BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,
ERNAKULAM.
Date of filing : 08/11/2011
Date of Order : 21/12/2013
Present :-
Shri. A. Rajesh, President.
Shri. Sheen Jose, Member.
Smt. V.K. Beena Kumari, Member.
C.C. No. 617/2011
Between
1. Greeshma M.R., | :: | Complainants |
D/o. Rajan, Mattappilly House, Edathala North. P.O., Ernakulam District. 2. Jithu Thomas, S/o. Thomas, Vevukattu House, Muttinakam, Varapuzha. P.O., Pin – 683 517. 3. Ebin Antony, S/o. Antony, Kulakayampilly House, Kuzhoor. P.O., Mala – 680 734. 4. Varghese Antony, S/o. Antony, Kodipparambil House, South Chellanam. P.O., Ernakulam – 682 008. 5. Renjith V.R., S/o. Remesan, Veliyathukattil House, Okkal. P.O., Ernakulam – 683 550. 6. Vishnu K. Sreelan, S/o.Sreelan, Kollanteparambil House, Koduvazhanga, Neericode. P.O., Alangad – 683 511. | | (Compts. by Adv. Renil Anto Kandamkulathy & Roy Varghese Advocates, No.7, Thrivarna Lane, Karukappilly Junction, Desabhimani Road, Cochin - 26) |
And
1. M/s. Cochin International Airport Ltd., | :: | Opposite Parties |
Rep. by its Managing Director, Kochi Airport. P.O., Nedumbassery, Ernakulam – 683 111. 2. M/s. Kairali Aviation Aeronautical Engineering Pvt. Ltd., Rep. by its Director, Geetha Bhavan, Sanathanapuram. P.O., Kalargode, Alappuzha - 688033. 3. M/s. Cochin International Aviation Services Ltd., Rep. by its Managing Director, Kochi Airport. P.O., Nedumbassery, Ernakulam – 683 111. | | (Op.pts. 1 & 3 by Adv. Shyam Prakash, M/s. Menon & Pai Advocates, I.S. Press Road, Ernakulam, Kochi – 682 018) (Op.pty 2 by Adv. V.K. Subramanian & M.K. Saseendran Advocates, Keerthi Law Chambers, KSS Building, Town Hall Cross Road, Ernakulam North, Kochi – 682 018.) |
Date of filing : 09/03/2012
C.C. No. 142/2012
Between
1. Sooraj M.S., | :: | Complainants |
S/o. Muraleedharan Pillai, Sooraj Mandiram, Meeyannoor. P.O., Kollam District. 2. Rachindra Chandran, D/o. Chandra Babu, Kizhakketh House, Pannialil, Omalloor. P.O, Pathanamthitta district. | | (Compts. by Adv. Renil Anto Kandamkulathy & Roy Varghese Advocates) |
And
1. M/s. Cochin International Airport Ltd., | :: | Opposite Parties |
Rep. by its Managing Director, Kochi Airport. P.O., Nedumbassery, Ernakulam – 683 111. 2. M/s. Kairali Aviation Aeronautical Engineering Pvt. Ltd., Rep. by its Director, Geetha Bhavan, Sanathanapuram. P.O., Kalargode, Alappuzha - 688033. 3. M/s. Cochin International Aviation Services Ltd., Rep. by its Managing Director, Kochi Airport. P.O., Nedumbassery, Ernakulam – 683 111. | | (Op.pts. 1 & 3 by Adv. Shyam Prakash) (Op.pty 2 by Adv. V.K. Subramanian & M.K. Saseendran Advocates) |
C O M M O N O R D E R
A. Rajesh, President.
1. The matters involved in the above complaints are the same and since the opposite parties are the same. Joint trial of the above complaints were allowed vide order dated 28-11-2012 and the above complaints are disposed off by this common order.
2. The case of the complainants in C.C. No. 617/2011 is as follows :-
The complainants are students having successfully completed their Plus 2 studies. The 1st opposite party started an institution in the name and style “CIAL AME INSTITUTE” offering to provide quality education in Air Craft Maintenance and MRO (Maintain, Repairs and Overhaul of air craft, aviation training and certificates. Lured by the advertisements and prospectus issued by the 1st opposite party, the complainants have joined the course. The complainants have remitted Rs. 1,77,334/- each as fee for the course. The duration of the course was 3 years and it commenced on 03-08-2010. The institute was closed on 22-07-2011 due to the refusal of the Director General of Civil Aviation to renew the approval to the Institute. The 2nd opposite party is the operating partner of the 1st opposite party in conducting the institute. It was a joint venture conducted and managed by the 2nd opposite party. During the time of admission, the complainants were assured that the institute was having approval from the Civil Aviation Department. They had also promised that the complainants would be given placements at the 1st opposite party after successfully completing the course. The complainants have lost 2 years of study due to discontinuance of the course by the opposite parties. The 1st opposite party is liable to refund the fee paid by the complainants with interest together with a compensation of Rs. 1,50,000/- to each complainants and costs of the proceedings. This complaint hence.
3. The version of the 1st opposite party in C.C. No. 617/2011 is as under :-
The 1st opposite party is a company incorporated under the Companies Act 1956 engaged in the operation of airport. The 1st opposite party is neither running any institute nor has entered into any agreement with the 2nd opposite party. There is neither a privity of contract between the complainants and the 1st opposite party nor the 2nd opposite party offered any service to the complainants. The 1st opposite party is not a necessary party to the proceedings. This Forum lacks jurisdiction to entertain the complaint, since the complainants are not consumers as contemplated under the Consumer Protection Act. The 1st opposite party is neither running any institute as alleged in the complaint nor offered any course to the complainants. The complainants have no cause of action against the 1st opposite party.
4. The defense of the 2nd opposite party in C.C. No. 617/2011 is as follows :-
The complaint is bad due to non-joinder of necessary parties. The 2nd opposite party is a company registered as the subsidiary of M/s. Kairali Aviation (P) Ltd. exclusively to be associated with the 1st opposite party. The 1st opposite party has made a proposal to set up an Air Craft Maintenance Engineering Institute (CIAL – AME) adjacent to the airport as a part of their training academy through their subsidiary company the 3rd opposite party. The 3rd opposite party invited applications for the eligible management partners on behalf of the 1st opposite party for the proposed AME Institute. The 3rd opposite party has finalized the application of the Kairali Aviations Ltd. for the management partnership for running of AME Institute. An agreement was executed between the 3rd opposite party and M/s. Kairali Aviation Ltd. Subsequently, the 2nd opposite party has registered as a subsidiary of Kairali Aviations Ltd. with the consent of the 1st opposite party to run the CIAL AME Institute. As agreed upon between the parties all the Directors of the Kairali Aviation Ltd. had been allowed to continue as Directors of the 2nd opposite party. The above proposal had been endorsed by a tri-parte agreement entered into between the parties. The 2nd opposite party had deposited with the 3rd opposite party an amount of Rs. One crore towards interest free security deposit for the payments to be made to the 1st and 3rd opposite parties in par with the terms of the agreement. The 2nd opposite party had spent more than Rs. 6 crores for the establishment of the institution. The course has been forced to be discontinued as a result of the termination of the agreement. The 1st and 3rd opposite parties are responsible for the same. That is why the 1st and 3rd opposite parties suggested to the complainants, the alternative remedy like migration etc. The 2nd opposite party had collected only one academic year tuition fee from the students and in turn the classes have been conducted in that academic year. The complainants are not entitled to get any relief as prayed for against the 2nd opposite party.
5. The contention of the 3rd opposite party in C.C. No. 617/2011 reads as under :
The 2nd opposite party was selected for the purpose of managing and operating the AME Institute after a competitive process. The 3rd opposite party had accordingly entered into an agreement dated 12-03-2009 with M/s. Kairali Aviations Pvt. Ltd. for the operation and management of the Institute. At the request of the 2nd opposite party a supplementary agreement was executed on 30-12-2009 by which the 2nd opposite party which is an associate company of M/s. Kairali Aviations Pvt. Ltd. undertook to fulfill and comply with all the obligations of M/s. Kairali Aviations Pvt. Ltd. under the agreement dated 12-03-2009. As per the terms of the agreements, the only responsibility of the 3rd opposite party is to provide space to the 2nd opposite party for the institute. The 2nd opposite party commenced the course by admitting 33 students during September 2010 after obtaining conditional approval from Director General, Civil Aviation valid from 23-08-2010 to 31-12-2010. The 2nd opposite party failed to comply with their obligations under the agreements, they failed to pay salaries due to the staff engaged by them, they did not pay the royalty payable to the 3rd opposite party and also failed to comply with the requirements of the Director General of Civil Aviation leading to non-renewal of approval after 31-12-2010. When the 2nd opposite party realised that they will not be able to correct the discrepancies, highlighted by the Director General of Civil Aviation to renew the approval of the institute and admit the 2nd batch of students, they issued a letter dated 08-07-2011 to the 3rd opposite party informing that they are unilaterally withdrawing from the management and operation of the institute. They intimated the same to the Director General of Civil Aviation as well. Accordingly, there was no option before the 3rd opposite party but to terminate the agreement with the 2nd opposite party. In spite of repeated requests to pay various dues to the 3rd opposite party, the 2nd opposite party failed to clear any of the dues and so the 3rd opposite party was compelled to invoke the bank guarantee. Considering the interest of the students, the 3rd opposite party informed them to render necessary help for enabling migration to other institutes approved by the Director General of Civil Aviation. The 3rd opposite party cannot be held liable for any negligence on the part of the 2nd opposite party.
6. The complainants in C.C. No. 142/2012 as well raised the very same allegations against the opposite parties as that of the complainants in C.C. No. 617/2011.
7. The opposite parties in C.C. No. 142/2912 have filed separate versions raising the similar averments in their version filed in C.C. No. 617/2011.
8. No oral evidence was adduced by the parties. Exts. A1 to A3 were marked on the side of the complainants in C.C. No. 142/2012 and Exts. A4 to A9 were marked in C.C. No. 617/2011. Exts. B1 to B17 were marked on the part of the opposite parties 1 and 3. Heard the learned counsel for the parties.
9. The points that emanated for consideration are as follows :-
Whether the complaint is maintainable against the opposite parties 1 and 3?
Whether the complaint is bad for non-joinder of necessary parties?
Whether the complainants are entitled to get refund of the fees from the opposite parties?
Whether the opposite parties are liable to pay compensation to the complainants?
10. Point No. i. :- At the outset, the 1st and 3rd opposite parties challenged the maintainability of these complaints in this Forum against them. They maintain that there is no privity of contract between the complainants and the 1st and 3rd opposite parties and also they had not offered any service to the complainants.
11. Admittedly, the 3rd opposite party is a subsidiary company of the 1st opposite party. It is not in dispute that the 3rd opposite party and the holding company of the 2nd opposite party M/s. Kairali Aviations (P) Ltd. (KAPL) entered into Ext. B15 agreement on 12-03-2009. As per the agreement, the responsibilities of the 3rd opposite party and the 2nd opposite party are as under :-
“RESPONSIBILITIES OF CIASL
18. CIASL shall make available eight class rooms of size approximately 475 sq.ft. each, work shop area (approximately 5200 sq.ft.), an area for instructor's room, back office, library etc. (approx. 1400 sq.ft.) and other common allied facilities for the proposed AME Institute.
19. CIASL shall also provide the requisite infrastructure at their premises in the form of electricity, water, road, drainage and other common facilities.
20. CIASL shall assist KAPL for getting on the job training placement for trainees.
21. The day-to-day management and operation of the Institute shall be done by KAPL, KAPL shall be responsible for arranging all interior furnishings, furniture, training aids, work shop equipments aircraft/engines etc. for the successful establishment of the AME Institute. These internal facilities shall be provided in consultation with CIASL and it will be the responsibility to ensure that these shall comply with the requirements of DGCA and also other regulatory bodies.
22. The reputation of the AME Institute with regard to pass percentage etc. shall be to the satisfaction of DGCA/CIASL.
23. Obtaining approvals from Regulators shall be the responsibility of KAPL.
24. KAPL shall be responsible for arranging instructors and other staff for the Academy and shall be on their payroll. The day-to-day running expenses of the Academy shall also be borne by KAPL. KAPL shall also be responsible for securing affiliations and approvals from competent authorities.
25. KAPL shall maintain high quality and standards and shall be comparable with similar courses offered anywhere in the world and shall also facilitate OJT/job placements for the trainees.
26. KAPL shall be responsible for arranging suitable accommodation and transport facilities for the students and the charges for the same can be recovered from the students by KAPL.
27. The course fees for students shall be decided and fixed jointly with CIASL.”
12. In furtherance of Ext. B15 agreement, Ext. B16 supplementary agreement was made on 30-12-2009 between the 3rd opposite party (CIASL), M/s. Kairali Aviations (P) Ltd. (KAPL and the 2nd opposite party (KAAEPL), the terms and conditions in Ext. B16 supplementary agreement are as follows :-
“1. KAAEPL shall fulfill and comply with all the obligations of KAPL as per the Agreement dated 12th day of March, 2009 executed between CIASL and KAPL for the Management and Operation of the CIAL AME Institute.
2. KAAEPL shall have the Board of Directors consisting of all the Board Members of KAPL by nominating/electing or through other processes during the period of this agreement.
3. The investment by KAPL in equity shares of its subsidiary company KAAEPL shall always be not less than 51%.
4. The shareholding pattern of KAAEPL shall not be changed without the prior written approval of CIASL. However any change in the shareholding pattern of KAPL shall be intimated CIASL within 30 days from the date of such change.
5. KAPL shall guarantee due performance of all the obligations of KAAEPL as per the various terms and conditions enumerated in the Agreement dated 12th March, 2009.
6. KAPL and KAAEPL shall be jointly and severally responsible for discharging all the obligations under this Agreement.
7. KAPL and KAAEPL shall be jointly and severally responsible for the payment of Annual stipulated royalty and any other payments due to CIASL including penalty / fines / damages etc.
8. All the notices with respect to this Agreement shall be served on both parties viz, KAPL & KAAEPL
9. KAAEPL shall not commence any other activities without the prior approval of CIASL.
10. The Agreement dated 12th March 2009 executed between CIASL and KAPL for the management and Operation of CIAL AME Institute which is attached as Annexure will form part of this Agreement.”
13. In consequence of Ext. B16 agreement, the 2nd opposite party commenced the course after obtaining conditional approval of the course from the Director General of Civil Aviation which was valid from 23-08-2010 to 31-12-2010. Thereafter, the Director General of Civil Aviation after their inspection found the discrepancies as stated in Ext. B1 in respect of the institute. Though the 2nd opposite party corrected the same partially, they could not correct the same fully evident from Ext. B2 and B3 letters issued by Director General of Civil Aviation. Resultantly, the 3rd opposite party caused Ext. B11 termination letter to the 2nd opposite party and its holding company to terminate the agreements and also invoked the arbitration clause by nominating Hon'ble Mr. Justice B.M. Tulasidas, Retd. Judge of the High Court of Kerala as the sole arbitrator to adjudicate the disputes between them. We need not sit in judgment of the disputes between the opposite parties.
14. As per Exts. B15 and B16 agreements between the opposite parties, we do not find any deficiency in service on the part of the 1st and 3rd opposite parties. The opposite parties could not proceed with the course only due to the shortfall on the part of the 2nd opposite party. In confirmation of the above, we are of the firm view and opinion that the complaint is not maintainable against the 1st and 3rd opposite parties.
15. Point No. ii. :- The 2nd opposite party in their version contended that the complaint is bad for non-joinder of necessary party, since their holding company is not a party to the proceedings. We are not to agree with the said averment, especially when in Ext. B16 supplementary agreement dated 30-12-2009 among the 2nd and 3rd opposite parties and the holding company of the 2nd opposite party, the 2nd opposite party undertook to fulfill and comply with all the obligations of their holding company as per Ext. B15 agreement dated 12-03-2009. So, the contention of the 2nd opposite party goes for the same reasons. Rejected hence.
16. Point No. iii. :- Admittedly, the complainants joined for the 3 year course and the 2nd opposite party started the classes on 30-08-2010 and closed the institution on 22-07-2011. It is not in dispute that the complainants paid their 1st year fees to the 2nd opposite party. The complainants in C.C. No. 142/2012 have produced Exts. A1 and A2 the fee receipts. The 1st and 3rd opposite parties had made necessary arrangements for the migration of the students of the institute to other institutions approved by the Director General of Civil Aviation, and thereafter, permitted them to complete their training at the airport evident from Exts. B12 series. Since the 2nd opposite party is solely responsible for the discontinuation of the course, the 2nd opposite party is liable to refund all the fees collected from the complainants.
17. Point No. iv. :- The grievances of the complainants having been met adequately, we refrain from awarding compensation to them.
18. In the result, we partly allow the complaint and direct as follows :-
In C.C. No. 617/2011, the 2nd opposite party shall refund all the amounts received from the complainants in connection with the course.
In C.C. No. 142/2012, the 2nd opposite party shall refund Rs. 1,77,834/- and Rs. 1,52,834/- as per Exts. A1 and A2 to the complainants respectively.
The above orders shall be complied with, within a period of thirty days from the date of receipt of a copy of this order, failing which the above amounts shall carry interest @ 12% p.a. till realisation.
Pronounced in the open Forum on this the 21st day of December 2013.
Sd/- A. Rajesh, President.
Sd/- Sheen Jose, Member.
Sd/- V.K. Beena Kumari, Member.
Forwarded/By Order,
Senior Superintendent.
A P P E N D I X
In C.C. No. 617/2011 :-
Complainant's Exhibits :-
Exhibit A4 | :: | Copy of the letter dt. 06-06-2011 |
“ A5 | :: | Prospectus issued by the op.pts. |
“ A6 | :: | Copy of the letter dt. 06-06-2011 |
“ A7 | :: | Manual of the op.pts. |
“ A8 | :: | Copy of the certificate dt.01-11-2010 |
“ A9 | :: | Copy of the message dt. 14-08-2010 |
Opposite party's Exhibits :: Nil
In C.C. No. 142/2012 :-
Complainant's Exhibits :-
Exhibit A1 series | :: | Copy of receipts (2 Nos.) |
“ A2 | :: | Copy of receipts (3 Nos.) |
“ A3 | :: | Prospectus issued by the op.pts |
Opposite party's Exhibits :-
Exhibit B1 | :: | Copy of the letter dt. 20-05-2011 |
“ B2 | :: | Copy of the letter dt. 12-07-2010 |
“ B3 | :: | Copy of the letter dt. 30-06-2010 |
“ B4 | :: | Copy of the letter dt. 24-03-2011 |
“ B5 | :: | Copy of the letter dt. 20-07-2011 |
“ B6 | :: | Copy of the letter dt. 11-08-2011 |
“ B7 | :: | Copy of the letter dt. 12-09-2009 |
“ B8 | :: | Copy of the agreement dt. 01-08-2011 |
“ B9 | :: | Copy of the letter dt. 08-07-2011 |
“ B10 | :: | Copy of the letter dt. 01-08-2011 |
“ B11 | :: | Copy of the letter dt. 16-07-2011 |
“ B12 | :: | Copy of the agreement dt. 31-01-2013 |
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