Order-13.

Date-09/12/2016.

This is an application u/s.12 of the C.P. Act, 1986.

            Complainant is a small unaffiliated Govt. registered autonomous school imparting education to poor and needy children sponsored by “Hope Foundation”, an NGO.  OP1 is a multi-national company having its registered office in Bombay.  OP2 is the Branch Office of OP1 in the city of Kolkata.  Upon persuasion by the representative of OP2 the complainant agreed to avail the services of the OPs for installing ‘classedge’ to implement the interaction education interface for their students.  On 31-08-2012 the representative of the OP2 came to the school and obtained signatures of the Principal of the complainant’s school on various pages of an agreement written in very small letters and the Principal put his signature for such agreement in good faith together with the cheque of Rs.18,500/- for the offer of the classedge.  It is alleged that the said principal was not given any opportunity to read and understand the meaning and implications of the said agreement.  OP2 at the time of offer informed that they would provide broadband connection, hardware imparting training to teachers, providing glow-shine board to implement the said classedge interactive education interface.  They also informed that they would provide support services which would include continuous warranty for smooth running of the same.  It was stated that the total cost of the service including hardware, broadband connection would be around 11 lakhs payable in quarterly instalments.  During the month of October, 2012 the OP2 informed the complainant that OP1 has accepted the offer of the complainant by putting signature of the aforesaid agreement in their office in Bombay on 20-12-2012.  OP2 also provided a copy of the same and compelled the complainant to pay a further amount of Rs.37,000/- being balance amount of advance against acceptance of agreement.  Thus OP2 collected total sum of Rs.55,000/- from the complainant prior to delivery of any such hardware, internet etc.  The OPs failed to delivery necessary items as well as to do the needful in spite of telephonic talks and reminders.  It is alleged that the OPs failed and neglected to implement the classedge in the school w.e.f. 01-01-2013 as assured by them.  Ultimately, in the last week of January, 2013 instead of 01-01-2016 as assured OP2 uploaded/downloaded the software without imparting necessary training to teachers.  OPs also provided dungle instead of broadband and did not provide the neon-shine board etc. as per their commitment.  OP2, however, agreed to provide necessary training to selected teachers after much persuasion but that was not also possible for the training was arranged during the late afternoon and after school hours for which the teachers disagreed to attend the training the school authority had to incur extra expenditure for the same.  The complainant also submits that subsequent to implementation of the system the complainant faced several problems such as a) Project focus was not proper, b) stylus was not working.  As such the main purpose of installing digital classes was frustrated.  On 02-04-2013 and 25-04-2013 one Sudeshna Roychowdhury and one Alokesh Dey representative of OP2 visited the complainant’s school to collect further instalments of money without paying any heed to the genuine grievances made by the complainant’s school.  The complainant, however, was compelled to pay a further sum of Rs.18,500/- with the assurance by the OP2 to set right entire grievance of the complainant within 7 days but in vain.  The complainant has paid Rs.1,85,000/- to the OPs in 5 instalments for the period upto 07-10-2013.  The complainant being dissatisfied and frustrated with the acts and conduct of the OPs decided to go out of the agreement and asked the OPs to provide no due certificate.  But the representative of the OP2 stated to the complainant that in case of termination of the agreement the complainant will be liable to pay balances/dues up to the date of letter of surrendering system.  On 26-08-2013 OP1 issued a withdrawal notice with the assurance to issue an installation certificate but despite reminders and follow up, the OP did not remove their hardware and other materials etc. in good running condition from the school premises prior to 14-09-2013.  It is stated by the complainant that the complainant had already paid of their obligation till July, 2013, i.e. the month of termination of the agreement.  On 04-03-2015 and 14-03-2015 the complainant to utter dismay received two letters from OP1 demanding of Rs.92,500/- towards their dues which is not at all correct.  In reply thereto the complainant vide letter dated 07-03-2015 and 28-03-2015 denied the demand of OP1 on the ground that the school had already paid entire due in time prior to surrendering the classedge system in terms of clause of agreed contractual obligation.  Recently one Mr. Narendra Brist, a representative of the OP1 telephonically threatened the complainant saying that unless a sum of Rs.3 lakhs is paid by the complainant, the said OP will initiate legal proceeding in Bombay Court in terms of agreement.  The complainant apprehended the OPs may file case in Bombay against the complainant to create mental pressure upon the complainant.  Some unknown men of OP2 till recently have been visiting the school and the family members of the complainant to clear up the alleged dues of the school.  As a result, 70 years old father of the complainant has been attacked with cerebral stroke and suffered paralysis of left side of the body and loss of speech.  It is alleged that the OPs have indulged in unfair trade practice and have been deficient in rendering services to the complainant’s school.  Hence, this case.

            OPs 1 and 2 have filed written version contending, inter alia, that the complainant is not entitled to get any relief and the instant complaint is not also maintainable and is liable to be dismissed.  It is stated that as per the agreement the exclusive jurisdiction lies at Bombay and therefore, the case is also barred for territorial jurisdiction.  It is also stated that the transaction is a commercial one and, as such, the complainant is not a consumer under C.P. Act.  It is stated that the complainant apart from part payment has never paid the entire amount of dues even after constant reminders.  The OPs stated that for implementing classedge the schools require hardware which is given by the OPs on a specialized basis to the complainant’s school.  This OP submits that the OPs as per the terms of the said original agreement have installed all the requisite materials and fixtures and hardware in the complainant’s school premises valued at Rs.4,50,000/- and also provided the proper services as required to implement the said classedge package at the school premises of the complainant.  This OP submits that as per the said original agreement the complainant was under obligation to pay total sum of Rs.11,10,000/- from 1^st January, 2013 till the expiration of the said original agreement, that is, till 31-12-2017 being the cost towards the said TATA Classedge package.  It is also stated that after signing and executing the original agreement the OP2 installed necessary equipments and hardware within the school premises and the complainant was availing the services till September, 2013 and with no payment of arrears/instalments due and also for damage/compensation for hardware utilization.  The OPs have time and again raised invoices upon the complainant claiming dues but the complainant turned their deaf ears to the requests of the OPs to make the payment.  It is sated that the complainant thereafter, unilaterally desired to come out from the services of the OPs by making false and frivolous allegations.  OP agreed to terminate the original agreement as the complainant had been continuously defaulting in making payment to the OPs.  The complainant under letter dated 14-09-2013 allowed the OP to uninstall all the equipment and hardware within the complainant’s school premises.  The complainant handed over a cheque for a sum of Rs.18,500/- and failed and neglected to pay to the OPs the balance sum of Rs.37,000/-.  The OP submitted that the total amount lying due to the complainant is Rs.4,01,002/-.  It is also stated that the OPs have already filed a suit bearing no.1101 of 2016 against the complainant which is pending before the Bombay City Civil Court at Bombay for recovery of a sum of Rs.4,01,002/-.  It is stated that the instant case is false, frivolous and is liable to be dismissed.

Point for Decision

1. Whether the case is maintainable in its present form and prayer?
2. Whether the OPs are deficient in rendering services for classedge package to the complainant?
3. Whether the complainant is entitled to get the relief as prayed for?

Decision with Reasons

Point No.1 . Ld. Lawyer appearing for the OP has argued that the case is not maintainable in this Forum on the ground of territorial jurisdiction.  It is stated that as per agreement executed between the complainant and the OP and as per clause 9 of the said agreement as entered between the complainant and the OP it has been specifically mentioned that any dispute arising out of the said agreement will be subject to the exclusive jurisdiction of the courts at Bombay.  Ld. Lawyer for the OP submits that the complaint is liable to be dismissed on this ground alone.  We have perused the Clause 9 of the said agreement.  We think mere use of word about the territorial jurisdiction will not make it binding upon the parties and it requires or templates a further fresh consent.  It requires consensus ad idem, i.e. consent of both the parties.  The provision of C.P. Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.  We think that mere presence of Clause 9 of the agreement will not be a bar to the entertainment of the complaint relating to deficiency of service in this Forum.  Moreover, we find that OP1 is a multi-national company having its registered office in around office in the city of Bombay and local offices in an around cities of various states dealing with its propriety interactive educational interface.  OP2 is the branch office of the OP1 in the city of Calcutta but the address as stated in the cause title of the petition of complaint and within jurisdiction of this Forum.  Accordingly, we think that the case is very well maintainable in this Forum u/s.11 of the C.P. Act.  We are fortified by the decisions reported in (2015) 1 WBLR (SC) 385, National Seeds Corporation Ltd. vs. Madhusudan Reddy’s case reported in 2012(2) SCC 506, (2007) 5 Supreme Court Cases 719, Secretary Thirumurugan Cooperative Agricultural Society vs. M. Lalitha.  Moreover, it has been alleged by the complainant that the Principal of the school was not given opportunity to read and understand the necessary meaning and implications of the clauses of the said agreement and the representative of the OP obtained signature of the principal of the complainant on various pages on the agreement hastily and he put his signature in good faith and the agreement was also written in very small letters and cannot be read easily.

            Be that as it may, we think that the case is maintainable in this Forum u/s. 11(2)(b) and (c) of C.P. Act. 

Ld. Lawyer for the OP has also argued that the case is hopelessly barred by limitation.  The complaint in the instant case was filed after lapse of two years and it is barred as per Section 24A of C.P. Act.  We find that the case was filed on 10-06-2016.  The agreement in between the parties was cancelled on 26-08-2013 by the OP.  But we find that even after that OP caused service of a legal notice dated 25-04-2015 upon the complainant continuing the cause of action of the case.  So, we find that the legal notice issued by the OP can be taken as a base to bring the alleged complaint of the complainant within the limitation period.  We accordingly think that the case is not hit u/s.24A of C.P. Act, 1986.

It is also argued by the Ld. Lawyer for the OP that the transaction was commercial one because the school is exacting fees from the students.  But we are not in a position to accept such argument.  Education is not a commodity.  Educational Institutions are not providing any kind of services, therefore, in the matter of admission, fees, there cannot be a question of commercial transaction.  (P.T. Koshay vs. Ellen Charitable Trust and Ors., Maharshi Dayanand University vs. Surjeet Kaur 2010 (II) SCC 159 referred to).

Points No.2 and 3  . We have travelled over the documents on record, i.e., Photostat copy of Tata Classedge Agreement, of Classedge TM Package availed by the complainants school as on date 31-08-2012, Xerox copy of total consideration, xerox copy of Tata agendum, Xerox copy of pass book statement of the complainant, Xerox copy of the letter of the complainant’s school for cancellation of the TATA interactive system w.e.f. 01-08-2013, withdrawal letter dated 26-08-2013 of the OP, xerox copy of the legal notice dated 25-04-2015 of the OP, Xerox copy of GDE No.2969 dated 28-205-2016 and other documents on record.

            It appears that the OP is a division of TATA Industry Ltd. incorporated under the provisions of the Companies Act, 1930 having its office as mentioned in the cause title of the petition of complaint.  The OP has developed its proprietary interactive education interface by the men of Tata Classedge which the OP provides to various schools.  In the instant case, the parties agreed on the terms and conditions under the term classedge package.  It was agreed that OP would provide broadband connection, imparting training to teachers providing glow-shine boards as well as support services for smooth running of the same.  it is alleged by the complainant that the OPs failed to delivery necessary items as well as to do the needful, thus OPs failed and neglected to deliver hardware and other necessary items to implement classedge in the school w.e.f. 01-01-2013 and ultimately during the last week of August, 2013 OP2 uploaded/downloaded the software without imparting necessary training teachers.  We find that the commencement date of the agreement is 01-01-2013 and expiry date being 31-12-23017.  We find that on 31-07-2013 the principal of the school communicated some problems to one Sudeshna Roychowdhury of Tata Interactive system and expressed an intention to cancel the agreement w.e.f. 01-08-2013.  Based on mutual discussions between the parties, as we find, OP terminated the agreement vide letter dated 26-08-2013.  We also find that OP removed all the hardware equipments, materials etc. supplied or installed by TIS under the agreement.  We also find that the OP received all the parts, machineries, computer set up projector of TIS without any damage along with a cheque of Rs.18,500/- vide letter dated 14-09-2013.  We find that proposal for cancellation of TIS under the agreement was eventually accepted by the OP vide letter 26-08-2013 but we find that the complainant agitated deficiency vide letter dated 23-07-2013 we did not find any reply to such allegations of the complainant from the end of the OP.  Be that as it may, the contents of the letter dated 31-07-2013 of the complainant school remains unrebutted and uncontroverted.  Moreover, we find that the OP vide letter dated 14-09-2013 received all the parts machineries computer set up projector of TIS without any damage along with cheque of Rs.18,500/-.  The matter did not end there.  It appears that after a lapse of almost 20 months on 25-03-2015 the complainant received a legal notice from the OP1 demanding Rs.4,24,772/- towards their dues but from the letter dated 04-09-2013 it appears that the school had already paid dues of Rs.18,500/- by a cheque at the time of removal of parts, machineries, computer set up projector of TIS.  It is specifically stated in that letter that the OP received such parts, machineries, computer set up projector of TIS without any damage.  So, we think that the question of dues prior to surrendering classedge system does not arise.  It can be inferred that if the total dues of the complainant was not paid up to the date of uninstallation, how OPs removed all the accessories from the premises of the complainant without raising objection.  It appears that all the hardware equipments materials supplied or installed by TIS under the agreement found uninstalled and removed from the school premises as per the letter of the OP dated 14-09-2013 and those hardware and machineries have been recovered from the school without any damage.  We find that the deficiency in services as alleged by the complainant to school vide letter dated 31-07-2013 have not been controverted or rebutted from the end of the OPs.  It appears that the complainant on 31-07-2013 surrendered the services by way of cancellation of the purported agreement of the OP highlighting severe deficiency of service by OP2.  We find that those allegations regarding deficiency in service have not been controverted from the side of the OP.  Accordingly, the allegation of deficiency in service by the local office OP1 stands firm and remains uncontroverted.  It also appears that the OP took delivery of all the equipments without any damage together with a cheque of Rs.1,85,000/- till July, 2013 i.e. up to the date of termination/surrender of services.  It appears that the complainant availed services till September, 2013.  We accordingly hold that the OPs have neglected to provide proper services to the complainant’s school violating the terms of agreement.  It is also alleged that some unknown persons on behalf of the OP have been demanding so called purported dues and the complainant as such has been compelled to lodge a complaint with the local P.S..  We think that OPs have been deficient in providing services to the complainant in terms of the agreement. 

In result, the case merits success.

Hence,

Ordered

That the instant case be and the same is allowed on contest against the OPs. 

            OPs are jointly and severally directed to pay Rs.1 lakh as compensation for deficiency in service apart from litigation cost of Rs.10,000/- to the complainant within 30 days from the date of this order.

Failure to comply with the order will entitle the complainant to put the order into execution u/s.25 read with Section 27 of the C.P. Act and in that case OP shall be liable to pay penal damage   at the rate ofRs.5,000/- per month to be paid to this Forum till full and final satisfaction of the decree.