Birla Technologies Ltd vs Neutral Glass And Allied Industries Ltd

3. The appellant had sent a detailed proposal for developing certain computer software for the respondent at a cost of Rs.36 lacs on 11.2.1998. This proposal was accepted by the respondent who sent the letter of intent indicating its intention to entrust the appellant with the development of the said software. On 1.4.1998, the respondent sent a purchase order to the appellant regarding the terms and conditions at which the appellant was to develop the software for the respondent. That software was to take care of (1) Financial Accounting, (2) Production, (3) Marketing, (4) Purchase, (5) Stores/Inventory, (6) Fixed Assets, and (7) Pay Roll and Personnel System. The appellant wrote to the respondent on 3.2.1999 informing that the Stores and Purchase Modules had been installed in the respondent's office on 1.2.1999. The appellant wrote on 4.2.1999 to the respondent that since the respondent's requirements for the Marketing Module had gone up considerably in comparison with what had been initially agreed between the parties, the appellant would require additional 250 man hours to complete. On 26.2.1999, the appellant informed the respondent that three Modules had been successfully installed, they being, (1) Stores, (2) Purchase, and (3) Production. Again on 17.3.1999, the appellant confirmed that even the Financial Accounting Module was also successfully installed. Further, the appellant wrote to the respondent that in view of the additional requirements of the respondent, it would require 350 man hours more. On 30.3.1999, the appellant informed the 3 respondent that the changes suggested by the respondent had been successfully carried out. The appellant informed the respondent again that due to the addition of 48 new functions to the Marketing Module, the estimation for the Module had gone up by 45 man days, costing an additional Rs.60,000. On 7.4.1999 and 13.4.1999, the appellant informed that the Stores and Purchase Module and Financial Accounting and Marketing Modules were also installed respectively on those dates and sought for their feedback. Thereafter, there was a lot of correspondence between the parties as regards the work of the said software and in respect of the different Modules. It seems, at times, the respondent/complainant expressed its satisfaction over the working of the Modules. All this happened in the last months of 1999 and in January, 2000. It seems that till February, 2000, the payment of the appellant was not released requiring the appellant to write to the respondent for the same. The respondent thereafter started complaining about the working of some Modules. In the month of September, 2000, the respondent placed a fresh purchase order with the appellant for enhancement of the Production Module, on which the appellant requested the respondent to clear the outstanding dues which were not cleared till then. The appellant again wrote to the respondent for payment in the month of April, 2001. 4

4. The disputes started taking ugly shape and the respondent started complaining about the working of various Modules. On 15.4.2002, the respondent wrote a letter to the appellant identifying the problems with various Modules of the software, which letter was replied to by the appellant. There was then lot of correspondence between September, 2002 and March, 2003 as regards the Modules supplied. The respondent, however, sent a legal notice to the appellant through its Advocate on 4.4.2003, wherein it alleged deficiency in services rendered by the appellant with respect to all seven Modules developed by the appellant. There was another legal notice sent by hand and ultimately a complaint against the appellant came to be filed on 26.6.2003 before the State Consumer Disputes Redressal Commission (hereinafter called "the State Commission" for short). The appellant, by way of its reply to the complaint, raised a preliminary objection that the respondent/complainant was not a `consumer' within the meaning of the Act and also sought the decision on this preliminary objection as an issue. A rejoinder was sent to this reply.

5. By its order dated 4.3.2004, the State Commission accepted the appellant's preliminary objection and dismissed the complaint. The respondent/complainant, therefore, filed First Appeal No. 218 of 2004 before the National Commission. By its order dated 17.12.2009, which is impugned here, the National Commission reversed the order of the State 5 Commission and held that the `goods' purchased by the respondent from the appellant were being used by the respondent for a commercial purpose, and, therefore, the respondent was not a `consumer' within the meaning of Section 2(1)(d)(i) of the Act. However, the National Commission further held that notwithstanding such findings, the respondent was entitled to maintain a complaint under the Act with respect to the deficiency in service during one year warranty period with respect to said goods relying on Section 2(1)(d)(ii) of the Act.

11. Shri Lalit, learned Senior Counsel did not assail this observation. We, therefore, do not wish to interfere with that observation. However, we observe that the parties may avail of the remedies available to them in accordance with law. The appeal is allowed. The order of the National Commission is set aside and the complaint is dismissed with costs assessed at Rs.50,000/-.

New Delhi.