National Consumer Disputes Redressal
M/S Rinac India Ltd. & Anr. vs Karnataka Regional Engineering ... on 26 April, 2010
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 311 OF 2005 (Against the order dated 30.06.2005 in Complaint No. 76 of 1998 of the State Commission Karnataka, Bangalore) 1. M/s Rinac India Ltd. ........ Appellants having its registered office at No.5 Saraswathy Nivas, Main Channel Road Saraswathipuram, Ulsoor, Bangalore-8 Represented by its Managing Director 2. P.V. Balasubramanian No. 29, I Cross, II Main Combridge Layout Extension Bangalore Vs. Karnataka Regional Engineering College Society ......... Respondent Suratkal, P.O. Srinivasnagar-574 157 Dakshina Kannada Distt., Karnataka State BEFORE: HON'BLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER HONBLE MR. ANUPAM DASGUPTA, MEMBER For the Appellants : Mr.Mathai M. Paikeday, Sr. Advocate with Mr. T G N Nair, Advocate For Respondent : Mr.A P S Ahluwalia, Advocate with Mr.S.S. Ahluwalia, Advocate and Mr.Govinda Raj, Registrar, NITK Surathkal Mangalore Dated : 26 th April, 2010 ORDER
PER JUSTICE R.C.JAIN, PRESIDING MEMBER Aggrieved by the order dated 30.06.2005 passed by the Karnataka State Consumer Disputes Redressal Commission Bangalore ( in short, the State Commission) in complaint no. 76 of 1998 M/s Rinac India Ltd. & another (original Opposite Parties in the complaint), have filed the present appeal. By the impugned order, the State Commission has allowed the complaint filed by the complainant Karnataka Regional Engineering College Society ( in short the KRECS) by giving the following directions to the opposite parties appellants:
a. The complaint is allowed opposite parties are directed to replace the machineries / articles referred to in Annexture A of the complaint and make the compressor and other accessories in workable condition without any further defects within three months.
b. In the alternative, if the OPs failed to replace the machineries / articles referred to in Annexture A of the complaint within three months as directed above, the OPs are directed to pay Rs.17,17,500/- to the complainant with interest at 12% p.a. from the date of the complaint till realization subject to handing over possession of the machineries / articles referred to above to the OPs.
c The opposite parties are directed to pay Rs.50,000/- to the complainants as punitive damages with interest at 12% p.a. from the date of this order till realization.
d. The opposite parties are also directed to pay a sum of Rs.5000/- to the complainants as the cost of the proceedings.
2. The complaint before the State Commission was filed with the averments and allegations that complainant had entered into an agreement dated 02.11.93 with M/s Clean Air, which later merged into the appellant M/s Rinac Ltd. for installing an air conditioning system (air cooled split type) in the computer center building of the complainant KRECS at a total cost of Rs.23,05,596/-. The agreement provided that the air cooled condensing units would be located on the terrace and each floor will have air handling unit of adequate capacity with multi circuit cooling coil. The system was to consist of six compressors ( two compressors for each of the three floors) together with required condensers and necessary controls and protection and ducting. As per the agreed terms, the Opposite Party was to supply, erect and commission the air conditioning system as per the specifications contained in the agreement within three months of the agreement and was to provide a local person for minor repairs during the warranty period of one year. It was alleged that though the site for installing the air conditioning system was made available to the opposite party on 08.12.93, still the system could be installed only in December 1994. Further, the case of the complainant was that in October / November 1995, air conditioning system on the ground floor had partially failed as one compressor went out of order, AC duct solenoids were not functioning and switches required replacement and so the complainant, vide letters dated 31.10.95 and 08.11.95, requested the opposite party to rectify the malfunctioning of the compressor and rectify the defects pointed out but the opposite party failed to rectify the defects in the system. Again a request was made to the opposite party to commission and tune the air conditioning system on the first and second floors and to replace one defective compressor. Despite assurance, the compressor was not replaced. Thereafter, even the second compressor installed at the first floor also developed problems in January 1996.
Representatives of opposite party who visited the complainants premises in order to rectify the defects could not do so and they took away the two compressors and one AHU motor on 2.3.1996 for repair or replacement by assuring the complainant that they will return within 2-3 days. Despite reminders, the compressors were not replaced and after a long delay it was informed that one compressor had been repaired and same shall be sent back while the other compressor would require some more time to be rectified. Since the compressors were not returned and the defect in the air conditioning system was not rectified, the complainant, after issuing a legal notice dated 05.08.1997, filed the present complaint seeking replacement of the compressors, control system consisting of return air thermostat, humidstat and supply air thermostat and powder coated air terminals or, in the alternative, to repay the cost paid by the complainant and also to pay damages for the defect and deficiency in service. Opposite parties resisted the complaint raising preliminary objection about the complaint being barred by limitation as no complaint about any defect was made during the warranty period. Denying there was any defect in the system so supplied or deficiency in service, it was sought to be explained that M/s Batliboi & Co. were the manufacturer of the compressors and, therefore, if there was any manufacturing defect in the compressors, the said company was liable to pay the damages and in the absence of M/s Batliboi & Co., no relief could be granted to the complainant against the opposite parties. The State Commission, having regard to the pleadings of the parties, evidence and material which was mostly documentary in the form of agreement and correspondence exchanged between the parties, more particularly that the complainants had been taking up the matter with the opposite parties till as late as September 1997, held that the complaint filed in the year 1998 was not barred by limitation.
It would appear that during the pendency of complaint, the complainant appointed a Commissioner to submit a report regarding the status and working of the equipments supplied by the opposite parties and the Commissioner submitted a report dated 19.6.99 in which the said Commissioner pointed out several defects in the compressor and other accessories of the system. As the report of the Commissioner remained unshaken despite cross examination by the parties, the State Commission going by the report of the said Commissioner, held that there were defects in the compressors supplied by the opposite parties and even if the same were manufactured by M/ Batliboi and Co., the opposite parties were liable to compensate the complainants for the loss and injury suffered by them. Accordingly, the State Commission answered the complaint and gave the above directions to the opposite parties.
3. We have heard Mr. Mathai M Paikedey, Senior Advocate, learned counsel for the appellants and Mr. A P S Ahluwalia, learned counsel representing the respondent and have given our thoughtful consideration to their respective submissions.
4. Learned counsel for the appellants would assail the impugned order and finding of the State Commission as erroneous and not based on correct appreciation of the pleadings of the parties as also the evidence and material produced on record. In this connection learned counsel for the appellants emphatically argued that the complainant had miserably failed to establish any defect in the air conditioning system installed by the opposite party at the computer center of the complainant-institute or any deficiency in service in rectifying any defect which was brought to the notice of the opposite party. To this end he has taken us through the correspondence exchanged between the parties after the installation of the air conditioning system. He first referred to the Commissioning report of the system dated 10.12.94 wherein in the Remarks column, the complainant had certified that the unit was working satisfactory. It is an admitted position that after the installation of the system in December 1994, the complainant made no complaint for about one year and it was only on 05.12.95 that complainant addressed a communication to the Customer Support Engineer of the opposite party informing him that an international conference on Heat and Mass Transfer was proposed to be held from 25th December 1995 on the first and second floor of the building of the computer center where the air conditioning system had been installed by the opposite party and, therefore, the complainant requested the said representative to attend to the following :
1. Tuning the ACT in First and Second Floor.
2. Replacing isolators ( 100 A) for 1st and 2nd floor.
3. Repairing / replacing the compressor ( one no.) of the ground floor system.
5. In response to the said request of the complainant, the opposite party vide communication dated 26th December 1995 informed the complainant that they had recommissioned the first and second floor unit as per the request and consequently requested the complainant to release their security deposit amounting to Rs.1,53,564/- which had been withheld from the bills paid to the opposite party because the units were commissioned by 10.12.94 and more than a year had elapsed and the units were working satisfactorily. In the same communication, opposite party quoted a sum of Rs.2,40,000/- for annual maintenance contract for one year. It would appear that thereafter there was some meeting between the representative of the complainant and the opposite party and following problems in the operation of the refrigeration system were pointed out:
a. The KEB power supply is irregular and the voltage also fluctuates between 330V and 420V.
b. Your persons are unable to check status of the unit kept on terrace whenever there is a trip situation in thermostat etc. c. Electrical panels being on the terrace is subject to rough weather during monsoon and cannot be attended during fault situation. It is suggested to locate 2 compressors and electrical panel in the respective AHU rooms in each floor
- to locate the aircooled condensers at the AHU room level of each floor, but outside the building and adjoining to the AHU room, supported on steel frame work fastened to the walls.
- The above work will involve the following:
- Modification of condenser housings.
- Modification of compressor stand / frame work.
- Modification of refrigerant piping.
- Modification of electrical cable and earth routing.
- Recommissioning of the units.
- Frame work four mounting the condenser.
- Approach ladder / door at AHU.
6. The opposite party offered to remove the said problems at a cost of Rs.2,00,000/-, besides taxes. However, vide communication dated 27.01.97 complainant wrote to the opposite party about the decision of the building committee of the college taken in a meeting held on 25.01.97 to the effect that there was no need to relocate the compressors and condensers and, therefore, asked the opposite party to commission the units at the existing location at the earliest and to collect their retention money. This was followed by a legal notice dated 05.08.97 asking the opposite party to replace / repair the air conditioning system or in the alternative to refund the amount received by them. The notice was replied to by the opposite party on 25.08.97 thereby denying any defect in the system or any deficiency on their part to rectify the problems pointed out by the complainant from time to time.
7. After hearing the learned counsel for the parties at some length it was not clear as to whether the two compressors which were removed by the opposite party with the assurance to return the same after the repairs had been actually returned to the complainant. Learned counsel for the complainant Society sought permission to file additional affidavit of a senior officer to clarify the said position as also in regard to the expenses incurred in getting the air conditioning system repaired and making it functional. The Commission granted the prayer of the respondent complainant and accordingly an affidavit of Dr.Govinda Raj, Registrar of the respondent was filed with a view to explaining the above position. In the affidavit, the above named deponent deposed that the opposite party had removed three compressors which had stopped working and taken them away to its factory with an assurance that they would be reinstalled in a short time after carrying out the necessary repairs but despite issuing several reminders and legal notice, the opposite party failed to return the compressors. As regards the expenses incurred by the complainant for the rectification of the existing air conditioning system installed by the opposite party, it was deposed on behalf of the respondent-complainant that after inviting tenders, the Institute entrusted the work of rectification of defect in the air conditioning system to M/s Batliboi Ltd. who carried out the requisite work at a total cost of Rs.10,66,248/-, bills of which were also filed on record. On going through the correspondence exchanged between the parties during the relevant period of March 1997 to May 1999, there is no escape from the conclusion that at least two compressors which were removed by the opposite party for carrying out the repairs and then refixing the same at the computer center of the complainant were not returned. The documents filed alongwith affidavit would clearly show that complainant has incurred an expenditure of Rs.10,66,248/- in replacing the six compressors by new compressors as also for supply of other material and executing certain other works in order to make the air conditioning system functional in a proper manner.
8. Learned counsel for the appellants has strongly argued that on the basis of the material brought on record, the opposite party could not have been held liable for supply of defective compressors which were manufactured by Batliboi & Co. and, in any case, for any deficiency in service because the air conditioning system did not work properly due to its improper installation at the roof top of the building rather than at some other suitable place as advised by the opposite party and the erratic voltage of the electric supply was also responsible for improper functioning of the system. In any case, his submission is that the directions given by the State Commission for replacement / repair of the system, and in the alternative for payment of Rs.17,17,500/- and compensation was not at all justified. He has contended that the complainants are not even entitled to a sum of Rs.10,66,248/-
purportedly spent by the complainant towards the rectification of the entire air conditioning system because Batliboi & Co. had not replaced merely the two defective compressors but had replaced and charged for all the six compressors in respect of which no complaint was made by the complainant to the opposite party. There appears to be force in this submission. In the circumstances, we hold that there was defect at least in two compressors supplied by the opposite party as part of the air conditioning system and the said compressors which were removed by the opposite party were not replaced. We have no manner of doubt that the opposite parties are liable to pay the price of the said compressors to the complainant. There is ample material on record that despite requests made by the complainant, the air conditioning system installed by the opposite party was not made to function properly and the defects persisted which would clearly show that there was deficiency in service on the part of the opposite party, at least to that extent.
9. Having held so, the ultimate question is as to what amount of compensation the complainants are entitled from the opposite party because the complainants have already got repaired / replaced the air conditioning system from M/s Batliboi & Co., having considered the facts and circumstances of the case, we are of the opinion that direction of the State Commission to the opposite party to pay a sum of Rs.17,17,500/- to the complainant alongwith interest @ 12% p.a. from the date of complaint till realization as an alternate relief is not tenable, the amount being far in excess of the loss / injury which the complainants can be said to have suffered due to defect in the equipment or deficiency in service in rectifying the said defects / problems. Mr. Ahluwalia has made a vehement plea that respondents are at least entitled to a sum of Rs.10,66,248/- which the complainant had to pay to Batliboi & Co. in order to replace / rectify the defects. Counsel for the appellants contended that even award of compensation to the above extent will not be proper because the said expenses were incurred by the complainant not only for the rectification of the defects but for overall replacement / rectification of the system after several years of the earlier installation. We see force in this contention. In our view it would adequately meet the ends of justice if a lumpsum compensation of Rs.5,00,000/- is awarded to the complainant for the defect in the equipment and deficiency in service on the part of the opposite party in rectifying the defect / problems which had occurred in the air conditioning system installed by them at the premises of the complainant. The amount was payable either from the date of notice or at least from the date of complaint and so the complainant is entitled to a reasonable amount of interest on the said amount at least with effect from the date of filing of the complaint.
10. In the result, the appeal is partly allowed and the impugned order of the State Commission is hereby set aside / modified in the manner that opposite party appellants are directed to pay a lumpsum compensation of Rs.5,00,000/- with interest @ 9% p.a. w.e.f. date of filing of complaint till payment. In the facts and circumstances of the case, parties are left to bear their own costs throughout.
.Sd/-J (R.C. JAIN) ( PRESIDING MEMBER) ..Sd/-
(ANUPAM DASGUPTA) MEMBER Am/