Case: STEREOCRAFT Vs. MONOTYPE INDIA LTD., VOHRA HOUSE, NEW DELHI

1. This appeal is directed against the judgment dated 13-7-1990 passed by the National Consumer Disputes Redressal Commission, New Delhi. 2. In May, 1984, the appellant imported phototype-setting machine from West Germany after opening a letter of credit in favour of the manufacturer M/s. H. Berthold, AG, Berlin. The respondent M/s. Monotype India Ltd., New Delhi is the agent and distributor of the manufacturing German Company in India. The machine was installed at the complainants business premises on 17-8-1984. But soon thereafter, it was found to be defective in many respects which were brought to the notice of the respondent who attended to the complaints between 17-8-84 and 23-3-87, but the machinery remained defective and could work properly only for 152 hours as against the expected run of 12500 hours. 3. Consequently, the appellant filed a claim petition before the National Commission for a sum of ` 11,22,000/- for the loss suffered by them on account of the failure of the respondent to supply a defect-free machine and to service and maintain the same in proper working condition. 4. The claim was dismissed by the Commission on the ground that the machine was purchased by the appellant for its printing press business and since the purchase was for a commercial purpose, the appellant could not be treated as consumer within the meaning of the definition of that expression contained in Section 2(1)(d)(ii) of the Consumer Protection Act, 1986. The Commission also found that the claim of the appellant was barred by limitation. 5. We have heard learned counsel for the appellant. It is contended by the learned counsel that the appellant had not only purchased the machine from the respondent, they had also hired and availed of the services of the respondent for keeping the machine in a defect-free condition. It is contended that since the appellant hired and availed of the services for a consideration which had already been paid to the respondent, the appellant has to be treated as a consumer within the meaning of sub-clause (ii) of Clause 1 (d) of Section 2 of the Act. According to this sub-clause, a consumer would be a person who- (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promises, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the service for consideration paid or promises, or partly paid and partly promised or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person : 6. We are not prepared to accept the contention advanced by the appellant. From the documents filed before the Commission, it appears that the manufacturer had inter alia, agreed, as part of the sale transaction, as follows : 7. Free Erection and Demonstration. Where quotations provide free erection and demonstration the Corporation shall install the machinery and shall leave the same in a workable condition subject, however, to the customers compliance with the following terms : (a) Before the arrival of the Corporations Engineer the customer shall unpack the complete consignment at the erection site. (b) The customer shall supply all labour which may be required by the Corporation for carrying out the required job. (c) To facilitate immediate commencement of the installation work the customer shall at his own cost made all necessary arrangements for electricity, water, drainage etc. (d) In any case where in terms of the contract the Corporation is obliged to provide free erection and demonstration of the goods purchased a time limit may be stipulated as may be found reasonable by the Corporation and in case the installation work cannot be completed within the stipulated time through any default on the part of the customer all salaries, cost of travelling, living and other expenses incurred by the Corporation for its employees or agents engaged in such erection and/or demonstration shall be borne by the customer provided however that for erection and/or demonstration of machinery outside normal working hours whether before or after the expiry of the time limit specified above the Corporation for such works reserves its right to charge the customer extra. 8. Servicing. After installation the costs and expenses to be incurred by the Corporation relating to all visits by the Corporations Engineer as may be found necessary from time to time whether to service machinery guaranteed or otherwise may be charged and realised from the customer at the discretion of the Corporation. The customer shall be responsible for supplying at its own expense any labour lifting table and any other appliances which may be required by the Corporation in connection with the installation of the machinery ordered by the customer and in accepting these conditions of sale the customer will be deemed to have agreed to indemnify and keep the Corporation indemnified against any costs expenses claims demands, loss damages suffered or incurred by the Corporation in respect of any accident caused during the period of installation or subsequent to the service or repair resulting in death of or injury to be suffered or incurred due to wilful and negligent act on the part of the Corporation and/or its servants. ********** 14. Guarantee. If within twelve months from the date of invoice there appears in the goods or parts thereof (excluding Class of every description) any defect admittedly arising out of faulty design, materials or workmanship in the said goods or parts thereof and the customer promptly gives notice thereof to the Corporation in writing, and in case such defective goods or defective parts are returned to the Corporation (if so required by the Corporation) at the cost of the customer, the Corporation shall make good the defects either by repair, or at its option, by the supply of new goods free of charge in replacement thereof. Subject, however, to the condition that the Corporations liability in this regard will be strictly limited to the repair or replacement of such parts. Provided that the liability of the Corporation under this Clause is expressed to have been given in lieu of any other liability whether under any law, Warranty or condition express or implied by Law or otherwise in respect of the quality or the designs or fitness of the goods or every form of liability for loss or damage direct or consequential or any accident resulting from defective material, faulty workmanship or otherwise. 7. After installation of the machinery, in the business premises of the appellant, it was found to be defective. The defects were reported to the respondent as part of the sale transaction and in terms of clauses 7, 8, 10 and 14 quoted above, the respondent rendered the services to the appellant. But even then, as the appellant says, the machinery could not work properly. Since the service was rendered by the respondent was in compliance of clauses 7 and 8 of the sale transaction between the appellant and the manufacturer, it could not be said that the appellant had hired the services of respondent for consideration. Consequently, the appellant cannot be treated as consumer within the meaning of sub-clause (ii) of clause (d)(1) of Section 2 of the Act. The appellant on his own showing had worked the machinery for about three years from 17-8-84 when it was installed at its premises upto at least 23-3-1987. After having worked the machinery for such a long period, the appellant could not legally claim the replacement of the machinery or compensation, for the reason that the machinery had not run for 12500 hours which was the least run expected by the appellant.

Decision reasoning: 0[ds]6. We are not prepared to accept the contention advanced by the appellant. From the documents filed before the Commission, it appears that the manufacturer had inter alia, agreed, as part of the sale transaction7. After installation of the machinery, in the business premises of the appellant, it was found to be defective. The defects were reported to the respondent as part of the sale transaction and in terms of clauses 7, 8, 10 and 14 quoted above, the respondent rendered the services to the appellant. But even then, as the appellant says, the machinery could not work properly. Since the service was rendered by the respondent was in compliance of clauses 7 and 8 of the sale transaction between the appellant and the manufacturer, it could not be said that the appellant had hired the services of respondent for consideration. Consequently, the appellant cannot be treated as consumer within the meaning of sub-clause (ii) of clause (d)(1) of Section 2 of the Act. The appellant on his own showing had worked the machinery for about three years from 17-8-84 when it was installed at its premises upto at least 23-3-1987. After having worked the machinery for such a long period, the appellant could not legally claim the replacement of the machinery or compensation, for the reason that the machinery had not run for 12500 hours which was the least run expected by the appellant.