STATE GOVERNMENT OF MAHARASHTRA vs HINDUSTAN COMPUTER LTD.

THE State Government of Maharashtra and the Manager, Government Photo Registry filed this Original Petition No. 292/93 claiming damages and refund of the cost of a photo copying machine from the Hindustan Computer Ltd., Bombay/Pune and International Data Management Ltd., New Delhi/Pune. THE State Government of Maharashtra wanted to change its system of photo copying of the registered documents, which are to be preserved in terms of the statutory provisions, as they found that the Planetary Camera System in use since 1927 was not adequate enough to cope with the continuously increasing number of documents. THEse documents are supplied to the public on demand for a very nominal charge. In fact, at times even the cost of the printing and supply is not met out of the charge levied for this purpose. With a view to modernising the system and after obtaining an expert advice from the Tata Consultancy Services, the State Government invited tenders specifying their requirements to have a modern photo copying system. M/s. Hindustan Computers Ltd., who are opposite parties in this case, were one of the tenderers and their tender was accepted. THE system was installed by the Hindustan Computers Ltd. and became operational on July 11, 1992. THE case of the complainant is that to their dismay and shock they noticed the following deficiencies in the use of machinery/equipment supplied by the opposite party No. 1 : (i) Jamming of document pages on roller-belt in the roller camera. (ii) Tearing of corners of document pages in the process of exposure on the roller camera. (iii) Unequal illumination during photography, resulting in one side of the document reflected on the other side which in turn led to wastage of film of both sides of the document. (iv) Printing of unwanted matter of one side of the document on the other side causing wastage during the process of printing. (v) Scratches on the film in the process of exposure on the duplicate machine.

THE complainants also found that the output of the photo printing was much below the output committed in the tender, so much so that between July, 1992 and September, 1993 it was 37.67% and 24.16% in respect of microfilming and printing, respectively. Correspondence ensued between the complainant and the opposite party as regards the deficiencies and finally the complainant requested the opposite party to take either of the three following remedial actions : (i) Take back the entire set of machinery and refund all the amount to the Government and compensate for the loss caused to the Government due to the wastage and rejection of prints attributed to the defects in machines, or (ii) Replace the machinery/equipment by another set of different type, which will achieve the committed target of productions with acceptable quality of prints and compensate for the loss caused to the Government because of wastage, or (iii) Compensate for the loss to the Government as per the Clause 27 of Tender Enquiry in addition to the wastage in work already carried out.

The opposite party did not accept either of these three remedial actions and thereafter the Government of Maharashtra filed a complaint before this Commission. It has been mentioned in this complaint petition that even in the initial stage itself the Service Personnel of the opposite party Nos. 1 and 2 had to visit the Government Photo Registry as many as 184 times during the period from 14.7.1992 to 8.7.1993.

The opposite parties - M/s. Hindustan Computers Ltd. contested the contention of the complainant and have stated that Rotary Camera manufactured by Cannon of Japan, which was supplied to the complainant, is one of the best equipments for the purpose for which it was supplied. The deficiencies pointed out by the complainants are primarily because they did not operate it properly and did not enter into a maintenance contract with the opposite party which was necessary for proper upkeep of their machine and equipment. The maintenance of equipment after August, 1993 was not done by the opposite party as a result of non-execution of any contract. According to the opposite party as no other maintenance was done by the complainants, the result was eventual shut down and break down of the equipment in October, 1993 because of total lack of maintenance. They have also contended that the service report signed by the complainant and annexed to the complaint petition as Annexure-10 shows that the equipment was found to be working satisfactorily when inspected on June 27, 1993 and that the opposite party attended the fault and did the preventive maintenance of the equipment despite there being no maintenance contract. Hindustan Computers Ltd. have also contended that the procedure for the operation of this sophisticated equipment supplied by them shows that at every stage in microfilming the documents by the equipment, forming the subject matter of the complaint, the output entirely depends on the efficiency and motivation of the operator and, therefore, his speed and efficiency is the most important variable factor. According to them it is impossible for the manufacturer or for a dealer of the equipment to guarantee the output which is entirely dependent upon the operater''s efficiency, speed and performance; he can only guarantee the output based on the efficiency standards required for optimum use of the equipment. Another argument made by the opposite party is that the reduced output alleged by the complainants was because the actual working period was only between 5 and 6 hours as against the committed working period of 18 hours. After hearing arguments from both sides, we tried to find a viable solution to make this equipment workable for the purpose for which it was obtained. It may be mentioned here that we made our efforts because we are convinced that the State Government while complying with the statutory provisions of copying the registered documents, preserving them and supplying them to people, is not indulging in a commercial activity and, therefore, the complaint was within the ambit of the Consumer Protection Act. Having regard to this fact and with a view to ascertaining the suitability of the equipment supplied by the Hindustan Computers Ltd. for the purpose for which it was supplied, we decided to appoint Computer Maintenance Corporation, a Government of India Undertaking, with the consent of both the parties, to inspect this equipment and determine the following issues vide our order dated 28th July, 1995 : "1. Whether it is suitable for the purpose for which it was supplied ? 2. Whether it is operational for the purpose for which it was supplied ? 3. If not, what are the defects/deficiencies in this regard and the reasons for these defects and deficiencies ? 4. What steps can and should be taken to remove these defects to make it operational." Our Order further reads : "It was agreed that the Computer Maintenance Corporation Ltd. (A Govt. of India Enterprise), World Trade Centre, Cuffe Parade, Bombay-400 005, may be requested to undertake the work of inspection and preparation of a report on the four issues mentioned in the preceding paragraph. Therefore, CMC Ltd. is hereby requested to undertake the work of preparing a report on the points mentioned earlier for the assistance of this Commission. While preparing this Report the CMC would associate the representatives of the State Government of Maharashtra and M/s. Hindustan Computer Ltd. during their inspection of this equipment. CMC would also be free to associate any other institution and/or expert in case they think it necessary for the purpose of the work assigned to them."

IN pursuance of our order, the CMC submitted their report. After explaining the methodology of investigation, study of the relevant documents, visit to the Government Photo Registry, meetings with the representatives of HCL including discussions with their General Managers from Bombay and NOIDA office and Manager - Field Support Imaging Systems, they recorded their findings on the following issued : 1. Current Status of the Equipment. 2. Jamming of Stationery in microfilming equipment. 3. See through image effect on the printed copies of the documents. 4. Illegibility of printed copies of the documents. 5. Black borders in the printed copies.

Excessive consumption of the toner.

LOWER throughput of the microfilming and printing equipment. Very high level of defects and corresponding maintenance re-quirements on the equipment supplied. Smudging of the printouts.

SCRATCHES on the film during duplication. 6. M/s. CMC Ltd. also held discussions with M/s. HCL and examined the solutions suggested by the latter. Having done all this, the CMC Ltd. arrived at the following conclusions : 1. The equipment is not suitable for the purpose for which it was supplied. 2. The equipment is not operational for the purpose for which it was supplied. 3. The defects/deficiencies in this regard and the reasons for these defects and deficiencies are described in detail in Section 2 of their report. 4. M/s. HCL has offered various suggestions/solutions to reduce or eliminate the defects and deficiencies to make the equipment operational. However, these remedies have one or more of the following shortcomings. (a) They would reduce the throughput of the system drastically. (b) They would reduce the clarity of the printed images. (c) They would increase the paper toner consumption. (d) Hence they are not sufficient to resolve the problems effectively and permanently. In their opinion M/s. HCL Ltd. has not been able to suggest any effective ways to remove the defects.

Although M/s. CMC Ltd. were appointed by us vide our order dated 28th July, 1995 with consent of both the State Government of Maharashtra and the Hindustan Computer Ltd. and the terms of reference for their investigation and report were also agreed to by both of them, the opposite party - Hindustan Computers Ltd. have raised a number of points questioning the report of the CMC. Two major points raised by them are that M/s. CMC Ltd. had arrived at conclusions : (a) without seeing the equipment operated, and (b) without seeing the original documents, the photo copies of which are alleged to have been smudged, since the photograph and photo copies can only reflect the original. The opposite parties have also stated that the CMC did not consult M/s. Cannon of Japan whose equipment was supplied and who are the world leaders in manufacturing photographic and reproduction equipment and further that their investigation was not independent as they did not go into the causes for the alleged defects and the solutions to remove these defects. The HCL has also repeated that the CMC did not take into account the motivation and willingness of the Operators while determining the throughput.

We have carefully considered the arguments made by Counsel for the Hindustan Computers Ltd. on the report of the CMC who were appointed with their consent for the agreed terms of reference as per our order of 28th July, 1995. It is too late in the day now to raise the objections which in fact have been made the main ground of HCL for contesting the case of the complainant. It is quite clear that the CMC Ltd. tried to find a solution to the problems but solution offered by the Hindustan Computers Ltd. were having their own consequences and therefore were not found viable for the purpose of the complainant. We also find from the submissions of the opposite parties that the Rotary Camera supplied by them can no longer be repaired as the spare parts are not available since this Camera is no longer being manufactured. In other words, the equipment itself has become obsolete as far as the manufacturer is concerned.

In the circumstances of this case and after taking into account the report of the CMC Ltd., we are conviced that there is a definite deficiency on the part of M/s. Hindustan Computers Ltd. in supplying equipment, subject of this case, to the State Government of Maharashtra. We also find that it is not possible to replace the machinery at this stage. Therefore, we are of the considered view that it would be fair and just to pass the following order.

Hindustan Computers Ltd. should refund the cost of machinery i.e. Rs. 58,66,725/- to the State Government of Maharashtra and pay interest at the rate of 12% from the 7th October, 1993 the date on which the complaint was filed before us till the date of payment. We are of the view that no further compensation as demanded by the complainant is necessary as 12% interest is being awarded by way of compensation. There is no orders as to costs. The payment should be made within three months of the date of this order. Upon receiving this payment, the complainant should hand over the concerned machinery and equipment to the Hindustan Computer Ltd. within one month.

Complaint allowed.