GENERAL COOPERATIVE GROUP HOUSING SOCIETY LTD. vs J.K.CEMENT WORKS

BRIEFLY, the facts of the case are that the complainant is a Group Housing Society registered under the Cooperative Societies Act. They were constructing flats for the members no. plot on 37, Patparganj, Delhi. They wrote a letter dated 15.7.89 to J.K. Cement works, respondent No. 1, inquiring whether they were agreeable to supply 50,000/- cement bags to them on the terms and conditions mentioned in the letter. The respondent vide letter dated 12th August, 1989 agreed to supply the said quantity of bags to the complainant. It is alleged and that the complainant accepted the terms and conditions on which the respondent agreed to supply the bags.

THE complainant thereafter placed orders for the supply of 15,000 cement bags on the respondent No. 1 from time to time, which were executed on 24th July, 1990 they asked the respondent No. 1 to supply 35,000 cement bags within one month. Inspite of various letters and reminders, the respondent failed to supply the said quantity. In order to avoid stoppage of work, it is pleaded, the complainant purchased 4336 bags from the market at a cost of rupees 3,91,789/-. THE respondent had to supply the cement at the rate of Rs. 68/- per bag. THE price of the said 4336 bags at the rate of Rs. 68/- came to Rs. 2,94,848/-. Thus the complainant paid an excess amount of Rs. 96,941/-. THE complainant has claimed the said amount of Rs. 96,941/- from the said respondent. THEy have further requested that respondent No. 1 be directed to supply the balance quantity of cement bags immediately. THEy have claimed both the reliefs against respondent No. 2, the agent of respondent No. 1 also. The complaint has been contested by the respondent. They inter-alia pleaded that the complaint did not fall within the definition of word ''complaint'' as defined in Section 2(c) of the Consumer Protection Act, 1986 (hereinafter referred to as the Act). They further pleaded that the complainant wanted enforcement of the contract against the respondent which cannot be done by the State Commission under the Act. It was also pleaded by them that the complainant claimed the relief for an amount which was less than Rs. 1 lac and therefore the Commission had no jurisdiction to entertain the complaint.

On the merits, it is pleaded that there was no completed contract between the parties according to which the respondent agreed to supply 50,000 bags of cement to the complainant. Even if there was any such contract, it was valid for 30 days only from the date of the letter dated 12th August, 1989 written by the respondent. The agreed period had expired long back and consequently, the Complainant could not claim any cement on the basis of the contract. It is further averred that in the absence of any consideration having been received by the respondents, they were not bound by any law to supply cement to the complainant after the expiry of the period of 30 days.

THE respondent also pleaded that they never supplied the cement to the complainant, on the other hand complainant gave cheques to M/s Cement Sales, respondent No. 2 from whom they purchased cement. THE said cheques were got encashed by respondent No. 1 who duly credited the amount to the account of the Cement Sales. THE respondent was, therefore, not bound to supply any cement to the complainant. The first question that arises for determination is whether there was any completed contract between the parties to supply 50,000 bags of cement to the complainant and if so what were the terms of the said contract. There is no written agreement between the parties. However, there was an exchange of correspondence between them. It is to be seen whether the correspondence constitutes a binding contract between the parties. The first letter is dated 15.7.89 in which the complainant wrote to the respondent that they required 50,000 cement bags within a period of 11/2 years for constructing flats. In case they were interested in entering into a contract with the complainant for supplying the said quantity within that period, they should quote their rates alongwith terms and conditions of supply. The respondent vide letter dated 12th August, 1989 acknowledged the letter of the complainant and gave therein the terms and conditions in which the cement could be supplied by them. The letter reads as follows: - "Refer to the above, we confirm you that we shall supply the cement @ 68/- per bag FOR. 100% payment is to be made against the supply of the material (i.e. within 10 days if not Rs. 1/- will be charges extra per bag) in the name of M/s. J.K. Cement Works or M/s. New J.K. Cement Works for whichever the cement received. If the payment is not received within 30 days interest @ 18% will be charges. Kindly note that this offer is valid for a period of 30 days."

(emphasis supplied)

THE complainant in reply to the letter dated 12th August, 1989 informed the respondent vide letter dated 2.9.1989 that they accepted the offer given by them (respon- dent) subject to the following conditions: - "(i) THE rates of Rs. 68/- (Rupees sixty eight only) per bag (50 Kg.) quoted in your offer is FOR which we take as FOR Society''s Site at 37, Patparganj, Delhi. (ii) THE Society will accept delivery only in railway wagons for which prior wagon arrival intimation will have to be sent to the Society. THE unloading/loading of cement bags will be in the presence of the Society''s authorised representative; otherwise the Society will have the right to refuse the stock without any financial obligation on its part. (iii) THE basis of this acceptance of offer is our letter dated 15.7.89 and your offer dated 12.8.89, both quoted above."

The respondent again wrote a letter dated 7.9.89 to the complainant that they would supply the Cement at 37, Patparganj by road transport and therefore, the question of intimation to the complainant regarding railway wagon, would not arise. They further reiterated that the terms and conditions as offered vide letter dated 12th August, 1989 would remain the same and they would accept the order on those conditions alone. Therefore, the complainant informed the respondent vide letter dated 16.9.89 that they would accept the cement bags by road in sealed trucks alongwith a test report regarding quality of the cement They also placed order for 1500 bags of cement at the rate of Rs. 68/- per bag in that letter. No office letter containing terms and conditions of the Contract has been placed on record. At this stage it is proper to refer to some of the provisions of the Contract Act. Section 2(a) defines proposal. Section 2(b) promise. Section 2(e) agreement and Section 2(h) contract. The said definitions are as follows: "Proposal" - When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. "Promise" - When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise. "Agreement" - Every promise and every set of promise, forming the consideration for each other, is an agreement "Contract" - An agreement which is enforceable by law is a contract Section 7 of the Contract Act says that in order to convert a proposal into a promise, the acceptance must be absolute and unqualified.

FROM reading of the above provisions, it is evident that the proposal becomes promise when the person to whom it is made, given his assent to that. A promise or a set of promises which form consideration for promisor and promisee forming an agreement and the agreement which is enforceable by law is a contract. It is well settled that an acceptance of a proposal to be effectual must be unconditional and unambiguous. It must not change, add or qualify the terms of the offer. Where an offer has been made by a person to another and the latter accepts the proposal conditionally or introduces a new condition while accepting the same, that becomes a counter proposal. The acceptance of a proposal with a new condition, at variance with the proposal is rejection of the original proposal and advancement of a counter proposal. With this background, we have to find out whether the letters to which reference has been made above constitute a binding contract between the parties.

THE first letter of the complainant dated 15th July, 1989 is, for inviting tenders to supply 50,000 bags of cement within a period of 1-1/2 years. Respondent No. 1 in their letter dated 12th August, 1989 agreed to supply the said quantity @ Rs. 68/- per bag. However, they put a condition that the complainant should place the order within a period of 30 days for the total quantity. THE complainant instead of accepting the offer of the respondent put counterproposal to them vide their letter dated 2nd September, 1989. THE salient additional conditions, in that letter have been mentioned above. THE inference from the said letter is that the complainant accepted the terms of offer mentioned by the respondent in their letter dated 12th August, 1989 but the acceptance was subject to certain new terms. THEse letters, therefore, do not constitute an agreement. Rather the letter dated 2.9.89 is a counter offer. The respondent in their letter dated 7th September, 89 in reply to the letter of the complainant dated 2nd September, 89 reiterated their earlier stand and specifically said that the terms and conditions of supply of the cement would remain the same as were mentioned in the letter dated 12th August, 1989. It was further clarified that the cement would be supplied by them at the site and not at the Railway Station. If the terms of the letter are seen minutely, it can safely be held that it does not amount to acceptance of the terms of the complainant. After the receipt of this letter the complainant incorporated a new condition in the letter dated 16th September, 89 to the effect that the company would send that test report of the stock alongwith the supply. They also placed an order of 1500 bags which were supplied to them.

From the aforesaid correspondence, it is evident that there was no completed contract between the parties and the letters of the parties were constituting merely offers and counter offers. However, in pursuance of the order placed by the complainant on the respondent, vide letter dated 16th September, 89, the respondents supplied cement to the complainant. So it appears that by conduct the respondent accepted the offer of the complainant to supply 50,000 bags to them. From the aforesaid discussion it emerges that the terms contained in the letter of the respondent dated 12th August, 89 constitute a part of the contract. One of the terms given in the letter was that the offer to supply cement to the complainant was available for a period of 30 days only from the dale of letter. That condition was not repudiated by the complainant in any of their letters. So the respondent was bound to supply 50,000 bags, if the order was received by them within a period of 30 days of the letter and not thereafter. It is true that they had been supplying cement even after the expiry of the said period but that will not make difference. Consequently, we are of the view that the complainant cannot force the respondent to supply 35,000 bags now.

THE second question that arises for determination is as to whether the State Commission has the jurisdiction to try the complaint. It is not disputed that the State Commission has jurisdiction to entertain the claim if the value of claim is more than Rs. 1 lac. The learned Counsel for respondent No. 1 has argued that as the complainant has claimed an amount of Rs. 96,941/- from the respondents in the complaint, therefore, the Slate Commission cannot entertain the complaint.

WE have duly considered the argument but do not find any substance therein. The complainant has claimed two relief, first, for recovery of Rs. 96,941/- on account of difference of price of the cement paid by them and at which the respondent agreed to supply it and secondly, for directing the respondents to supply the complainant 35,000 bags of cement. Admittedly, the cement was to be supplied by the respondent at the rate of Rs. 68/- per bag. If the total price of 35,000 bags is worked-out at that rate the amount would come to much more than Rs. 1 lac. Therefore, we are of the view that the Commission has jurisdiction to try the complaint. The third question that arises for determination is whether the complainant can file the complaint under the Consumer Protection Act for a direction to the defendant that they should supply to the complainant remaining bags. Mr. Chachra has vehemently argued that the complainant is seeking specific performance of the agreement entered into between the parties. According to him the person who seeks such a relief does not fall within the definition of the word ''consumer'', and the claim petition in which such a relief is sought does not fall within the definition of the word ''complaint''.

WE have duly considered the arguments of the learned Counsel. The argument prima-facie appeared to be good but when examined in depth it was found without merit. In order to determine the question whether the complainant is a consumer, the definition of the word ''consumer'' may be seen. It is as follows: ''consumer'' means by person who, (i) buys any goods for a consideration which has been paid or promised or partly paid or partly promised, or under any system of deferred payment (ii) xxx xxx xxx xxx It is evident from the definition that a person who buys goods for a consideration is a consumer. The consideration can be paid by him at once or later or partly at once and partly later. The terms buy and sell are correlative. In every transaction of buying or selling there are two parties i.e. a buyer and a seller. In an agreement to buy the consideration has been paid or promised or partly paid and partly promised by the buyer. Thus definition of ''consumer'' contains the same ingredients as are in the agreement to buy. The Act has been framed for the protection of the consumer. It is well settled that in interpreting provisions of beneficial statutes, the Courts lean in favour of that interpretation that furthers beneficial purpose of the statute. If the definition of the word ''consumer'' is read with this background, it is evident that a person, who has entered into an agreement to purchase the goods becomes a consumer, even though he does not get delivery of the goods from the seller and/or he does not pay the consideration wholly or partly at the time of entering into the agreement. Taking into consideration all the aforesaid circumstances, we are of the view that the complainant is a consumer.

NOW, it is to be seen, whether the present claim petition is covered by the definition of the word ''complaint''. The definition of the word ''complaint'' is as follows: - 2(1)(e): ''Complaint'' means any allegation in writing made by a complainant that (i) xxx xxx xxx xxx (ii) the goods mentioned in the complaint suffer from one or more defects. (iii) xxx xxx xxx xxx (iv) xxx xxx xxx xxx with a view to obtaining any relief provided by or under this Act;" The word ''defect'' has also been defined and it is as follows: - 2(i)(g) ''Defect'' means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or as is claimed by the trader in any manner whatsoever in relation to any goods. According to the definition of the word ''defect'' if there is a shortage in the quantity of goods, that amounts to defect in goods. If the seller fails to deliver the goods, which he agreed to sell, that will be treated as a defect in the goods. Therefore, a petition containing an allegation that the total quantity of goods agreed to be supplied to the complainant had not been supplied by the seller to him falls within the definition of the word ''complaint''. After taking into consideration the facts of the case, we are of the opinion that the present complaint is entertain able by the Commission. For the aforesaid reasons, we find no merit in the complaint and consequently dismiss the same with no order as to costs. Complaint dismissed.