State of Bihar vs MAGADH MOTORS

THE present complaint case has been filed by the State of Bihar through Commissioner-cum-Secretary, Department of Excise Prohibition, complainant No. 1 and Special Superintendent of Excise, EIB, complainant No. 2 against M/s. Magadh Motors, opposite party No. 1 through its partner Manoj Kumar, opposite party No. 1(a), Sunil Kumar Verma, opposite party No. 1(b). Area Sales Manager, M/s. Mahindra & Mahindra Ltd., Patna, opposite party No. 2 and M/s. Mahindra & Mahindra, Marketing Department, Automotive Product Group, Bombay, opposite party No. 3 with a prayer to direct the opposite parties to refund Rs. 6,03,466.60 with interest with effect from 25.5.1990 and reasonable compensation for non-supply of vehicles against advance payment.

THE facts of the complaint case in brief are that Magadh Motors, opposite party No. 1 sent a quotation to the Secretary to Commissioner of Excise, Government of Bihar for supply of one Mahindra & Mahindra, Model 640 DP. Diesel jeep quoting Rs. 1,50,618.38. THE Deputy Commissioner, Excise, EIB thereupon asked for proforma bill vide his letter No. 2 dated 30.3.1990. Proforma bill for Rs. 7,53,081.90 for supply of five jeeps in response was submitted by opposite party No. 1 on 30.3.1990 itself. Payment of Rs. 7,53,082/- was made to opposite party No. 1 on 26.5.1990 by the complainant through Bank Draft. According to the complaint petition, the opposite party No. 1 supplied one number of jeep after receiving payment but did not care to supply the remaining four number of jeeps in spite of assurance for quick delivery of the vehicle. Complainant No. 2 then wrote to opposite party No. 2 on 6.8.1990 to take necessary steps to ensure immediate delivery of jeeps. This was followed by another letter dated 13.8.1990 addressed to opposite party No. 1 with a copy to opposite party No. 2 and opposite party No. 3. In response opposite party No. 2 assured vide his letter dated 11.8.1990 that the supply of jeeps would shortly be arranged through the dealer who had received payment as jeeps are readily available in their stock. M/s. Magadh Motors will have to collect them and deliver the same to the complainants. Opposite party No. 1 thereafter assured the complainants for supply of the vehicles within a fortnight vide their letter No. M/50-51 /131 dated 5.8.1990. THE opposite party No. 1 again only after 13 days on 18.8.1990 informed that the vehicles would now be supplied by 26-28th August, 1990. Supply of vehicles could not be made within that period. THE opposite party No. 1 once again vide their letter No. MM/90-91/186 dated 29.11.1990 assured to supply the vehicle within one month. But opposite party No. 1 vide their letter dated 15.2.1990 informed the complainant that because of unforeseen circumstances they could not supply the vehicles. THEy however assured to supply three jeeps by 15th March, 1991. But inspite of assurance jeeps were not supplied. Opposite party No. 1 vide letter dated 10.1.1991 wrote to the complainant No. 2 that in view of change in sales tax structure w.e.f. 16.11.1990 they would not be in a position to supply the vehicle to the complainant @ 30% Bihar Sales Tax and advised complainant to write to M/s. Mahindra & Mahindra Ltd. for supply of one number of jeep of the above model for which payment will be made by opposite party No. 1. Accordingly complainant No. 2 wrote to opposite party No. 2 enclosing Form IX A for supply of jeep of the said model but no supply of jeep except one made earlier was made. Rest of the vehicles have not been supplied in spite of several reminders of the complainant and assurance of opposite parties. It is alleged that opposite party No. 2 changed his stand and said that he cannot supply the vehicles due to change in tax policy of the State and only manufacturers could supply the vehicles. Since supply of four jeeps could not be made by the opposite parties, the complainants have demanded refund of Rs. 6,03,466.60 with current rate of Bank interest and compensation. The complainants had earlier filed Complaint Case No. 15/1992 which was withdrawn on 29th April, 1993 with a liberty to file a fresh petition before appropriate Forum.

Opposite party No. 1 represented by opposite party No. 1(a) and opposite party No. 1(b) neither ever appeared before the Commission in the present case nor filed any written statement in spite of several notices through registered post. Opposite party No. 2 and opposite party No. 3 filed written statement on 26.8.1994, wherein question of maintainability of the complaint case was raised. The two opposite parties contended that the complainants had filed Complaint Case No. 15/1992 before this State Commission earlier against the same set of opposite parties for the same grievances which was disposed of in 1993. The present complaint is barred by principle of res-judicata as the issue involved was substantially agitated when counter affidavits and replies on behalf of all the parties were filed and arguments were advanced in the earlier complaint case. The second complaint case has been filed to harass them. The complainants have no cause of action against them as the entire payment for supply of jeeps was made to opposite party No. 1 without any intimation to opposite party No. 2 and opposite party No. 3. There is no privity of contract between the complainants and opposite party No. 2 and opposite party No. 3. They further averred that opposite party No. 1 had filed counter affidavit in earlier Complaint Case No. 15/1992 wherein the opposite party No. 1 admitted the fact of receiving payments of the amount as stated by complainants and had also stated that they were ready to repay the said amount. The allegations made in the complaint petition therefore do not make out any consumer dispute within the meaning of Section 2(c) of the Act. There has not been any deficiency on the part of opposite party No. 2 and opposite party No. 3 either.

THEY further stated that they had informed the complainants in their letter dated 15.9.1998 that M/s. Lawly Sen and Company are authorised to sell or service Mahindra and Mahindra range of vehicles for their department and they could draw their requirements from M/s. Lawly Sen and Co. The opposite party No. 2 and opposite party No. 3 have alleged that the complainants overlooked their letter with ulterior motive and they placed order for supply of jeeps with opposite party No. 1 at Gaya without informing opposite party No. 2 and opposite party No. 3. THEY further alleged that after receiving quotation, proforma bill was asked for, received and was approved the same day by the complainants. The complainant No. 2 informed the opposite party No. 2 and opposite party No. 3 only when opposite party No. 1 made delay in supplying jeeps. Opposite party No. 2 wrote to the opposite party No. 1 to remit the price of the jeep received by them so that the vehicles could be supplied to the complainants. Price of one jeep was sent to the them and supply of the same was made without any delay. There is no question of supplying the remaining four jeeps by them when payment had not been made to them. THEY have denied the allegations levelled against opposite party No. 2 in para-9 of the complaint petition. THEY further pointed out that the dealings of opposite party No. 1 with opposite party No. 2 and opposite party No. 3 is that of a principal to principal. Opposite party No. 1 is a dealer who buys their goods and sells them without processing. THEY therefore prayed that the complaint case, in view of their aforesaid submission, may be dismissed by awarding exemplary cost to them. They also filed supplementary written statement enclosing photo copy of the written statement filed by opposite party No. 1 in earlier Complaint Case No. 15/1992.

THE complainants filed reply to the supplementary written statements of opposite party No. 2 and opposite party No. 3 wherein they have cited various letters written by them to opposite parties to expedite supply of jeeps and opposite parties vain assurance every time. THE complainants further contended that principle of res-judicata would not be attracted in this case as the Complaint Case No. 15/1992 earlier filed before the State Commission for a claim exceeding Rs. ten lakhs when the State Commission, prior to 1993 Amendment of the Act, had powers to adjudicate cases limited only to claims amounting to Rs. ten lakhs. THE complaint case therefore had been withdrawn with the liberty to file the case before appropriate Forum. This principle therefore will not be applicable as the consumer dispute had not been adjudicated by the State Commission. THEy have further stated that the opposite parties had agreed to repay the dues. But that was not possible only because of non- availability of fund. THEy further averred that opposite parties on several previous occasions and also presently undertook to refund the balance amount with interest on adjustment of dues against the Excise Department. But that was not done. This according to the complainant is a deficiency in service on the part of the opposite parties. THE complainants haves suffered because of the fault of the opposite parties who inspite of advance payment of full amount failed to supply the vehicles. This was solely done by the opposite parties for availing interest on the amount paid in advance. THEy further alleged that the intention of fraud and cheating was in the mind of the opposite parties from the beginning itself. THE complainants therefore feel that all the opposite parties jointly and severally are liable to pay the entire balance amount with interest. Before we enter into the merit of the case we would like to discuss the preliminary objection on maintainability point. Since adjudication-in Complaint Case No. 15/1992 had not been done by the State Commission as it was not a competent Court and since the aforesaid complaint case had been withdrawn on point of jurisdiction by the complainant with liberty to file fresh case before appropriate Forum, principle of res-judicata in our view, will not be attracted in this case. We are fortified by the judgment of Supreme Court in State of Maharashtra v. M/s. National Construction Company, Bombay, AIR 1996 SC 2367, wherein it has been held that the bar under Section 11 of CPC applied only if the matter directly and substantially in issue in the former suit has been heard and finally decided by a Court competent to try such suit. Final adjudication had not been made in the Compliant Case No. 15/1992. The present complaint case therefore will not be hit by the principle of res- judicata. We are also supported by the decision of Karnataka High Court in M.S. Baliga and Ors. v. National City Corporation and Ors., reported in AIR 1998 (sic.). In this case consideration money admittedly was paid to opposite party No. 1 for supply of goods and goods were partially supplied also. There was thus apparent failure on the part of opposite party No. 1 in rendering service to the complainants when they had accepted advance payment which included price of goods and service charge of opposite party No. 1. Therefore there cannot be any iota of doubt that it will be a consumer dispute within the purview of Consumer Protection Act, 1986. We therefore hold that the present case is maintainable and the preliminary objection is not sustainable in law. On perusal of record it is found that opposite party No. 1 had sent quotation to the Secretary to Commissioner and Secretary, Excise & Prohibition, Patna for supply of jeep of their own accord. The complainants wrote to opposite party No. 1 Gaya on 30.3.1990 to send proforma bill for supply of five number of diesel jeeps. Proforma bill from Gaya was received the same day on 30.3.1990 and was approved in the same financial year either on the same day or one day later, i.e., on 31.3.1990. It is admitted that a sum of Rs. 7,53,082/- through Bank Draft dated 25.5.1990 was paid to opposite party No. 1 which was acknowledged by them on 28.5.1990. Out of the above amount only one jeep was arranged to have been supplied. But complainants have alleged that all the opposite parties are responsible for non-delivery of vehicles. The point therefore before us is to find out as to who are responsible for not supply in remaining vehicles, whether opposite party No. 1 or opposite party No. 2 and opposite party No. 3 or all the opposite parties jointly, since the complainants have not clearly come out on this point.

IT is found from papers available on record that opposite party No. 1, inspite of several reminders from complainant for early supply of vehicles, does not appear to have been stirred to take necessary steps to arrange the supply of vehicles. They had not sent the price of the vehicles to opposite party No. 3 for arranging the supply although the money of complainant was available with them. Opposite party No. 3 on receipt of price of one jeep had supplied the same without any delay. Money for supply of remaining jeeps had not been remitted to opposite party No. 3 by opposite party No. 1 and therefore supply of jeeps could not be made by opposite party No. 3 even though jeeps were readily available with them.

FURTHER, we find from the record that no specific allegation has been brought against opposite party No. 2 and opposite party No. 3 by the complainants. They have only stated that the opposite parties had not supplied the vehicles even inspite of advance payment. Payment in shape of Bank Draft in the name of opposite party No. 1 had been made to opposite party No. 1. There is nothing on record to show that opposite party No. 1 ever tried to ascertain the delivery position from opposite party No. 2 or opposite party No. 3. The entire money was retained by opposite party No. 1 for a period of about one year. Supply of only one vehicle was arranged. The balance amount remained with opposite party No. 1. No amount was passed on to opposite party No. 2 and opposite party No. 3 for supply of remaining jeeps. According to the conditions for supply of jeeps by manufacturer pre-payment in full was required to be made to them. When payment was not made to opposite party No. 2 and opposite party No. 3, they were not obliged to supply the vehicles. There is thus no deficiency in service on the part of opposite party No. 2 and opposite party No. 3 when no consideration amount was paid to them. In fact they had been dragged into unnecessary long drawn litigation. We further find that the allegation of the complainant against opposite party No. 2 in para-9 of the compliant petition is contradictory in its content. It is not amenable to reasons as to how Area Sales Manager of Mahindra & Mahindra Ltd. could take a stand that he cannot supply the vehicles due to change in tax policy of the State and his employer, Mahindra and Mahindra Ltd. could supply the vehicles. None of the two letters referred to in this para have been written by opposite party No. 2. One letter is from opposite party No. 1; and the other is from Lawly Sen & Co., not related with this case. Such unfounded allegation against opposite party No. 2 may be suggestive of a design on the part of the complainant to confuse the issue and help the opposite party No. 1. In the light of the above facts, we are of the view that no liability in respect of non-supply of four jeeps to complainants can be fastened on opposite parties 2 and 3 in the present context. We are therefore constrained to hold that opposite party No. 2 and opposite party No. 3 cannot be held responsible for any deficiency of service on their part.

But opposite party No. 1 had received payment of Rs. 7,53,082/- from the complainant. One jeep out of the above amount was supplied. Supply of remaining vehicles have not so far been made. Payment against proforma bill is made for goods just ready to be supplied. Supply of goods only partially was done. Supply of remaining jeeps could not be done, according to opposite party No. 1 due to some unforeseen circumstances. No pain was taken by opposite party No. 1 to come out with the nature of the unforeseen circumstances. The inability of opposite party No. 1 in not effecting delivery of vehicles when advance payment had been made could be understandable in case if opposite party No. 3 would not have been in a position to supply the vehicles. But the letters of opposite party No. 2 clearly show that the vehicles were readily available with them to be supplied on pre- payment. Pre-payment had not been made to opposite party No. 3 and therefore vehicles could not be delivered to the complainants. This not only shows gross deficiency but also wilful misconduct and fraudulent practice on the part of the opposite party No. 1 for which the complainants would have fairly been entitled for compensation. But no pains were however taken by the complainants to quantify the loss suffered by the department due to non-delivery of the vehicles by opposite party No. 1. The evidence adduced by the complainants also docs not disclose an basis for ascertaining the amount of compensation. In the circumstances it is difficult to grant any amount by way of compensation.

IT may be pertinent to note that the department of Excise and Prohibition had totally ignored me advice of M/s. Mahindra & Mahindra Ltd. given in their letter dated 15.9.1988 available on record. Opposite party No. 3 had informed the department that M/s. Lawly Sen & Co. vas their authorised dealer in Patna and that the Excise Department could draw their requirement from the above dealer. The department should have better found out from M/s. Lawly Sen & Co. if they were ready to supply the vehicles to them in 1990 as the aforesaid letter was of 1988. In case of inability on the part of the above dealer to effect delivery in 1990 they should have then chosen to place orders with other parties after fully verifying their credibility and goodwill. That does not appear to have been done and decision in haste was taken for placing the order with opposite party No. 1 and accordingly payment was made. But delivery of vehicles could not be made for about nine months. In the long last supply of one jeep was made. Allegation of ulterior motive has been brought against complainants by opposite party No. 2 and opposite party No. 3 in their written statement. But complainants have not refuted such serious allegation. They remained silent on this point. They have themselves in their final report in para-14 accepted that there was intention of fraud and cheating on the part of the opposite parties from the very beginning. They have still magnanimously not been specific as to which of opposite parties allegedly adopted fraudulent practice with them. A criminal case under Sections 420, 467 and 468 of IPC is reported to have been filed by the department. The result of that case has also been kept as a secret by the department from the Commission. IT may also be noticed that they had made Magadh Motors, Area Sales Manager, Mahindra & Mahindra and M/s. Mahindra & Mahindra, Marketing Department, Automotive Product Group as three opposite parties. Payment for supply of jeeps had been made by the complainants to opposite party No. 1 without even intimating opposite party No. 2 and opposite party No. 3. But when jeeps were not supplied, complainants held all the three opposite parties equally responsible for non- delivery of jeep when it is in the knowledge of the complainants that opposite party No. 1 had not made pre-payment to opposite party No. 3 for ensuring supply of vehicles. Inspite of that complainant showed sympathetic consideration to opposite party No. 1. Further, complainants on two dates informed the Commission, once on 14.12.1995 by Chandra Bhushan Lal of Excise Department and second time on 11.9.1996 by the Lawyer that negotiation is going on with the opposite parties and settlement of disputes may be arrived at. But opposite party No. 2 and opposite party No. 3 were not the opposite parties carrying on negotiation as they were not the parties in the dispute for refund of the balance amount. Obviously negotiation might have been going on between the complainants and opposite party No. 1. But opposite party No. 1 never entered appearance before this Commission in the present case. The Commission is at a fix to understand as to how the complainants were carrying on negotiation with them. Allegation of ulterior motive brought about by opposite party No. 2 and opposite party No. 3 against the complainants cannot therefore be brushed aside in such circumstances. Since the issue of fraudulent practice on the part of opposite party No. 1 and connivance of some officers or staff in the Excise Department cannot be the subject matter of adjudication under Consumer Protection Act, 1986, we would not comment on it. But since loss of huge public money is involved in this case the Commission strongly feels that the State Government through the Chief Secretary and Finance Commissioner may look into the matter and may take suitable necessary action against Government Officers and staff responsible for their acts of omission and commission in this transaction.

WE, in view of the discussions in previous paragraphs, solely hold opposite party No. 1 represented by 1(a) and 1(b) responsible for deficiency in service and direct opposite party No. 1 represented by 1(a) and 1(b) to refund Rs. 6,03,466.60 with 12% interest w.e.f. 28.5.1990 within two months from the date of receipt of this order. There is no order as to cost. Complaint disposed of. ______________