Monopolies and Restrictive Trade Practices Commission
Khandelwal Photostat And Type Centre vs Kores India Limited on 9 March, 1993
ORDER
A.N. Varma, Chairman
1. This is an application for compensation under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as "the MRTP Act"). As the respondent failed to appear in spite of due service of notice, the case proceeded ex parte. In support of his application, the applicant has filed an elaborate affidavit supported by all the relevant documents in proof of his claim.
2. On March 2, 1990, the applicant, which is a Photostat and Type Centre at Kherli (Alwar), Rajasthan, purchased from Kores India Limited an automatic plain paper copier machine for the sum of Rs. 43,100 which was duly paid by the applicant. The bill and receipt for the payment of the amount have been annexed to the affidavit as exhibits CW-1/1 and CW-1/2. The machine carried a warranty for a period of six months. Exhibit CW-1/3 is the warranty card. In the warranty card, March 2, 1990, is mentioned as the date of installation of the machine. Six months period would, therefore, run from this date.
3. Throughout the affidavit of Shri Ramesh Chander, the proprietor of the applicant concern, runs a sad tale of the photo-copier in question giving endless trouble right from the beginning. In fact, if the proprietor of the concern is to be believed-and we see no ground why he should not--it seems apparent that the machine did not function properly, much less smoothly, for more than three days at a stretch, Every time the applicant lodged a complaint with the respondent, the latter would allow a gap of several weeks to elapse before its service engineer or mechanic would condescend to attend to the fault. And again not more than three days would elapse before the machine would again go out of commission. The proprietor would make a fervent request to the respondent to send its service engineer to attend to the fault thoroughly so that the problem does not recur within the next few days at least. The appeals would fall on deaf ears. The service engineer would turn up several weeks thereafter to attend to the fault. He would, however, appear to make some temporary repairs which would not last more than three days.
4. The proprietor would specifically point out all this on the service card itself after the so-called repairs were done by the service engineer. The proprietor would note down on the service card brought by the service engineer that the machine be reinspected after three days as the machine does not function for more than three days at a stretch.
5. By way of example reference may be made to the service reports marked exhibits CW-1/18 and CW-1/19.
6. We find the same notings made by the applicant on the service reports throughout. The service engineer of the respondent would not visit thereafter on his own and the machine would again be thrown out of gear within not more than three days of the pretended repair by the respondent's service engineer.
7. This state of affairs continued throughout the period until on 24th June, 1990, the service engineer of the respondent told the proprietor that his future complaints shall not be attended as the period of free service was over. The proprietor was shocked to be told this as the warranty was valid for a period of six months from March 2, 1990. He showed the warranty card to the service engineer whereupon the service engineer told the proprietor that the warranty card is given only for satisfying the customer at the time of purchase and that the general practice was that after a few months the customers must enter into a service contract. He also said that the applicant must deposit Rs. 4,715 towards the service contract for a period of one year from August 2, 1990. The applicant states that having been driven to the wall, he was forced to enter into the service contract. The service contract dated June 24, 1990, is exhibit CW-1/13.
8. Meanwhile, the same pattern of facts of the machine being thrown out of gear immediately on being repaired by the service engineer of the respondent whereafter it would remain unattended for weeks together continued unabated throughout. This fact is simply established by all the numerous complaints filed by the applicant and the service reports containing apart from engineer notings, the applicant's protests that the machine was not properly attended, it continued to give trouble time and again and the copies also continued to be dim and illegible. All this material is on record.
9. Disgusted with the above state of things, the proprietor met Mr. Somani, branch manager of the respondent concern at Jaipur and apprised him of the highly unsatisfactory service being provided to the deponent. As a result, the service engineer of the respondent visited the applicant's premises on August 3, 1990, and made a pretence of repair whereupon the proprietor noted down on the service report itself that the copies continued to be dim and that the machine needs to be rechecked after three days. As apprehended the machine became non-operative from August 4, 1990. Proprietor again met Mr. Somani who told the former that the warranty period was over and that the company was not responsible for the machine any more. The proprietor also alleges that Mr. Somani misbehaved with him and asked him to get out of his office. He further told the proprietor that no service shall be provided unless the applicant paid Rs. 4,715 for the service contract for a period of one year beginning from August 2, 1990. The proprietor's protest that the warranty period was operative till September 2, 1990, had no effect on Mr. Somani, the branch manager.
10. The result was that the applicant had to close down its business. The machine is stated to be lying idle ever since August, 1990. In the process, the proprietor asserts, the applicant has suffered considerable loss, apart from mental agony and loss of goodwill, etc.
11. Upon these facts, the present application has been filed by the applicant claiming a compensation of Rs. 1,46,965.
12. The facts stated by the proprietor of the applicant concern in his affidavit have not been controverted by the respondent. Indeed the respondent has not even appeared in response to the notice issued by the Commission.
13. The assertions of the applicant are supported by voluminous evidence. The receipt evidencing payment of Rs. 43,100 by the applicant for the machinery is on the record. Warranty card is also there on the file being exhibit CW-1/3. The complaints filed by the proprietor are all there together with the service reports with the notings of the proprietor thereon. In the service report, there is a column meant for the remarks of the consumer. These remarks indicate that the applicant was protesting right from the beginning that the machine was giving trouble and that there was some fundamental defect therein which the service engineers of the respondent were not able to rectify. The fact that the machine would not operate for more than three days after the carrying out of the so-called repairs is more than established on the record, as is evident from the frequency of the complaints and the visits of the service engineer and the duration between the visit of the service engineer and the complaints alleged by the applicant immediately thereafter.
14. What is, however, of significance is that the respondent started pressing the applicant to enter into a service contract on payment of Rs. 4,715 for a period of one year beginning from August 1, 1990. The service contract dated June 24, 1990, is on the record being exhibit CW-1/13. It will be seen that this service contract was got executed in June, 1990, i.e., long before the expiry of the warranty period. And what was still more serious was that the respondent started pressing the applicant within three months of the purchase of the machinery that the applicant should enter into a service contract without which they would not attend to the faults. This was a flagrant breach of the warranty and the action squarely attracts Clause (vii) of Section 36A(1) of the Monopolies and Restrictive Trade Practices Act, 1969. The charge of unfair trade practice thus stands fully established.
15. Further, the insistence of the respondent that the applicant should enter into a service contract also attracts Clause (b) of Section 33(1) of the Monopolies and Restrictive Trade Practices Act. The action of the respondent clearly amounts to imposing unjustified costs on the consumer manipulating conditions of delivery. The respondent has, therefore, clearly indulged in restrictive trade practices as well.
16. That brings us to the question as to how much compensation should be awarded to the applicant. Before quantifying the compensation we may add that the applicant has suffered loss as a direct consequence of the unfair and restrictive trade practice indulged in by the respondent. As a result of the failure of the respondent to effect satisfactory and lasting repairs the machine in question was lying in disuse for almost the entire length of time right from the beginning. Indeed, the machine was a deadwood'for the applicant for all practical purposes. Further, the applicant was forced to enter into a service agreement with the respondent even for the period covered by the warranty. The transaction was for the applicant more or less a total loss. It was, therefore, clearly entitled to get the entire amount of Rs. 43,100 which it paid for the machine. It is also entitled equally to a decree for interest on this amount at the rate of 18% per annum.
17. As regards the other items claimed by the applicant such as loss of goodwill and profits likely to have been earned if the machine had functioned properly, telephone expenses, rental for the shop, we find that the applicant has furnished no satisfactory evidence to prove the same. It has placed before us no details of the same or anything to establish its relation to the acts or omission of the respondent. We cannot accept the self-serving assertions of the applicant about all these losses without being supported by any reliable material.
18. In the result, the application is allowed. The applicant is granted a decree for Rs. 43,100 together with interest at the rate of 18% per annum from March 2, 1990, to the date of payment. It will, however, be open to the respondent to take back the machine in question and if the respondent so requests the applicant shall allow the respondent or its authorised representative to take back the machine from the applicant. The applicant will be entitled to the cost of these proceedings assessed at Rs. 2,000. The respondent is directed to pay costs and the aforesaid amounts, the principal and the interest thereon to the applicant within six weeks of the receipt of this order.