BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
FA 1637 of 2008 against C.C. 4/2008, Dist. Forum-I, Hyderabad.
Between:
Yadagir Shanganti
S/o. Chandraiah
Age: 35 years, Business
C/o. Mayuri Photo Studio
Koutala P.O & Mandal
Adilabad Dist. *** Appellant/
Complainant.
And
1) Radiant Infosystems Pvt. Ltd.
Rep. by its Director
Reg. Off : 2227/1, Division No. 52A
9th Main, B.S.K-II Stage
Bangalore-566 070.
Regional Office at
Flat No. 301,
S.V.S. Classic Residence
6-6-3-853/2, Ameerpet
Hyderabad-500 016.
2. M/s. Bharath Electronics Ltd.
Regd Office at Outer Ring Road
Nagavara Bangaluru
Karntaka State
3. The Commissioner EDS
e-seva, Ward No. 8
MCH Building, 1st floor
Road No. 7, Banjara Hills
Hyderabad. *** Respondents/
Ops.
Counsel for the Appellant: M/s. G.K. Deshpande
Counsel for the Respondent: M/s. Dua Associates (R1)
M/s. M. Gunneswara Rao (R2)
M/s. N. Rajeshwara Rao (R3)
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SRI T. ASHOK KUMAR, MEMBER
THURSDAY, THE TWENTY NINETH DAY OF SEPTEMBER TWO THOUSAND ELVEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)
***
1) Appellant is unsuccessful complainant.
2) The case of the complainant in brief is that the respondents started a project by name Rajiv Internet Centre (herein after called RIC) at various places on BOP (build, own and operate) model wherein R1 was consortium partner entered into a contract on 31.8.2005 whereby he became entitled for maintenance of KIOSK at RAJiv at Koutala of Adilabad District. He responded to it by enclosing a demand draft for Rs. 1,000/- towards application fee. On 16.6.2006 R1 directed him to pay license as well as franchise fee of Rs. 1,25,000/- which he had paid. On 5.8.2006 on receipt of amount by R1 franchise agreement dt. 11.10.2006 was executed. As per the agreement R1 shall provide, set up, install, commission and maintain the KIOSKS equipment viz., desk top, dot matrix printer, UPS, scanner, barcode reader, smart card reader, and credit card swipe terminal etc., and to provide training in management and operation of the internet centre wherein 64 services like issuance of caste certificate etc. are to be made. He had to pay Rs. 6,000/- for the first year and thereafter as fixed by the Govt. of A.P. Accordingly he acquired rented premises for an amount of Rs. 3,000/- per month, invested Rs. 20,000/- for furniture and fixtures and Rs. 7,500/- per month towards salaries to the staff. The service centres were supposed to start from September, 2006. It has only provided three items as against eight items, and failed to provide the remaining items, and as such he incurred heavy loss. Despite lapse of more than 1-1/2 years no progress was made. A lawyer’s notice was also issued to make good the loss occurred on account of agreement. Therefore he claimed refund of Rs. 1,35,000/- , reimburse Rs. 1 lakh incurred by him, and pay Rs. 1,26,000/- towards recurring expenses, Rs. 1 lakh towards mental agony and Rs. 1 lakh towards loss in all Rs. 5,61,000/- with interest @ 24% p.a. together with costs.
3) R1 resisted the case. While admitting that it is a consortium partner and offered the complainant to operate KIOSK at Koutala mandal of Adilabad District and that it has received Rs. 1,25,000/- and appointed him as a franchise under agreement dt. 11.10.2006 it alleged that it is a commercial transaction and that he does not come under the definition of ‘consumer’. While admitting that it had to provide equipment viz., desktop, dotmatrix printer, UPS, scanner, barcode reader, smart card reader etc. denied providing training and management and operation of the internet centre. It admitted that it has to provide access to Rajiv portal and other service channel purpose and other 64 services as per the assurance of the government. It alleged that it was not aware of complainant providing infrastructure facilities, furniture and fixtures etc., besides rented premises and paying salary to the staff. It is a commercial transaction. It cannot be held responsible for the lapses if any, and therefore prayed for dismissal of the complaint with costs.
4) R2 equally resisted the case. It admitted that it was a consortium partner of R1. It did not enter into any agreement with the complainant for setting up of RAJiv KIOSK at Koutala in Adilabad district. The amounts were paid to R1. It was not aware that three services were provided out of eight services by R1 for the payments made by the complainant nor that he had incurred expenses. Therefore it prayed for dismissal of the complaint with costs.
5) R3 equally resisted the case. It alleged that there was no cause of action for filing the complaint against it. There is no relationship of consumer between them. The relief claimed is that of civil nature. The transaction is purely commercial. The Dist. Forum lacks jurisdiction, and therefore prayed for dismissal of the complaint with costs.
6) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A19 marked while the respondents filed their affidavit evidence, and did not file any document.
7) The Dist. Forum after considering the evidence placed on record opined that for the project contract entered into between them he should seek specific performance by filing a suit. There is no deficiency in service on the part of respondents, and therefore dismissed the complaint.
8) Aggrieved by the said order, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the project was floated by R3 Government of A.P. as part of e-governance programme to provide affordable services within the reach of rural population through RAJiv internet through educated unemployed, and that R1and R2 entered into an agreement with R3 and pursuant to which an agreement was entered into with him. A sum of Rs. 1,35,000/- was collected from him with an assurance that necessary equipment would be supplied besides imparting training in management and operation of Rajiv portal for service channel purpose and other 64 services. Despite the fact that he fulfilled his contract by taking KIOSK on rent, purchasing furniture and fixtures and paying salaries to the staff, however, the respondents did not provide the equipment amounting to deficiency in service, and therefore he prayed that the complaint be allowed.
9) During the course of hearing of the appeal, R3 filed a photostat copy of contract entered into by it with BEL (R2) marked as Ex. B1.
10) The points that arise for consideration are:
i) Whether the complainant is a consumer, and the agreement
entered into by him with R1 des not attract the
jurisdiction of Consumer Fora?
ii) Whether the complainant is entitled for refund of amount deposited by him?
iii) To what relief?
11) At the outset, we may state that R1 in its project information document Ex. A3 mentioned that it has proposed to offer license to set up, operate and manage the KIOSK a self-employment model. This is a good opportunity for those who are willing to work sincerely and are capable of investing towards infrastructure and technology which itself excludes the argument that it was for commercial purpose and excludes the case of the complainant from the provisions of the Consumer Protection Act. See Section 2(1)(d)(ii) of Consumer Protection Act.
12). Not only in the said pamphlet but also in various other documents relied upon by the complainant, especially Project Information document, the complainant having been conferred to lead a consortium comprising themselves, BEL, and Government of Andhra Pradesh floated this project whereby they intended to promote the Rajiv Internet (e-Seva) Centres as many as more than 5000 in number to be handed over to the educated unemployed for providing as many as 64 services to the villagers. In that process they invited deposits from such unemployed aspirants. Lured by the said offer the complainant deposited the amounts. For confirmation, a formal agreement was entered into and provision of infrastructure for the purpose of commencing the services no doubt for consideration from the retail consumers. Thus the complainant by making deposits has taken a step forward keeping in view the potential consumer vis-à-vis the opposite party a service provider. It is also evident from the record that the service provider could not keep up the promise of facilitating the business and means from the perspective of the complainant for eking out his livelihood. Thus the respondent failed to provide the services promised. No doubt they tried to assign various reasons including the project promised by the Government of Andhra Pradesh etc., but the fact remains that the respondent had made a public offer and invited deposits from the educated unemployed youth like the complainant .
It means that they did not consolidate their position to make that offer but it appears that they made the offer pre-maturely. This kind of offer which was not sure of keeping up itself marks deficiency of service if not unfair trade practise.
13) Learned counsel for the respondent contended that under Ex. A13 agreement R1 would provide all possible government services as and when made available by EDS. New private services will also be made available to the franchise on a regular basis as and when signed with service channel partners. Since R3 did not provide it could not provide the services. It is in between the respondents to provide or not to provide, the services they intended to give. On that ground the complainant cannot be denied whatever services the respondents agreed to give. In Schedule-B of Ex. A13 the complainant was directed to equip basic infrastructure such as tables, chairs, lighting fan, telephone connection, internet connectivity, interiors, electrical connections etc. besides a premises for the KIOSK. The complainant contends that he incurred Rs. 1 lakh towards organizational set-up, and incurring Rs. 7,500/- towards salary to the staff and Rs. 3,000/- towards rent. Except alleging the said fact the complainant did not file the affidavit evidence of those persons who were employed under him. For the notice issued by the complainant R1 gave reply among other things categorically mentioning that “Govt. of A.P. is not in a position to provide its services they asked BEL to voluntarily exist from the project but BEL refused as they had already setup through R1 all over the state of Andhra Pradesh with huge investments.” The question of privity of complainant and R1 would not arise in the light of very terms of agreement provided under Ex. B1. The appellant/complainant alleges that R1 provided only three items out of eight items promised under the agreement.
14) We may mention herein that in a batch of complaints filed by various complainants against the very same respondent (R1) in C.C. 28/2008 and batch amounts were directed to be returned. On an appeal this Commission confirmed the order, against which was a revision was preferred. The National Commission confirmed the same in R.P. No. 2809/2010 by order dt. 25.10.2010.
“It is not disputed before us that the petitioner had failed to provide the promised service to the respondent. The fora below have rightly come to the conclusion that the petitioner has failed to provide the services promised by it, as it had not taken clearance from the various departments while collecting the sum of Rs. 2 lakhs from each of the respondents. We do not find any infirmity in the order passed by the fora below. Revision petitions are dismissed. Counsel for the petitioner states that the petitioner had supplied certain goods to the respondents. If that be so, the respondents are directed to return the goods/equipment received by them, on receipt of the awarded amount.”
15) In the above batch of matters R2 and R3 were not impleaded as parties. The complainant did not enter into an agreement with them. There is no privity of contract between them. If for any reason R1 finds that R2 & R3 were instrumental for not rendering services to this complainant it is for R1 to take action against them if it deems fit, and recover the amount. The complainant cannot question alleging deficiency in service on their part viz., R2 & R3. We are of the opinion that the complaint does not sustain against R2 & R3. It cannot be said that there was deficiency in service on their part vis-à-vis complainant.
16) Though the complainant alleged that by virtue of agreement he had taken the premises on lease, and sustained loss of income for a period of two years he did not file any document to substantiate the said fact. He ought to have filed the receipts from the landlord showing the amounts that were paid towards rent. Had the said fact been deduced by way of receipts or letters that he had incurred the expenditure the entire amount would have been awarded. No doubt some compensation could be awarded for the latches on the part of R1 by way of compensation viz., mental agony etc., which we fix at Rs. 25,000/-. For a period of two years it takes care of loss if any towards rent, income etc.
17) In the result the appeal is allowed in part setting aside the order of the Dist. Forum. Consequently the complaint is allowed in part directing R1 to repay Rs. 1,25,000/- with interest @ 12% p.a., from date of agreement viz., 11.10.2006 till the date payment together with compensation of Rs. 25,000/- and costs of Rs. 5,000/-. Time for compliance four weeks. The appellant/complainant is directed to return the goods/equipment received by him, on receipt of the awarded amount. The complaint against R2 & R3 is dismissed without costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
29/09/2011
*pnr
UP LOAD – O.K.
