National Commission Allows Appeal By Fast Engineers In AC Installation Disputes

Brief Facts of the Case

The complainant had hired Fast Engineers/engineering company/company for installing an LG air-conditioning system. The complainant paid Rs. 18,50,000 for installation work to be completed in six months. The engineering company informed the complainant that materials have reached and would start installing work soon but did not complete the work and the equipment remained unused. An LG representative revealed that the cost of the system was around Rs. 10,00,000. The complainant in this case ordered an 84-ton AC for some other place at Rs. 9,93,157. However, the engineering company did not install that AC again. Legal notices were issued, but the engineering company did not perform the obligation. Therefore, the complainant approached the State Commission of Rajasthan, and it allowed the complaint. It directed the company to refund Rs. 18,50,000 with an 8% interest rate along with Rs. 2,00,000 as compensation, and Rs. 10,000 as litigation costs. Consequently, the company appealed before the National Commission.

Contentions of the Company

The company argued that the complainant was not a consumer as the property in question was used for a hotel project and not residential purposes. Furthermore, it was claimed that the complainant's issue regarding overcharging for a 64-ton AC system was incorrect, as capacity is measured in horsepower, not tons. The complainant's overcharging claim ignored the company's initial quotation, and most payments were made to LG, which supervised the work but was not made a party. It was argued that despite a signed handover report confirming the work's completion, the State Commission passed an erroneous order.

Observations by the National Commission

The National Commission observed that the main issues were whether the complainant qualified as a “consumer”, whether there was a deficiency in service by the company, and the liabilities of the parties if any deficiency was found. Referring to the Supreme Court's decision in Omkar Realtors & Developers Pvt. Ltd. v. Kushalraj Land Developers Pvt. Ltd. & Anr., it emphasized that determining whether goods were purchased for commercial purposes depends on the facts of each case. If the dominant purpose of purchase was personal use, the buyer would still qualify as a consumer under the Act. In this case, the company failed to prove that the AC installation was for commercial use. The Commission noted the complainant's allegations that the installation of the 64-ton AC system was incomplete and that multiple complaints and notices had been issued. An affidavit from an AC mechanic stated that part of the installation remained unfinished. However, the mechanic's qualifications as an expert were questioned. Furthermore, the Commission acknowledged that the contract was voluntary and that most equipment had been delivered. While the company claimed the installation was complete and payment of Rs. 3,43,000 was pending, the complainant alleged incomplete work and deficiency in service. The complainant's reference to a lower LG quotation was deemed irrelevant to the existing contract. The National Commission found the State Commission's order for a full refund of Rs. 18,50,000, plus interest and damages, disproportionate and unsustainable. The State Commission's order was set aside, and the appeal was allowed.

Case Title: Fast Engineers Vs. Deepshikha Kala Sansthan

Case Number: F.A. No. 566/2022

Click Here To Read/Download The Order