HAPSON TELECOM LIMITED vs PUNJAB COMMUNICATIONS LIMITED

A scheme was introduced by the Punjab Communications Limited, for installation of a rural automatic exchange. Shri S.P.S. Malhi, complainant No. 2 and his wife being unemployed graduates responded to the scheme and approached the Manager, Telephones, Chandigarh. On receipt of the demand note dated 23.6.1995, they were given a licence to run a private exchange and were provided junction of 12 out-going and 8 incoming lines. The equipment was supplied and installed by respondent Nos. 1 and 2 at the premises of the complainant which he had obtained on rent in Sector 44, Chandigarh. It may be mentioned here that in the beginning the complainant made a payment of Rs. 25,000/- on 27.7.1995 and another payment of Rs. 57,000/- on 18.8.1995. He invested a further sum of Rs. 82,000/- which he had obtained as a kind of loan from M/s. Vardhan Properties and Investment Limited. He obtained further loan of Rs. 4,01,425/- from the aforesaid bankers and invested it for installation of exchange. The other expenses incurred, losses suffered, etc. mentioned in the complaint are reproduced hereunder :

MR. K.S. Bawa, learned Counsel for the complainant has taken us through the entire record of the case. The certificate of warranty, dated 21.8.1995, Annexure C-12, was valid for a period of 18 months from the date of delivery and for a period of 12 months from the date of installation. The telephone exchange machinery was delivered to the complainants on 21.8.1995 at their premises known as # 357, Sector 44/D, Chandigarh [Annexure C-13] but almost from the very beginning it did not work satisfactorily and the complainant started making complaints in writing as well. A letter dated 8.11.1995, Annexure C-14, addressed to the respondents is reproduced as under : "Hapson Telecom Limited HT/EXCH/002/95 Dated : Nov. 8, 1995 To, The Managing Director, Punjab Communications Ltd. Mohali. Subject : Installation of DID 256 P. Rax. Please refer to our previous fax letter sent to you dated November 1, 1995 reference No. HTL/EXCH/001/95. This is to inform you that no serious action has been taken so far. The exchange gets stuck up after every 5 minutes. Customers are continuously persuing us for the same and asking for refund. Please look into the matter personally and make sure that it gets fully installed at the earliest. Thanking you, Yours faithfully, Sd/- [Satinder Pal Singh Malhi] Managing Director."

This would show that the complainant started bringing out to the notice of the respondents even in writing w.e.f. 8.11.1995. In a subsequent letter dated 27.11.1995, Annexure C-15. It was complained that out of 12 out-going junctions, only 6 were working and out of 8 in-coming junctions, 2 were not working properly. On 15.4.1996, Annexure C-19, the respondents disclosed that in fact the software part has been supplied to them through C-DOT and they were trying to contact the aforesaid concern for fault rectifications. The respondents gave another assurance in their letter dated 11.4.1996, Annexure C-21. The relevant part of the letter dated 11.4.1996 is reproduced as under : "As promised, we have already taken up a case with C-DOT to examine the few instances of wrong data recording and shall revert back to you shortly on this subject."

Thus, it is well established that the respondents were unable to provide satisfactory machine for the huge consideration received by them in cash.

There is an affidavit dated 19.2.1998, [Annexure P/1] of Shri Gautam Banerjee, who is an expert on the work of repair and maintenance of telephone instruments and telephone exchanges installed at various places and para Nos. 5 and 6 of his affidavit are reproduced as under : "5. That the deponent observed and is of the opinion that the said machine has repeatedly been repaired by PCL [as told by the MD of M/s. Hapson Telecom Limited] and basically lacking in the poor quality of the software and its programmes are faulty due to which the numbers dialled by the customers can get through only on the 3rd or 4th attempt. The Exchanges do not mention about the earlier attempts done by the customers to the MP, therefore no data is given to the PC. Hence, the printer does not point out that the earlier three/four calls done by the subscriber of the M/s. Hapson Telecom Ltd. due to which there is call loss to the Hapson Telecom Ltd. The Hapson Telecom Ltd. is liable to pay bills to the Telecommunication Department about four times more than the actual usage of the same. It seems to be that the repair at card level and at the same time at component level has been done extensively by PCL Engineers without any results and technically, it is found that the card and certain imported components has swapped (unserviceable). 6. That in my opinion the Exchange alongwith its allied products supplied by the PCL are not of the required standards and, therefore, there is a problem of call dropping, low voice and wrong printout of the telephone bills and there is manufacturing defect in the Exchange, its maintenance penal. Therefore, the Exchange installed by M/s. Hapson Telecom Limited, cannot work. When I inspected the Exchange and found the same being lying closed by M/s. Hapson Telecom Limited, due to the poor quality of the material and workmanship of the machine being faulty. It was told to me by the Managing Director of M/s. Hapson Telecom Limited, that the Exchange is lying idle for the last about 1 year and he has suffered substantial losses due to the installation of this defective machine of PCL."

THIS witness has not been cross-examined by the respondents and it clearly establishes that besides the admission of the respondents, there is an expert opinion as well that the machinery/components supplied to the complainant was defective and it was not capable of repair. It seems that they are not actual manufacturers. It also appears that the respondents collected considerable part of the machine from here and there and the complainant had been paying the price on demand. The version of the respondents has been that the complainant is itself a business concern and could not be considered as a consumer. The learned Counsel for the complainant has explained that Shri S.P.S. Malhi and his wife Mrs. Kuldip Kaur were un-employed graduates and in order to earn their livelihood they responded to a scheme which was offered by respondents. In Tata Engineering and Locomotive Co. Ltd. & Anr. v. Gajanan Y. Mandrekar, III (1996) CPJ 123 (NC), the National Commission held that where the complainant purchased a Tipper truck for earning his livelihood for a sum of Rs. 4,30,771/-, was a consumer. In Prahladbhai Kadia v. Sayaji Iron Works Pvt. Ltd., I (1995) CPJ 178, the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad held that where the concrete mixer was purchased for maintenance of the family, and the defects thereof could not be rectified at various times, the purchaser was entitled to refund of the price notwithstanding the fact that the period of guarantee lapsed. After considering the facts of the case, now in hand, we hold that the complainants are consumers. The mere fact that considerable part of the price was arranged from M/s. Vardhan Properties and Investment Ltd. could not go against the complainants. The liability of the complainant regarding re-payment to the aforesaid Bankers is an altogether different issue between the complainant and the Bankers. It was not considered necessary to implead the Bankers here. The other objection taken is that an earlier complaint instituted by the complainant was dismissed as withdrawn. Since the earlier complaint was dismissed as withdrawn on 21.7.1998 with permission to institute a fresh one, the plea of the respondents that the present complaint was not maintainable has no merit.

IT shall be useful to refer to the relevant extracts of "Hardware Installation Record" and it is reproduced as under : "Hardware Installation Record Office Location Code 14000 Customer No. xxx xxx xxx Organisation Name : M/s. Hapson Telecom Ltd. Contact person : Mr. Satinder Malhi Designation : M.D. Address : SCO 357, Sector 44/D, Chandigarh Telephone : 665965 xxx xxx xxx Delivery challan No. 4B/706 Date of delivery at Customer''s premises 1.9.1995 Date of installation 7.9.1995 xxx xxx xxx" A perusal of the aforesaid communication establishes that the complainant was a user and the mere fact that funds were partly invested by M/s. Vardhan Properties and Investment (P) Ltd. does not render the complainants ineligible. The plea raised on behalf of the respondents in their reply dated 1.9.1998 that the role of the vendor is limited upto installation, is not acceptable. After conclusion of evidence the respondents have not taken interest in these proceedings and after 3.11.1999 none has appeared for the respondents. After considering all these facts, we hold that the respondents had been deficient throughout and are liable to refund and compensate. As regards the quantum, we hereby order that it shall be payable by the respondents as under : 1. One PCL Computer (486) for printing and data recording. 70,000/- 2. Business Loss @ Rs. 40,000/- p.a. from November, 1995 to November, 1996. 48,000/- 3. Mental harassment. 10,000/- 4. Interest on loan amount @ 18% p.a. 2,05,000/- 5. Salaries of the employees (1 Manager Rs. 1,500/- p.m.1 Lineman Rs. 1,000/- p.m. from October, 1995). 32,500/- 6. Expenses including fee. 5,000/- 7. Wires and other accessories installed to give telephone connection to subscribers. 65,000/- 8. Call dropping losses. 1,00,000/- 9. Incorrect printout due to faulty software of PCL. 2,25,000/- 10. PCL Exchange. 4,77,470/- 11. Installation charges of PCL exchange. 40,000/-

THE payment shall be made by the respondents within four months to the complainants failing which they shall be liable to pay interest at the rate of 18% per annum from the date of this decision till realisation.

THE respondents are also liable to pay costs of Rs. 10,000/-. Complaint allowed with costs.