INDOCHEM ELECTRONIC AND ANR. versus ADDL. COLLECTOR OF CUSTOMS, A.P.

Citation: [2006] 2 S.C.R. 584 · Decided: 24-02-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

A. 
INDOCHEM ELECTRONIC AND ANR. 
v. 
ADDL. COLLECTOR OF CUSTOMS, A.P. 
FEBRUARY 24, 2006 
B 
[S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.] 
Consumer Protection Act, 1986; Ss. 2(g), 2(e) & 14/Sale of Goods Act, 
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1930; S.12: 
c 
Conditions and Warranty-Contract of Sale of EPABX Telephone 
system-Deficiency in service-Complaint-State Consumer Redressal 
Commission directed the supplier to refund the cost of the instrument with 
interest-Appeal dismissed by National Commission-On appeal, Held: Defects 
in EPABX system required to be attended to immediately by the supplier in 
D terms of the contract-Supplier voluntarily attending to the complaint of 
malfunctioning of the system even after expiry of period of warranty-Thus, 
for all intent and purport, the period of warranty stood extended-Defects 
... 
in the system including manufacturing defects found not only during the 
period of warranty but also during the extended period-By reason of its 
own conduct, the supplier represented that maintenance of the system to the 
E satisfaction of the consumer was its contractual obligation-Though in terms 
of Section 12(3) of the Sale of Goods Act, no right accrues to the purchaser 
to reject the goods on breach of stipulation of warranty, it does not mean that 
the extent of damages cannot be equivalent to the price of the goods in as 
much as such power has specifically been conferred upon the consumer 
F Commission. 
.. 
Appellants-supplier supplied EPABX telephone system to the respondent-
I 
purchaser. In terms of the contract of sale entered into between the parties, 
warranty period of one year was provided for the said equipment. Besides, the 
supplier undertook to open a service center specifically, to provide services 
G during the warranty period. The system was found to be defective and on 
complaint, the supplier did not provide proper maintenance services, though 
they attended to the complaints of the purchaser even after expiry of the 
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warranty period. Since the system did not provide satisfactory services, the 
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purchaser filed a complaint against the supplier before the State Consumer 
H 
584 
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INDOCHEM ELECTRONIC v. ADDL. COLLECTOR OF CUSTOMS, A.P. 
585 
Redressal Commission. The Commission directed the supplier for refunding A 
cost of the system with interest. Appeal against the order of the State 
Commission was dismissed by the National Commission. Hence the present 
appeal 
It was contended by the appellant-supplier that in terms of the contract 
of warranty, they were required to maintain the system free of cost only for a B 
period of one year and it was not at all necessary for them to provide free 
services and/or to maintain the system thereafter; and that the breach of 
contract of warranty would not enable the purchaser to reject the entire 
contract and claim the price of goods supplied, particularly, when the period 
of warranty had expired. 
C 
Dismissing the appeal, the Court 
HELD: 1.1. Telephone is a means of communication. The communication 
system was required to be run effectively and efficiently by the appellants 
having regard to the statutory duties they were required to perform. The D 
deficiencies in EPABX system supplied by them were such as were required 
to be attended to immediately. If the supplier had not been able to attend thereto 
immediately, there would be a 'deficiency of services' on their part as 
immediate attention to such complaints was a part of the contract. [591-F-G) 
1.2. The Sta!e Consumer Commission as well as the National Consumer E 
Commission have arrived at findings of fact as regard nature of deficiencies 
of service complained of by the respondent in terms of the provisions of the 
contract. If such breaches of conditions of warranty had taken place during 
the period of warranty, no exception can be taken to the judgment and order 
passed by the State Commission as also the National Commission. 
F 
[591-H; 592-A) 
1.3. The Appellant had all along been aware that the system installed 
by them had not been functioning properly. On its own showing, they had been 
attending to the complaints made by the Respondent relating to the functioning G 
of the system. From their conduct, it may be inferred that they voluntarily 
undertook to meet the requirements of the Respondent relating to mal-
functioning etc. of the said system despite expiry of the period of warranty. 
For all intent 'Ind purport, the period of warranty, thus, stood extended. As 
t

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