Consumer
Case Studies
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| National
Consumer Disputes Redressal Commission, New Delhi |
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| K
S Gupta, Presiding Member; S N Kapoor and Dr P D Shenoy,
Members |
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| Punjab
Tractors Ltd - Petitioner |
| Versus |
| Hamam
Singh & Am - Respondents |
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| Revised
Petition No. 2144 and 2145 of 1999 |
Decided
on 18.01.2005 |
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(i) |
Consumer
Protection Act, 1986 - Section 2(1)(d) Expl - Tractor
purchased for agricultural purposes - Whether commercial
purpose? (No) |
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(ii) |
Consumer
Protection Act, 1986 - Section 2 - Sale of tractor
with one year warranty on 27-11-1996, within 9 months
two pistons, two liner assy, sealing ring and cam
shaft replaced - Whether amount to manufacturing
defect? (Yes) |
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(iii) |
Consumer
Protection Act, 1986 - Section 16(1)(d) - Manufacturing
defects in tractors purchased - Parts replaced -
Sold for half value - Complaint - District Forum
granted 50% with interest - Whether calls for any
interference? (No) |
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(iv) |
Consumer
Protection Act, 1986 - Section 21 (b)-2(1)(i) r/w
2(1)(f) - Defect in Tractors - Parts replaced -
DF and SC granting 50% compensation without deducting
depreciation - Whether calls for interference in
revision? (Yes) |
IMPORTANT POINT
Where defective tractor was sold after two years' use,
in calculating compensation, depreciation for two years'
use has to be deducted. |
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ORDER |
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S
N Kapoor, Member - The above mentioned two appeals
arise out of one and the same order passed by the State
Consumer Disputes Redressal Commission, Punjab, Chandigarh
dated 25.8.1998 in Appeal No. 1037 of 1998 dismissing appeal
filed by the Supreme Tractors Corporation and Punjab Tractors
Ltd. |
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2. |
By
the said appeal, the order of the District
Forum, Faridkot, dated 21.9.1997 was challenged
whereunder the Supreme Tractors and Punjab
Tractors were directed to pay 50% of Rs.
2,62,500/- (the price of the tractor) along
with interest thereon @ 18% from 29th August,
1997 with cost of Rs. 1,500/-.
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3. |
The
Complainant, Hamam Singh purchased a tractor
on 27.11.1996 with one-year warranty. He
had taken loan from PADB Branch at Faridkot
and he had sold some shares for purchasing
the tractor. Immediately after the purchase
of the tractor, it started giving trouble
inasmuch as two Pistons Assemblies, Liner
Assy, Main Oil seal and Levelling Rod and
Shaft had to be replaced. The Complainant
sought compensation amounting to Rs. 2.00
lakhs.
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4. |
The
opposite party, Supreme Tractors Corporation
claimed that the tractor was delivered on
20.10.1996 and, up to 1.8.1997, it had been
used for 940 hours. The defect in the tractor
was removed and the Complainant and his
son were fully satisfied.
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5. |
Punjab
Tractors, the manufacturer of the tractor,
contested the matter on the grounds, which
were taken by the Supreme Tractors Corporation.
The sale was guaranteed by one-year warranty
for parts against manufacturing defects,
subject to certain terms and conditions
as contained in Swaraj Operations Manual.
The Complainant availed the services of
warranty. Necessary parts were replaced
after rendering free service and job done
on 9 occasions from 27.11.1996 to 1.8.1997.
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6. |
Learned
Counsel for the Punjab tractors submitted
that there was no manufacturing defect as
it was evident that the tractor had plied
for 940 hours during first nine months itself.
If the tractor was defective, it could not
have been used for such a long period. The
fact that the vehicle was sold, was not
disclosed earlier as it would indicate mala
fide intention on the part of the Complainant/Petitioner
when he filed the appeal. The vehicle was
used for commercial purposes. The Complainant
was not consumer and he was not entitled
to any relief after the expiry of the warranty.
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7. |
We
have heard the Ld Counsel for the parties
and gone through the record.
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8. |
In
so far as the point as to whether Hamam
Singh was a consumer or not and the submission
that the tractor used for commercial purposes
would be covered by the explanation added
to the definition of the term 'consumer',
the Complainant could not be excluded from
the definition of 'consumer'. One has to
consider distinction between the different
terms, commercial, industrial, agricultural,
etc., which are being simultaneously used
in various enactments. Since it is not meant
for re-sale, it could not be said to be
a commercial purpose. Tractor would be used
for agriculture purpose. Consequently, the
contention of the Ld Counsel appearing on
behalf of the manufacturer and the dealer
in this regard cannot be accepted.
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9. |
In
so far as the question of manufacturing
defect is concerned, there is no dispute
that on 9.12.1996, the piston assembly was
replaced. Again on 10.1.97, Liner assembly
was replaced. On 24.4.1997 again, piston
and liner assembly were required to be replaced.
On 7th May 1997, sealing ring was replaced
and again on 1.8.1997, main oil seal and
levelling rod had to be replaced, even if
one ignores replacement of oil seals on
14th February 1997 to 24th February 1997.
Since out of three pistons, two were required
to be replaced along with liner assembly
and cam shaft, it would clearly indicate
that there was manufacturing defect in the
tractor. One could not be oblivious to the
submission that these defects were noticed
within a very short time span of 10 months
from the date of purchase forcing the dealer/
manufacturer to replace them. Even if we
ignore the changing of oil seals and diesel
filter and other repairs and replacement
required to be undertaken by the dealer,
and consider undisputed jobs done, the manufacturing
defects would become too obvious. A tractor
is supposed to give reasonable service for
a number of years, for 5 to 7 years, without
forcing a purchaser to visit workshop of
the respondents to complain about the aforesaid
defects again and again.
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10. |
As
regards the affidavit filed by the purchaser
of the tractor from the Complainant, he
has, no doubt, stated that he had not suffered
any problem afterwards, but it would not
make any difference in view of the admitted
situation about the replacement of the above
mentioned parts of the tractor namely, two
pistons, two liner assemblies, sealing ring
and cam shaft. There are certain defects,
which have been allegedly found as mentioned
earlier and there is other corroborative
evidence of the Complainant, which would
support that there was a manufacturing defect.
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11. |
Supposing,
for the sake of arguments, no defect was
found by the subsequent purchaser, it would
mean that the Complainant had maintained
it well after the warranty period and before
the sale i.e. one day before, the appeal
was filed on 15.10.1998. One could not be
oblivious to the submissions that in revision
petition this Commission is supposed to
be very slow in disturbing the finding of
facts.
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12. |
As
regards the submission that the Complainant
had already got half of the price by selling
the tractor, it would neither help the dealer
nor the manufacturer, the reason being that
the Complainant had to sell the vehicle
as he had to spend undisputedly, time, money
and energy in getting the tractor repaired
repeatedly and could not have the satisfaction
of using new tractor. He might have earned
much more by running and using the tractor,
if it was not defective and could be used
for more period. It was sold after two years.
The Complainant did not get any compensation
for the loss of use for hundreds of lost
working hours. He had to pay interest to
the bank. In these circumstances, if the
State Commission instead of replacement
ordered to pay 50% of the amount after considering
the sale of the tractor on 15.10.1998, we
do not think that in so far as the amount
of refund of 50% of the value is concerned,
any interference is called for.
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13. |
It
was submitted that the interest was on higher
side. But, there was no dispute that the
Complainant had taken the loan from PADB
Branch at Faridkot for Rs. 2,30,000/- and
he had to sell his shares as is mentioned
in para 5 of the complaint. Neither the
Supreme Tractors, Faridkot nor the other
opposite party (Punjab Tractors Ltd) disputed
the fact of taking advance of Rs. 2,62,500/-.
If we consider the loss of business, the
requisite interest paid @ 14-15% to the
financial institutions, the amount of interest
awarded does not call for any interference.
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14. |
Coming
to the second limb of the argument, in ordinary
course, during two years, the tractor would
have depreciated in value at least to the
extent of 20%, one has to keep in view the
fact that there is evidence of its use for
940 hours in first nine months. We are also
supposed to take into consideration the
various defects replaced by the Petitioners.
In these circumstances, while we would not
disturb the ratio of the loss suffered to
the extent of 50%, we would like to reduce
the amount of Rs. 1,31,250/- by taking into
consideration the depreciated value to the
extent of 20% from the original value of
Rs. 2,62,500/-. The contention that the
Petitioner had already received a sum of
Rs. 1,56,000/- by selling the tractor on
15.10.1998 would not make any difference.
It would be totally different kind of transaction
depending on the price of a new tractor
of the same brand, market forces of supply
and demand and condition of the tractor.
The Petitioners have nothing to do with
it. We would accordingly reduce Rs. 53,500/-
by way of depreciation, take its value at
Rs. 2,09,000/- and award 50% of Rs. 2,09,000/-
i.e. a sum of Rs. 1,04,500/- with interest
@ 18% p.a. with cost of Rs. 1,500/- in all.
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15. |
Both
the Petitioners i.e. Punjab Tractors Ltd
and Supreme Tractors Corporation being jointly
and severally liable in terms of judgment
in Jose Philip v. Premier Automobiles Ltd,
are accordingly directed to pay the above-mentioned
amount within a period of six weeks. Both
the revision petitions stand disposed of
as mentioned hereinabove.
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