Sardar Ali, Acting Chairman -
(1.) PURSUANT to the complaints dated 9.1.90 and 15.12.90 of one Shri Vijay Kumar Jain, 1339 Krishna Gali, Bazar Guliyan, Delhi (hereinafter referred to as informant), the M.R.T.P. Commission has ordered the preliminary investigation under Regulation 35(1) of M.R.T.P.C. Regulations, 1974 (herein after referred to as Regulations) to be conducted by Director (Research). In the complaints the informant has alleged that M/s. Expo Machinery Ltd. (hereinafter referred to as respondent) has sold a defective refrigerator and has not rendered satisfactory after -sale service. The Director (R) simply prepared its report dated 10th May, 1991 on the basis of the comments/ reply furnished by the respondent and made the recommendation for institution of enquiry against the respondent under Section 36A(viii) (ii) of the Monopolies & Restrictive Trade Practices Act (hereinafter referred to as Act).
(2.) FINDING a prima facie case the Commission directed the issuance of Notice of Enquiry and therefore Notice of Enquiry dated 5th July, 1991 was issued to the respondent under Section 36A(1)(i)(viii) of the Act which, inter alia, reads as under:
"The respondent is a wholly owned subsidiary of Kelvinator of India Limited engaged in the sale and service of Kelvinator Refrigerators. It had sold a Kelvinator refrigerator to one Vijay Kumar Jain of Krishna Gali, Bazar Guliyan, Delhi in November, 1988. The fridge was defective as it did not work properly even during the warranty period. The consumer brought the defects to the respondent's notice several times and its service engineer repaired the fridge three times during the warranty period. In spite of those repairs the defects remained the same. Therefore, the fridge was replaced during April, 1990. The fridge which was replaced by the respondent had also some manufacturing defects. Its inside body was quite shabby. It seems some 2nd hand fridge had been delivered to the consumer. The consumer lodged a complaint with the respondent in July '90 for repairing of the fridge. The service engineer of the respondent kept the fridge under observation but could not rectify the defects. Finally, the fridge was taken to respondent's workshop on 14th February '91 but returned to the consumer in the same condition on 8th March, 1991. The fridge is still out of order as reported by the consumer in a letter dated 27th March '91. A copy of the PIR dated 10th May, 1991 is enclosed for ready reference."
The respondent in response to a reply to the Notice of Enquiry submitted that the present complaint in question is an abuse of process of law and ought not to be entertained by the Com mission as the informant by exerting his access to press has misused his privilege and has tried to malign of a reputed manufacturer who sell thousands of refrigerators within the courtry every year; that the Notice of Enquiry deserves to be discharged since the nature of the complaint is very vague and generally showing no specific problem and it was merely at the whims and fancy of the informant and his family members, who wanted the refrigerator to be replaced even though the refrigerator was in prefect working condition; that complainant had originally purchased one 286 litre refrigerator in November, 1988 and was duly entitled to service under the service contract entered into with the Company and the present complaint cannot be with respect to both the refrigerators because it was the first refrigerator which was sold to the complainant and the second refrigerator was only given by way of replacement to the first one and was not sold as such; that each and every refrigerator manufactured by M/s. Kelvinator of India Ltd. is "test checked" before it is rolled out of the factory for sale and it is absolutely incorrect that the refrigerator was defective in any manner; that the informant being an employee of Times of India group of newspapers or the Company publishing those newspapers has misused his position in indulging in this malicious propaganda against the respondent and exerted pressure on the respondent in agreeing to give a new refrigerator even though the same was in working condition; that as far as the second refrigerator is concerned, which was given by way of replacement to the first one has been working satisfactorily and has been attended as and when informant asked for.
(3.) NO rejoinder was filed by the director General and the issues were prepared on 6.9.91 as under:
1. Whether the NOtice of Enquiry deserves to be discharged on the grounds mentioned in paragraphs 1 and 2 of the reply; 2. Whether the respondent has committed unfair trade practice alleged in the NOtice of Enquiry? 3. If reply to Issue NO. 2 is in the affirmative, whether the same is prejudicial to the public interest of the consumer or consumers generally. 4. Relief. 5 The Director General in support of its case tendered the informant Shri Vijay Kumar Jain as AW 1, who was examined and tendered 3 documents, which were marked Ex. AW 1/1 to Ex. AW 1/3. Ex. AW 1/1 is a letter dated 9.1.90 of the informant addressed to the Marketing Manager, Kelvinator of India Ltd., Faridabad alongwith one annexure. AW 1/2 is a letter dated 15.12.90 from the informant addressed to the M.R.T.P. Commission with 4 Annexures; Ex. AW 1/3 is a letter dated 27.3.91 of informant addressed to the M.R.T.P. Commission with certain annexures. 6. In rebuttal the respondent has produced one witness Shri P.K. Chakravorthy and filed its affidavit dated 7th March, 1974 alongwith exhibits viz., outdoor service call certificates dated 13.7.90 and 26.5.92. The witness has also relied on a joint inspection report dated 4th April, 1990 conducted by Shri C.K. Bakhru, Deputy Director of Bureau of Indian Standard, New Delhi (Ex. RW1/2). 7. After recording of the evidence the case was argued by the parties and were given liberty to file their synopsis and the orders were reserved. It is seen that subsequently both the parties have filed their respective synopsis. 8. Issue NO. 1: This preliminary issue was framed on account of the fact that the respondent has taken certain objections with regard to the maintainability of the NOtice of Enquiry in its paras 1 and 2 of the reply. However, these points were not pressed as also seen from the written submissions during the time of argument. Therefore, the submissions in these paras will also be considered while considering the 2nd issue and as such no findings are required for this issue. 9. Issue NOs. 2 and 3: The allegations made in the NOtice of Enquiry against the respondent are two -fold - one relating to supply of defec tive refrigerator and the other one is of not providing after -sale service during warranty period - under Section 36A(1)(i) and (viii) of the Act. Section 36A(1)(i) and (viii) reads as under:
"36A(1) -The practice of making any statement, whether orally or in writing or by visible representation which, - (i) falsely represents that the goods are of a particular standard, quality, (quantity) grade, composition, style or model; xx xx xx (viii) makes to the public a representation in a form that purports to be - (i) a warranty or guarantee of a product or of any goods or services; or (ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out." 10. NOw it is to be seen with respect to each allegation whether those allegations have been substantiated by proving the same by the D.G. through documentary evidence or otherwise. It is the common case of the parties that the fridge was purchased/sold on 28.11.88 with one year warranty and a four -year service contract for Kelvinator Refrigerators Sealed System was also entered between the parties. The warranty of one year reads as under: "Complete Refrigerator for One Year The refrigerator and all parts thereof (except the light bulb and crisper glass) to be free from defect in material and workmanship under normal use and service. Expo's obligation under this warranty shall be limited to repairing and providing the replacement of any part (except the light bulb and crisper glass) of said refrigerator, which thus proves defective within one year from the date of original purchase and which on Expo's examination discloses to its satisfaction to be thus defective -free service after sale is available only within the municipal limits of the area served by an office of Expo or its authorised dealer from whom the refrigerator has been originally purchased. Limit of Warranty: (1) XX XX XX (2) This warranty holds good so long as there is a correct use and maintenance of refrigerator. (3) This warranty still continue to be in force for the term herein specified irrespective of what replacements may be provided under it, and such requirements shall not attract any fresh warranty........." 11. The witness produced by the Director General to substantiate his case has said that the fridge from the very beginning did not give satisfactory service; the cooling was not upto the mark and the material put in did not stay fresh and a couple of complaints in writing to the respondent were made about the defect in the refrigerator. Sometimes mechanics came but did not carry any repair nor the respondent replaced the fridge. The details of the defect are mentioned in the complaints and complaints/ letters dated 9th January, 1990,15th December, 1990 and 27th March, 1991 (Exs. AW 1/1 to AW l/3 alongwith annexures).In the examination the witness was talking of a complaint dated 9th January, 1990 (Ex. AW 1/1) which has one annexure - copy of letter dated 24.10.89 received from the Bureau of Indian Standard Faridabad. Ex. AW 1/1 is a letter addressed by the witness to the Marketing Manager of Kelvinator of India Ltd., Faridabad and also refers to earlier letters dated 2nd May, 1989,30th June, 1989 and 21st August, 1989 requesting therein to reimburse the market current value of the fridge that is Rs. 5,200/ - as the respondents are unable to rectify the following defects in spite of refilling the gas three times: 1. The fruits and vegetables become wet and are generally spoiled and 'fungs' damage the same. 2. After defrost, the ice does not melt fully and automatically it starts functioning again. 3. It does not cool and things get sour after some time. Many a time thunder voice comes and all the fridge shakes heavily. Many a time a sound like 'cut' is head. 4. Ice -drops gather on the ceiling of freezer box.;