SARAT EQUIPMENTS vs INTER-UNIVERSITY CONSORTIUM

THIS appeal is directed against the order of the State Consumer Disputes Redressal Commission, Madhya Pradesh at Bhopal, dated 22.1.1994 by which the opposite party, appellant in this appeal, was directed to pay Rs. 1,02,000/-.

THE facts giving rise to this appeal are that the complainant-respondent, Inter-University Consortium, a Society established by the University Grants Commission, purchased an X-Ray Generator from M/s. T.R. Technology (Rigaku) and a Water Chilling Plant was needed for the same. M/s. T.R. Technology recommended water circulation system manufactured by the appellant. THE respondent made an inquiry from the appellant for the supply of water chilling plant. After correspondence it was agreed between the parties that the appellant would supply water circulation system (chilling unit) to meet the requirements of two systems viz., Rigaku Rotating Anode X-Ray Generator (12KW) and the XPS/UPS system. THE price including all expenses upto installation and satisfactory demonstration was settled at Rs. 1,55,428/-. 75% of the price was payable at the time of delivery at Indore and the balance 25% after the proper installation and demonstration. THE unit was to be installed within two weeks and the opposite party had guaranteed successful and proper functioning of the unit for a period of 12 months. THE equipment was supplied and the complainant required the opposite party to instal and demonstrate the plant between 15th April and 20th April 1991. After the plant was installed and demonstrated the complainant wrote to the opposite party on 11th May 1991 complaining that plant was defective and was working with only about 0.7-ton capacity while it should work with 5 ton capacity. THE opposite party was required to do the needful before 15th May or to take back the plant and return the money paid by the complainant. THE case of the complainant was that the opposite party promised to do the needful, but nothing was done. Ultimately, the opposite party checked the plant and found that the compressor was defective and replaced it. Even after replacement, the plant was found working only around 1 ton capacity instead of the capacity of 5 tons. THE opposite party went on seeking time to repair the plant. Ultimately, when this was not done, the complainant had to get the plant repaired from local market at a cost of Rs. 27,000/-. According to the complainant he suffered losses and damages due to delay in commissioning of the plant and estimated the damages as Rs. 1 lakh. With this grievance complainant approached the State Commission with a demand of Rs. 1,27,000/- towards compensation. Needless to say that the complaint was contested on behalf of the opposite party on various grounds. It was contended that the chilling water circulation system for the plant was being used by the researchers and the complainant charged fees from those researchers for using the said machine and, therefore, the transaction was commercial and not covered by the Consumer Protection Act, 1986. It was also pleaded that the system could not be installed within the stipulated time for reasons attributable to the complainant alone; the opposite party was ready to instal the system but the machine with which the said system was to be attached had not been received by the complainant; that there was no manufacturing defect in the system; the reason why the system has not given the desired result was also attributable to the lapses on the part of the complainant; mishandling of the system was the reason for the system not giving desired performance; Gas leakage was due to mishandling of the system. The repairs said to have been effected by the complainant were not necessary and it was not necessary to replace the compressor also. The parties led evidence in support of their respective contentions.

After considering the relevant contentions of the parties and perusing the material placed on the record, the State Commission returned the finding that the purchase of the machinery was not for commercial purpose, the opposite party had failed to rectify the defects despite affording a number of opportunities. The State Commission awarded to the complainant Rs. 27,000/- for the amount spent on repairs etc., besides a sum of Rs. 75,000/- was awarded towards damages.

WE have heard the learned Counsel for the parties. The first contention of Mr. S.K. Sharma, was that the finding of the State Commission that the purchase of the water plant was not for commercial purpose was not correct. According to him, the system was to be used for the research work and fees was being charged by the complainant from researchers. On the other hand, the Counsel for the respondent urged that the finding of the State Commission on that point was justified and calls for no interference. On this point, the State Commission returned the finding that the complainant had refuted the charge that fees was being charged for use of equipment. A commercial purpose envisaged profit making. The main purpose of the activity must be to generate profits by using the goods purchased. If an educational institution bought equipment for being used by the students and even if it charged certain amount of fees for allowing the equipment to be used for students, the main purpose of purchase could not be said to be commercial. It was one thing to purchase the property with the object of making profit by hiring it to others for use and it was entirely a different thing when the equipment was bought for the purpose of use of students for education and charging a certain amount to render the costs and maintenance charges for such equipment. In the present case, the equipment was purchased for being attached to some other system purchased for the purpose of education and research, it could not be said to be a purchase for commercial purposes.

WE have gone through the reasons given by the State Commission very carefully. In our opinion, the reasons rendered by the State Commission are well justified and we are not inclined to disagree with this finding. In view of this, we find no force in the contention raised on behalf of the appellant and it is repelled. The other point that was canvassed by Mr. Sharma was that the plant was not defective and the defects had occurred due to mishandling of the plant by the opposite party. There was no justification for getting it repaired at a cost of Rs. 27,000/-. We have perused the entire material placed on record by the parties. The respondent-complainant asked again and again to the appellant to rectify the defects. By letter dated the 24th April, 1991 the complainant informed the appellant that the plant was not giving satisfactory performance and if the plant was not set right by 31st July, 1991, they would take action against them, such as, the balance of money payable to them would be forfeited; and that they would get the chilled water unit rectified from somebody else and the opposite party would be liable to pay all the costs so incurred. It appears, despite this, no action was taken on behalf of the appellant to rectify the defects. By another letter dated the 25th September, 1991, the complainant informed the opposite party that they had failed to perform their part of the agreement for supplying chilled water unit capable of 12 KW performance, the balance money of 25% i.e. Rs. 38,857/- payable to the opposite party was forfeited. Again this was repeated in the letter dated 25th October, 1991. The complainant spent a sum of Rs. 27,000/- and got the defects rectified from M/s. Jawahar Refrigeration, Indore. In our opinion, the State Commission was right in holding that the unit was got repaired from a local party after giving full opportunity to the opposite party to remedy the defect.

IT was lastly contended that the award of Rs. 75,000/- infavour of the complainant was not based on any evidence and the amount awarded was arbitrary and without any proof placed on record of the case. The complainant had already forfeited Rs. 38,857/- being the 25% balance amount of the price of the plant. We have given our thoughtful consideration to the matter. In our opinion, the State Commission was justified in awarding Rs. 27,000/- spent on repairs of the plant. The complainant had already forfeited a sum of Rs. 38,857/-, 25% of the balance price payable by the complainant to the opposite party. We feel there was no justification in awarding another sum of Rs. 75.000/- towards damages to the complainant. Nothing was placed on record justifying the loss suffered by the complainant. The total price of the plant was Rs. 1,55,000 /- The complainant got a sum of Rs. 27,000/- for the repairs of the plant and an amount of Rs. 38,845/- was also forfeited by the complainant towards the balance price of the plant. In our opinion, this was enough compensation, which could be awarded to the complainant. In the result, the appeal is partly allowed and the award of compensation of Rs. 75,000/- by the State Commission to the complainant is set aside. The remaining part of the order of the State Commission is upheld. The parties are left to bear their own costs in this appeal. Appeal partly allowed. ______________