute its Secretary. It is agreed that the opposite party will supply remaining articles if any under the contract so that effective demonstration can be given. (b) The complainant has deposited today two cheques drawn on Bank of India, IF Branch, Ahmedabad for Rs. 4,00,000/- and Rs. 22,600/-, which amount is outstanding as per the original order dated 21st February 1989, Ex. 1. The amount of Rs. 4,00,000/- will be paid as soon as trial production is given to the satisfaction of the Court Commissioners and the second cheque of Rs. 22,600/- will be given to the opposite party on their supplying remaining equipments which are not supplied as required under Ex. 1. As per arrangement arrived and as shown under Clause (e), Mr. Shirishbhai Mehta and Mr. K.T. Bora, the then Secretary to the Commission, were appointed as Joint Court Commissioners and to submit their report after observation as to whether the opposite party had commissioned & demonstrated the Plant with trial production of the hand gloves in conformation of the specifications as per Annexure A.

By our order passed on August 6, 1990, the two cheques produced by the complainant were kept in safe-custody. Thereafter, time was being taken for actual trial and at the joint request Mr. Shirish Mehta, the Expert and Mr. K.T. Bora, the Secretary, were appointed to work as Commissioners. Some other applications were also filed from time to time in this respect, but they are not relevant for our purpose. Suffice to say that the complaint was kept pending and was being adjourned from time to time, to enable the parties to arrive at a settlement which may be beneficial to both.

IT appears that thereafter, on October 16, 1990, the opposite party carried out the production test, but according to the complainant, the deficiencies listed in Annexure ''A'' of the complaint, dated 17th January, 1990, were still noticed. We have also received the Report made by the Court-Commissioners on December 10,1990, along with the technical report and findings with samples. The findings of the Commissioners as disclosed in this Report show that the supplied machine was capable of producing required quality of gloves which could be observed from the sample, which is annexed to the report. The technical report, however, shows that the machine could produce the gloves as per the specification Annexure A of the Purchase Order, subject, however to certain modification in the machine to be carried out as observed in the said Technical Report. As can be seen from the Report, the machine had remained idle for a pretty long time and it could not produce few samples inspite of strenuous efforts on the day of the trial and hence, according to the Commissioners, the production on commercial basis with the said machine in the condition in which it was found, cannot be thought of.

THE complainant had filed objections against the Commissioner''s Report. Since the parties could not arrive at any settlement and since there is no clear opinion of the Commissioners about the satisfactory working of the machine and about the production capacity of hand gloves as per the specification, and particularly, the production of 4000 to 4500 pieces of gloves per hour, it was not possible to pass on the cheque or any cheque out of the two cheques deposited before us, to the opposite party. Be it as it may; since the parties could not arrive at any settlement, they requested us to decide the complaint in accordance with law. In this view of the fact and circumstances, we have heard the learned Advocates and we, therefore, proceed to decide this complaint on merits. Now, as can be seen from the record, the complainant is a company, engaged in the business of manufacture of pharmaceutical products and it had placed an order for the machineries to be set up for manufacture of rubber gloves. The opposite party is admittedly manufacturer of such machinery and it had entered into contract for sale and commissioning of such machinery at the premises of the complainant. This is, therefore, a contract of sale of movable property for commercial purposes. In this view of the matter, the complainant cannot be said to be a ''consumer'', within the meaning of Section 2(1)(d)(i) of the Consumer Protection Act

THE Hon''ble National Commission in a similar case in Original Petition No. 25 of 1989 decided on September 15,1989, has held that- "....this complaint has to be rejected on the short ground that the purchaser of the machine made by the complainant was for commercial purpose and the complainant is, therefore, not a ''consumer as defined under the Act..."

So observing, the Hon''ble National Commission had dismissed the said complaint with no order as to costs.

NONE of the parties in the present case is able to convince us that the purchase by the complainant of the machine for preparing gloves in the present case was not for commercial purpose. In this view of the matter, the complainant cannot be said to be a ''consumer'' as defined under the Act and he cannot, therefore, move this Commission for redressal of his grievances, if any, against the opposite party. In light of what is stated above, the complaint is liable to be dismissed. Before parting with this matter, however, we may make it clear that since both the parties requested for time, stating that they would settle the dispute with the assistance of the Commissioner, the complaint was not heard on merits; but, unfortunately, the parties could not arrive at any settlement and hence we are deciding this complaint on the preliminary issue of jurisdiction and not on merits, keeping open the rights and contentions of the parties and not deciding any of their legal or factual submissions.

In there suit we hold that the Complainant is not a ''consumer'' within the meaning of Section 2(1)(d)(i) of the Consumer Protection Act That being so, the complaint is liable to be dismissed. Accordingly, we dismiss the same with no order as to costs. Order accordingly. Complaint dismissed.