Managing Director of Greaves Cotton and Company Limited vs The State of Bihar and Another

S.N. Mishra, J.—In these two petitions, the Petitioners are the Managing Director and General Manager of M/s. Greaves Cotton and Company Limited, have prayed for quashing the order taking cognizance dated 7.3.1994 of an offence punishable under Sections 420 and 409 of the Indian Penal Code against the Petitioners.

The opposite party who is the General Manager of Bihar State Sugar Company Limited has filed a complaint petition alleging therein that the complainant deals with production of sugar in Sugar Mills in the State of Bihar. The accused No. 1, namely, M/s. Greaves Cotton and Company Limited is a registered public limited company having its head office at Calcutta and local branch office at Exhibition Road, Patna. It is alleged that the said company is the manufacturer, dealer, distributor and supplier of diesel engine. Since the Petitioner was in urgent need of Diesel Engine of 166/167 K.V.A. at Patna for its manufacturing industry, the complainant invited tenders from various companies dealing with such Diesel Engine. The representative of the accused company submitted a tender on 24.9.1991. Having convinced of the assurance given by the company and the guarantee being of one year period, the complainant purchased the diesel engine from the accused company after having paid the entire amount of Rs. 2,96000/-. The accused company assured the complainant that if any manufacturing defect is found during the guarantee period the company will replace it free of cost. It is alleged that in terms of the agreement, the machine was installed in the unit of the complainant on 13.2.1992 and soon after the installation of Diesel Engine, the Service Engineer of the accused company inspected the machine who found some manufacturing defects which were to be rectified. It is further alleged that from the very installation, the said Diesel Engine was not functioning properly due to the manufacturing defect as found by the Engineer of the accused company. Accordingly, the complainant wrote several letters to the Company for rectification of the manufacturing defects but inspite of the several letters and requests made to the company, nothing has been done either to rectify the said defect/or to replace the Engine in terms of the agreement. It is alleged that the said Diesel Engine did not function right from the date of installation causing heavy monetary loss to the complainant. It is alleged that when the defect was not rectified, the complainant asked for the refund of the amount which was paid to the accused company but even then nothing has been done in this regard. On the basis of the aforesaid allegations, a case was registered as Complaint Case No. 759(C) of 1993 against the Petitioner as stated above.

Learned Counsel appearing on behalf of the Petitioners has challenged the order of taking cognizance on the ground that the Engineer of the company had inspected the Diesel Engine and whatever the defects found were removed by the Service Engineer. According to the learned Counsel the diesel engine has gone out of order due to faulty use without proper maintenance and not due to manufacturing defects, for which the company is not responsible. It is further submitted that even the allegations made in the complaint petition is accepted as correct, no offence is made out against the Petitioners and, at best, it is a civil liability which can be adjudicated by filing a civil suit. In this connection, reference may be made to the various orders passed in Cr. Misc. No. 12803/1994 wherefrom, it appears that the dispute is likely to be compromised and the defects are likely to be rectified. When this case was placed for hearing before this Court, the learned Counsel appearing on behalf of the Petitioners made a statement that the Engineer of the Company will go and inspect the Diesel Engine and will remove the defects as may be found on inspection. Accordingly, the case was adjourned at the request of the parties. When the case was taken-up for further hearing, learned Counsel for the Petitioner expressed his inability to remove the defects on the ground that it costs heavy amount and, as such the company is not in a position to do anything in this regard. Admitted position in this case is that the Engineer of the Company visited the Unit and inspected the Diesel Engine during the guarantee period and found the manufacturing defect in the Engine and accordingly, he assured the complainant that the matter will be reported to the Company. It is further submitted that during the guarantee period itself, the complainant not only wrote several letters but personally approached the accused company and pointed out the defects as found by its Engineer. As the allegation stands the manufacturing defect was detected during the guarantee period itself by noneless than the service engineer of the accused company. It was incumbent upon the accused company either to remove the defect and or replace the same by new one. As alleged the Diesel Engine did not function right from the date of installation resulting in huge monetary loss to the complainant. It is true that pursuant to the tender having been accepted, the Diesel Engine was purchased from the company in accordance with the terms and conditions as stated above, the company is bound to remove the defect as found by its own Engineer during the guarantee period, if not, then in terms of the agreement, the accused company is entitled to refund the amount to the complainant.

In the premises, therefore, I am not inclined to interfere with the order taking cognizance of the alleged offence against the Petitioner. Accordingly, these applications are dismissed. Before I part with the case, I may observe that meanwhile if the diesel engine is made workable and/ or the price thereof is refunded to the complainant in that event, the criminal proceeding initiated against the accused Petitioners stands automatically quashed.