Bangalore District Court
M/S.Fedders Lloyd vs North Western Karnataka on 13 December, 2018
IN THE COURT OF XL ADDL.CITY CIVIL &
SESSIONS JUDGE (CCH-41) AT BENGALURU.
Dated this the 13th day of December, 2018.
PRESENT
SRI.RAVINDRA. M. JOSHI,
M.A., LL.B. (Spl.)
XL Addl.City Civil & Sessions Judge, Bengaluru.
O.S.NO.8269/ 2010
PLAINTIFF : M/S.FEDDERS LLOYD
CORPORATION LIMITED,
Represented by its Chairman and
Managing Director, Having its Head
Office at No.159,
Okhla Industrial Estate, Phase-III,
New Delhi- 110 020.
Having a Branch Office at No.10,
Velu Mudaliar Street, off Kamaraj Road,
Near Commercial Street,
Bengaluru-560 001.
Represented by its Branch Head
Mr.SHASHIKANTH BHAGOJI.
(By Sri.Adinath Narde, Advocate.)
AND:
DEFENDANT: NORTH WESTERN KARNATAKA
ROAD CORPORATION,M
Represented by its Chief Law Officer,
Central Offices,
Stores and Purchase Department,
Central Stores, Gokul Road,
Hubli-30,
State of Karnataka.
(By Smt.S.Nirmmala, Advocate)
2 OS.8269/2010
i) Date of Institution of the 29.11.2010
suit.
ii) Nature of the suit. Money suit.
iii) Date of the
commencement of 21.06.2012
recording of evidence.
iv) Date on which the
judgment was pronounced. 13.12.2018
v) Total Duration Year/s Month/s Days
08 00 14
*****
JUDGMENT
This suit is for recovery of a sum of Rs.24,95,200/- with interest at the rate of 14% from the date of filing of the suit till the date of realization.
2. It is pleaded that, plaintiff company is duly incorporated under the Provisions of Companies Act and it is engaged in the business of manufacturing, supplying and installation of Air Conditioner Units. It is pleaded that, defendant Corporation invited Tender for procurement/supply of Bus Air Conditioner Units (AC Unit) for NWKRTC Buses vide its Tender Notification No.T 22 dated 12.12.2006. In pursuance of said Tender Notification, Plaintiff Company applied for allotment of 3 OS.8269/2010 Tender and it became successful bidder. The defendant Corporation called Tender and offer was accompanied with Technical Specifications and dimensions of AC Units to be supplied as well as EMD of Rs.1,00,000/- along with other requisite documents. It is averred that, there was a meeting between plaintiff and defendant Corporation on 29.01.2007 and after negotiations, the terms and conditions and other modalities was agreed and contract was entered with defendant Corporation for supply and installation of Roof Mounting, Sleek Type Air Conditioning Units for a sum of Rs.4,65,000/- per unit. A letter of intent along with the terms and conditions were issued on 29.01.2007. The letter of intent was for supply and installation of 18 numbers of Roof Mounting Sleek Type Air Conditioner Units for passenger seater vehicles/sleeper Coaches vehicle at the rate of Rs.4,65,000/- per unit. The letter of intent stipulated that, the required Purchase Order would be released shortly. The plaintiff pleaded that, as no Purchase Order was received by the plaintiff company, therefore, by letter dated 15.02.2007, while submitting a Bank Guarantee for Rs.8,37,000/- in favour of defendant Corporation, it was requested for arranging for sending a formal order for supply of 18 numbers Bus AC Units. It is averred that, instead of issuing a regular supply order, by its letter dated 19.02.2007, requested the plaintiff 4 OS.8269/2010 company to make immediate arrangement for supply of one AC Unit to M/s.S.N.Kannappa Automobiles Pvt.Ltd., Bengaluru. In the said letter, it was stated that, Bus Body Construction of Air Conditioned "Meghdoot" Bus was already completed and the vehicle was held up for want of AC Unit. The plaintiff averred that, the representative of plaintiff company visited M/s.S.N.Kannappa Automobiles Pvt.Ltd., site and it came to know that, aforesaid vehicle was not ready, as such, there was no question of fitting a AC Unit. Said Automobile Pvt.Ltd., has issued a letter in this regard. Therefore, the plaintiff company replied to defendant through letter dated 19.02.2007, 23.02.2007 and informed by enclosing a report of M/s.S.N.Kannappa Automobiles Pvt.Ltd., confirming that, said vehicle is not ready for fitment for Air Conditioning Unit. In the said letter, the plaintiff company once again requested the defendant Corporation to immediately place Supply Order along with delivery schedule. With a view to expedite the matter, the plaintiff company continued manufacturing of ACs and by letter dated 01.03.2007 informed the defendant Corporation that, A.C.Unit were being processed and were planning to deliver the first lot of 2 Nos. of Unit by 06.03.2007. It is averred that, the defendant Corporation, by its letter dated 02.03.2007 rectified the description and supply point of the goods and 5 OS.8269/2010 requested the plaintiff company to supply the Bus Air conditioners, as per delivery schedule. In fact, no delivery schedule was supplied by the defendant Corporation, on that day. Therefore, the plaintiff company replied to said Notice reiterating that, they have proceeded with manufacturing of Bus Air-Conditioning Units despite not having received the Purchase Order. It is pleaded that, plaintiff company dispatched one Bus Air Conditioner Unit to M/s.S.N.Kannappa Automobiles Pvt.Ltd., and it was brought to notice of defendant Corporation on 09.03.2007 through letter and the Invoice of AC Unit was raised by the defendant Corporation. It is further averred that, on 17.03.2007, the defendant Corporation requested the plaintiff company to supply the Bus Air Conditioner Unit to M/s.S.N.Kannappa Automobiles Pvt.Ltd.,. However, this was despite the fact that, the Bus Air Conditioner Unit had already been supplied to them on 10.03.2007. Further, by letter dated 23.03.2007, the plaintiff company brought to the notice of defendant Corporation about the installation was in progress at M/s.S.N.Kannappa Automobiles Pvt.Ltd., After completion of installation of the Unit in the Bus at M/s.S.N.Kannappa Automobiles Pvt.Ltd., it was informed to defendant Corporation by letter dated 26.03.2007.The plaintiff pleaded that, defendant Corporation requested the plaintiff to extend the Bank Guarantee for a period of one 6 OS.8269/2010 year through its letter dated 21.06.2007, since warranty period was 24 months or 2.5 lakh Kilometers, whichever is later from the date of commissioning of the AC Unit. For this, plaintiff company replied through letter bringing to the notice that, till date they had not received the original Supply Order and on receipt of the said order, they would extend the Bank Guarantee for further period of 6 months from the delivery schedule, as and when it was finalized. The plaintiff pleaded that, it has supplied 4 numbers of A.C.Units to M/s.Veera Vahana Udyog Pvt.Ltd., ACs were installed under cover of letter dated 27.06.2007 and submitted 100% value Pre-Receipt Bill in respect of 5 AC Units supplied to the defendant Corporation. Thereafter, the plaintiff company requested the defendant Corporation to release the payment in respect of the Bills. However, on 30.06.2007, the plaintiff company received a purchase order dated 12.05.2007, issued by defendant Corporation in terms of Letter of intent. The plaintiff pleaded that, the defendant Corporation through FAX and letter dated 23.07.2007 acknowledged, having received 5 Numbers of AC Units and requested the plaintiff company to install and arrange to divert 2 Numbers AC Units to M/s.S.N.Kannappa Automobiles Pvt.Ltd., and also requested for supply of 11 units to M/s.Veera Vahana Udyog Pvt.Ltd., thereby, the defendant Corporation 7 OS.8269/2010 requested for supply of in all 13 numbers of A.C.Unit to M/s.Veera Vahana Udyog Pvt.Ltd., The request of the defendant Corporation was contrary to the earlier request dated 23.07.2007, wherein the plaintiff company has been requested to supply 2 AC Units to M/s.S.N.Kannappa Automobiles Pvt.Ltd., and 11 AC Units to M/s.Veera Vahana Udyog Pvt.Ltd., The plaintiff averred that, already plaintiff company dispatched 2 AC Units to M/s.S.N.Kannappa Automobiles Pvt.Ltd., on 28.07.2007. The plaintiff company apprised the aforesaid fact to the defendant Corporation stating that, they would try to divert the dispatch already made to M/s.S.N.Kannappa Automobiles Pvt.Ltd., to M/s.Veera Vahana Udyog Pvt.Ltd., It is pleaded by the plaintiff that, despite having supplied the AC Units as per requirement, the defendant Corporation did not make payments in time. Therefore, the plaintiff was constrained to with-hold the delivery remaining AC Units. However, after the payments were received by the plaintiff company, vide letter dated 24.08.2007, it brought to notice of the defendant Corporation, that, the Company is ready to deliver remaining AC Units to defendant Corporation at the earliest and also brought to the notice of the Corporation that, the Corporation had held back 3% under clause discount for prompt payment, when there was exorbitant 8 OS.8269/2010 delay of 3 months for the payment, therefore, the plaintiff company requested the defendant Corporation to make up the short fall in the payment to the plaintiff company. The plaintiff pleaded that, it supplied 2 nos. of AC Units to M/s.Veera Vahana Udyog Pvt.Ltd., under Invoice No.107 dated 26.07.2007 for a sum of Rs. 9.3. lakhs and the said Units after installation were commissioned in the two vehicles on 12.12.2007 and 13.12.2007. Thereafter, two more AC Units were dispatched to M/s.S.N.Kannappa Automobiles Pvt.Ltd., as per the instructions of the defendant Corporation and were supplied vide their Invoice No.122 dated 08.09.2007 for Rs.9.3 lakhs and the said Units after installation were commissioned in the other two vehicles on 14.11.2007 and 15.11.2007. The plaintiff further pleaded that, on 18.04.2008, issued a Warranty of Roof Mounting Sleek Type Air Conditioning Units shall perform trouble free service for a minimum 24 months or 2.5 lakh Kms, which is later from the date of commissioning of AC Units. During this period, plaintiff company or Authorised Representative will attend the defects free of cost including replacement of spares. It is alleged that, inspite of issuing Warranty, defendant Corporation failed to make payments due. Once again, the plaintiff company requested the defendant for making payment through letter dated 15.09.2008. The plaintiff 9 OS.8269/2010 conceded that, as on 15.01.2007, the defendant Corporation is due of Rs.19,29,750/- on account of supply /installation and commissioning of AC Units at M/s.S.N.Kannappa Automobiles Pvt.Ltd., and M/s.Veera Vahana Udyog Pvt.Ltd., as per Order placed by defendant Corporation. As the defendant Corporation, fails to make payment, plaintiff company issued a Notice on 09.08.2010 calling upon the defendant to pay amount due to the plaintiff company amounting to Rs.19,29,750/- with 18% interest p.a. within 15 days from the date of receipt of Notice. The Notice issued by plaintiff has been received by defendant Corporation on 10.08.2010. But, defendant Corporation neither made payment nor assigned any cogent reasons for non-payment. Therefore, the plaintiff constrained to file the suit for recovery of the amount. The cause of action accrues to the plaintiff on 12.12.2006, when defendant Corporation invited Tender for supply of AC Units and the date on which defendant Corporation accepted the bid on 29.01.2007, again when the installation were commissioned on 14.11.2007, 15,11,2007, 15.09.2008 and when plaintiff issued Notice on 09.08.2010 calling upon the defendant to pay the amount.
3. In pursuance of summons, defendant appeared through counsel and submitted written statement. The 10 OS.8269/2010 defendant contended that, the suit of the plaintiff is not maintainable or on facts and liable to be dismissed. The defendant admits that it has invited tender for supply of Air Conditioner Unit vide tender No. T-22/2006-07 dated 2.12.2006. In pursuance to the said tender, the plaintiff applied for allotment of tender and became successful bidder. Further, it is averred that, the plaintiff company offered to supply A.C.Unit as per Technical Specification and offered Rs.1,00,000/- as EMD in terms of D.D. bearing No.561007 dated 28.12.2006. The defendant offered that it has issued letter of intent on 29.01.2007 for supply and installation of 18 Roof Mounting Sleek Type Air Conditioning Units for passenger vehicles/Sleeper Coach. Further, in the letter of intent, it has brought to the notice of plaintiff company to adhere to the dates mentioned in the delivery schedule, failure of which may lead to cancellation of the order, security deposit shall be submitted within 10 days from the date of receipt of letter of intent and only after the receipt of the security deposit and bank guarantee the purchase order will be issued. Further, it is made clear that full payment will be effected within 21 days from the date of supply and successful installation and satisfactory report from the defendant corporation. Further, 3% prompt payment discount on end rate f the payment made within 5 working days from the 11 OS.8269/2010 date of supply and successful installation and satisfactory report of installation of Air Conditioners. The defendant averred that after issuance of letter of intent on 29.01.2007, a purchase order dated 12.05.2007 was placed with plaintiff company upon its furnishing bank guarantee of Rs.8,37,000/- for supply of 18 sets of Air Conditioner Units. The defendant pleaded that the plaintiff company delivered first lot of two numbers of defective and poor/sub-standard A/C units on 21.03.2007, which is contrary to the needs of defendant. The defendant denied the averments made out in para 8 of the plaint as to defendant corporation placed order rectifying the description and supply point of goods. The defendant contended that the supply point is at Bengaluru and it is not at all changed. The defendant also denied the averments as to defendant corporation did not furnish delivery schedule and purchase order was not received by plaintiff. The defendant denied the averments made out in para 9 of the plaint as to plaintiff company supplied one A.C. Unit to M/s.S.M.Kannappa Automobiles on 21.03.2007. It is contended that plaintiff company did not install the A.C. Unit for which defendant Corporation written a letter on 17.03.2007. But the plaintiff supplied first A.C.Unit on 21.03.2007 and it is not yet installed. The defendant admits the averments of para 10 of the plaint as 12 OS.8269/2010 to it has sought for extension of bank guarantee for a period of 1 year through its letter dated 21.06.2007, but it has denied that plaintiff company had not received original supply order and it would extend the bank guarantee for a further period of 6 months from delivery schedule. The defendant averred that for supply of 5 A.C. Units, necessary certificate has been sent to CAO-FA on 25.07.2007 for effecting payment. The defendant pleaded that Bill No. 189 dated 11.03.2007 relating to A.C.Unit commissioned on 15.06.2007, Bill No. 11 dated 02.05.2007 relating to 4 Units commissioned on 25.07.2007 respectively. The total amount of 5 A.C. Units comes to Rs.23,25,000/- and out of which by deducting prompt payment discount amount of Rs.69,750/- and net amount of Rs.22,55,250/- has been paid Vide Cheque No.333858 dated 03.08.2007 for full and final settlement of bills and same is correct ad comes within the letter of intent and purchase order condition. There is no due in respect of these bills to plaintiff company. The defendant averred that the Corporation made request to supply 18 numbers of Roof Mounting Sleek Type Air Conditioner Units, but plaintiff company supplied only 9 A.C.Units, out of which 4 Units fitted to the vehicle, but they are defective since the date of commission. It has been brought to the notice of plaintiff. But plaintiff company has not taken any steps to 13 OS.8269/2010 rectify the mistakes or defects of A.C.Units within the warranty period as per Order. The plaintiff company has not carried out any repair of the defective A.C.Units. Due to supply of defective A.C.Units, the very purpose of installation and commission of A.C.Units was completely defeated and it caused loss, damage inconvenience to the defendant Corporation. Therefore, the plaintiff company can not claim the Bill amount, as it violated the terms and conditions of purchase order. Due to supply of defective A.C.Units and failure on the part of plaintiff to rectify/repair of the defective A.C.Units, the defendant Corporation sustained loss of revenue due to non-plying the Busses after commissioning of faulty Air Conditioner to an extent of Rs.40,31,910/-, loss of confidence and trust from public Rs.1,00,000/- and defendant sustained loss of payment made towards purchase of Air Conditioner Units amounting to Rs.23,25,000/-. In this regard, the defendant Corporation filed complaint before State Consumer Dispute Redressal Forum. The defendant averred that on 23.09.2008, a meeting was conveyed by defendant Corporation for discussing about service problem and payment with plaintiff. But the plaintiff company did not attend the meeting. The defendant pleaded that as per the terms and conditions of the purchase order, 3% prompt payment discount could be availed after 5 working days of 14 OS.8269/2010 successful installation of A.C.Units and not from the date of supply of materials. The defendant averred that materials have been accepted on 25.07.2007 and payment was made on 03.08.2007. Therefore, 3% is deducted towards prompt payment discount is correct. The defendant further contended that the plaintiff company supplied 4 A.C.Units. But same is not commissioned on 14.11.2007, 16.11.2007, 15.09.2008 as claimed. The A.C.Units commissioned to the vehicles are found defective, since the date of commission. Therefore, payment towards said A.C.Units could not be made as the defects were not rectified during warranty period despite repeated requests with the plaintiff company. It is averred that plaintiff company though provided warranty clause to rectify the defects in the A.C.Units supplied has not acted on it. Therefore, claims towards installation and commission of A.C.Units could not be paid. It is averred that the plaintiff company supplied in all 9 .A.C.Units. But they are defective from the date of commission and could not be put to use for want of rectifying the defects. Though the defendant made payment towards 5 Units supplied by plaintiff, but has failed to rectify he defects under warranty period. The defendant contended that plaintiff claimed amount with interest for supply of A.C.Units. But it has not complied the request of defendant 15 OS.8269/2010 for rectifying the defects in the A.C.Units within the warranty period. Therefore, the plaintiff is not entitled for any of the reliefs sought. On these grounds and substance, prayed for dismissing the suit.
4. On the basis of pleadings, the following issues are framed:
1. Whether plaintiff proves that it has supplied nine Bus Air Conditioner Units to the defendant Corporation as per the orders placed and they were successfully installed and commissioned under the circumstances pleaded in Paras-11 & 14 as alleged?
2. Whether the defendant Corporation proves that it has placed orders for supply of 18 sets of Air Conditioner Units to the plaintiff Company and as against that the plaintiff has supplied only 9 units and all of them were defective materials and inspite of repeated reminders and requests, the plaintiff did not rectify the defects inspite of warranty period resulting in causing loss of revenue as alleged in Paras-13 & 19 of the written statement?
3. Whether the defendant further proves that it had sustained loss of Rs.73,68,523/-
and for Recovery of the said compensation filed complaint No.154/10 before the State Consumer Dispute Redressal Commission, Bengaluru as alleged in Para-13 of the W.S.?
16 OS.8269/20104. Whether the suit is not maintainable as alleged in Paras-13 & 26 of the written statement ?
5. Whether the suit is not valued properly and the Court fee paid is insufficient?
6. Whether the plaintiff is entitled to recover suit claim of Rs.24,95,000/- with interest at 14% p.a. from the defendant Corporation as prayed?
7. To what reliefs, if any, the parties are entitled?
5. To prove and substantiate the contentions, the Service Engineer of plaintiff company is examined as PW.1 and got marked in all 16 documents at Exs.P.1 to 16. The Divisional Controller, NWKRTC examined as DW.1 and got marked in all 18 documents at Ex.D1 to Ex.d18.
6. Heard.
7. The above issues are answered for the reasons, findings given in the foregoing discussions as:
REASONS
8. ISSUE No.1&2 : These two issues are inter connected and depending on each other. To avoid repetition and discussion, they are taken jointly for consideration.
17 OS.8269/2010The plaintiff pleaded and contended that the defendant invited tender for supply of Air Conditioner Units for Buses through tender Notification No.T-22 dated 12.12.2006.The plaintiff company participated in the tender process and became successful Bidder. The plaintiff company made an offer letter accompanied by Technical Specification and Dimension of A.C.Units to be supplied. Subsequent to the tender, a meeting was conveyed on 29.01.2007 in the office of defendant and after negotiations, terms and conditions and modalities was agreed and contract was entered with defendant Corporation for supply and installation of Roof Mounting Sleek Type Air Conditioning Units for a sum of Rs.4,65,000/- per unit. The defendant company by its letter of intent dated 29.01.2007 asked for supply and installation of 18 Roof Mounting Sleek Type Air Conditioner Units for the Buses. However, the defendant Corporation has not issued purchase order. The plaintiff company submitted Bank guarantee for Rs.8,37,000/- to defendant Corporation and requested to sent a formal Order for supply of 18 Numbers Bus AC Units. The plaintiff also contended that instead of issuing a regular supply order, the defendant Corporation through its letter requested to make immediate arrangement for supply of one A.C Unit to M/s.S.N.Kannappa Automobiles Pvt.Ltd., Accordingly, 18 OS.8269/2010 plaintiff company supplied the same. Further, plaintiff company supplied 4 A.C.Units to M/s.Veera Vahana Udyog Pvt.Ltd., and all were installed. Thereafter, plaintiff company requested the defendant Corporation to release the payment in respect of Bills. The defendant company acknowledged the receipt of 5 A.C.Units. Despite having supplied A.C.Units as per requirement, the defendant Corporation did not make payment any time. Therefore, the plaintiff company constrained to withheld the delivery of remaining A.C.Units. However, after payments were received, plaintiff company brought to the notice of the defendant Corporation that company was ready to deliver remaining A.C.Units. The plaintiff also contended that it has supplied 2 A.C.Units to M/s.Veera Vahana Udyog Pvt.Ltd., as per Invoice dated 26.07.2007 and after installations were commissioned, thereafter two more A.C.Units were dispatched by the plaintiff company to M/s. S.N. Kannappa Automobiles Pvt.Ltd., as per the instructions of the defendant Corporation and they were installed. The defendant contended that as per agreement with plaintiff, it has to supply and install 18 Air Conditioner Units to the Buses. As per the agreement between the defendant and plaintiff Corporation, the plaintiff has to supply the A.C. Units. As per requirements and as per the terms and conditions of the Agreement, the plaintiff has 19 OS.8269/2010 not supplied A.C.Units. However, the plaintiff company supplied A.C.Units and installed. But, they are defective Units. The defendant though brought to the notice of the plaintiff company for rectification of the defective A.C. Units supplied, but the plaintiff company has not attended repair/rectify the defective A.C.Units in time. The defendant contended that out of 18 A.C.Units, plaintiff company supplied only 4 A.C.Unit, out of which 4 A.C Units fitted are defective, since the date of commission. The defendant has made payment towards 5 A.C.Units supplied. The plaintiff company failed to rectify the defects under warranty period.
9. To substantiate the contentions, the Service Engineer of plaintiff company examined as PW.1. PW.1 filed affidavit in lieu of examination in chief by reiterating the averments made out in the plaint. In support of the contentions, plaintiff produced letter dated 24.01.2007 sent to defendant (Ex.P1), Purchase Order dated 12.05.2007 sent by defendant (Ex.P2), Letter dated 17.03.2007, 31.05.2007, 21.08.2007, 04.09.2008, 25.06.2008 sent by plaintiff company (Ex.P3, Ex.P4, Ex.P6, Ex.P10 & Ex.P12), Letter dated 17.07.2008 sent by plaintiff to defendant (Ex.P11).
20 OS.8269/201010. In the cross-examination, PW.1 states that Defendant Corporation ordered for supply of 20 .AC. Units. But plaintiff supplied 9 Units. Further, PW.1 states that defendant Corporation made payment in respect of 5 A.C.Units. PW.1 further states that during the year 2008, they have supplied 2 A.C.Units to M/s.Veera Vahana Udyog Pvt.Ltd., and 2 Units to M/s.S.N.Kannappa Automobiles Pvt.Ltd., PW.1 states that he has no knowledge about the letter written by defendant to plaintiff about defects in the A.C.Units. Pw.1 further states that he has received oral complaint from defendant and he has attended the said defects. PW.1 further states that during the year 2009, he checked A.C Units and at that time, they were in good condition. But he states that, he has no document to show that he has verified, checked the A.C. Unit and they are in good condition. PW.1 denied that he received complaint of all A.C Units, which are defective. However, he states that he attended only 2 A.C. Units, which were having defects as per oral complaint of defendant. Further, PW.1 in is cross-examination on 23.11.2016 admits that there was a joint inspection in respect of working condition of Air Conditioners by plaintiff and defendant. Further, he states that he was also present and signed the report prepared on that day (Ex.D1). He admits that as per the said report, 21 OS.8269/2010 out of 9 Air Conditioners, one Air Conditioner Unit is in working condition and other 8 Air conditioners are failed.
11. The defendant examined Divisional Controller as DW.1., Principal of Regional Training Institute -NWKRTC - Hubli as DW.2, Works Manager as DW.3. However, the evidence of DW.2 has been discarded at the instance of defendant.
12. DW1 filed affidavit in lieu of examination in chief by reiterating the averments made out in the written statement. In the cross-examination he states that the A.C.Units installed to Busses bearing No.KA31-F-1016, KA31-F-1017, KA31-F-1014, KA31-F-1015. He denied the suggestion that A.C.Units installed to KA.31-F-1014 and KA 31-F-1015 are still working. Further, he states that defendant has given in writing to the plaintiff about the non-working of A.C. Units.
13. DW.2 filed affidavit in support of the case of defendant. In the cross-examination, he states that he is working as Works Manager and he has personal knowledge about the supply of Air Conditioners by plaintiff to defendant Corporation. He states that on the basis of report by the Divisional Controller of defendant Corporation, he says Air Condition Unit supplied were 22 OS.8269/2010 defective. DW.3 denied that plaintiff Corporation has supplied Air Conditioner Units, which are in good condition. The defendants in support of the contention produced Letter of plaintiff- (Ex.D3), Letter of Intent- (Ex.D4), Letter of plaintiff (Ex.D5, Ex.D6) Letter sent to plaintiff-(Ex..D7, Ex.D8, Ex.D9), Letter of plaintiff- (Ex.D10), Report dated 21.08.2008-(Ex.D11),Letter dated 13.08.2008-(Ex.D13), Letter dated 12.08.2008-(Ex.D14 & Ex.D15).
14. On appreciation of oral and documentary evidence, it goes to show that defendant invited tender for procurement of A.C.Units to the Buses run by it. The plaintiff became successful Bidder. Thereafter, the plaintiff made an offer letter to defendant. Further, there was a meeting between plaintiff and defendant company on 29.01.2007, wherein deliberation has taken place and terms and conditions, other modalities are discussed. As per the requisition made by defendant Corporation, plaintiff has to supply .A.C Units and price has been fixed at Rc.4,65,000/- per A.C.Unit. The defendant has issued purchase order for supply and installation of 18 A.C.Units. The plaintiff supplied 9 .A.C.Units to the defendant. The A.C.Units so supplied were installed to the Buses.
23 OS.8269/201015. The defendant contended that the A.C.Units supplied and installed by plaintiff were having defects, as such, the defendant informed the plaintiff for rectifying/ repairing of the defective A.C.Units. Inspite of information, the plaintiff has not attended repair work of defective A.C Units. On the other hand, the plaintiff contended that whenever defendant informed about defects in the A.C.Units installed, the plaintiff attended and rectified the defects. As per the Agreement between plaintiff and defendant, the plaintiff extended guarantee of attending defects free of cost including replacement of spares for any manufacturing defects in the A.C.Units for minimum 24 months or 2.5 lakh Kms., whichever is later from the date of commissioning of the vehicles. Further, payment for supply of A.C.Units shall be made within 21 days from the date of supply and acceptance of the material or 3% prompt payment discount on end rate, if the payment made within 5 working days from the date of supply and successful installation of Air Conditioners. As per the instructions of the defendant, plaintiff supplied A.C.Units to M/s.S.N.Kannappa Automobiles Pvt.Ltd., and M/s.Veera Vahana Udyog Pvt.Ltd., The materials on record goes to show that plaintiff has supplied in all 9 A.C. Units as per specification to the defendant.
24 OS.8269/201016. The defendant contended that out of 9 A.C. Untis supplied and installed by the plaintiff, the defendant has made payment for 5 A.C.Units. Further, the defendant contended that since other A.C.Units supplied were defective and the plaintiff has not rectified/ repaired the A.C. Units, as such it has withheld the payment. PW1 in his evidence admits that defendant Corporation placed Orders for 20 A.C.Units and plaintiff supplied 9 A.C.Units. Further, PW.1 states that the defendant Corporation made payment in respect of 5 A.C. Units. PW.1 further states that dispute is pending before the State Consumer Forum, Bengaluru with respect to 5 A.C. Units, as the said 5 A.C.Units are not functioning properly. As far as payment towards supply and installation of A.C.Units is concerned, both plaintiff and defendant admits that payment has been made for 5 A.C.Units, out of 9 A.C.Units supplied and installed. The defendant contended that the A.C. Units supplied and installed to the Buses by plaintiff are all defective. Inspite of intimation given to plaintiff, they have not cured the defects. The plaintiff contended that whenever complaint is received about the defective functioning of A.C.Units installed, they used to attend and repair the same. On going through the document, which is marked at Ex.D11, it reveal that on 21.08.2008, 9 vehicles to which A.C.Units are installed by plaintiff are inspected by representative of 25 OS.8269/2010 plaintiff and defendant. In the said inspection, it is found that except one vehicle, other 8 vehicles were having defective A.C.Units. PW.1 in his evidence categorically admits about defects found in the A.C. Units installed to the Buses as per Ex.D11. However, he states that plaintiff put signature on the assurance that defendant will make payment of the A.C.Units. This contention of PW.1 can not be accepted. Apart from this, the facts remain is plaintiff supplied 9 A.C.Units to defendant and out of 9 Units of A.C. only one A.C. Unit is functioning properly, other A.C. Units are having defects.
17. As earlier stated, the plaintiff supplied in all 9 A.C. Units to the defendant Corporation and the defendant Corporation made payment for 5 A.C. Units. The defendant has to make payment for remaining A.C. Units as per Agreement. Supply of A.C.Units and its installation to the Buses of defendant are governed by terms and conditions agreed between plaintiff and defendant. There is an agreement as to any defect in functioning of A.C.Unit installed by plaintiff is found during warranty period, the plaintiff has to attend the defects free of cost or replacement of spare parts. Further, as per the terms and conditions, the plaintiff has to attend the defects during warranty period i.e., 24 months from the date of 26 OS.8269/2010 installation or 2.5 lakhs Kms. of running the Buses after installation. As per Ex.D11, the inspection of the A.C.Units installed vehicles are made on 21.08.2008 jointly by plaintiff and defendant. As per the document signed by both sides (Ex.D11) except one vehicle, all other vehicles having A.C.Unit are defective. The inspection has been made during warranty period. The plaintiff is bound to attend the defects found in the A.C.Units installed Buses. At the same time, there is no condition in the Agreement about non-payment for supplied installation of A.C.Units by plaintiff, when there is a defect in the A.C.Unit. The defendant contended that it has made payment for 5 A.C.Units out of 9 supplied by plaintiff. Further, it is contended that it has not made payment for 4 remaining A.C.Units, as they were having defect. In this regard, the defendant withheld payment of the amount, as there is no such condition to withheld payment by defendant. Therefore, the defendant has to make payment for supplied installation of A.C.Units to the Buses by plaintiff. At the same time, it is evident from he material on record that the A.C.Units supplied and installed to the Buses by plaintiff are not free from defects. Though the plaintiff contended that it has attended the defects found in the A.C.Units, whenever the defendant Corporation complained. Absolutely, there is no material on record to 27 OS.8269/2010 substantiate this aspect. The joint inspection by plaintiff and defendant has been made on 21.08.2008. On that day also, out of 9 A.C.Units installed to the Buses, only one A.C.Unit is functioning, others are having defect. The contention of the defendant as to due to the defective A.C.Units, they could not run the Buses. Due to non-plying of the Buses, they would have suffered financial loss also. On considering all the materials on record, this court answered issue No.1 and 2 in Partly Affirmative.
18. ISSUE No.3:- The defendant contended that due to defective A.C.Units installed to the Buses, defendant Corporation sustained loss of Rs.73,68,523/-. In this regard, it has filed complaint before the State Consumer fForum. As far as the present suit is concerned, the defendant has not sought for counter claim. In the absence of this, this court can not consider nature of loss suffered by the defendant Corporation due to defective A.C.Units installed by plaintiff and the quantum/ amount of loss sustained by the defendant Corporation. However, the defendant claims that it has approached consumer Forum. In view of this, this issue does not arise for consideration by this court. Therefore, issue No. 3 is answered in the Negative.
28 OS.8269/201019. ISSUE No,4:- The defendant contended in the written statement that the plaintiff supplied and installed A.C.Units to the Buses, which are defective. Inspite of intimation to the plaintiff for attending the defects, the plaintiff failed to rectify or repair the defects. Due to defective A.C.Units, defendant Corporation not plyed those Buses, due to which it sustained loss. Therefore, the defendant approached State Consumer Dispute Redressal Commission by filing complaint No.164/2010. The defendant Corporation filed the complaint much prior to filing of the suit. Therefore, the suit filed by the plaintiff is not maintainable and it can not be considered till disposal of the complaint filed by it. In view of earlier discussions, this court finds that there is no agreement between plaintiff and defendant to withheld payment of the A.C.Units supplied and installed by plaintiff. The defendant approached State consumer forum alleging the defective services in A.C.Units installed by plaintiff and loss caused due to those defective A.C.Units. The present suit is filed for recovery of the amount due from defendant for supply and installation of A.C.Units to the Buses of defendant. The claim of defendant is not at all relevant in this suit. The defendant has not claimed damages by way of counter claim. The proceedings initiated by defendant and the suit filed by plaintiff are for different reliefs. Therefore, for 29 OS.8269/2010 these reasons, this court answered Issue No.4 in the Negative.
20. ISSUE No,5:- The defendant in para 28 of written statement has averred that court fee paid by plaintiff is not correct and insufficient. Except this passing remark, the defendant has not given any particulars as to what is the proper court fee and what is the deficit court fee to be paid by the plaintiff. Apart from this, the plaintiff sought for decree for recovery of Rs.24,95,200/- with interest @ 14% p.a. from the date of suit till its realization. The plaintiff has paid court fee as per Section 21 of Karnataka Court Fees and Suit Valuation Act. Section 21 of the Act provides for court fee to be paid for a suit of recovery of money. In a suit for money (including a suit for damages, compensation, arrears of maintenance of annuities or of other sums payable periodically), fee shall be computed on the amount claimed. The valuation made by plaintiff and court fee paid is correct. Therefore, issue No.5 is answered in the Negative.
21. ISSUE No.6:- For the reasons, findings given in the above made discussions, this court comes to the conclusion that as per the Agreement entered into between plaintiff and defendant, the plaintiff has supplied 30 OS.8269/2010 and instilled 9 A.C.Units to the Buses of defendant Corporation. As per agreement each A.C. Unit cost Rs.4,65,000/-. The defendant placed order for supply of 18 A.C.Units. But plaintiff supplied and installed only 9 A.C Units. The defendant made payment for 5 A.C. Units and has not made payment for remaining A.C.Units installed, on the ground that it has withheld the amount as the A.C.Unit installed by plaintiff are having defects and plaintiff has not attended the work of repairing the defective A.C.Units within the validity period. As per the agreement, there is no condition for withholding the amount due for supply and installation of A.C.Units. In this case, the plaintiff sought decree for Rs.24,95,200/- with interest @ 14% from the date of suit till realization. The defendant is due of money for 45 A.C.Units, which comes to Rs.18,60,000/-. The plaintiff issued notice on 09.08.2010 calling upon the defendant to make payment of the amount with interest @ 18% p.a. As per agreement, there is no provision for claiming interest on the due amount. However, it is a commercial transaction, the plaintiff is entitled for interest @ 9% p.a. on the amount due. Therefore, this court answered issue No.6 in Partly Affirmative.
31 OS.8269/201022. ISSUE No.7: In the result, this Court proceeds to pass the following:
ORDER Suit is decreed party with costs.
The plaintiff is entitled for Rs.18,60,000/- with interest @ 9 % p.a. from the date of suit till its realization from the defendant.
Draw decree accordingly.
(Dictated to the Judgment Writer, transcribed by her, the transcript print is corrected and then pronounced by me in the open court on this the 13th day of December, 2018.) (RAVINDRA. M. JOSHI) XL Addl. City Civil & Sessions judge, Bengaluru.32 OS.8269/2010
ANNEXURE WITNESSES EXAMINED ON BEHALF OF PLAINTIFF:
PW.1 -Ganesh. B. S/o. G.Bheemappa.
DOCUMENTS PRODUCED ON BEHALF OF PLAINTIFF:
Ex.P.1 Carbon copy of Tender Letter dated 24.01.2007.
Ex.P.2 Purchase order dated 12.05.2007.
Ex.P.3 Letter dated 17.03.2007 issued by NWKRTC.
Ex.P.4 Letter issued by NWKRTC.
Ex.P.5 Letter dated 01.07.2008 issued by Fedders
Lloyd Corporation Limited.
Ex.P.6 Letter dated 21.08.2007 issued bh
NWKRTC.
Ex.P.7 Packing Slip dated 26.07.2007.
Ex.P.8 Packing Slip dated 02.05.2007.
Ex.P.9 Packing Slip dated 08.09.2007.
Ex.P.10 Letter dated 04.09.2008 issued by
NWKRTC.
Ex.P.11 Letter dated 17.07.2008 issued by Fedders
Lloyd Corporation Limited.
Ex.P.12 Letter dated 26.06.2008 issued by
NWKRTC.
Ex.P.13 Postal Receipt.
Ex.P.14 Postal Acknowledgment.
Ex.P.15 Certificate of Posting.
Ex.P.16 Copy of Lawyer Notice dated 09.08.2010.
33 OS.8269/2010
WITNESSES EXAMINED ON BEHALF OF DEFENDANT:
DW.1 - Suresh S/o. Ramachandra Joshi. DW.2 - T.H.Chandrashekar S/o. T.H.Puttappa. DW.3 - P.R.Mahajan S/o. Raja Rao.
DOCUMENTS PRODUCED ON BEHALF OF DEFENDANT:
Ex.D.1 Authorization Letter.
Ex.D.2 Tender Document.
Ex.D.3 Letter dated 28.12.2006.
Ex.D.4 Letter of Intent.
Ex.D.5 Letter dated 15.02.2007.
Ex.D.6 Letter dated 21.06.2007.
Ex.D.7 Another Letter dated 21.06.2007.
Ex.D.8 Letter dated 19.02.2007.
Ex.D.9 Letter dated 10.03.2007.
Ex.D.10 Letter dated 06.03.2007.
Ex.D.11 Joint Inspection Report.
Ex.D.12 Authorization.
Ex.D.13 Letter dated 13.08.2008.
Ex.D.14 Letter dated 12.08.2008.
Ex.D.15 Another Letter dated 12.08.2008.
Ex.D.16 Letter dated 24.01.2008.
Ex.D.17 Authorization Letter.
Ex.D.18 Letter dated 05.05.2008.
(RAVINDRA. M. JOSHI)
XL Addl.City Civil & Sessions judge,
Bengaluru.
34 OS.8269/2010
13.12.2018
P -A.N.
D -sn (Judgment pronounced in the open
For Judgment. Court vide separate order.) ORDER Suit is decreed party with costs.
The plaintiff is entitled
for Rs.18,60,000/- with
interest @ 9 % p.a. from the
date of suit till its realization
from the defendant.
Draw decree accordingly.
XL.ACC & SJ
Bengaluru.