Jan Sewa Ashram vs Til Limited

THE machineshaveassumed significant place in this modern age. Onemachinecan do the work of about 100 ordinary men, in just a few seconds. A machineisfast, accurate and obeys the commands of man. A machine is beneficial and a boon, when it is functional and sans defects but it is detrimental, harmful and ruinous a bane when it becomes defective and non -functional.

NOW , we turn to the facts of the case in hand. This is one of the oldestcasesfiled in this Commission on 21.08.2000. Jan SevaAshram, the complainant purchased a ''Backhoe Loader -cum -Excavator '', machine to be used for a project on ''waste management and making compost '' out of garbage, in District Solan, Himachal Pradesh, from TIL Ltd., OP1. Copy of letter ofofferdated 05.12.1998, along with the terms and conditions, including the warranty offered was placed on record as Annexure C -1 (colly). The machine was purchased for a sum of Rs.14,00,000/ - as per the purchase order dated 23.12.1998, copy of which was placed on record as Annexure C -2. Thisisthe first machine which is not the machine in dispute. Thesaidmachine was commissioned by Service Engineer of OP1 on 21.01.1999, vide Commissioning Report marked as Annexure C -3. Thenewlypurchased backhoe loader was unauthorisedlyoperated by a worker who accidently slipped the machine into a deep ditch. The said worker died in the accident and the machine was damaged beyondrepairs. Thecomplainantdiscovered that the charges for an overhaul of the damaged machine would almost equal the cost of a new machine. Therefore, thecomplainantdecided to purchase a new backhoe loader machine from OP1, on the same terms and conditions.

ACCORDINGL Y , OP1 sold a newbackhoeloader machine to the complainant on the previous terms and conditions. This is the second machine, which is the machine in dispute. Further, OP1 agreed to takebackthe previous damaged machine at salvage value and adjusted this value against the price of the new machine. Thesaidsecond ''new '' machine was delivered on 01.07.1999. Mr.ManishSharma, Engineer of OP1 arrived for the purpose of commissioning the machine, but could not commission it due tofundamentalnature of defects in the same. ThesaidMr.ManishSharma, went back to his office on 04.07.1999, without commissioning the machine because of the above said defects. Hefurtherpromised that he would come again, after a couple of days, with the parts necessary to make the machine functional. Aftermanyrequests, another Engineer, named Mr. D.K. Bhattacharjee, arrived. He, however, didnotbring most of the parts necessary for repairing the machine. He tried to make the machine functional with whatever parts he had brought, however, his attempt failed and other problems cropped up. TheRadiatorof the machine also burst. When it was notcommissioning, a veil of suspicion enveloped the complainant ''s mind that the machine was a ''used '' and an ''old one ''. On checking,itwas observed that the tyreswere old, with numerous cuts and cracks. The tyressupplied with the machine weremanufacturedin the year 1997. It also came to light that the pre -air cleaner of the engine had been fixed in the year 1997. The machine had the following problems : - ''''a) the machine was not taking ''load ''

b) theengine was overheating with only a few minutes of operation.

c) theboom cylinder was not functional. Boom was coming down on its own.

d) swingcylinder burst on operation.

e) thediesel filters were completely choked. (note. This is impossible in a new machine).

f) ''O '' ring got damaged on attempting to operate the machine.

g) animportant hose (rubber part) was cracked and leaking.

h) ''elbow '' was cracked and needed replacement.

i) therewere no locks on the cabin doors and windows

j) therewas only one ignition key. A new machine isalways supplied with two keys ''''.

THEREAFTER ,correspondencewent on between the parties. OP1assuredthat they would carry out a comprehensive overhaul of the said new machine and make it as good as new. On 12.08.1999, Mr. R.K.Jain, yet another Engineer of OP1 arrived to attempt commissioning of the machine. Despite the warranty, the complainantpaidfor several items/parts for repairs, replacement, etc. The machine became partially functional, but its performance was extremely poor and unsatisfactory. No commissioning report was ever preparedbythe representatives of OP1 with respect to the said machine. Anotherletterdated 23.11.1999, was sent by the complainant to OP1 which was placed on record as Annexure C -7. Again,thecomplainant wrote to OP1 on 06.01.2000, marked as Annexure C -8. The request made by the complainanttimeand again to replace the said machine, fell on deaf ears.

IT transpiredthatit was an old machine, not in working condition, replete with problems stemming from substandard and used components. Ithadintrinsically faulty design which had been phased out by Sh.RaviShankar, General Manager (Marketing), OP2. Themachineremained completely non -functional for 117 days out of the first 180 days after its delivery. Again, itsworking during the remaining days was most unsatisfactory, it remained non -functional for prolonged lengths of time and every time when the machine was used for few days, it developed some defect or the other. Usually, in order to savetime, the complainant was forced to have done repairs at its own cost, instead of waiting for the Service Engineer of the OP1 to arrive. The OP1hadplayed fraud with the complainant.

THEMACHINE SUPPLIED in July, 1999 was manufactured prior to the machine supplied in January, 1999. Serial No. of the machine supplied in January, 1999 was 57 whereas the Serial No. of the machine in question, supplied in the month of July, 1999 was 55. OP1 hadissueda Certificate that it was a ''new '' machine. Itwasaverred that succinctly stated, the said machine has, till the time of filing of this complaint, on 21.08.2000, never been in a fit condition to be commissioned. On 21.08.1999, the Engineers ofOP1managed to make the machine partially and intermittently functional. The machine neverworksto its full, rated power and capacity and it cannot be run for over more than one or two hours at a stretch as its engine over -heats and it has to be shut down lest it seizes. Further, after 3 -4 days of such intermittentandpartial operation, the machine tends to develop some major defect or the other needing substantial repairs.

ULTIMATELY , this complaint was filed with the following prayers : - ''''A. Direct the opposite parties to replace the old and defective machine supplied to the complainant vide bills dated 03.07.1999 with a new machine, free from design and manufacturing defects;

B. Grant the complainant compensation/damages of Rs.10,64,038/ - (Rupees Ten Lakhs Sixty Four Thousand and Thirty -Eight only), being the loss actually suffered by it on account of the defective machine supplied to it and the subsequent, deficiency in service by the opposite parties resulting in the complainant being unable to put the machine to even such use as it was capable of;

C. Grant the complainant compensation/damages of Rs.10,00,000/ - (Rupees Ten lakhs only) for the harassment and loss suffered by it on account of the gross and culpable breach of promise by the opposite parties of the terms of the contract of sale/purchase of the machine supplied to it;

D. Grant the applicant cost of the present proceedings; and

E. Pass such other orders as are thought fit in the facts and circumstances of the case ''''.

THE originalcasewas filed against two Opposite parties. OP2 wasmentionedas Sh.RaviShankar, General Manager, Hindustan Motors Pvt. Ltd., Earth Moving Equipment, ParkashDeep, 10th Floor, Tolstoy Marg, New Delhi. Subsequently, his designation and address were changed and the amended memo of parties was filed on 28.01.2003, as Sh.RaviShankar, General Manager (Marketing), Of Cater Pillar India (P) Lrs., 6 -B, GST Road, Chennai - 600 016. DEFENCE :

IN its written statement, OP1hasset up the following defences. It contended that the machine was commissioned, the complainant receivedthemaintenance guide and the parts list book in respect of the machine which the complainant was required to follow and consult for the purpose of maintenance and up - keep of the machine. Aftercommissioningof the machine, it was thoroughly checked and a check -list was completed which the complainant acknowledged. OP2 is actually responsible forsupplyof parts and accessories for the machine during the warranty period. The machine was misused, inter alia, for the purpose of road construction and was handled by third -parties under sub -contracting from the complainant for some kind of jobs for which the machine was not geared up. It is explained that the engineofthe machine failed after the warranty period. However, as a goodwill gesture, the OP 1 brought the machine to SahibabadWorkshopand an estimate of Rs.1.25 lakhs being the price of spares and accessories was given, but the repair of the engine could not be carried out. Service reports clearly reveal that quite often, no water or muddywaterwas found in the radiator and substandard oil or no oil at all was used in the hydraulic pump.

THE complainant failed and neglected to take necessary steps and action for regular and normal maintenance and up -keep of the machine with the help of the operation guide, the parts list and also the professional advice given by the Service Engineers of the OP1 during several visits made by OP1 for putting the machine in order both, during and after the warranty period. Thenewmachine was sold to the complainant. The complainantfurtheradmitted having got repairs to the machine done by indigenous sources instead of by the Service Engineers of OP1. This resulted in improper handling and service and maintenance of the machine during the warranty period. The complainant availed services from OP1 for carrying out the complainant ''soperations. It is explained that the difference in Serial Nos. of the machine supplied in January and July, 1999 to the complainant is on account of the fact that these were supplied from two different stockyards for the machine. The allegations of selling the oldmachineand playing fraud are baseless.

WE haveheardthe parties and perused their written synopses. Thefirst, half -hearted submission made by the OPs was that the complainant, was not a consumer.

THIS argumentissans merits. We have perused the Quotation, dated 05.12.1998,whichmentions about the warranty, as under : - ''''Warranty We are agreeable for a warranty of 12 months or 2000 hrsfrom the date of commissioning of machine, whichever is earlier ''''.

THERE is another warranty issued by Hindustan Earthmoving Equipment. The relevant portion of it,runsas follows : - ''''HINDUSTAN MOTORS LIMITED ''S, Earthmoving Equipment Division, warrants new earthmoving, construction and material handling machinery and attachments thereformanufacturedand sold by it to be free from defects in material and workmanship under normal use and service subject to the following provisions. During the first six months after date of delivery of the product to the initial user, a new or repaired part, whichever HM -EED elects, along with the labourfor installation of such new or repaired part, will be provided in place of any parts which are found upon its inspection to be defective in material or workmanship. Such parts and labourwill be provided without charge to the user during normal working hours at a place of business of a HM -EED dealer or other establishment authorized by HM -EED but this warranty does not include any cost for transporting the product to such place of business or establishment. Replacementpartsprovided under the terms of this warranty are warranted for the remainder of the warranty period applicable to the product in which installed as if such parts were original components of that product. No warranty is made with respect to items supplied by MH -EED onspecial order nor with respect to engines, transmissions, tyresand batteries not manufactured by HM -EED. The provisions of this warranty shall not apply to any HM -EED product which has been subject to misuse, negligence, or accident or which shall have been repaired or altered by other than an authorized Dealer of HM -EED ''''.

IT is, therefore, clear thatthemachine became defective during the subsistence of warranty.

IT isapparentthat Mr.ManishSharma, Service Engineer of OP1 first, visited and checked the machine. Thereafter, Mr.D.K.Bhattacharjeealso visited and checked the machine and found that the machine had so many problems, as already discussed above in paraNo.2 of this judgment. Therefore, it is true that thedefectscropped during the warranty period and this fact was not disputed. The first complaint with regardtodefects filed on 20.07.1999, was proved on record as Annexure C -6, which was followed by other various complaints, such as Annexure C -7, dated 23.11.1999 and Annexure C -8, dated 06.01.2000, etc.

THIS Commission in various authorities reported in M/s. Pearlite I -Liners Ltd Vs. Thermo Jarrell Ash Corporation, IV (2006) CPJ 375 NC, UA Md. Ali Raja Vs. Godrej PhotoneLtd & Ors, M/s. Olympic Zippers Pvt. Vs. K C Cherian& Anr, I (2002) CPJ 11 (NC), M/s. Tinkle Bells Enterprises Vs. State of Rajasthan, I (2003) CPJ 71 (NC), SateleePower Electronics (P) Ltd Vs. National Research, III (2002) CPJ 124 (NC), State Government of Maharashtra Vs. Hindustan Computer Ltd. I (2000) CPJ 13 (NC), Jai Industries Vs. N. BabhraiahAcharya& ORs. R.P. No.1758/2001, decided on 22.11.2001, came to the conclusion, in all the above cases, that the machine(s) purchased by the consumer(s) were defective, causing great loss and harassment to the complainant, and, as such, ''''during the warranty period '''', and therefore, the buyers of those machine(s) are all consumers. It was further held that a person can be considered as a consumer, if he hires or avails the services of the opposite party for consideration and if there is any deficiency in service, then, such a person can be considered as a consumer, even though, the hiring or availing of such services was for the purpose of commercial venture. The deficiency in service in such eventualities on the part of OP/seller must accrue during the warranty period as had been held by the National Commission in its decision, more than once.

WE mayormay not agree with the above said view, but we are bound to follow the view taken by this Commission in numerous cases. We, therefore, hold that the complainant is a ''consumer ''.

WE haveheardthe counsel for the complainant on the point of deficiency and negligence. This is an admitted factthatthe complainants were given Engine No. and ChasisNo. which did not tally with the Sales Certificate. This is also an admitted fact that when thecomplainantapproached for registration back, the RTO refused to issue the same. Counselforthe OP1 admitted that there was some mistake on their part, in this case.

SECONDLY , the counsel for the complainant vehemently argued that it was an old machine and in not working condition. The machinesuppliedto the complainant in January, 1999, bore the Serial No.57, but subsequently, a much lower number, i.e. 55, was given. The excuse givenbythe OP that there were two machines and that they came out from two different stockyards, is not creditworthy. However,counselfor the OP pointed out that all these facts were in the knowledge of the complainant. It was the duty ofthecomplainant to check the engine No. and chasisNo. and should have raised the objection at the very start. Why, their Nos. are up and down,inthe same year. Counsel for the OP contended that all thesefactswere in the knowledge of the complainant.

COUNSEL for the complainant further submitted that the documents supplied by OP1 prove that machine was manufactured by OP1 in June, 1997, over two years prior to the date on which the said OP1 agreed to sell it to the complainant. The machine delivered to the complainant was so defective that the Engineers of the OPs were never able to commission it and it remained completely non -functional for 117 days out of the first 180 days after its delivery. OP1 obtained thesignaturesof the complainant, without commissioning the machine, on 04/05.07.1999. However, on06.07.1999, the Service Engineer of the OPs noted the failure details with the machine, as commissioning. Thusitis clear that the machine was not commissioned on 05.07.1999. The machinewasalmost continuously non -functional till January, 2000. The servicerecordof the machine itself goes to demolish this assertion. Despite carrying out repeated and extensive repairs on the machine, the OPs were unable to make it functional and useable. EveninJanuary, 2001, i.e., for more than one -and -a -half years, the complainant paid a sum of Rs.1.25 lakhs for further repairs.

WE findthatthis is a case of contributory negligence. The counselforthe complainant has listed the above mentioned points. We almost agreewiththem. This machine was manufactured in the year 1997, and the tyreswere manufactured in the year 1997. The complainantshouldhave been vigilant and should have seen what kind of machine he was purchasing. The complainant should have raised objection that the machine was manufactured in January, 1999 with serial No.57, while OPs were giving him an old machine showing lesser serial number of the machine, i.e. 55. It appears that thecomplainantagreed to purchase this machine because its previous machine stood destroyed and the OP had agreed to give the new machine on the previous terms and conditions. We will assume thatthecomplainant should have taken the objection at that time, like a vigilant purchaser. There is not even an iota ofevidencethat he was forced to take that machine. Hetookthe said machine of his own volition.

THE allegationofcheating, fraud, coercion, undue influence, etc., is conspicuously missing. However, the record showsthatthe machine remained defective for more than two years. Counsel for the OP have placed on record the details of visits of the Engineers of OP1, which show that between 10.07.1999 to 13.07.1999, the Engineer, found that customer was using low grade diesel from local sources, which had chocked the diesel filter completely which could affect the engine performance. The relevantentriesmade for the visit during 16 -21.08.1999, by Sh.R.K.Jain, at Annexure -A, at page 76 of the Paper -book, at Column - ''Remarks '', is as under : ''''TIL Service Engineer was sent to site for 06 days as acourtesyto support customer and educate customerstaffabout M/C operative maintenance ''''.

AGAIN , Sh.D.K. Bhattacharjee, Engineer, made the following remarks, during his visit from 10 -13.07.1999, marked as Annexure A, at page 76 of the Paper -book, which reads as follows : - ''''During service engg.Visit it was found that the customer is using low grade diesel from local sources which can affect the engine performance ''''.

Further, the subsequententriesmade for the visit made during 01.11.1999 to 02.11.1999, by Sh.D.K.Mohapatra, at Annexure -A, at page 77 of the Paper -book at Column - ''Action taken by TIL '', is as under : - ''''TIL service Engineer replaced all demanded parts on ''''FOC '''' basis. However, during this visit, our Service Engineer once again found that customer is not doing the regular maintenance, i.e., one bolt of Hyd.Pumpplate was broken and not replaced by customer. Such type of sheer negligence can result the failure of hydraulic pump the costs of which is approx. Rs.50,000/ - ''''.

HOWEVER , no reliance can be placed on this registered kind of documents. Thepossibilityof there being manipulation, cannot be routed out. There is deficiency on the part of OP1 as well. When they foundthatthe complainant was not following their directions, they should have sent a letter/notice in ''black and white ''. The above said register doesnotbear the signature of the complainant or its employees. A writtenpaperwould have gone a long way to establish the case of the complainant fully. Itisrudimentary principle of law that the documents will always get preponderance over the oral evidence because it is a well know maxim that men may tell lies but not the documents. The above saiddocumentsshould have been acknowledged by the complainant. Thisisa one way traffic which carries exiguous value.

THE complainanthimselfadmits that he had got the machine repaired from private person. As per the Agreement, there lies a rub. The complainant is not permitted to get the machine repaired from private/localpersons. It is clear that the complainant was doing it at its own peril.

THE record further reveals thatevenduring the pendency of this case, the machine was once again rectified. The report marked as Annexure OP2/2, dated 31.03.2002 reads as follows : - ''''No defect observed during trial testing of above mentioned engine at ourworksand found working satisfactoryin all respects. Verifiedandtested in the presence of customer representative, whose signatures are attested below; and is being delivered to him on behalf of M/s. JansewaAshram, Solan, for onward dispatch to their SolanH.O site by themselves at their risk and costs. For JansewaAshram ForTIL Ltd. Sd/ - Sd/ - (Sanjay Sharma) (RavinderVerma) ''''.

AGAIN , there is Joint InspectionReport, dated 02.04.2002, marked as Annexure OP2/R, which reads as follows : - ''''Joint Inspection Report Assembly :ParkinsEngine (Sl.No.6001800521D) of 50Hx machine. Location :TIL LIMITED, Sahibabad, Ghaziabad (U.P) Test Parameter : 1. Starting of engine -Satisfactory 2. Temperature -Satisfactory 3. RPM - Satisfactory 4. Exhaust - Satisfactory 5. Abnormal noise - No abnormal noise Sub Assembly : 1) Alternator 2) Self 3) FIP Physical condition : 1. No breakage 2. Double coat painting 3. Accessories in OK condition All above test parameters, sub -assembly and physical condition checked jointly with M/s. Jan SewaAshram representative Mr.SanjaySharma at our works. Same engine is handed over to Mr.SanjaySharma. Sd/ - (Sanjay Sharma) Sd/ - (A.K. Verma) M/s. Jan Sewa AsramM/s. TIL Ltd ''''.

FROM therecordit appears that the defects in the machine were rectified intermittently. The recordrevealsthat the machine was working satisfactorily on 05.07.1999 which bears the signatures of the complainant. Theservicerecord and the register maintained by the OPs show that it did not work properly, for some period. It is not out ofplaceto mention here that the counsel for the complainant contended that it does not want replacement of the machine. It is also admitted that the machinewassold subsequently and the complainant insisted merely for compensation.

CONSEQUENT LY , thecaseis limited only for the period from 01.07.1999 to 31.03.2002. Themachinewas not in proper condition during that period and there was contributory negligence. The complainant had to spendRs.1.25lakhs due to negligence, inaction and passivity on the part of the OPs. Counsel for the complainant admitted that he is not claiming any relief against OP2 and there is no grievance/evidence against him. We, therefore, dismiss thecaseagainst OP2. However, OP1 is directed to pay a sum of Rs.2,50,000/ - to the complainant, for causing harassment, mental agony, anger, anguish, frustration, etc. The said amountbepaid to the complainant, within 90 days from the date of receipt of the order, otherwise, it will carry interest @ 9% p.a., till its realization.