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Jain Irrigation System Ltd. Petitioner(S) v. Kis Anrao And Others (S).
Summary of National Consumer Disputes Redressal Commission Order
Factual and Procedural Background
This matter arises from two Revision Petitions (including Revision Petition No. 3737 of 2014 and RP 3640 of 2014) before the National Consumer Disputes Redressal Commission (NCDRC), heard and decided on 9 July 2020. The petitions challenge a common order dated 16.05.2014 of the Maharashtra State Consumer Disputes Redressal Commission ("State Commission") which had partly allowed appeals filed by Opponent Nos. 1 & 2 (the manufacturer and its dealer), thereby altering parts of an earlier award of the District Consumer Disputes Redressal Forum, Amravati ("District Forum").
Parties (as reflected in the opinion): Jain Irrigation System Ltd. (OP-1; petitioner before NCDRC), Tambi Irrigation Services (OP-2; dealer), complainants Shri. Kisanrao Motiramji Ghatole and Shri. Madhavrao Kisanraoji Ghatole, and State Bank of India (OP-4).
Brief factual chronology based on the record: OP-1 (manufacturer) proposed a lift/drip irrigation system to the complainants with an estimated total investment of approximately Rs. 14,00,000. The complainants contributed margin money of Rs. 3,50,000 (25%), financed by a loan from OP-4. Installation was completed on 20.06.2004 and a demonstration was given on 01.09.2004. The complainants alleged that at demonstration and thereafter the pipes/materials were of inferior quality, broken at many places, and the system performed poorly, failing to deliver the expected water supply; they therefore filed a consumer complaint in the District Forum alleging deficiency in service and loss.
The District Forum partly allowed the complaint and directed relief including refund of sums (Rs. 10,50,000 and Rs. 3,50,000) with interest, payment of certain costs and compensation, and ancillary directions involving OP-3 (the bank). The State Commission partly allowed appeals filed by OP-1 and OP-2: it maintained certain directions (clauses 2 & 3 of the District Forum order) but quashed other clauses (4, 5 & 6) including the compensation and certain cost/refund items. Aggrieved, OP-1 and OP-2 filed revision petitions before the NCDRC seeking to challenge the State Commission's order.
Legal Issues Presented
- Whether the State Commission's order dated 16.05.2014 (which partly allowed appeals from the District Forum and altered certain reliefs) was liable to be set aside by way of revision before the NCDRC.
- Whether both the manufacturer (OP-1) and the dealer/installer (OP-2) were jointly and severally liable to the complainants for the defective/deficient installation and the consequential reliefs awarded by the District Forum (as affirmed or modified by the State Commission).
- Whether there was any crucial error in the appreciation of evidence by the two fora below such as would require de novo re-appreciation of evidence by the NCDRC within the ambit of section 21(b) (as referenced in the opinion).
Arguments of the Parties
OP-1 / OP-2 (Petitioners before NCDRC)
- Contended before earlier fora that the complaint was not maintainable in a consumer forum and ought to be dealt with by a Civil Court because it involved voluminous evidence and document verification.
- Asserted that they did not supply inferior quality material; pipes were of standard I.S.I. mark and OP-2 had completed work before the rains.
- Blamed the complainants for improper functioning by not following the design and project report (engineer's design) and for flouting terms and conditions.
- Before the NCDRC OP-1 (manufacturer) emphasised that OP-2 (dealer/installer) was responsible for proper connections and installation and contended that the system did not deliver expected discharge; OPs alleged the complainants used an inadequate motor configuration (a 15 HP motor instead of two 10 HP pumps) — an assertion the NCDRC found to be unsupported by scientific evidence.
Complainants / Respondents before NCDRC
- Alleged that upon demonstration and thereafter, the pipes were inferior and broken, and the system was defective and did not conform to specifications, causing inadequate water supply and loss.
- Asserted entitlement to refund/compensation and other reliefs for the deficient system and its poor performance.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The NCDRC considered the record, including the Commissioner's (engineer's) report prepared by Mr. M. P. Pandey, and the submissions of learned counsel for the parties. The court's analysis proceeded as follows:
- Evaluation of evidence: The Commissioner's report was relied upon by the NCDRC. That report observed that the drip/lift irrigation system was not installed in accordance with the project report or the manufacturer's scheme, and that several materials and pipes used were of inferior quality. The report also recorded leakages at several places and expressed the opinion that negligence occurred during execution.
- Assessment of appellants'/petitioners' technical defence: The NCDRC noted OPs' contention that the complainants' choice of motor/pumping arrangement caused poor performance, but observed that OPs did not produce scientific evidence to substantiate that technical defence. The court found that such unsubstantiated technical assertions were not acceptable to displace the findings of defective installation and materials in the Commissioner's report.
- Manufacturer's liability: The court addressed OP-1's attempt to absolve itself by shifting responsibility to its dealer (OP-2). The NCDRC reasoned that where a dealer sells and installs a manufacturer's system, the manufacturer could not be absolved from liability merely by pointing to the dealer. On the facts and in view of the Commissioner's findings, the manufacturer and dealer were held liable jointly and severally.
- Review standard under revision: The NCDRC examined whether there was any crucial error in the appreciation of evidence by the District Forum and the State Commission that would necessitate a de novo re-appreciation of evidence in revision under section 21(b). The court found no such crucial error in the fora below that would justify overturning the State Commission's conclusions.
- Conclusion of analysis: Given the engineer's report, the absence of technical/scientific rebuttal from the OPs, and the principle that a manufacturer cannot escape liability by apportioning blame solely to its dealer, the NCDRC concluded that the State Commission's order was correctly decided and the award should be affirmed.
Holding and Implications
Final Holding: Both Revision Petitions were dismissed. The NCDRC upheld the impugned order dated 16.05.2014 of the Maharashtra State Consumer Disputes Redressal Commission and affirmed the award made therein.
Direct consequences for the parties (as reflected in the opinion):
- The State Commission's modifications to the District Forum order stand — the court affirmed the State Commission's decision and its resulting reliefs (including the directions maintained by the State Commission).
- Both OP-1 (manufacturer) and OP-2 (dealer/installer) were held liable jointly and severally to the complainants on the facts of the case.
- Both Revision Petitions being dismissed means the petitioners did not obtain any further relief from the NCDRC.
The opinion does not state any broader rule or precedent being laid down beyond the application of the findings to the parties; no new legal precedent was announced in the reasoning recorded in the provided text.
Source: Order of the National Consumer Disputes Redressal Commission, Presiding Member: Dr. S.M. Kantikar, pronounced on 9 July 2020 — summary prepared exclusively from the provided opinion text.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION PETITION NO. 3737 OF 2014
(Against the Order dated 16/05/2014 in Appeal No. 405/2007 of the State Commission Maharashtra)
1. JAIN IRRIGATION SYSTEM LTD.
HAVING ITS REGISTERED OFFICE AT JAIN FIELDS, N.H
NO-6, BAMBHORI,
JALGAON - 425001
MAHARASHTRA ...........Petitioner(s) Versus
1. KIS ANRAO & 3 ORS. S/O RAMRAOJI GHATOLE, R/O WADEGAON,TAHSIL
WARUD
DISTRICT: AMRAVATI
MAHARASHTRA
2. M. ADHAORAO, S/O. KISANRAOJI GHATOLE R/O WADEGAON,TAHSIL WARUD
DISTRICT: AMRAVATI
MAHARASHTRA
3. TAMBI IRRIGATION N SERVICE,
PANDHURAMA CHOWK,WARUD, THROUGH ITS PROP
DISTRICT: AMRAVATI
MAHARASHTRA
4. STATE BANK OF INDIA
THROUGH ITS BANK MANAGER, WARUD BRANCH
DISTRICT: AMRAVTI
MAHARASHTRA ...........Respondent(s)
BEFORE:
HON'BLE DR. S.M. KANTIKAR,PRESIDING MEMBER For the Petitioner :
For the Respondent :
Dated : 09 Jul 2020
ORDER
APPEARED AT THE TIME OF ARGUMENTS
(RP/3640/2014)
For Petitioner :
Mr. M. R. Khan, Advocate
1
For Respondents No. 1 & 2 :
Mr. I. K. Juneja, Advocate For Respondent No. 3 :
Mr. Sandeep Narain, Advocate For Respondent No. 4 : NEMO
(RP/3737/2014)
For Petitioner :
Mr. Sandeep Narain, Advocate For Respondents No. 1 & 2 :
Mr. I. K. Juneja, Advocate For Respondent No. 3 :
Mr. M. R. Khan, Advocate For Respondent No. 4 : NEMO
Pronounced on: 9th July 2020
ORDER
1. These are two Revision Petitions against the common Order of the 16.05.2014 of the Maharashtra State Consumer Disputes Redressal Commission, (for short "State Commission") whereby the appeal was partly allowed and some clauses of the order of the District Consumer Disputes Redressal Forum, Amravati (for short "District Forum") were set-aside. Both the Petitions are therefore, disposed of together by this order. For convenience, the facts are drawn from RP 3640 of 2014 and the parties are placed as in the original complaint filed before the
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District Forum.
2. The Jain Irrigation System Ltd. (OP - 1) is a manufacturer of the components of irrigation system and Tambi Irrigation Services (OP -2) is the authorized dealer of OP - 1. Shri. Kisanrao Motiramji Ghatole and Shri. Madhavrao Kisanraoji Ghatole are the complainants in the Consumer Complaint. The State Bank of India (OP- 4) financed loan to the complainants.
3. Brief facts that, the OP - 1 proposed a lift irrigation system to the complainants for proper irrigation of their plantation. As per the project report, approximately total investment was Rs. 14,00,000/- . The margin money of 25 % i.e Rs. 3,50,000/- was invested by the complainants by taking a loan from OP-4 Bank. The installation of the lift Irrigation System by the OP - 2 was completed on 20.06.2004 and its demonstration was given on 01.09.2004. At the time of demonstration, complainants noted that the pipes were of inferior quality and broken at many places. Thus, complainants alleged that the irrigation system purchased/ installed from the OPs was found to be defective and its performance and not conform to its specifications and descriptions. Thus, as a result the required water supply to their plantation was not available and they sustained loss. Being aggrieved by the alleged deficiency in service the complainants filed a complaint in the District Forum, Amravati.
4. The complaint was resisted by OPs 1 & 2 by filing two separate written statements and denied the allegations. It was contended that the complaint was not maintainable in a consumer fora and should be tried before a Civil Court as the case involved recording of voluminous evidence, verification of documents etc. Moreover, the OPs did not supply any inferior quality material. All the pipes were of standard I.S.I mark the OP - 2 had completed the work before the commencement of rainy season. The irrigation system failed because the complainant did not use the design of the Engineer Shri. P.M. Durge and did not follow the project report. He flouted the terms and conditions. The OPs further submitted that the complainant was required to deposit a total amount of Rs. 1,16,666/- with interest from the month of April2006 to 2014. However, the complainant had not done it.
5. The District Forum partly allowed the complaint and passed the following order:-
ORDER
Application preferred by the Complainant is partly allowed.1. If the order is passed that the Opponent Nos. 1 and 2 should carry out the entire work of the Lift Irrigation Scheme of the complainant again , the same state of affairs will remain and several years will pass in the dispute (approval/disapproval) of both the parties and in the present circumstances , such possibility cannot be ruled out , because despite giving an amount of Rs. 10,50,000/- and the amount of Rs. 3,50,000/- for other expenses , to the opponents and accepting the same , the first scheme is not performed properly and honestly. Hence, the Forum is also not sure whether by placing reliance on the same work again, the work will be completed. Therefore, Opponent Nos. 1 and 2 should refund to the complainant, without any grievance, the sum of Rs. 10,50,000/- received by way of loan and the sum of Rs. 3,50,000/- accepted for other material and completing the work.
2.
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The Opponent Nos. 1 and 2 should pay jointly and severally the sum of Rs. 10,50,000/- + Rs. 3,50,000/- together with an interest on the said sums at the rate of 9 per cent per annum , from 28/8/2004 till the date of passing of order , to the complainant.
3.
The Opponent No. 2 should pay Rs. 7,000/- towards the cost of the said application.4. The Opponent No. 1 and Opponent No. 2 should pay Rs. 25,000/- ( in words , rupees Twenty Five Thousand only) towards the compensation on account of damage caused to the farming of the complainant.
5.
The Opponent Nos. 1 and 2 should pay to the complainant the cost of Rs. 2,000/- incurred on the application to issue commission.
a) This order should be complied with within 30 days of the receipt of the duly signed and sealed copy of the order, failing to comply with within the said period, the sums together with interest at the rate of 9 per cent on total sums be paid after the period.
6.
Notwithstanding that Opponent No. 3 has given a loan of Rs. 10,50,000/- to the complainant , the Opponent No. 3 should take cognizance of the incalculable loss caused to the complainant and the loan be repaid by making a compromise by both the parties between themselves about giving and taking of account.
7.
The Opponent No. 3 should endeavor to give benefit as per the scheme of the Government of Maharashtra framed for the farmers.
(Order of the District Forum)
6. Being aggrieved by the order of the District Forum, OPs - 1 & 2, filed separate appeals FA A/07/405 and FA A/07/428 before the State Commission. Both the appeals were partly allowed by the State Commission with following observation:-
8.
16. We also perused the Commissioner's report which sums up its observations after recording various discrepancies in respect of leakages by saying that "there is discrepancies in the installation of material system which is contrary to as mentioned in design and project report". This report of the Commissioner clearly reflects that the system itself was not installed in accordance with the report. Therefore, the submission of the appellants that the complainants for the first time complained about the irrigation system after two years of installation infers that the system was working for properly for two years cannot be accepted. It is highly probable when a person notices certain defects, discrepancy or shortcoming then initially he makes efforts to get the defect corrected or repaired. For the forgoing reason we find no irregularity in the impugned order in respect of granting refund of the amount of Rs. 14,00,000/- to the complainants by the opposite party Nos. 1 & 2.
17. However, granting compensation of RS. 25,000/- for the loss incurred in respect of cultivation cannot be accepted since the complainants have not bought any cogent evidence on record to prove the loss incurred , therefore unsustainable. The impugned order further allowing refund of Rs. 2000/- to the complainants towards the commission charged also not sustainable in law. Allowing Rs. 7000/- towards cost of proceeding would be deemed to be inclusive of every expenses.
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18. For the forgoing reasons both the appeals is bearing Nos. 405/2007 and 428/2007 deserves to be partly allowed.
In the result we pass the following order
ORDER
Appeals bearing Nos. 405/2007 and 428/2007 are partly allowed.1. Directions in clause Nos. 2 & 3 of the impugned order are maintained and directions given in clause Nos. 4,5 & 6 are quashed and set aside.
2.
In the peculiar facts and circumstances of the case ,parties to bear their own cost.3. Copy of the order be furnished to both the parties free of cost. (paras 16,17 and 18 of the State Commission's Order, emphasis applied )
7. Being aggrieved by the order of the State Commission, both the OPs preferred these two Revision Petitions before this Commission.
8. Heard the learned counsel for the parties and perused the material on record. Learned counsel for OP-1- Jain Irrigation submitted that it was the responsibility of OP-2 to do proper connections and installation of the pipes as per the project report. As per the project report, the irrigation setup in question was to give out water at the rate of 300 litres per minute. But, in reality, it gave 100 litres of water in about 2 -3 minutes. Thus, it prima facie it is evident that the system provided to the complainants was a complete failure. The OPs put the blame on the complainants for improper functioning of the irrigation system because of the usage of a motor of 15 HP instead of two pumps of 10 HP. It is not acceptable as the OPs have not placed any scientific evidence in this regard. It should be borne in mind that when a consumer buys equipment or a system, he intends the product / system to be in good condition and given the desired results for a considerable period of time. Farmer is solely dependent on water supply for cultivation of plants, thus proper irrigation facility is essential to get good agricultural produce. In the instant case the complainants incurred a loss due to low productivity and they deserve trouble free installation of the irrigation system or the refund of entire amount.
9. I have perused the Commissioner's report issued by Mr. M. P. Pandey, the engineer. In his report, it was mentioned that the drip irrigation system was not installed as per the project report / scheme of manufacturer (OP-1). During installation of the system, several goods and pipes used were of inferior qualities. On several places, there were leakages in the pipes and therefore actual water discharge could not be measured. He opined that there was negligence caused during execution of the entire project. In addition, it is pertinent to note that the OP-2 was a dealer, who sold the drip irrigation system of OP-1, who was a manufacturer. Thus, the manufacturer could not be absolved from its liability. In the instant case, the manufacturer - Jain Irrigation System (OP-1) was shifting its liability upon its dealer. Therefore, in my view, both the OPs-1 & 2 are liable jointly and
4.
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severally to the complainants.
10. Based on the foregoing discussion, I have no hesitation in upholding the impugned order dated 16.05.2014 of the State Commission and in affirming the award made therein. Thus, within the ambit and scope of section 21 (b), I, however, find no crucial error in appreciating the evidence by the two Fora below, as may cause to require de novo re- appreciation of the evidence in revision.
11. Both the Revision Petitions, being misconceived and devoid of merit, are dismissed.
......................
DR. S.M. KANTIKAR
PRESIDING MEMBER
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