State Consumer Disputes Redressal Commission
The Pondicherry State Co-Operative ... vs M/S Mascon Global Ltd., on 30 July, 2009
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT PUDUCHERRY BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT PUDUCHERRY THURSDAY, the 30th day of July, 2009. First Appeal No.16/2007 The Pondicherry State Co-Operative Bank Ltd., Rep. by its Managing Director, Having its Head Office at No.271/2, GRR Zone, 1st Floor, M.M.Adigal Salai, Puducherry. Appellant Vs. M/s Mascon Global Ltd., Rep. by its Partner, No.158, II Floor, Brindavanam Building, Greams Road, Chennai- 600 006. .. Respondent (On appeal against the order passed by the District Forum, Puducherry in Consumer Complaint No.49 of 2006 dated 21.06.2007) Consumer Complaint No.49 of 2006 The Pondicherry State Co-Operative Bank Ltd., Rep. by its Managing Director, Having its Head Office at No.271/2, GRR Zone, 1st Floor, M.M.Adigal Salai, Puducherry. Complainant Vs. M/s Mascon Global Ltd., Rep. by its Partner, No.158, II Floor, Brindavanam Building, Greams Road, Chennai- 600 006. . Opposite Party BEFORE: HONBLE JUSTICE THIRU N.V. BALASUBRAMANIAN PRESIDENT TMT. P.V.R. DHANALAKSHMI, MEMBER
FOR THE APPELLANT:
Thiru R.Ka.Prem Kumar, Advocate, Puducherry.
FOR THE RESPONDENT:
Tvl.Harishankar, K.Balaji, Advocates, Puducherry O R D E R The is an appeal filed by the complainant against the order of the District Forum at Puducherry made in Consumer Complaint No.49/2006 dated 21.06.2007 in dismissing the complaint.
2. The brief facts of the case of the complainant are as follows:
The complainant placed a work order dt.01.02.2003 with the opposite party to install the application of software in its E.C.R. Branch for a sum of Rs.62,000/- and Rs.15,000/- towards cost of total branch automation application of software and implementation charges.
Subsequently, the complainant extended the introduction of the total branch automation in six of its branches as per work order dt.14.08.2003 for a sum of Rs.3,72,000/- and Rs.76,500/- towards cost of total branch automation application software and implementation charges. Thus, the total value is Rs.5,25,500/- and the complainant had paid a sum of Rs.2,78,735/- in advance and the balance would be paid on satisfactory completion of the work. Since there were some deviation in the agreement, the complainant sent the same for modification, but the opposite party did not send the modified agreement in spite of repeated demands. The complainant encountered several problems in the implementation of the automation software. Despite letters of request to rectify the mistakes, it was not done and the complainant faced difficulty in attending to the half-yearly closing on 31.03.2005.
Since the opposite party failed and neglected to satisfactorily complete the work, a legal notice was issued on 01.09.2005 calling upon the opposite party to come forward to execute a modified proforma agreement in respect of the installation and implementation of the software application in the complainants banks. The opposite party acknowledged receipt of the notice and informed the complainant over phone to meet them in the third week of September, 2005 for discussion, but, the opposite party did not turn up for discussion. The act of the opposite party amounts to deficiency in service and hence the complainant filed the complaint.
3. Disputing the averments in the complaint, the opposite party filed the written version with the averments, in brief, as follows:
The complainant is not a consumer as defined under the Act, as the services of the opposite party were availed for commercial purposes. A proposal for total branch automation software at the complainants banks was sent by the opposite party on 12.11.2002 and on certain clarifications by the complainant, a revised proposal was sent on 30.12.2002. At the instance of the complainant, after negotiation on 21.01.2003, a final proposal was submitted on 22.01.2003 by the opposite party and the opposite party agreed to implement the work at the E.C.R. Branch in February, 2003. The work order was issued by the complainant on 01.02.2003 at a cost of Rs.62,000/- for software and Rs.15,000/- towards implementation charges. The software was installed on 03.03.2003 and it started functioning from 06.03.2003. Some problems were reported by the complainant and most of them were rectified and some customization requests were agreed to be taken at the time of implementing the application in other branches as soon from letter dt 29.04.2003. The opposite party received 25% of software cost, i.e. Rs.15,500/- on 24.05.2003 from the complainant and sent a proforma agreement in April, 2003. The complainant wanted certain modifications in the agreement, vide letters, dt.24.05.2003 and 15.09.2003. Notwithstanding the terms of the proposal and purchase order, the complainant started comparing the terms agreed upon between the Tamil Nadu Apex Co-Operative Bank and demanded parity vide letters, dt.24.05.2003 and 23.01.2004, which was not possible as the contract with TNSCB was on a larger scale. Meanwhile, the complainant also wrote a letter dt.23.07.2003 proposing to introduce automation in their six more branches by replacing the existing system and requesting the opposite party to send proposal for the six branches and the opposite party sent the proposal by vide letter dt.28.07.2003. The complainant placed work order on 14.08.2003 and the warranty period was thirteen months. The work in the first two branches was completed in the first week of October, 2003 and in December, 2003 three more branches were completed. The problems reported by the complainant were addressed by the opposite party from time to time. The invoice for the work done at five branches was raised for Rs.2,01,500/- on 12.02.2004 and the Kadhirkamam branch work was not completed as the complainant was yet to organize the hardware requirements. A part payment of Rs.50,000/- was received by the opposite party belatedly on 19.08.2004. The work in the last branch was implemented in March, 2004 and a part payment of Rs.50,000/- was released after several reminders and out of the total outstanding, the complainant agreed that there was a balance of Rs.2,46,765/- due to the opposite party. The complainant insisted on an agreement for total implementation of the total branch automation software and a draft agreement was sent by the opposite party. The complainant wanted modification in the agreement, of which some were accepted and the others not accepted by the opposite party as it was beyond the scope of earlier proposal. The complainant wanted the non-agreed points to be incorporated in the agreement and it was refused by the opposite party stating that the modifications were outside the scope of negotiation. It is false to state that the opposite party had not addressed the problems reported by the complainant. As a special case, the opposite party even made provision for customization after the parameterization implementations at six branches, which was outside the scope of purchase order. The opposite party was always prompt to address any errors or problems quickly and effectively. It is the complainant who has committed breach of contract and there is no deficiency in service on the part of opposite party. The opposite party is not liable to refund Rs.2,78,735/- to the complainant and the complaint is liable to be dismissed.
4. Before the District Forum, on the side of the complainant, CW1 was examined and Exs.C1 to C15 were marked. On the side of the opposite party RW1 was examined and Exs.R1 to R3 were marked.
5. The District Forum has framed the following three points for consideration:
1. Whether the complainant is not a consumer as defined under the Act?
2.
Whether the opposite party has committed any deficiency in service against the complainant?
3. To what relief the parties are entitled?
6. The District Forum has dismissed the complaint on the ground that the complainant is not a consumer within the ambit of the Act and left the others points undiscussed.
Aggrieved by the finding and order of the District Forum, the present appeal is directed.
7. We have heard both sides and perused the records. Both sides have also filed written arguments. The point for determination in this appeal is: Whether the appellant/complainant is a consumer? If so, whether there is any deficiency in service, on the part of respondent/opposite party in performing the work of installation of application software and implementation of the same?
8. ON THE POINT:
The District Forum has dismissed the complaint on the ground that the appellant/complainant is not a consumer as the services of the respondent/OP were availed of by the appellant/complainant for commercial purposes and hence the appellant/complainant is not a consumer within the meaning of the Act and hence the appellant/complainant is not entitled to sue the respondent/O.P. in such capacity. The submission of Learned counsel for the appellant consumer is that the District Forum overlooked, that the supply of software was for the exclusive use of the Bank and in spite of many requests, the respondent/O.P. has not attended to the problems even though there is warranty for the period of thirteen months from the date of installation and the date of delivery of deliverables. Learned counsel, therefore, submitted that the complaint has been preferred within the warranty period as the defects were not rectified even during the warranty period and hence there is a deficiency of service though the computers were installed for commercial purpose and since there are defects in the software, the complaint is maintainable. Learned counsel for the appellant referred to the date of installation and the period of warranty and the period of expiry of warranty and submitted on the basis of the decision of the National Consumer Disputes Redressal Commission in the case Vyavasthapak Control Print (India) Ltd., * Another Vs. Laxmi Agro Chemical (reported in III (2007)CPJ 454 (NC) and in the case Hindustan Power Plus Limited Vs. Santosh Drillers & Others (reported in IV (2007) CPJ 161 (NC), the complainant is a consumer. There is no doubt about the proposition of law submitted by learned counsel for appellant. The National Commission in the two decisions referred above, has held that purchaser of goods would be consumer if the goods develop defects within warranty period even though the goods were purchased for commercial purpose within the meaning of the Act. The National Commission held that if manufacturing defects in the goods supplied were not rectified within the warranty period that would amount to deficiency in service and the complaint would be maintainable.
The District Forum has not adverted to this aspect though in Paragraph 13 of the Order the District Forum noticed the submission of the complainant that the complaint would be maintainable if the transaction is covered by warranty even if the transaction was for commercial purposes.
The District Forum has held that the complaint was filed on 26.07.2006 after the amended provisions and the complainant is not a consumer and rejected the complaint on the ground that the services of the respondent/O.P. were for commercial purposes. In our view, the District Forum was not correct in holding that the complainant cannot be regarded as a consumer as the transaction was for commercial purpose. The District Forum should have gone into the question whether the defects developed during the warranty period and whether those defects were rectified or not?
9. Learned counsel for the respondent/O.P. submitted that the decisions relied upon by the appellant are not applicable to the facts of this case as the installation of the software itself is not complete in other branches of the appellant bank and the table attached to the written arguments contained particulars and only on the completion of installation of software the warranty period would start.
According to the respondent/, the installation and implementation of the software have not been completed due to non payment by the complainant and the insistence of unilateral changes in the agreement by the complainant and hence the claim that the goods developed defects during the warrant period does not arise. Learned counsel for the respondent submits that the list of problems referred to in the letter dated 05.01.2005 all relate to application software, i.e. customization of services and since on the point of customization, there is no agreement, the complaint is not maintainable. Learned counsel for the respondent also submits that no evidence was adduced to substantiate the claim that the problem referred to in the letter dated 05.01.2005 do not relate to customization though the appellant has admitted that items No.9, 62, 76, 82, 90, 95, 100 and 104 relate to customization and there is no evidence to show that the other problems listed out in the said letter do not relate to customization. We find force in the submission of the learned counsel for respondent. The complainant has stated in the complaint that the balance payment of Rs.2,46,765/- would be released to the opposite party upon satisfactory completion of software application including pending modules. The complainant has also admitted that the parties have not agreed to the modified agreement and the complainant has stated that there is no positive response from the respondent on the revised agreement. The complainant has also admitted that they encountered several problems in the implementation of the total branch automation and the letters referred to in the complaint relate to implementation of software operation by the opposite party. In the letter dated 17.06.2005, the complainant has referred to the problem in the installation and implementation of the software applications.
The complainant has also stated that the opposite party has neglected to respond the request of the complainant to set right the problems faced by the appellant/complainant in the implementation software which amount to deficiency in service and in more than one place in the complaint the complainant has stated that there were problems in the implementation of the software by the respondent/opposite party. The complainant in the prayer column has prayed for a direction to rectify the problem faced by the complainant in the installation and implementation of the software application including modules. The respondent has taken a stand in the version filed by it that it refused to modify the agreement as per the request made by the complainant as the complainant has sent the modified agreement as the complainant insisted that they should be on the same terms contained in the agreement entered into by the opposite party with the Tamilnadu State Co-Operative Bank. The respondent has taken a specific stand that the software has been implemented and the difficulty faced in the installation of the same has been rectified. The respondent has also taken a stand that the in the software installed in the E.C.R. Branch, a problem has arisen and the same has been rectified. The respondent has taken a stand appellant/complaint was insisting on the respondent to sign an agreement containing conditions contrary to the understanding between the parties. In spite of the specific denial by the respondent/O.P., the appellant/complainant has not let in any evidence to show that the problems referred to in the letter dated 05.01.2005 (Ex.C12) relates to the installation of the software and they do not relate to the problems faced in the implementation of the software.
As a matter of fact, the appellant/complainant has admitted some of the problems listed in the list along with the letter dated 05.01.2005 do relate to customization for which the parties have not entered into any agreement. In so far as the other problems listed in the letter (Ex.C12) are concerned, there is absolutely no evidence or material or statement on the side of the appellant/complainant to show that the problems relate to the installation of software in various branches of appellant bank. The appellant bank has chosen to examine one Elango, General Manager in the appellant bank and he has stated that he was unable to tell whether the problems referred to were hardware or software related and he is not technically qualified to say the same.
There was no other evidence on the side of the complainant to show that the problems listed in the list enclosed along with the letter, dated 05.01.2005 do not relate to customization but they relate to installation of the software in the branches. The respondent has specifically stated in the version that they all relate to customization service for which the respondent has not entered into agreement with the complainant. The complainant has also admitted that the parties have not entered into any agreement for implementation of the software. In the absence of any evidence on the side of the appellant/complainant to show that the problem encountered by it relate to installation and not customization, the narrow question that has to be decided is whether the complainant is maintainable or not? We are not inclined to remand the matter to find out that the problems alleged to have been faced by the appellant/complainant do not relate to the implementation of software. The complainant, as already held, has not let in any evidence to establish the said problems relate to the installation of software and they do not relate to the implementation of the software. The respondent has taken consistent stand that the problems relate to the implementation of the software and when there was any denial, the claimant should have let in evidence or produced some material or document to establish that the problems listed in the letter dated 05.01.2005 relate to installation of software and not implementation of software. There was no statement anywhere that the problems relate to installation of the software. In the absence of any evidence or material or statement on this aspect, we are unable to give any finding in appeal that the problems do not relate to the installation of software. The complainant has prayed for a direction to rectify the problem faced by the appellant/complainant both in the installation and implementation of the software, but not specified or indicated which of the problems relate to installation or which relate to implementation of the software. The appellant/complainant has not established that the defects listed out in the letter dated 05.01.2005 relate to the installation of software, and if we give any finding that they relate to installation that finding would be given without any evidence. As far as the implementation of the software is concerned, there is no agreement between the parties and hence no direction can be given for the implementation of the software and consequently the prayer for refund of money does not arise. We answer the points framed for consideration as under: The appellant would be a consumer, but there is no evidence to show that there is any deficiency of work on the part of the respondent in performing the work of installation of software. As far as the implementation is concerned, there is no agreement between the parties till date. Though we are of the view that the complaint would be maintainable in cases where the goods manufactured, supplied developed defects during the warranty period, the appellant/complainant miserably failed to establish that the defects pointed out by it relate to installation and not in the implementation of software, and consequently the appeal is liable to be dismissed.
10. In the result, the appeal stands dismissed. The order of the District Forum in C.C.49/2006, dt.21.06.2007 is confirmed. However, in the circumstances of this case, there is no order as to costs.
Dated this the 30th day of July, 2009.
(N.V.BALASUBRAMANIAN) PRESIDENT (P.V.R.DHANALAKSHMI) MEMBER