Lakshmi Elecro Control And Automation vs Fabionix India Pvt Ltd

THIS Appeal is by Opposite Party (O.P.) No. 1 challenging the Order of the District Forum fixing liability on it on the ground that O.P. No. 2 being only a Dealer is not liable to refund the amount received from the Complainant and if there is manufacturing defect in the goods supplied to the Complainant it is only the manufacturer is liable.

THE facts in this case are as follows: On the orders placed by the Complainant with O.P. No. 1, O.P. No. 1 being a dealer has sold ''AC Servo Amplifiers'' to the Complainant. Thereafter, the said AC Servo Amplifiers did not work as they did not match with the machine belonging to the Complainant. Immediately thereafter, the Complainant asked O.P. No. 1 to set -right the AC Servo Amplifiers for the purpose of fixing the Motor. Then O.P. No. 1 requested O.P. No. 2, which is a manufacturer of the AC Servo Amplifiers, to fix the AC Servo Amplifiers to the Motor for the purpose of running the Motor. On that request, O.P. No. 2 had sent its Engineer to assemble the AC Servo Amplifiers with the Machine. Accordingly, the Engineer of O.P. No. 2 who attended the assembling work suggested for a new Motor. From this it is seen that the AC Servo Amplifiers sold by O.P. No. 2 through O.P. No. 1 to the Complainant did not suit the Motor belonging to the Complainant. If that is so, in our view there is a ''Deficiency in Service'' in not supplying the required AC Servo Amplifiers, which would match with the Motor belonging to the Complainant. The District Forum having recorded the finding that there is a Deficiency in Service directed O.P. No. 1 to pay Rs. 1,36,253 to the Complainant with interest at 8% per annum from the date of receipt of the amount till realization and dismissed the Complaint as against O.P. No. 2 without fixing any liability on it.

THE case of O.P. No. 1 is that it is only a Dealer and not a manufacturer and, therefore, if at all if there is any deficiency, it is only the Manufacturer has to make good the loss caused to the Purchaser. No doubt the District Forum has not fixed any liability on O.P. No. 2 on the ground that there is no privity of contract between the Complainant and the Manufacturer, i.e., O.P. No. 2. From these facts, it is seen that O.P. No. 1 is only a Dealer and O.P. No. 2 is a Manufacturer. If at all there is any defect in the goods sold, it is only the Manufacturer, which is answerable and not the Dealer, irrespective of the fact whether there is any privity of contract between the Purchaser and the Manufacturer.

THE House of Lords in Donoghue v. Stevenson, (1932) AC 562 (HL) have taken the view that the Manufacturer is answerable to all possible consumers irrespective of the fact whether there is any privity of contract or not, by formulating a theory called ''Neighbours Theory''. In view of this decision, we are of the view that if there is any defect in the goods, it is only the Manufacturer who is liable. Therefore, we hold that the direction issued by the District Forum to O.P. No. 1 to pay Rs. 1,36,253 to the Complainant is liable to be set aside and in modification of the Order of the District Forum we have to hold that both O.P. Nos. 1 and 2 are jointly and severally liable to refund the amount to the Complainant. In the result, we pass the following Order in modification of the Order of the District Forum as follows: (1) The Complaint filed by the Complainant is allowed. (2) O.P. Nos. 1 and 2 are jointly and severally liable to pay Rs. 1,36,253 to the Complainant with interest at 8% per annum from the date of receipt of the said amount till realization. The Complainant is directed to hand over the AC Servo Amplifiers purchased by him to O.P. Nos. 1 and 2 on receipt of the above said amount. (3) Damages of Rs. 10,000 and cost of Rs. 5,000 ordered by the District Forum is kept undisturbed. (4) O.P. Nos. 1 and 2 are given four weeks time from today to pay the above said amount to the Complainant. (5) In the event if O.P. No. 1 is made to pay the above said amount, it is open for O.P. No. 1 to recover the said amount from O.P. No. 2. (6) Parties to bear their costs.

Appeal disposed of.