GODREJ GE APPLIANCES LTD. vs SATINDER SINGH SOBTI

THE complainant, the respondent herein, purchased a refrigerator manufactured by M/s. Godrej and Boyce Manufacturing Co. Ltd. on 19.2.1988. THE manufacturer gave a warrantly which was valid for 12 months. It expired on 18.2.1989. On 5.1.1993 the purchaser lodged a complaint about the non-functioning of the refrigerator to the local dealer of the manufacturer at Ludhiana, i.e. Arya Traders, Chaura Bazar, Ludhiana. THE complaint made by the complainant to the local dealer was not entertained. THEreafter, he had the refrigerator examined by M/s. Dutta Electrical and Refrigerator Specialist, who reported that the refrigerator was not workable and its compressor requires replacement. THE complainant went back to M/s. Arya Traders who is alleged to have stated orally that the compressor required replacement. Ultimately, a complaint was filed in the District Forum, demanding a payment of Rs. 10,000/- as damages. Various pleas of limitation, jurisdiction and maintainability of the petition were taken in defence, which were not upheld by the State Commission. THE State Commission noted the contention made on behalf of the manufacturer that the warrantly with regard to the sealed component could be extended only if a service contract for four years on payment of Rs. 175/- was entered into at the time of the purchase of the refrigerator. THE purchaser had opted not to enter into any separate contract at the time of purchase of the refrigerator. THErefore, the purchaser had lost his right to get repair done from the Company.

ON behalf of the Company reliance was placed before the State Commission on the standard contract form. There was a ''Refrigerator Warranty'' and ''four year service contract for the refrigerator, sealed system''. It is stated in the service contract form as under : "This four year service contract is optional in nature and comes into force on the expiry of the ONe-year Refrigerator Warranty. If at any time within the said period of one-year, you desire a refund of the Optional Service Contract charges paid by you, kindly return this contract to the nearest Godrej Branch by Regd. A/D with a written request for refund".

Having examined the facts of the case and the two contract forms the State Commission held : "We are of the view that the opposite party- the Godrej Company is indulging in unfair trade practice in not treating all the purchasers of the refrigerators at par in the matter of giving warranty in respect of the sealed units of the refrigerator manufactured by them. Such of the purchasers of the godrej refrigerators who do not enter into service contract for a period of four years over and above the period of 12 months, which is applicable to all purchasers, cannot be denied the warranty of five years for the sealed units. The only result would be that warranty for a period of additional four years would continue to apply whereas the company would be entitled to charge service charges during the period of additional four years from such of the purchasers who opt out. If warranty against sealed components for a period of five years is not allowed to all the purchasers, it would amount to arbitrariness and thus unfair trade practice. The service contract is entirely separate from the warranty and it cannot be inter-linked to grant such a benefit to some who choose to pay a sum of Rs. 175/- and deny to them who opt out of service contract and a sum of Rs. 175/- is refunded by the Company. At the outset, it may be stated that in the price of the refrigerator originally charged as per terms and conditions referred to about it includes service contract for a period of five years. Obviously, it could include warranty of the sealed components for such a period. A person opting out of service contract for additional four years cannot be denied the benefit of warranty of five years for the sealed components of the unit and at the most he could be charged for the services to be rendered for implementing warranty".

It has been argued on behalf of the manufacturer that initially the practice of the petitioner Company as well as the other major refrigerator manufacturers was to charge a small sum for "four year post warranty service" in respect of refrigerators at the time of sale of the refrigerator. In other words, the Company was giving guarantee of one year and also four years post warranty service for which a small charge of Rs. 450/- was made. This practice came up for consideration before Monopolies and Restrictive Trade Practices Commission, New Delhi in "Restrictive Trade Practice Enquiry No. 16 of 1985 decided on 19.3.1986, where an allegation was made that the Company was indulging in restrictive trade practice inasmuch as they were tying up the post warranty service with the sale of the refrigerator. The respondent denied the charge by filing a rejoinder. Ultimately, respondent had to give an undertaking before the M.R.T.P. Commission to the following effect :

"The respondents undertake that they will not in future force, compel or pressurise any purchaser of a Refrigerator to take a post-warranty service contract at the time of the purchase of the Refrigerator, as a condition of such purchase, but shall clearly inform the purchaser of the Refrigerator that he or she is free to avail or not avail of the Post-Warranty Optional Service Contract offered to the purchaser for his or her convenience and reassurance. The respondents also undertake that the customer shall be told in clear terms that it is not necessary to enter into such a contract at the time of booking or purchasing the refrigerator. The respondents further undertake to send a circular to all their dealers that a one-year after-sales service is included in the price of the Refrigerator. The dealers shall be further directed not to, directly or indirectly, force, compel or pressurise any customer of a refrigerator to take post-warranty service contract at the time of booking or purchase of a refrigerator."

The M.R.T.P. Commission held as follows : "We accept the aforesaid undertaking. However, beyond that undertaking it is also agreed by the respondents that on the board displayed in show room indicating the price of the refrigerator, the following shall be the words in respect of charges for post-warranty services contract : We offer optional four years service contract after warranty at extra charges of Rs. ........" It is also stated by the learned Counsel of the respondents that all the dealers will be asked to display the said wordings on their price-boards. Now, that the aforesaid undertaking is there and the respondents are not going to carry on the restrictive trade practice, we are of the opinion that there is no necessity of any further proceedings. Further proceedings are stoppped but the respondents shall file affidavit of compliance within one month from today".

Our attention has also been drawn to a similar order passed by M.R.T.P. Commission in the case of Kelvinator, another major manufacturer of Refrigerators.

THERE was no appeal against the order of M.R.T.P. Commission. The order has become final. In view of this, we are unable to upheld the order of the State Commission. In terms of the order passed by the M.R.T.P. Commission and the undertaking given by the petitioner to it, a separate charge has to be made by entering into a separate contract for the post warranty optional service. A separate contract will have to be entered into at the time of sale of the refrigerator. The purchaser has an option not to enter into such contract. The purchaser may decline if it so thinks fit to enter into such contract. In the background of all these facts, it cannot be held that the petitioner had indulged in any unfair trade practice in this case by inviting the purchaser to enter into a separate post warranty service contract. The respondent has not appeared before us, but has submitted a written statement in which he has reiterated the argument made before the State Commission. But the fact that he had failed to enter into a separate service contract is not denied. It was argued that this Commission has also upheld the principle that where warranty period had expired and no service contract was entered thereafter for providing service, the complainant could not claim any free service. Choklingam, Proprietor, Malandu Printers v. M. Amba Shankar & Ors., (1975) 5 CTJ 23 (CP) (NCDRC). Having considered all aspects of the case we are of the view that the prayer made in this application will have to be allowed. The Revision Petition succeeds. The order passed by the State Commission on 26.9.1996 is set aside. Each party will bear its own costs. Revision Petition allowed