Steel City Securities Limited vs INNOVATIVE INFORMATION TECHNOLOGY

THE complainant, a registered Company engaged in share broking and consultancy services purchased on 28.3.1997 a Think Pad Computer of IBM brand under bill dated 29.3.1997 for Rs. 3,90,000/- from the first opposite party manufactured by opposite parties 2 and 3. However from April, 1997 onwards it was not serving properly and the very purpose of purchasing the Thinkpad has been defeated because the external floppy disk drive FDD was not functioning. Though the first opposite party collected the instrument part for repairing and servicing as is evident from call report dated 18.12.1997 was lying with it upto 8.9.1998. However on 8.9.1998 the first opposite party came back with a new Thinkpad part to instal it. Even the substitute part could not be made to work. In the customer call report dated 8.9.1998 the same was mentioned. Even the registered notice sent by the complainant did not evoke any response. As such, the complainant suffered business loss of Rs. 10,40,400/- and hence filed the complaint for the said amount together with costs of Rs. 10,000/-. THE first opposite party did not file its written version.

IN the written version filed by the opposite parties 2 and 3 it is stated that the second opposite party appoints distributors who purchase the stock and distribute/sell the P.Cs. through their own net-work of dealers/retailers who in turn resell the goods to customers. There is no privity of contract between the second opposite party and the complainant. But the sale is an exclusive transaction between the complainant and the first opposite party and the second opposite party does not come in the way. Further, the complainant is not a consumer, inasmuch as the purchase of Thinkpad was for commercial purpose. The complainant filed Exs. A-1 to A-12 besides the affidavit of its Executive Director. The opposite parties 2 and 3 also filed Exs. B-1 to B-3 besides the affidavit of their Sales Manager.

The point for consideration, therefore, is whether there is any deficiency on the part of the opposite parties 1 to 3, if so, to what extent ?

BEFORE we consider the question of deficiency in service, it is necessary to examine the objection raised by the opposite parties that the complainant is not a consumer. No doubt, the complainant is a commercial organization and the purchase of Thinkpad is for commercial purpose. But it is admitted that three years warranty was given and as such even if the goods were purchased for commercial purpose, the purchaser becomes a consumer in respect of the services to be rendered during the said period vide judgment of the National Commission in F.A. No. 312/2001, dated 8.7.2002. Hence this objection cannot be countenanced.

THE learned Counsel for the complainant urged that inasmuch as the opposite parties 2 and 3 are manufacturers they are anwerable for the defect in the goods sold through their dealer/retailer, the first opposite party. It is true, when there is manufacturing defect, the manufacturer is certainly liable. Hence the question that falls for consideration is whether there is any manufacturing defect in the piece sold. There is no dispute about the purchase of Thinkpad manufactured by opposite parties 2 and 3 from the first opposite party on 28.3.1997. The User''s Guide of IBM at page 297 shows that warranty period for IBM Thinkpad 760EB is three years, one year on battery. Therefore, it is clear that the warranty period is three years. Even under Ex. A-1 order this warranty of three years is specifically mentioned. As seen from Ex. A-3 Customer Call Report dated 18.12.1997 it is seen that "1.44 FDD not working. FDD brought back for servicing". Ex. A-7 Customer Call Report dated 8.9.1998 shows that "Installation of External 1 FDD (1.44 MB) not successful. FDD taking back for servicing". From this, the learned Counsel for the complainant submits that the first opposite party could not rectify the defect. In fact he addressed a letter to the first opposite party on 1.9.1998 under Ex. A-6 stating that the system supplied by the latter is not working because of defective FDD supplied and though it was taken back for repairs 10 months back, the defect could not be rectified. Even earlier under Ex. A-5 dated 11.8.1998, the complainant complained that FDD is not working and though it was taken back for the purpose of sending it to third opposite party, the complainant has not received any communication so far. Later on 19.9.1998 under Ex. A-8, the complainant issued a registered letter seeking refund of the total sale consideration. May be as a reply to these letters, the first opposite party by their letter dated 22.9.1998 under Ex. A-10 informed the complainant that the customer has to send the Thinkpad to the nearest IBM office for service problems. IBM will not accept servicing of the same by any dealer or Authorised Service Provider. The same was clearly mentioned in their product catalogue furnished at the time of sale. Because the complainant being a major customer they are attending to their service calls and such a service was only on courtesy. Ofcourse it is further stated that on the request of the complainant, they have taken FDD in the month of June, 1998 and sent it to IBM office, Hyderabad, the second opposite party and replacement was given in the month of August. The same was delivered to the staff of the complainant and obtained service report. The complainant is finally directed to interact with the IBM office for service.

THE learned Counsel for the opposite parties 2 and 3 submits that the first opposite party is not an Authorised Service Provider. It is not their agent but an independent reseller of the products manufactured and sold by the third opposite party. It is merely a reseller and is not an Authorised Service Agent of IBM products including the Thinkpad Computers. THEre is no proof that the product catalogue referred to by the first opposite party in Ex. A-10 was infact supplied to the complainant. THErefore, the complainant is well-advised in approaching the first opposite party for service problems. Infact the first opposite party has entertained the complaints as already seen from Ex. A-10 and sent the FDD to second opposite party''s office. No objection whatsoever was taken for such a conduct of the first opposite party. If the first opposite party has no such authorisation, the opposite parties 2 and 3 would have reprehended the first opposite party. But this was not done. Having regard to the circumstances of the case, we cannot accept the submission of the learned Counsel for the opposite parties 2 and 3 that the first opposite party has no authorisation to entertain the service complaints. Be that as it may.

THE main question which still remains to be answered is whether there is any defect in the product purchased by the complainant. In fact there is no complaint that there is any defect in the main IBM Thinkpad. All that is complained of is about FDD. Floppy driver is an external gadget purchased as an accessory and not as integral part of the Thinkpad. As such, in the absence of any proof that there is any defect or problem in the use of Thinkpad we are of the view that the complainant will not be justified in claiming the replacement of the Thinkpad.

Then for not being able to provide proper FDD, what is the reasonable compensation payable to the complainant ?

THE learned Counsel for the opposite parties 2 and 3 submits that had the complainant sought for replacement of FDD the same would have been done as it would not cost more than Rs. 5,000/- or Rs. 6,000/-. Here again we are not impressed over this submission. THE complainant has issued a legal notice under Ex. A-9 to all the opposite parties including opposite parties 2 and 3. Though they received the notice, they kept quiet. Even after the complaint is filed, they did not express their readiness to supply a new FDD or rectify the defect pointed out by the complainant for all these years. THE complainant who has purchased the system with fond hope that it will have several advantages, has been left uncared for both by the first opposite party who sold the system pointing out opposite parties 2 and 3 for redressal while opposite parties 2 and 3 maintained stone deaf silence even when legal notice was issued to them. THE belated offer that the opposite parties 2 and 3 are prepared to rectify the defect or supply a new FDD cannot be swallowed without a pinch of salt. For these reasons we are constrained to hold that there is deficiency in service on the part of the opposite parties 2 and 3. Then what are the quantum of damages, the complainant is entitled to, will be the next question.

THE complainant, as seen from para 9 of his affidavit only wanted connectivity to network which is always available through internet and Modem. Hence loss of business merely because there is defect in floppy drive is beyond our comprehension. However taking all the facts and circumstances into consideration, we are of the opinion that a sum of Rs. 25,000/- would meet the ends of justice. This sum shall carry interest at 12% p.a. from the date of filing of the complaint till payment. In the result, the opposite parties 1 to 3 are directed to pay the complainant a sum of Rs. 25,000/- with interest at 12% p.a. from the date of filing of the complaint till payment. They are also directed to pay the complainant a sum of Rs. 5,000/- towards costs. Time for payment six weeks. Complaint allowed.