Kirloskar Electric Co. Ltd. vs Fabionix India Pvt. Ltd. and another

Petitioner was the opposite party No. 2 before the District Forum, where M/s. Fabionix India (Pvt.) Ltd., had filed a complaint alleging deficiency in service on the part of the petitioner and second respondent M/s. Lakshmi Electro Control and Automation (hereinafter referred to as L.E.C.A.).

Briefly stated the facts leading to filing the complaint were that the complainant M/s. Fabonix India Pvt. Ltd., purchased Servo Drives Amplifiers from L.E.C.A. Since it was not generating requisite cooling, the engineer of the L.E.C.A. were called after its being commissioned. Upon which Engineer of L.E.C.A., visited the complainant''s premises and suggested for a new motor. It is in these circumstances, a complaint was filed alleging deficiency in service on the part of the L.E.C.A. in the first instances and subsequently petitioner was added as opposite party No. 2, after amending the complaint with the permission of the District Forum.

The matter was contested before the District Forum and District Forum after hearing the parties and perusal of extensive material on record, allowed the complaint in following terms : "Complaint is allowed directing the 1st O.P. to pay Rs. 1,36,253 to the complainant with interest at 8% p.a. from the date of the receipt of the said amount till payment alongwith damages of Rs. 10,000. The 1st O.P. is also directed to pay Rs. 5,000 towards the costs of the proceedings. The 1st O.P. is directed to comply with the order within a period of four weeks from the date of communication of this order. Complaint as against the 2nd O.P. stands dismissed."

Aggrieved by this order, L.E.C.A. filed an appeal before the State Commission, who after hearing the parties, partly allowed the appeal and modified the order passed by the District Forum by holding the petitioner as also the L.E.C.A. jointly and severally liable to pay the awarded amount. Aggrieved by this order, this revision petition has been filed before us.

Question for our consideration is whether in facts and circumstances of the case and material brought on record, can the petitioner be held responsible ?

We have very carefully gone through the dealership agreement between the petitioner and L.E.C.A. Clause 8 of the Agreement reads as under : "This agreement does not in any way contribute the service agent an agent of the Company and the service agent/contractor agrees not to represent himself as such to others or not to permit himself to be represented as such by others. The service agent/ contractor shall not use the name ''Kirloskar'' or any abbreviation or modification thereof as part of the Service Agent/Contractor firm or corporate name. The service agent may with the prior written consent of the company use the name or emblem of Kirloskar in a manner which shall correctly describe the relationship existing between the Company and the service agent/contractor at the time of such use." (Emphasis supplied)

A pure and simple reading of this would show that the L.E.C.A. was agent of the petitioner but only for a limited purpose. So there is no question of L.E.C.A. being the ''dealer'' or ''agent'' for purpose of sale. The agreement is only for purposes of appointing them as a ''service agent'' and not for purchase and sale of their products. In the circumstances, there cannot be any privity of contract between the buyer/complainant and the petitioner. We have also gone through the purchase order dated 22.11.2001. In that document also we see not even a remote reference to the name of the petitioner, except that they will be installing the equipment with K.E.C. make AC Servo Amplifier. As per material on record it is the 2nd respondent who entered into an arrangement for purchase of a certain goods, like any other person or service provider, which was later on installed by them in the premises of the complainant.

We are unable to appreciate the point raised in the written statements (Para 11) (Page 111 of the paper-book) of the second respondent that he was only a ''dealer'' and agent of the petitioner, hence, the liability cannot be fastened on the agent.

If we carefully go through the agreement entered between the parties, it is quite clear that the petitioner had appointed L.E.C.A. as the service agent/contractor. Clause 8, reproduced earlier, of this agreement does not help the case of the second respondent. He would not fall within the category of a ''dealer'' or ''agent'' in the commercial sense except that he had a ''serviceC contract, and sale was not part of service or vice versa.

Section 182 of the Indian Contract Act, defines the word ''agent'' and ''principal'', which reads as under : "''Agent'' and ''Principal'' defined.-An ''agent'' is a person employed to do any act for another, or to represent another in dealing with third persons. The person for whom such act is done, or who is so represented, is called the ''principal''."

As already referred to earlier in terms of agreement, L.E.C.A. was not an agent of the petitioner for sale, purchase, installations of the equipment manufactured by the petitioner. It is L.E.C.A., who entered into an arrangement with the purchaser/complainant, and if he used certain machinery produced by some third party in its normal commercial activity, he will not fall within the definition of ''agent'', as he was not authorised to deal with third person, on behalf of the petitioner. In the instant case, the installation of equipment in the complainant''s premises was undertaken by the L.E.C.A. as an independent entity.

Since there is no relationship between the petitioner and the purchaser with the L.E.C.A., respondent No. 2, except that of a service agent/contract, for any deficiency in service on the part of the L.E.C.A., the petitioner cannot be held liable.

We are unable to appreciate the reference by State Commission to judgment of House of Lords in Donoghue v. Stevenson, (1932) AC 562 (HL), borrowing certain principle which in our view, has got no relevance in the instant case. Firstly, the facts of the case are different and secondly in view of the fact that there is specific definition of ''principal'' and ''agent'' defined in the Indian Contract Act, as also the factum that we are dealing with the case under Consumer Protection Act, we have to be governed by laws on the subject. A foreign country''s Court reference made in the year 1932 will have relevance only if we have no clear law on the subject, which is not the case here.

In the worst case scenario, if L.E.C.A. found any defect or problem with supply of equipment by the petitioner, with which he was not satisfied, then they could have dealt separately with the supplier/ petitioner. However, it is also necessary to observe that in such situation, L.E.C.A. would not be a ''consumer'' under Section 2 (d) (1) of the C.P.A. for the simple reason that the L.E.C.A. purchased goods for re-sale purposes, thus, ousting him from the purview of being a ''consumer'' under the law. If there is any grouse on the quality of material supplied by the petitioner to L.E.C.A., the remedy does not lie before us.

In view of above, the order passed by the State Commission cannot be sustained, which is set aside and the order passed by the District Forum is restored. Revision petition stands allowed in above terms.

Fifty per cent of the awarded amount has been deposited by the petitioner on 27.9.05 with the Registrar of this Commission, which may be returned to the petitioner alongwith accrued interest, if any.