National Consumer Disputes Redressal
Jcb India Ltd. vs Ram Singh & 2 Ors. on 14 June, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 1770 OF 2018 (Against the Order dated 11/05/2018 in Complaint No. 71/2012 of the State Commission Punjab) 1. JCB INDIA LTD. HEAD QUARTER 23/7, MATHURA ROAD, BALABHARH-121004, HARYANA ...........Appellant(s) Versus 1. RAM SINGH & 2 ORS. S/O BANT SINGH,# 191, VILLAGE-JHALOOR,TEHSIL-SUNAM DIST. SANGRUR, PUNJAB 2. KRISHNA AUTOMOBILES THROUGH MANAGING DIRECOTR, PHASE -1,PLOT NO 125, INDUSRIAL AREA, CHANDIGARH 3. JCB INDIA LTD THROUGH ITS BRANCH MANAGER/AUTHORIZED SIGNATORY NEAR MAGNUM PALACE, SANGRUR, PUNJAB ...........Respondent(s)
BEFORE: HON'BLE AVM J. RAJENDRA, AVSM VSM (Retd.),PRESIDING MEMBER
FOR THE APPELLANT : FOR THE APPELLANT : MR. SANJEEV MAHAJAN, ADVOCATE
MR. PRANJAL TANDON, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENTS : MS. SUNAINA, AUTHORIZED COUNSEL FOR R1
NONE APPEARED FOR R-2 & R-3
Dated : 14 June 2024 ORDER
1. The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act") against the Order dated 11.05.2018 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (hereinafter to be referred as "the State Commission"), in Consumer Complaint No. 71 of 2012, wherein the Complaint filed by the Complainant (Respondent No. 1 herein) was allowed.
2. For Convenience, the parties in the Appeal are being referred to as mentioned in the Complaint before the State Commission. "Ram Singh" is referred to as the Complainant. While M/s. Krishna Automobile is referred as the OP-1, JCB India Ltd., Head Quarter and Branch Office is referred to as OP-2 and OP-3 respectively.
3. During the pendency of the case before the learned State Commission, the Complainant filed MA No. 218/2013 seeking an amendment to the complaint. The learned State Commission allowed this amendment vide order dated 01.04.2013. Aggrieved by the said order, OP-2 filed Revision Petition No. 2604 of 2013 before this Commission. This petition was disposed of vide order dated 09.01.2018, which upheld the amendment of the complaint and granted OP-2 the opportunity to file an amended reply to the same.
4. Brief facts of the case, as per the Complainant, are that on 13.02.2012 he purchased a JCB machine, Model/Chassis No. 1817428, Engine No. H000021382, from OP-1 for his livelihood and paid a total consideration of Rs. 20,74,999.62. OP-1 provided a one-year guarantee for the JCB machine, promising to replace any defective parts within that period. On 16.02.2012, Anuj Kumar, a service engineer from OP-1, inspected the JCB machine at the Complainant's premises. He found that the rims of the left and right-side tires were bent, and gearbox was making noise. He informed the Complainant that he would consult with OP-1 and then proceeded to repair/replace the defective parts. On 28/29 April 2012, the Complainant visited OP-3 to report the ongoing issues with the JCB. Gurdev Singh, a service engineer from OP-3, also confirmed that the rims of the left and right-side tyres were bent and that the gearbox was noisy. Necessary spare parts were not readily available and that the machine would be repaired once the parts are received. On 12.06.2012, Ganesh Kumar, a service engineer visited his premises and reiterated the defects and documented in Service Visit Report No. 59128 dated 12.06.2012 and asked him to bring the machine to Sangrur for repairs. The Complainant had also written a letter to Ganesh Kumar in this regard. On 16.06.2012, he took the machine to OP-3, where service engineers Ganesh Kumar, Gurdev Singh and Anuj Kumar replaced some parts. However, the machine still did not function properly. He returned the machine to OP-3 for further repairs. The OP-3 service engineer on inspection discovered a manufacturing defect: there was no needle bearing in the gearbox, which was not curable. He requested OP-3 to replace the machine with a new one since it was still within the guarantee period, but this request was denied for various reasons. Due to defective machine and the failure to fully repair within the guarantee period, he suffered mental agony, harassment, and financial loss, which he attributed to the deficiency in service and unfair trade practices by OPs. Being aggrieved, he filed Consumer Complaint No. 71 of 2012 before the State Commission against the OPs, seeking replacement of defective JCB machine with a new one of same make and model, compensation of Rs.6,00,000 for mental agony and harassment, and Rs.11,000 for litigation expenses.
5. Upon notice, OP-1 & 2 filed their individual responses to the complaint before the learned State Commission. However, OP-3 did not file a reply to the amended complaint. Previously, a joint reply was submitted on behalf of OP-1 and OP-3.
6. In reply, OP-1 contended that the complaint be dismissed against it as it is neither the manufacturer nor the seller of the JCB machine in question. It merely is an authorized dealer responsible for maintenance and service of machines sold by OP-2 during the warranty period. OP-1 argued that there is no privity of contract between the Complainant and itself and he is not a 'consumer', as the machine is only meant for commercial purposes and the same is not being used by him for earning his livelihood by way of self-employment, as he has employed/engaged an operator for running the same. On merits OP-1 asserted that it never sold the machine to him and did not issue any invoice, warranty, or guarantee certificate for the machine. The assessment made by Sh. Anuj Kumar was subjective, noting that the reported issues, such as rim bending and gearbox noise, did not render the machine immobile and were only raised after multiple service visits. OP-1 explained that the reported problems were not stated during the initial free services. When the issues were eventually brought to OP-1's attention on 11.06.2012, an engineer had inspected the machine. However, the Complainant delayed bringing the machine to OP-3 workshop till 16.06.2012. After replacement of defective parts, including the front rims and hydraulic level gauge and overhaul of the gearbox, the machine was returned without gearbox noise. The Complainant requested the reversal shaft to be changed, which was subsequently replaced on 11.07.2012. OP-1 contended that no complaints were received after this repair until the expiration of the warranty period. Additionally, OP-1 addressed the issue with the tyres by referring the matter to CEAT Ltd., the OEM, as per warranty requirements, and conveyed rejection of warranty for the tyres to him. OP-1 highlighted that the machine operated without complaint for over a year after repairs, as evidenced by a subsequent servicing on 16.01.2013, for a different issue regarding the cabin, during which no complaints were reported. As per OP-1, the Complainant was not entitled to any relief and sought for the complaint to be dismissed.
7. In the joint reply previously submitted on behalf of OP-1 & 3, similar arguments were reiterated as those raised by OP-1 in response to the amended complaint. OP-2, in its separate reply, raised preliminary objections regarding the Complainant to be a 'consumer' under Section 2(1)(d) of the Act, contending that the machine was not purchased for self-employment and is strictly used for commercial endeavours, thereby falling outside the scope of the Act. Further, OP-2 denied any manufacturing defect in the machine, asserting that it was covered under the warranty policy at the time of purchase. The machine underwent thorough examination by OP-2's engineers, who advised bringing it to the workshop for necessary repairs, which were subsequently undertaken on 16.06.2012. The reversal shaft, not available initially, was replaced on 11.07.2012, after which the machine functioned properly without any noise. OP-2 emphasized its adherence to the warranty policy and highlighted its position as a leading manufacturer of excavators and loaders in India, with a vast market share. It argued that any issues with the machine were likely due to improper handling by the complainant, as these machines undergo comprehensive testing and examination. Regarding jurisdictional matters, OP-2 argued that this Commission lacks territorial jurisdiction, as both parties agreed to the jurisdiction of courts in Faridabad. Additionally, the pecuniary jurisdiction of the Commission is inapplicable, as the dispute concerns only the gearbox, which is below the jurisdictional threshold of Rs.20,00,000. On the merits, OP-2 reiterated its earlier arguments and denied the need for machine replacement, as the machine has been functioning satisfactorily since 11.07.2012, without any complaints from the complainant. All other allegations were refuted, and dismissal of the complaint was sought, along with exemplary costs.
8. The learned State Commission upon hearing the parties, and considering the facts and the circumstances of the case partly allowed the complaint with the following Order: -
"31. In the above said judgments, it was clearly laid down by the Hon'ble National Commission that if a brand new vehicle gives trouble within a few days of its purchase, the consumer would be dissatisfied. It was further held by the Hon'ble National Commission that there is no necessity for a new vehicle to go to workshop on several occasions.
32. Keeping in view all these facts and circumstances, it is held that no purpose would be served by getting the machine, in question, repaired again and again from the opposite parties, because the defects therein are of the nature of manufacturing defects, which are beyond repairs/replacements. So it is a fit case, where a direction is to be given to the opposite parties, jointly and severally, to replace the JCB machine, in question, with a new one of the same make and model. However, if the machine of the same make and model is not available or if the same has become obsolete or if the same is not being manufactured now, then the opposite parties shall be liable to refund the entire cost of the machine, in question, to the complainant, along with interest. For the mental agony and harassment suffered by the complainant for all this long period of 6 years from the date of purchase of the machine till today, he is also entitled to suitable compensation.
33. In view of my above discussion, the complaint is allowed and following directions are issued to the opposite parties, jointly and severally:
to replace the JCB machine, in question, with a new one of the same make and model; and to pay 33,000/-, as compensation on account of mental agony and harassment suffered by the complainant as well as litigation expenses.
34. The opposite parties shall comply with this order within a period of 45 days from the receipt of certified copy of this order, failing which they shall be liable to refund the entire cost of the machine, in question, i.e. ₹20,74,999/- to the complainant, along with interest at the rate of 12% per annum from the date of purchase of the machine i.e. 10.02.2012 till realization, besides aforesaid payment of composite compensation and litigation expenses to the tune of ₹33,000/-, within 30 days thereafter."
9. Being aggrieved by the impugned order dated 11.05.2018, the OP-2/Appellant i.e. JCB India Ltd, Head Quarter filed this present Appeal no. 1770 of 2018 with the following prayer:
"A. Allow the first appeal and set aside the judgment dated 11.05.2018 passed in Consumer Complaint No. 71/2012 titled "Ram Singh Vs Krishna Automobiles & Ors." passed by the State Consumer Disputes Redressal Commission, Chandigarh, Punjab and consequently dismissed the complaint of the Respondent No.1.
b) Pass such other and further order as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case.
10. In this Appeal, the Appellant/OP-2 raised the following main issues:-
The State Commission overlooked the established legal principle that purchasing machinery for business activities constitutes commercial purposes, thus disqualifying the Complainant as a Consumer under the Act. There is no evidence demonstrating that the machine was procured for self-employment.
The State Commission failed to note that a valuable machine acquired for excavation and loading inherently serves commercial purposes. Mere assertions of it being for livelihood do not suffice.
Each issue highlighted by him was addressed by the Appellant as per warranty terms, ensuring repair and replacement of necessary parts to his satisfaction as evident from service reports dated 12.06.2012 and 11.07.2012.
Service reports dated 14.04.2012 and 07.06.2012 indicated machine operation for 125 and 526 hours respectively. Later, from 16.06.2012 to 16.01.2013, the machine ran successfully for 1276 hrs, suggesting absence of any defects. Minor issues due to use do not indicate such defects, especially when rectified promptly.
The State Commission disregarded the warranty terms, which absolve the manufacturer's liability after the 12-month warranty period. The warranty explicitly outlines repair or replacement obligations, subject to specified conditions.
The State Commission overlooked the absence of laboratory or expert reports, as required under Section 2(1)(a) of the Act, or any other substantiating documents to validate the alleged defects.
11. In response to the notice on memo of Appeal, the Complainant filed a reply/objection, reiterating the facts and emphasizing sound reasoning behind the Order of the State Commission addressing all facets of the case. He argued that the Appellant is not entitled to any relief and urged for dismissal of the first appeal with costs.
12. While no representation was made by Respondent No. 2 & 3, the Counsel for the Appellant asserted that Respondent No. 2 & 3 bear no liability and they are merely proforma parties in the case. Consequently, vide order dated 21.02.2024, Respondent No. 2 & 3 were proceeded ex-parte.
13. The learned counsel for the Appellant/OP No. 2 reiterated the facts of the case as well as the grounds of the Appeal. He strongly argued that as per the warranty the JCB machine was duly repaired and the parts giving problem were replaced to the satisfaction of the Complainant. There were no manufacturing defects pointed out at any stage and the defect which was pointed out was due to the machine being handled by an untrained operator/driver. After the machine was repaired, as per the service report dated 14.04.2012 and 07.06.2012 the machine had run for 125 hours and 526 hours respectively. Further, the machine successfully ran for 1276 hours from 16.06.2012 to 16.01.2013. The State Commission ignored the fact as per the service report dated 12.06.2012 and 11.07.2012, the machine was repaired to the satisfaction of the Complainant.
14. The learned Counsel specifically highlighted that the Machine was purchased for commercial purpose. Thus, he was not consumer under Section 2(1)(d)(ii) of the Act. The machine in question was used for excavation and loading, and an operator was employed for the same. As such, it was for commercial use for construction work. A machine worth over Rs.20 lakhs cannot be utilized for generating mere livelihood and it was not being utilized by self-employment. Moreover, it was nowhere stated in the complaint that it was for his own livelihood. Subsequently, an application for amendment was filed and was allowed by the State Commission on 01.04.2013 and he was allowed to plead that he purchased it for self-employment for earning livelihood. As per Clause 1.4 of the warranty certificate, it does not extend to the components not manufactured by Appellant. As regards the complaint in respect of tyres, since M/s Ceat Tyre was the manufacturer, it was referred to M/s Ceat Tyers. However, this claim was rejected by M/s Ceat on 13.07.2013 and 21.07.2012 on the ground that after examination the failure was not found due to the manufacturing defect. He did not annex any report of appropriate laboratory/expert as required. The complaint is liable to be dismissed as it was filed without jurisdiction as the parties by mutual consent agreed in the warranty certificate to exclude the jurisdiction of all courts and Forums to entertain, try and decide any dispute related to the said JCB except Faridabad and also agreed to resolve their disputes only within the courts and forum at Faridabad. Also, the relief granted by the learned State Commission for replacing the machine or refunding Rs.20,74,999/- is not commensurate with the defects pointed out by him. Admittedly he remained in possession of the machine even after filing the complaint and continued to use the same throughout this period. There is no proof that the machine had stopped working or that the same was not being used him. The Counsel for Appellant/OP-2 relied on the following judgments :-
a) Laxmi Engineering Works Vs. PSG International Institute, AIR 1995 SC.
b) Cheema Engineering Services Vs Rajan Singh, VI(1998) SLT 20=(1997) 1 SCC 131 by Supreme Court.
c) Satish Chandra Gupta and Sons vs Klic Nixon Limited & Anr., 2010(3) CPC 520 (NC).
d) Meera Industries Vs Modern Construction,2009(1)CPC 108(NC)
e) Billagi Sugar Mills Ltd. Vs M/s Kessels Engineering Works (P) Ltd., 2010 (2) CPC 295(NC).
f) Birla Technologies Ltd. Vs Neutral Glass and Allied Industries Ltd. in Civil Appeal No.10650 of 2010.
g) Sabeena Cycle Emporium Chennakhaada Vs. Thajes Ravi M.R. Pancha Vila Vedar Ezhkone P.O. (1992) 1 CPC 97.
15. The counsel for Complainant reiterated the facts stated in the complaint, reply and forcefully argued that he indeed purchased the machine for self-employment. The initial omission to mention self-employment in relation to the machine was a genuine oversight. Due to the Appellant's negligence, he suffered mental agony and loss of livelihood. The issues with the machine, its tyres and gearbox, were detected shortly after its delivery, indicating potential negligence in the manufacturing process by the Appellant. He was never satisfied with the services of the Appellant, as they only made superficial repairs. He disputed the allegation that it was operated by untrained staff. He thus sought that the Appeal to be dismissed with costs and relied on the following judgments to support the arguments:-
a. Laxmi Engineering works v. P.S.G. Industrial Institute, (1995) 3 SCC 583.
b. Tata Motors Ltd. vs Antonio Paulo Vaz & Anr, decided on 09.01.2020.
16. I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the Parties.
17. The primary issues to be determined are whether the Complainant, who purchased a JCB machine is a consumer under the Act? If he is a consumer, whether his claim of manufacturing defect in the JCB machine is established? And if so, is he entitled for replacement and/or payment of compensation by the OPs?
18. As regards addressing the core issue as regards the allegation of manufacturing defect, the question is whether the Complainant should approach any recognized Govt. authority for inspection in accordance with Section 13 of the Act? An excerpt from Section 13 pertaining to manufacturing defects is reproduced below: -
13. (1) Procedure on admission of complaint (1) The District Forum shall, [on admission of a complaint] if it relates to any goods -
(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;
19. This Commission in Mercedes Benz India Private Ltd Vs. Smt. Revathi Giri & Ors, FA No. 766 of 2021, decided on 11.10.2023 has held that an inherent manufacturing defect needs to be established through the process of examination by way of an expert opinion. The relevant portion of the Order is as under: -
"9. From the material on record it is manifest that no expert opinion of any authorized laboratory or authority has been brought on record to establish that the vehicle suffered from any defect that could be ascribed to the manufacturer of the vehicle by the appellant. The vehicle had admittedly run over 56,815 kms as on 18.07.2019 when it was brought to the workshop of respondent no.2. It is not the case of the respondent that the vehicle was not properly attended to or that the defects were not rectified as per the terms and conditions of the warranty valid for three years. There is, therefore, no deficiency in service that has been established in this particular case either on account of any manufacturing of defect of the vehicle under section 13 (1) (c) or repairs by respondent no.2 for which the appellant would be liable. In the absence of any deficiency in service being established under section 2 (1) (d) the findings of the State Commission that the vehicle suffered from inherent manufacturing defects cannot be sustained. Section 13 (1) (c) makes it explicitly clear that an inherent manufacturing defect needs to be established through the process of examination by way of an expert opinion. Without such an examination being undertaken, the conclusion that there were inherent manufacturing defects cannot be arrived at. Admittedly, provisions of section 13 have not been followed in this case. Defects which are covered under the terms and conditions of the warranty cannot be ascribed to be an inherent manufacturing defect without the requisite examination of the vehicle after applying the rigour of section 13 (1) (c). The defects which are covered under the terms of warranty cannot be concluded to be a manufacturing defect. In the absence of any expert opinion, such a conclusion is conjectural and based on surmise and cannot be sustained. The State Commission's order is therefore liable to be set aside on these grounds.
20. In the present case, admittedly the Complainant purchased the JCB machine in question on 13.02.2012 for total consideration of Rs.20,75,000/- from OP-1, with one year guarantee with promise to replace defective parts within that period. While the JCB machine is inherently for commercial use, the Complainant has stated that it was used by him for earning his livelihood. Thus, notwithstanding the contention of OPs of commercial usage of the said JCB by the Complainant, in the absence of any substantial evidence to the contrary by the OPs, the Complainant is a consumer under the Act.
21. It is also admitted position that the said machine purchased on 13.02.2012 started giving troubles to him from the beginning. On complaining to OP-1, it was inspected, and repairs were undertaken by OP-1 on multiple occasions. It was noticed by OP-1 that the rims of the left and right-side tires were bent, and gearbox was making noise. OPs alleged that the JCB was driven by unqualified persons. The repairs were addressed by OP-1 service engineer, parts were replaced and the machine was made serviceable. However, he continued to complain that the machine remained unserviceable due to some or the other defects. The same was also addressed to a large extent by the OPs. Not being satisfied, the Complainant filed a Consumer Complaint before State Commission for replacement for the JCB with a new one of same make and model, Rs.6,00,000/- compensation for mental agony and Rs.11,000/- as costs. In this regard, OP-1 contended that the problems stated in the complaint by him were never brought out during the initial free service and were stated only on 11.06.2012. The OP-1 engineer inspected the JCB, replaced the defective parts including the front rims and hydraulic level gauge and did overhaul of the gearbox and returned the JCB in a fit condition. When the Complainant had requested for the reversal shaft to be changed, that was also replaced on 11.06.2012.
22. OP-1 reiterated that no complaints were received after this repair until the expiry of the warranty period. While the learned State Commission had directed for replacing of JCB machine and to pay Rs. 33,000/- as compensation, the OPs asserted that all complaints were addressed to his satisfaction. The problems arose on account of untrained operator driving the JCB. After servicing of the JCB on 14.04.2012 and 07.06.2012, the machine was used for 125 hours and 526 hours respectively. Further, from 16.06.2012 to 16.01.2013 it was successfully run for 1276 hours. OP-2 contended that, if there are any manufacturing defects in the machine, as claimed it could not be extensively used by him. It is a matter of record that the OPs replaced the defective parts free of charges and restored its functioning and it has been used for long durations. Further, in any case, towards establishing manufacturing defects, if any, there is nothing on record to state that there was an expert report/opinion that was placed on record by the Complainant under Section 13(1) of the Act. In the absence of expert opinion, due indulgence of OPs to restore the machine free of any charges, regular free replacement of defective parts; and the fact that machine remained functional for long durations as brought out above, no case is made out for manufacturing defect and replacing of the machine in question.
23. As regards addressing the core issue of manufacturing defect, the question is whether the Complainant should approach any recognized Govt. authority for inspection in accordance with Section 13 of the Act? An excerpt from Section 13 pertaining to manufacturing defects is reproduced below:-
13. (1) Procedure on admission of complaint (1) The District Forum shall, [on admission of a complaint] if it relates to any goods -
(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;
24. Examination of the material on record reveals that no expert opinion from an authorized laboratory or recognized Govt authority was procured or presented by Respondent/Complainant to assert the claim of 'manufacturing defect' in the machine. It is uncontested that the JCB machine was substantially used. There lacks substantial and definitive evidence supporting the claim that the JCB machine was inadequately repaired by OP or that defects persisted.
25. In the instant case, the learned State Commission returned a finding of inherent manufacturing defect without proceeding under section 13(1)(c) of the Act and without proving that the machine in question suffered from the defects specified in the complaint are manufacturing defects. The learned State Commission proceeded to award relief in respect of deficiency in service without the procedure under section 13(1)(c) of the Act being satisfied. Therefore, the conclusion that the Complainant is entitled to get relief of replacement of the JCB machine and compensation on the ground that there was manufacturing defect, deficiency in service and adoption of unfair trade practice cannot be accepted.
26. Considering this, no service deficiency is established under Section 13(1)(c) of the Act or in the service provided by the OPs, rendering them accountable. The burden to prove such a defect rested with the Complainant. Without an expert opinion, these conclusions remain speculative and reliant on assumptions. Thus, the orders of the learned State Commission and learned District Forum are unsustainable in law and, therefore, liable to set aside.
27. In view of the foregoing discussions, the order of learned State Commission in CC No. 71 of 2012 dated 11.05.2018 is set aside and the present Appeal is allowed.
28. There shall be no order as to costs. All Applications pending, if any, also stand disposed of accordingly.
29. The Registry may release the Statutory deposit amount, if any due, in favour of the Appellant.
................................................................................... AVM J. RAJENDRA, AVSM VSM (Retd.) PRESIDING MEMBER