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2009 DIGILAW 519 (JK)

Chairman KAYDEES Pvt. Ltd. v. Zulfkar Ali Beigh

2009-10-29

G.D.Sharma, Rifat Aijaz

body2009
G.D. Sharma, J. 1. Through the medium of this appeal order dated 28.11.2006 passed by the learned Divisional Consumer Protection Forum Srinagar, (hereinafter to be referred to as `the Forum'), has been challenged. In terms of the impugned order, the learned Forum has directed the appellant herein to pay an amount of Rs. 174631/- to respondent No. 1 alongwith 8% interest from the date of purchase of three wheeler mini door pick up with TD-499-LC Diesel Engine (3)45x10-8 ply tyres, till realisation. Compensation in the amount of Rs. 20000/- has also been awarded for the loss suffered in business alongwith litigation expenses in the sum of Rs.3000/-. 2. Brief facts of the case are that respondent No. 1 purchased the abovesaid vehicle from respondent No. 5 alongwith accessories for a consideration of Rs. 3.00 lacs. The vehicle was plied for some time and defects surfaced. According to respondent No. 1 (complainant) there were inherent manufacturing defects and despite best efforts being made could not be removed. The vehicle was taken to Jammu in the workshop of the appellant for effecting repairs. Respondent No. 1 received information from the respondents that those defects had been removed but after making a visit to the office of the appellant it was found that the vehicle was in the same defective position. On 25.4.2002, complaint was filed in the Forum, which was allowed by granting the abovesaid reliefs. 3. Written versions were filed before the Forum by respondents Nos. 2 to 5 except by the appellant herein in the appeal it is pleaded that when the complaint was filed the Managing Director of the appellant had died and respondents 2 to 4 had removed all the stocks from the premises of the appellant and agency was given to a third party. The appellant, who is the mother of the late Chairman, stepped into his shoes for liquidating the business claims and liabilities. That no notice was served upon her by the Forum to participate in the proceedings of the complaint. The case of respondent No. 1 is that he had purchased the vehicle against price from respondent No. 5. Both of them have admitted in their pleadings that the vehicle in question was suffering from inherent manufacturing defects and it had failed to be roadworthy in Kashmir Valley as it was sold on trial basis. 4. The case of respondent No. 1 is that he had purchased the vehicle against price from respondent No. 5. Both of them have admitted in their pleadings that the vehicle in question was suffering from inherent manufacturing defects and it had failed to be roadworthy in Kashmir Valley as it was sold on trial basis. 4. The order in question has been inter alia challenged on the grounds that the Forum after holding its view that vehicle in question suffered from inherent manufacturing defect fell into error by fastening the liability on the appellant who was only an agent being the status of holder of nodal agency for delivery of the vehicles to the sub-agent namely respondent No. 5 and effecting their sales. Sale price thereof was being transmitted to the principals i.e. respondents 2 to 4. It is an admitted case of the parties that sale consideration had been received by respondent No. 5 when the vehicle was sold by him in Srinagar to respondent No. 1. 5. Mr. Sami Yaqoob, the learned counsel appearing for the appellant has contended that the appellant had acted lawfully as an agent of her principal/employer and U/S 222 of the Contract Act, she was to be indemnified against the consequence of lawful acts by respondents 2 to 4. That protection was also available to the appellant U/S 223 of the said Act being an agent to be indemnified against consequences of acts done in good faith. That U/S 230 of the Contract Act the appellant being the agent was not bound by the contracts on behalf of the principal. In support of his submissions, he has cited the case of Marine Container Service v. Go Go Garments ( AIR 1999 SC 80 ) wherein it has been held by the Hon'ble Supreme Court under the Consumer Protection Act that provisions of Sec. 230 of the Contract Act have to be read alongwith the provisions of Sec. 2(e) of the C.P. Act and agent is entitled to invoke protection available to him u/s 230 of the Contract Act and his defence based thereon cannot be brushed aside. Concluding his arguments, he has stated that it was an established case of inherent manufacturing defects as held by the Forum itself but it wrongly fastened the liability on the appellant to indemnify respondent No. 1 when the appellant had not been afforded an opportunity of being heard as she was not served with any notice to take part in the proceedings. Her son, Late Shri Davinder Singh, undoubtedly had tried to get the defects removed from the concerned engineers of respondents Nos. 2 to 4 and then entered into correspondence during his life time with respondent No. 1 that defects had been removed but that factum would not make her liable to compensate respondent No. 1 for the price of defective motor vehicle which after its inspection made by the experts on the direction of the Forum was not suo moto lifted by respondent No. 1 from the business premises of the appellant. Mr. G.N. Sofi, learned Advocate appearing on behalf of respondent No. l has also concurred with the submissions made by counsel for the appellant. 6. Mr. I. Sofi, the learned counsel appearing on behalf of respondents Nos. 2 to 4 has contended that in the written version OPs had taken the plea to the effect that there was a relationship of principal to principal between the appellant and respondent Nos. 2 to 4 and that averment had not been rebutted by the appellant as she never appeared before the Forum. Today, he has placed on record Photostat copy of the letter dated 20.12.1988, allegedly addressed on the address of "M/S Kaydees Pvt. Ltd. Durganag Road Srinagar". In this letter the appointment of the appellant as per its clause (M) had been made on the basis of "Principal to Principal" with a clear rider imposed thereon that no relationship of agency of any sort shall be deemed to be created. He has referred to Sec. 182 of the contract Act, which defines the term "Agent and Principal". In this letter the appointment of the appellant as per its clause (M) had been made on the basis of "Principal to Principal" with a clear rider imposed thereon that no relationship of agency of any sort shall be deemed to be created. He has referred to Sec. 182 of the contract Act, which defines the term "Agent and Principal". The definition states "An agent is a person employed to do any act for another or to represent another in dealing with third person, the person for whom such an act is done or who is so represented, is called the "Principal." He has also referred to sale letter (annexure F) dated 21.6.2001 written to respondent No. 5 by the appellant which according to him concerns sale of the vehicle in question made by them. Vide annexure G the appellant had appointed respondent No. 5 as their authorised sale and service outlet at Awantipore, within Pulwama District only. There was warranty for removing the defects of sold vehicle within six months or after coverage of 7500 K.Ms distance by the vehicle, whichever was earlier. That alleged defect had surfaced after the period of warranty. According to annexure G the vehicle in question was brought to Jammu on 5.2.2002, which means within the warranty period. He has further stated that Dy. Director Garages Jammu on the direction of the Forum in his report dated 12.4.2005 had stated that it was not possible to get the engine operative since the vehicle was lying in an abandoned condition for the last three years and condition of tyres was also not satisfactory. The accessories and the wires were out of order so engine could not start at that time. After this on the direction of the learned Forum another committee of experts was appointed which was headed by General Manager Mechanical SRTC Jammu who in their report dated 10.4.2006 has stated that in the premises of the appellant on 10.4.2006 at l PM engine was started and it was running and was checked. It was found that there was continuous missing problem in the engine and its working was neither smooth nor fit to be roadworthy. According to the counsel, the finding of the Forum is not based on any evidence and requires to be set aside as two above stated opinions of the experts are self-contradictory. It was found that there was continuous missing problem in the engine and its working was neither smooth nor fit to be roadworthy. According to the counsel, the finding of the Forum is not based on any evidence and requires to be set aside as two above stated opinions of the experts are self-contradictory. On the basis of expert evidence, which is of puerile nature, no liability can be fastened on respondents 2 to 4. That complaint was filed against the Chairman Kaydees Pvt. Ltd. and appeal has been filed by the same Chairman and in case the Managing Director of the appellant had died that makes no difference to say that the complaint was filed against a dead man. That it has come in the evidence of Farooq Ahmed Bhat that after the purchase of vehicle on 21.6.2001 the same remained in the custody of respondent No. l and while plying he noticed some defects in its functioning and ultimately brought them to the notice of respondent No. 5. In case the vehicle was having inherent manufacturing defects, how it could be plied upto a distance of more than 10,000 KMs, as has been admitted by respondent No. l in his complaint. 7. After considering the factual matrix of the case, as well as the respective arguments advanced by the counsel of the parties it becomes clear that the impugned order suffers from legal infirmity so far as liability has been fastened against the appellant to indemnify respondent No. 1. The case of respondent no. 1 was in respect of inherent manufacturing defects existing in the vehicle in question which had been sold to him by respondent No. 5 against price who was the duly appointed sub-dealer of the appellant. The J&K Consumer Protection Act of 1987, (hereinafter to be referred to as Act), is one of the benevolent piece of legislation intended to protect a large body of consumers against their exploitations. The Act provides for "business to consumer disputes and not for "business to business" disputes. The letter of appointment written by Bajaj Tempo to the appellant which has been placed today on record of the appeal by the counsel of respondents No. 2 to 4 helps the appellant because it clarifies her status as a "dealer" and not that of a "principal". The letter of appointment written by Bajaj Tempo to the appellant which has been placed today on record of the appeal by the counsel of respondents No. 2 to 4 helps the appellant because it clarifies her status as a "dealer" and not that of a "principal". The opening words of the letter are "We are pleased to appoint you as dealers for sale and service of Matador Tempo Travellier, Tempo Taxi, Tempo 3-wheeler vehicles, engines and spare parts thereof...." The appointment had been made from 1st January, 1989 to 31st of December 1990 unless renewed in writing Clause (m) inserted therein, that the relationship between them and the appellant was that of principal to principal basis does not bind the appellant because the letter does not bear her signatures. It is only a unilateral offer and the letter does not take the pace of a contract as is contemplated under the provisions of the Contract Act. Respondents 2 to 4 although had taken this plea in the written version but had failed to prove it by leading any evidence. At this late stage the argument advanced by Mr. I. Sofi advocate, coupled with the production of the above stated copy of the letter, does not advance their case but on the contrary supports the case of the appellant that her relationship with respondents 2 to 4 was only that of a dealer/agent and not of a manufacturer/principal respectively. In the proceedings before the Consumer Fora mere preponderance of possibility suggests that a fact is said to be proved when the forum either believes that it exists or considers its existence so probable that a prudent man ought, under the circumstances of a particular case, to act upon the supposition that it exists. The Fora created under the Act are not fettered or bound by the technical rules contained in the Evidence Act. What is required is that they must conduct themselves in accordance with the principles of justice, equity and good conscience. They should follow the procedure laid down under sec. II of the Act. The Fora created under the Act are not fettered or bound by the technical rules contained in the Evidence Act. What is required is that they must conduct themselves in accordance with the principles of justice, equity and good conscience. They should follow the procedure laid down under sec. II of the Act. Applying the above stated yardstick to the facts and circumstances of the case, it is held beyond any manner of doubt that the relationship of a principal and a dealer had been established on the basis of evidence brought on the record and the ratio decidendi laid down by the Hon'ble Supreme Court in the decided case, AIR 1999 SC 80 (supra) applies in all fours to the controversy. Since it was a proved case of inherent manufacturing defect of the vehicle in question so respondents Nos. 2 to 4 were liable to indemnify respondent No. l against the award passed by the Forum. The recovery made from the appellant from her joint account maintained with her husband was an illegal exercise and order suffers from patent illegality. 8. In this view of the matter, we allow the appeal of the appellant and modify the impugned order to the extent that the awarded amount, alongwith interest accrued thereon, amount of compensation and litigation expenses be recovered alongwith further litigation expenses of the appeal in the sum of Rs. 6000/- from respondents Nos. 2 to 4. Accordingly the execution proceedings initiated against the appellant by the Forum stand quashed. 1/4th of the awarded amount which is, statutory deposit made by the appellant in the Commission to file the appeal, as reflected in the interim order dated 28.9.2007 on the application of the appellant, be released in her favour, alongwith interest accrued thereon. The record of the Forum be returned at once and the appeal is consigned to records.