1.      The above two present Revision Petition (RPs) have been filed under section 21 (b) of Consumer Protection Act 1986, against the common order dated 19.06.2017 of the State Consumer Disputes Redressal Commission Uttar Pradesh (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 1569 of 2015 in which order dated 08.07.2015 of District Consumer Disputes Redressal Commission Saharanpur (hereinafter referred to as District Commission) in Consumer Complaint (CC) no. 170 of 2011 was challenged, inter alia praying for setting aside the order of the State Commission dated 08.07.2015.

2.      In RP No.2876 of 2017,  the Revision Petitioner ( Kiran Cold Storage) was OP before the District Forum and Appellant  before the State Commission  the Respondent ( Mahendra Pal) was the Complainant before the District Forum and Respondent before the State Commission.

3.      In RP No.3303 of 2017, the Revision Petitioner ( Mahendra Pal), was Complainant before the District Forum and Appellant before the State Commission, while the Respondent was OP before the District Forum and Respondent before the State Commission.

4.      Notice was issued to the Respondent in the revision petitions. Parties filed Written Arguments/Synopsis on 01.01.2024 ( Complainant) and 18.08.2023 (OP) respectively.

5.      Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that Complainant kept 3330 bags of potato weighing 50 kg per bag with the OP for the period 01.02.2011 to 31.10.2011 at the rate of Rs.60/- per bag.  The potatoes were of good quality and were kept in good condition.  The Complainant had purchased the potatoes from different places. In May 2011, the Complainant visited the OP and told the OP that since the rate of potatoes in the market are good, therefore, he asked for delivery of the same. The OP refused to deliver the potatoes since grocery items are kept in the verandah and asked the complainant to load directly in the truck.  Complainant told the OP that potatoes are to be  firstly kept open in the verandah and after moisture from the potatoes vanishes,  they are to be loaded.  Inspite of this, the OP did not empty the verandah, as a result of which the potatoes could not be taken out and got spoiled.  The complainant, therefore, suffered a loss of Rs.14,50,000/-. Being aggrieved, the Complainant filed CC before the District Forum and District Forum vide order dated 08.07.2015 allowed the Complaint of the Complainant.  Being aggrieved, the OP preferred an Appeal before the State Commission and State Commission vide order dated 19.07.2017 partly allowed the Appeal and directed the Appellant to pay Rs.4,40,187 with 9% interest.  Being aggrieved of the said order of the State Commission,  both Complainant and OP have approached this Commission by way of the present two revision petitions.

6.      Petitioner in RP No. 2876 of 2017 has challenged the said Order dated 19.06.2017 of the State Commission mainly on following grounds:

1. The respondent does not come in the definition of consumer, as he kept the potatoes in the cold storage for selling in market which is for commercial purpose, which he admitted in the complaint.

2. The State Commission found the report of District Horticulture Officer dated 08.11.20111 true and correct in which all the 3328 potato bags were found in fit condition on his inspection.

3. State Commission wrongly held the Petitioner liable on the basis of selling the potatoes without waiting for the completion of seven days, after giving information to the respondent and without giving information to District Horticulture Officer and without public auction as per provision of Section 17 of the U.P. Regulation of Cold Storage Act, 1976. 

4. The State Commission did not peruse the record carefully and letter dated 16.10.2011 which was sent to the respondent, vide which the Petitioner informed the respondent to take out potatoes by 31.10.2011 and to pay Rs.7,01,517/-, otherwise the Petitioner will not be responsible.

5. Further, the letter 31.10.2011 which was sent by the Petitioner to District Horticulture Officer in reply to their letter dated 29.10.2011, copy of which was sent to the respondent, wherein it was clearly written that they have informed to the respondent that if balance payment of Rs.7,01,517/- is not paid, the company will wait till 05.11.2011 and thereafter, the amount will be recovered by selling the potatoes. 

6. Vide letter dated 06.11.2011, it was again requested to the respondent to take back his potato bags and pay the amount of Rs.7,01,517/- otherwise the potatoes will be sold and further, lastly vide telegram dated 16.11.2011, the Petitioner informed the respondent that neither they ( respondent ) replied to the letter nor came personally and did not pay the amount, two days time was given otherwise the potatoes shall be sold and respondent will be liable for the loss.

7. A general notice was published in two newspapers in ‘Hindustan’ and ‘Nai Dishayan’ but none came and thereafter the potatoes were sold through Mandi Samiti.

8. The Petitioner much earlier informed the respondent and District Horticulture Officer vide letters dated 31.10.2011 and 06.11.2011.

9. The Petitioner acted according to Section 17 of the U.P. Regulation Act, 1976 by selling the potatoes through Mandi Samiti. 

10. State Commission committed legal error and did not pass the order of paying the rent of cold storage by the respondent because of the recovery case filed by the Petitioner in Civil Court, Saharanpur. Under the  Consumer Protection Act, a complaint will be maintainable when the consideration is paid or partly paid or in deferred mode of payment.  Thus, without providing the rent as consideration to the Petitioner by the respondent, neither the complaint is maintainable nor the judgment is valid. 

11. Respondent did not come to the cold storage for taking out the potatoes despite several intimations.

7.      Petitioner in RP No. 3303 of 2017 has challenged the said Order dated 19.06.2017 of the State Commission mainly on following grounds:

(i)      State Commission has not considered the facts that Potato seeds of the Petitioner damaged due to the negligence of the respondent for not maintaining proper temperature required for keeping the Potato in good condition and kept other grocery goods and chilies alongwith the Potato seeds of the Petitioner which led to damaging, shrinking and sprouting of potato seeds of the Petitioner.

(ii)      Petitioner earns his livelihood by sowing Potato seeds on the land taken on batai, but due to damaging of Potato seeds, the Petitioner could not sow the Potato crop.

(iii)     State Commission failed to appreciate that Petitioner had to pay compensation to the tune of Rs.3,40,000/- to the owner of the land from whom the Petitioner took 17 acres of land on batai and as specifically mentioned in the agreement, in case the petitioner will not sow potato crop in the land taken on batai, the Petitioner is liable to pay compensation @ Rs.20,000/- per acre.

(iv)    State Commission failed to appreciate that respondent by making false and frivolous entries on receipt of keeping Potato seeds, made a futile attempt to get the false and frivolous inspection report in connivance with the Distt. Horticuluture Officer wherein Distt. Horticulture Officer has mentioned that all the 3328 bags of the Potato seeds were reported to have been lying in the cold storage which is contradictory from the receipt issued by the respondent on 22.10.2011 stating that the respondent had already sold out 1583 potato seed bags of the Petitioner and there were only 1745 bags in the cold storage.

8.      Heard counsel for Kiran Cold Storage and Mahinder Pal, who appeared in person.  Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

8.1    Complainant ( Mohinder Pal) who appeared in person argued that he purchased good quality of seeds from the market and kept 3328 potato seed bags in the cold storage of the OP on rent with a view to sow potato crop on the land owned by the his joint family and 17 acres of land taken on Batai for earning livelihood from the Potato farming.  He paid compensation on account of vacant land of 17 acres to the landlord at the rate of Rs.20,000/- per acre as he could not sow potato seeds in his land as well as the land taken on Batai  Further, OP issued ten receipts to him acknowledging keeping 3328 potato seed bags.  No entry of advance has been shown on the receipt issued by the OP.  There  is no dispute about the quantity of the potato seeds bags kept with the OP which has been  admitted by the OP.

8.2.   It is argued that in  May 2011,  he went to the OP’s cold storage and asked for delivery of potato seed bags for replacing by Highgrade potato seeds but OP failed to give delivery as the corridor of the OPs cold storage was full of grocery items including chilies

8.3.   It is further argued that dispute between him and OP arose on 22.10.2011 when he went to the cold storage for taking delivery of the potato seed bags for sowing seeds  but he was surprised and shocked to receive the information that 1583 potato bags out of 3328 potato bags have been sold by the OP without the his consent and at the same time issued a communication dated 22.10.2011 showing that 1745 potato bags are available in the cold storage, which is in contravention of Section 21 and 24 of U.P.Cold Storage Regulation Act, 1976 .   On raising the objection by him for selling the potato seed bags without his consent, the OP asked him not to raise the issue any more as the OP offered to settle the issue with him and asked him to come after two days and at the same time asked him to hand over the original receipts of keeping potato bags for settling the issue.  He believing the same, handed over the receipts to the OP.

8.4.   Further, it is argued that when he went to the OP cold storage on 24.10.2011 for settling the issue, instead of giving compensation to him, OP started asking the amount of  Rs.4 lacs which the OP fraudulently entered on the receipts taken from him on 22.10.2011.   He managed to get back the original receipts from the OP on which wrong entries of loan have been made.  The OP made double entries of loan on receipt dated 23.02.2011. 29.02.2011 and 27.02.2011 and that OP had not taken his signature on any agreement nor entered the loan in bahikhata of the OP or not gave advance loan through bank or by cheque.

8.5.   It is also argued that the District Horticulture Officer (DH) in response to the complaint made by him, failed to take action.   The District Horticulture Officer in his report dated 01.11.2011 reported that 3328 potato bags were found in good condition.  The said report is false and has been prepared in his absence and has been prepared in connivance with the OP because as per the OP there were 1745 bags of potato available in the cold storage after selling 1583 potato seeds out of the total 3328 potato seed bags kept in the cold storage by him before 22.10.2011.

8.6.   Complainant further argued that OP in their affidavit submitted that in addition to above, 783 and 385 bags of seeds were also with the OP in safe condition and the same were thrown out from the cold storage due to closing of cold storage on 31.10.2011.  It is also argued as to how the DHO inspected the 3328 potato seed bags in the cold storage on 31.10.2011.  There was no potato seed balance in the cold storage on 31.01.2011. Further, when OP published in the newspaper on 20.11.2011 that 3328 bags in balance are in good condition in the cold storage, then how the Mandi Samiti sold 500 potato seeds bags on 19.11.2011.  Further, statement of the OP is contradictory as in one letter it has been stated that he did not visit the cold storage after  September 2011 whereas in their letter dated 06.11.2011, OP has stated that he remained in constant touch in the month of September and October 2011 and contacted also by way of telephone. 

8.7.   It is also argued that OP concocted a story of advancing Rs.4,00,000/- to him with a view to avoid responsibility of paying compensation on account of damaged potatoes to him by making fake entries on the receipts issued by the OP. Further, letter dated 16.10.2011 is not sent to him.  Even the letter dated 08.11.2011 is a forged and fabricated letter because as alleged, it has been sent by the UPC, which has been closed by the Government vide Gazettee Notification.  It is argued that he visited the office of DHO only on 25.10.2011 on which date DHO told him that he will call him by registered notice by post or telephonically but DHO did not send any registered notice nor called him.   The DHO and the owner of the cold storage has played fraud with him  and gave false and illegal inspection report dated 08.11.2011. No photograph of inspection of 3328 bags was taken which shows that DHO has not visited the cold storage on 01.11.2011.  The OP admitted that he (Complainant) had constantly visited the cold storage in the month of September- October 2011 and also contacted on phone. The OP sold the Potato before 31.10.2011, the closing date of cold storage.  Further, the balance sheet prepared by Deepak Goyal and Company is totally illegal because entry of Rs.4.0 lacs has been shown as advance amount with the name of Mahinder Pal ( complainant), as there was no record in any ledger account in which Mohinder Pal has put his signature.  Further ITR and balance sheet prepared by Deepak Goyal and Company and the sales receipts of Mandi Samiti dated 19^th to 22^nd November, 2011 have not been filed before the District Forum.  Even no bank account in which written entry of loan has been entered.  Further, as per section 21 of the UP Cold Storage Act, 1976,licencee cannot sell potato without the written authority of the Hirer and if he does so, the licencee shall be liable to pay compensation to the hirer for every loss, destruction, damage, deterioration, non delivery of goods stock.   Further, the total proceedings have been done by the respondent after filing the case in the District Forum. 

8.8.   Learned counsel for the OP ( Kiran Cold Storage ) argued that Complainant had availed a loan in accordance with the provisions of the Cold Storage Act from the OP and the stipulated deadline for both the loan repayment and the retrieval of the stored potatoes was the 31.10.2011.  The OP provided this information to the Complainant on 16.10.2010.  The Complainant simultaneously lodged a complaint with District Horticulture Officer on 25.10.2011.  Further, subsequent to the initial complaint, the Complainant visited the District Horticulture Office on 28.10.2011.  and during his visit, the Complainant provided a reminder regarding his prior complaint to the DHO and in response to the same, DHO requested the Complainant’s presence for an inspection on 01.11.2011 but Complainant consciously and deliberately chose to remain absent during the scheduled inspection on the said date.  This absence raises questions about the credibility of the Complainant’s claims and reflect a possible intention to avoid scrutiny or evidence gathering. 

8.9    It is further argued that complaint lodged by the Complainant was subsequently addressed by the DHO and the Complainant had the option to seek recourse through an appeal process if he is dissatisfied with the DHO’s findings and recourse to the consumer Forum is not applicable.  Further, prior to the receipt of DHO’s response, the Complainant chose to initiate legal proceedings by filing a suit with the District Forum.  Learned counsel further argued that initial communication was letter dated 29.10.2011 from the DHO followed by another letter dated 31.190.2011 to the Complainant.  These letters pertain to the proposed sale of the potatoes and were duly acknowledged by the DHO.  Subsequently, the sale of potatoes took place on 19.11.2011, marking a span of 19 days from the date of first notice.  This is compliance of the provision of Section 17 of the U.P. Cold Storage Act, 1976. Further, the entire stock was sold to a government organization ‘Mandi Samiti’ and the sale process was publicly disclosed through newspaper publication.  Further, the DHO asserted that they had informed the Complainant about the impending sale of the potatoes and provided the date of the sale, however, despite being informed, the Complainant deliberately chose not to be present on the date of sale.   The Petitioner has not made any mention of the sale of the potatoes in the Appeal or Complaint, nor has he sought any form of compensation related to the sale of the potatoes.  The Complainant had visited the cold storage in May 2011 and sought the release of potatoes, citing favourable market prices. This reflects that potatoes were being held for commercial purposes.  Learned counsel further argued that on one hand, the Complainant claims to be a consumer engaged in potato farming for livelihood while on the other hand, their actions point to engagement in the buying and selling of potatoes through financers.   Further, potato crop is sown in the month of September-October.  If potatoes were kept for sowing, releasing of potatoes in the Month of May is not acceptable and, therefore, it is proved that Complainant kept the potatoes for business activities.    Further, in the  year 2009, the Complainant kept 1968 bags of Potato in the cold storage which were sold in the Saharanpur Market.  Potatoes were sent to Gulshan Potato Co., Sabzi Mandi, Saharanpur and when appropriate price of the same was not received, it was kept in the cold storage by getting finance from the respondent. 

8.10. Learned counsel further argued that OP requested the Complainant for loan repayment and storage rent, however, the Complainant failed to fulfill this obligation as mentioned in the letter dated 16.10.2011.  Despite the OP’s offer to settle the amount after the potato sale, the Complainant remained non-responsive about their commitment.  If the Complainant had any grievance, he should have addressed them to the DHO.   Further, it requires investigation as to how much land, the Complainant is having.  If the farming had been done by him on the land of other people, then it is a commercial activity.  The Complainant deals in the business of potato through Commission or finance and the receipt of purchasing potato do not have any address of farm, name and telephone number.   Further, Complainant is doing the business of potato, otherwise there was no necessity of keeping agricultural seeds in the cold storage of Saharanpur by leaving 100 cold storage situated in the state of Haryana. 

9.      We have carefully gone through the orders of the State Commission, District Forum, other relevant records and rival contentions of the parties.  State Commission has appropriately addressed the contentions of the OP that Complainant is not a consumer and we are in agreement with the same.         State Commission, after considering the facts and evidence of the case, has concluded that Complainant has failed to establish that DHO has given a false report and District Forum committed a mistake by not relying on the report of the DHO.  State Commission has concluded that Complainant has failed to establish that his 3328 bags of potatoes have got rotten due to negligence in storing and protecting the potatoes on the part of the OP.  However, State Commission has held OP liable for deficiency in service on account of non observance of provisions of U.P. Cold Storage Regulation Act, 1976 while selling the potatoes of Complainant.  In this regard, extract of relevant paras of order of the State Commission is reproduced below :

“During the argument , the report dated 08-11-2011 from the District Horticulture Officer was presented by the appellant's counsel, which stated that on 01-11-2011, they inspected the 3328 bags of potatoes stored in the appellant's cold storage and found them to be in perfectly good condition.

Therefore, based on the  averments and arguments of both parties, there is sufficient ground to believe that the inspection conducted by the District Horticulture Officer on the 3328 bags of potatoes stored in the appellant's cold storage indicated that the potatoes were in good condition.

No evidence has been presented by the respondent to prove that the District Horticulture Officer's report was incorrect. As a public servant, the report prepared by the District Horticulture Officer cannot be deemed incorrect unless proven otherwise. However, there appears to be no reasonable and logical basis for doubting the District Horticulture Officer's report.

After submitting the complaint, the respondent did not apply to the District Forum for an analysis or testing report of the potatoes from a proper laboratory or any other relevant source. Furthermore, no expert's opinion regarding the spoilage of the potatoes was presented before the District Forum.

After considering all the facts and evidence, we are of the opinion that the respondent has failed to demonstrate that the District Horticulture Officer prepared a false report.

Upon reviewing all the facts, evidence, and circumstances, we conclude that there is no reasonable basis for doubting the District Horticulture Officer's findings, and the District Forum erred by not believing the report.

After evaluating all the facts, evidence, and circumstances, we believe the respondent has not proven that the spoilage of the 3328 bags of potatoes was due to negligence or oversight in storage and maintenance by the appellant. However, it is an undisputed fact that the respondent did not receive the delivery of the potatoes and that the appellant has sold the potatoes, which the appellant also admits. Therefore, the question arises whether the appellant sold the respondent's potatoes in compliance with all formalities according to the provisions of the Uttar Pradesh Cold Storage Regulation Act, 1976. Section 17 of this Act is relevant in this regard.

"17(1) Whenever any goods stored in a cold storage begin to spoil due to reasons beyond the control of the licensee, or there is a possibility of spoilage, or the tenant does not collect the goods from the cold storage within fifteen days from the specified date mentioned in the receipt, the licensee shall immediately give notice to the tenant, requiring them to collect the goods after paying all charges due to the licensee, and a copy of such notice shall be sent to the licensing officer.

(2) If the tenant does not comply with the notice specified in sub-section (1) within seven days of its service, the licensee may dispose of the goods by public auction at the tenant's expense and risk: provided that the licensee shall inform the licensing officer of such sale at least forty-five hours prior, and the licensing officer shall supervise the sale either personally or through an authorized officer."**

The appellant stated in section-11 of their written statement that they sent a telegram to the respondent on 16-11-2011. However, after the telegram, the respondent did not respond, and on 20-11-2011, they published a notice in the Hindustan newspaper. Nevertheless, no trader contacted them to purchase the potatoes, prompting the appellant to sell them. In the written arguments presented before the commission, the appellant mentions that the sale of potatoes occurred on 19-11-2011, 21-11-2011, and 22-11-2011. The appellant has neither mentioned in their written statement before the District Forum nor in the written arguments before the commission that the sale of potatoes was reported to the licensing officer, namely the District Horticulture Officer.

Therefore, it is clear from the written statements and the arguments presented by the appellant before the District Forum that the appellant sold the potatoes before the completion of the seven-day period after sending the telegram on 16-11-2011, and no notice of this sale was given to the District Horticulture Officer. The appellant has indicated that they published a notice regarding the potato sale in the newspaper on 20-11-2011, even though they sold the potatoes on 19-11-2011 and subsequently on 21-11-2011 and 22-11-2011. Thus, it is clear from the aforementioned details that the appellant sold the respondent's potatoes without fulfilling the formalities prescribed in Section 17 of the Uttar Pradesh Cold Storage Regulation Act, 1976.

Section 17 clearly stipulates that the sale should be conducted through public auction and notice must be given to the licensing officer, who shall supervise the sale either personally or through an authorized officer. However, the appellant sold the potatoes without notifying the licensing officer, i.e., the District Horticulture Officer, and without following the public auction process.

Considering all the facts and circumstances, we are of the view that the appellant has committed a service error by not complying with the provisions of the Uttar Pradesh Cold Storage Regulation Act, 1976, in the sale of the respondent's potatoes. It is clear from the above-mentioned findings of the District Horticulture Officer that the 3328 bags of potatoes were found to be in good condition on the inspection date of 01-11-2011. Therefore, the appellant is liable to pay the value of the potatoes to the respondent.

The District Forum determined the total amount, including the value of the potatoes and expenses incurred in bringing them to cold storage, to be ₹5,00,334, which includes the potato value of ₹4,40,187. This valuation suggests that the price of the potatoes is approximately ₹250 per quintal, which appears reasonable and logical. However, the additional costs included in the potato value for freight and other expenses by the District Forum are not justified since the respondent has not taken the potatoes himself without any reasonable cause. Therefore, the appropriate compensation to be given to the respondent should only be the value of the potatoes, which is ₹4,40,187. From the review of the impugned decision and order of the District Forum, it is evident that the District Forum has awarded ₹5,00,000 for alleged financial loss due to the respondent's inability to sow crops because of the spoilage of the potatoes, along with ₹3,40,000 as compensation paid to farmers, totaling ₹8,40,000 in addition to the value of the potatoes. Additionally, they granted ₹1,00,000 for mental anguish and ₹5,000 for litigation expenses. The above conclusion shows that the respondent’s argument lacks a reasonable and logical basis to claim that their potatoes spoiled. The reason provided for not receiving delivery from the appellant is not credible. In this situation, it is reasonable to conclude that the respondent failed to collect the potatoes from the appellant's cold storage within the specified time.

Thus, we hold that the District Forum’s decision to grant ₹5,00,000 for financial loss and ₹3,40,000 at the rate of ₹20,000 per acre as compensation to farmers, along with ₹1,00,000 for mental anguish, is neither justified nor reasonable.

The interest of 9% granted by the District Forum from the date of filing the complaint until the date of payment is reasonable, and there is no need for any interference. However, it is evident from the above findings that the compensation awarded by the District Forum should be modified and reduced.

Finally, it is important to mention that the appellant has stated that an advance payment of ₹4,00,000 has been made to the respondent, and regarding this advance amount, the interest claimed, and the rental charges for the cold storage, the appellant has filed a case in the District Civil Court, and that case is currently pending. Therefore, no decision regarding the aforementioned advance amount of ₹4,00,000, the interest due on it, and the rental charges for the cold storage should be made at this level under the Consumer Protection Act. The District Civil Court is the competent authority to make a decision on this matter.

Based on the above analysis, we partially accept the appeal presented by the appellant and modify the impugned decision and order of the District Forum, directing the appellant to pay the respondent ₹4,40,187 along with 9% annual interest from the date of the complaint until the date of payment. Additionally, the amount of ₹5,000 awarded by the District Forum as litigation expenses will also be paid by the appellant to the respondent.

10.    State Commission has given a well-reasoned order.  We are in agreement with its observations and findings and find no reason to interfere with the same.  There is no illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the same is upheld.  Accordingly, both the RPs are dismissed. 

11.    The pending IAs in the case, if any, also stand disposed off.