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P.L. Birla Paper Product Machines v/s Vidyasagar Panicker

    First Appeal No.440 of 2011

    Decided On, 16 October 2012

    At, Kerala State Consumer Disputes Redressal Commission Thiruvananthapuram

    By, THE HONOURABLE MR. K. CHANDRADAS NADAR JUDICIAL MEMBER

    For the Appellant: C.S. Rajmohan, Advocate. For the Respondent: ----------



Judgment Text

SHRI. K. CHANDRADAS NADAR, JUDICIAL MEMBER

The appellant was the opposite party in CC.121/11 in the file of CDRF, Palakkad. The respondent was the complainant. It is alleged in the complaint that the complainant had placed an order for paper napkin making machine with the opposite party on 31.8.10 with the intention of starting a Paper Napkin Manufacturing business. An advance amount of Rs.1 lakh as Demand Draft from State Bank of Travancore was given along with the order in the name of paper product machines. The fund for the business was raised by way of loan from the State Bank of Travancore, Kollenkode Branch. The construction of the building and other facilities was started on 5.9.10. But the construction was delayed due to increase in the price of construction materials. The complainant could not complete the construction of the building to house the business within the time limit of 19.2.11. The bank demanded repayment of the loan instalments from 19.2.11 as per the repayment schedule. Under the above circumstances due to financial problems, the complainant cancelled the order for the machine on 5.5.11. The complainant requested the opposite party to refund the advance paid to them. But the opposite party has not returned the advance amount. The opposite party has agreed that the advance amount will be deducted from the bill amount at the time of delivery of the machine. The complainant paid the advance amount in good faith. The act of the opposite party amounts to deficiency in service and unfair trade practice. Hence the complaint seeking refund of the advance amount of Rs.1 lakh with interest and compensation.

2. Once the matter was decided ex-parte by the CDRF, Palakkad. That order was challenged before this Commission and the matter was remanded back with direction to afford opportunity to the opposite party to file version and adduce evidence. Thereafter, the opposite party filed version and contended that the complaint was not maintainable before the CDRF, Palakkad. The appellant admitted that an advance amount of Rs.1 lakh was paid by the complainant. The purchase order was placed on 31.8.10. In obedience to the order, the opposite party manufactured the machine and requested the complainant through telephone to collect the machine after paying the balance amount. Thereafter, the appellant sent letter dated 27.11.10 requesting the complainant to collect the machine and pay the balance amount. Thereupon the complainant sent a cancellation order. The opposite party has spent a large amount for manufacturing the machine in compliance with the order dated 28.6.10. The complainant is not entitled to get refund of the advance amount. On the contrary he is liable to pay the balance amount of Rs.4,64,560/- with penal interest at the rate of 24% per annum. The opposite party sent notice through their lawyer on 16.5.11 to the complainant intimating him that legal proceedings would be initiated against him for his failure to collect the machine after paying the balance amount. The complainant did not respond. The machine was specifically manufactured as per the order of the complainant deviating from the other machine. There was no deficiency in service on the part of the appellant and hence the complaint was liable to be dismissed.

3. After remand, the complainant was examined as PW1. Exts.A1 to A5 were marked on the side of the complainant. No oral evidence was adduced by the opposite party/appellant. Exts.B1 to B6 were marked on the side of the opposite party/appellant. The CDRF, Palakkad as per order dated 23.3.12 directed the opposite party to pay to the complainant an amount of Rs.90,000/- and cost of Rs.1000/-. Hence the appeal by the aggrieved opposite party.

4. The point that arises for consideration is whether deficiency in service on the part of the appellant is established and whether the forum was right in directing refund of 90% of the advance amount.

5. Admittedly, the complainant with intention of starting a paper napkin manufacturing business raised loan from the State Bank of Travancore, Kollankode branch, and started construction of building to house the business and other facilities. It appears that tender was invited for supplying necessary paper product making machine. In response the appellant submitted Ext.B2 quotation dated 28.6.10 specifying the details of their machine which was valued at Rs,5,50,000/-. The terms and conditions were also specified in Ext.B2. Admittedly the complainant placed Ext.B3 purchase order dated 31.8.10 along with a demand draft issued from the State Bank of Travancore for Rs.1 lakh as advance. It was mentioned that the balance price would be paid at the time of delivery of the machine after satisfactory trial run at the works of the appellant. Delivery of the machine was to be made within 3 months from the date of the order. The inspection and trial run was to be conducted at the works of the appellant. The complainant wanted guarantee for a period of 12 months for the machine.

6. It is the case of the appellant that in compliance of the purchase order they manufactured the paper napkin manufacturing machine and contacted the complainant asking him to collect the machine after paying the balance amount. PW1, the complainant has admitted that he had received such telephone calls. The complainant has denied the allegation that he had received Ext.B4 notice dated 27.11.10 whereby he was requested to collect the machine immediately and pay the balance amount. But, on 5.5.11 as per Ext.B3 letter, the complainant cancelled the order placed on 31.8.10 due to unavoidable reason and sought refund of the advance amount. Thereupon the appellant wrote back repeating the request in Ext.B4 (vide Ext.B5).

7. Thus it is quite obvious that the complainant accepted the tender of the appellant and placed purchase order. The machinery was to be supplied within 3 months from the date of the purchase order that was on or before 30.11.10. Before that, the appellant has written Ext.B4 letter requesting the complainant to collect the machine after paying the balance amount. The contention that the letter was not received is obviously not correct. It is quite obvious from the allegations in the complaint that financial difficulties on the part of the complainant alone was the reason for the cancellation of the purchase order placed with the appellant. Under the said circumstances no deficiency in service on the part of the appellant can be made out. The Forum was of the view that since nowhere in Ext.A1 quotation, it was mentioned that the advance amount will not be refunded, they were bound to refund the advance. But it is the definite case of the appellant that they have suffered loss be cause of the failure of the complainant to collect the machine after paying th

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e balance amount. But it is not for a Consumer Disputes Redressal Forum to go into questions such as whether there was actual loss due to breach of contract on the part of the complainant and the extent of loss suffered by the appellant. On the facts and circumstances disclosed there was no deficiency in service on the part of the appellant. Hence the CDRF, Palakkad erred in directing refund of 90% of the balance amount, which was done for no obvious reason. Hence the appeal is liable to be allowed. In the result, the appeal is allowed. The order of the CDRF, Palakkad in CC.121/11 dated 29.3.12 is set aside. The complaint is dismissed. Considering the facts and circumstances of the case, the parties are directed to bear their costs in the appeal.
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