VIJAY NARAYAN AGARWAL vs CHOWGULE INDUSTRIES LTD.

THE Complainant Shri Vijay Narayan Agrawal, now Petitioner, had filed a complaint before the District Consumer Disputes Redressal Forum, Bilaspur under Section 12 of Consumer Protection Act, 1986 (for short "the Act"). According to the Complainant he had purchased one Canon N.P. 150 Photo copier machine from the Respondent, Opposite Party, M/s. Chowgule Industries Ltd.. (for short "the Company") for Rs. 91,000/- and the machine was installed at his premises on 12.7.1988. From the very beginning there was problem of getting consumable items. A part of the machine called drum also became defective before the expiry of the guarantee period. Consumable items and spare parts were not supplied by the Opposite Party despite correspondence and personal visits to Bombay and Calcutta and the photo copier machine was lying idle for more than a year. On 23.9.1990 the Complainant purchased for the Company another photo copier machine-Canon N.P. 271 which was installed in his premises on 27.9.1990. Thereafter the Complainant requested the Head Office of the Company as well as their local representative that the amount paid for Canon N.P. 150 be adjusted towards the price of the Canon N.P. 271 as the earlier machine involved problems from the very beginning in respect of consumable items, materials and spare parts. The Claimant also claimed Rs. 150/- per day with interest as financial loss as he was paying interest to the Punjab National Bank from whom he has taken financial aid for purchasing both photocopier machines.

THE Opposite Party i.e. the Company filed a counter alleging that the photocopier earlier supplied to the Complainant was not defective. On 27th July, 1988 the Complainant had requested for supply of Toner and some spare parts. The Service Engineer of the Company visited the Complainant and rendered necessary maintenance services. By that time a total number of 5,617 copies had been taken out. Again on 1.9.1988 the Service Engineer of the Company visited the Complainant and rendered necessary service and according to the meter-reading a total number of 13,600 copies had been taken out. On 14.9.1988 the Engineer of the Company again visited the Complainant and as per service report recorded by him and duly certified by the Complainant a total number of 17,300 copies had been taken out from the photocopier Canon N.P. 150. There was superficial mark on the drums which had been removed by the said Engineer to the satisfaction of the Complainant. The Company had fully discharged its warrants obligation and the operational capacity of the drum was bout 10,000 copies for that model. As per the warranty card, the warranty was only for three months or till 20000 copies were taken out whichever was earlier. The Complainant was advised to enter into a regular maintenance contract without which the machine could not be property maintained but this was not acceptable to the Complainant. The Company had strong reasons to believe that the machine was being maintained by unqualified and unauthorised mechanics coupled with improper use of sub-standard locally available toners, spare parts etc. which would render such sensitive electronic machine inoperative. The Company, therefore, submitted that the Complainant could not complain about the failure to provide proper maintenance service. The District Forum after consideration of documents and the statement of the Complainant who had appeared in the witness box, came to the opinion that the photocopier Canon N.P. 150 had been purchased by the Complainant for commercial purpose and therefore the Complaint was not maintainable. For coming to that conclusion, the Forum found that the Complainant was charging 40 to 50 paise per copy. The complaint was accordingly dismissed.

FEELING aggrieved by that order the Complainant filed an appeal before the State Consumer Disputes Redressal Commission, Madhya Pradesh. It upheld the finding of the District Forum and dismissed the appeal. The Complainant has now come before us by way of this Revision Petition.

WE have gone through the arguments and the record carefully and are of the opinion that both the Forums below have committed irregularity in the exercise of their jurisdiction. The State Commission has held that the new machine-Canon N.P. 271 had been purchased by the Complainant as his business had expanded. For coming to that conclusion reliance was placed upon a letter dated 23.8.1990 written by the Complainant to his Bank for financial aid for purchasing another heavy duty Machine Canon N.P. 271 costing Rs. 1,17,647.05 as he had expanded his business. The complaint of the Complainant is that in fact the earlier photo copier N.P. 150 was defective one and service was not rendered properly and therefore he is entitled to compensation. Therefore the first question to be considered in the present case is whether the earlier photo copier Canon N.P. 150 had been purchased by the Complainant for ''commercial purpose'' and therefore he cannot be said to be a ''consumer'' with respect to that photo copier. His complaint is with respect to the said photo copier. We have to see the status of the Complainant when he purchased photo copier Canon N.P. 150. From the various cases decided by this Commission, some of which have been considered by the Forums below, the following two principles are deducible : (1) If a person is engaged in a business on a large scale with a view to earn large profit then if he purchases any article for the purpose of his business then it can be said that he has purchased the article for commercial purpose. (2) If a person purchases an article for self-employment in order to earn his livelihood or if he is engaged in some small activity and he purchases an article to better his prospects for the purpose of better living (as distinguished from large scale profit making activity) then it cannot be said that the purchase of the article is for commercial purpose.

IN the present case, the Petitioner, Complainant was only running a Type Institute when he placed an order for Canon N.P. 150 photo copier with the Company. By no stretch of imagination it can be said that the said photo copier had any connection with any large scale profit making activity that the petitioner was carrying on. It also cannot be said that the said photo copier would have brought him large profits. According to the petitioner he was charging only 40 to 50 paise per copy. He had purchased the photo copier for Rs. 91,000/- after taking a loan from the Bank. He must be paying interest to the Bank. While preparing copies he must be using consumable material. Therefore, it cannot be said that the said photo copier would have enabled him to generate large profits. After considering all the materials on record, we are of the opinion that the petitioner had not purchased the photo copier Canon N.P. 150 for a ''commercial purpose''. In other words, he must have to be held a ''consumer'' as defined in Clause (d) of Section 2(1) of the Act.

THE next question that arises is whether the said photo copier had any manufacturing defects. In the complaint, the Complainant has not complained about any defect in the machine. His complaint is to the effect that from the very beginning there was problem of getting consumable articles and a part of the machine called drum became defective before the expiry of guarantee period. As noticed earlier, it had been installed at the premises of the petitioner on 12.7.1988. Before the purchase of the copier there was some correspondence between the parties. The petitioner placed an order for Canon 150 N.P. photo copier on 15.6.1988. The said order was accepted by the company vide the letter dated 21.6.1988. In this letter the Company had clearly mentioned that the warranty period was 90 days from the date of installation or 20,000 copies, whichever happened earlier. It was further mentioned that this warranty would cover the replacement of parts which became defective due to faulty manufacturing excluding drums, belts, cleanings, webs etc. that have specific copy life. However, it was also mentioned that defects resulting from accident, negligence or misuse were not covered under this warranty. The warranty was subject to the condition that it was applicable only if toner supplied by the Company was used. As the petitioner had accepted the machine after the receipt of the said letter, it must be held that he accepted the conditions specified by the Company. Thus there was no warranty with respect to the drum. After the photo copier had been installed it was first serviced on 27.7.1988. The certificate of service is at page 117 and it shows that the service had been satisfactorily effected. It bears the signatures of the technician as well as of the customer. The technician of the Company again inspected the machine on 1.9.1988 and the said service certificate is at page 118. About the work it was found that the machine was in working condition. However, it was found that there are two marks on the drum. These marks on the drum do not find mention at the time of first inspection. If any such marks were on the drum of the photo copier since installation, the petitioner would have noticed them and would have reported to the technician when he had inspected the machine on 27.7.1988. Thus, it is clear that those marks on the drum have appeared some time between 27.7.1988 and 1.9.1988.

THE next service report is dated 14.9.1988 and it is at page 119. The copy quality of the photo copier was found O.K. The machine was also in working condition and it is mentioned that the marks on the drum had been removed. By that time 17,300 copies had been taken out from the photo copier. It appears that on 14.9.1988 the petitioner had written to the Company for replacement of the drum. Vide letter dated 20.9.1988 (copy at page 120), the Company replied that the problem of the drum had been rectified. It was also mentioned that in fact some toner had adhered to the drum and after necessary cleaning it was functioning well though earlier the engineer had suspected the same as a scratch and hence the question of the replacement did not arise at all. Thereafter there was no complaint about the drum. It appears that earlier the petitioner had purchased toner from some other place. Vide delivery challan No. 346 dated 17.10.1988 (copy at page 122) two cartons of toner were supplied to the Complainant by the Company.

IT appears that on 7.10.1988 the complainant had placed the order for toner and also asked for some discount. Vide letter dated 1.11.1988, the complainant had been informed by the Company that 2 cartons of toner had already been sent. About the 2% discount it was mentioned that though it was not mentioned in the contract but as a special case, the matter had been discussed with one Mr. Chaturvedi and papers have been forwarded for necessary approval. That commission has not been paid. It may be noticed here that in case the photo copier was defective or there was any defect in the rendering of service by the Company the petitioner would not have asked for commission and on the other hand he would have asked the Company to take back the photo copier and return the amount. It appears that the photo copier Canon N.P. 150 was properly functioning and the petitioner must have been satisfied with the machine. He must be feeling some difficulty about the procurement of the spares. There was no legal or contractual liability on the part of the Company to supply spares. The spares of the proper specification must be available in the open market from other dealers of this type of the photo copier. According to the Company, the spares had to be imported from Japan by the manufacturer of these machines and the dealers sold them as retailers. Thus sometimes there was shortage of the spares with the Company. The next letter that has been produced on the present record is the letter dated 10.11.1989 written by the petitioner to the Company more than one year after the purchase of Canon N.P. 150. It will be better to reproduce the contents of the above letter : "SUB : SERVICING and SPARES FOR CANON N.P. - 150. Dear Sir, I have purchased 1 Canon N.P. 150 on 12 July, 1988 from your company. Your Sales Executive Mr. A.K. Chaturvedi and your company gave me detailed information about its good performance and best service alongwith easily availability of spares through your nearest branch office Raipur. From very beginning I feel great trouble regarding raw material, servicing and other minor problems regarding proper timely care and attention. Lastly on 18.9.1989 I have booked an Order for supply of OPC Drum and DRUM COVERING PLATE for it with your Lower Parel Office through your Sales Executive. I visited personally on 29.9.1989 at your Lower Parel Office. But the Drum Cover plat was not supplied and take another order for it on 29.9.1989 and Mr. Dinesh Sharma promised me to supply within 2 months time because it is not available in India. I came to know that there are two separate departments - Sales and Servicing. If letter services are not provided, the sales will surely he effected. Seeing these trouble, I booked an order No. APP/41/89 dated 4.11.1989 for Second Machine Canon N.P. 271 with some bitter experiences regarding Canon N.P. 150; alongwith necessary Advance Money Rs. 5,000/- vide Cheque No. 309511 dated 4.11.1989 of PNB Bilaspur through your Sales Executive Mr. Chaturvedi. If I don''t get spare parts for my Canon Machine within stipulated time, please keep all Pending orders with you, suspended until your supply me spare-parts and don''t present Cheque because I have intimated Bank Not to honour it till you supply me spare parts. I hope favourable reply regarding earliest supply of DRUM COVERING PLATE for which CANON N.P. 150 became BREAKDOWNED SINCE LAST TWO MONTHS".

ACCORDING to this letter, the petitioner had no grievances about any defects patent or latent in respect of the photo copier. His only grievance was that supply of spares was not proper. Another thing to be noted is that in case the conduct of the Company in respect of Canon N.P. 150 was not satisfactory, the complainant would not have placed an order with the same Company for another copier of higher value. The Area Office (agency of the Company) through which the Complainant had purchased the copier N.P. 150 wrote a letter (page 48) dated 12.12.1989 to the Calcutta Office to supply some spares to the petitioner, who was considered as valued customer as he had placed an order for another copier. According to this letter for want of some spares, the machine was said to have been in breakdown condition for the last 2/3 months prior to that letter. This breakdown was for want of spares and not on account of any defect in the machine.

THE company was pressing the petitioner to enter into a service contract but the petitioner refused to enter into the contract. This fact has been admitted by the petitioner in an affidavit filed before us (pages 44 to 46). In spite of that the Company serviced the machine five times as is clear from the pleadings of the parties. The petitioner again ordered for some spares from the agency in question and wrote a letter dated 26.5.1990 and also sent a draft for Rs. 250/- to the area agency. The agency vide letter dated 5.6.1990 returned the draft on the ground that the spares were not available and those will be received within 12 to 15 weeks and as soon as the stock was received, he would be intimated about it and then a fresh draft could be sent. If the company was dishonest in its dealings it would not have returned the draft. This shows that upto June, 1990 there was no serious breakdown in the photo copier Canon N.P. 150 on account of any manufacturing defect. The breakdown in the photo copier for some period was only due to the non-availability of the spares. The Company is right in saying that if the spares were not available in the stock those could have been purchased by the Complainant from the open market. In fact he purchased one such spare from the open market as it is clear from his affidavit (at pages 44 to 46). The present petition appears to be false, frivolous and vexatious. The petitioner is unnecessarily complaining that the service has not been properly rendered by the Company. It is clear from the various documents that are filed that the Canon N.P. 150 was serviced by the technician on five occasions and minor defects that were found on account of normal use were rectified.

THE petitioner committed another fraud upon the Company. On 23.8.1990 the petitioner wrote a letter (page 127) to his Bank for financing second photo copier machine. It is relevant to reproduce here the contents of this letter : "We have already financed for one Photocopy machine Canon N.P. 150 vide your Term Loan A/c. No. 5/155 on 12.7.1988. The payment of Account is regular. As we have expanded our this existing business of photocopy, we urgently require one heavy Duty Machine Canon N.P. 271. Now, we desire to purchase another Canon N.P. 271 seeking Rs. 1,17,647.05 with your kind co-operation and financial help. Seeing my regular payment in T/L A/c., my all relevant informations : title deed and other documents are lying with you, hence it is earnestly requested you to finance me further loan to purchase a new Canon N.P. 271 to run our business smoothly. I assure and promise to you to regular payment in both the A/cs (if loan is sanctioned). Our relations are good, hence I have already booked an order alongwith Advance Money Rs. 8,900/- (Receipt enclosed). We accept that Copier will installed upto 29.9.1990."

(The second copier was infact installed on 27.9.1990). On 25.9.1990 the Bank issued a certificate with the heading "To whom so ever concern". By this certificate, the Bank had assured about financing of the second machine which was to be supplied to the petitioner. On the basis of this certificate, the petitioner induced the Sales Executive of the company to deliver the second machine, i.e., Canon N.P. 271 to the petitioner. When the Company asked the Bank to make the payment, the Bank refused to make payment on the ground that the petitioner has not completed the requisite formalities. Thus, the Company has been left high and dry. When the company asked the petitioner to make payment for the second machine, the petitioner filed the complaint before the District Forum complaining about the defects in the copier N.P. 150 and requiring the Company to give an adjustment of Rs. 91,000/- in the purchase price of the second machine. This is a fraudulent act on the part of the petitioner complainant.

IN the light of the above discussion, we find that the Company did not supply defective goods (i.e. Canon N.P. 150). It has not been found negligent in rendering service. Consequently the present Revision Petition fails. The orders of the District Forum and the State Commission are maintained though on different grounds. The petitioner will be liable to pay costs of this present petition to the respondent which we assess at Rs. 5,000/-. Mr. Y. Krishan, Member - The complaint was dismissed by the District Forum on the ground that the complainant had purchased the photocopier for a commercial purpose. The appeal against the order of the District Forum was also dismissed by the State Commission on the same ground. In the majority order of this Commission, however, a finding has been given that, after considering all the materials on record, the petitioner had not purchased the photocopier N.P. 150 for a commercial purpose. I have my reservations on this point. There is no adequate data in the record or before this Commission to establish that the Revision Petitioner-Complainant was only engaged in self-employment to earn his livelihood or was engaged only in a small-scale activity. The Revision Petitioner was running a Typing Institute when he purchased the photocopier in question. The number of typewriters he had in the institute, the number of students or trainees who were attending the institute, the number of shifts in which the institute was being run, the profit and loss account or income & expenditure statement of the revision petitioner for the relevant year, whether he was an income-tax assessee in the year etc. are not known. Further it is the normal practice of most of the typing institutes to do typing work on job basis and also to maintain photocopiers. This enables them to supplement their income and the photocopier in such cases, truly speaking, is an integral part of the typing institute. The purchase of the photo-copier cannot be divorced from the ''status'' of the typing institute. In the absence of the data pertaining to the typing institute, I do not think that we can come to a conclusive finding against the findings of the District Forum and the State Commission that the Revision Petitioner had purchased the photocopier for a commercial purpose and thus committed irregularity in the exercise of their jurisdiction. Subject to these observations, I concur with the rest of the findings of the majority order.