IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOLLAM
DATED THIS THE 31st DAY OF DECEMBER 2020
Present: -Sri. E.M.Muhammed Ibrahim, B.A, LLM. President
Smt.S.Sandhya Rani. Bsc, LLB ,Member
Sri.Stanly Harold, B.A.LLB, Member
CC.No.162/2017
The Principal,
MNPM Central School,
Kottackakom, Chavara P.O., Kollam
(By Adv.A.Sudheer Bose):Complainant
V/S
- M/s Educomp Solutions Pvt.Ltd.,
1211, Padma Tower-1,5, Rajendra Palace,
New Delhi 110 008.
(By Adv.G.Vijaya Kumar)
- M/s Edu Smart Services Pvt.Ltd.,
WZ 931, A/2, Street No.14 A/2,
Sandh Nagar, Palam Colony,New Delhi-45. : Opposite parties
(By Adv. G.Vijaya Kumar)
ORDER
Sri.E.M.MUHAMMED IBRAHIM , B.A, LL.M,President
This is a case based on a complaint filed U/s 12 of the Consumer Protection Act 1986.
The averments in the complaint in short are as follows:-
The complainant is the Sr.Principal of MNPM Central School which is engaged in imparting education on school level under CBSE syllabus. The school is affiliated to Central Board of Secondary Education, New Delhi. The 1st opposite party is engaged in setting up smart class programme and 2nd opposite party is the authorized representative of 1st opposite party for implementing its smart class programme within the territory of India as per the standard specified by the 1st opposite party.
Opposite party 1 and 2 jointly approached the complainant on 08.01.2010 with a proposal to set up smart class programme at the premises of MNPM
Central School, Chavara which comprises of sale of hardware and making available of its digital contents. At the time of making the proposal the complainant was made to believe that they will supply and install high quality
hardware components and also software support which is free from any manufacturing defect and they assured the absolute uninterrupted performance in terms of its quality, efficiency and accuracy. Believing the words of opposite parties, the complainant was constrained to accept the proposal for starting smart class programme in their school. A tripartite agreement between the complainant and opposite parties was executed on 02.02.2010 at the office of the complainant’s school at Chavara, Kollam for the installation of smart class
programme. On the basis of the said tripartite agreement, the opposite parties have supplied and erected DLP projection system, interactive class room teaching systems, CPU, UPS and other peripherals for 20 class rooms. The entire system was installed by the technicians of the opposite parties at their risks and costs after the installation of the smart class system, the complainant has also advertised and canvassed the students on the specific assurance of providing smart class interactive teaching systems with DLP projections and computers. After the installation of system, the opposite parties have deployed Mr.Sivakumar R.G. as resource co-ordinator with precise duty of maintenance and performance of smart class teaching systems in the school. He is supposed to send periodic reports regarding the performance and functioning of smart class interactive systems called HWR report, ie. Hardware Issues pending from time which describes the date of reporting complaint, the area of problem, HW problem detection and also the resolution remarks. From the very inception, the hardware system and also softwares were showing malfunction. The functioning of the entire smart class systems was not upto the mark. There arose series of problems in the functioning of the hardware and software system which were brought to the attention of the resource co-ordinator. He had been trying his best to put these systems into proper performance. Series of problems arose upon projector, UPS, Audio, speaker and also network. Those defects and malfunctioning of smart class systems were duly endorsed in the HWR report and the same were duly communicated to the opposite parties in time. The complainant herewith produces a few of the HWR report which narrates the problem related to product, brand name, description of the problem, resolution of remarks and also status. A bare perusal of HWR report would go to show that the systems like UPS, projector and CPU are dead most of the times and needs repair. Even after repair, the systems were not functioning and was finally remarked as “Needs replacement”. From these periodical reports the opposite parties were aware and convinced of the malfunctioning of entire smart class systems. The opposite parties have not taken any steps to put the system in operation by making necessary steps and replacements. There were series of communications between the complainants and opposite parties inviting the attention of opposite parties for taking care of the product and services supplied by them. But they have taken a deaf ear to all such communications. Due to the continuous malfunctioning and also the non-functioning of CPU, UPS, monitor and projector, the entire smart class system came to a standstill from the Academic years 2013-14. By virtue of email dated 23.07.2014, the complainant had sent a specific letters through email reiterating that the complainant is not getting proper service since September 2013 and was unable to use the smart class properly. By this time, the complainant has paid a total sum of Rs.52 lakhs towards the 20 smart classes and Rs.11,92,080 for 8 classes. Though the complainant has paid a total sum of Rs.63,94,080/-, the complainant has not received the full utility of the system. The timely intimation of complaints to Mrs.Sofia David, the Regional manager and Mr.Sujith, Area manager did not yield any result at all. Hence the complainant, through this email dated 23.07.2014 requested the Director of the opposite parties for his personal intervention to solve this problem. As stated earlier, out of total amount of Rs.77,21,200/-(Rupees seventy seven lakhs twenty one thousand and two hundred) total amount, the complainant has directly paid a sum of Rs.63,94,080/- (Rupees sixty three lakhs ninety four thousand and eighty only), by means of prompt part payments. In spite of that the opposite parties are not cared to give proper and complete service to the school as envisaged in the
agreement executed by them. Hence the complainant was constrained to withhold the payment of last 3 cheques as shown in the schedule of payment, by sending stop payment instruction to the bank. It is true that cheque No.181918 submitted by the opposite parties was returned unpaid for the obvious reason “ payment stopped by Drawer”. The circumstances under which lead to an instruction to the
bank is as mentioned above. But even after the return of said cheque, the opposite parties were not eager to look into the complaints and to solve the problems of smart class systems. When the 1st opposite party have sent legal notice under the provisions of Negotiable Instrument Act by virtue of notice dated 06.12.2014, the complainant has sent a reply notice on 20.06.2014 narrating the circumstance under which stop payment was instructed and reiterated the terms of contract and the required service support from opposite parties. After, receiving the reply for lawyers notice, the opposite parties initiated arbitration proceedings without any notice to the complainant who is a party to the contract. The intention of opposite parties is nothing but to circumvent the litigations or actions expected against them from the complainant’s side. The smart class system supplied by the opposite parties is faulty and there is imperfection and short coming in the quality and standard which is required to be maintained by any manufacturer or supplier. The software support and service rendered by opposite parties was also suffering from imperfection, short coming and inadequacy in the quality, nature and manner of performance which is required to be maintained by any service provider or in pursuance of a contract entered by the parties. As stated earlier, the Agreement entered between the opposite parties and complainant cover a period of 5 years of operation which ended on 31.08.2015. But from the inception, more particularly from September 2013, the complainant could not use the smart class and enjoy its benefits. So it is evident that the complainant could not enjoy the utility and service of smart class up to August 2013 only, ie. 36 months of the contracted period of 60 months. Hence, the opposite parties are liable to refund proportionate value of the goods and service offered by the opposite parties, which in any case shall not be less than 15 lakhs. Due to the nonfunctioning of
the smart class system, the functioning of the school has come to a standstill and it has affected the reputation of the school as well. The mental agony, sufferings and loss of reputation suffered cannot be equated with money. However for legal purpose, it is fixed for a tune of Rs.15 lakhs.
In response the notice opposite parties 1 and 2 entered appearance through Adv.G.Vijayakumar and filed IA 448/2018 raising the question of maintainability on 3 grounds.
- The school is run by a trust and the trust would not come within the definition of a consumer.
- The smart class installed by the opposite party is commercial purpose .
- The complaint is barred by limitation.
After hearing both sides the said IA was dismissed vide order dated 25.11.2019 by finding that the complainant has been filed by the Principal of the school which is not run by any trust. It is run by an individual management that the smart class system was purchased by the complainant from the opposite parties by paying consideration and not for resale or form making any profit and that the complainant is not barred by limitation since the cause of action arose only when the opposite parties had withdrawn from providing service to the complainant and initiated arbitration proceedings by sending notice dated 17.07.2018. The question of the maintainability has been considered in the IA and the order in the said IA has become final. However the opposite parties have not filed any version though sufficient opportunity was granted. On 17.09.2020 when the case was taken up for trial the learned counsel for the opposite parties submitted that opposite parties have not filed any version since opposite parties 1 and 2 are not in existence and he is having no instruction from opposite parties. Hence opposite parties 1 and 2 set exparte.
Exparte evidence has been recorded. Complainant filed proof affidavit and got examined as PW1 marked as Ext.A1 to A3 series A4 to A6. Heard learned the counsel for the petitioner.
The only point to be considered is whether the complainant is entitled to get relief sought for in the complaint.
The Point
The main relief sought for the complaint is to direct the opposite parties to refund a sum of Rs.15 lakhs being the value of unused goods and services from September 2013. The 2nd relief sought for is compensation of Rs.5 lakhs for the mental agony, sufferings and loss of reputation of the complainant. Cost of the proceedings is also sought for us the 3rd relief.
The unchallenged averments in the affidavit coupled with Ext.A1 to A3 series A4 to A6 documents would establish that the complainant is the Principal of MNPM Central School, Chavara that the said school is affiliated CBSE, New Delhi. The 2nd opposite party is the authorized representative of 1st opposite party for implementing its smart class programme as per the standards specified by the 1st opposite party. On 08.01.2010 opposite party 1 and 2 jointly approached the complainant with a proposal to set up smart calss programme at the premises of MNPM Central School Chavara. At the time of making the proposal the opposite parties caused the complainant to believe that they will supply and install high quality hardware components and also software support which is free from any manufacturing defect and they assured the absolute uninterrupted performance in terms of its quality, efficiency and accuracy. By believing the words of opposite parties, the complainant was constrained to accept the proposal for starting smart class programme in the said school. Ext.A1 is tripartite agreement dated 04.02.2010 was executed by agreement to installing 20 class rooms at an estimated cost of Rs.52 lakhs out of which Rs.27,44,750 towards hardware equipment Rs.10,40,000/- towards service support and Rs.14,15,250/- towards licensing fee. It is also clear from the available materials that on 20.07.2010 another tripartite agreement (Ext.A2) executed between the parties for the installation of 8 more class rooms. The total consideration for this agreement was Rs.25,21,200/- out of which Rs.10,69,930/- was towards value of hardware knowledge centre, Rs.9,21,200/- towards hardware and equipments and Rs.5,30,064/- towards the cost of service support. On going through Ext.A1 and A2 agreement it is clear that it would stipulate conditions and obligations of the
opposite parties to supply hardware, server, equipment networking and accessories to implement the smart class programme in the school. The above 2 agreement also stipulate that the 2nd opposite party will appoint train and deploy one full time smart class resource co-ordinator and the resource co-ordinator shall be deployed at the premises of the complainant during the period of agreement and the 2nd opposite party shall pay his/her salary, incentives etc and the said resource co-ordinator shall assure that all the equipments provided to the complainant as per the two agreements would be in working condition throughout the duration of the agreement which is 5 years with the help and support provided by the customer support team deployed by the 2nd opposite party. The agreement would further stipulate that any problem reported would be rectified within 48 working hours and in case of any replacement of any defective part is required the same shall be replaced within 7 working days free of cost. It is also clear from the available materials that upon the execution of agreement the complainant has paid the advance amount of Rs.30,000/- installation of smart class programmes for 28 class rooms. On the basis of tripartite agreement the opposite parties have supplied and erected DLP projection system, interactive class room teaching systems, CPU, UPS and other peripherals for 20 class rooms. The entire system was installed by the technicians of the opposite parties at their risks and costs. After installation of the smart class system, the complainant advertised and canvassed the students on the specific assurance of providing smart class interactive teaching systems with DLP projections and computers.
It is also brought out in evidence that one Mr.Sivakumar R.G., was the smart class co-ordinator appointed by the opposite parties. Ext.A3 series are hardware working report during the year 2013 and 2014. It is clear from the available materials including Ext.A3 series that from the very inception the hardware and software system was showing malfunctioning. The entire smart class system was not upto the mark. The malfunctioning of the hardware and software system was brought to the attention of the resource co-ordinator and he had been trying his best to put these systems into proper performance. The malfunctioning of hardware and software reported to the opposite parties in time and they were made aware of the defects and malfunctioning of the entire smart class system but they have not taken any steps to cure the defects by replacement of necessary equipments. In spite of repeated communication of the complainant regarding the defects and malfunctioning of the systems they have not taken any steps to cure the same. It is clear from the available materials that due to the continuous malfunctioning and nonfunctioning of CPU, UPS, monitor and projector the entire smart class system came to a standstill from the Academic year 2013-14. The complainant sent email after email reiterating the complainant and stating that they have not been getting proper service since September 2013 and was unable to use the smart class properly. The software support and service rendered by opposite parties was also suffering from imperfection, short coming and inadequacy in the quality, nature and manner of performance which is required to be maintained by any service provider or in pursuance of a contract entered by the parties. As stated earlier, the Agreement entered between the opposite parties and complainant cover a period of 5 years of operation which ended on 31.08.2015. But from the very inception, more particularly from September 2013, the complainant could not use the smart class and enjoy its benefits. So it is evident that the complainant could enjoy the utility and service of smart class up to August 2013 only, ie. 36 months of the contracted period out of 60 months. Hence, the opposite parties are liable to refund proportionate value of the goods and services offered by the opposite parties, which in any case shall not be less than 15 lakhs. In view of the materials discussed above it is clear that there is deficiency in service and unfair trade practice on the part of the opposite parties No.1 & 2. Hence the complainant is entitled to get the refund of 15 lakhs from opposite party 1 and 2 jointly and severally being the value of unused goods and services from September 2013 onwards till 31.08.2015. In the circumstances the complainant is entitled to get the 1st relief allowed.
The 2nd prayer is compensation with tune of Rs.5 lakhs for the mental agony loss of reputation from the complainant. It is also clear from the available materials that to the nonfunctioning of the smart class system, the functioning of the school has come to a standstill and it has affected the reputation of the school as well and thereby the complainant has sustained mental agony, sufferings and loss of reputation. In view of the misfeasance, malfeasance, nonfeasance of the opposite parties the complainant has not only sustained financial loss but also sustained mental agony. Therefore the complainant is entitled to get the loss and compensation. In view of the facts and circumstances of this case we are of the view that the complainant is entitled to Rs.10,000/- as costs of the proceedings.
In the result complaint stands allowed in the following terms:-
- Opposite parties 1 and 2 are directed to refund Rs.15 lakhs with interest @ 6% per annum from the date of complaint till realization due to malfunctioning and non functioning of the smart class system installed by the opposite parties at the complainant’s school.
- The opposite parties 1 and 2 are further directed to pay Rs.5 lakhs with interest @ 6% per annum from the date of complaint till realization as compensation for the mental agony and loss of reputation of the complainant.
- The opposite parties are directed to pay Rs.10,000/- as costs of the proceedings.
- The opposite parties 1 and 2 are directed comply with the above directions within 45 days from the date of receipt of a copy of this order failing which the complainant is entitled to recover Rs.20 lakhs (15 lakhs + 5 lakhs) with interest at the rate of 9 % per annum from the date of complaint till realization with the costs ordered above.
Dictated to the Confidential Assistant Smt. Minimol.S transcribed and typed by her corrected by me and pronounced in the Open Forum on this the 31st day of December 2020.
E.M.Muhammed Ibrabim:Sd/-
S.Sandhya RaniSd/-
Stanly Harold:Sd/-
Forwarded/by Order
Senior Superintendent
INDEX
Witnesses Examined for the Complainant:-
PW1 : Kanakamma
Documents marked for the complainant
Ext.A1 : Agreement for smart class programme for Educom Solution MNPM
Central School, dtd 4.2.2010 for 20 class rooms
Ext.A2 : Agreement for smart class programme for Educom Solution MNPM
Central School, dtd 20.7.2010 for 8 class rooms
Ext.A3 series : HWR Reports from 11.06.2013 to 16.11.2014 (4 Nos.)
Ext.A4 : Complaint dtd.23.7.2014 by the complainant to the opposite parties
Ext.A5 : Legal notice dtd.6.12.2014 sent by Adv.Jyotsna Sharma
Ext.A6 : Reply notice dtd.20.12.2014 sent by Adv.George Varghese
E.M.Muhammed Ibrabim:Sd/-
S.Sandhya Rani:Sd/-
Stanly Harold:Sd/-
Forwarded/by Order
Senior Superintendent
