The court ruled that damages occurring due to operational errors after equipment takeover are outside the warranty provisions, and commercial contracts fall outside the Consumer Protection Act's jurisdiction.

JUDGMENT

AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER

1. The present Consumer Complaint has been filed under Section 21 (a)(i)of the Consumer Protection Act , 1986 (for short “the Act”) against the Opposite Party seeking to direct the OPs:

(i) Allow the complaint and direct the OP no.l M/s United India Insurance Company Limited, to settle the claim amounting to Rs.6,76,86,291/- (Rs.6.77 crores approx) along with interest @18% p.a. payable to the Complainant for losses suffered on account of breakage and failure of spindle of duplex oil filter causing damage of turbine bearings due to oil starvation.;

(ii) Pass any other order or such further orders as this Hon'ble Commission deemed fit and proper in the facts and circumstances of the present case.

2. Brief facts of the case, as per the Complainant, are that the Chief Engineer, Project and Planning of Haryana Power Generation Corporation Limited (HPGCL), Panchkula, Haryana issued Purchase Order No. 578/CE/TD/M-III/293/Vol.II dated 31.07.2006 to Bharat Heavy Electricals Limited (BHEL), New Delhi for the supply of material and machinery for Boiler, TG, C&I and BOP. Concurrently, Work Order No. 108/CE/TD/M-III/293/Vol.II dated 01.08.2006 was issued for erection, testing, and commissioning of the equipment and material supplied under the said Purchase Order, including associated mechanical, electrical, and civil works required for renovation, modernization, and up-rating of 110 MW Unit-I at Panipat Thermal Power Station (PTPS), Haryana. As stipulated in Clause 5 of the Work Order dated 01.08.2006, a Storage-cum-Erection Insurance policy (SCE Policy) was to be procured by BHEL on behalf of HPGCL, with insurance charges payable by HPGCL upon submission of relevant documentation. The contractual arrangement specified that any claims regarding losses or damages would be lodged by the contractor with the insurance company, and settlement payments would be received directly by the contractor from the insurance company, with HPGCL providing necessary authorization for this purpose. In furtherance of the Purchase Order & Work Order dated 31.07.2006 and 01.08.2006 respectively, BHEL entered into two contract agreements with HPGCL on 28.02.2007 for "supplies" and "services" related to the uprating of Unit No. 1. The contract included a warranty provision stating that all new equipment erected under the contract would be free from defects in design, material, and workmanship for a period of 14 months from the date of completion of trial operation or declaration of commercial operation, whichever occurred earlier, or 15 months from the date the unit was ready for trial operation but could not be completed due to reasons attributable to the purchaser/owner, whichever was earlier, defined as the "Warranty Period." Under the warranty terms, the contractor was obligated to repair or replace any defective parts that might develop in the plant of their manufacture or those of their sub- contractors, under conditions provided by the contract and arising solely from faulty design, materials, or workmanship, upon prompt notification of such defects by the purchaser. The contractor's obligations were limited to replacement or repair at the contractor's works or at the site, with all transportation, insurance, and other charges for sending defective parts to the contractor's works and back to the site to be borne by the contractor. The contract further specified that in cases of defective parts not repairable at the site but essential for commercial operation, the contractor and purchaser would mutually agree to a program of replacement or renewal that would minimize interruption in operation. For replaced or renewed equipment, th