Case No. 137/2022   

IN THE MATTER OF

M/s AAN Enterprises office at barula by pass road Aligarh, UP, pin 202001 through sole proprietor M.Musahib Ali

                                                         V/s

Klen Fix Chemicals Pvt. Ltd. F-11D Okhla Industrial Area Face 1 New Delhi 110020 present office address1756A/s first floor Govind Puri Extn, Kalkaji, New Delhi 110019 through managing director Shanshank Kumar Goel

CORAM

 Present:                                   

1. Shri Hasnain Qureshi, President
2. Shri Alok Upadhayay, Member
3. Smt. Purnima Singh Rajpoot,Member

PRONOUNCED by Shri Hasnain Qureshi, President

JUDGMENT

1. The present complaint has been filed by the complainant before this commission for-

1. Op be directed to takeout the products lying dumped in the godown of the complainant and to reimburse him of the amount Rs.947124 with interest at the 9% per annum from June, 2022 till the date of actual payment.
2. Op be directed to pay compensation Rs.200000 for physical and metal suffering.
3. Op be directed to pay litigation expenses Rs.50000.

2.  The Complainant has stated that M. Musahib Ali is the sole proprietor of the complainant firm engaged in the business as the authorized super stockiest of the op. OP company is the manufacturing unit of liquid toilet cleaner, flour cleaner, glass cleaner utensil cleaner, bathroom cleaner, liquid hand shop, liquid detergent, detergent powder, oven and grill cleaner stainless steel polish plus cleaner and wood furniture polish plus cleaner. On 25.2.2020 op appointed the complainant its super stockiest as per agreement for the business area Aligarh, Kasganj, Hathras and Etah. Complainant had offered a godown for storage and office for sale and supply of the products manufactured by the op. Complainant had to receive the orders and visit the market as per need and to have vehicle for delivery to distributors/retailers and to deal with them for delivery and payment. Op was under obligation to provide at least two sales agents / managers for arrangement of the orders from distributors/retailers. In view of terms and conditions of the agreement the complainant had to discharge the function of storing products manufactured by the Op and to supply the products to the distributor/ retailers on orders arranged by the sales persons of the op. Complainant was under obligation to supply the products manufactured by the op on providing orders from the distributors/retailers of the op through the sales persons of the op. Complainant and the op were under their respective contractual obligation. Complainant was entitled to get the commission/ remuneration form the distributors/ retailers of the company as per rate list of each product fixed by the company for super stockiest and distributor and retailers. Complainants had been discharging his obligation by performance of the act as the buyer agent of the company and the complainant had been provided remuneration as commission on sale for services rendered by it. OP supplied the products to the complainant on 29.2.2020 for Rs.385371 which was paid by the complainant. OP also supplied the products on 12.3.2021 for Rs.64657 paid by the complainant. OP also supplied products on different dates for Rs.1323194. The products were stored in the godown and were supplied to different distributors/retailers on orders received through sales representatives of the company. Complainant supplied the products to M/s A.K. Chaudhary Traders on 9.2.2021 for Rs. 40249 which remained unpaid. Complainant supplied the products on 27.2.2021 to M/s Balaji Traders for Rs. 43804 which remained unpaid. Complainant supplied orders on 12.3.2021 to M/s Balaji Traders for Rs. 29957 and it remained unpaid. Complainant supplied products to M/s G and J Enterprises on 18.8.2021 and 1.3.2021 for Rs.10050 and Rs. 2010 respectively. The distributors/ retailers are the appointees of the op to whom products were supplied on orders received through sale representatives appointed by the company and these distributors/retailors acted on behalf of the company and made the company liable for their acts. Op is under obligation to pay the amount due to complainant against the distributors/ traders. M/s A.K. Chaudhry Traders returned the products on 6.3.2021 amounting Rs. 11920.37. M/S G and J Enterprise returned the products on 20.11.2020 amounting Rs. 30716. M/s Laxmi Naryan Enterprises returned the products on 9.6.2021 amounting Rs. 14664. M/s Subham Agencies returned the products on 14.6.2021 amounting Rs.19060 out of which amount Rs.6500 was paid through cheque.  The products were returned with a complaint that the quality of the products was not good whereby the customers did not purchase the products and sales representatives had also failed to promote the sale of the product in the market. Complainant stored the product in godown. Complainant has returned the product to the op on 10.10.2020 for Rs.15782 and on 12.3.2021 for Rs. 21342 but no payment was made against the products. Complainant stored the products in godown amounting Rs.250000 and the amount Rs. 125000 is outstanding against the distributors/ retailers. The amount of Rs. 15782 and Rs.21342 are also due against the op for the products returned. On 11.2.2021 certain items were sent to the company for replacement which were not returned and their cost is  Rs. 2500.  An amount Rs.4000 was paid to sales officer Deepak Sharma in the month April, 2021 on intimation of the company for scheme. On 9.6.2021 an amount of Rs.2500 was paid as freight charges for the carriage of returned materials from Iglas, Hathras and Sasni Distributors. Rs.2000 incurred as miscellaneous charges for carriage of returned material. Complainant has suffered the loss of remuneration for two year on account of no sale of the products which is assessed at Rs.200000. All the charges are calculated Rs.623124. Complainant has been making payment to CA for filing GST return @Rs.1500 per month from March,2021 till June,2022 total Rs.24000. Complainant has been suffering loss @ 10000 per month as the rental value of the godown which calculated at Rs.160000 from March 2021 till June,2022. Electricity charges of go down during this period is calculated at Rs.12000 at the rate Rs.750 per month. The expenses incurred in payment to  assistant deputed at go down during this period is calculated at Rs.128000 @ Rs.8000 per month. The total amount loss and injury is calculated at Rs.947124. Complainant inform the company by emails on different dates to shift the products somewhere else lying in the go down. Complainant availed the services of op for a consideration. The term consideration is based on the concept of bargaining for exchange and parties get something that they have agreed to. Consideration is exchanged for the performance of the promises and consideration cannot be the money and it can be service. Accordingly acts of supplying the products by the op to the complainant to supply to the distributors/ retailers for sale amounts to service rendered by the op and is a consideration for the op and commission to be given by the distributor to the complainant on behalf the op is consideration for the complainant. Accordingly, there exists a relationship of consumer and service provider between the parties and complainant who is engaged in earning of his livelihood by means of self-employment is entitled for reimbursement on failure discharge obligation by the op and thereby committed deficiency in service.is consumer                                             
3. Op stated in WS that the agreement was executed in New Delhi and the District Commission Aligarh has no jurisdiction to decide the complaint. Op has further stated that the complainant has being the super stockiest would purchase the goods from the op and would sell on commission to the distributors and retailers and it is not the case of the complainant that he had been purchasing the stock for resale to customers to earn has livelihood. Rather the complainant was appointed as super stockiest for distribution of stock to the distributors and agents. Complainant had to receive the orders and to have vehicle to deliver the goods to distributors and retailers. OP was not under obligation to provide to sales manager for arrangement of order from distributors and retailers. Complainant was to discharge functions in accordance with terms and conditions. Complainant used to supply the products to the distributors and retailers and to receive the commission on the sale of the products pertaining the op. Complainant purchase the products for doing business to earn livelihood. Complainant has the right to initiate  proceeding to recover amount due to such person and op is not liable to pay the amount due to the complainant against distributors and the retailers and he may institute case against said persons for recovery. Complainant has stored the goods in godown amounting Rs. 250000 and the amount of Rs. 125000 is outstanding. The amount claimed by the complainant is without basis. Complainant was the super stockiest of the op to deal with the distributor/ retailers and the transaction was commercial and is excluded from the preview of the Act. Complainant was selling the products of the op to the distributors and agents on commission and is not a consumer. The forum do not have the territorial jurisdiction.                   
4. Complainant has filed his affidavit and papers in support of his pleadings. Op has also filed affidavit in support of their pleadings.
5. We have perused the material available on record and heard the parties counsel.
6. The first question of consideration before us is whether the complainant is entitled to any relief?
7. Complainant has stated that it was appointed by the op its super stockiest vide agreement annexure 1 and the complainant has to discharge the function of storing products manufactured by the op to supply to distributors/retailers on orders arranged by the sales persons of the op. The complainant has stated to be the buyer agent of the company for discharging its obligation on commission/ remuneration on sales made by the distributors/ retailers of the company. Op company has admitted the complainant its stockiest for selling the products on commission. Op has denied that the complainant had to receive orders. Op has denied that it was   under obligation to provide sales person for arrangement of the orders. The complainant has been purchasing the stock for resale to costumers and it was appointed as super stockiest for distribution of stock to distributors/agents.      

It is clear that the complainant was the op’s super stockiest to supply the products manufactured by the op to distributors/ retailers. It is not disputed that products manufactured by the op were stored by the complainant. It is also not disputed that the products were delivered by the complainant to the distributors / retailers. The issue is the status of the complainant as to whether the complainant was a buyer agent of the op to supply the products to the distributors/ retailers on commission or it was a dealer of the op to purchase the products manufactured by the op and to sell to the distributors on commission. Op has admitted that the complainant used to receive commission and it is a common factor in both the cases of being buyer agent or dealer. As per agreement annexure 1  it is clear that the complainant was appointed by the op as its super stockiest  and as per clause of 18 of the agreement company had to provide atleast two sales agents for arrangements of order from distributors and as per condition no.5 of the terms and conditions annexed with the agreement complainant was under obligation to send stock register, receive orders and all sales related information to the company as and when asked by the company and as per condition no.4 complainant was under obligation to have sufficient stock to provide in time and enough stock to meet customer’s orders. These facts clearly indicate the status of the complainant as a buyer agent of the op to store the product manufactured by the op to supply to the distributors/ retailers on orders arranged by the sales representatives provided by the op company. Thus the complainant was under obligation to supply the products on behalf of Op Company to distributors /retailers through sales representative provided by the complainant and he was entitled to get the commission on the sale of the products. The complainant was not a independent dealer to sell the products in its independent capacity. So far as the question of commercial purpose is concerned, complainant has supplied the goods on behalf of the op to earn his livelihood by engaging it in self-employment through natural person and the transactions made by the complainant are excluded from the ambit of commercial transactions and thus complainant falls within the category of consumer.

Complainant has alleged that the sales representatives were the key persons to arrange the orders from the distributor/ retailers to supply the product by the complainant. Mukesh Kumar and Sukh Dev Yadav were appointed sales officers by the op but Mukesh Kumar left the company and there was only one sales man Sukh Dev yadav who could not bring orders as being a single person. Another sales officer Deepak Kumar Sharma was also appointed who supplied the products to distributors and retailers on credits. The demand of the products were also lowered down on account of substandard and poor quality of material. Deepak Kumar Sharma has also left the company and Shkekar Yadav had also stopped marketing. There was no sale and the products were returned by the distributors to the complainant. The matter was brought to notice of the company. The products could not be supplied to the distributors/retailers and were lying in the godown . The MD Mr. Shashank Kumar Goyal and Mr. Daya Yadav sales manager with Mr. Kuldeep Saxena visited Aligarh and it was admitted by the MD that the material was of substandard and poor quality which would be improved and the substandard products would be replaced by new products but nothing was done. Complainant informed the op through email and it was made clear in email dated 10.1.2022 (annexure 23 ) that the sale was adversely effected on account of delivery of substandard and poor quality of product supplied by the company and the complaint made in this regard were not responded properly which resulted in closing down the business. Op was under obligation to supply the products of standard and good quality to the complainant and also make to arrangement of sales persons to arrange orders for sale of the products to  make delivery by the complainant to the distributor/retailers for profitable  running of the business. OP failed on both the counts of providing the products of standard and good quality and to make arrangement of sales persons to promote the sale of the products. Op has committed breach of contract and is liable to reimburse the complainant. complainant’s  case is proved on the basis of material on record and op is liable to reimburse the complainant for Rs. 623124 against all he charges claimed by the complainant except  the CA fees, rental value of godown, electricity charges of the godowm and assistant pay deputed at godown. These are the charges which were to be borne by the complainant while carrying on the business and is not the loss to complainant on account of failure of the business. The loss on failure of the business is the commission on the amount Rs. 623124 which may be compensated in terms of interest.                       

8. The question formulated above is decided in favor of the complainant.
9. The second question of consideration before us is whether the District Commission has jurisdiction to decide the present case?
10. Op has challenged the jurisdiction of this commission on the ground of execution of agreement at Delhi. In view of provisions of section 34(2) (d) of the Act the District Commission is vested with the jurisdiction to decide the present case as the complainant resides or works for gain with the territorial jurisdiction of the District Commission, Aligarh.  
11. The question formulated above is decided in favor of the complainant.
12.  We hereby direct the op to indemnify the complainant the amount Rs.623124 with interest @ 9% per annum from the month June,2022 till the date of actual payment and  the products lying in the godown of the complainant may be received by the op. Op also directed to pay litigation expenses Rs. 10000.  
13. Op shall comply with the directions within 30 days failing which Ops shall be prosecuted for non-compliance in accordance with section 72 of the Act for awarding punishment against him.
14. A copy of this judgment be provided to all the parties as per rule as mandated by Consumer Protection Act, 2019. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
15. File be consigned to record room along with a copy of this judgment.