SUPER ENGINEERING CORPN. (HUF) vs SANJAY VINAYAK PANT

THE facts leading to appeal are that the present respondent No.1, Sanjay Vinayak Pant, (hereinafter referred to as the Complainant) had filed a complaint before the Consumer Disputes Redressal Commission, Maharashtra State, New Bombay against the present respondent No. 2, Chetan Machinery & Paper Mart, (for short the Paper Mart), who was Respondent No. 1 in the original complaint and the appellant Super Engineering Corporation, (hereinafter referred to as the Corporation). According to the Complaint, (Translation of which is at page 27 of the paper-book), the Complainant had placed an order on 31st January, 1989 for a Suepr Offset Printing Machine with the Paper Mart, who was dealer of the manufacturer i.e. appellant Corporation for which machine the Corporation had earlier sent a proforma invoice quotation dated 27th December, 19 89 in the name of Maharashtra State Financial Corporation (for short MSFC) through their dealer, Paper Mart : Full amount of the Printing Machine was to be deposited in advance and it was so deposited with the Paper Mart, partly by the claimant and rest by MSFC. THE Printing Machine was supplied to the Complainant on 20th February, 1990 by the dealer. THE mechanic of the manufacturer arrived on 19th March, 1990 and fitted the machine, but it did not work properly. One Mr. Agarawal, owner himself came and tried the machine but it did not start and he took away one part known as damping unit with him for repairs to Bombay on 26th March, 1990. On 2nd April, 1990 the mechanic brought a new ''damping unit'' and fixed it in the machine but still it did not work. THE mechanic went back on 6th April, 1990 and came back on 9th April, 1990 and again tried to start the machine, but on the paper scum was coming. THE mechanic returned to Bombay and did not come again. THE Complainant gave notices to the dealer as well as to the manufacturer. THE MSFC also asked the manufacturer to repair the machine. However, till the date of filing of the complaint, neither the dealer nor the manufacturer responded. Thus since installation the machine did not work. It is further the case of the complainant that instead of Super Offset Printing Machine, he was supplied Offset Printing Machine, Stallion model. THE complainant claimed the following reliefs: (a) Opposite Parties No. 1 & 2 should replace the offset machine; (b) For the last four months (preceding the filing of the complaint) he had suffered a loss due to non repairs of the machine and was hence entitled to recover Rs. 50,000/- as compensation. (c) He had paid interest to MSFC from 18.1.1990 at the rate of 15% per annum on the loan of Rs. 1,90,500/- and this had to be paid to him by Opposite Parties No. 1&2. (d) THE rent of the shop & servant expenditure amounting to Rs. 550/- per month has to be paid by Opposite Parties No. 1 & 2 to him. (e) Opposite Parties No. 1 & 2 avoided the repairs of the machine and hence his and his family''s health suffered and he was entitled to compensation amounting to Rs. 10,000/-. (f) He also claimed the refund of excess amount amounting to Rs. 1,56,007.70P. charged by Opposite Parties No. 1 & 2 with interest at the rate of 12 per cent per annum.

VERSION dated 27th July, 1990 of the manufacturer i.e. Corporation was received by the State Commission by post and thereafter they did not appear before the Commission. The manufacturer denied having sold any machinery to the Complainant. According to them they supplied the machine to the Paper Mart. The Paper Mart contested the complaint petition and pleaded that the machinery was supplied by the manufacturer to the Complainant through them as dealer. According to them they were not responsible for any deficiency in the machinery supplied to the complainant. They further alleged that they had to recover some amounts from the claimant and in that respect some litigation was going on.

The State Commission held that the machine had been manufactured by the Corporation and had been supplied to the Complainant through their selling agent i.e. the Paper Mart. It was further held that the price of the Super Offset Printing Machine was Rs. 3,15,007/- inclusive of all taxes out of which Rs. 1,26,000/- had been received by the Paper Mart from the complainant while the MSFC, to whom the Complainant had applied for loan, had paid Rs. 1,90,500/- to the Paper Mart by means of a cheque The State Commission also held that instead of supplying Super Offset Printing Machine, latest model, which was ordered, the manufacturer delivered to the complainant another machine. It was further found that the printing machine did not work properly. The State Commission issued the following directions : "I. The opposite party No. 2, Super Engineering Corporation, (HUF) 427 and 428, Kalidas Udyog Bhavan, near Contest Century Bazar, Warali, Bombay-25 shall replace the present machine lying with complainant with a new MCH-III, 15" X 20" size offset machine which shall be free from any defect and take back the machine lying with the complainant. The price of the new replaced machine shall be as per the terms of quotation dated 31.1.89 at a price of Rs. 3,15,007/-quoted by the opposite party No. 1 as dealer of opposite party No. 2. The opposite party shall bear the expenses of replacement and deliver new MCH-III, 15" X 20" offset machine to complainant directly F.O.R. Amaravati, inclusive of all taxes.

II. The opposite party No. 2 shall refund the excess amount to complainant in excess of Rs. 3,15,007/- which is the price of MCH-III Model. III. The opposite party shall bear and pay the interest at the rate of 15% p.a. on the amount of loan of Rs. 1,90,500/- from 8.1.1990 till the date of replacement of the machine to the complainant.

IV. The complainant be paid Rs. 1000/- by opposite party No. 2 towards the cost of litigation."

FEELING aggrieved the Corporation i.e. the manufacturer have filed this appeal. Their main contentions are as follows : (i) That the Paper Mart had placed an order on 7th February, 1990, for the purchase of Stallion Model Printing Machine and vide invoice dated 12.2.1990 the price of the printing machine was Rs. 1,71,000/- exclusive of sales tax, packing etc. The total value inclusive of the above taxes comes to Rs. 1,93,455/-. The machine was supplied to the Paper Mart in the ordinary course of business and not in the capacity of a dealer and this fact is clear from the order placed by the (i.e. Paper Mart). (ii) That the machine had been purchased for commercial use. (iii) The appellants were not afforded an opportunity by the State Commission of being heard. That they were never informed about the date of hearing fixed by the Commission and, therefore, the impugned Order was against the principles of natural justice. (iv) That the cost of the printing machine (Stallion model) supplied was Rs. 1,93,455/- and its replacement by a machine (i.e. Super Offset, Latest Model) costing Rs. 3,15,007/- was unjustified and uncalled for.

Other objections have also been taken against the Order but those need not be referred to for the purpose of the present Order as after hearing the parties we are of the opinion that the case should be remanded to the State Commission for fresh decision for the reasons given below.

THE State Commission issued a notice dated 21st July, 1990 to the appellants directing them to give their version within 30 days as regards the complaint. Admittedly this notice was issued under Sec. 13(1)(d) of the Consumer Protection Act, 1986 (for short the Act). That provision has been made applicable for disposal of complaint by the State Commission vide Sec. 18 of the Act. However, another notice dated 23rd July, 1990/24th July, 1990 was issued by the State Commission to the appellants. That notice is at page 18 of the paper book and reads as follows: - "I am directed to inform you that the matter is fixed for hearing on 1.8.1990 at 1 P.M. at Circuit House Amarwati. I hereby inform yo to appear before the State Commission, personally or through the authorised agent, alongwith necessary evidence if any to produce your say. If you fail to appear before the Commission on the said date, time and place, the Commission will take further action in to this matter according to law."

Obviously this subsequent notice violated the provision of Sec. 13(1)(d). THE appellants were not given 30 days time within which they were to file their reply. The appellants replied to the notice dated the 24th July, 1990, in which they took up various objections, but we are concerned with only two. They pleaded that they had not received the copy of the complaint and further that notice was very short and their absence may be condoned at Amaravati on the date fixed by the Commision (i.e. on the 1st August, 1990). Except the two notices referred to above, no further notice appears to have been given to the appellants even when the appellants had raised an objection that copy of the complaint had not been supplied to them and that the time of hearing was short. The State Commission ought to have adjourned the case and aught to have supplied copy of the complaint to them. The complainant also in reply to the memorandum of appeal does not allege that any further notice was given by the State Commission to the appellant about the date of hearing of his complaint. Thus there is clear violation of mandatory requirement of law as well as principles of natural justice. It may be mentioned here that the appellants have filed affidavit in support of their above allegations.

AS the version of the appellants was not before the State Commission, therefore full facts could not come before them. The appellants have produced zerox copy of the letter written by the Paper Mart to them on 7th February, 1990 ordering one offset printing machine Stallion model. The details of the invoice have been given in this letter. The price of the machine including sales-tax, packing, forwarding and etc. is quoted as Rs. 1,93,455/- and that price was paid by the Paper Mart. The Paper Mart had further written in that letter that: "We hereby confirm that no dealer''s commission is payable by you to us on this transaciton. This letter supercedes our previous correspondence with you regarding the above machine." Clearly this purchase was not done by the Paper Mart as a Dealer of the Corporation. In response to that order, the appellants sent the printing machine ordered vide invoice dated 12th February, 1990. (The zerox copy is at p.58). That Printing machine was despatched through the Economic Transport Organisation as directed by the Paper Mart in their order .The number of the consignment note is 530/47925 (Zerox copy is annexed as E Colly). The machine was received from Bombay at Amaravati on 20th February, 1990 and on the same date the Paper Mart prepared another invoice in the name of the Complainant. In that invoice the printing machine was described as Super Offset Printing Machine and the price was mentioned as Rs. 3,46,507.70p. The number of the above consignment note was given in that invoice. This was the price which was quoted by the manufacturer in their proforma invoice dated the 27th December, 1989. This price consisted of Rs. 3,15,007/- as the price of the printing machine plus sales-tax at the rate of 10% amounting to Rs. 31,500/-.Thus the Paper Mart appears to have made a clear profit of Rs. 3,46,507.70p-Rs. 1,93,455 i.e. Rs. 1,53,052.70 p. In this Order we do not want to say anything that which of the parties - manufacturer or dealer or both - are guilty of supplying a wrong printing machine to the complainant as this statement of fact of the manufacturer requires to be gone into by the State Commission. AS noticed earlier the appellants had not been afforded sufficient opportunity to put their case before the State Commission.

ANOTHER point which has been raised before this Commission also requires consideration by the State Commission. The dealer as well as manufacturer have stated before us that the purchase of printing machine was for commercial purpose and therefore, the Complainant does not fall within the definition of consumer as define in Sec. 2(1)(d) of the Act. That provision, while defining a ''consumer'' has excluded from its definition a person who obtains goods for sale or for any commercial purpose. The complainant in reply to the memorandum of appeal in para No. 2 has stated that the printing machine was purchased for commercial purpose. However, he puts a rider to that statement by stating that the machine was not put to actual use for commercial purpose as the machine was not in fit condition at the very first stage i.e. from the day of installation itself. The complainant has filed his reply perhaps without any legal help. (The reply has not been filed through any lawyer nor any lawyer has appeared on his behalf before us). Though the Paper Mart has stated in reply filed before this Commission to the memorandum of appeal that they had raised the question before the State Commission that the complainant was not a consumer as the printing machine had been purchased by him for a commercial purpose. However, the order passed by the State Commission does not show that the question was raised before them at the time of argument. We do not want to decide the question if the purchase of the printing machine was made by the complainant for commercial purpose as used in the Act or the complainant as a layman has described the purchase to be for commercial purpose as he wants to earn money from the printing machine. This Commission had remarked in Synco Textiles (P) Ltd. v. Greaves Cotton & Co. I (1991) CPJ 499 (NC)as follows (para 5) "It seems to us clear that the intention of Parliament as can be gathered from the definition section is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit making activity engaged on a large scale. It would thus follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that exclusion clausse should apply it is however necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit".

Therefore, it is to be decided if the machine was to be used for profit making activity on a large scale or for use in small venture in order to make a living as distinguished from a large scale activity for profit. This question can be decided only if the parties are given an opportunity to lead evidence on this point.

For the reasons given above we accept the present appeal, set aside the Order of the State Commission and remand the case for fresh decision after giving an opportunity to the appellants to file their version in reply to the complaint and after giving an opportunity to the parties to lead evidence which they might like to produce. We direct the appellants to file their version of reply before the State Commission within 10 days from the date of the receipt of the copy of this order. No order as to costs. Appeal partly allowed.