BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 05^th DAY OF MARCH 2016

O R D E R

SRI. P.V SINGRI, PRESIDENT

The complainant has filed this complaint U/s.12 of the Consumer Protection Act, 1986 (herein after referred as Act) against the Opposite Parties (herein after referred as OP) with a prayer to direct the OPs to refund him a sum of Rs.27,488-87 along with interest and costs.

2. The brief averments made in the complaint are as under:

The OP is a registered body and is running the services of network in the city of Bangalore under the name and style BNI Addvantage Network LLP in India and is referred as BNI.  OPs provide the services of contacts and reference.  The members of BNI canvas for the members of the chapter.  Members are admitted from different category of the business activities.  The OP collected a sum of Rs.27,488-87 at the time of admission on 20.03.2013.  The weekly meetings are conducted on Fridays.  Suddenly the OPs shifted the meeting to Tuesdays.  The members have to be at the meeting venue by 7.30 a.m and the meetings goes upto 11 am to 11.30 am.  On the day of every weekly meeting, the members have to pay Rs.400/-.

The OPs sent a mail stating that, the attendance is critical to the group.  If a member cannot attend, he may send substitute to the meeting and the same will not be count as an absence.  A member is allowed three absences in any six month rolling period.  More than this the member is subject to removal by the Chapter’s Leadership Team or Membership committee.  When the complainant returned to home town on 22.05.2013, the OP sent a mail dated 16.05.2013 stating that the complainant failed to meet the commitments to the chapter and BNI therefore he has been removed from the membership.  The removal of the complainant is without sufficient cause or reason.  The OPs failed to issue any show cause notice or called upon the complainant for explanation for his absence.  The OPs failed to follow the natural rules of justice.  The termination of the membership is arbitrary and unreasonable.  The said action of OP caused mental tension, trauma and damage to the reputation of the complainant among the fraternity.  The complainant therefore called upon the OPs to refund the admission fees and membership fee as he has been removed from the chapter within a period of 2 months.  However, the OPs failed to refund the admission amount and membership fee despite repeated calls and reminders.  Therefore, the complainant was compelled to approach this Forum.

For the reasons stated above, the complainant prays for an order directing the OPs to refund him the admission amount of Rs.27,488-87 together with interest @ 18% p.a with cost and damages.

3. In response to the notice issued, the OPs appeared through their counsel and filed their version.  The sum and substance of the version relevant for the purpose of deciding the dispute, on hand, are as under:

The complaint is fundamentally flawed inasmuch as the dispute pertains to membership of the group.  OP-1 is not in the business of either selling any goods or providing any services as understood under the Consumer Protection Act and it does not have any ‘consumers’ as such, within the meaning of Section 2 (d) of the Act.  In any event and without prejudice to the foregoing the complainant does not fall under the definition of a ‘consumer’ under the Consumer Protection Act as he had availed the membership in the networking group run by the OP-1 solely for commercial purposes and benefit and as such the complaint itself deserves to be dismissed at the very outset as not maintainable in law.  If at all the OP-1 is providing any services (which is not conceded) then such service is exclusively for commercial purpose, as the meetings organized by the OP-1 are attended to only by business owners/entrepreneurs and other professionals with the sole objective of bolstering the respective business prospects through the process of professional networking.  The complainant has not approached the Forum with clean hands and has suppressed many vital material facts.  OPs.2 & 3 have been unnecessarily made parties to the complaint with a malafide intention of harassing them.

BNI is one of the world’s leading platforms for building business through word-of-mouth ‘referrals’ and networking.  The brand ‘BNI’ is a property of BNI Enterprises Inc., a US-based company.  One Dr.Ivan Misner is a founder of the said company and he is renowned all around the world as a leading expert in the science of building businesses through word-of-mouth referrals and networking.  BNI was founded in 1985 and is believed to be world’s largest business networking forum as on date.  BNI works on license and exclusive franchise system.  The exclusive license to open BNI chapter in India has been granted by BNI Enterprises Inc. to BNI Training Services Pvt. Ltd., who in turn have granted BNI Addvantage Network LLP i.e., the OP-1, the exclusive right to set up and manage BNI chapters in Bangalore.  As a platform, BNI offers those who are typically the owners of business, professions and entrepreneurs an opportunity to meet and network and other persons of a similar background.  In Bangalore city alone, there are about 23 chapters of BNI.  Each chapter meets once a week on a designated week and at a regular time and venue.  Each chapter has members from several different trade/business categories, such that no chapter has more than one member from the same trade/business category.  When members meet, they take turns to describe their business/profession/products/services to the other members, so that the other members in the chapter can better understand the business/profession/product/service and can then refer/recommend to their friends/family sphere/contact circle.  The BNI offers a structured platform wherein members can derive commercial benefit from the contact circles of their members and thus generate more business for themselves.

The BNI member policies and the MSP work book which contain the principles and ethics by which all BNI members have to act, have been shared with the complainant also, at the time of accepting his membership request as a part of the standard induction exercise.  As such the complainant is aware that his membership in the forum is subject to his abiding by the terms and conditions of the member policies.  The complainant was made well aware that he would have to adhere to the terms and conditions of the membership in order to continue as a member for the duration of one year for which he had originally subscribed.

Attendance of the members at weekly meeting is mandatory and any member who misses more than 3 meetings in any given 6 months period is automatically removed from the rolls and is liable to have his category opened up.  This is one of the cardinal principles of BNI membership and is made known to all applicants before any amounts towards membership fees are even taken from them.  This principle/term of membership is stringently enforced in all cases, as all other members of any chapter are investing their precious time and energy in coming for the meetings and are therefore interested in seeing full attendance of their co-members who can pass business referrals to them.  A networking organization cannot possibly succeed if the members do not turn up the meetings.

There are two methods by which a member can avoid having his membership in the chapter terminated namely; by appointing a substitute to attend the meetings or by indefinitely suspending his membership due to business/personal reasons.  A member is also exempted from having his membership terminated if he is unable to attend meetings due to medical reasons for up to 8 weeks and he is unable to attend the meetings due to medical reasons for upto 8 weeks and he has the approval of the membership committee.

The complainant had willfully absented himself for four continuous meetings of the GEMS chapter within the same six month period i.e., 23.04.2013, 30.04.2013, 07.05.2013 and 14.05.2013 without giving any prior intimation or explanation as such he became liable to have his membership in BNI terminated and the membership committee was accordingly constrained to do so in terms of the well publicized BNI policies, which are known to all members.  The complainant was also advised by the committee as well members to attend the meetings without giving scope for termination of his membership.  The complainant completely ignored and disregarded their advice and willfully remained absent for four continuous meetings and as such the membership was terminated by the membership committee.  The action taken by the membership committee is in accordance with the contractual terms of membership.  The complainant cannot be heard to say that he was required to be given a ‘hearing’ prior to termination, as this is not contemplated in the contract between the parties.  The complainant cannot import principles of public law/administrative law into private contractual arrangements and he cannot seek that the principles of public law be used to re-write his membership contract to suit his convenience.  The decision to terminate the membership was taken after due deliberation and after giving sufficient prior opportunities to the complainant to rectify his defaults.  In fact the members of the OP went beyond their required duties and personally got in touch with the complaint on several occasions to try and coax him into becoming regular in his attendance or at least arranging for substitutes so as to prevent his membership from being terminated.  At every meeting, a nominal fee charged to all attendance, to cover the cost of food and refreshments served at the meetings, as well as the rental expenses of the venue.  As such, all members pay for themselves at each meeting and the fees collected from members at each meeting is thus used in its entirety for the benefit of the members themselves.  Guests or ‘visitors’ accompanying from any members to the chapter meetings are also required to pay this fee as well.  Those amounts do not go towards BNI membership fee but towards covering the expenses of each meeting.  The accounts for funds collected are maintained at the level of the Secretary-Treasurer of the chapter and no part of these collections is ever made over to BNI.

The members of the GEMS chapter unanimously voted to change the designated day for their weekly meetings from Fridays to Tuesdays and complainant was very well aware the change of day of the meetings from Friday to Tuesday and he also attended the meetings held on Tuesdays.  The complainant never objected for the meeting day from Friday to Tuesday either verbally or in writing.  The actions of OP in terminating the membership of the complainant is thus comply justified and in accordance with the contract.  The complainant had willfully absented himself for 4 days in a single 6 month period, which fact is not at all in dispute.  Therefore, the complaint is completely devoid of merits and is liable to be dismissed.

For the aforesaid reasons, the OPs pray for dismissal of the complaint with exemplary costs.   

4. After the version was filed by the OPs, the complainant was called upon to file his evidence by way of affidavit.  Accordingly, he filed his affidavit evidence in lieu of oral evidence.  Thereafter, on behalf of OPs one Mr.Anantharam Varayur, the Executive Director of OP-1 filed his affidavit evidence in support of various contentions made in the version.  Both the parties have submitted their written arguments and placed reliance on various documents.

 5. On the rival contention of both parties, the points that arise for our determination in this case are as under:

        6. Perused the allegations made in the complaint, averments made in the version, sworn testimony of both parties, various documents relied upon by both sides, written submissions and other materials placed on record.

7. Our answer to the above issues are as under:

REASONS

8.  The OPs took up a contention that OP-1 is not in the business of either selling any goods or providing any services as understood under the Consumer Protection Act and it does not have any ‘consumers’ as such, within the meaning of Section 2 (d) of the said Act.  Therefore, it is contended that, the dispute raised by the complainant does not fall within the ambit of Consumer Protection Act.  OPs further contended that the complainant does not fall under the definition of ‘Consumer’ as defined under Consumer Protection Act, as he had availed the membership in the networking group run by the OP-1 solely for commercial purposes and benefit and as such the complaint itself deserves to be dismissed at the threshold.  The complainant in his affidavit evidence except reiterating the allegations made in the complaint did not meet the aforesaid objections raised by the OPs in their version.  Even in his written submissions the complainant did not meet the above mentioned objections raised by the OPs in their version as well as in their affidavit evidence.  The advocate for the complainant did not submit any oral arguments other than filing the written arguments and failed to convince us as to how the aforesaid basic contentions raised by the OPs are either in-correct or not tenable in the given circumstances of the case.

9. The OPs have produced the copy of member policies at document no.2.  The said copy of member policies contains the terms and conditions which govern the membership of each member.  The close perusal of the terms and conditions of the membership policy reveals that, the OP-1 is neither engaged in any business nor provides any services to any of its members.  The OP-1 offers a structured platform wherein the members who are typically the owners of business, professions and entrepreneurs to meet each other on a appointed day and time and can derive commercial benefit from the contact circles of other members and thus generate more business for themselves.

10. It appears members some time also derive on other benefit by each other sharing business experties, professional and other tips and business strategy.  Other than providing a platform to its members to meet each other and discuss each other so as to generate more business for themselves, the OP-1 does not provide any services of any kind to any of its members.  Admittedly, OP-1 is also not engaged in any business of any sort except the functions as provided in the member policy.  Thus, looking from the objectives of the OP-1, it would be difficult for anybody to claim that, it is either a service provider or engaged in any sort of business so as to bring any dispute arising between members and OP-1 within the ambit of the Consumer Protection Act 1986.  The complainant did not deny either in his affidavit evidence or in his written submissions that his membership with OP-1 is governed by the terms and conditions mentioned in the member policy.

11. In view of the terms and conditions of the member policy now it has to be seen as to whether the complainant would fit into the definition of ‘consumer’ as defined in section 2 (1) (d) of the Act.  The ‘consumer’ is defined as under:

(d) “consumer” means any person who –

          (i)       buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii)      hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person  but does not include a person who avails of such services for any commercial purpose;

Explanation: For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood, by means of self-employment

12. The complainant failed to point out as to how he would became a ‘consumer’ as defined under the Act.  As already stated above, OP-1 is neither engaged any business activities nor provide any services to any of its members for consideration.  Moreover, looking to the activities carried out by various members in the OP-1, one can safely say that, the activities relates to their business and for commercial purposes.  Each one of the member of OP-1 is either a businessman, professional or entrepreneurs who had joined the OP-1 for bolstering his business.  Therefore, it is apparent on the face that the transaction and the discussions conducted there is purely commercial.  Therefore, on this ground also the complainant would not become ‘consumer’ as defined in the Consumer Protection Act.

13. It is alleged by the complainant that, the OP-1 provides services of networking therefore it becomes a service provider.  To find out as to whether the OP-1 is a service provider, one has to look into the definition of services as defined under the Act.  Section 2 (1) (o) defines as to what is services and it reads as under:

(o) “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

(oo) “Spurious goods and services” mean such goods and services which are claimed to be genuine but they are actually not so;

14. On going through the definition of services as extracted above and the objective of OP-1 one cannot be said by any stretch of imagination that OP-1 is a service provider.  Therefore, we are unable to accept the contention of the complainant that OP-1 is a service provider therefore falls within the ambit of consumer Protection Act.

15. For the reasons mentioned above and discussions made in the above paragraphs, we are of the considered opinion that, the complainant is neither a ‘consumer’ nor OP-1 is a service provider.  Therefore, the complaint as brought is not at all maintainable in this Forum and on this count alone the complaint is liable to be dismissed.         

16. It is argued on behalf of the complainant that the OPs are not justified in terminating the membership of the complainant without causing him any prior notice and without hearing him.  It is not denied by the complainant that he was not aware of the member policies at the time of joining OP-1. The complainant having understood the terms and conditions governing the membership with OP-1 had joined by paying the requisite fees.  The complainant also admits that attendance is critical.  The complainant admits that he was sent with a e-mail by OP stating that the attendance is critical to the group.  He further admits that if at all a member is unable to attend the meeting, he may send substitute to the meeting which will not count as absence.  He also admits that if member remains absent three (3) times in any six (6) months rolling period his membership is liable to be terminated by the Chapter’s Leadership Tem or Membership Team.  Clause 5 of the Member policies reads as under:-

                   Attendance is critical to the group.  If a member cannot attend, they may send a substitute (not a member of their own Chapter) to the meeting.  This will not count as an absence.  A member is allowed three absences in any six month period.  More than this and the member is subject to removal by the Chapter’s Leadership Team or Membership Committee.

            17. As per clause 5 of the general policies and as admitted by the complainant if at all if he remains absent thrice in any six months period his membership is liable to be terminated.  The complainant does not deny that he remained absent for three times thereby inviting the termination of his membership.  The complainant having agreed to the terms and conditions of the member policies now cannot challenge his termination on the ground that his termination was done without causing him any notice or without hearing him.  This Forum cannot interfer into the terms and conditions of the contract between the complainant and OP-1 and complainant is liable to adhere to the terms and conditions of the contract.

18.  The copy of the member application produced by OP-1 at Document No.3 discloses in bold letters that fee are non-refundable.  Even in the ‘terms and conditions’ contained in the member policies it has been made clear that any fees paid to the OP-1 are non-refundable. In the membership application it has been mentioned in bold letters as:- “UPON YOUR ACCEPTANCE TO BNI, FEES ARE NON-REFUNDABLE”.  The complainant having understood the terms and conditions governing his membership with OP-1 has become the member by accepting the same.  Therefore, now he cannot demand refund of the fee.  This Forum has no powers to interfer into the terms and conditions of the contract/agreement entered into between complainant and OP-1.  Therefore, on this ground also the complaint is not maintainable. 

19. In view of the discussion made in the above paragraph we are of the considered opinion that the complaint is liable to be dismissed both on the point of jurisdiction as well as on merits.

             20. The order could not be passed within the stipulated time due to heavy pendency. 

             21. In the result we proceed to pass the following:-

O R D E R

The complaint filed U/s.12 of the Consumer Protection Act, 1986 by the complainant is dismissed.  Parties to bear their own costs.

Furnish free copy of this order to both the parties.

 (Dictated to the Stenographer and typed in the computer and transcribed by her, verified and corrected, and then pronounced in the Open Court by us on this the 5^th day of March 2016)

MEMBER                               MEMBER                         PRESIDENT

Vln/Nrs

Complaint No.2633/2013

Witness examined on behalf of the complainant dated 14.03.2014.

1. Sri.Stanley Lazarus.

Witnesses examined on behalf of the OPs dated 28.03.214.

1.  Sri.Anantharam Varayur.

MEMBER                                MEMBER                        PRESIDENT

Vln/Nrs