Judicial Analysis Court Copy Headnote Facts Arguments Court observation

TAMIL NADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHENNAI
Honble Thiru Justice E.J. Bellie, President;
Pulavar V.S. Kandasamy & Dr. (Tmt.) Angel Arulraj, Members
REGIONAL MANAGER, CEMENT CORPN. OF
INDIA LTD.—Appellant
versus
ADMINISTRATOR, M.R. KRISHNAMURTHY CO
OP. SUGAR MILLS LTD. & ORS.—Respondents
A.P. No. 235 of 1996—Decided on 11.11.1997

Counsel for the Parties :
For the Appellant :M/s. Anand Dasgupta & Sagar, Advocates.
For the Respondents:Mr. A. Kulasekaran & Mr. K. Ramu, Advocates.

A seller is liable to refund the amount paid by the buyer for defective goods along with interest.

Headnote:
CONSUMER PROTECTION ACT - SALE OF GOODS ACT - SECTION 12, 14, 15 - SUPPLY OF DEFECTIVE CEMENT - LIABILITY OF SELLER - INTERPRETATION OF SECTIONS 12, 14, AND 15 OF THE SALE OF GOODS ACT - COURT HELD THAT THE SELLER IS LIABLE TO REFUND THE AMOUNT PAID BY THE BUYER FOR THE DEFECTIVE CEMENT ALONG WITH INTEREST.
Fact of the Case:

The complainant, a sugar mill, placed an indent with the appellant, a cement corporation, for the supply of 100 MT of cement. The appellant supplied only 78.130 MT of cement, which was of inferior quality. The complainant incurred a loss due to the use of defective cement and filed a complaint before the District Forum.
Finding of the Court:

The District Forum held that the appellant was liable to refund the amount paid by the complainant for the defective cement along with interest. The appellant challenged the order of the District Forum before the State Commission.
Issues: 1. Whether the appellant was liable to refund the amount paid by the complainant for the defective cement? 2. Whether the appellant was liable to pay interest on the amount refunded?
Ratio Decidendi: The State Commission held that the appellant was liable to refund the amount paid by the complainant for the defective cement along with interest. The State Commission relied on Sections 12, 14, and 15 of the Sale of Goods Act, 1930, which impose a duty on the seller to supply goods of merchantable quality and provide a remedy to the buyer in case of breach of this duty.
Final Decision: The State Commission dismissed the appeal filed by the appellant.

ORDER

Thiru Justice E.J. Bellie, President—Of the four opposite parties in the O.P., the 2nd opposite party against which alone an award has been passed, is the appellant. The complainant Administrator, M.R. Krishnamurthy Co-opera- tive Sugar Mills Ltd., Sethiathope placed an indent to the 2nd opposite party-Regional Manager, Cement Corporation of India Limited, Madras for supply of 100 MT of cement on 4.3.1992. It appears as against the quantum of cement to be supplied as per the invoice being 87.100 MT, actually only 78.130 MT cement was . supplied. The complainant has paid an advance of Rs. 1,80,000/-. The construction work was started on 13.3.1992 and 150 bags of cement was used for RCC roofing and sunshade. While using the cement purchased, the Engineers of the complainant suspected the quality of the cement and therefore me work was stopped. On account of this, the complainant incurred a loss of Rs. 51,500/- After a legal notice and a telex message issued, one Mr. Natarajan, Sales Officer of the 2nd opposite party visited the complainant's factory on 20.3.1992 and noted the poor quality of the cement. The 4th opposite party carried the cement from the 2nd opposite party and delivered it to the complainant at the instance of the 2nd opposite party. The 2nd opposite party in their letters dated 17.12.1992, 15.7.1993 and 30.7.1993 acknowledged that the cement supplied was of inferior quality and undertook to refund the amount, but later on, wanted to replace the cement supplied with good quality cement. But nothing took place. Therefore the complaint in the District Forum.

2. In the District Forum the 1st and the 3rd opposite parties were given up and the case proceeded against only the 2nd and the 4th opposite parties.

3. The 2nd opposite party in its written version contended that they supplied 87.100 MT of cement and not 78.730 MT as stated by the complainant. It then contended that while the cement was duly transported by the 4th opposite party, some anti-social elements diverted the loads of cement to private sheds and there they got the cement bags replaced with adulterated cement. Therefore, the 2nd opposite party is not responsible for any shortage/adulteration. The complainant has sent the cement for testing only after he has already used 150 bags of cement. The sample should have been tested within one week from the date of delivery to the complainant but that has not been done so. In this case, while the cement had been delivered in the first week of March, 1992, the testing had been done only on 28.3.1992. Therefore, the testing was not valid. The 2nd opposite party is prepared to replace the cement bags which are in the complainant's godown and the 2nd opposite party is not liable to refund the amount or to pay any interest. But the complainant was not agreeable to replacement of the cement. There fore the 2nd opposite party is not liable to pay any amount to the complainant.

4. The 4th opposite party in its written version contended that it was only a handling agent of the 2nd opposite party and there was no privity of contract between the complainant and this opposite party and therefore this opposite party is not liable to pay any amount to the complainant. It is further contended that the 2nd opposite party as well as this opposite party wrote to the complainant that new cement will be given on the complainant handing over the defective cement. But there was no response from the complainant. The complainant has been lethargic and is only trying to find fault with this opposite party. Therefore this opposite party is not liable to pay any amount to the complainant.

5. The District Forum on consideration of the pleadings and evidence, came to the conclu- sion that only 78.230 MT cement had been supplied to the complainant. It further held that there was no doubt that the cement supplied was defective. It then held that only the 2nd opposite party is liable and not the 4th opposite party since there was no privity

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