w w w . L a w y e r S e r v i c e s . i n

T. Nagaiah v/s M/s. Jain Irrigation Systems Pvt Ltd., Through Its Chief Executive Officer, Maharashtra & Others

    First Appeal No. 163 of 2014

    Decided On, 17 August 2020

    At, National Consumer Disputes Redressal Commission NCDRC


    For the Appellant: B. Shravanth Shanker, Advocate. For the Respondents: R1, Sandeep Narain, R2, B.V.V. Satyanarayana- Pioneer Drip System- In person, R3 & R4, Nemo (served).

Judgment Text

This appeal has been filed by the appellant T. Nagaiah challenging the order dated 02.01.2014 passed by the State Consumer Disputes Redressal Commission, Andhra Pradesh, (in short ‘the State Commission’) in CD No.04 of 2004.

2. The brief facts of the case are that the appellant/complainant entered into a joint farming agreement with some other farmers dated 12.03.1998 for taking up annatto crop in 70 acres of land of these farmers including 8 acres of the complainant and 10 acres land of wife of the complainant. For the project, the complainant was authorised by other farmers by way of General Power of Attorney to pursue all the matters for the implementation of the project. The appellant approached the respondent no.2, Pioneer Drip System Ltd. They installed the drip irrigation system manufactured by respondent no. 1, Jain Irrigation Pvt. Ltd. in the total area of about 70 acres in November- December 1998. In the year 2003, it was noted by the complainant that certain pipes of the drip irrigation system developed cracks and water got leaked and consequently the crop died due to shortage of water. The complainant then filed a consumer complaint before the State Commission. The complaint was resisted by the opposite parties by filing the written statement. The objections were raised in respect of General Power of Attorney in favour of the complainant and on the maintainability of the complaint. The State commission vide its order dated 13.03.2007 allowed the complaint and directed respondent No.1/manufacturer to pay Rs.26,25,000/- @ Rs.75,000/- per acre for 35 acres. Aggrieved by this order, respondent No.1 preferred an appeal no.392 of 2007 before this Commission and this Commission remanded the matter to the State Commission vide its order dated 16.10.2012 for deciding the complaint afresh after providing both the parties to lead evidence in their support. The State Commission has now dismissed the complaint vide its order dated 02.01.2014.

3. Hence the present appeal.

4. Heard the learned counsel for the appellant as well as learned counsel for respondent No.1 and respondent No.2 in person. Respondent Nos.3 & 4 did not appear even after service of notice. The learned counsel for the appellant/complainant stated that the State Commission was not correct in dismissing the complaint on the ground of maintainability because the complainant has filed the agreement for joint forming dated 12.03.1998 wherein under para 10 of the agreement, the complainant has been authorised to pursue all the matters pertaining to the project. Hence, observation of the State Commission that “the contents of the agreement made it clear that the other farmers had not authorized the complainant to file and prosecute the complaint before the commission or any court” is not correct. The Consumer Protection Act, 1986 is a beneficial legislation enacted for the benefit of consumers and if there is any lacuna in the wordings of the document it should be interpreted in favour of the consumers for providing the substantive justice.

5. Learned counsel for the appellant further stated that this Commission vide its order dated 16.10.2012 remanded the matter to the State Commission for deciding the complaint afresh and permitted the parties to submit the additional evidence, if any. The State Commission instead of discussing about these points i.e. on warranty period, letter dated 16.01.2003 and any other legal issues to be raised by the parties, has dismissed the complaint holding that the present complainant has no locus standi to file the complaint on the basis of agreement for joint farming without going into the merits of the case.

6. It was argued by the learned counsel for the appellant that the respondent no.1 misrepresented before this Commission stating that the dealership of Respondent No.2 was cancelled in the year 2000 whereas the same is contrary to the certificate issued by it. The certificate issued by Respondent No.1 clearly says that M/s. Pioneer Drip System Pvt. Ltd. is authorized dealer valid upto 31.03.2003.

7. It was stated that the respondent no.2/dealer has admitted that he had sent the information on 16.01.2003 but the respondent No.1 has not sent any engineer or given any reply. He several times requested the respondent no.1 to replace the defective material in order to maintain the cordial relationship with the customers. He has also stated that he discussed with their officer Mr. Ajit Jain regarding the complaint made by the appellant during the month of December, 2002 itself. He further stated that the officer of the respondent no.1 informed him that due to transporters strike in the State of Andhra Pradesh, the replacement of the defective pipeline could not be arranged. He categorically admitted that the respondent no.1 agreed to replace the lateral pipe 12 MM which got damaged as a special case as was mentioned by him in Exhibit A-4. He further disclosed that he has forwarded pipe sample, delivered challan details and invoice and the details to the respondent no.1. He denied that the respondent no.1 terminated his dealership in December 2000. It is relevant to submit here that in spite of the admission made by the respondent Nos.1 and 2 in respect of manufacturing defects in the pipes supplied by respondent no.1, the State Commission failed to consider the claim of the appellant.

8. Learned counsel for the appellant also stated that an express warranty should not be limit the buyer’s right for damages for latent manufacturing defect and the manufacture is liable for the defect and also liable to compensate the complaints for direct loss caused thereby.

9. Learned counsel for the complainant further stated that the State Commission has wrongly held that the complainant is not a consumer. Complainant is also a farmer. He purchased drip irrigation system, which had the manufacturing defect and therefore, he is a consumer of respondent No.1 and respondent No.2. All the farmers have contributed for the payment of this irrigation system and the complainant had paid Rs.8,03,343/- towards the cost of the irrigation system. It was further argued that the manufacturer has given warranty of three years whereas the manufacturer has also claimed the system to be ISI marked and as per the Bureau of Indian Standards (BIS) norms, life of the pipes of the irrigation system is 10 years, therefore, the manufacturer is cheating the purchasers by reducing the warranty period. If the material supplied is ISI marked, then the pipes should have lasted for 8-9 years, if not 10 years.

10. On the other hand, respondent No.2 stated that the receipt is in the name of the complainant and others, therefore, the complainant cannot file the complaint for all other purchasers and cannot claim the refund as well as damage on behalf of others. It was further stated that the complainant has alleged the manufacturing defect and therefore, respondent No.2 who is a dealer, is not concerned with manufacturing defect, therefore, no deficiency can be attributed to respondent No.2.

11. Respondent no.2 has further stated that it is wrong to say that the respondent no.2 was not a dealer of the respondent no.1 as the respondent no.1 has given a certificate on 1st April, 2002 stating that M/s. Pioneer Drip Systems Ltd. is their authorised dealer. It was stated that the Chairman/Director of the respondent no.1 had agreed to change damaged pipes, however the same were not changed.

12. The learned counsel for respondent No.1 stated that the complainant is not one of the six famers who had taken the “annatto plantation”. The complaint is in respect of the annatto plantation and therefore, the complainant is not the affected person, hence not a consumer. In fact, complainant had sown papaya plants and complainant had not alleged any damage to these plants. Each farmer had taken a separate loan and had separately availed the subsidy under the scheme from the State Government. The complainant had no locus standi to file the present complaint. Paragraph no.10 of the agreement does not state that any General Power of Attorney was given to the complainant for filing complaint on behalf of the other farmers and to bring them into litigation. Thus, the alleged power of attorney given to the complainant is not valid for the present matter and the State Commission has rightly dismissed the complaint. The State Commission has also observed that there is no proof that the complainant had grown annatto crop. Thus, there is no question of considering any loss due to damage in annatto crop. Though the irrigation system was laid in 72 acres of land, but the complaint has been filed only for those farmers, who had sown annatto crop. If the complaint is treated in the representative capacity then the complainant has not taken any permission from the State Commission for filing a complaint under Section 12(1)(c) of the Consumer Protection Act 1986. Thus, from this aspect also the complaint is not maintainable. It was further informed by the learned counsel for the respondent No.1 that the dealership of respondent no.2 was already cancelled. It was further argued by the respondent no.1 that the warranty is only for three years and no defects developed during the warranty period. If any defect develops after the warranty period, then the manufacturer is not responsible and the complainant has to get it repaired on his own. In total, the irrigation system was laid down in 90 acres and the defect was noted only in 25 acres and that too after the warranty period. Thus, no deficiency can be attributed to respondent no.1/the Manufacturer.

13. I have carefully considered the arguments advanced by both the parties and have examined the record. There is no doubt that a joint farming project was initiated by some farmers including the complainant and the complainant was given the General Power of Attorney to take up all actions and steps for the implementation of the project. Clause 10 of the agreement reads as under:-

“10. That all the members hereby authorise and give general power of attorney to Shri T. Nagaiah, as the authorised signatory, to deal with all the matters pertaining to the project including opening of Bank Accounts, signing of deeds, documents, instruments, to receive and to repay loans, to purchase implements, inputs, services etc., to sell, lease, and realise the outputs, crops, bye-products, to recruit and control workmen, and to do all such other deeds and acts which are warranted in the overall implementation of the project and to pursue the farming. The members further declare that all the commissions and omissions committed by the Authorised Signatory are binding upon all members and this general power of attorney is irrevocable until, all charges, lieans and liabilities to the Bank and others are cleared and discharged.

14. This clause of the agreement reveals that the power of attorney has been given for the deeds and acts which are warranted in the overall implementation of the project and to pursue the farming. Clearly, the implementation of the project warranted that the damaged irrigation system should be repaired or replaced or the project be compensated and for that matter, complainant was impliedly authorised to pursue for repair/refund from the respondent nos.1 & 2, but when it came to filing of the complaint under a particular Act and in this particular case, the Consumer Protection Act, 1986, then the requirements of the Act are also to be fulfilled. Under Section 12A individual complaint can be filed and in 12(1)(c) of the Consumer Protection Act, 1986 joint complaint can be filed by any one complainant, however, in that situation, permission is required to be taken from the consumer forum, which has not been obtained in the present case. Thus, in my view, the complainant was not authorised to file the complaint on behalf of other farmers. It is not disputed that the complainant is one of the farmers who combined themselves for the joint project for raising annatto crop. In the agreement, it is mentioned that he has given 8 acres of land and his wife has given 10 acres of land. Thus, in total 18 acres of land has been given by the complainant including his wife. The observation of the learned State Commission that the complainant has not grown annatto crop, seems to be unfounded because the report of the Horticulture Officer dated 29.07.2003 has indicated that the Horticulture Officer inspected the damaged crop of annatto plantation. The following are some of the observations of the Horticulture Officer who inspected the crop:-

“The Dead plants were showing severe infestation of termites even the live plants were covered with mud gullies of termite, it shows that no intercultural operation, were taken up from last 6 to 7 month.”

He has taken drip Irrigation system in year 1998 through Pioneer Irrigation system Limited and also a dealer for Jain Irrigation Pvt. Ltd. Office at Hyderabad. He also received 90% subsidy through Government of Andhra Pradesh under Micro Irrigation Scheme.

As after noticing the cracks developing an the letters of drip system he had neglected the plant protection measures which were to be taken against termites”

Only after receiving the lawyer notice of Sri. Serla Pandari in the month of July, 2003 Department of Horticulture sent an enquiry immediately on 24.07.2003 to collect the samples of lateral pipes and to study the field situation and causes for the death of the plants. Only after thorough survey and inspection 1 conclude that the farmer had not communicated his field problem with the Department of Horticulture regarding Drip Irrigation System and plant protection measure in time. I am submitting the samples collected from Sri. T. Nagaiah and his brothers Annatto field.”

15. From the above observations of the Horticulture Officer, it seems that there was annatto crop planted in the field of the complainant, which was found damaged by the Horticulture Officer. Horticulture Officer has not clearly stated that the crops were damaged by leakage of water through cracks which developed in the pipes of drip irrigation system, rather he has also stated that the complainant neglected the plant protection measures for saving the crop. This report also mentions the following:

Soil type and problems related to the soil.

Mr. T. Nagaiah has taken up Annatto in a vergin land, previously there was no plantation, he had modified the land and followed the cultivation practice of Annatto.

The soil is Red Sandy loam good for cultivation of Annatto. The soil also harbors the termites or white ants because of good aeration. These white Ants are in abundant which require plant protection measure in fortnight interval. These white Ants feeds on the root and bark of the plant under mud galleries white ants is a serious problem in this soil.”

16. From the above facts, it seems that the leakage of water through damaged pipes may not be the sole reason for damage to the crop though it may have contributed to a significant extent. The another report of Assistant Director of Horticulture dated 13.11.2002 confirms that the subsidy was released to respondent no.2 M/s. Pioneer Drip Systems Ltd. Secunderabad. after confirming the ISI standard pipes. Another report of Assistant Director of Horticulture dated 10.06.2005 states the following:-

“g. Drip laterals are spread here and there and longitudinally broken.

h. No irrigation or watering is found to be given for the past 1 years.

i. Total drip system is collapsed as the laterals are found in heaps of bunds of the orchard.

j. Near about 25% of the total plant population is dead and the remaining also are about to die due to negligence of field and no proper maintenance.”

17. From the above it is also clear that the drip irrigation was not functioning from the year 2003 and the crop had suffered badly because of this reason. It is thus clear that the complainant had suffered loss due to damage to annatto crop, due to failure of the drip irrigation system though there have been some other reasons also for damage to the crop. Clearly, the services of respondent Nos. 1 & 2 have been deficient because the normal expected life of the pipes of drip irrigation is 10 years as per BIS standard though the opposite parties have given the warranty of only three years even after claiming the pips to be of BIS standard. Even if one does not consider the present complaint as filed under Section 12 (1)(C) of the Consumer Protection Act, 1986, the present complaint can definitely be considered as filed by the complainant in his own capacity. From this perspective, the complainant and his wife have contributed 18 acres of land to the project, which is about 1/4th of the project land. Thus, even by considering the present complaint as filed by the complainant only, the complainant is entitled to get compensation for loss suffered by him and his wife. As drip irrigation system did not work for the expected life, the opposite parties No.1 & 2/ respondent Nos.1 & 2 are jointly responsible for refunding 1/4th of the cost of irrigation system. As the total cost of the system is Rs.8,08,000/-, which was partly paid by the complainant on behalf of the project farmers and largely paid by the Government of Andha Pradesh by means of subsidy. The report of the Horticulture Officer clarifies that the amount of subsidy was 90%. Thus, opposite parties Nos.1 & 2/respondent Nos.1 & 2 are required to refund Rs.2,00,000/-, which is 1/4th of the total cost of the irrigation system. Out of this Rs.2,00,000/-, Rs.20,000/- is to be refunded to the complainant and Rs.1,80,000/- is to be refunded to the State Government. As it will be difficult to refund the amount in the Government Exchequer, it is directed that the amount of Rs.1,80,000/- be deposited with the State Consumer Welfare Fund.

18. Though the complainant has claimed about Rs.60,00,000/- for loss to the whole project, but for hi

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s own land of 18 acres, he can only claim about 1/4th which will be Rs.15,00,000/-. The reports of the Horticulture Officer and the Assistant Director of Horticulture have clarified that the complainant has not taken up inter-cultural operations and plant protection measures properly and therefore, the total loss of crop cannot be attributed to the failure of the irrigation system. However, it is clear from the report of the Assistant Director Horticulture dated 10.06.2005 that the damage to the drip irrigation system has played havoc with the crop. The complainant has stated in the complaint that the cost of cultivation is about Rs.17,000 per acre and thus, the cost of cultivation for 18 acres comes to about Rs.3,00,000/-. Accordingly, treating the contribution of damage to irrigation system as 2/3 of the loss of cost of cultivation, the complainant deserves a compensation of Rs.2,00,000/- for the cost of cultivation even if any profit is left out. 19. On the basis of the above discussion, the first appeal no.163 of 2014 is partly allowed and the order dated 02.01.2014 passed by the State Commission in CD No.04 of 2004 is set aside. The respondent Nos.1 and 2 are directed jointly and severely to; 1. pay Rs.20,000/- (rupees twenty thousand only) to the complainant along with interest @6% p.a. from the date of filing of the complaint till actual payment. 2. deposit Rs.1,80,000/- (rupees one lakh eighty thousand only) with the State Consumer Welfare Fund along with interest @6% p.a. from the date of filing of the complaint till actual deposit in the State Consumer Welfare Fund as return of State Government subsidy. 3. pay Rs.2,00,000/- (rupees two lakhs only) to the complainant along with interest @6% p.a. from the date of filing of the complaint till actual payment. 4. pay Rs.10,000/-(rupees ten thousand only) as cost of litigation to the complainant. 5. comply with this order within eight weeks from the date of receipt of this order.