S.B.GOTADAKI vs PRIMARY CO-OPERATIVE AGRICULTURE AND RURAL DEVELOPMENT BANK LTD.

THIS complaint is regarding the sub-standard and defective PVC pipes for irrigation supplied by the Opposite Party No. 2 Supreme Industries Limited for Rs. 8.43 lakhs in 1989.

THE complainant, for executing life irrigation works for irrigating lands of himself and others in Lolsur, Basaligundi and Arabhavi of Gokak Taluka from Ghataprabha river arranged for loans totalling Rs. 8.76 lakhs (see statement at Page 21 of the paper book) through the Opposite Party No. 1 Cooperative Bank. For lift irrigation, PVC pipes of ISI specifications were purchased from Opposite Party No. 2 Supreme Industries Ltd., which were supplied in 1989. In April, 1993 the Complainant filed a complaint before this Commission alleging that the PVC pipes were defective. According to the complainant the Opposite Party No. 2 was to supply pipes which would sustain 60 H.P. force 2 but the pipes were of inferior quality; they could not sustain 40 H.P. force and therefore burst and started leaking. He has lodged a claim for Rs. 39.21 lakhs against the Opposite Party No. 2. The claim is composed of the following elements: (i) Repayment of the loan amount of Rs. 14.21 lakhs to the Bank. (ii) Mental agony, pain and suffering Rs. 10 lakhs; and (iii) Damages and loss of income Rs 15 lakhs.

THE complainant has also alleged that the Opposite Party No. 1 the Bank has joined hands with Opposite Party Nos.2 and 3 - Supreme Industries and initiated proceedings against the complainant for recovery of the loan amount. He has also therefore, charged the Opposite Party No.1 the Bank with negligence inasmuch as "when the opponent No.1 knowing fully well that, the goods supplied by the opponent No. 2 are defective and the complainant and other members are not in a position to repay the loan amount and the amount sanctioned by the opponent No.1 to the complainant and other members is of no use and the complainant and other members are not benefited by the said loan amount. Therefore, the complainant is constrained to file this petition on his behalf and on behalf of other members of the said project." He has also pleaded that it was the bounden duty of the Opposite Party No.1 the Bank to have verified the quality of the material supplied by Opposite Party No.2 and that for its failure to do so the Opposite Party No. 1 is guilty of negligence and deficiency in service in not properly examining the goods supplied by Opposite Party No. 2. He has therefore, prayed that Opposite Party No. 1 be directed to stop further proceedings regarding recovery of loan etc., against the complainant and other members of the said project. The complaint has been filed by the complainant Shri Gotadaki on his own behalf and also in his capacity as power of attorney, holder on behalf of the 23 other beneficiaries of the lift irrigation scheme.

THE complaint has been contested by the Opposite Parties. Opposite Parties Nos. 2 &3 Supreme Industries have pointed out that Agricultural Rigid PVC pipes were supplied in June, 1988 and the present complaint has been made on 24th March, 1993 i.e. after the expiry of more than four years and nine months. The complaint is, therefore, hopelessly barred by time. It has further averred that the purpose of the lift irrigation scheme was to increase the income and employment of the complainants and the scheme was, therefore, for a commercial purpose and as such, the complaint was not maintainable under the Consumer Protection Act. Its further contention is that the specifications of the pipes to be supplied were in terms of pressure per sq. cm.; 2.5 Kg./per sq. cm., 4 Kg./per sq. cm. and 6 Kg./per sq. cm. and not in terms of H.P. force. The pipes supplied were according to the prescribed specifications and were of the ISI standard. In fact as per the project report only three units of electric motor driven pump sets of 15 H.P. each were to be installed and only one motor of 15 H.P. was to be used at any one point of time. Therefore, if the complainant used 40 H.P. electric motor for pumping, it cannot be held that the bursting of pipes was due to the pipes being of defective or sub standard. According to the Opposite Parties Nos. 2 and 3 "the pipes are never sold on H.P. rating rather those are always sold on Pressure Rating and as such to hold the respondents guilty of inferior supply on the basis of H.P. rating is an incorrect approach of the complainants and not tenable." The complainants never made any complaint for more than three and half years after the supply of the PVC pipes and therefore, the Opposite Parties were not liable for the bursting of the pipes if it has occurred after the lapse of many years of use. The Opposite Party No.1-Bank has in its reply to the complaint also submitted that the complaint is barred by limitation, that at the relevant time, the Complainant Shri S.B.Gotadaki himself was the President of the Opposite Party-Bank and misused his powers as the President of the Bank to make gain out of the lift irrigation scheme. He played the dual role of the grantor and guarantee of the loan. It has also challenged the authenticity of the list of loanees furnished by the complainant as the same has been prepared by the complainant himself.

IT has also disputed the power of attorney produced by the complainant with his complaint on the ground that the same has not been executed before any Magistrate or a public notary for its authentication. It has further alleged that the complainant himself, as the President of the Bank (O.P. No. 1) approved the quotation of Opposite Party No. 2 and ordered the supply of the pipes for Rs. 8.43 lakhs on 29th April, 1988 in his capacity as the President of the Opposite Party Bank. The Opposite Party No. 1 Bank has explained that the complainant has filed his complaint before this Commission after recovery proceedings were started and an award was passed against him in A.B.N. Case No. DRL. ABN. 320/ 1992-93. These proceedings were initiated as the complainant and other members of the said scheme failed to pay the overdue installments of the loans. To sum up the version of the Opposite Party No.l ".......... the complainant himself, as the President of the opponent No. 1 (Bank) has placed an order for supply of the goods with opponent No. 2 by a letter dated 29.4.1988 under his own signature and he has taken delivery of the goods, examining the standard ISI marks on the goods and the quality of the same. Therefore, opponent No. 1 Bank cannot be held to be negligent and deficiency of service cannot be attributed to this opponent. Added to this, the complainant himself, in the capacity of the President of opponent No. 1, has got the goods in question approved by the Karnataka State Co-operative Agriculture and Rural Development Bank Ltd., Bangalore. Under these circumstances..........by misusing the office of the President of opponent No. 1. Bank and abusing the powers, he has played the dual role with an intention to dupe the opponent-Bank. With an ulterior motive of delaying the execution of the award against him, the complainant has approached this Commission to the detriment of the Opponent No. 1 Bank..............."

THE rejoinder of the complainant to the objections of Opposite Parties Nos. l&2does not adequately answer the allegations levelled against the complainant. He averred that even though he was the President of Opposite Party No. 1 Taluka Bank, the loan was to be sanctioned by the Board of the Bank with its Head Office at Bangalore. His further contention is that Non-registration of the power of attorney does not in any way affect the merits of this case. According to him "....... the allegations that the complainant has misused his powers and sanctioned the loan application etc., are immaterial in view of the loan sanctioned by the Head Office of the opponent No.1Bank.......... The allegation that the complainant has misused that powers etc., are immaterial and irrelevant ...........".

He has denied that the recovery proceedings against himself and others have been finally concluded. He has further not answered the point that the pipes supplied were of the prescribed specifications with the ISI mark and that the specifications were in terms of pressure rating instead of Horse Power rating. He has submitted along with his counter only an affidavit from a Civil Engineer re: the pipes being defective as they burst when water was pumped with 2 units of 10 H.P. electric motors. It is evident from the facts given above that the complaint is absolutely false and is intended to harass the Opposite Parties. The complaint is therefore, dismissed. The complainant is required to pay a compensation amounting to Rs. 10,000/- to each of the Opposite Parties. In addition he shall pay costs of Rs. 3,000/- to each of the Opposite Parties.