State Consumer Disputes Redressal Commission
M/S Garg Sons Estate Promoters Pvt. Ltd. vs M/S Terex India Pvt. Ltd. on 4 July, 2022
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint case No. : 19 of 2021 Date of Institution : 03.08.2021 Date of Decision : 04.07.2022 M/s Garg Sons Estate Promoters Pvt. Limited, A Company incorporated under Companies Act, having its Registered Office at House No.260, Sector 9-C, Chandigarh, through its Director Sh.Ashok Kumar Garg. ...... Complainant V e r s u s M/s Terex India Pvt. Ltd. having Registered Office at Infotech IT Park, Plot No.110A, B, Phase 1, Electronic City, Bangalore-560100. M/s Infinitude International Pvt. Ltd., having Registered Office at DSM 42, DLF Tower, Shivaji Marg, Moti Nagar, New Delhi-110008. ....Opposite parties BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT MRS. PADMA PANDEY, MEMBER
MR. RAJESH K. ARYA, MEMBER Present:- Sh.Rakesh Gupta, Advocate for the complainant.
Sh.Gagan Kumar, Advocate alongwith Sh.Arora Vishwas Kumar, Advocates for the opposite parties.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT The complainant is a private limited company engaged in the construction of roads. For that purpose, vide purchase order dated 27.08.2018, Annexure C-3, following equipments for total amount of Rs.5,75,00,000/- were purchased by it from opposite party no.2:-
TEREX Finlay Jaw Crusher Model J1175 TEREX Finlay Cone Crusher Model C1540 TEREX Finlay 3 Deck Screen Model 684 It has been stated that the said purchase was subject to following terms and conditions:-
"...a. Rates were on F.O.R. basis i.e Freight on Road (wherein the transportation charges are to be paid by the seller) site as mentioned in the said purchase order as Consignee address;
b. Standard delivery period; i. Upto 20 days at Silliguri from issuance of delivery order; ii. Upto 8-10 days after the arrival at Silliguri for dismantling and further assembling process. It was further agreed that all the necessary tools, machinery and manpower would be arranged and provided by opposite party No. 2 (acting on behalf of opposite party no.1) for the job and all the expenses were to be incurred by the opposite party no. 2. c. Loading and unloading at Silliguri and delivery at the site were to be provided by the opposite party no.2 (acting on behalf of opposite party No.1). It was further condition precedent that the cranes were to be provided by opposite party No. 2 (acting on behalf of opposite party No.1) at both the situation at their own cost. d. Crusher unit should be assembled and operational within 30 days from the issuance of delivery order. e. The complainant shall help to arrange for transporter from Silliguri to delivery site (if needed), however, cost for the same was to be borne by opposite party No.2 (acting on behalf of opposite party No.1)......"
It has been averred that in pursuance of the said purchase order, an amount of Rs.58,00,010/- was remitted in favour of opposite party no.2 on 30.08.2018. It has been pleaded that as per terms and conditions of the purchase order, opposite party no.2 was under obligation to make arrangements for dismantling the said equipment/machinery and assemble the same within a period of 8 to 10 days after its arrival at Silliguri, West Bengal. It was a condition precedent that the crusher unit was to be assembled and made operational within a period of 30 days from the date of issuance of delivery order dated 30.08.2018, Annexure C-5, but the opposite parties failed to do so, despite reminders having been sent to them in the matter. Following pleas have taken by the complainant in this regard in para nos.8 to 28 of its complaint:-
"...8. That the complainant in pursuance of the delivery order vide e-mail dated 11.10.2018 reminded the opposite party no.2 that the crusher unit should have been operational within 30 days from the issuance of the delivery order and even after the lapse of 43 days the process of assembly of the unit was not even initiated and even some parts of the units did not even reach the complainant. Due to breach of terms and conditions laid down in the aforementioned purchase order by the opposite party no. 2, complainant had to face immense financial losses. Copy of Email dated 11.10.2018 communication is attached as Annexure C-6.
That however, till date, due to the negligence of the opposite parties, the said equipment has neither been dismantled nor the assembling process has been initiated, resultantly the said equipment is not in operation and is lying idle at the spot.
That the opposite party did not pay any heed to the above mentioned email and as such the complainant was being penalized on daily basis by the department day basis and aggrieved by the same the complainant once again demanded the opposite party no.2 to commence the assembly of the unit and the same should be completed within a week vide letter dated 18.10.2018. Copy of the same is attached as Annexure C-7.
That the complainant was being penalized in tune of Rs. 10.00 lacs by the department due to the delay in installation of the stone crusher on time which was to be done by the opposite party no. 2 within 30 days from the issuance of delivery order dated 30.08.2018 as and hence opposite party no. 2 is liable to compensate the complainant for the same.
That as per the terms and conditions, the equipment purchased was on F.O.R basis i.e. Freight on Road basis that the equipment mentioned in the invoice will be transported from the supplier (opposite party no.2) to the client (complainant) without any transportation charges. That even so, the opposite party did not delivery all the parts of the unit and the same were moved in by the complainant through Mahavir Transport Service for total of Rs.3,60,000/- which was paid by the complainant from his own pocket and the opposite party no.2 is liable to pay the same. The same was communicated to the opposite parties vide email dated 25.10.2018. Copies of the same are attached as Annexure C-8 Colly.
That during the course of visual inspection of the above mentioned equipment, it transpired that the entire chassis of the equipment was defective in nature, since it had developed cracks before commissioning and the same was accepted by opposite party No.2 vide their mail dated 15.11.2018 and false reassurance were given by the opposite party No.2 on replacement of the defective machinery and for reimbursement of Rs.9.00 lacs which was paid by the complainant for transportation. Copy of the email dated 15.11.2018 is attached as Annexure C-9.
That the complainant brought the entire factual position to the knowledge of opposite parties through numerous communications and emails, however the same have not been paid any heed to by the opposite parties.
That as stated hereinbefore, the parties agreed to the time schedule specified in the aforementioned purchase order, resultantly the opposite parties did not abide by the necessary terms and conditions of the contract and by providing defective machinery have caused irreparable loss to the complainant.
That the equipment were purchased by the complainant for its own use and consumption, in order to meet various contractual obligation which the complainant had undertaken. Due to the failure on the part of opposite parties and failure to abide by the terms and conditions of the contract, complainant was forced to pay penalty to the Government / Non-Government / Semi-government institutions, for faults which are attributable to the opposite parties.
That both the opposite parties including Country Head of opposite party no. 1 (Mr. Viraj Parthi) along with the director of opposite party no. 2 (Mr. Aseem Dhingra) acknowledging their mistake and the faulty machineries purchased by the complainant, held a meeting with the complainant on 29.11.2018 at Chandigarh and inter alia committed to replace the conveyor frame of 684 screen and assembly of the conveyors. The same was communicated to the complainant vide email dated 30.11.2018. Copy of the same is attached as Annexure C-10.
That even after the meeting held on 29.11.2018, the opposite parties did not adhere to the commitments made by them in the aforesaid meeting and vide email dated 30.11.2018 and as such the complainant had to once again remind the opposite parties for the same vide email dated 11.12.2018. Copy of the email dated 11.12.2018 is attached as Annexure C-11.
That the opposite parties did not stick to the commitments made by them in its entirety and as such another meeting was held on 15.02.2019 at Chandigarh wherein it was mutually settled that opposite party no.1 will issue a credit note of Rs.11,66,200/- in favor of the complainant on the account of expenses accrued in transportation and installation of stone crusher unit. The opposite party agreed to discount an amount of Rs.30.00/- lacs on purchase on spare parts and also agreed to get the crusher unit in production within 7 days after the weather condition become adequate. It was also mutually agreed between opposite party no. 1 and the complainant that the crusher unit will be effective from 15.06.2019 which was earlier rescheduled with effective date 15.12.2018. The same terms was confirmed by the opposite party no.1 vide email dated 05.03.2019. Copy of the same is attached as Annexure C-12.
That even after the lapse of 4 months from the confirmation by the opposite parties to the terms and conditions of the meeting, yet the complainant had to once again remind the opposite parties vide email dated 05.07.2019 about the agreed terms of settlement and further informed them about the weather condition getting better and hence requested the opposite party no.1 to initiate the installation process as per the settlement agreement. Copy of the email dated 05.07.2019 is attached as Annexure C-13.
That in pursuance of the above mentioned email the opposite party no.1 sent a service engineer to the site of the complainant to inspect the crusher unit who observed that the hydraulic system is not working properly and as such the complainant requested the opposite party no.1 vide email dated 13.07.2019 to look into the problem at priority basis and sort out the same. Copy of the email is attached as Annexure C-14.
That the opposite party no.1 did not do the needful and as such the complainant once again had to remind the opposite party vide email dated 31.07.2019 to fix the problem with hydraulic system and commence the installation of the crusher unit as per settlement agreement. Copy of the email dated 31.07.2019 is attached as Annexure C-15.
That even the aforementioned emails the crusher unit was not commissioned as per the settlement terms by the opposite party no. 1 and the screen which was required to make the whole crusher unit operational did not reach the complainant and as such the complainant had to once again remind the opposite party no.1 vide email dated 08.08.2019 for the same. Copy of the email dated 08.08.2019 is attached as Annexure C-16.
That the screen required in making the whole crusher unit operational was still not commissioned and as such the complainant had to once again remind opposite party no.1 vide email dated 10.09.2019. Copy of the same is attached as Annexure C-17.
That even though various reminders the opposite party no.1 were not commissioning the screen. The complainant even had to send his representative to Bangalore to pick up spare parts of the screen to make it easier for opposite party no.1 to do their work of commissioning the screen and the unit. As complainant only had limited working period, once again requested the opposite party no.1 for commissioning the crusher unit vide email dated 23.09.2019. Copy of the same is attached as Annexure C-18.
That the complainant even after numerous reminders to the opposite party, failed to commission the screen due to which the complainant was unable to start his work and as such had to face financial losses on daily basis. Complainant again reminded the opposite party no. 1 for the same vide email dated 30.09.2019. Copy of the same is attached as Annexure C-19.
That the complainant for the same issued a legal notice to the opposite parties dated 28.10.2019. Copy of the legal notice date 28.10.2019 is attached as Annexure C-20.
That even after the issuance of legal notice the commissioning of the screen was not done by the opposite party and the complainant had to once again remind the opposite party to install the same vide email dated 29.06.2020. Copy of the same is attached as Annexure C-21..."
Hence this complaint has been filed by the complainant seeking following relief:-
".......A sum of Rs.5.75 crore for providing with defective machinery and further a sum to the extent of Rs.4.00 crore for the losses incurred by the complainant on daily basis due to the faulty machinery; breach of terms and conditions of the purchase order and the same amounts to Rs.9.75 crore and thus causing irreparable loss to the work and reputation of the complainant to be awarded.
It is further prayed that appropriate cost of the present complaint may also be awarded to the complainant...".
Opposite party no.1 in its written version while admitting the factual matrix of the case with regard to purchase of the said equipments/machinery by the complainant, in the manner stated in its complaint, took numerous pleas/objections as under:-
that the complainant has approached this Commission with unclean hands;
that the machinery was to be delivered at Lugnak-La, Thangu Valley, Sikkim;
that opposite party no.1 has fulfilled all its obligations and the machinery in question has been put to use by the complainant since September 2019;
that the jaw crusher and cone crusher was commissioned first, as GSB is the base material utilized in earlier stages of construction of any road;
that delay in commissioning of deck screen, does not hamper the works at road construction site and would not result in a situation where the entire equipments/ machinery is lying idle;
that the complainant changed the terms of the purchase order;
that it was agreed to between the parties that opposite party no.2 will bear the cost of transportation of equipments/machinery upto the site upto Rs.9 lacs and that the complainant was required to arrange the transporter and other necessary documents;
that opposite party no.1 had informed the complainant that the equipments/machinery will take 30 days to reach Silliguri and further 8 to 12 days for the dismantling and assembly process, provided all necessary machinery and manpower is available at the site;
that purchase order did not record the above aspects but infact has provisions to the contrary;
that pursuant to purchase order, the equipments/ machinery was dispatched on 23.09.2018, 26.09.2018 and 29.09.2018 respectively;
that the equipments/machinery was fully ready at the complainants' site on 05.11.2018, in a very harsh and difficult conditions including inclement weather conditions and lack of basic amenities for the team deployed by the opposite parties; and that delay also took place because the complainant changed the site location from Lugnak-La to Munghthan, due to non readiness of the first site and heavy snowfall in the area, as a result whereof, the equipments/machinery was to be taken to a further distance of 15 kilometers and on that site also heavy snowfall and narrow approach was encountered.
However, while admitting the fact that frame of 684 screen of the machinery was cracked during transit, it has been stated that during meeting held between the parties on 29.11.2018 it was agreed that the frame of 684 screen which had been cracked during transit would be dispatched by 07.12.2018 positively and that the weld repair carried out to this component would effect a trouble-free operation of the screen; that vide email dated 22.10.2019, opposite party no.2 informed the complainant that the screen is commissioned and ready for use but the final load test could not be carried out as it would take almost 15 days to reach the site, which was inaccessible; that J1175 and C1540 will reach the project site within 4 to 5 days provided that the weather is clear; that once both these units reach site, the engineer of the opposite parties will be present to commission the equipments/machinery and train the operator team; that once the GSB production is started with J1175 and C1540, the tracking of 684 will be started, which was to take 7 to 10 days to reach the site, depending upon the weather and road conditions where-after only assembly of the conveyor will be done for 684. It was further stated that delay took place for reaching the Jaw Crusher and Cone Crusher at the complainants' site because the approach road was very slippery due to continuous snowfall. Due to bad weather, the equipments/machinery could not be commissioned at the site. It was further pleaded by opposite party no.1 in para no.11 g to 14 of the written reply as under:-
".........g: Due to continued bad weather conditions, the Equipment could not be commissioned at the Complainant's site. Accordingly, during a meeting held, inter alios, between the Parties on 15 February 2019, it was agreed that the Jaw Crusher and Cone Crusher will be put in production within 7-10 days of adequate weather conditions. It was further. agreed that the Complainant would be required to repay amounts to SREI Infrastructure Finance Limited ("SREI") (the Complainant's financier for this transaction) only from 15 June 2019 (a fact subsequently confirmed by SREI on 6 March 2019). As such, the time for completion of works under the Purchase Order was explicitly extended from time to time, thereby implying that time was not of the essence.
The Complainant has only filed the Answering Party's email dated 5 March 2019 as Annexure C-12, but not the entire minutes as sent by the Complainant itself. A copy of the minutes of the meeting held on 15 February 2019 are annexed herewith as Annexure R1-4. A copy of SREI's email dated 6 March 2019 is annexed herewith as Annexure R1-5.
Further, during the meeting on 15 February 2019, it was agreed that Opposite Party No. 1 will provide a credit note for Rs. 11 lakhs to the Complainant on account of any expenses incurred by it towards transportation and installation of the stone crusher. This credit note was issued by Opposite Party No. 2 on 19 March 2019 and is continuing to be utilised by the Complainant towards the purchase of spare parts for the Equipment. As such, no further amounts are payable by the Opposite Parties towards any costs that may have been incurred by the Complainant towards transportation and the Complainant's claims on this account are baseless and mala fide. A copy of Opposite Party No. 2's email dated 19 March 2019 is annexed herewith as Annexure R1-6.
It was only on 5 July 2019 that the Complainant informed the Opposite Parties that the weather conditions had improved. Thereafter, the Jaw Crusher and Cone Crusher were operated at ideal conditions by the Answering Party's engineer on 28 July 2019 and given load on 1 August 2018. The Jaw Crusher and Cone Crusher ran smoothly for two days in the presence of the Answering Party's engineer, and the Answering Party fully commissioned the Jaw Crusher and Cone Crusher on 3 August 2019 and gave the requisite training to the Complainant's team as well. Subsequent thereto, the Complainant has started producing GSB material as well. As noted in an email dated 22 October 2019, the crushers had clocked almost 500 hours as of that day. By this email, the Complainant was also sent certain videos which demonstrated the smooth operations of the crushers. Copies of the commissioning reports dated 3 August 2019, with the email dated 5 August 2019 to the Complainant are annexed herewith as Annexure R1-7. A copy of the email dated 22 October 2019 is annexed herewith as Annexure R1 8.
With respect to the Screen, as agreed during the meeting held on 29 November 2018, the tracking of the Screen to the Complainant's site was to begin once the Jaw Crusher and the Cone Crusher were commissioned and GSB production had begun. The marching of the Screen too was entirely dependent on weather and road conditions. However, as is evident, the Complainant's own admitted position is that it did not require the Screen to be able to commence works at the site.
Consequently, subsequent to the commissioning of the Jaw Crusher and the Cone Crusher, the Answering Party's engineer began fitting the Screen from 25 August 2019, and the tracking of the Screen towards the Complainant's site began on 3 September 2019. However, the road to the Complainant's site was very narrow as a result of which the Screen was stuck at a distance of about 2-3 kms from the Complainant's site. These facts are recorded in the Answering Party's field service report dated 22 October 2019. A copy of the Answering Party's field service report dated 22 October 2019 is annexed herewith as Annexure R1-9.
The Answering Party's engineer again visited the Complainant's site from 20 September 2019. While carrying out the machine dismantling and assembly process, the engineer found a crack in the Screen's support frame assembly, which was replaced by the Answering Party free-of-cost under warranty. However, while carrying out this process, the Answering Party found several issues such as missing hardware, that a hydra was not sufficient to lift the components of the Screen box and an excavator would have to be arranged by the Complainant, and that the hydraulic oil was getting over. All these issues had to be dealt with by the Complainant. This is in addition to the fact that weather conditions were adverse and hampered smooth progression of work. Finally, after the Complainant provided all requisite components, etc., the Answering Party completed the assembly process and commissioned the Screen from its side on 3 October 2019. Thereafter, the Screen began tracking towards Complainant's side. A copy of the Answering Party's email dated 30 September 2019 is annexed herewith as Annexure R1-10. A copy of a report prepared by the Answering Party's engineer is annexed herewith as Annexure R1-11.
Accordingly, by an email dated 22 October 2019, Opposite Party No. 2 informed the Complainant that the Screen is commissioned and ready for use, but the final load test could not be carried out as the Screen had to march for almost 15 days to reach the Complainant's site which was inaccessible. Therefore, no delays were attributable to the Opposite Parties. In this email, the Complainant was also asked to inform the Opposite Parties when the Screen reaches the site.
Instead of replying to the email dated 22 October 2019, the Complainant sent a legal notice making false and frivolous allegations. The Answering Party replied to the legal notice on 29 January 2020, another document which has been deliberately concealed by the Complainant. A copy of the reply to the legal notice dated 29 January 2020 sent on behalf of the Answering Party is annexed herewith as Annexure R1-12.
The Answering Party verily believes that the Complainant has been running the Equipment successfully since September 2019, a fact which is corroborated by the fact that the Complainant has purchased spare parts for the Equipment including in September 2021. Copies of the correspondence and invoices in relation to the purchase of spare parts by the Complainant are annexed herewith as Annexure R1-13 (Colly).
Pertinently, even subsequent to the issuance of the Purchase Order, the Complainant has placed orders on the Answering Party for equipment to be used on its other sites located at Andaman and Nicobar Islands and Himachal Pradesh, which the Answering Party has delivered successfully. Copies of the subsequent purchase orders issued by the Complainant to the Answering Party are annexed herewith as Annexure R1-14 (Colly).
12. As is evident from the above, the Answering Party has fulfilled all its obligations qua the Complainant. There have been no defects or deficiencies in the goods provided by the Answering Party to the Complainant and the Complaint is motivated, frivolous and baseless. The Complainant, despite having put the Equipment to use, is only seeking to gain unfair advantage by filing the present Complaint. It is therefore submitted that the Complainant is not entitled to a refund of the amount of Rs. 5.75 crores or any part thereof towards the purchase of the Equipment.
13. It is further submitted that any transport charges which may have been initially borne by the Complainant have already been refunded to it by virtue of the credit note issued by Opposite Party No. 2, which the Complainant is utilizing till date by receiving free of cost spare parts. Pertinently, Opposite Party No. 2 has also borne a further amount of Rs. 10 lakhs towards freight and transportation charges, which were paid directly by Opposite Party No. 2 to the transporter. In addition, Opposite Party No. 2 has also borne an additional amount of Rs. 1.6 lakhs towards procuring hydraulic oil for the Equipment which had been stolen from the Complainant's site. No amounts are payable by the Answering Party towards this or any other claim that is being raised by the Complainant. Without prejudice, it is submitted that if any amounts are found payable to the Complainant in this regard, the same are to be borne by Opposite Party No. 2, and not the Answering Party.
Copies of correspondence and proof of payments made by Opposite Party No. 2, as sent by Opposite Party No. 2 to the Answering Party, are annexed herewith as Annexure R1-15 (Colly).
14. The Complainant is also not liable to be compensated for any purported losses or damages. As stated above, the time for commissioning the Equipment had been extended from time to time, inter alia, due to inclement weather and other conditions which were outside the Answering Party's control and had rendered any work impossible. The Answering Party is also not aware of any losses or damages purportedly suffered by the Complainant, and the Complainant has not substantiated this claim in any manner whatsoever. The Complainant's claim for the amount of Rs. 4 crores towards purported losses is exaggerated, unsubstantiated, unsustainable and liable to be dismissed in its entirety...."
Opposite party no.2 also took almost similar objections/pleas as have been taken by opposite party no.1 in its written version. However, additionally, it has been stated by opposite party no.2 in its written version as under:-
that usually the customers get the Jaw Crusher and Cone Crusher commissioned first, as GSB is the base material used in the earlier stages of any road;
that delay in commissioning of screen does not hamper the works at road construction site;
that because during meeting on 15.02.2019, time for completion of works under the purchase order in question was explicitly extended, as such, time was not the essence of contract;
that the Jaw Crusher and Cone Crusher were commissioned on 03.08.2019;
that thereafter tracking of screen to the site began on 03.09.2019, yet, it took a long time to reach because of the weather and road conditions;
that a crack in the support frame of screen was found while dismantling and assembly process;
that several issues were found such as missing hardware, hydra was not sufficient to lift the components of screen box;
that thereafter the assembly process was completed and commissioned the screen on 03.10.2019, which was informed to the complainant vide email dated 22.10.2019 which was not replied by it;
that thereafter the equipment/machinery has been running satisfactorily; and that any transport charges or other costs, which has been initially borne by the complainant has been refunded to it.
In the rejoinder filed, the complainant reiterated all the averments contained in its complaint and controverted those contained in written statements filed by opposite parties no.1 and 2.
This Commission afforded adequate opportunities to the contesting parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, the contesting parties have adduced evidence by way of affidavits and also produced numerous documents including written arguments.
We have heard the contesting parties and have carefully gone through the entire record of the case, including the written arguments filed by the parties.
There is no dispute with regard to the fact that the complainant vide purchase order dated 27.08.2018, Annexure C-3, purchased TEREX Finlay Jaw Crusher Model J1175, TEREX Finlay Cone Crusher Model C1540 and TEREX Finlay 3 Deck Screen Model 684 i.e. the machinery which is used for construction of roads, for which it paid an amount of Rs.5,75,00,000/- to opposite party no.2. It is also not in dispute that the said rates fixed for purchase of the said machinery were on F.O.R. basis i.e Freight on Road, wherein the transportation charges were to be paid by the seller and the machinery was to be delivered within a period of 20 days at Silliguri and thereafter, it was to be made operational within a period 30 days from the issuance of delivery order. Admittedly, the machinery in question was not assembled and commissioned with the committed period and it is coming out from the record that only TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 were assembled and in that too various defects were encountered by the complainant.
At the time of arguments, besides what has been submitted by the opposite parties in their separate written replies, referred to above, Counsel for the opposite parties contended with vehemence that delay in commissioning of Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 took place, as there was delay on the part of the complainant to provide proper tools, machinery, cranes, manpower, hydra etc. to the opposite parties at the site and also the location of the site was changed by it at the last moment. Whereas, on the other hand, Counsel for the complainant contended with vehemence that as per the purchase order, the opposite parties were under obligation to assemble and commission the said machinery complete in all respects by engaging their own manpower, material etc. which they miserably failed to do so.
Thus, at this stage, the moot question which needs to be decided by this Commission is, as to whether there was any delay in assembling and commissioning of the equipments/machinery in question and if yes, who was responsible for the said delay? To answer this question, we first need to refer the terms and conditions mentioned in the purchase order dated 27.08.2018, Annexure C-3, which are reproduced hereunder:-
"......Dated 27/8/2018 To M/s Infinitude International Pvt Ltd.
DSM 42, DLF Tower, Shivaji Marg, Moti Nagar, New Delhi 110005 Subject: Order for Terex Finlay 200 TPH Track Mounted Mobile Crushing Plant.
Dear Sir, With reference to your Performa Invoices Dt. 16.08.2018, we are pleased to place our order with for the below mentioned equipments with the following terms & conditions:
Terex Finlay Jaw Crusher model J1175.
Terex Finlay Cone Crusher model C1540.
Terex Finlay 3 deck screen model 684 Total Price Rs.5,75,00,000/- (Rupees Five Crore Seventy Five Lakhs Only) Terms & Conditions:
Rates are inclusive of GST.
Warranty:-The warranty period will be of 2000 Hrs/12 months from the date of commissioning and extended warrantee of 2000 Hrs/12 months.
Rates are F.O.R Site as mentioned below as Consignee address.
Standard Delivery Period Upto 20 Days at Silliguri from issuance of Delivery Order.
Upto 8-10 After arrival at Sillgurl for dismantling and further assembling process, all the necessary tools, machinery and manpower will be arranged and provided by you for the job, however we will help to procure the requisite tools, machinery & manpower (if u needed) but all the expenses will be borne by you.
Loading and unloading at Silliguri and delivery site will be provided by you. The requisite cranes will be provided by you at both stations at your cost.
The crusher unit should be assembled and will be operational within 30 day from Issuance of Delivery Order.
We will help to arrange the transporter from Silliguri to delivery site (if u needed). However the cost of the same will be borne by you.
Transit insurance will be provided by you.
E-way bills of the same consignment will be generated & extended from time to time by you.
As far as FOC offered of Rs.25.00 Lakhs is concerned, we can pick any part of the said equipments.
Billing Address:
Garg Sons Estate Promoters Private Limited Rangpo Near Post Office, Samridhi Residence Opp. IK Pump, Rangpo, East Sikkim Pin Code-737172 GST No. 11AACCG3312Q1ZT Consignee Address:
Garg Sons Estate Private Limited Lugnak-La, Thangu Valley Post Office Lachen, P. Station (PS) Lachen Block (Tehsil): Chungthang Sub Division Distt. North Sikkim State- Sikkim-737120 GST No. 11AACCG3312Q1ZT......."
From bare perusal of terms and conditions of the purchase order, Annexure C-3, which are not in dispute, it is evident that the equipments/machinery in question was to be delivered within 20 days at Silliguri from issuance of Delivery Order. It is further evident from Annexure C-3 that within 8 to 10 days after arrival of machinery at Silliguri for dismantling and further assembling process and also for loading and unloading, all the necessary tools, machinery, cranes, manpower, transit insurance, e-way bills etc. was to be arranged and provided by opposite party no.2 only. The complainant was only to assist opposite party no.2 in the matter, if needed. It is further evident from Annexure C-3 that the machinery in question was to be assembled and made operational within 30 days from issuance of Delivery Order. Since, the delivery order in the present case was prepared on 30.08.2018, Annexure C-5, as such, the opposite parties were under obligation to deliver equipments/machinery at the site latest by 10.09.2018 i.e. 20 days from the date of delivery order and thereafter to dismantle and start assembling process, within a period of 8 to 10 days therefrom. In all, the equipments/machinery in question was to be assembled and made operational/commissioned within a period of 30 days from the date of issuance of delivery order i.e. latest by 29.09.2018 (30 days from 30.08.2018).
Admittedly, the said equipments/machinery was not assembled and made operational by 29.09.2018 (30 days from 30.08.2018). No doubt, the opposite parties have tried their level best to prove that delay if any was on the part of the complainant, yet, when we go through the entire record of this case, we find it contrary, as will be discussed hereinafter.
Admittedly, as per terms and conditions of the purchase order dated 27.08.2018, the entire responsibility of delivering the equipments/machinery in question; its dismantling and further assembling the same; its loading and unloading; cranes at the project site; arrangement of necessary tools, machinery, manpower etc. was of opposite party no.2. It is also coming out from terms and condition of the said purchase order that the complainant was only to assist opposite party no.2 in the matter, yet, there is nothing on record that the complainant was under any obligation for the same. It is coming out from the record that when the equipments/machinery in question, complete in all respects, was not made operational and commissioned within the committed period i.e. latest by 29.09.2018 (30 days from 30.08.2018), the complainant wrote email dated 11.10.2018, Annexure C-6 i.e. after more than 1 ½ months to the opposite parties wherein it was clearly intimated that even after a lapse of 43 days, assembling of crusher unit is not yet started and some parts of the crusher were still not provided at the site. Request was made to make the said machinery operational. Relevant part of the said email is reproduced hereunder:-
"......Subject: REGARDING DELAY OF MACHINERY CRUSHER PLANT From: Yahoo ([email protected]) [email protected]; [email protected]; [email protected]; [email protected]; [email protected]: [email protected];
Date:- Thursday, 11 October 2018, 17:14 We had ordered Terex Finlay 200 TPH Track Mounted Mobile Crushing Plant on dt 27.08.18. The Delivery Order of the same issued by the financer on dt 30.08.2018 to M/s Infinitude International Pvt Ltd. As per our Purchase Order the crusher unit shall be operational within 30 days from the issuance of Delivery Order. After lapse of 43 days even the assembling of the crusher unit is not yet started and some parts of the crusher unit are still lying at Silliguri. As per terms & conditions laid down in the PO issued to of M/s Infinitude International Pvt Ltd, we had purchased relevant machinery like Excavators & Tippers which would be used once crusher unit got operational. Resulting which our machinery are still idle and we have faced huge financial losses. So you are requested to please take the appropriate steps to get the crusher unit operational.
Thanking You Garg Sons Estate Promoters Pvt. Ltd......."
However, when nothing was done by the opposite parties, the complainant sent reminder letter dated 18.10.2018, Annexure C-7, email dated 25.10.2018, Annexure C-8 and email dated 15.11.2018, Annexure C-9 in the matter. Thereafter, opposite party no.1 vide email dated 30.11.2018, Annexure C-10 committed to give all support to make the success in the matter. It is also coming out from the contents of the said email dated 30.11.2018 that the 4th product conveyor frame of 684 screen had been cracked during transit and it was committed by opposite party no.1 that it will be replaced shortly. It was further informed to the complainant vide the said email that the equipments/machinery will reach the site within 4 to 5 days and that thereafter only the assembly of conveyors will be done. Relevant contents of the said email dated 30.11.2018, Annexure C-10 are reproduced hereunder:-
"......Dear sir, First of all, I would like to thank you for meeting us in Chandigarh. We discussed on the actions ahead to commission the plant at your project. While we have lost some time on account of inaccessibility of the site due to land slides we had deputed our Regional Service Manager Mr. Anindya Chakraborti to trouble shoot the engine and the same was started and the machine has started tracking. Despite inclement weather we have been successful as a team to commence tracking the machine to its designated location.
We once again commit that we will provide you all the support in your venture in Sikkim and will make it a success. We have reviewed the status of the plant and based on that we can commit the following plan:
1 A replacement against the 4th product conveyor frame of 684 screen that had cracked during transit would be dispatched from Hosur by 7th December positively. We are certain that the weld repair carried out to this component would effect a trouble free operation of the screen. However we are proactively dispatching a standby frame to your site just for any eventuality considering the typical conditions at this strategic project of national Importance.
2. The J1175 and C 1540 is tracking towards the Mungthang and will reach the project site within next 4-5 days provided the weather does not deteriorate and the road to the site is clear. Once both these units reach site, our service engineer will be there to commission them and train the operator team.
3. Once the GSB production is started with the J1175 and C 1540, the tracking of 684 will be started. This will also take 7-10 days to reach the site depending upon the weather and the road condition. The assembly of the conveyors will be done afterwards for the 684.
4. The operator team with three members are there at the site and they need to be engaged by you. They will add another three members soon. I request you to finalize the terms and conditions with this team immediately. In case you are not satisfied with this team, please let us know and we will try to arrange for another team.
We once again thank you for your time and assure of our best support..........."
A bare perusal of the contents of the email dated 30.11.2018 makes it very clear that by 30.11.2018, the equipments/machinery was not delivered at the site of the complainant and also conveyor frame of 684 screen was found to be cracked during transit. It is also coming out from the contents of the said email that the opposite parties informed the complainant that they require another 15 days to assemble the machinery and to make it operational. However, there is nothing on record that the said machinery was assembled and made operational in the said 15 days even. It is also evident from the record that thereafter the complainant arranged transport and got installed the stone crusher on its own, as a result whereof, opposite party no.1 vide email dated 05.03.2019, Annexure C-12 informed the complainant that a credit note of Rs.11 lacs will be issued in its favour by opposite party no.1 before 15.03.2019 on account of expenses accrued towards transportation and installation of stone crusher by it (complainant). It was further assured by opposite party no.1 vide the said email dated 05.03.2019 that after adequate weather, the crusher unit will be made operational for production within 7 to 10 days. Relevant part of the email dated 05.03.2019 is reproduced hereunder:-
".........RE: Regarding Meeting (M/s Garg Sons) From: Parthi, Viraj ([email protected]) To: [email protected] [email protected] Ranga [email protected]: Shryans [email protected] Date: Tuesday, 5 March 2019, 10:56 PM GMT+5:30 Dear All, Please find our confirmation for the points agreed upon during the meeting held on 15th Feb, 2019.
1. A credit note of Rs. 11 lacs will be issued to you by our dealer and the seller in this case M/s Infinitude International before 15th of March on account of expenses accrued transportation and installation of stone crusher by you.
2. We agree that we will provide you discount on spares purchased by you directly by Terex India worth 30 lacs over a period of time.
3. We assure you that after the adequate weather condition at site we will have to get the crusher unit in production within 7-10 days.
4. I have also been informed that you have received the confirmation from your financier regarding the change in the EMI date to 15th June I request you to kindly confirm your financer to release the payment at the earliest as per our discussion during our joint meeting.
Thanks & Regards, Viraj........"
However, when despite assurance, still the machinery was not made operational, the complainant sent email dated 05.07.2019, Annexure C-13, 13.07.2019, Annexure C-14, 31.07.2019, Annexure C-15, 08.08.2019, Annexure C-16, 10.09.2019, Annexure C-17, 23.09.2019, Annexure C-18, 30.09.2019, Annexure C-19 followed by legal notice dated 28.10.2019, Annexure C-20 and 29.06.2020, Annexure C-21. In these emails and letters, it was informed by the complainant to the opposite parties that since they have failed to install Finlay 3 Deck Screen Model 684 at the site, it is unable to use the crusher unit, which has resulted into huge financial loss, as the CPW Department has imposed penalties on it.
Not only as above, there is a Engineer Delivery Service Record dated 21.11.2018, Annexure R1-2 placed on record by opposite party no.1 itself, which reveals that there was a trouble in the engine of the crusher machine as it was not starting. In its report, the engineer of the opposite parties has categorically mentioned in the said record that after running the engine of crushers at 850 RPM, sudden fault occurred from terex end and as such to run the engine smoothly, they need to solve the terex end fault. It was further mentioned in the said report that engine was unable to start due to some fault Code (2) from terex and at the time of Cranking (E.T.) shows engine on 100% load and as such, to start the engine, these two faults need to be sorted out from terex end.
There is another Field Service Report dated 22.10.2019 (at pages 71 to 75 of the paper book) placed on record by opposite party no.1 itself, wherefrom it is evident that the engineers of the opposite parties, in a very candid manner, mentioned therein that they started screen tracking on 03.09.2019. On 04.09.2019, they inspected jaw and cone crusher. However, it was found that both engines are getting high load as diesel and water separator filters are choked, which were replaced. There is another report, Annexure R1-11 of the engineer of the opposite parties, wherein it was clearly mentioned that transfer conveyor was not functioning satisfactorily. Even the hydraulic system of crusher unit was not functioning, which fact was brought to the knowledge of the opposite parties, by the complainant vide email dated 13.07.2019, Annexure C-14 but the same was not even replied by them.
Thus, from the sequence of events narrated above, which have been culled out from the record of this case only, it has been proved that firstly, there was a huge delay in delivery and assembling of TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540. Furthermore, during the period intervening of assembling of the said two machines, various defects were found therein and there is nothing on record that the said defects stood rectified to the satisfaction of the complainant.
Not only as above, it has also been proved on record that despite the fact that as per terms and conditions of the purchase order, the opposite parties were under obligation to provide manpower, cranes, transportation etc. till commission of the said machinery, but they miserably failed to do so and on the other hand, the complainant provided the same, which act in itself is a material violation of terms and condition of the purchase order. The machinery in question was to be commissioned latest by 29.09.2018 (30 days from 30.08.2018), whereas, on the other hand, till October 2019, it could not be made operational, as it suffered from various defects such as; fault in hydraulic system; engines were getting high load, as the diesel and water separator filter were choked; after running the engine of crushers at 850 RPM, sudden fault occurred from terex; engine was unable to start due to a fault Code (2) from terex and at the time of Cranking (E.T.) showed engine on 100% load; and transfer conveyor function was not functioning satisfactorily. These defects had been reported by the engineers of the opposite parties themselves. Thus, in this view of the matter, it can easily be said that defective TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 were supplied to the complainant by the opposite parties.
Now coming to the machinery-TEREX Finlay 3 Deck Screen Model 684, it may be stated here that admittedly a cracked deck screen was supplied by the opposite parties to the complainant. There is nothing on record that the said deck screen has been made operational and commissioned even by the date this complaint has been filed or during pendency of this complaint. Though, the opposite parties claimed that they have made the entire machinery operational and commissioned the same by September 2019, yet, when we go through the contents of email dated 20.08.2020, Annexure R1-19 placed on record by opposite party no.1, we find that it has been clearly mentioned therein by opposite party no.1 that the deck screen has not been commissioned and that it is ready to provide support for commissioning of deck screen in question and further support on all equipments in Sikkim, in case, the complainant withdraws legal complaint against the opposite parties. Relevant contents of email dated 20.08.2020 are reproduced hereunder:-
"......From: Parthi, Viraj Sent: 20 August 2020 11:34 AM To: Yahoo Mail <[email protected]>; Swamy, Ranga <[email protected]> Subject: RE: Regarding Crusher Unit (M/s Garg Sons)- REMINDER 5 Dear sir, I hope that you and your family are doing fine and are safe during this pandemic situation. M/s Garg Sons is one of or most valuable customers having 9 units of Terex Finlay crushers and screeners in your fleet. We value your patronage to Terex Finlay brand and we have always provided you our best support even in challenging situation. We are supporting your plant in Andaman as well as Himachal Pradesh site without any issues. With respect to the commissioning of Finlay screen model 684 in Sikkim, please refer to our discussion earlier. The assembly of this unit was done by our team and commissioning could not be done since this unit could not reach the site which was unapproachable due to bad weather. In the meantime, we received a letter from your legal team mentioning several issues. This was replied by our team few months back with all the facts and also with best of our intentions. We have always maintained that we are ready to support our plant to the best of your satisfactions and our capabilities. We also intend to have a long lasting relationship with you and your organization. Hence, I once again request you to please withdraw the legal complaints against Terex in order to provide all the support for the commissioning of screen 684 and further support on all the equipment working in Sikkim as well. I once again thank you for all the support earlier and hope for the same in future.
Thanks & Regards, Viraj.........."
The contents of email dated 20.08.2020 extracted above, are sufficient to prove the case of the complainant that even by 20.08.2020, the complete equipments/machinery was not commissioned by the opposite parties at the site, which is a grave violation of terms and conditions of the purchase order on their part.
To wriggle out of the situation, Counsel for the opposite parties contended with vehemence that the commissioning of TEREX Finlay 3 Deck Screen Model 684 was not necessary alongwith TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540, as the deck screen was to be utilized at later stage because GSB is the base material utilized in earlier stages of any road and that delay in commissioning of deck screen did not hamper the work at road construction site and would not result in a situation, where the entire equipment is lying idle. We do not agree with the contention raised for the reasons to be recorded hereinafter. As stated above, even by August 2020, the deck screen was not commissioned at the site by the opposite parties. Irrespective of the fact that even the TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 was assembled after an inordinate delay, which too has not been proved to be defect free, yet, in the absence of commissioning of deck screen, the complainant was not in a position to complete the construction of roads. Even otherwise, the opposite parties have failed to place on record any document to prove their case that they were not legally bound to provide TEREX Finlay 3 Deck Screen Model 684 alongwith TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 to the complainant. On the other hand, it is evident from the purchase order dated 27.08.2018, Annexures C-3 and delivery order dated 30.08.2018, Annexure C-5, that the opposite parties were under obligation to provide all the three equipments/machinery and to make them fully operational latest by 29.09.2018 (30 days from 30.08.2018), which they miserably failed to do so. This act of the opposite parties amounts to deficiency in rendering service, negligence and adoption of unfair trade practice.
As far as plea taken by the opposite parties to the effect that delay in commissioning of TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 took place on account of the reason that firstly the complainant had shifted the location of the machines to some other location which was 15 kms away from the actual site; and secondly on account of weather conditions in the area, it may be stated here that the opposite parties have failed to place on record any convincing and cogent evidence in this regard. First coming to the alleged change of location of the site, it may be stated here that as per purchase order dated 27.08.2018, Annexures C-3 and delivery order dated 30.08.2018, Annexure C-5, the equipments/machinery in question was to be commissioned at Lugnak-La, Thangu Valley, Sikkim. The Field Engineers of the opposite parties in their Field Service Reports dated 22.10.2019 (at page 72 of paper book) and Annexure R-1-11 have clearly mentioned that they visited the site of the complainant at Thangu Valley, Sikkim. In this view of the matter, plea taken by the opposite parties to the effect that delay in commissioning of machinery took place on account of the reason that the complainant had shifted the location of the equipments/machinery to some other location being devoid of merit stands rejected.
As far as contention raised to the effect that delay took place on account of weather conditions in the area, it may be stated here that on the face of contents of reports of the engineers of the opposite parties to the effect that till October 2019, the machinery could not be made operational, as it suffered from various defects in its hydraulic system; engines were getting high load, as the diesel and water separator filter were choked; after running the engine of crushers at 850 RPM, sudden fault occurred from terex; engine was unable to start due to fault Code (2) from terex end and at the time of Cranking (E.T.) engine showed on 100% load; and transfer conveyor function was not functioning satisfactorily, the said plea does not merit acceptance. The opposite parties have taken more than one year for assembling TEREX Finlay Jaw Crusher Model J117 and TEREX Finlay Cone Crusher Model C1540 and still it has not been proved that the same are defect free or not, whereas, on the other hand, the TEREX Finlay 3 Deck Screen Model 684 has not been commissioned even. Not an iota of evidence has been placed on record to prove that the entire machinery could not be commissioned because of the alleged bad weather/climate conditions. On the other hand, it is the definite case of the complainant that before purchasing of the said machinery, the representative of the opposite parties was made to visit the site, to ascertain as to whether, the said machinery could be provided and commissioned, which fact has not been disputed by the opposite parties. Even otherwise, from the email dated 05.07.2019, Annexures C-13, it is evident that the complainant requested the opposite parties to commission the machinery, as the weather condition was good at the site. Thereafter also, the complainant wrote number of emails, referred to above, to the opposite parties, requesting them to commission the machinery but to no avail. Thus, the plea taken by the opposite parties in this regard being devoid of merit stands rejected.
In this view of the matter, it is held that from the peculiar facts and circumstances of this case, it has been proved that it was on account of the reason that defective machinery-TEREX Finlay Jaw Crusher Model J1175 and TEREX Finlay Cone Crusher Model C1540 was supplied to the complainant, as a result whereof, huge delay of more than one year took place and at the same time, on account of supply of broken TEREX Finlay 3 Deck Screen Model 684, the same could not be commissioned till August 2020 and even thereafter, which act amounts to deficiency in providing service, negligence and adoption of unfair trade practice on the part of the opposite parties, which has caused a huge financial loss to the complainant and agony & humiliation to its Director, as in the absence of commissioning of the entire machinery at the site, it could not complete its project of road construction.
Now coming to quantifying of damages suffered by the complainant, due to deficiency in service and negligence on the part of the opposite parties, as a result whereof, the equipments/machinery was not made fully functional till date. In the complaint, it has been specifically pleaded that the complainant has been penalized by the Government departments for delay in completion of the work but it did not produce on record any evidence to that effect. Therefore, under these circumstances, the complainant who paid a huge amount of Rs.5.75 crores for purchase of the said equipments/machinery would have definitely suffered financial loss. In the circumstances of this case, we are of the view that the damages can be quantified by granting interest on the amount paid by the complainant towards the said equipments/machinery, which will take care of financial loss suffered by it, on account of non-functioning of the equipments/machine in question. We are of the considered view that if we grant interest @12% p.a. on the amount paid by the complainant i.e Rs.5.75 crores towards purchase of the said equipments/machinery from the date of purchase thereof, till the same is made fully operational, to the satisfaction of the complainant, that will be adequate and will also meet the ends of justice.
For the reasons recorded above, this complaint is partly accepted, with costs and the opposite parties, jointly and severally are directed as under:-
To make the entire machinery i.e. TEREX Finlay Jaw Crusher Model J1175, TEREX Finlay Cone Crusher Model C1540 and TEREX Finlay 3 Deck Screen Model 684 fully operational and commission the same, upto the satisfaction of the complainant, after replacing the defective/broken parts thereof, if any, within a period of 30 days from the date of receipt of a certified copy of this order and to give fresh warranty on the entire equipments/machinery.
To pay compensation by way of interest @12% p.a. on the entire amount paid by the complainant from 29.09.2018 (30 days from delivery order dated 30.08.2018) i.e. the committed date of commissioning the said machinery, till compliance of directions given in clause (i) of para no.28 above.
To pay to the complainant, compensation for causing mental agony and harassment to its Director; deficiency in providing service, negligence and adoption of unfair trade practice and also cost of litigation, in lumpsum, to the tune of Rs.5 lacs within a period of 30 days from the date of receipt of a certified copy of this order, failing which, the said amount shall carry interest @9% p.a. from the date of passing of this order, till realization.
Certified copies of this order be sent to the parties, free of charge.
The file be consigned to Record Room, after completion.
Pronounced.
04.07.2022 Sd/-
[JUSTICE RAJ SHEKHAR ATTRI] PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Sd/-
(RAJESH K. ARYA) MEMBER Rg.