DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.311 of 2017

                                                 Date of institution:  24.04.2017                                                         Date of decision   :  01.03.2018

Sanjeev Singla aged 47 years son of Parshotam Singla, resident of Old Grain Market, Near Fountain Chowk, Sirhind Mandi, Tehsil and District Fatehgarh Sahib.

…….Complainant

Vs

1.     Adi Sports India Pvt. Ltd., Ground Floor -001, FF 40 to 44, Cosmo Plaza, Zirakpur, Tehsil Dera Bassi, District SAS Nagar, Mohali, through its authorised signatory.

2.     Adidas India Marketing Pvt. Ltd., Corporate Office at Plot No.53, Sector 32, Institutional Area, Gurgaon 122002 through its authorised signatory.

                                        ……Opposite Parties

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:   Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member

                Mrs. Natasha Chopra, Member.

Present:    Complainant in person.

                Shri Manoj Lakhotia, counsel for the OPs.

Order by :-  Shri G.K. Dhir, President.

Order

               Pair of shoes having actual MRP Rs.6,799/- (inclusive of all taxes) was purchased by complainant due to 40% discount offer on MRP, on 26.01.2017 from OP No.1 by paying price of Rs.4,663/- vide bill. The said pair of shoes was carrying warranty of three months and complainant found manufacture defect in first week of April, 2017. The product was of most inferior quality due to which holes cropped up in the front upper part of shoes. Complaint through e-mail on 05.04.2017 was lodged with request for replacing the same and in reply thereto OPs claimed that the product was sold under policy “No Return No Exchange”. Even they claimed that the warranty had expired, but complainant claims as if the warranty was to expire on 26.04.2017. The holes surfaced due to exertion of pressure upon front upper part of shoes due to designing of the same in such a way. OP company is a company of repute and as such defect found by complainant was not expected. Moreover the product in question was purchased on discount of 40% on MRP, but OPs charged Rs.583/- as tax in illegal way by adopting unfair trade practice and as such refund of the same with interest @ 9% per annum w.e.f. 26.01.2017 till realisation claimed. Even replacement of shoes with same model alongwith compensation for mental agony and harassment of Rs.20,000/- and litigation expenses of Rs.11,000/- more claimed.

2.             In joint reply submitted by OPs, it is claimed  that complaint is not maintainable because of complainant being not consumer within meaning of Section 2 (1) (d) of the Consumer Protection Act. Moreover, it is claimed that complaint is based on vague, misconceived and false assumptions, not disclosing any cause of action and as such in view of malafide intention of complainant in harassing OPs, complaint deserves to be dismissed at limine stage. The matter regarding charging of VAT on discounted price is already sub judice before Hon’ble Supreme Court of India in SLP No.8868 of 2017 titled as M/s. Aero Club (Woodland) Vs. Rakesh Sharma and as such prayer made for adjourning the proceedings sine die. Admittedly OP company is a company of repute having acquired good market reputation and offering range of products. Complaint alleged to be filed by suppressing material facts because complainant failed to disclose that invitation to offer discount was subject to terms and conditions, which were displayed on the website itself. Allegations regarding adoption of unfair trade practice or violation of provisions of any rules or regulations or Act denied one by one each. Complainant before purchase of shoes in question was made aware about terms and conditions of charging VAT extra on the discounted price. Due payment was made by complainant as per terms and conditions and as such now complainant alleged to be estopped by his act and conduct from filing the complaint, more so when protest was not raised at the time of payment of price. Facts regarding charging of VAT amount of Rs.583/- or offer of discount of 40% on the purchased product are admitted alongwith the fact regarding policy of “No Return No Exchange”. The product in question was not suffering from any manufacturing defect and as such claim for replacement was rightly repudiated. On the bill itself  mention made regarding “No Return No Exchange “ policy. At no point of time OP No.1 declared regarding grant of flat rate of discount on MRP of the product, so sale price alongwith the VAT rightly claimed by OP No.1. Photograph of advertisement of sale clearly mention that VAT will be charged extra. The product was sold below MRP, but at discounted price without resorting to double taxation and as such by denying each and every allegation of complaint, prayer made for dismissal of the complaint by claiming that courts at Gurgaon alone has the jurisdiction.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 to C-7 and thereafter closed evidence. On the other hand, counsel for OP tendered in evidence affidavit Ex.OP-1/1 of Gurpreet Mann, authorised signatory/representative and documents Ex.OP-1 and Ex.OP-2 and thereafter closed evidence.

4.             Written arguments not submitted by the parties but oral arguments heard and records gone through.

5.             It is vehemently contended by complainant that contents of his affidavit Ex.CW-1/1 alongwith photographs   Ex.C-7 establishes that pair of shoes purchased by complainant happened to have holes on the front top of shoes and as such complainant entitled for replacement of shoes. Emergence of those holes alleged to be on account of manufacturing defect and that is why e-mail correspondence Ex.C-2 to Ex.C-6 was entered for pointing out the manufacturing defect and for staking claim of replacement of shoes in question. Through Ex.C-3 OPs were informed that as warranty of three months was to expire on 26.04.2017 and holes surfaced before that and as such entitlement of complainant for replacement of shoes in question is there. These submissions though looks ex-facie as correct, but in fact they have no force because no report of expert produced to establish the manufacturing defect. Manufacturing defect is a defect arising out of the designing or quality of the material used in manufacture of the product. So it has to be established by complainant by leading expert evidence that the quality used for manufacture of shoes in question was inferior or the designing of the product was in such a way as actuated defect in question. However, not even a single assertion in that respect made either in the complaint or in the affidavit or in any other document produced on record. What designing was required for preventing emergence of the holes on the upper top of the shoes, qua that not even a single sentence uttered in the pleadings. What should be the magnitude of pressure on the front toe of the shoes and what in fact was expected from the designing, qua that no material produced. The required quality of material used for manufacture of the product even not mentioned and nor mention made as to what quality actually used in manufacture of the shoes in question. In the absence of all this material on record, it has to be held that complainant failed to prove the manufacturing defect in the shoes in question. So complainant not entitled for refund of the price amount or replacement of the shoes in question, more so when shoes were sold under policy “No Return No Exchange”.

6.             Endorsement regarding policy “No Exchange No Return” in stamp is made on the invoice Ex.C-1 itself. When the products sold under policy of “No Exchange No Return”, then certainly entitlement for exchange or for return synonymous to that of replacement is not warranted. So even as per terms and conditions of sale of the product in question endorsed on Ex.C-1 itself, complainant not entitled for replacement of the shoes in question, more so when it is not established that surfacing of holes was due to manufacturing defect and not due to any overt act or act of negligence on part of OP. Complainant even failed to prove that he used the purchased product in question with due care and caution, but despite that pointed out defect has emerged. So no iota of evidence or pleading is there warranting for replacement of the shoes in question.

7.             After going through invoice Ex.C-1 and contents of affidavit Ex.CW-1/1 of complainant, it is made out that offer of 40% discount was given. It was due to this offer of 40% discount that complainant was allured to purchase the shoes in question from OP No.1 by paying price of Rs.4,663/- including tax @ 14.3% of amount of Rs.583.35 N.P. This is even borne from contents of invoice Ex.C-1. MRP includes the chargeable taxes and as such after giving discount, extra VAT could not have been charged on the discounted price, but same has been done in this case and as such OPs adopted unfair trade practice.

8.             After taking us through photostat copy of advertisement Ex.OP-2, it is claimed that terms and conditions itself mention that VAT to be charged extra and as such act of charging VAT on the discounted price is not unfair trade practice. However, after going through Ex.OP-2, it is made out that the main contents of the advertisement are buy 2 @ 50% off, buy 1 @ 40% off. VAT extra alongwith condition of terms and conditions apply, is also mentioned in Ex.OP-2. Whether display of this Ex.OP-2 actually was done conspicuously at the show room from where complainant purchased product in question or not qua that no material produced on record. Only the conspicuous display of VAT extra charge could have given authorization to OPs to charge VAT on the discounted price. As evidence regarding conspicuous display of applicability of terms and conditions or of charge of VAT extra not led and as such general rules regarding non charging of VAT on the discounted price to apply. Practice of charging VAT on the discounted price has been held to be unfair trade practice as per law laid down by  Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case titled as M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of 2016 decided on 04.01.2017 as well as in case bearing First Appeal No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh.  In view of this legal position, certainly OP adopted unfair trade practice by charging VAT on the discounted price, which caused mental harassment and agony to complainant, due to which he is entitled for refund of excess charged amount alongwith compensation for mental harassment and agony and also to litigation expenses.

9.             Learned counsel for the OP vehemently contends that order dated 04.01.2017 passed by the Hon’ble National Commission in case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra)  has been challenged before the Hon’ble Supreme Court and the Special Leave Petition in that respect has been admitted and as such the proceedings of this complaint should be adjourned sine die. Provisions of Order 41 Rule 5 of CPC provide that mere filing of appeal does not amount to stay of operation of orders under challenge in appeal and as such on the same analogy, it has to be held that on mere filing of SLP alone, it cannot be inferred that operation of the law laid down by Hon’ble National Commission in above cited case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) has been stayed. So long as the operation of law laid down by Hon’ble National Commission not stayed, the same to prevail and as such there is no need to adjourn the proceedings sine die.

10.           As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.583.35 N.P. with interest @ 6% per annum w.e.f. 26.01.2017 till payment. Compensation for mental agony and harassment of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order.

                Since there is shortage of postal stamps in this Forum, therefore, the parties through their counsel are directed to receive free certified copy of the order by hand and it will be the responsibility of the learned counsel for the parties to inform them accordingly.  This direction issued by following the principle laid down by Hon’ble  Punjab State Consumer Disputes Redressal Commission, Chandigarh in Consumer Complaint No.956 of 2017 titled as Partap Rai Sharma Vs. Greater Mohali Area Development Authority (GMADA), decided on 25.01.2018. File be indexed and consigned to record room.

Announced

March 01, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                                   (Amrinder Singh Sidhu)                                                               Member

(Mrs. Natasha Chopra)

Member