Kerala

StateCommission

CC/09/26

M/s Satlinks Cable TV Network - Complainant(s)

Versus

M/s Motorola India (P) Ltd. - Opp.Party(s)

Vinod Madhavan

16 Mar 2018

ORDER

THE KERALA STATE  CONSUMER DISPUTES REDRESSAL  COMMISSION

VAZHUTHACAUD,  THIRUVANANTHAPURAM.

COMPLAINT  –NO- 26/2009

JUDGMENT DATED . 30/05/2018

 

PRESENT:-

HON’BLE JUSTICE SRI. S.S.SATHEESACHANDRAN  : PRESIDENT

         

SRI. V.V.JOSE      : MEMBER

 

COMPLAINANTS:

 

1. . M/s. Satlinks  cable t v network,

    P.B. No. 4, Shoranur, Kerala state,

    Pin. 679 121, Represented by its Managing Partner,

   Asha Rani.

2. Asha Rani P.K,

   Managing  Partner, M/s Satlinks Cable T V Network,

    P.B.No.4, Shoranur, Kerala State, Pin. 679 121.

3. Anil Kumar R.B,

    Partner, M/s Satlinks cable T V Network,

    ( Power of attorney holder of Asha rani P.K)

    P.B. No. 4, Shoranur, Kerala state, Pin. 679 121.

(By Adv. M.V. Bose and  Vinod Madhavan)

V/S

OPPOSITE PARTIES.

1. M/s. Motorola India (p) Ltd,( Represented by its Managing Director, Connected home solutions, No. 66/1,  Plot no. 5,

(By Adv. V.K. Mohan kumar )

2. M/s. Cable Zone, Anugraha kumaranilayam lane,

Ravipuram road, Ernakulam- 16.

 

                                  JUDGMENT

HON’BLE JUSTICE SRI. S.S.SATHEESACHANDRAN  : PRESIDENT

 

        The above complaint has been filed u/s 12 r/w section 17 of Consumer Protection Act for compensation. 

2.     Complainants are a registered partnership firm and its two partners, who are spouses.  Complainants are engaged in the business of telecasting free air channels and pay channels to their subscribers.  To provide digital channels and improve the quality of existing channels operated, the firm decided to start a regional digital channel by name “Yes Digital Channel”.  By digitalization, telecasting could be transported to larger distances, extending the operation of business to larger geographical areas and thus earning more revenue to the firm was the motive for such digitalization.  The firm wanted to be a forerunner in the digitalization process in the region before the entry of other operators engaged in telecasting .  First opposite party agreed to provide all back up at the price fixed and a project report was prepared which involved  three  phases.  The project contemplated of a digital cable system of  eighty three  free air channels and one satellite channel for the firm.  The first phase involved availability of FTA channels in DUV format from satellite and in non-encrypted form and then its conversion into QAM format  received  by a set top box.  Set top boxes included in the proposal of first opposite party were of DVB variant and they have to be distributed to the customers for receiving telecast in QAM format.  Phase I was to be followed by Phase II and III and on completion of all three phases, the complainant firm was assured by opposite parties that its telecast will clearly have a march over the rest of the cable operators.  To implement Phase I, a quotation was raised for five numbers of DVB satellite receiver, one number of MPEG2 encoder , one number of SEM, one number of FTA software and 250 numbers of DVI 1000 set top boxes, all items to be provided with warrantee of 12 months from the date of invoice.  On further negotiation, the number of DVI 1000 set top boxes was agreed to be raised to 1035.  Complainant firm paid an amount of Rs.35 lakhs under four demand drafts on 24.02.06.  Such payment was over and above the advance of Rs.2 lakhs paid earlier, which was collected for the installation and service of the sophisticated materials which required involvement and assistance of experienced staff of the first opposite party.  The goods covered by the quotation were purchased on 19.12.06 and brought to Shornur from Bangalore at the expense of the firm.  When the installation process commenced on 16.01.07 by the engineering staff of the first opposite party, it was found that the encoder supplied was not functioning.  The staff  returned with  the defective encoder  taking 20 set top boxes also.  The defective  encoder  prevented telecast of the Yes Digital Channel proposed by the complainants.  On 24.01.07, the engineering staff of the opposite party came back and the remaining set top boxes were transported to a nearby location.  The service engineer examined and rectified all the set top boxes and returned 15 set top boxes out of the 20 collected earlier.  Service engineer left after repairing the set top boxes and, later,  the encoder was sent from Bangalore to the 2^nd opposite party.  After receiving the encoder by complainant, the service engineer again came on 14.02.07 and rectified the defects.  The encoder functioned temporarily and later ceased functioning intermittently hindering the telecast.  Request by the complainants to rectify the defects were not promptly redressed by the first opposite party and it was delayed by 10 to 15 days.  Complainants have noticed   while rectification of the set top boxes that  it contained an inscription by name “Iquara Choice” and it was masked by stickers.  Then only they realized that these set top boxes were  imported for some other company and on rejection of being defective, were sold to the complainants.  Supply of defective set top boxes affected the quality of telecast and intermittent non-functioning of the encoder.  The encoder again became defective on 02.09.07 and complaints raised were not responded.  After repeated requests, the encoder was taken back on 15.11.07 for rectification without providing substitute by a staff attached to the office of the 2^nd opposite party.  Since the encoder was not returned after rectification of defects, a notice was issued to the opposite parties on 02.01.08, which was not responded.  Thereafter, an advocate’s notice was issued demanding refund of the entire sum  of Rs.37 lakhs with damage of Rs.5 lakhs from the opposite parties.  First opposite party sent a reply raising untenable contentions.  The encoder was not replaced or returned after rectification and no substitute was also provided for continuing with the telecast.  Complainants had to face lot of complaints from its subscribers who were expecting to view their digital channel and they returned the set top boxes asking for return of the subscription paid.  The reputation of the firm was seriously damaged by the acts of the opposite parties in not returning the encoder after rectification or even providing of a substitute.  Subscribers refused to pay the monthly subscription to the firm.  As the set top boxes did not work properly and efficiently, complainants suffered monthly loss of Rs.50,000/-.  Complaint was thereupon filed claiming refund of a sum of Rs.37 lakhs with 12.75% interest from the opposite parties with direction to take back all equipments supplied.  Complainants also claimed towards damages and loss of business and goodwill, a sum of Rs.5 lakhs from the opposite parties with cost of the proceedings.

3.     Notices given first opposite party appeared and filed a version disputing the claims of the complainant.  2^nd opposite party, after service, remained absent.

4.     First opposite party in its version challenged the maintainability of the complaint contending that the complainants obtained the goods and availed services of the opposite parties for commercial purposes.  Complainants, who availed the services of the opposite party for commercial purpose, it is contended, are not consumers.  Maintainability of the complaint was also challenged stating that the complaint requires expert evidence over technical details and technicality involved and it cannot be decided in   summary proceedings by the Commission.  While admitting the acceptance of the quotation from the first complainant  it is contended that  after negotiations, agreement  was formed to supply set top boxes at a discounted price of Rs.1250/-.  Since set top boxes were provided at a discounted price, no warranty was provided to them, but only for the  products and  warranty was  for a period of one year from the date of invoice.   According to this opposite party, certain minimum quantity of set top boxes were agreed to be supplied to its distributor, 2^nd opposite party, as spares for   complainant.  The installation of receiver, encoder and SEMB8, according to this opposite party, was completed on 16^th January 2007  and the  whole system configured as per the list given by the complainants.  The set top boxes were not able to decode the video contents and it was found that there was a requirement of flashing new code on to set top boxes chip sets for receiving the video contents.  20 set top boxes were brought to Bangalore for flashing code and testing purposes.  From the day of installation i.e. 16.01.07, the encoder was always in the possession of   complainants, according to this opposite party.  After successful testing of the 20 set top boxes, they were returned back to the complainants.  Thereafter, the service engineers of the first opposite party carried out flashing of all set top boxes with new code and it was successfully completed.  Minor complaints were attended to and the entire system was commissioned and started functioning since January 2007.  First opposite party, it is contended, did not enquire into the purposes or end use of the equipments supplied to complainants.  After nine  months of smooth functioning, the encoder in October 2007 had a minor fault in output video.  On examination, it was found that it was a hardware problem and the encoder required to be re-exported for repair.  The encoder was received on 27.11.07 by Motorola and re-exported to US on 6^th December 2007 for rectification.  First opposite party arranged stand by encoder unit to the complainant on 10^th January 2008, though there was  no provision to provide replacement.  This opposite party was unable to contact complainant No.3 and thereupon, through 2^nd opposite party, its distributor,  attempts  were made to contact the complainant and then it was reported that he was out of station for about three  weeks and his manager asked  to collect the replacement   stated that it could be done only with the direction of   3^rd complainant.  Several intimations sent to 3^rd complainant to collect the stand by unit from Bangalore warehouse of the opposite party were not responded and letter sent was returned with the endorsement “addressee not available”.  Complainants failed to collect the stand by unit and deliberately omitted to respond to its letters, according to this  opposite party.  The alleged faults or defects in the encoder or the equipment installed, according to this opposite party, are due to its improper use or apparent tampering of them, for which, it is not responsible.  Advocate notice of the complainant was responded denying the allegations and stating true facts.  There was no deficiency of service by the opposite parties and the allegations raised in the complaint are baseless.  There was no unfair trade practice by the opposite parties,  over which  no  specific allegation is raised  in   complaint.  First opposite party  raising   contentions as above  urged for dismissal of the comlaint.

5.     During the course of the proceedings, first opposite party had moved a petition for recording the change of its name stating that such a name change was allowed by an Order of the Hon’ble High Court of Punjab and Haryana in Company Petition No.72 of 2010 in the matter of scheme of arrangement and reorganization between the company and its share holders and creditors.  It was claimed that the name was changed to Motorola Mobility India Pvt. Ltd. and,  later,  entering into a business purchase agreement with General Instrument Corporation of India Pvt. Ltd. and under certificate of incorporation, its name has been further changed to General Instrument Corporation India Pvt. Ltd.  Then, w.e.f. 2^nd March 2015,  it is stated.  First opposite party again underwent a change from General Instruments Corporation of India Pvt. Ltd. to ARRIS India Pvt. Ltd. and that change of name has been registered with the Registrar of Companies through a fresh certificate of incorporation dated 2^nd March 2015. On 15.09.05, the above  petition I.A.No.61 of 2015 was allowed permitting the change of name of first opposite party as ARRIS India Pvt. Ltd. with direction to file fresh proof affidavit by the opposite party.  Pursuant to that order, first opposite party filed another  proof affidavit affixed with the seal of ARRIS India Pvt. Ltd.

6.     Evidence of the case consisted of the testimony of PW1 and PW2 and exhibits A1 to A14 for the complainants.  For the first opposite party, one witness as DW1 was examined and exhibits B1 to B5 were marked.

7.     After hearing counsels on both sides and perusing the materials produced  we find the  following points arise for consideration :-

i)      Whether the complainants are consumers,  and the complaint involves a consumer dispute as under the Consumer Protection Act?

ii)      Have the opposite parties committed any unfair trade practice or  deficiency of service in the supply of goods and providing of services to the complainant after receiving   consideration  for  the goods and   for rendering service?

iii)     What , if any,  are the relief or reliefs the complainants are entitled to?

 

Point no: (1)

8.     First opposite party has challenged the maintainability of the complaint,  contending that the complainants are not consumers covered by the Act and as such, the disputes raised by them do  not fall under consumer dispute entertainable by the Commission.  Complainants had obtained goods and services of first opposite party solely for commercial purposes and not  for earning livelihood by means of self employment is the contention of the first opposite party to challenge the maintainability of the complaint.

9.     First complainant is a registered partnership firm and 2^nd and 3^rd complainants are its partners, is not disputed.  The goods were purchased and services in relation to such goods were availed for improving the business activities of the 1^st complainant, a registered partnership firm, which is engaged in telecasting of free air channels and pay channels to  subscribers, is also not in dispute.  Essentially, the transaction between the parties for the supply of encoder and set top boxes was for commencing a new channel by changing into digitalization.  In the complaint it has been stated that such change was contemplated for expansion of its business to larger geographical areas, to get more number of customers and thus  to earn   more revenue to the first complainant.  The expansion of commercial activities of the firm in telecasting operating channels by its digitalization was contemplated under the business transaction entered with the opposite parties for supply of encoder and set top boxes and for providing continuous service.  Complaint raised by the complainants alleging deficiency of service and unfair trade practice by the opposite parties before proceeding further has to be examined whether the complainants are consumers as defined under the Act.  First complainant being a registered firm and the 2^nd and 3^rd complainants its partners, it has to be looked into whether the first complainant falls within the definition of consumer.  Person is defined separately under the Act un/s 2(1)(m) which includes (i) a firm whether registered or not.  So a registered partnership firm carrying out commercial activities can be a consumer under the Act provided it satisfies the conditions stipulated under the explanation to the definition of consumer.  Challenge raised by the opposite parties that the complainant and its partners are carrying on commercial activities as such would not render their complaint non-maintainable, if the firm registered or not and the partners thereof are qualified to have the status of consumer in accordance with the explanation under that definition.  The explanation states that the clause ‘commercial purpose’ under the definition of consumer does not include use by persons of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self employment.  In  the case of a firm whether registered or not to examine whether it satisfies the conditions  stipulated under the explanation as to purchase of goods bought and used and services availed has to be examined and decided in relation to its partners whether the business activities of the firm are carried out exclusively for the purpose of earning their livelihood by means of self employment.  A firm must have not less than 2 partners and when a test of this nature is called for, there must be satisfaction that the business activities are exclusively for earning the livelihood by means of self employment of all such partners and not limited to some of them.  Where a firm registered or not falls under the definition of a person and thus be  eligible  to here status of   consumer under the Act, whether it has  such  status of requires to be analysed with respect to the  question  whether its commercial activity is exclusively for the purpose of earning livelihood by means of self-employment by all  the  partners constituting at  firm.  In Lakshmi Engineering Works vs PSG Industrial Institute (1995 (3) Supreme Court Cases 583), analyzing   the definition of consumer and the effect of the explanation added to it by Act 52 of 1993, the Apex Court has observed thus :

“Explanation reduces the question what is “commercial purpose”, pure question of facts is to be considered in the back ground of each case.  It is not the value of the goods that matters but for the purpose for which the goods was bought or put to.  Several words employed in the explanation viz. “uses them by himself”, “exclusively for the purpose of earning livelihood”, “by means of livelihood”, make the intention of Parliament abundantly clear that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood”. 

 

Examining the impact of the explanation with reference to a firm, the Apex Court has further observed thus :

“We are also of the opinion that the definition of the expression ‘person’ in section 2(m) includes a firm (whether registered or not), a Hindu Undivided Family, a co-operative society or any other association of persons (whether registered under the Societies Registration Act 1860 or not) makes no difference to the above interpretation.  If a firm purchases the goods, the members of the firm should themselves ply, operate or use the goods purchased”.

 

So, when the firm registered or not raises a consumer dispute, the maintainability of its complaint depends on the conditions envisaged under the explanation that the goods bought and used and services availed are exclusively for earning livelihood by means of self-employment of all its partners.

10.    In the complaint, no specific case has been made out by the complainants to show that the first complainant firm satisfies the requirement cast under the explanation to claim the status of a consumer.  The only averment made in that regard is thus :

“The firm is constituted by complainants 2 and 3, for earning livelihood by means of telecasting of free air channels and pay channels, by themselves, to their subscribers”.

In the proof affidavit filed in lieu of examination in chief of 3^rd complainant on behalf of the complainants, the above statement is repeated thus :

“The firm is constituted by my wife and me for earning livelihood by means of telecasting of free air channels and pay channels by ourselves to our subscribers”.

There is no whisper in the complaint or in evidence that the commercial activities  of the firm are carried out for the purpose of earning livelihood of its partners   ‘by means of self-employment’.  They are carrying out the business of the firm by themselves for earning livelihood as canvassed in the complaint and evidence, would not be sufficient to satisfy the requirements covered by the explanation to the definition of consumer.  Several business activities can be carried out by constituting a firm or individually for earning livelihood and the operations thereof can be performed by themselves or by others.  However, satisfaction of the explanation to definition of consumer demands that the goods bought and used and services availed by a person is exclusively for the purpose of earning his livelihood by means of self-employment.  Commercial activities in the case of a firm must be shown exclusively for the purpose of earning livelihood of the complainants, all of them, by means of self-employment.  In the present case where the complainants have no case other than that they are carrying out business for their livelihood by themselves, which is exclusively for the purpose of earning livelihood by means of self-employment, the first complainant firm cannot claim the status of a consumer and it follows that its partners, 2^nd and 3^rd complainants also do not have such status.    We, therefore, hold that the complaint is not maintainable.

11.    In view of the findings as above, no further scrutiny of the evidence and other points arise for consideration in the case.

        Complaint accordingly fails and   is dismissed without cost.

 Dismissal of the complaint is without prejudice to the rights of the complainants to file a suit for the reliefs claimed in these proceedings in accordance with law,  and ,  in such case, they can canvass the benefit of section 14 of Limitation Act to exclude the period spent in prosecuting the proceedings under Consumer Protection Act, while computing the period of limitation prescribed for such suit. 

  

JUSTICE  S.S.SATHEESACHANDRAN  : PRESIDENT

 

 

 

         

V.V.JOSE                                                   : MEMBER

 

 

                        APPENDIX   

COMPLAINANT’S  WITNESSES

Pw1- R.B. Anilkumar

PW2- Jaisankar .  C.V 

EXBTS FOR COMPLAINANT:

Exbt. A1-   True copy of letter dated. 10-11-2006, issued by 1^st opposite                      party to the complainants.

Exbt.A2- True copy of receipt, dated.  11.01.2007, issued by 1^st opposite                              party to Satlinks.

Exbt.A3- True copy  of letter, dated 15.11.2007, issued by Mr. Sudhi,                                     attached to the 2^nd opposite party in receipt  of encoder.

Exbt. A4- True copy of notice, dated 02-01-2008, issued by the 1^st                                complainant to the 1^st  opposite party.

Exbt. A5-  True  copy of letter, dated. 21-08-2008, issued by the ottappalam               division of department of posts, India  to the 1^st  complainant.

Exbt. A6 –True copy of  lawyer notice,   dated. 08-06.2008, issued by the                             counsel for 1^st complainant. 

Exbt. A7- True copy of lawyer notice, dated. 1-8-2008, issued by the                                     counsel for 1^st opposite party. 

Exbt.A8- Letter dated. February 20, 2006.

Exbt.A9-Letter dated. 25-09-2008 sent to Anilkumar.

Exbt.A10-   Dated. 05-12-2005 proposal prepared by Motorola, CHS

Exbt. A11-  e-mail  letter  dated. 8^th 2003.

Exbt.A12- e-mail  letter dated. 07-10-2003.

Exbt.A13- Appointment letter dated. August 11, 2003.

Exbt.A14-  Letter dated September 29, 2005

 

OPPOSITE PARTIES WITNESS:

 

Dw1- Sri. Kannan Navaneetha Krishnan

 

EXHIBITS FOR OPPOSITE PARTIES:

 

Exbt. B1-  Letter dated. 10, November 2006.

Exbt. B2- A copy  of purchase Order

Exbt.B3-  A copy of the letter dated 6 February 2008 from

               Motorola to Satlinks.

Exbt. B4-  A copy of  email  from M/s. Cable  zone to Motorola .

Exbt. B5-   A copy of email from Motorola to Satlinkgs  .

 

 

JUSTICE  S.S.SATHEESACHANDRAN  : PRESIDENT

 

 

         

 

V.V.JOSE                                                      : MEMBER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sh/-