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2010 (8) Supreme 613
SUPREME COURT OF INDIA
V.S. Sirpurkar and T.S. Thakur, JJ.
Birla Technologies Ltd. — Appellant
versus
Neutral Glass and Allied Industries Ltd. — Respondent
Civil Appeal No. 10650 of 2010
(Arising Out of Slp (C) No. 9526 of 2010)
Decided on : 15-12-2010
(b) Consumer Protection Act, 1986 – Section 2(1)(d)(ii), after amendment – A person availing services for any commercial purpose is not a consumer. (Para 8)
(c) Consumer Protection Act, 1986 – Section 2(1)(d)(i) and (ii) – The complaint filed after amendment of the Act – Goods purchased for commercial purposes – Services were hired or availed of for commercial purposes – Complaint not maintainable. (Para 9)
(d) Limitation Act, 1963 – Section 14 – Period spent in prosecuting proceedings before wrong forum – To be excluded while determining limitation. (Para 10)
Facts of the case:
1. The appellant had entrusted with the work of developing certain computer software for the respondent at a cost of Rs.36 lacs.
2. The appellant developed the software and installed the same in respondent’s office.
3. Disputes arose about payment.
4. The respondent sent legal notices to the appellant and ultimately filed a complaint against the appellant before the State Consumer Disputes Redressal Commission which accepted the appellant’s preliminary objection and dismissed the complaint.
5. The National Commission held the respondent was entitled to maintain a complaint under the Act with respect to the deficiency in service during one year warranty period with respect to said goods relying on Section 2(1)(d)(ii) of the Act.
Finding of the Court:
Complaint filed after amendment of the Act was not maintainable.
Result : Complaint dismissed with cost.
Certainly. Based on the provided legal document, here are the key points:
The case involves a dispute over the maintainability of a consumer complaint filed by a respondent against an appellant for deficiency in service related to software development and installation (!) (!) .
The appellant contended that the respondent was not a consumer within the meaning of the Consumer Protection Act, as the goods purchased and services hired were for commercial purposes (!) (!) .
The National Commission found that the goods (software modules) were purchased for a commercial purpose, thus excluding the respondent from the definition of a consumer under Section 2(1)(d)(i) of the Act (!) .
Despite this, the National Commission held that the respondent could maintain a complaint regarding deficiency in service during the warranty period under Section 2(1)(d)(ii), as it was filed before the amendment of the Act, which explicitly excludes services availed for commercial purposes (!) (!) .
The Court identified a crucial factual error: the National Commission's decision was based on the incorrect assumption that the complaint was filed before the amendment, whereas in fact, it was filed after the amendment came into effect. This significantly impacts the applicability of the exception for services availed for commercial purposes (!) (!) .
The Court emphasized that because both the goods were purchased and the services were availed of for a commercial purpose, the complaint was not maintainable under the Consumer Protection Act, especially after the amendment, which explicitly excludes such cases (!) .
The Court also noted that the respondent is free to pursue remedies through other legal avenues, such as filing a suit, and can avail of provisions that may exclude certain periods from limitation calculations (!) (!) .
Ultimately, the Court set aside the order of the National Commission and dismissed the complaint with costs, reaffirming that the complaint was not maintainable given the commercial nature of the transaction and the timing of the filing relative to the amendment (!) .
Please let me know if you need further clarification or assistance.
JUDGMENT
V.S. Sirpurkar, J. —
1. Leave granted.
2. This appeal is filed against the judgment passed by National Consumer Disputes Redressal Commission (hereinafter called ‘the National Commission” for short), allowing the First Appeal filed by the respondent herein holding that the complaint filed by the respondent herein was tenable relating to its grievance about the deficiency of service, under Section 2(1)(d)(ii) of The Consumer Protection Act, 1986 (hereinafter called “the Act” for short) as amended.
3. The appellant had sent a detailed proposal for developing certain computer software for the respondent at a cost of Rs.36 lacs on 11.2.1998. This proposal was accepted by the respondent who sent the letter of intent indicating its intention to entrust the appellant with the development of the said software. On 1.4.1998, the respondent sent a purchase order to the appellant regarding the terms and conditions at which the appellant was to develop the software for the respondent. That software was to take care of (1) Financial Accounting, (2) Production, (3) Marketing, (4) Purchase, (5) Stores/Inventory, (6) Fixed Assets, and (7) Pay Roll and Personnel System. The appellant wrote to the respondent on 3.2.1999 informing that the Stores and Purchase Modules had been installed in the respondent’s office on 1.2.1999. The appellant wrote on 4.2.1999 to the respondent that since the respondent’s requirements for the Marketing Module had gone up considerably in comparison with what had been initially agreed between the parties, the appellant would require additional 250 man hours to complete. On 26.2.1999, the appellant informed the respondent that three Modules had been successfully installed, they being, (1) Stores, (2) Purchase, and (3) Production. Again on 17.3.1999, the appellant confirmed that even the Financial Accounting Module was also successfully installed. Further, the appellant wrote to the respondent that in view of the additional requirements of the respondent, it would require 350 man hours more. On 30.3.1999, the appellant informed the respondent that the changes suggested by the respondent had been successfully carried out. The appellant informed the respondent again that due to the addition of 48 new functions to the Marketing Module, the estimation for the Module had gone up by 45 man days, costing an additional Rs.60,000. On 7.4.1999 and 13.4.1999, the appellant informed that the Stores and Purchase Module and Financial Accounting and Marketing Modules were also installed respectively on those dates and sought for their feedback. Thereafter, there was a lot of correspondence between the parties as regards the work of the said software and in respect of the different Modules. It seems, at times, the respondent/complainant expressed its satisfaction over the working of the Modules. All this happened in the last months of 1999 and in January, 2000. It seems that till February, 2000, the payment of the appellant was not released requiring the appellant to write to the respondent for the same. The respondent thereafter started complaining about the working of some Modules. In the month of September, 2000, the respondent placed a fresh purchase order with the appellant for enhancement of the Production Module, on which the appellant requested the respondent to clear the outstanding dues which were not cleared till then. The appellant again wrote to the respondent for payment in the month of April, 2001.
4. The disputes started taking ugly shape and the respondent started complaining about the working of various Modules. On 15.4.2002, the respondent wrote a letter to the appellant identifying the problems with various Modules of the software, which letter was replied to by the appellant. There was then lot of correspondence between September, 2002 and March, 2003 as regards the Modules supplied. The respondent, however, sent a legal notice to the appellant through its Advocate on 4.4.2003, wherein it alleged deficien
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