Rostfrei steels private limited - GLS Tanks

GLS TANKS - Rostfrei steels Private Limited

ABOUT ROSTFREI STEELS PRIVATE LIMITED TANK COMPANY

Rostfrei Steels Private Limited Tank Company is established in 2000 with its main office in Okhla and five more branches in other states of India. It was found by Mr. A to supply different kinds of tanks to their respective customers.  With years of experience in the market of GLS & Silo tank suppliers, they earned goodwill which attracts customers to date. Rostfrei steels Private Limited Company supplies GLS/GFS tanks, Silo grain tanks, corn silo tanks, etc.

Nature of Business- Manufacturer and seller

Delivery Location- India & Across India

After considering their experience in manufacturing the tanks and supplying the same, for the purpose of construction Rostfrei steels private limited, one of the leading construction companies in India ordered five GLS/ GFS  and storage tanks at their construction site.

Each of the tanks was of 5000 liters GLS Tanks of 1000KL ordered on 31.03.2018. 

The order was made after considering all the factors of construction and the requirements of the people. 

It was clearly mentioned by the customer that they require the water and the storage tanks within five days of their orders i.e. by 05.04.2018. ABC Companies agreed to the same and accepted a 30% advance amounting to RS. 60,000. 

ISSUES OF THE CASE

The problem arose when the delivery of the tanks was not made within 5th April 2018. M&V Construction Company enquired the supplier the reason for the delayed delivery. But, the Supplier failed to provide any valid reason for such delay. The tanks were delivered after 11th April 2018. The supplier explained that due to the absenteeism of their delivery boys they failed to deliver the tanks on time.

After the delivery of the tanks, several other issues came forward:-

 It was found that out of five tanks 3 tanks were defective. Five nut-bolts in two tanks were found defective. They had galvanization issues that could not be managed by the other mechanics on the floor at an instance. 

 When the tanks were tested by the mechanics on the construction site it was found that the tanks faced quality issues. Most of the parts of the tanks were used product and damaged.  Even after explaining the reason for using the product the supplier did not manufacture the tanks with good quality parts. the pipe used inside the tanks were damaged and are found rusted.

Due to the damaged parts, most of the tanks faced the leakage issue. While test use of the tanks, the tanks failed to store the water for a longer time and the leakage issue emerged.

The supplier was contacted many times but the supplier did not respond to any of the calls and the complaints lodged. Although the whole payment of 2lakh was made on time, ABC company did not respond to any of their complaints. Since the order was placed in a different state, the state branch of the same denied taking the responsibility. 

 Since the work of construction cannot be stopped for a longer period, XYZ Co started working with the damaged tanks for the purpose of their construction after applying certain safety measures. They faced several issues regarding the same. 

Although they charged a penalty and filed a case for the breach of law against ABC Company, they had to get a new set of storage and water tanks to complete their requirements of construction.  

M&V CO. demanded twice the amount of the payment from the supplier as they failed to keep their promises. 

Held that: Rostfrei steels private company is responsible and according to the decision they are required to pay the whole amount as a penalty to the construction company.