LARSEN AND TOUBRO LTD vs Pophale Nursing Home

THIS order will dispose of both the above titled appeals as they arise out of the same Order delivered by the State Consumer Disputes Redressal Commission, Maharashtra at New Bombay in a complaint registered on their file at No. 55 of 1991. The facts are that present Respondent No. 1 herein M/s. Pophale Nursing Home (for short complainant) had filed the complaint against present appellant M/s. Larsen & Toubro Ltd. (for short the appellant) and M/s. Eastland Business Corporation (for short Corporation) who are appellants in appeal No. 212 of 1991. They had been arrayed as Opposite Parties No. 1 and No. 2 respectively in the complaint. Accordingly to allegation of the complainant. According to allegation of the complainant, it was an Institution (wrongly described by the State Commission as Public Trust Institution), having nursing home facility with general ward. VIP rooms and other air conditioned rooms. It was a sort of poly clinic with facilities of diagnostic, X -Ray Department, Laboratory, Operation Theatre and Physiotherapy Department. The poly clinic which include Surgeons, Physicians Gynaec Surgeons, Dental Surgeons, Eye Specialists etc. are attached to it. A need was felt to connect the Laboratory, X -Ray Department, Operation Theatre and all the Specialists including the Emergency Doctor, Operation Theatre Nurse and Office with each other through sixteen extensions of telephone. With this purpose, the complainant contacted the Corporation, who is the dealer of the appellant and was given an order for installation of ELTEX -10R, Electronic Telephone System. The full amount was paid to the Corporation in two instalments. The last instalment was paid vide cheque dated 13th December, 1990. The Nursing Home had warned the Corporation that the whole responsibility of complete installation and satisfactory working would be of their organisation to which they had agreed. The Corporation started installation and handed over the system to the Telephone Operator of the complainant on 4th January, 1991. Soon thereafter it was noticed that calls from outside were received on the internal phone numbers, but could not make outside calls as the system had come one day. The Corporation wasinformed about this fact on 5th January, 1991 by means of a telephone call from outside as well as through a letter. The Corporation acknowledged that letter on 10th January, 1991 and thereafter their mechanic came and fiddled with the machine but could not undo the fault and the dislocation went on for a long time, i.e., for about a month. The normal work of the Institution & Nursing Home could not be carried on till the end of January, 1991. On 29th January, 1991, the complainant wrote a letter to the appellant informing them of the defect in the system and also told them to take effective action. The appellant deputed their Service Engineers, Mr. Sandesh Areka, who changed the box and set the things right and made the system workable. In this complaint, the main grievance of the complainant is about un -satisfactory service rendered by the internal telephone system till it was changed on 7.2.1991. The complainant Nursing Home was also carrying on two national programmes, one on family planning and other one on immunisation. According to the complainant, on account of the defective installation, a lot of inconvenience and mental agony was caused to the complainant Rs. 50,000/ - was claimed as compensation on the ground that there was defect in the rendering of service.

THE present appellant filed a counter affidavit. They took a preliminary objection that the complainant was not a ''consumer'' as defined in Section 2(d) of the Consumer Protection Act. They further pleaded that they were always willing to actively associate in the process of stabilising the system by a process of evaluation, but the complainant did not allow any such time for such activities and barely a day after the system handed over, it wrote a letter on 5th January, 1991. Adoption the policy that the customer is right, they responded to all the grievances of the complainant, however, minor those were in nature. The complainant has not referred to the efforts made by them and the Corporation in the right perspective and it has given a distorted version only to substantiate the complaint. As admitted by the complainant, the appellants Service engineer came and changed the box and made the system workable. The system was found to be working satisfactorily as endorsed by the complainants personnel. A joint inspection by the opposite parties was organised on 31st May, 1991 and the system was found working properly. They have not shown any indifferent attitude nor their approach has been inefficient. They are entitled to costs for having been dragged in the proceedings by the complainant un -necessarily. Opposite party No. 2, M/s. Eastland Corporation, also filed a counter. They denied the allegation that after the installation of the system, only outside calls were received on the internal phones and that the system had become one way. Once the system was installed, there were bound to be some problems during the initial period and had to be made operative to suit the requirements of a customer which varies from situation to situation depending upon the extent and nature of usage. Instead of allowing the system to settle down to the Institutions requirements with the active co -operation of the complainant, he chose to raise a dispute within 24 hours of the handing over of the system. Other pleas taken by the Corporation were similar to that of the opposite party no. 1, i.e. the appellant.

THE State Commission held that the Electronic Telephone system, when it was supplied in the complainant had inherent defects and there was deficiency in the rendering of service by an appellants parties. As a result of which, the complainant had to suffer inconvenience during the period of one month which must have affected its income. They held that both the opposite parties to the complaint were liable jointly and severally to pay compensation on the complainant. The total compensation assessed was Rs. 38,000/ - out of which Rs. 5,000/ - was made payable to Dr. Pophale, who is the proprietor of the Nursing Home, Rs. 18,000/ - as loss to various consultants and Rs. 15,000/ - as loss to the Nursing Home.

FEELING aggrieved by the Order, opposite party No. 1 has filed the present appeal, while the Corporation has filed the connected appeal no. 212 of 1991 before this Commission. Learned Counsel for the appellant argued that the complainant, Pophale Nursing Home is a ''commercial establishement'' and ELTEX -10R, Electronic Telephone System must be deemed to have been purchased for a ''commercial purpose'' and therefore, the said Nursing Home is not a ''consumer'' as defined in Clause (d)(i) of Sub -section (1) of Section 2 of the Consumer Protection Act, 1986. We are of the opinion that the said argument has force. According to the said definition of ''consumer''. In relation to goods, means any person who buys any goods for a consideration which has been paid or promised or partly paid and partly promised....but does not include a person who obtains such goods for resale or for any commercial purpose. Therefore, the question to be considered is whether the purchase of the Electronic Telephone System by the Nursing Home was for a ''commercial purpose''. The facilities available in the Nursing Home have already been given above. Those have been reiterate by Dr. Pophale in his affidavit dated 12.7.1991 filed before the State Commission as follows : I say that the said Nursing Home & Polyclinic is the Institution having an Eight Bed Nursing Home facility along with air -conditioned VIP Rooms, air -conditioned Room with two beds and General Ward of three beds. Alongwith are the Diagnostic, X -Ray Department Laboratory, Operation Theatre & Physiotherapy Department. Eighteen Specialists are attached to the Polyclinic of this Institution who render their services on their given times. These include Surgeons, Physicians, Gynaec Surgeons, Dental Surgeons, Eye Specialists etc. In the description as deponent he has stated ''Dr. H.V. Pophale ¦..having my Nursing Home and Polyclinic ¦''. Thus, the institution is completely owned by him.

IN his affidavit dated 31.7.1991 he has stated in para 4 as follows: On account of the non -functioning of the System ELTEX 10 -R EPABX for the period of one month, the loss caused to myself and other Medical Consultants and to the Institution, is set out as follows : a. Loss of practice to Dr. H.V. Pophale Rs. 5,000.00 b. Loss of earning to Pophale Nursing home Rs. 30,152.00 c. Loss of Income to various Consultants Rs. 18,000.00 d. Total amount of loss Rs. 53,152.00 Rounded off to Rs. 50,000.00 Thus, it is clear that the Nursing Home is quite a big one owned by Dr. Pophale who is running it for profit which is quite large. According to the said affidavit the Nursing Home collected gross fees during the year 1989 -90 in the sum of Rs. 331,673.50 and during the year 1990 -91 in the sum of Rs. 3,31,673.50. It was further stated that in view of the receipt of fees for the periods as indicated above the loss of income of the Nursing Home per month would be atleast in the sum of Rs. 30,152.00. This sum does not include the income of the various consultants. 7. Here, we may refer to Synco Textiles Pvt. Ltd. v. Greaves Cotton & Company Ltd., I (1991) CPJ 499 (NC), a case decided by this Commission. In our Order, we defined ''commercial activity'' as follows: ''Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression ''consumer'' any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making profit. As already indicated since resale of the goods has been separately and specifically mentioned in the earlier portion of the definition clause, the words ''for any commerce purpose'' must be understood as covering cases other than those of resale of the goods. It is thus obvious that Parliament wanted to exclude from the scope of the definition not merely persons who obtain goods for resale but also those who purchase goods with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit. On this interpretation of the definition clause, persons buying goods either for resale or for use, in large scale profit making activity will not be ''consumers'' entitled to protection under the Act. It seems to us clear that the intention of Parliament as can be gathered form the definition section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It would thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing processing activity carried on for profit. In order that exclusion clause should apply it is however, necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit.'' On the basis of facts found in the present case it will have to be held that the Electronic Telephone System was purchased by the complainant for a ''commercial'' purpose and hence it is not a ''consumer'' as defined in the Act. Consequently the complaint was not maintainable under the Act.

WE may mention here that in his affidavit dated 31.7.1991, Dr. Pophale has stated in Para No. 2 that Family Planning and Immunisation activities are also undertaken at this Nursing Home. In none of the affidavits filed by Dr. Pophale before the State Commission it was mentioned that these services are rendered free of charge or no State aid is given to the Nursing Home for those services. In para No. 8 of his affidavit dated 18.4.1991 he has stated: ''Our problem is vital because our Trust is carrying out two National Programme, one of Family Welfare & another of Immunisation. We are also doing Sterilisation Surgery alongwith practicing Family Planning. There is a Polyclinic of eighteen Specialists, who render their services to the needy population. Diagnostic Departments like Laboratory, X -Ray & Operation Theatre, require telephone as a most necessary instrument at hand, for all types of communication, co -operations and co -ordinations.'' From this it is clear that the activities of Polyclinic (i.e. Nursing Home) and that of the Family Welfare and Immunisation are separate. In his letter dated 5.1.1991. Dr. Pophale below his signature has designated himself as Medical Director - Pophale Nursing Home. In his letter dated 22.1.1991, he has designated himself as ''Medical Director - Pophale Nursing Home, Chairman - The Family Planning and Medical Aid Trust''. This clearly shows that Family Planning and Medical Aid Trust has no connection with the Pophale Nursing Home. The Pophale Nursing Home has no where been termed by Dr. Pophale as a ''Trust Institution''. ''The Family Planning and Medical Aid trust'' might be some social organisation of which Dr. Pophale might be Chairman. In the complaint of various affidavits filed by Dr. Pophale before the State Commission, he did not state that any part of the income from the Nursing Home is being spent on the Family Welfare and Immunisation programmes. The State Commission, from a calendar of events published by the Bombay Hospital Journal has noted: '' ¦ ¦..it is found that the Family Planning and Medical Aid trust is also doing charitable work, of free immunisation of pregnant mothers and children and others and also for Cholera to the people going abroad.'' If a certain organisation, located in a part of the building where Pophale Nursing Home is located or elsewhere is doing charitable work, it cannot be said, without proof, that the said Nursing Home is also doing charitable work. Moreover, if a part of the income of Pophale Nursing Home, of which there is no evidence, is spent upon charitable activities it cannot be said that the Nursing Home is a charitable institution. Dr. Pophale produced before the State Commission a note from its Chartered Accountants about the income of the Nursing Home. He could have very well produced another note from them showing the expenses incurred by it on charitable purposes. Hence, there is nothing to contradict the argument of the learned Counsel for Appellant that Pophale Nursing Home is a Commercial Institution earning huge profits and the Electronic Telephone System was purchased by them for better communication between the various Specialists, Laboratory, X -Ray Department, Operation Theatre, Emergency Doctor, Operation Theatre Nurse and the Office and thus the purchase was for ''commercial purpose''. Even if, for arguments sake it is held that the purchase of Electronic Telephone system was not for commercial purpose even then the complainant has no case. The defective system was replaced on 7.2.1991 by the appellant. It may be mentioned here that, as will be discussed below, it appears that the said system was corrupted by the inefficient Telephone Operator of the complainant.

THE installation of the system was completed by the Corporation in the Nursing Home on the evening of 4.1.1991 and handed over to the Telephone Operator of the complainant. As is clear from the various affidavits of Dr. Pophale he was present in the Nursing Home at that time. We are not going to believe that at the time of handing over of the System to the complainant, nobody checked it, if it was working properly. On the morning of 5.1.1991 Dr. Pophale is said to have noticed that the outgoing calls could not be made from that System and only incoming calls were being received. The System was set right on 16.1.1991 by the Engineer of the Corporation and inspection report was prepared (it is at page 78 of the Paper -Book). Against the column meant for Service Engineers comments it is mentioned: ''The wire of one extension had come off. Same was connected. Checked complete system and found the system to be working satisfactorily. Explained working of the system to Operation once again (emphasis added).'': If the Operator of the complainant was working the system properly there was no need to explain its working again to him. Against the column meant for any other comments in that report it is mentioned; ''working properly''. There is a typed/ printed endorsement under that report to the effect ''Machine found in absolutely fine and working condition''. Below that endorsement some body has signed on behalf of Pophale Nursing Home. If the System had some manufacturing defect, it could not have been set right.

WHEN the System was reinstalled on 7.2.1991 by the Engineer of the Appellant, named Mr. Kaza, another report was prepared (which is at page 56 of the Paper -Book). In the body of the report it is mentioned : ''While on the subject, we wish to highlight that the problems were mainly caused due to switching off and on of main power supply to the system, which was corrupting the software. We would urge your staff not to switch off the system at any point of time''. Below that report some body has written on behalf of Pophale Nursing Home as follows : ''System is reinstalled and working satisfactorily today.'' Shri Nitin Joshi, an Executive of the appellant, in his affidavit dated 3.8.1991 has stated that after the system was replaced on 7.2.1991 at the request of the complainant a sticker was affixed on the switch of the system to the effect that ''do not switch off. The above facts clearly show that after the system was brought to working order on 16.1.1991, the software again started malfunctioning on account of the fault of the Telephone Operator of the complainant. These problems were created by him and switching off and on'' the main power supply to the system. Hence, neither the appellant nor the Corporation can be made liable for the malfunctioning of the Electronic Telephone System. The box of the system had to be replaced on 7.2.1991 as the software had been corrupted by the fault of the Telephone Operator. Only to keep their goodwill, the appellant replaced the box.

THE learned Counsel for the Nursing Home also argued that it is a case where there was imperfection, shortcoming or inadequacy in the rendering of ''service'' by the appellant as well as by the Corporation. We do not agree with that contention. As and when the complainant made complaint, the Engineer of the appellant or the Corporation attended to it and tried to rectify the defect as is clear from the various letters exchanged between the parties. We need not dilate upon this point as in our opinion this is a case of purchase of goods. We may however mention here that during the relevant period number of telephone calls increased as is clear from the telephone bills. We may tabulate the calls as follows Telephone Number: 2045353 Period No. of calls 15.9.1990 to 15.11.1990 752 15.9.1990 to 15.1.1991 1714 15.1.1991 to 15.3.1991 1202 15.1.1991 to 15.5.1991 1144 The above telephone is in the name of Dr. H.V. Pophale Prop. Pophale Nursing Home, The other telephone No. 2020832 is in the name of Dr. H.V. Pophale. Calls made from that telephone for different periods are as follows : Period No. of calls 16.10.1990 to 15.12.1990 113 15.12.1990 to 15.2.1991 826 15.2.1991 to 15.4.1991 826 Thus, the complainants contention that no outgoing call could be made from the system for the whole period of about one month, i.e., from 4.1.1991 to 7.2.1991 cannot be accepted as gospel truth.

BEFORE closing this order, we may mention that Pophale Nursing Home (respondent No. 1) has filed a counter claim. In the Act, there is no provision for filing counter claim. In case the complainant was aggrieved against any finding about its claim arrived at by the State Commission its remedy was only to file an appeal under Section 19 of the Act. Hence, we are not taking into consideration the said counter claim. For the reasons recorded above, we accept the present appeal as well as appeal No. 212 and set aside the Order passed by the State Commission and dismiss the complaint filed by the complainant. No order as to costs in both the appeals. Appeal accepted.