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1992 Supreme(Del) 571
High Court Of Delhi
H.C.L.LIMITED - Appellant
Versus
KRISHNA NANU NAIK AND SONS - Respondent
First Appeal 112 of 1992
Decided On : 12/07/1992
Ashok Sapra, DALJIT SINGH, M.S.Vinayak
The purchase of a computer system for commercial purposes is not covered under the definition of 'consumer' under the Consumer Protection Act, 1986.
Headnote:
CONSUMER PROTECTION ACT - DEFECTIVE GOODS - SECTION 2(1)(g) - INTERPRETATION - PURCHASE OF COMPUTER SYSTEM FOR COMMERCIAL PURPOSE - REJECTION OF CLAIM FOR COMPENSATION - APPEAL ALLOWED.
Fact of the Case:
The respondent purchased a computer system from the appellant in 1985 and entered into a five-year maintenance contract. In 1988, the appellant offered to replace the old system with a new one, which the respondent agreed to. The new system, however, could not be successfully commissioned despite several attempts by the appellant's mechanics and experts. The respondent filed a complaint with the State Commission seeking compensation for the defective computer.
Finding of the Court:
The State Commission found that the computer system was purchased for personal or office use and that the goods supplied were defective. It directed the appellant to refund the amounts paid by the respondent and pay interest on the same. The appellant challenged this order before the National Commission.
Issues: 1. Whether the purchase of the computer system was for a commercial purpose. 2. Whether the State Commission erred in rejecting the appellant's technical objections without discussing them.
Ratio Decidendi: 1. The National Commission held that the purchase of the computer system was for a commercial purpose, considering the close nexus between the system and the respondent's commercial activity and the fact that the respondent was a large commercial organization. 2. The National Commission found that the State Commission had not discussed the appellant's technical objections in detail and had passed them off as vague findings. It held that the State Commission should have considered these objections and given reasons for rejecting them.
Final Decision: The National Commission allowed the appeal and set aside the order of the State Commission. It held that the respondent was not entitled to compensation for the defective computer.
( 1 ) THIS is an appeal against the order of the Goa State Commission, Panaji in Complaint No. 12/91.
( 2 ) THE complaint was for recovery of compensation on account of supply of defective goods. The facts of the case as derived from the State Commission s order are that:-
"the Complainant (respondent herein) alleged that they were supplied a computer system in the year 1985 by the Opposite Party (appellant herein) model WORKHORSE-11. The Complainant also had hired the services of 0. P. under maintenance a contract for a period of five years for the maintenance of aforesaid computer system. The complainant had no grievances at all either about the functioning of WORKHORSE-II computer system or for its maintenance. Thereafter, complainant s business increased considerably. In the year 1988, the O. P. volunteered to supply another computer system of model OASYS-1 in place of WORKHORSE-11 taking into consideration the expansion of business. The O. P. on 22. 9. 1988 gave the quotation with special trade-in offer considering the requirement of the complainant. The complainant placed the order dated 16. 2. 1989 with the respondent for the model OASYS-I with a five years warranty and service contract. Both the parties entered into two contracts. (1) for the supply of OASYS-I model and (2) for annual maintenance of the computer system. The settled terms were that the Opposite Party shall take back WORKHORSE-II model to be replced by OASYS-1 model for which the complainant was to pay to Opposite Party Rs. 2,59,347. 62 including installation and successful commissioning. In ad- 448 dition to this, the balance amount as regards the maintenance charges for WORKHORSE-11 model lying with the Opposite Party, the complainant was to pay Rs. 99,590. 00 for Five years annual maintenance charges. The OASYS-1 model was supplied to the complainant in the month of March, 1989. The aforesaid facts are not in dispute. A consumer dispute arose in this case when the Opposite Party could not successfully commission the OASYS-I model computer. The complainant alleged that despite several attempts of mechanics and experts of the Opposite Party, the OASYS-I computer could not be successfully commissioned till the date of Sling this complaint. The complainant, therefore, claimed compensation for Rs. 7,45,991. 65 alleging negligence of the part of Opposite Party in supplying the defective computer. While opposing the complainant s claim, the Opposite Party raised many technical objections and submitted that the complainant had malafide intention to file the complaint with the sole aim to prove that OASYS-I computer could not work under HICIX and that he had various both DOS and HICIX software on Floppy and cartridge tapes which could be copied on the OASYS-I system whenever he wished. Several technical aspects were mentioned in the lengthy written version of the Opposite Party. "
( 3 ) THOUGH the appellant had put forward the argument that the computer system had been purchased by the respondent for a commercial purpose, the State Commission had not considered it to be so, stating that it was for a personal or office use. On its second point of consideration whether the goods supplied were defective, it was found in the affirmative.
( 4 ) ON the third point of consideration the State Commission found that though the claim was for Rs. 74,591. 65 taking into view that the old WORKHORSE-II system was still in use and that respondent had paid only Rs. 2,59,347. 62 plus Rs. 99,590. 00 for service contract, it was only fair that the appellants refund those amounts and pay 18% interest from 28. 3. 1989 till realisation within 30 days from the date of the receipt of the order and take back the new OASYS-I computer system from the respondent s premises at the appellant s costs.
( 5 ) AGGRIEVED by this order, the appellants have come in appeal at the National Commission. A plea is raised by the appellants that the State Commission had rejected various
