MATHER AND PLATT (I) LTD. vs KALEESWARI INDUSTRIES

FIRST Appeal No. 386/93 by M/s. Mather & Platt (I) Ltd., the Opposite Party before the State Commission and First Appeal No. 435/93 by M/s. Kaleeswari Industries, the Complainant before the State Commission are directed against the order dated 17.5.93 allowing the complaint and directing Opposite Party to pay to the Complainant the sum of Rs. 4,97,152.86 with interest at the rate of 12% per annum from the date of the order with costs of Rs. 2,000/-.

THE Complainant is«a registered partner-ship-f jrm constituted to commence and carry on a business of Book Binding Cloth and related goods etc. The copy of the partnership deed is on record incorporating therein that the principal object of the firm shall be to engage itself as manufacturers, dealers, agents, importers, exporters and traders of Book Binding Cloth and related goods for the above said purpose. The Complainant needed machinery for the Book Binding Cloth project. The Opposite Party is a leading manufacturer of Back Filling Machine, Calendering Machine and Damping Machine used for production of Book Binding Cloth. They gave an offer dated 31 st March, 1987 to the Complainant to sell, install and erect the machinery. The Complainant accepted the offer and placed an order vide their purchase order dated 30th June, 1987 for the supply of said machineries. There was some dispute about payment schedule. The order was later confirmed by the Opposite Party by their letter dated 1.11.89. The Opposite Parties supplied the machines on 31st March, 1990 and erected the same on 12.4.91. Some more parts were supplied on 5.8.91 for completion of the manufacturing unit. These are undisputed facts. The Complainant had alleged that the machinery did not function properly but restricted its claim before the State Commission only to the Back Filling Machine valued at Rs. 7,50,000/-. The State Commission formulated three points for consideration namely, (i) whether the complaint is maintainable, (ii) whether there has been any deficiency of service on the part of the Opposite Party, and (3) to what relief the Complainant is entitled. The State Commission held that the Complainant had purchased from the Opposite Party Back Filling Machine also called Coating Machine, Calendering Machine and Damping Machine for the production of Book Binding Cloth. The purchase is no doubt for commercial purpose and the Complainant is not therefore, a consumer within the meaning of Section 2(l)(d)(i) of the Consumer Protection Act, 1986. The State Commission, however, held that the Complainant certainly, will be a consumer under Section 2(l)(d)(ii) of the Act in respect of services rendered or to be rendered by the Opposite Party for the proper functioning of the machineries during the period of warranty. The State Commission held that Bank Filling Machine had failed to work properly even from the beginning and hence it was not proper on the part of the Opposite Party to have insisted on payment of the balance before attending to the improper functioning of the Back Filling Machine and therefore there is gross deficiency of service on the part of the Opposite Party in its failure to rectify the malfunctioning of the Back Filling Machine. The State Commission allowed the complaint as already noticed and gave the directions in the impugned order.

WE have heard the learned Counsel for the parties and have gone through the records of the two appeals. It is writ large on the record that the machinery was purchased by the Complainant for commercial purpose. The purchase of the machinery was clearly for enabling the Complainant to carry on its commercial activity of manufacturing Book Binding Cloth on a large scale for the purpose of trade with which object the partnership firm was constituted. A person who purchases goods for consideration and obtains such goods for commercial purpose is not included in the definition of consumer as given in Section 2(l)(d)(i) of the Consumer Protection Act.

THE next question is whether the Complainant who purchased the machinery for commercial purpose will be a consumer under Section 2(l)(d)(ii). This will depend upon whether there was any warranty as part of the composite contract of supply, installation and erection of the machinery and its maintenance for any fixed period during which the alleged defects occurred. The terms of guarantee are contained in the acceptance letter dated 1.11.89 to the following effect: "We undertake that the machinery manufactured by us shall be of first class materials and of sound workmanship and that we will make good or replace any defective parts or defects therein, which may appear within 12 months of delivery from our works and which are proved to be due solely to the use of defective material or bad workmanship, any defective parts replaced to be our property."

The first letter of the Complainant is dated 10.6.91 in which the firm stated that the erection and commission of 3 Bowl Clander, Back Filling unit and Damping Machine had been completed by the Opposite Party''s Erector, Mr. P.G. Nair and that "all the above said 3 machines working properly except Doctor blade on back filling unit is not working properly". Mr. Viswanathan, Service Engineer of Opposite Party attended the works from 7.8.91 to 17.8.91. The Complainant wrote letter dated 17.8.91 that "in Back Filling Machine Cotton Bowl grinded and New Doctor blade fitted, now the coating is even without the use of eccentric mechanism". It also mentions that the speed achieved by the Coating Plant (Back Filling Machine) is not 10 meters/minute and the drying range is working 5 meters/minute only. A further demand is made that Entry Batching arrangement have not been provided for Bach Filling Machine and the Opposite Party is called upon to arrange one set of Entry Batching arrangement with shafts. There is lot of correspondence between the parties to which a reference is not called for. The Opposite Party had offered to modify the Drying Machine to give the Complainant the final speed of 10 meters/minute but the Opposite Party wanted clearance of the balance of payment. It is manifest from the specifications of the supply that Book Binding Cloth Machinery with an operating speed of 10 meters per minute was the contract. The case of the Complainant is that the machinery that was supplied is defective from the very beginning and it had not achieved the operating speed of 10 meters per minute and not that it had developed defects subsequently after use. The complaint in substance is regarding breach of contract of sale and supply of goods and not deficiency in service. The Opposite Party had undertaken to supply, erect, and commission the machinery, but there is no contract of maintenance of the machinery by the Opposite Party for a period of one year as has been erroneously held by the State Commission. Such a contract is neither contained in the offer and acceptance nor there is any separate contract. What is agreed in the guarantee is the replacement of defective parts proved to be defective due to solely to the use of defective material or bad workmanship. In this category fell "Doctor Blade on Back Filling Unit" which was replaced and a new Doctor Blade fitted on or about 17.8.91. Section 2(l)(g) defines that "deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service". The deficiency must pertain to the performance in terms of quality, nature and manner to be maintained or has been undertaken to be performed in pursuance of a contract.

THE Complainant restricted relief for the Bank Filling Machine valued at Rs. 7,50,000/- in the complaint. The prayer clause in the complaint is restricted to direct the Opposite Party to rectify all the defects or to replace all the machinery with new one which should be free from any defects and shall work to its full capacity as promised by them. In our view, the case falls purely in the realm of the breach of contract for the sale and purchase of machinery found not in accordance with the specifications. The machinery is admittedly purchased for commercial purpose. There is no deficiency in service within the scope and ambit of Section 2(l)(g) of the Act. The remedy for the defective goods purchased for commercial purpose lies not in Consumer Redressal Forums but elsewhere.

IN the result the appeal of the Complainant fails and that of the Opposite Party is allowed. The impugned order of the State Commission are set aside and the complaint dismissed leaving the parties to bear their own costs throughout.