GODREJ And BOYCE MFG. CO.LTD vs AMAR SINGH JAIN

THIS appeal has been filed by the opposite party No. 2 against the order of District Forum dated 3.4.1992 by which the warranty period of the sealed unit of the Godrej Refrigerator was extended by three years w.e.f. 3.5.92.

BRIEFLY the facts are that Sh. Amar Singh, complainant respondent No. 1 purchased a Godrej Refrigerator on 17.2.1987 from opposite party no. 1-respondent No. 2 and it was delivered to him on 4.3.1987. It was covered under 12 months warranty by the appellant followed by a four years of service contract. Respondent No. 1 opted for four years additional guarantee by paying extra amount to respondent No. 2. Thus, respondent No. 1 became entitled to a warranty for five years w.e.f. 4th March, 1987. The refrigerator started giving trouble to respondent No. 1 after two months of its purchase. It was repaired by the appellant first on 5.6.1987 and again on 3rd June, 1988. The sealed unit was thereafter replaced by the appellant on 31.10.88. The replaced sealed unit was defective and it was again replaced on 29.5.1989. It did not work properly even thereafter. The third sealed unit was replaced on 7.2.91. Even then it did not work properly. It was replaced 4th time on 3.5.91 at the request of the complainant respondent No. 1. It is alleged that the warranty was expiring on 4.3.92 and if the Refrigerator was not properly repaired by the appellant-respondent No. 2, he after the expiry of the period of warranty, shall have to bear all expenses of the repair. Consequently a complaint was filed and it was prayed by respondent No. 1 complainant that the appellant and respondent No. 2 be directed to supply a new unit to the complainant before the expiry of the warranty period.

The learned District Forum granted the relief to the complainant as mentioned above i.e. the warranty period was extended by three years w.e.f. 3.5.1991. Respondent No. 2 has come up in appeal against the said order before the State Commission.

IT is contended by the learned Counsel for the appellant that according to the terms of the warranty opted by respondent No. 1 the warranty period was upto 4.3.92. According to him that period could not be extended any further by the Fora under the Consumer Disputes Act (hereinafter referred to as ''the Act''). We have duly considered the arguments of the learned Counsel but regret our inability to accept the same. It is true that according to the conditions on which the Refrigerator was sold by the dealer of the appellant to respondent No. 1 the warranty period was five years from the date of supplying the Refrigerator to him. It cannot be disputed that a consumer is not equal in bargaining power with the companies which manufacture consumer goods and especially companies like the appellant. Fridge has also become a necessity for the families and the consumer has to purchase one out of those available in the market. The principles of law are not static and in the changing society the out model concepts of law are being changed. There is great change in the theories propounded during the last century. The Courts have to safeguards the rights to the weak persons as there is tendency amongst the strong persons to push the weak to the wall. The manufacturer of goods in the end of 20th century cannot be allowed to exploit the lay consumer and obtain pecuniary advantage on him on the ground that the conditions of sale in all circumstances are binding on them. The Courts can always find out as to whether the terms of contract between the parties were fair or not. If those are not found to be fair, the Courts have ample powers to modify them. The Parliament by enacting Consumer Protection Act has provided a greater protection to the consumers. Freedom of contract is a reasonable ideal only, if bargaining power between the contracting parties is the same and not otherwise.

IN America such contracts are called "adhesion contracts''. The word ''adhesion contract'' has been defined in Black''s Law Dictionary 5th Edition at page 38 as follows : "Adhesion contract". Standardized contract form offered to consumers of goods and services on essentially ''take it or leave it'' basis without affording consumer realistic opportunity to bargain and under such conditions that consumer cannot obtain desired product of services except by acquiescing in form contract. Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms. Not every such contract is unconscionable." It is true that every such contract is not unconscionable. But, the more standardized the agreement is and lesser the capacity of a party to bargain meaningfully, the more the terms of the contract open to a claim of unconscionability. IN a recent decision by the Supreme Court in Central INland Water Transport Corporation Ltd. v. Brojo Nath, AIR 1986 SC 1571. The learned Court after taking into consideration the case law and the opinion of the jurists observed as follows: "90. Should then our Courts not advance with the times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by leaving us floundering in the sloughs of nineteenth-century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the Courts sit back and watch supinely while the strong trample under foot the rights of the week? We have a Constitution for our country. Our judges are bound by their oath to "uphold the Constitution and the laws". The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Art. 14. This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to given an exhaustive list of all bargains of this type. No Court can visualize the different situations which can arise in the affairs of man. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of the circumstance, where of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them, it will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable, a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principles may not apply where both parties are businessman and a contract is a commercial transaction. IN today''s complex world of giant corporations with their vast infrastructural organisations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myried situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances."

It is evident from the facts of the present case that the appellant changed the sealed unit four times during the period of five years. If the defect in the Refrigerator which required replacement of the sealed unit four times within five years, what is the guarantee that the unit changed lastly would give a trouble free service thereafter. A warranty is given to a new unit so that the consumer has not to suffer within a short period after its purchaser, in case the item purchased by him does not give trouble free service. It is normally assumed that if a machine gives trouble free service during the warranty period, it will not give trouble thereafter. The trouble free service should continue during the warranty period. In case some major part of the machinery sold is replaced by the manufacturer the warranty for the replaced part would start afresh and would continue for the same period from the date of replacement for which the warranty was originally given. In the facts and circumstances of the present case we are of the opinion that the warranty should have been extended for a period of five years. However, the District Forum thought it fit to extend the warranty for a period of three years only. No appeal has been filed by the consumer against the order before us. In the circumstances we do not want to modify the order in favour of respondent No. 1.

FOR the aforesaid reasons we do not find any merit in the appeal and dismissed the same with costs. Costs. Rs. 500/-. Appeal dismissed with costs.