Cimmco Ltd. vs HIND FABRICS PVT. LTD.

M/s. Hind Fabrics Pvt. Ltd., Bhilwara respondent-complainant (hereinafter referred to as complainant) had placed an order on 11.12.1992 with M/s. Cimmco Ltd, Birla Nagar, Gwalior, the appellant (hereinafter referred to as the appellant company), for supply of 8 looms for Rs. 8,32,800/-. However on 13.12.1992 only one loom worth Rs. 1,21,120/- was commissioned by the erector of the appellant at the business site of the complainant at Bhilwara, as per wishes of the complainant. The case of the complainant was that the loom supplied by the appellant to it was not of the specifications which were agreed between the parties and that the loom supplied did not work to their satisfaction. The complainant, therefore, alleged supply of defective goods by the appellant to them and claimed a total compensation, expenses, etc. at Rs. 3,12,973/-. The appellant apart from disputing the merits of the case, as put forth by the complainant against them, raised preliminary objection to the effect that since the complainant was a businessman engaged in manufacturing cloth at a large scale, it did not qualify the character of a "consumer" within the meaning of the term used in Section 2(1)(d)(i) of the Consumer Protection Act, 1986 (the Act). On merits too it was averred by them that although the loom sold by the appellant to the complainant was as per specification mentioned by the complainant in his order and that as and when the services of the engineers of the appellant in the erection and the commissioning of the loom or repairing any spare parts therein were required they were timely rendered to the appellant by the complainant even after the expiry of the warranty of one year. It was further averred that since the complainant had not honoured his commitment of purchasing 8 looms from the appellant and thus had committed breach of the contract, they intended to file a suit against the complainant but as a counter-blast, the complainant filed the complaint in the present case against the appellant before the Consumer Forum.

AFTER having considered the rival submissions of the parties, the D.F. held that the appellant had sold defective goods to the respondent and in that behalf decreed the claim of the complainant to the extent of Rs. 3,000/- only with cost at Rs. 500/-. Aggrieved against such order of the D.F. the appellant has filed this appeal. The learned Counsel for the appellant invited our attention to the observations made by the D.F. at page 5 wherein the D.F. appears to have though appreciated the objection of the appellant to the effect that the complainant was engaged in manufacturing activities at a large scale to earn commercial profits but even then held that the complainant was a consumer of the services of the appellant in the matter of removal of defects in the goods sold. The learned Counsel, placing reliance upon our order dated 4.10.1995 made in Appeal No. 10/1994, Mewar Textile Mills v. New Standard Company Ltd., submitted that on identical facts this Commission has already taken the view that where transaction was between a businessman and businessman, the Forums under the Act would not entertain the complaints under the provisions of the Act as the complainant would not be a "consumer" within the definition of the term given in Section 2(1)(d)(i).

The learned Counsel for the respondent, however, submitted that since defect in the machines were noticed not only at the time of commissioning thereof by the engineer of the appellant but also at the subsequent period, and the appellant did not render proper services for removing the defects/repairing the defective machines, the complainant was a "consumer" within the meaning of the term defined in Section 2(1)(d)(ii).

AFTER having gone through the pleadings of the parties and the material placed before us we entertain no doubt that the complainant is a private limited company engaged in the business of manufacture of cloth at looms at a large scale to earn huge commercial profits from its business activities. It is in evidence that the complainant had stated that it intended to purchase as many as 11 looms and accordingly had placed an order for 8 looms with the appellant but ultimately had given up his idea for purchasing the remaining 7 looms as the one loom which was commissioned by the engineer of the appellant did not give satisfactory services to the complainant. These averments coupled with the fact that in the complaint the complainant had nowhere averred that it was engaged in the business of manufacturing cloth to earn his livelihood by self-employment, we hold that it was a transaction of purchase and sale of goods between two business men and not simply between a seller of goods and buyer of goods. The complainant was, therefore, not a "consumer" within the meaning of the terms defined in Section 2(1)(d)(i) of the Act and the Explanation thereunder did not apply to the case of the complainant. Insofar as complainant''s case that it was "consumer" by virtue of its hiring the services of the appellant for repairing the defective goods is concerned, we are of the opinion that in the instant case it was not the hiring of the services by the complainant for consideration but of purchase of specific goods from the appellant for specific consideration. As per terms and conditions between the parties, attached to the sale and purchase of the goods, the appellant had undertaken to commission the loom at the business site of the respondent. A warranty given by the appellant was in respect to the quality of the goods supplied by them to the respondent. It was not an independent contract of service between the provider of service and the consumer of service.

IN view of above we hold that since in the present case the complainant was not a consumer within the meaning of the term defined in Section 2(1)(d) of the Act, the complaint was not maintainable before the D.F. In the result the impugned order is set aside and the appeal allowed. Consequently, the complaint filed by the complainant before the D.F. is dismissed with cost on parties throughout and with liberty to the complainant to seek his remedy from appropriate Forum. Appeal allowed.