P.D. Shenoy, Member
1. This is a case in which manufacturing defects were noticed in the Vacuum Spectro Analyser sold by M/s. Thermo Jarrell Ash Corporation to M/ s. Pearlite Liners Limited during the warranty period. Accordingly, the complainant-purchaser of the instrument filed this complaint for replacement of the instrument or in the alternate pay a sum of Rs. 25,39,725 , the amount spent for the equipment and its transportation and installation along with interest @ 20% from the date of installation till realisation of the amount.
Case of the complainant:
2. M/s. Pearlite Liners Limited, Shimoga a registered Medium Scale Industry is engaged in the manufacturing of liners, cast iron castings, etc., for supplying to various customers like Ashok Leyland, Steel Authority of India Ltd., Hindustan Motors, etc. The customers required certain proportion of the alloys as the standard material in the end product. To maintain the standard quality, quantity, precise and definite mixing of proportion is imperative. Therefore, the company opted to buy a Spectro Analyser manufactured by opposite party No. 1 - M/s. Thermo Jarrell Ash Coprorafion. Accordingly, the complainant placed an order for TJA 181 Vacuum Spectrometer at a total cost of Rs. 25,39,725.
3. It is the say of the complainant that from the day one this equipment started giving trouble which had an initial warranty for 12 months against the manufacturing defects. The equipment was installed on 17.12.1993.
4. Ms. Annapoorani, the learned Counsel for the complainant listed the defects noticed in the functioning of the equipment and efforts made by the authorised service engineering firm (opposite party No. 2) in trying to rectify the same.
Within four months of its installation i.e. on 13.4.1994, the Thermo Space Software was not working properly and the Service Engineer was called and he reported that the software is corrupted and reloaded the software.
Thereafter, between 20.4.1994 to 22.4.1994, the instrument did not work and the Service Engineer detected the problem in the non-return valve of the vacuum pump and promised to take necessary action. He also noted that, arrangement will be made to send the item by 25th April to PLL (Pearlite Liners) Office, Bangalore.
Thereafter, within a month on 16.5.1994 the Service Engineer changed the 'O' ring since it became hard and made the machine working only to a satisfactory level.
Thereafter, on 27.6.1994, Mr. Subramanya of I R Technologies informed that they had discussions with M/s. TJA U S on Fax abd that Mr. Chetan is coming on 30.6.1994 for further check-up. In their job description, they admitted that to check the wave from at the high voltage ignition gap, and the spark gap, a high voltage probe will be required which will be brought from Bangalore. It was also mentioned that the instrument is yet to be rectified for the above defect (spark and excitation) and necessary action to be taken for the above defect at the earliest
Within three days of the service, again between 30.6.1994 and 2.7.1994, the IC -U9 on the source control board failed, due to which the relay toggled between 400V to 600V. Though the IC-U9 source control board was replaced, the SCR was not replaced for the source to function normally. The Service Engineer also noted down as follows 'the SCR Potentiometer and chamber doom needs free replacement at earliest. Work has stopped.
Within four days i.e. between 6.7.1994 and 7.7.1994, the Service Engineer had to be called, who changed the SCR but gave a report that the capacitors charge is not building up to more than 500V because of which the source is unable to excite high silicon and low carbon samples. They also wrote that the matter will be taken up with TJA and the capacitors will be replaced as soon as possible. The Service Engineer on 7.7.1994 wrote that the equipment is not in working condition and requires measures to put back into service at the earliest.'
Between 25.7.1994 and 27.7.1994 the Service Engineer had to be called wherein he stated that the filtering capacitors need to be checked and hence they are to be taken to Bangalore. He also observed that the problem with the source is not responding to high silicon samples and will be solved as soon as possible.
Again between 1.8.1994 and 4.8.1994, the Service Engineer had to be called wherein the Service Engineer admitted that the chamber doom of the petry stand has flashed over a few times and needs to be replaced. He also said that the same is being arranged as warranty replacement from M/s. Thermo Jarrell Ash Corporation (respondent No. 1), USA, immediately. The Service Engineer mentioned that the equipment was stopped from 21.6.1994 to 4.8.1994. Thereafter on 2.9.1994, the Service Engineer said that the cylinders supplied by the Asiatic Industrial Gases were not good and recommended that IOLAR Grade 1 be used.
Thereafter, within 55 days i.e. on 28.10.1994, the Service Engineer suggested that there is no improvement while doing both manual and automatic profiting and that the Hg lamp needs to be replaced. He also mentioned that the problem with the DIVA source needs to be rectified. It was also mentioned that the equipment was stopped from 21.10.1994. Earlier the equipment had stopped from 21.6.1994 to 4.8.1994.
Within three days i.e. on 1.11.1994, the Service Engineer detected a problem in the source control board and said that it will be rectified as soon as possible. The Service Engineer was not able to rectify it then and there. He took inductor L-3 of the source to Bangalore to get it checked.
Between 8.11.1994 and 10.11.1994, the Service Engineer again detected a problem with the filtering capacitor and said that the capacitors will be bought in Bangalore and replaced as a temporary arrangement He also mentioned that the instrument will be put back to function as soon as possible.
Within three weeks i.e. 28.11.1994, the Service Engineer, detected the problem with the filter capacitors. He also said that Thermo Jarrell Ash (Respondent No. 1) will be consulted for the above said problem and actions shall be taken at the earliest
Towards the end of the warranty period i.e. 9.12.1994, the Service Engineer was called wherein he admitted that the source will be made alright after receiving the capacitor as warranty replacement from M/s. TJA Corporation (respondent No. 1). The complainant on that day requested the respondent No. 2 to put the instrument in working condition at the earliest
However, on 4.1.1995 the Service Engineer replaced:
(a) 180 Pf 40 KV Capacitors
(b) Flex collet - 2 Nos. 'O' ring - 8 Nos. were handed over to the customer as warranty replacement
(c) The vacuum safe valve was replaced
Thereafter, on 10.5.1994 the respondent No. 2 informed the complainant that they have informed respondent No. 1 about the problem and that Mr. Chetan will visit their factory shortly. They also assured that if it is not possible to repair the pump, M/s. Thermo Jarrell Ash Corporation will send a new pump under warranty. They also undertook to solve the problem as early as possible.
Again on 5.8.1994, the complainant brought to the attention of Dr. K.S. Kim, that the TJA 181 Spectrometer though installed eight months ago is not giving satisfactory performance. Since the complainant did not get a reply from the respondent, sent a Lawyer's notice on 6.12.1994. The complainant also brought to the notice of the respondent that there is a manufacturing defect in the equipment This was reiterated by another letter from the complainant on 14.12.1994.
The Service Engineer/ respondent No. 2 on 16.12.1994 informed the complainant that they have already informed respondent No. 1 and that they have agreed to send the spare parts of the machinery by DHL Couriers.
However, on 23.12.1994, the respondent No. 2 informed the complainant that the spare parts required for rectifying the instrument has been sent by the respondent No. 1 on 19.12.1994 and that they will take up the servicing of the equipment.
The complainant on 28.1.1995 addressed a letter to the second respondent wherein they say that the machine was operated only for 108 days out of 365 days and since the Spectrometer is not working to the satisfactory level and requested them to arrange for a free replacement of the entire equipment. A legal notice asking for the replacement of the entire equipment was also sent to both the respondents.
The first respondent vide their letter dated 10.12.1995 admitted some unresolved question about the accuracy of the measurement and that the respondent No. 2 would continue to provide assistance. They also added that in view of the problems experienced during the period after installation they would extend the warranty on the instrument upto 30.9.1995. This is the first time after a lapse of more than 13V4 months the respondent No. 1 corresponded with the complainant company.
The complainant in reply to the letter dated 10.2.1995 of the respondent No. 1 expressed that the respondent No. 2 have failed to identify the defect, and requested the respondent No. 1 for a free replacement of the equipment. In response to this the respondent No. 1 on 20.6.1995 stated that, as a sign of good faith, they have extended the warranty until September 1995 and that it will ensure trouble free operation, It is pertinent to mention here that the machinery did not perform well and the details of further breakdowns and repairs after 1.3.1995 are exhibited in Ex-P 43 at page 81. The machine worked for only 108 days in the whole year from December 1993 to December 1994, which was well within initial warranty period. Even after the extension of the warranty the machinery did not function properly. The respondent No. 1 who gave quality assurance of TJA 181 Optical Emission Spectrometer, did not supply the desired quality machinery though they claimed to be the suppliers of quality products for more than 50 years. Hence, there is a gross deficiency in service.
5. Ms. Annapoorani, the learned Counsel has stated that in several judgments, this Commission has held that even though the equipment is bought for commercial purposes, if any, manufacturing defect is noticed, during the warranty period, then this will be construed a deficiency in service and the buyer would be deemed to be a consumer. As the deficiency persisted during the warranty period, the manufacturer/seller have extended the warranty period by 9 months i.e. upto September 1995 which dearly shows that there is deficiency in service.
6. Ms. Annapoorani also gave a statement of damages under different heads in a tabular form which is reproduced below.
----------------------------------------------------------------- S. Particulars Amount in No. Rupees -----------------------------------------------------------------
1. Towards the costs of replacement
of spare parts done by the respon-
dent Service Engineers. 1,78,241
2. Under the head of service charges
for attending the services during
the relevant period. 37,557
3. Towards the cost imposed as an
additional expense for Argon
Purifier. 39,000
4. Cost towards the installation of the
Air Conditioner. 15,000
5. Towards the running of Chemical
Laboratory for 297 days during the
breakdown period. 2,17,404
6. Towards the running of Chemical
Laboratory for 128 days during the
break-down period between January
1993 and January 1995. 93,686
7. Interest at the rate of 20% for 12
months from December 1993 and
January 1995 on the cost of equip-
ment Rs. 24.40 lakh. 4,88,000
8. Towards the damages suffered by
the complainant for the deprivation
of the comforts of new and fresh
equipment, the tension, mental
agony, anxiety, etc. 6,00,000
------------
TOTAL AMOUNT 16,68,898 -----------------------------------------------------------------
7. Ms . Surekha Raman, the learned Counsel for M/s. Thermo Jarrell Ash Corporation (opposite party-1) submitted that evidently this equipment was used by the purchaser (complainant) for commercial purposes and it was put to full use on day to day basis. Though the equipment was of an international standard, as the buyer did not have any experience in using such a sophisticated equipment, used the equipment in an inappropriate and improper manner. The complainant did not install a proper stabiliser, computer and also software. Though some minor defects were noticed from time to time, the Service Engineering Firm namely M/s. I.R. Technology Services Private Ltd., rectified the same promptly to avoid any inconvenience to the buyer. Further, the Service Engineer used to make routine monthly visits to the factory premises of the buyer as the latter was inexperienced in handling such a sophisticated equipment. All parts were replaced free of charge during the warranty period.
8. She further submitted that the question of replacing the machinery/equipment at this distant time does not arise for the simple reason that the equipment is functioning perfectly e.g., on 23.10.1999 the complainant M/s. Pearlite Liners Ltd. had written a letter to M/s. I.R. Technology Services Pvt. Ltd., (respondent No. 1) in the following words:
We have received your fax asking particulars of the spectrometer. Please find herewith the following details:
Model No. TTA ATOM
COMP 181 VAC
S. No. 83 394
Year of Installation 1994
Computer Model 386
Dose version 6.22
Thermospec version 5.06
Present usage of the Presently using continu- Spectrometer ously on all working days (24 hrs/day)
Hope we have given all the details. If in doubt contact us.
9. She has also stated that as recently as on 21.1.2004 the complainant wanted to purchase a spare part namely Solenoid Valve for the Spectormeter Model TJA 181 by writing a letter to M/s. I.R. Technologies Services.
Subject: Request for Solenoid valve for our Spectrometer Model TJA 181.
Further to the telecom the undersigned had with you, please find here below the details of the Solenoic valve which we had asked. Part Name Solenoid Valve 2 way
Part No. 130135-01
Title Assy' manifold
Org No. 131406-00
Revision
Kindly offer your lower quotation at the earliest and oblige.
The foot note to that also indicated that the instrument is working and is in use.
10. Ms. Surekha Raman also submitted that the equipment has been working satisfactorily and the alleged minor complaints in the performance of the equipment were due to causes attributable to the complainant and its negligence is mainly due to the following reasons:
(a) the approved standards of calibrations to cover analytical programmes were not adopted by the complainant;
(b) the complainant failed to use Argon Gas of standard quality and adequate purity in the chamber;
(c) the complainant failed to stabilise the power supply and did not regulate power flow, which resulted in erratic supply causing spikes and transients and damage to the instrument and also resulted in malfunctioning of the instrument;
(d) the complainant defaulted by not using a computer devoted exclusively to the subject equipment as repeatedly advised but instead loading various softwares into one computer, including the software required for running the subject equipment;
(e) the operators of the complainant mis-used the equipment by opening the entrance window without isolating vacuum and by using emery paper for cleaning the chamber door and entrance quartz widows which are otherwise sensitive and have to be cleaned by specific quality functions;
(f) the equipment was running satisfactory as determined during the inspection by the inspectors of opposite party No. 2 and the complainant is carrying on its business in fact using the subject equipment.
11. Further she submitted that the statement of damages under different heads claimed by the complainant are not relevant for the reasons mentioned against them:
------------------------------------------------------------
1. Towards the costs of All these expenses were replacement of spare incurred is given in parts done by the Exhibit P-46, Vol-11 (page respondent Service 86) after the extended Engineers warranty period i.e. from 3.11.1995 to 7.8.1998,
hence they are not
payable.
2. Under the head of These expenses were service charges for incurred from 23.9.1996 attending the services to 11.11.1998, as these during the relevant were beyond the extend- period. ed period of warranty, the service charges had to be
paid and hence, the claim
is baseless. (Exhibit P-46,
Vol-II (Page 88).
3.& Towards the cost im- This is an essential part
4. posed as an additional which had to be bought. expense for Argon
Purifier and Cost to-
wards the installation
of the Air Conditioner.
5. Towards the running The break-up of running of Chemical Laboratory of Chemical Laboratory for 297 days during the has not been given. breakdown period.
6. Towards the running There appears to be of Chemical Laboratory overlapping between for 128 days during the item Nos. 5 and 6. breakdown period
between January 1993
and January 1995.
7. Interest at the rate of As there was no manu- 23% for 12 months facturing defect, item from December, 1993 No. 7 is not payable. and January 1995 on
the cost of equipment
Rs. 24.40 lakh.
8. Towards the damages Vague, hence, she suffered by the com- submitted that there plainant for the depri- is no amount is
vation of the comforts payble.
of a new and fresh
equipment, the tension,
mental agony, anxiety,
etc.
------------------------------------------------------------
Findings:
12. The first issue is to be determined as to whether the complainant qualifies to be a consumer. In a catena of judgments, this Commission has held that even though the equipment is purchased for a commercial purpose, if there was a defect or deficiency of service during the warranty period the buyer is deemed to be a consumer, some of which are quoted below:
In UA Md Ali Raja v. Godrej Photone Ltd., and Ors. this Commission has held that under Section 2(l)(d)(ii) of the Act, a person can be construed a consumer if he hires or avails the services of the opposite party for consideration and if there is any deficiency in service, then such a person can be construed a consumer even though the hiring or availing of such services was for the purpose of commercial venture. The deficiency in service in such eventualities on the part of the opposite party seller must accrue during the warranty period as had been stated by the National Commission in decisions more than one. In this case on hand, there is no whisper or murmur as respect the period of warranty given by the opposite parties.
In M/s Olympic Zippers Pvt. Ltd. v. KC Cherian and Anr. I (2002) CPJ 11 (NC). this Commission has held that deficiency "in service - saviour attendance and payroll manager ordered to be taken back with Rs. 5,000 as damages and Rs. 4,000 as legal expenses - machine not functional - it obliges the respondents to provide proper service to the petitioner so that the machine is functional - there is certainly deficiency in service on the part of the respondents.
In M/s. Tinkle Bells Enterprises v. Slate of Rajasthan I (2003) CPJ 71 (NC), this Commission has held that 'deficiency in service - EPBX system purchased - equipment damaged due to frequent voltage fluctuations - Appellant repudiated liability on the plea that warranty was to cover any manufacturing defect and not for loss on any other count - complaint seeking refund with interest-State Commission held appellant deficient in rendering the service - held material reproduced corroborates the same.
In Satelee Power Electronics (P) Ltd. v. National Research III (2002) CPJ 124 (NC), FA No. 498/1995 decided on 25.2.2002, this Commission held that Section 2(1 )(g) - deficiency in service for the defects developed in UPS, not rectified. Appellant certainly deficient in service.
In State Government of Maharasthra v. Hindustan Computer Ltd. I (2000) CPJ 13 (NC), O.P. No. 292/1993, decided on 25.11.1999, this Commission held that when the photocopier machinery gave the result much below than committed, the complainant was entitled to compensation.
In Jai Industries v. N. Babhraiah Acharya and Ors. R.P. No. 1758/2001 decided on 22.11.2001, this Commission held that the machine purchased was defective causing great loss and harassment to the complainant and that both the seller and the manufacturer were liable to refund the amount of the price of the machine with interest.
13. Hence, it is very clear that M/s. Pearlite I- Liners Ltd., is a consumer and is entitled for protection under the Consumer Protection Act. The detailed chronological events narrated by the learned Counsel for the complainant make it clear that the equipment supplied has suffered from manufacturing defects during the warranty period and opposite party had deputed their Service Engineer on a regular basis to rectify the defects. The learned Counsel has filed Exhibit P-17 on 6.3.1994 to Exhibit P-33 on 3.3.1995 which are copies of the services reports which are indicative of the defects noticed and rectified.
14. On 5.8.1994 the complainant wrote to opposite party No. 2, the text of the letter is reproduced below:
We invite your kind reference to the placement of order by us for supply of one No. Thermo Jarrell Ash make TSJ 181 Vacuum Spectrometer, manufactured by M/s. Thermo Jarrell Ash Corporation, Franklin, USA and subsequent developments thereon and we wish to write to you that even though it is more than 8 months of installation, it is not giving satisfactory performance.
You are kindly aware that we had received the equipment during the month of December 1993 and a thereafter your Engineers have been on frequent visits and attending the work of setting the equipment for satisfactory performance. Inspite of this, it is not giving consistent results.
During the process of correction and setting us, your Engineers have not left almost any part untouched by them and you are fully aware of this.
We have already brought this to your kind notice on several occasions/on telephone that the equipment is not giving the expected performance and the guarantee period is coming to an end. We presume that there is a manufacturing defect in the equipment itself. We are afraid that we will be in trouble once the warrantee period is over. Kindly let us know the performance of your equipment supplied to other parties.
You are aware that we have invested around Rs. 30 lakh and even after 8 months, we are not in a position to depend on the results given by the equipment, which has become inconsistent and consequently, we have not been able to use the equipment.
Inspite of your technicians doing all that they have been able to do, they have not been able to set the equipment right. We now call upon you to arrange for free replacement of the entire equipment within one month from this date failing which we will have no option except to proceed legally in terms of guarantee given by us (sic. you) as well as your principal.
We are also endorsing a copy of this letter to your Principals namely M/s. Thermo Jarrell Ash Corporation, Franklin, USA, who may not be aware of the facts i.e., about in-built manufacturing defect in the equipment itself.
This clearly indicates that there were manufacturing defects and there was deficiency in service by the seller of the equipment i.e., opposite party No. 1.
15. The third issue to be determined is whether equipment requires to be replaced as claimed by the complainant. This issue has been answered by the learned Counsel for opposite party No. 1 by filing the lettered dated 23.10.1999 written by M/s. Pearlite Liners Ltd., to M/s. I R Technologies Services (Pvt.) Ltd., the crucial sentence in which reads as follows:
Present usage of the Presently using conti- Spectrometer : nuously on all working days (24hrs/day).
(emphasis supplied)
This shows that the equipment is functioning properly at present, hence, the question of replacement of equipment does not arise at this distance of time.
16. The only issue remains to be decided is, what is the compensation to be awarded. The complainant has given the statement of damages under different heads which is listed by us earlier at para No. 5. It is clear from the analysis of submissions made by the learned Counsel for opposite party No. 1 that item Nos. 1 to 4 are not eligible for reimbursement and there is overlapping between item Nos. 5 and 6. Accordingly item No. 6 is subsumed in item No. 5. The equipment in question could beput to use only for 100 days out of the 365 days of the first year, whereas in 1999 it was put to use in all the days of the year (emphasis added). The complainant has invested more than Rs. 25 lakh to buy this expensive equipment and there is enough evidence on record that manufacturing defects were noticed during the warranty period. Opposite party No. 2 had to make regular trips to the factory premises to repair the equipment. This has also caused mental agony and truama to the complainant. Therefore, it is crystal clear that there is deficiency in service rendered by the opposite party No. 1, i.e., M/s. Thermo Jarrell Ash Corporation.
17. Accordingly, in the fitness of things we feel that a lump sum compensation of Rs. 5 lakh (Rupees five lakh) requires to be awarded to the complainant. Therefore, we direct that the opposite party No. 1, shall pay Rs. 5 lakh to the complainant along with interest @ 9% per annum from the date of the complaint till the date of payment. In view of the peculiar facts and circumstances of the case there shall be no order as to cost.
