NIZAMUDDIN BUILDING CENTRE vs SURYA POWER GENSETS

BRIEFLY, the facts of the case are that the applicant placed an order on the respondent on 19.8.1997 for the supply of a Kirloskar Genset of 62.5 K.V.A. The applicant paid an advance of Rs. 1.00 lakh and asked the respondent to ensure the supply of Genset within one week from the date of the letter i.e., 19.8.1997. The applicant''s contention is that the respondent failed to fulfil its obligation to supply the Genset within the stipulated period of one week and even thereafter till the date of filing of this petition i.e., 23.9.1997. It is further stated that protracted correspondence and reminders issued to the respondent yielded no fruitful results and therefore, the applicant had to hire a Genset on rental basis @ Rs. 1,000/- per day, which caused financial loss to the applicant. Thus aggrieved, the applicant has approached the Monopolies and Restrictive Trade Practices Commission under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act - in short) for grant of compensation @ Rs. 1,000/- per day from 26.8.1997 till the date of installation and commissioning of the Genset. The applicant has also claimed compensation @ Rs. 350/- per day for extra consumption of fuel due to hiring of Genset of ordinary make.

BY way of interim relief, the Commission vide its order dated 4.12.1997 directed to the respondent to supply, instal and commission the Genset at the site of the applicant''s project on payment of Rs. 1.80 lakhs in addition to the advance of Rs. 1.00 lakh already paid to the respondent. This order was passed without any prejudice to the contention of the respondent regarding the actual cost of the Genset. In its reply, the respondent has denied the allegations of restrictive/unfair trade practices and has stated that the delivery of the Genset was to be made within one month and not one week as claimed by the applicant. While giving the rationale behind the delivery period of one month, the respondent has stated that it takes about one month for the Genset to reach Delhi from the respondent''s godown at Silvasa, Union Territory of Dadar and Nagar Haveli. It is also stated in the reply that the applicant cancelled the order for the supply of the Genset on 10.9.1997. The respondent has also contested the actual price of the Genset and has stated that the price of Rs. 2.80 lakhs cited by the applicant was exclusive of excise and other levies on account of which the total price of the Genset gets raised to Rs. 3.20 lakhs. It is also stated that the applicant had confirmed the price of the Genset as Rs. 3.20 lakhs in its letters dated 20.9.1997 and 22.9.1997. It is further submitted that the respondent had informed the applicant vide its letters dated 11.9.1997, 15.9.1997 and 19.9.1997 that the Genset was ready for delivery subject to payment of the balance amount of Rs. 2.20 lakhs. It has been claimed that the applicant agreed to pay the balance amount of Rs. 2.20 lakhs but subject to prior commissioning of the Genset and adjustment of losses on account of alleged delay in the supply of the Genset. In its reply, the respondent also claims to have incurred additional expenditure on the payment of demurrage charges @ Rs. 600/- per day.

On completion of the pleadings, the following issues were framed : (1) Whether the respondent has been indulging in the restrictive trade practices as mentioned in the petition ? (2) Whether the said unfair trade practices are prejudicial to the consumer/consumers in general ? (3) Whether the applicant has suffered loss or damages due to the above ? and (4) Compensation, if any.

BOTH the parties filed their affidavits of evidence, supporting documents and list of witnesses whose cross-examination is on record. Final arguments were heard on 14.2.2001. From the maze of claims and counter-claims, the important question that emerges for consideration is whether there was delay in the supply of the Genset which may be tantamount to unfair trade practices on the part of the respondent as a result of which, the applicant claims to have suffered heavy financial loss.

IT is undisputed that there was no formal agreement between the applicant and the respondent for the supply of the Genset. But admittedly, there was an understanding arrived at between them for the supply of the Genset. In these circumstances, we have to refer to the correspondence exchanged between the applicant and the respondent as also the documents related thereto for ascertaining the truth of the matter. The first written proof available in this regard is the letter dated 19.8.1997 vide which the applicant asked the respondent to supply the Genset within a week at the total price of Rs. 2.80 lakhs (F.O.R. at Jaunapur). Interestingly, in response to this letter, no commitment or assurance came forth from the respondent. Hence, the applicant''s contention that the delivery period of one week and the price of Rs. 2.80 lakhs cannot be accepted as the agreed arrangement. At best, it was a unilateral offer for which there is no acceptance by the respondent on record. The delivery period of one week also looks doubtful in view of the fact that although the one week period expired on 25.8.1997, the applicant sent reminders long after the expiry of the said period asking the respondent to expedite the delivery of the Genset. These reminders were sent on 29.8.1997 and 4.9.1997 respectively. This shows the applicant''s willingness to accept the delivery of the Genset even 17 days after the alleged one week period. In the above mentioned letters, the applicant also mentioned that additional expenditure @ Rs. 1,000/- per day on hiring the Genset was being incurred but it did not clarify that the expenditure thus incurred will be adjusted against the price of the Genset. The respondent has also brought to our notice an anomaly in the letters received from the applicant. In the fax reminder dated 29.8.1997, the date of the purchase order has been hand written as 18.8.1997 as against 19.8.1997 claimed earlier. This raises a doubt as to the veracity of the applicant''s claim. The respondent sent a fax message on 5.9.1997 to inform the applicant that the Genset is in transit and it is likely to reach Delhi on 8.9.1997. Since the Genset could not arrive on 8.9.1997, the applicant informed the respondent through fax dated 10.9.1997 that if the Genset is not installed and commissioned by the evening of the same day i.e., 10.9.1997, the order will be cancelled. The respondent informed the applicant that the Genset would reach Delhi on 11.9.1997. However, the applicant decided not to wait for a day more and cancelled the order on 10.9.1997 itself i.e., on the same day on which a threat of cancellation was given. In its fax message, the respondent had also asked the applicant to arrange for the balance payment and inspection of the Genset. On 19.9.1997, the respondent again asked the applicant to arrange payment of the balance amount of Rs. 2.20 lakhs latest by 22.9.1997, failing which, it was clarified, the respondent will not be liable to deliver the Genset or to refund the advance. In its reply, the applicant wrote to the respondent on 20.9.1997 informing him that the outstanding dues were never denied by the applicant and further stated that the applicant will not be in a position to make the full payment of the amount demanded by the respondent on account of late delivery of the Genset. In the aforesaid fax message dated 20.9.1997, the applicant also informed the respondent that the matter had been referred to the MRTP Commission, whereas from the record, we find that the compensation application was filed in the Commission on 23.9.1997.

FROM the facts discussed above, it is clear beyond doubt that the time frame for the delivery of the Genset was not reduced to writing. Nor was any commitment made by the respondent to deliver the same within a week. Thus, the applicant''s claim that the Genset was to be delivered within one week from the date of placing the order is not supported by any evidence on record except its own statement in the letters which is unilateral. It also looks irrational to expect the delivery of the Genset within one week if the Genset was to be brought to Delhi from Silvasa, Union Territory of Dadar and Nagar Haveli. There is also no proof on record that the Genset was readily available in Delhi. Nor has it been so claimed by the applicant in its averments. The respondent''s claim that it takes about one month for the Genset to reach Delhi from Silvasa has not been controverted by the applicant. The applicant has also not controverted the fact that the Genset was available with the respondent in Delhi on 11.9.1997. This being so, the allegation of delay on the part of the respondent remains unproved by the applicant.

THE dispute now gets narrowed down to the price of the Genset and the terms of payment. While the applicant insisted that the Genset should be installed and commissioned before the payment of the balance amount, the respondent asked the applicant to inspect the Genset and pay the balance amount. Neither the applicant disputed the balance amount payable to the respondent nor the respondent ever declined from installation and commissioning of the Genset. In fact, in its letters dated 20.9.1997 and 22.9.1997, the applicant has admitted the outstanding amount due to the respondent. Since the applicant has failed to prove that the respondent had agreed to instal and commission the Genset before the payment of the balance amount, the respondent cannot be blamed for its failure to deliver the Genset before making the balance payment. It is also admittedly correct that the respondent had made the Genset available for delivery in Delhi within the reasonable period of one month. But the delivery was not effected because the respondent insisted on prior payment of the balance amount and offered to execute the remaining part of the deal i.e., installation and commissioning later. Looking at the totality of the facts and circumstances of the case as discussed above, the applicant has failed to make out any case of restrictive/unfair trade practices against the respondent by reason of delay in the delivery of the Genset or any other deficiency in service. This being so, the applicant''s claim for grant of compensation for the loss or damage allegedly suffered by him cannot be looked into because the law requires that such loss/damage should have resulted form the restrictive/unfair trade practices on the part of the respondent which the applicant has failed to establish. Since the applicant has admitted the outstanding amount due to the respondent in its letters referred to above, the balance amount of the price of the Genset i.e., Rs. 40,000/- is payable to the respondent because the Genset has been installed and commissioned by the respondent pursuant to the order of the Commission.

In view of the above, the compensation application of the applicant is rejected with no order as to the costs.

THE applicant is directed to pay the balance amount of Rs. 40,000/- to the respondent within eight weeks from the date of receipt of this order. C.A. dismissed.