BEFORE THE BENGALURU IV ADDITIONAL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM,

C.C.No.494/2012

M/s. Aakruti Nirmiti Ltd & Others

Vs

M/s. Hephzi Elevators Pvt. Ltd

ORDER

SRI.J.N.HAVANUR, PRESIDENT

This is a complaint filed by the complainants against the OP, under Section 12 of the Consumer Protection Act, 1986, praying to pass an order, directing the OP to refund Rs.7,82,325=00 along with 24% interest and damages at the rate of rupees one lakh per month from Sept. 2011 and also seeking other reliefs as to cost etc. as deemed fit, in the interest of justice and equity.

2. The brief facts of the complaint can be stated as under.

The 1^st complainant is a leading property developer and builder with15 years of perfect reputation in the state of Maharashtra. For the past five years, the 1^st complainant has also entered housing business in Bengaluru city. The 1^st complainant has commenced a residential apartment project at Ananth Nagar Phase-II, Huskur gate, Bengaluru wherein the 1^st OP has constructed 176 residential apartment and that project is known as Aakruti Amity and it comprises of 5 blocks. That initially in block – A, the 1^st complainant got installed lifts manufactured by M/s. Airson Elevators Ltd, which have been functioning efficiently till date. On completion of the last block in the project, by means of dishonest and deceptive inducement, the OP persuaded the 1^st complainant to opt for a lift manufactured by the OP. The OP falsely misrepresented that it is the most innovative and leading manufacturer of lifts in India. The 1^st complainant getting carried away by the OP’s misrepresentation placed an order to install an Elevator for six passengers with B+G+7 floors in the E block of the apartment.

As per the agreement dated 2-3-2011, the OP undertook to complete the installation of elevator for a total cost of Rs.8,86,990=00 within 12 weeks from the date of handing over of site. That immediately on entering into the contract the 1^st complainant paid a sum of Rs.86,925=00 as advance to the OP. Accordingly the OP ought to have commenced the work in the month of March 2011 itself. But the OP took more than a month to commence the works and only after 15-4-2011 the OP dispatched the first material to the site. As per the agreed terms the 1^st complainant was supposed to make payment from time to time at each specified time of work progress. But the OP kept delaying the project on one hand and on the other hand kept demanding money without satisfactorily progressing with the installation work. Even before OP could complete and commission the lift the 1^st complainant had paid OP a total sum Rs.7,82,325=00 as on 28-7-2011 i.e. 90% of the cost as per the contract. In the meanwhile several apartment owners including the complainant no.2 to 8 herein had moved into their respective flats, as expecting the OP to commission the lift at least by June or July based on OP’s contractual obligation. But

OP failed to perform its part of the contract and caused wrongful injury and hardship to the 1^st complainant customers.

In the result the apartment occupants/inmates including senior citizens, children and women faced difficulties in climbing 7 floors without lift. Due to the OP’s folly the 1^st complainant faced repeated complaints and wrath of the apartment occupants grievance and misery. The 1^st complainant repeatedly pleaded and persuaded the OP to commission the lift immediately without delay. But the OP rather than keeping its promise, started dodging and evading the completion of the lift on various false and cooked up pretexts. The OP said motor is not working or power supply is not correct etc. The OP gave all sorts of rubbish and false excuses. Ultimately in first week of Sept. 2011 the OP’s manager Mr.Johnson informed that the lift was partially ready for use, only up to the 6^th floor. Further by email dated 7-9-2011 Mr.Johnson and Mr.Peter the officers of

OP’s stated that the lift was completed 10 days back, but for one floor which could not be serviced, because OP’s controller is wrongly supplied for 8 floors and the mistake was caused by the OP’s vendor. Since then the apartment inmates are facing a horrifying experience in the lift even to this day. The lift has not seen the 7^th floor and more over whatever lift the OP has provided has innumerable defects and nightmarish effects including jolting at the base landing, lift button malfunctioning, cabin door screeching at all floors, working only till 6^th floor, movement stuck on 4^th floor etc. In addition to this the doors of the lift have been closing and opening at irregular reckless intervals on its own. On several occasions is the occupant’s kids have suffered injuries and their lives are in absolute danger. In spite of having brought these defects and danger to the OP’s notice it has shown no concern for life and product responsibility. After Sept.2011 the OP has totally disappeared and has left the incomplete, defective, hazardous and recklessly dangerous lift unattended and in spite of several calls and mails the OP has refused to respond. So the complainant has to make immediate alternate arrangements to somehow keep the defective lift running by hiring another lift maintenance agency, resulting in wrongful loss and injury. The OP is not a BIS certified lift manufacturer and has absolutely no technical standard of lift manufacturing and no safety specifications for the lift sold to the 1^st complainant. That there is no reason why

OP’s manufacturing license, be terminated forth with. In fact the electrical inspectorate has refused to certify the defective lift for use by the inmates and has warned of fatal consequences. Consequently the apartment owners and occupants have been repeatedly demanding to replace the lift with another lift of an established tract record of guaranteed safety. Hence 1^st complainant having purchased the lift for domestic use of the

apartment inmates is unable to resolve their grievances due to

OP’s deficiency of service and knowingly supplying a substandard malfunctioning lift, hazardous to life and safety. The complainant no.2 to 8 are the owners of their respective flats purchased from the 1^st complainant and they are residing with their family therein. The entire block comprising of 49 flats have been sold and therefore all the flat owners are ultimate users/consumers of the lift. All the flat owners have been repeatedly complaining of the defective lift to the 1^st complainant and so the complainant no.2 to 8 have also lodged complaints. The 1^st complainant issued a legal notice dated 9-1-

2012 demanding immediate resolution of the grievance, but the

OP sent a frivolous reply dated 18-1-2012 falsely contending that due to acute power fluctuation the mother board was burnt and therefore is not responsible for the failure of the lift. The OP has also falsely replied that lift was operating to 7^th floor on the date of commission of the lift, which is an utter lie. It is the responsibility of the manufacturer to equip the lift with durable machinery and components including the motor, mother board etc. but the OP is now falsely blaming the 1^st complainant for failure of the mother board etc. All these are part of the lift system supplied by the OP and hence OP is liable for failure of the same. That to wriggle out from the liability and responsibility the OP has conveniently put the blame on power fluctuation and has disappeared. In fact there is and there was no power fluctuation in the entire building and it cannot be so. The OP is also guilty of cheating, endangering public life and safety due to rash and negligent conduct, in addition to deficiency of service and unfair trade practice. The 1^st complainant’s apartment inmates are exposed to great danger and risk of a mishap and are suffering unabated inconvenience, hardship, physical and mental trauma due to OP’s calculated fraud and contributory negligence. Complainants have been suffering continuous wrongful loss and injury due to the OP’s negligence and hazardous lift. So the OP is liable to refund the entire money with interest to 1^st complainant and pay damages to compensate the trauma being suffered by the complainants. If OP had known that there is power fluctuation and due to which the installation was impossible, in that case the OP should have either withdrawn from the contract or should not have installed the motor and the mother board for it to get burnt, without rectifying the power fluctuations, if any. If power fluctuation is technical snag in the installations then the OP should have tested the same in advance instead of taking the customer for a ride. The OP is a unscrupulous and unskilled lift manufacture without any sense of public safety or customer satisfaction. In fact being a professional lift manufacture the OP should have thoroughly completed the installation of the lift in all aspects and then should have permitted the 1^st complainant to use the same only after getting it approved from the life licensing authority. But the OP was only interested in collecting the entire amount even before the satisfactory completion of the installation. The OP having received 90% of the cost from the 1^st complainant had no business or reason to walk out from the project. On the other hand there was no reason for the 1^st complainant to withhold 10% of the payment after having paid more than 90% on the cost. The OP had laid a trap knowing fully well that if it walks out from the installation and maintenance of the lift, the 1^st complainant would be forced to make alternative arrangement without choice and then the OP can wriggle out from the completion of the lift as well as from the warranty of the same. Even before the lift installation is completed in all aspects the OP asserted that it has no obligation to maintain the lift, which clearly establishes the guilt of the OP. So the complainants have come up with the present complaint

3. After service of the notice, the OP has appeared through its counsel and filed version, contending interalia as under:

The complaint is not maintainable either in law or on facts. They do not know the complainants no.2 to 8 and there is no privity of contract between them and the complainants no.2 to 8 and the complainants no.2 to 8 have no locus standi to file the complaint against the OP. The 1^st complainant after understanding the terms of the contract with all its business sense has signed the agreement dated 2-3-2011 with them.

They have never stooped to the level of inducing the customers with dishonest means. It is true that as per the agreement dated 2-3-2011 they undertook to complete the installation of elevator for a total cost of Rs.8,86,990=00 within 12 weeks from the date of handing over of site to them. It is true that on entering into the contract the 1^st complainant no.1 paid a sum of Rs.86,925=00 to their company as advance. But it is false to state that they ought to have commenced the work of installation of the lift in the month of March 2011 itself. As the

1^st complainant has not kept the lift well ready in all respects they could not commence the installation work even in the month of April 2011 though they have dispatched the 1^st shipment of materials on 1-4-2011 as per the terms of agreement. So it is false to state that only after 15-4-2011 they dispatched the first material to the site of 1^st complainant. The 1^st complainant was required to make payment as per agreed terms against delivery of materials as per schedule. Accordingly the 1^st complainant received the 1^st shipment of material on 1-4-2011 and required to release the payment of Rs.2,66,097=00 which is the 30% of the contract value against delivery of materials. But the 1^st complainant has released a part payment of Rs.1,10,000=00 on 21-4-2011 and Rs.1,56,097=00 on 24-5-2011. Thus 1^st complainant has delayed the payment by over seven weeks whereas they were required to release the same against the delivery on 1-4-2011. The delay of 1^st complainant in releasing the payment also resulted in affecting the delivery of 2^nd shipment of materials to the 1^st complainant and it was delivered on 20-6-2011. The third shipment of material was delivered to the 1^st complainant by their company on 19-7-2011 whereas the 1^st complainant instead of releasing the payment on 19-7-2011 released the same on 28-7-2011. So it is false to state that they kept delaying the project on one hand and on the other hand kept demanding money without satisfactory progressing with the installation work. The delay in making payment by the 1^st complainant to them upon delivery of materials has resulted in consequential and proportionate delay in installation of the elevator. Apart from that the lift well was also not fully kept ready by the 1^st complainant for completing the installation of lift by the OP. The 1^st complainant was required to pay Rs.78,325=00 to OP as per the payment schedule mentioned in the contract. The 1^st complainant has defaulted in making payment as per the contractual terms. So the allegation of the complainant that the OP has failed to perform its part of the contract and caused wrongful injury and hardship to their customers is denied as false. OP Company was not aware as to the apartment occupants/inmates including senior citizens, children and women faced difficulties in climbing 7 floors without lift and hence deny the same as false. The 1^st complainant has to take the responsibility for causing inconvenience if any to its customers. During the installation of the lift their company technicians have noticed that there were constant power fluctuation in the site of the 1^st complainant and it has badly affected the commissioning of the lift by their company. In one such case, the winding of the motor of the lift machine was burnt. The 1^st complainant initially informed their

company to get the motor rewind by agreeing to bear the charges of the same. Subsequently the 1^st complainant got the motor of the machine rewind and handed over the same to them on 16-9-2011. Thereafter the lift was ready in all respects on the same day and their company intimated the said fact to the 1^st complainant on 16-9-2011 by email and requested its officials to take over the elevator. But the 1^st complainant has failed to acknowledge the receipt of handing over of the lift on the said day by their company. Keeping the delay in payment of amount towards materials from the 1^st complainant and subject to the availability of the lift well ready in all respects, their company has erected and commissioned the lift as agreed in the contract.

The OP Company has erected and commissioned the lift on 16-9-2011 and subsequently attended to the snags raised by the 1^st complainant and replaced the mother board burnt due to power fluctuation at the site of the 1^st complainant on 5-10-2011, and their company has kept its promise in the contract. All the shortcomings faced by their company before installation of the lift were successfully overcome by them and they have installed the lift on 16-9-2011 and it had become fully operational. Before

16-9-2011 all the issues and snags regarding the installation of lift were attended and solved by their company. The 1^st complainant has prevented the technicians of their company from entering the site of the lift from 14-10-2011 and handed over the same to some third party for maintenance during warranty period without their consent and their company is not answerable to the allegations made by the 1^st complainant so their company is absolved of its responsibility due to the handing over of the lift to third parties without its concurrence by the 1^st complainant. The OP Company is following the BIS standards for the manufacture and installation of the elevators. The lifts manufactured by the OP Company are already installed and running at several places and the same have been inspected by the lift inspectorate and the operating license issued for the same after thorough verification of the equipment. But the 1^st complainant has made baseless and malicious allegations against their company only with the intention of wriggling out its responsibility of making balance payment to their company to the tune of Rs.94,021=00 along with

Rs.18,000=00 towards replaced mother board. As the lift supplied to the premises of the 1^st complainant is custom made to suit the requirements of the order specification of the 1^st complainant, their company cannot take the said lift back as their company has supplied the materials and erected and commissioned the lift as per the contract, and it is not liable to refund Rs.7,82,325=00 with interest at 24% p.a. and damages as claimed by the complainant. So the OP Company is not guilty of cheating and endangering public life and safety and their company has not committed any deficiency of service to the 1^st complainant or anybody else. The said allegation is made against their company without any basis. To avoid making payment of Rs.94,021=00 being the balance amount and Rs.18,000=00 towards replaced mother board and to shift its negligence on them. The 1^st complainant has filed the present complaint alongwith other complainants by making false claim, so the complaint is devoid of merits, so it is prayed to dismiss the complaint with cost, in the interest of justice and equity.

4. So from the averments of the complaint of complainants and version of the OP, the following points arise for our consideration as under.

1. Whether the complainants prove that, the OP is negligent and there is deficiency of service on the part of the OP, in not supplying the good and satisfactory lift to them?

2. If point no.1 is answered in the affirmative, what relief, the complainants are entitled to?

2. What order?

5. Our findings on the above points are;

Point no.1: In the affirmative

Point no.2: The OP is directed to refund Rs.7,82,325=00 to the 1^st complainant along with 6% interest p.m. on the said amount from the date of complaint and to pay Rs.5,000=00 towards cost of litigation.

Point no.3: For the following reasons

REASONS

6. So as to prove the case, one Tarun Kumar Choudary

who being the GPA holder of 1^st complainant has filed his affidavit by way of evidence, so also the complainants no.2 to 8 have filed their affidavit and produced documents alongwith complaint and also produced copy of Karnataka Lift Act 1974. On the other hand, one R.Kamalesh, who being the General Manager of OP has filed his affidavit by way evidence on behalf of the OP Company and produced 9 documents along with list dated 16-7-2013 and 5 documents along with memo dated 17-10-2012. We have heard the arguments of both parties and we have gone through the oral and documentary evidence of both sides in between lines.

6. -One Tarun Kumar Choudary, who being the GPA

holder of 1^st complainant has stated in his affidavit evidence that, he is a leading property developer and builder with 15 years of perfect reputation in the state of Maharashtra. For the past five years, he has also entered housing business in Bengaluru city and he has commenced a residential apartment project at Ananth Nagar Phase-II, Huskur gate, Bengaluru wherein the 1^st OP has constructed 176 residential apartment and that project is known as Aakruti Amity and it comprises of

5 blocks. That initially in block – A, he got installed lifts manufactured by M/s. Airson Elevators Ltd, which have been functioning efficiently till date. On completion of the last block in the project, by means of dishonest and deceptive inducement, the OP persuaded him to opt for a lift manufactured by the OP.

The OP falsely misrepresented that it is the most innovative and leading manufacturer of lifts in India. He getting carried away by the OP’s misrepresentation placed an order to install an

Elevator for six passengers with B+G+7 floors in the E block of the apartment. As per the agreement dated 2-3-2011, the OP undertook to complete the installation of elevator for a total cost of Rs.8,86,990=00 within 12 weeks from the date of handing over of site. That immediately on entering into the contract, he paid a sum of Rs.86,925=00 as advance to the OP. Accordingly the OP ought to have commenced the work in the month of March 2011 itself. But the OP took more than a month to commence the works and only after 15-4-2011 the OP dispatched the first material to the site. As per the agreed terms he was supposed to make payment from time to time at each specified time of work progress. But the OP kept delaying the project on one hand and on the other hand kept demanding money without satisfactorily progressing with the installation work. Even before OP could complete and commission the lift he had paid OP a total sum Rs.7,82,325=00 as on 28-7-2011 i.e. 90% of the cost as per the contract. In the meanwhile several apartment owners including himself and complainant no.2 to 8 herein had moved into their respective flats, as expecting the OP to commission the lift at least by June or July based on OP’s contractual obligation. But OP failed to perform its part of the contract and caused wrongful injury and hardship to his customers. In the result the apartment occupants/inmates including senior citizens, children and women faced difficulties in climbing 7 floors without lift. Due to the OP’s folly he faced repeated complaints and wrath of the apartment occupants grievance and misery. He repeatedly pleaded and persuaded the OP to commission the lift immediately without delay. But the OP rather than keeping its promise, started dodging & evading the completion of the lift on various false and cooked up pretexts.

The OP said motor is not working or power supply is not correct etc. The OP gave all sorts of rubbish and false excuses.

Ultimately in first week of Sept. 2011 the OP’s manager

Mr.Johnson informed that the lift was partially ready for use, only up to the 6^th floor. Further by email dated 7-9-2011

Mr.Johnson and Mr.Peter the officers of OP’s stated that the lift was completed 10 days back, but for one floor which could not be serviced, because OP’s controller is wrongly supplied for 8 floors and the mistake was caused by the OP’s vendor. Since then the apartment inmates are facing a horrifying experience in the lift even to this day. The lift has not seen the 7^th floor and more over whatever lift the OP has provided has innumerable defects and nightmarish effects including jolting at the base landing, lift button malfunctioning, cabin door screeching at all floors, working only till 6^th floor. Movement stuck on 4^th floor etc. In addition to this the doors of the lift have been closing and opening at irregular reckless intervals on its own. On several occasions the occupant’s kids have suffered injuries and their lives are in absolute danger. In spite of having brought these defects and danger to the OP’s notice it has shown no concern for life and product responsibility. After Sept.2011 the OP has totally disappeared and has left the incomplete, defective, hazardous and recklessly dangerous lift unattended and in spite of several calls and mails the OP has refused to respond. So he has to make immediate alternate arrangements to somehow keep the defective lift running by hiring another lift maintenance agency, resulting in wrongful loss and injury. The OP is not a BIS certified lift manufacturer and has absolutely no technical standard of lift manufacturing and no safety specifications for the lift sold to him. That there is no reason why OP’s manufacturing license, be terminated forth with. In fact the electrical inspectorate has refused to certify the defective lift for use by the inmates and has warned of fatal consequences. Consequently the apartment owners and occupants have been repeatedly demanding to replace the lift with another lift of an established tract record of guaranteed safety. So he is having purchased the lift for domestic use of the apartment inmates is unable to resolve their grievances due to OP’s deficiency of service and knowingly supplying a substandard malfunctioning lift, hazardous to life and safety.

The complainant no.2 to 8 are the owners of their respective flats purchased from him and they are residing with their family therein. The entire block comprising of 49 flats have been sold and therefore all the flat owners are ultimate users/consumers of the lift. All the flat owners have been repeatedly complaining of the defective lift to him and so the complainant no.2 to 8 have also lodged complaints. He issued a legal notice dated 9-1-2012 demanding immediate resolution of the grievance, but the OP sent a frivolous reply dated 18-1-2012 falsely contending that due to acute power fluctuation the mother board was burnt and therefore is not responsible for the failure of the lift. The OP has also falsely replied that lift was operating to 7^th floor on the date of commission of the lift, which is an utter lie. It is the responsibility of the manufacturer to equip the lift with durable machinery and components including the motor, mother board etc. but the OP is now falsely blaming him for failure of the mother board etc. All these are part of the lift system supplied by the OP and hence OP is liable for failure of the same. That to wriggle out from the liability and responsibility the OP has conveniently put the blame on power fluctuation and has disappeared. In fact there is and there was no power fluctuation in the entire building and it cannot be so. The OP is also guilty of cheating, endangering public life and safety due to rash and negligent conduct, in addition to deficiency of service and unfair trade practice and his apartment inmates are exposed to great danger and risk of a mishap and are suffering unabated inconvenience, hardship, physical and mental trauma due to

OP’s calculated fraud and contributory negligence.

Complainants have been suffering continuous wrongful loss and injury due to the OP’s negligence and hazardous lift. So the OP is liable to refund the entire money with interest to him and pay damages to compensate the trauma being suffered by them. If OP had known that there is power fluctuation and due to which the installation was impossible, in that case the OP should have either withdrawn from the contract or should not have installed the motor and the mother board for it to get burnt, without rectifying the power fluctuations, if any. If power fluctuation is technical snag in the installations then the OP should have tested the same in advance instead of taking the customer for a ride. The OP is an unscrupulous and unskilled lift manufacture without any sense of public safety or customer satisfaction. In fact being a professional lift manufacture the OP should have thoroughly completed the installation of the lift in all aspects and then should have permitted him to use the same only after getting it approved from the life licensing authority. But the OP was only interested in collecting the entire amount even before the satisfactory completion of the installation. The OP having received 90% of the cost from him had no business or reason to walk out from the project. On the other hand there was no reason for him to withhold 10% of the payment after having paid more than 90% on the cost. The OP had laid a trap knowing fully well that if it walks out from the installation and maintenance of the lift, he would be forced to make alternative arrangement without choice and then the OP can wriggle out from the completion of the lift as well as from the warranty of the same. Even before the lift installation is completed in all aspects the OP asserted that it has no obligation to maintain the lift which clearly establishes the guilt of the OP. So the complainants have come up with the present complaint, so the complaint be allowed and grant relief as prayed in the complaint.

8. The complainants no.2 to 8 who being the purchasers of the flats no.106, 207, 307, 302, 706, 607 and 507 in Aakruti

Amity, Ananth Nagar, phase II, Huskur gate, Hosur main road, Bengaluru have filed their affidavit stating that, the flats in the building under their occupation, but they do not have proper functional lift, they gave complaints to the 1^st complainant by sending emails and tried to call the OP’s operation team to solve the technical defects in the elevator but OP has not responded. After Sept. 2011 the OP has disappeared from the site and left the incomplete, defective, hazardous and recklessly dangerous lift unattended &in spite of several calls and remainders the OP has refused to respond. So in order to solve their grievance the 1^st complainant has made immediate arrangement to somehow keep the defective lift running by hiring another lift maintenance agency resulting in wrongful loss and injury. The OP is negligent and there is deficiency of service on the part of the OP in not attending the lift. The apartment inmates are exposed to great danger and risk of mishap and they are suffering unabated inconvenience, hardship, physical and mental trauma, so he is liable to refund the entire amount with interest to the 1^st complainant and also to pay damages.

9. Let us a have look at the relevant documents of the complainant. Document no.1 of the complainant list dated 7-3-2012 is copy of agreement dated 2-3-2011 between the 1^st complainant and OP for installation of lift in the property of 1^st complainant within 12 weeks from the date of handing over of site in all respects and in that agreement payment schedule is also mentioned & the OP has accepted proposal of 1^st complainant for installation of elevator with particular specification in Aakruti Amity, Ananth Nagar, Phase II,

Kammasandra, Huskur Gate, Hosur Main road, Bengaluru for an amount of Rs.8,86,990=00 and out of it an amount of Rs.86,925=00 was received by OP as advance on the said date and it is stated in the agreement that the owner needs to pay entire expenses towards licensing activity and as per the clause 16 of agreement it is further clarified to pay all fees in connection with the erection or preparation of the structure is to be erected, usually billed by Govt. Agency directly to the owner also including license fees for installation or inspection the elevator equipment please note that OP only facilitate in obtaining the license though it is in the preview of the owner and the OP gave guaranty to the materials and workmanship of operation within one year from the date of completion & both 1^st complainant and OP have signed the agreement duly. Document no.2 is letter of 1^st complainant addressed to OP dated 28-10-

2011 stating that 1^st complainant has paid 90% of the contract value towards the service provided and as per agreement between the parties that the service shall be provided as per milestone within a span of 12 weeks but the OP has failed to complete its service as per contract in spite of written communication through email and several oral contacts, there is lack of onsite periodical inspection and maintenance activities to overcome the repeated frictions and breakdowns thereby questioning the safety and precautionary measures of the passengers using the lift so they have already deputed / outsourced the installation and maintenance services to the 3^rd party ensuring hassle-free services to their customers, they hereby serve a show cause notice for failure to perform and fulfill their contractual obligations, the above referred contract is deemed rescinded for non-performance leading to their mental agony and hardship, they may also institute a suit in the consumer court claiming refund /compensation for deficiency in services. Document no.3 is letter of OP dated 4-11-2011 addressed to the complainant stating that the payment from the end of 1^st complainant was not cleared as per the terms wherein they were required to receive a payment of Rs.2,66,097=00 which is 30% of the contract value against delivery. The materials were delivered on 1-4-2011 though the site was also not ready as per their understanding. The complainant has released Rs.1,10,000=00 on 21-4-2011 and Rs.1,56,097=00 on 24-5-2011 which is after a gap of over 7 weeks. The 1^st complainant’s delay in releasing the payment affected their installation and milestone’s agreement and the next shipment was delivered in 26 days as against 20 days agreed upon. The

3^rd shipment of materials was delivered on 19-7-2011 whereas the payment was received on 29-7-2011. Kindly note that they had completed the elevator and offered the 1^st complainant to take over the elevator on 16-9-2011 through email from

Mr.Peter, but the 1^st complainant did not take over the elevator by signing their handing over certificate. They would like to draw the attention of 1^st complainant regarding the failure of the main motor which was due to the unstable power supply at the site of 1^st complainant. The 1^st complainant has agreed to have the motor repaired at an additional cost of Rs.16,500=00, but subsequently the 1^st complainant had decided to get the rewinding done from their end. Due to the power fluctuation the main mother board also burnt out which was resupplied at an additional cost Rs.18,000=00 and same has been accepted by Mr.Yashtakkar through email dated 28-9-2011. Now they are surprised to note from the letter of complainant that the 1^st complainant has outsourced the installations maintenance services to 3^rd party without informing them. The elevator supplied by them is covered under defect liability period of one year against manufacturing defects from 16-9-2011. The 1^st complainant is already engaged the 3^rd party without getting their concurrence their liability stands cancelled. They have completed the elevator in full from their end. The 1^st complainant is liable to release the balance payment of 10% as per the contract and the mother board replacement charges of Rs.18,000=00 immediately. Document no.4 is copy of notice of 1^st complainant dated 22-11-2011 addressed to the OP stating that the 1^st complainant has made 90% of contract value and as per the contract the OP was required to (i) to complete the supply, erection, testing and commissioning of elevator within

12 weeks, (ii) to provide free maintenance and guarantee for a period of 12 months from installation of elevator (iii) Obtaining necessary certification from respective authorities and (iv) maintenance of elevators, but the OP has failed to oblige the contractual commitment, so the 1^st complainant is instituting a suit in a consumer forum court claiming compensation for delay and negligence and breach of contractual obligations. Document no.5 is reply of OP dated 28-11-2011 addressed to the 1^st complainant denying the noitice of 1^st complainant and called upon the 1^st complainant to release the balance payment of 10%. Even during the installation and commissioning it is the duty of the customer to provide proper power supply which has not happened from their side. Document no.6 is legal notice of 1^st complainant issued to OP dated 9-1-2012 stating that 1^st complainant having purchased the lift for domestic use of the apartment inmates is unable to resolve their grievances due to deficiency of service of OP and knowingly supplying sub-standard, mal-functioning lift hazardous to life and safety, so called upon the OP to refund Rs.7,82,325=00 alongwith 24% interest and compensation within 7 days from the date of receipt of this notice failing which the complainant will file civil and criminal complaint against the OP. Document no.7 is reply notice of OP dated 18-1-2012 denying the contents of notice of complainant. It is further stated in the reply notice of OP that when the lift was commissioned by the OP it was in perfect condition and operational throughout all the floor including the 7^th floor, they are absolved of their responsibility due to the handing over of the lift to the 3^rd parties without their concurrence. The OP is not liable to refund the amount along with interest and compensation. On the other hand, the 1^st complainant is liable to pay a sum of Rs.94,021=00 towards balance amount and Rs.18,000=00 towards replaced mother board of the lift alongwith interest. Document no.8 is copy of register maintained on the site for writing complaints by the inmates of building with regard to elevator in question. Document no.9 consists of letters of inmates of apartment addressed to the 1^st complainant in relation to poor working condition of elevator and lift fixed is malfunctioning etc. Document no.10 consists of emails correspondences between the 1^st complainant and OP and its employee and in one of the email of the employee of 1^st complainant addressed to Peter who being the employee of OP dated 16-9-2011 found on the email correspondence of complainant stating that they are giving team of OP last chance to make up and if failed they will be forced to diverge the workmanship to third party tomorrow onwards. The said email of 1^st complainant goes to show that, several times

the 1^st complainant has requested the OP to set-right the elevator as it is not working properly and inspite of it the OP did not attend it as per contract. The complainant has produced copy of lift plan given by OP which is not approved by competent authority. The complainant has produced copy of report /letter of Deputy Chief Electrical Inspector, Bengaluru dated 30-10-

2012 addressed to the 1^st complainant wherein Deputy Chief

Electrical Inspector has stated that on 17-9-2012 they inspected the Hepzi make passenger lift installed at E-block of 1^st complainant and instructed the 1^st complainant not to use the lift until the commissioning approval is obtained from their department. The 1^st complainant is informed to attend the following observations through their lift agency 1) the lift was not in running conditions, 2) the mechanical locking of the lift car doors of basement floor, 3^rd floor, 4^th floor, 6^th floor and 7^th floor was not working and the landing doors of the said floors were opening without de-locking key 3) the lift motor and controls in the lift room were replaced and 4) there was a leakage of oil from the gear box of lift motor, so asked the complainant to submit explanation for the unauthorized usage of the above lift within 7 days failing which the action will be initiated according to Karnataka Lift Act 1974. The complainant has produced the copy of Karnataka Lift Act, 1974. As per the said Act it is made unambiguously clear that under Section 3 and 4 of the said Act, every owner of property shall obtain the license from the concerned authority for erection of the lift and operation of elevator compulsory and section 6 of the Act, further makes it clear that, the lift should not be operated without licence.

10. At this stage, let us have a cursory glance at the material evidence of the OP. One R.Kamalesh, who being the General Manager of OP has stated in his affidavit that, the complaint is not maintainable either in law or on facts. They do not know the complainants no.2 to 8 and there is no privity of contract between them and the complainants no.2 to 8 and the complainants no.2 to 8 have no locus standi to file the complaint against the OP. The 1^st complainant after understanding the terms of the contract with all its business sense has signed the agreement dated 2-3-2011 with them. They have never stooped to the level of inducing the customers with dishonest means. It is true that as per the agreement dated

2-3-2011 they undertook to complete the installation of elevator for a total cost of Rs.8,86,990=00 within 12 weeks from the date of handing over of site to them. It is true that on entering into the contract the 1^st complainant no.1 paid a sum of Rs.86,925=00 to their company as advance. But it is false to state that they ought to have commenced the work of installation of the lift in the month of March 2011 itself. As the 1^st complainant has not kept the lift well ready in all respects they could not commence the installation work even in the month of April 2011 though they have dispatched the 1^st shipment of materials on 1-4-2011 as per the terms of agreement. So it is false to state that only after 15-4-2011 they dispatched the first material to the site of 1^st complainant. The 1^st complainant was required to make payment as per agreed terms against delivery of materials as per schedule. Accordingly the 1^st complainant received the 1^st shipment of material on 1-4-

2011 and required to release the payment of Rs.2,66,097=00 which is the 30% of the contract value against delivery of materials. But the 1^st complainant has released a part payment of Rs.1,10,000=00 on 21-4-2011 and Rs.1,56,097=00 on 24-5-2011. The 1^st complainant has delayed the payment by over seven weeks whereas they were required to release the same against the delivery on 1-4-2011. The delay of 1^st complainant in releasing the payment also resulted in affecting the delivery of 2^nd shipment of materials to the 1^st complainant and it was delivered on 20-6-2011. The third shipment of material was delivered to the 1^st complainant by their company on 19-7-2011 whereas the 1^st complainant instead of releasing the payment on 19-7-2011 released the same on 28-7-2011. So it is false to state that they kept delaying the project on one hand and on the other hand kept demanding money without satisfactory progressing with the installation work. The delay in making payment by the 1^st complainant to them upon delivery of materials has resulted in consequential and proportionate delay in installation of the elevator. Apart from that the lift well was also not fully kept ready by the 1^st complainant for completing the installation of lift by the OP. The 1^st complainant was required to pay Rs.7,82,325=00 to OP as per the payment schedule mentioned in the contract. The 1^st complainant has defaulted in making payment as per the contractual terms. So the allegation of the complainant that the OP has failed to perform its part of the contract and caused wrongful injury and hardship to their customers is denied as false. OP Company was not aware as to the apartment occupants/inmates including senior citizens, children and women faced difficulties in climbing 7 floors without lift and hence deny the same as false. The 1^st complainant has to take the responsibility for causing inconvenience if any to its customers. During the installation of the lift their company technicians have noticed that there were constant power fluctuation in the site of the 1^st complainant and it has badly affected the commissioning of the lift by their company. In one such case, the winding of the motor of the lift machine was burnt. The 1^st complainant initially informed their company to get the motor rewind by agreeing to bear the charges of the same. Subsequently the 1^st complainant got the motor of the machine rewind and handed over the same to them on 16-9-2011. Thereafter the lift was ready in all respects on the same day and their company intimated the said fact to the 1^st complainant on 16-9-2011 by email and requested its officials to take over the elevator. But the 1^st complainant has failed to acknowledge the receipt of handing over of the lift on the said day by their company. Keeping the delay in payment of amount towards materials from the 1^st complainant and subject to the availability of the lift well ready in all respects, their company has erected and commissioned the lift as agreed in the contract.

The OP Company has erected and commissioned the lift on 16-

9-2011 and subsequently attended to the snags raised by the 1^st complainant and replaced the mother board burnt due to power fluctuation at the site of the 1^st complainant on 5-10-2011 and their company has kept its promise in the contract. All the shortcomings faced by their company before installation of the lift were successfully overcome by them and they have installed the lift on 16-9-2011 and it had become fully operational. Before 16-9-2011 all the issues and snags regarding the installation of lift were attended and solved by their company. The 1^st complainant has prevented the technicians of their company from entering the site of the lift from 14-10-2011 and handed over the same to some third parties for maintenance during warranty period without their consent and their company is not answerable to the allegations made by the complainant. So their company is absolved of its responsibility due to the handing over of the lift to third parties without its concurrence by the 1^st complainant. The OP Company is following the BIS standards for the manufacture and installation of the elevators. The lifts manufactured by the OP Company are already installed and running at several places and the same have been inspected by the lift inspectorate and the operating license issued for the same after thorough verification of the equipment. But the 1^st complainant has made baseless and malicious allegations against their company only with the intention of wriggling out its responsibility of making balance payment to their company to the tune of Rs.94,021=00 along with Rs.18,000=00 towards replaced mother board. As the lift supplied to the premises of the 1^st complainant is custom made to suit the requirements of the order specification of the 1^st complainant, their company cannot take the said lift back as their company has supplied the materials and erected and commissioned the lift as per the contract, and it is not liable to refund Rs.7,82,325=00 with interest at 24% p.a. and damages as claimed by the complainant. So the OP Company is not guilty of cheating and endangering public life and safety and their company has not committed any deficiency of service to the 1^st complainant or anybody else. The said allegation is made against their company without any basis. To avoid making payment of Rs.94,021=00 being the balance amount of Rs.18,000=00 towards replaced mother board and shift its negligence on them 1^st complainant has filed the present complaint alongwith other complainants by making false claim, so the complaint is devoid of merits, so it is prayed to dismiss the complaint with cost, in the interest of justice and equity.

11. The OP has produced copy of sale invoice and delivery challan dated 1-4-2011, 20-6-2011, 19-7-2011, 23-8-2011, 8-8-

2011, 7-9-2011, 8-9-2011, 14-9-2011 and 11-10-2011. The OP has produced the original revised payment terms dated 2-3-2011 entered between the 1^st complainant and OP wherein we have found the payment schedule and in point no.6 of the said document it is stated that the owner needs to pay the entire expense towards licensing activities since their contract does not include the cost and the OP undertook to complete the supply, erection, testing and commissioning of elevator within 12 weeks from the date of handing over of site in all respects. The said payment terms makes it clear that, the owner has to pay the expenses of licensing activities to the OP and in that clause it is not stated specifically that the owner has to obtain the license by paying charges to the licensing authority obtaining license and hand over the same to the OP. Document no.2 is Statement of account dated 4-11-2011 showing receipt of Rs.7,92,969=00 from the 1^st complainant and the balance amount is of Rs.94,021=00 and the last payment received from the 1^st complainant was on 29-7-2011. Document no.3 is letter of 1^st complainant dated 28-10-2011 addressed to the OP stating that the OP has failed to fulfill its obligation as per the contract so they have outsourced the installation and maintenance service to the 3^rd party contract, the contract of OP is rescinded for non-performance and they will institute a suit in the consumer court for refund and compensation for deficiency of service. Document no.4 is letter of OP dated 4-11-2011 addressed to the complainant stating that the delay caused was not due to their failure but due to power fluctuation at the site. The complainant has outsourced the installation and maintenance services to 3^rd party without informing them, the elevator supplied by them is covered under defect liability period of 1 year against manufacturing defects from 16-9-2011, in this case, since the 1^st complainant has already engaged the 3^rd party without getting concurrence from them, their liability stands cancelled. They have completed the elevator in full from their end, the complainant is liable to release the balance payment of 10% as per the contract and the mother board replacement charges of Rs.18,000=00. The OP has produced some emails between OP and officials of complainant no.1 and in one of the email dated 16-9-2011 it is stated by the OP the lift

work is completed in all respects kindly deploy person from the 1^st complainant to take over the same and in one of the email of 1^st complainant addressed to the email of OP dated 15-9-2011 it is stated that they have no formal words to express their inconvenience by experiencing such a poor service, please do not make a further mess of this situation and another email of

1^st complainant dated 14-9-2011 it is stated that the motor is repaired by them the additional cost of Rs.16,500=00 is no longer applicable or payable.

12. On making careful scrutiny of the case of complainant on the background of oral and documentary evidence of both parties as narrated in details supra together with the relevant

Section of Karnataka Lift Act 1974, it is vivid and clear that, the 1^st complainant and OP have entered into written agreement on

2-3-2011 for installation of elevator in block-E of 1^st complainant for total cost of Rs.8,86,990=00 and the OP being a manufacturer of lift undertook to complete the installation of elevator within 12 weeks from the date of handing over the site for the said amount and on 2-3-2011 both parties have entered into written agreement and 1^st complainant has paid Rs.86,925=00 to the OP as advance and accordingly the OP has issued a letter on 2-3-2011 for acceptance of supply and work order in the name of 1^st complainant for total sum of Rs.8,86,990=00. The 1^st complainant has produced copy of agreement between the 1^st complainant and OP dated 2-3-2011 and in the copy of letter dated 2-3-2011 styled as amendment in payment term and delivery schedule at point no.6 it is mentioned as the owner needs to pay the entire expenses towards licensing activities. The said terms of agreement does not say specifically that the owner should pay the fee of licensing activities for erection and commission and obtain

license and give the license to OP particularly. The wording of the said letter at point no.6 and clause 16 of agreement that the owner needs to pay the entire expenses towards licensing activities and they (OP) only facilitate in obtaining the license though it is in the preview of the owner clearly means to say only that the OP should apply for license before competent authority after obtaining necessary fee from the owner and obtain the license for erection and operation of lift. Moreover, it is not the case of OP either in the version or in the evidence that the OP is not concerned with regard to obtaining of license from the concerned authority for erection and operation of lift etc. and it is the total responsibility of owner etc.

13. So from the terms and conditions of agreement in writing between the 1^st complainant and OP, version and evidence of employee of OP, we can hold unhesitatingly that the OP should collect the license charges from the owner i.e. 1^st complainant and apply for license before the licensing authority and obtain requisite license for erection and operation of lift and duty of the owner i.e. 1^st complainant is to pay the license fee to the OP and 1^st complainant is not duty bound as per the agreement between the parties to apply directly for license and obtain the same and hand over to the OP. Since 1^st complainant has delegated his power in favour of OP for obtaining license for erection and operation of lift as per the agreement it is bounden duty of OP to apply for license before the concerned authority after collecting necessary fee from 1^st complainant and secure the valid license before installation and operation of elevator. But unfortunately in the present case the OP being the manufacturer of lift and service provider has not bothered much about getting license from the concerned authority for installation and operation of lift since obtaining the license for

erection and operation of lift is mandatory as per provision of section 3 & 4 of Karnataka Lift Act, 1974 and without getting the license elevator cannot be installed and operated as per the Lift Act. If lift is erected and operated without obtaining any valid license from the concerned authority it will be an offence under the said Act. Without obtaining the license from the concerned authority the OP has erected the lift in the site of 1^st complainant and started operating the same and came forward with email addressed to 1^st complainant stating that the lift is ready in all respect and deploy his staff to take possession of the same which is totally against the provision of Section 3,4 and 6 of Karnataka Lift Act. Though responsibility of taking license from the concerned authority for erection and operation is on the owner of the site, in the present case on hands the OP who being the manufacturer and service provider has taken responsibility of erection and operation of the lift after obtaining necessary license by collecting necessary charges from the 1^st complainant. The erection and operation of lift made by OP in the site of 1^st complainant is totally illegal as it is against the provision of Section 3, 4 and 6 of Karnataka Lift Act. Further the main grievance of the OP is that after installation of elevator there was power fluctuation in the site and the complainant has not provided adequate power supply and on account of it mother board was burnt and the OP has replaced the same by incurring charges of Rs.18,000=00 and the 1^st complainant has agreed to pay expenses of new mother board fixed but did not pay the same and without their consent the 1^st complainant has out sourced the installation and maintenance service to the 3^rd party so their liability stands absolved. In fact before writing a letter dated 28-10-2011 to OP by 1^st complainant the employee of complainants have sent several emails to OP to come and rectify the mistake of the lift and inspite of it the OP did not respond and accordingly the 1^st complainant has sent a letter to

OP dated 28-10-2011 informing that the 1^st complainant has outsourced the installation and maintenance services to the 3^rd party ensuring hassle free services to their customers. Admittedly as per the letter of OP dated 4-11-2011 it is informed 1^st complainant that, the OP has completed the elevator and requested 1^st complainant to take over elevator on 16-9-2011 and warranty to lift as per the agreement is for one year from

16-9-2011 and well within the warranty period, the 1^st complainant and its customers i.e. complainant no.2 to 8 started facing lift problem, but problems of lift have not been rectified by the OP, despite making several requests and reminders by sending email and in this regard the 1^st complainant has produced copies of emails between 1^st complainant and OP. The OP who being the manufacturer and service provider ought to have taken care and caution at the time of installation of elevator to know whether requisite power supply is there on the site or not and after getting confirmed about proper power supply, the elevator must be fixed. No material evidence is placed by OP to show before the forum that, the OP took maximum care to verify the status of power supply on the site before installation of elevator. On the other hand after fixing elevator the OP started complaining that there is power fluctuation in the site and no adequate supply of power etc. The conduct of OP in not verifying or testing the status of power supply in the site before installation of elevator and erection and operation of elevator without getting license from the competent authority as provided under Section 3 and 4 of

Karnataka Lift Act and not resolving the lift problem of complainant well within warranty period certainly tantamounts to sheer negligence and deficiency of service on the part of the OP. The oral evidence of complainant that after collecting 90% of amount, the OP has not installed proper lift in the site as agreed and as on this day, the lift fixed by the OP is not working

and it is dangerous and hazardous for the use of inmates of E-block stands corroborated by documents of complainants as narrated in details supra particularly notice copy issued Deputy Chief Electrical Inspector and Section 3, 4 and 6 of Karnataka Lift Act, 1974. On the other hand the OP has not fixed elevator in the site of 1^st complainant by getting license from competent authority as provided under Section 3 and4 of Karnataka Lift

Act. The said Act of OP in fixing the elevator and making lift in operation without obtaining license from competent authority amounts to offence under Karnataka Lift Act. So in view of discussion made hitherto, we are inclined to come to straight conclusion that, the oral and documentary evidence of complainant placed before the forum are more believable trustworthy and acted upon than the material evidence of OP and accordingly we hold that, the complainants who come to forum seeking relief have established this point with clear cogent and consistent material evidence that, the OP is negligent and there is deficiency of service on the part of the OP in not supplying good and satisfactorily lift to them and accordingly we answer this point in a affirmative.

14. The problems of lift as stated by the complainant are well within the warranty period and those lift problem are not resolved by the OP. Moreover, the copy of letter of Deputy Chief Electrical Inspector, Bengaluru produced by the 1^st complainant shows that the OP fixed the elevator without obtaining the license from them and it is not working properly. So on account of rendering no satisfactory service to the complainant well within the warranty period of OP and looking to affirmative finding on point no.1, the 1^st complainant is entitled to claim refund of Rs.7,82,325=00 from the OP alongwith nominal interest @6% per annum on the said amount and not amount

as prayed in the complaint. So the OP is directed to refund Rs.7,82,325=00 to the complainant alongwith 6% interest per annu-m on the said amount from the date of complaint within 30 days from the date of this order, failing which the OP shall pay the said amount to the complainant alongwith 7% interest per annum from the date of complaint to till the date of realization.

The OP is further directed to pay Rs.5,000=00 to the complainant towards cost of litigation. The OP is directed to take back his lift materials from the spot after payment of amount to the complainant as per order and the 1^st complainant is directed to allow the OP to take his all lift material from the spot and accordingly we answer this point. In the result, for the foregoing reasons, we proceed to pass the following order.

ORDER

The complaint of complainant is partly allowed.

The OP is directed to refund Rs.7,82,325=00 to the 1^st complainant alongwith 6% interest per annum on the said amount from the date of complaint within 30 days from the date of this order, failing which the OP shall pay the said amount to the 1^st complainant alongwith 7% interest per annum from the date of complaint to till the date of realization.

The OP is further directed to pay Rs.5,000=00 to the 1^st complainant towards cost of litigation.

The OP is directed to take back his lift materials from the spot after payment of amount to the 1^st complainant as per order and the 1^st complainant is directed to allow the OP to take his all lift material from the spot.