RECKON DIAGNOSTIC vs BLUE STARS LIMITED

IN this complaint, filed on 25th September, 1990, the complainant has alleged that he had purchased from opposite party No. 1, Blue Stars Ltd., representing opponent Party No. 2 one double Beam Hitachi spectrophotometer (Model No. U 2000 manufactured by Opposite Party No. 2 Nissei Samglup Ltd. of Japan).

THE case of the complainant is that the said Spectrophotometer (for short the said Machine) was found to be defective and, therefore prayed for different reliefs as set out in para 11, and the compensation of Rs. 8,00,000/-. Notices were issued on June 12, 1990 to both the parties. Opposite Party No. 1 Messers Blue Stars Ltd., appeared and filed its Affidavit-in-reply on June 22,1990.

Therefore, the original complainant with Consumer Education & Research Society, now the second complainant, filed an application seeking permission to amend the complaint and permission to join the second complainant also as a party to the complaint. The said application for amendment was resisted by the Miss. Kapadia, who appeared as a Counsel on behalf of the Opposite Party. However, during the course of the arguments when we pointed out that the Commission can permit the first complainant to withdraw the complaint with permission to file a fresh complaint on the same cause of action, but the said course would prolong the litigation unnecessarily, Miss Kapadia did not press for the grounds of her objection and consequently the amended complaint was taken on file and parties given liberty to rest their case on the new pleadings.

AFTER the said amendment, Opposite Party Blue Stars Ltd. filed its Affidavit-in-reply on July 31,1990 alongwith certain documents. Thereafter the complainant''s representative Deepak Khurana filed the affidavit-in-rejoinder on behalf of the complainant. Mr. Khurana also produced certain documents along with the said rejoinder affidavit and, in reply, the opposite party Blue Stars filed affidavit-in-sur-rejoinder on 6th October, 1990. The learned Advocates and the Counsel appearing on behalf of both the parties addressed us at length, both on merits as also on the preliminary contentions, and they have relied upon the Affidavits and the documents produced by them in support of their case.

IN order to appreciate the case of the respective parties, we will first refer to in brief the case of the complainant as emerging from the amended complaint and some of the documents : 7(1) Complainant No. 1 Reckon Diagnostic had purchased one Hitachi Double Beam Spectrophotometer (hereinafter to be referred to for short as the ''said machine'') from the first opposite party, Blue Stars Ltd., who acted as agents for Opposite Party No. 2 manufacturers of the said machine a Japan based party as per the order placed on June 6, 1988. Copy of the said order is found to be annexed at Annexure-1. It is alleged by the complainant that the order was placed after discussion with the Representative of Blue Stars regarding the performance of the Spectrophotometer. He further alleged that Blue Stars Ltd., had represented that they were the sole agent of Opposite Party No. 2, and that the performance perameter of the said machine would be doing rate assay as shown in the Brochure. Copy of the said brochure has been annexed at Annexure-II to this complaint 7(2) The complainant has then alleged that the opposite party No. 2 had made an assertion that the auto-sippers fixed to the instrument will also function satisfactorily. According to the complainant, this auto-sipper is used for automatic aspiration of serum samples under test and to maintain an accurate temperature in flow cell. Annexure III to the complaint is the brochure of the said auto-sipper. 7(3) The complainant has further alleged that Opposite Party No. 1 had also given assurance by asserting that the UV-Region of die said instrument will also function properly. According to the complainant, the walve length range of the disputed machine as shown in the Brochure would be 190 to 1100 mm with photo-metric range from A B S -1 to 3 A B S. 7(4) The complainant''s case, then, is that after the machine was received and installed at their premises, it was found that the first Opposite Party Blue stars had made misleading and false statements concerning the performance of the disputed instruments, in that, (a) So far as rate assay is concerned, it was found, that rate assay at 340 nm was not performing. Further, the U V region was very noisy and it did not read absorbance more than 1 properly. The complainant has averred that the documentary proof in respect of the said performance is contained in the service report of the opposite party, while they under took service on 17th and 21st April, 1988. The complainant has, therefore, submitted that the said assertions which were found to'' be mis-leading and/or false and incorrect, amount to unfair trade practice within the meaning of Section 36A(1)(i) and (iv) of the MRTP Act, read with Section 2(1)(r) of the Consumer Protection Act, 1986, (for short the C.P. Act). 7(5) The complainant has also asserted that the said machine was not for re-sale but was means only for disgnostic testing at their own premises and, therefore, he was a ''consumer'' within the meaning of the C.P. Act. Further, according to the complainant, no raw material is consumed for making a new product. IN other words, according to him, the said instrument is not used for manufacturing any new product which would be put to commercial use. Further, according to the complainant, even if he may not be held to be a consumer, the real issue in this complaint hinges upon performance of services; that in the present case, the goods were supplied by opposite party No. 2 and the services were to be rendered and/or performed by Blue Stars Ltd. Opposite Party No. 1 in this complaint. According to the complainant, both of them are the integral parts of the contract and one cannot be separated from the other. On these premises, the complainant has averred that the Blue S tars Ltd., has been deficient in the performance of services, in that, right from the date of installation, the said party has been groping in the dark as to how the machine is going to work. It has made experiments on the property belonging to the complainant and the complainant hence suspects that it is this defective handling of the machine by the opposite party Blue Stars, which has created serious problems for them. Thus, according to the complainant, on this ground, this is a clear cut case of deficiency of services as defined Section 2(1)(d) of the C.P. Act and mat for such cases, according to the complainant, question of commercial purpose is not at all relevant. 7(6) IN paragraph (7) of the amended complaint, the complainant has enumerated the problems arose and faced by the company after the installation of the machine in question. On the aforesaid facts, the complainant has prayed for various reliefs and has prayed that they may be awarded the compensation of Rs. 8,00,000/- stating that the said machine would cost Rs. 2,60,000/- inclusive of Rs. 10,250/- being the expenses, etc. The complainant has also prayed for an order directing Blue Stars Ltd. to replace the machine in question and if that may not be possible, to award an amount of Rs. 5.40 lakhs as compensation. Thus, the complainant has prayed for the total compensation of Rs. 8 lakhs. Mr. Arun Khurana, the General Manager of the Analytical Instrument Department of Opposite Party Blue Star, has filed the Affidavit-in-reply on July 3,1990. Among other contentions, the opponent has raised preliminary contentions stating that the complainant is not a ''consumer'' within the meaning of the C.P. Act, since the said instrument was meant for commercial purpose. According to the opposite party, the complainant had purchased the said machine to enable them to carry on diagnostic tests of raw material, as also finished and semi finished products. According to the deponent, therefore, this would go to show that after such testing, the goods produced were meant for marketing and hence for commercial use. The rest of the preliminary contentions which have been raised cannot, however, be said to be preliminary objections since they are as such in the form of defence raised on merit 8(1) On merit, Mr. Khurana has denied that they had resorted to any unfair trade practice or that they had made any mis-leading or incorrect statements to the complainant. He has also denied that any discussion as alleged by the complainant had taken place between the parties. However, he has reproduced whatever assertions they had made prior to the installation of the disputed machine, in paragraph 6 of this affidavit, in details. 8(2) According to the deponent, the diagnostic kits produced by the complainant are tested for quality control on the said Spectrophotometer and the same are launched into the market and sold. 8(3) According to the deponent Mr. Khurana, as far as performance of the service is concerned, Opposite Party has bent over backwards to try and help its customers and to achieve the customers'' satisfaction. He has stated that the engineers of the manufacturer company from Japan had also visited the place where the said machine was installed. According to the deponent, there was nothing wrong with the disputed machine and that the problem as emerging from the service reports was that of the application of customer''s sample to the said instrument and that SGOT analysis on the said instrument which caused some problems has been ractified, after modification and that the complainant was fully aware of the modifications which were proposed to be made so as to see that his SGOT sample could be tested on the said machine. 8(4) After referring to the functions and technical details in nut-shell, the opposite party has denied of there being any defect in the said machine, and has also denied the allegations of misleading and incorrect representations. In these premises, while denying the case of the complainant, the opposite party has also contended that the issues involved are too technical and that the said can only be resolved by taking elaborate evidence and only with the assistance of the experts; and so contending, the opposite party has prayed for dismissal of the complaint. Having regard to the pleadings of the parties and the documents produced, the points that arise for our determination in this complaint are as follows : 1. Whether complainant No. (1) Reckon Diagnostic is ''Consumer'' within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1985? 2. Whether the instrument known as "Hitechi Double Beam Spectrophotometer" was defective, as alleged? 3. Whether the said machine supplied by the Opposite Parties was in accordance with the specifications as detailed in the Brochure, as contended by the opposite parties? 4. Whether the dispute can be suitably determined without following the elaborate procedure of recording the oral evidence and without testing and without the help of the technical experts on the subject? 5. Whether the Opposite Party is guilty of following unfair trade practice? 6. What order?

Before entering into the merits of the case, we will first take up for consideration, the preliminary contention advanced by the opposite party as to whether the first complainant is or is not a "consumer" within the meaning of Section 2(1)(d) of the Consumer Protection Act. Point No. 1 : The definition of the term ''Consumer'' contained in Section 2(1)(d)(i) of the Act reads as under : " "Consumer" means any person who - (i) buys any goods for a consideration which has been paid or promised or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for re-sale or for any commercial purpose. xxxxxx " The definition thus clearly excludes the person or persons who obtain such goods for re-sale or for any commercial purposes. The term "Commercial purpose" had come up for consideration before the Hon''ble National Commission in number of matters. In the case of M/s. Oswal Fine Arts v. H.M.T. Madras I (1991) CPJ 330 (NC) being Original Petition No. 1 of 1988, decided on April 27,1989, an off-set printing machine which was purchased by the complainant, was found to be defective, the complaint was rejected and one of the ground for its rejection was that M/s. Oswal Fine Arts was a "Commercial" establishment and that establishment obtained goods for its commercial purposes and such a consumer who obtains goods for commercial purpose, according to his Lordship, was excluded from the scope of the expression "consumer" by the definition contained in Sec. 2(1)(d)(i) of the Act. In another case M/s. Lohia Star Linger Ltd. v. M/s. Zenith Computers Ltd. I (1991) CPJ 145 (NC) (Original Petition No. 39 of 1989 decided on December 11,1989) the National Commission had to consider the question whether the computer system purchased by the complainant which was alleged to be defective, can be settled by the Commission, and the question that was posed was whether the complainant was the ''Consumer'' within the meaning of Section 2(1)(d)(i) of the Consumer Protection Act, 1986. The National Commission felt that the computer system was purchased by the complainant for commercial purpose, namely, for being installed and used by the complainant company for commercial purposes, to increase the production, to cut-down the costs of production or to promote sales and, therefore, the complainant was not a ''consumer'' as defined under the Act. The argument of the learned Advocate for the complainant in that case was that the computer system was not acquired for any such commercial purpose; and that it was not being used for commercial purpose to increase production or cut-down the costs of production; and that, at best, it could be deemed to have been used for computerizing the performance of certain activities in the company which hitherto were being done manually and that it would not be fairly and correctly maintained, that the computer was purchased as being used for commercial purpose and according to his submission, therefore, the complainant was a bonafide purchaser/consumer as defined under the Act and that the Commission had full jurisdiction to entertain the complaint. On query being made, the learned Counsel for the complainant informed the Court that the cost of the computer system formed part of the assets in the balance sheet of the complainant company; and that the cost of maintenance and operation and depreciation of the computer system were charged to the Profit and Loss Account of the complainant company. He also admitted that the expenses on account of depreciation operation and maintenance, formed part of the over-head cost of the products manufactured and sold by the company. The Hon''ble Commission, on these facts, came to the conclusion that, that left no room for doubt to hold that the computer system was and is being used for commercial purpose and had been acquired as such. The Commission, therefore, held that the complainant company had brought the computer system for a commercial purpose and that, therefore, it was not a ''Consumer'' as defined in the Consumer Protection Act.

IN the instant case, the complainant bad purchased one double-beam spectro photometer Hitechi Model U 2000 and, as stated in the first complaint, this machine was purchased to enable the company to undertake and do the testing of finished product, raw material and the material in process, etc., and was not meant for re-sale. IN the amended complainant, the complainant has in terms stated that the company had purchased the said machine for the purpose of testing the voltage at a given time and to check the correctness of the diagnostic testing of the product manufactured by them and for testing the raw material as well as the semi-processed material.

THE Opposite Party has raised a preliminary objection contending that the complainant is not a ''consumer'' within the meaning of Sec. 2(d) of the Act, since the said provision expressly excludes any person who buys the goods for any commercial purpose. THE opposite party has further submitted that the complainant had purchased the machine to enable them to do testing of their finished product, raw material and material in process, etc., and has further stated that the very fact of the testing of their various types of products such as finished raw material, etc. was required to be done by the suit-machine, makes it abundantly clear that after such test being carried out, the goods were meant for marketing and for ''commercial purpose'' only., Now, it is an admitted position that this Spectrophotometer was meant for testing the fitness of the material produced and marketed by the complainant and it was one of the integral part of testing the material before the same would be put into market for sale. In our opinion, therefore, this case is stronger than the cases referred to by us hereinabove. Cost of this Spectrophotometer machine obviously forms part of the equipment for testing and thereafter pushing the product in the market for sale on commercial basis. There is, therefore no doubt left in our mind to hold that the purchase of the disputed machine was for ''commercial purpose'' namely for the purpose of augmenting the sales in the market of its product by the complainant. We, therefore, hold that the complainant is not a ''Consumer'' within the meaning of Section 2(1)(d)(i) of the Consumer Protection Act. That being so, we have no jurisdiction to entertain and decide the dispute between the parties.

We have reproduced the respective pleadings of the parties at length so as to understand the nature of the dispute. These disputes cannot be determined and decided without the assistance of the Expert witnesses and without considering elaborate evidence of both the parties. In our opinion, therefore, this is a fit case which can tried and agitated in the Civil Court. On that ground also, we are not inclined to entertain this complaint. The complainant will be at liberty to approach the civil Court or any other forum as the desires or as may be advised. We do not entertain this complaint or express any opinion on merits. Hence order : The Complaint is dismissed on the ground of want of jurisdiction. There will be no order to costs. Complaint dismissed.