BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM RAICHUR.
COMPLAINT NO. (DCFR) CC.No. 47/2013.
THIS IS THE 26th DAY OF DECEMBER 2013
PRESENTS
1. Sri. Prakash Kumar, BA.LLB PRESIDENT.
2. Smt. Pratibharani hiremath BA.LLB (Sanskrit) MEMBER.
COMPLAINANT : Riyaz Abdul Gaffar Dumba S/o. Late
Abdul Gaffar Dumba, Age; 33 years, Occ: unemployed, R/o. H.No. 1-4-89/4, I.B. Colony, Raichur.
RESPONDENTS : 1. Next Retail India Ltd., Vedicon Industrial
Ltd., Adeshwar Arcade, 3rd floor, Near Sangam Big Cinema, Next to Crisil House/Loop Mobile gallery, Andheri, Kurla Road, Andheri East, MUMBAI.
2. Next Retail India Ltd., 27th Main Road, Number-2625, Sector-1, HSR layout, Opp: CPWD Complex, Bangalore-560102.
Date of Institution : 06-08-2013.
Date of Disposal : 26-12-2013.
Complainant represented by Sri. I.M. Patil, Advocate.
Respondent Nos-1 & 2 represented by Sri. Suresh. M.G. Advocate.
ORDER
By Sri. Prakash Kumar, President:-
The complaint is filed by the complainant against the Respondents U/sec. 12 of Consumer Protection Act 1986.
The complaint in brief is that, the complainant is a young unemployed MBA graduate. In order to earn his livelihood he wanted to start some business. The Respondent No-1 appoints retailer/franchise for sale of consumer durables, Electronic goods, household items which are manufactured by different manufacturers under different trade names and trademarks, under the name and style of “NEXT”. The duty of the retailer/franchise is to sell products supplied by the Respondents. The complainant in order to get him appointed as retailer/franchise applied to the Respondent No-1 and for this purpose formed a proprietorship concern by name M/s. A.G. & Sons. The Respondents represented by one Mr. Krishna visited the complainant at Raichur, explained terms and conditions of the Respondents to give franchise and asked the complainant to sign proforma of agreement to be sent to the Respondent to be signed by them. The complainant has signed the said agreement dt. 09-03-2012 on stamp paper at Raichur and handed over it to Krishna by keeping xerox copy of the same with him. But the complainant so far has not received the agreement signed by the Respondents. As per the terms and conditions of the franchise the retailer shall pay Rs.1,00,000/- before execution of the agreement. Retailer shall provide one commercial premises to establish retail outlet. At the expenses of complainant/retailer interior and exterior elevation and decoration work and furnishing etc., would be carried the expenses of which would be reimbursed by the Respondents in 36 equal monthly installments. The Relationship between the Respondents and complainant is that of seller and buyer and for the sale of the goods, the complainant would get gross margin of about 7%. As per the terms and conditions of the agreement the complainant took on lease one commercial building bearing Mpl.No.1-11-55/13/1 at Nijalingappa Colony, Raichur for a monthly rent of Rs.22,000/- by paying deposit of Rs.1,50,000/- and took possession of the said shop in the month of October-2012. On 09-03-2012 Mr. Krishna came to Raichur and collected DD for Rs.1,00,000/- drawn on IDBI Bank from the complainant towards deposit for allotment of Retailer ship/franchise and collected Rs. 2,50,000/- by cheque drawn on ING Vysya Bank towards furnishing of which the date expired. Hence as per the directions of the Respondents the complainant paid Rs.2,60,000/- through cheque dt. 17-09-2012 to Respondent No-2 towards furnishing and other works which was encashed by them. Further as per the directions of the Respondents the complainant spent about Rs.2,00,000/- for POP, Lighting, beautification etc., On 10-03-2012 the Respondents collected two blank cheques from the complainant to allot franchise. After completion of the showroom work when the complainant tried to contact Mr. Krishna over mobile phone it was switched off. When contacted the Mumbai Office of the Respondents the complainant came to know that Mr. Krishna had resigned and one Mr. Shabbir from Mumbai Office of the Respondents gave the complainant the number of Mr. Rohit Shah who was handling south India Affairs of the Respondents. The complainant contacted the said Rohit Shah who told him to contact one Mr. Kartik who was handling Karnataka Division. The complainant explained to him the whole situation who asked one of their office staff to take measurement of the showroom for furniture and fixture. When the complainant contacted Mr.Kartik for billing of stocks, he told that he is not handling the billing section and asked the complainant to contact Mr. Rohit Shah for the said purpose. Accordingly the complainant contacted Mr. Rohit Shah who told him that he would contact him soon. But since then there was no calls or reply from Mr. Rohit Shah even after 4 to 5 days. The complainant tried to contact him over phone but he had not bothered to receive it. Complainant contacted Mr. Shabbir who gave the contact number of Mr. Jaideep who is the CEO for NEXT RETAIL. The complainant contacted him and E-mailed him all details regarding showroom. He sent Mr. Sandeep to the showroom. After visiting the showroom, Mr. Sandeep informed the complainant that the NEXT has been merged with DIGIWORLD. When the complainant enquired him regarding franchise fees and furniture & fixture amount given to NEXT and the expenses incurred by him towards the beautification of the showroom. Mr Sandeep assured him that he will discuss the matter with his boss and inform as soon as possible. But till date there was no response either from Mr. Rohit Shah, Mr. Kartik, Mr. Sandeep or from the Respondents. Therefore the complainant got legal notice to the Respondents. But there was no response. Therefore the complaint seeking reliefs as prayed for.
2. The Respondent No-1 & 2 appeared through their counsel and filed the written version stating that the averments made in para- 1 & 3 of the complaint are true. The contents of Para-2 of the complaint are matters of fact. The contents of Para-4 of the complaint may be true. As regards Para-5 of the complaint, as per Article 3(A) of the agreement entered into between the complainant and the Respondents the complainant had paid Rs.1,00,000/- as his share of liability towards expenditure and this amount is non refundable. As regards margin on sale of goods is concerned, the Respondents deny that there was such an arrangement agreed between the complainant and the Respondents to give 7% on sale of goods to the complainant. Para-6 of the complaint are true to the extent that the monthly rent and deposit for the property in commercial building bearing Mpl.No. 1-11-55/13/1 at Nijalingappa Colony Raichur was Rs.22,000/- and Rs.1,50,000/- respectively. The Respondents deny the fact that the complainant has spent Rs.2,00,000/- for POP, Lighting, beautification etc., All the allegations made in Para-7 of the complaint are denied. The Respondents admit that they carried out the work towards furniture and fixtures carried out by the vendors of the Respondents and the said amount of Rs.2,60,000/- was utilized by the company for payment to the vendors. All the allegations made in para-8 of the complaint are denied. As per clause 6.11 of the Retailer ship agreement dt. 09-03-012 it was specifically agreed by the parties that for the supply of goods the retailer has to give the advance/DD to the company. However the complainant never gave any cheque/DD as advance payment for supply of goods along with order for supply of goods with the company. The Respondents are successfully doing business with more than 400 franchisees/retailers across India. All the allegations made in Para-9 & 10 of the complaint are denied. At no point of time the complainant approached the Respondents with order of goods to be supplied along with cheque/DD. The Respondents are still ready to do business with the complainant as per the terms of the agreement. The sum of Rs.1,00,000/- is charged towards establishment and initialization cost and the same is not refundable as per clause 3(A) of the retailer agreement. The sum of Rs.2,60,000/- was utilized by the Respondents towards interior and exterior elevation and decoration work and furniture in the shop as per clause 6.5 of the Retailer ship agreement. The furniture and fixtures were installed by the Respondents in the complainant’s shop. There is no deficiency in service on the part of the Respondents. The complainant has not complied with the terms of the agreement and any loss if any, suffered by him were due to his own faults and shortcomings. The complainant is put to strict proof of the same. The complaint is devoid of cause of action. The complainant is not entitled of any relief as prayed for. Hence the complaint be dismissed to meet the ends of justice.
3. Complainant to prove his case filed his affidavit which is marked as PW-1 and relied on twenty four documents which are marked as Ex.P-1 to Ex.P-24. On the other hand the Respondents have filed their affidavit evidence which is marked as RW-1. No documents are produced and marked in evidence.
4. Arguments heard on complainant’s side.
5. Written arguments is filed by the Respondents.
6. The points that arise for our consideration are:
1. Whether the complainant proved deficiency in service on the
Part of the Respondents against him?
2. Whether the complainant is entitled for the reliefs prayed for?
3. What order?
7. Our answer on the above points are as under:
1) In the affirmative.
2) Partly in the affirmative.
3) As per final order:
REASONS
POINT No.1
8. The complainant’s case is that he intending to obtain franchise from the Respondents to run their retail showroom at Raichur in order to enter into an agreement with them singed proposed agreement and handed over it to the representative of the Respondents by name Krishna with DD for Rs.1,00,000/- payable to the Respondents as per terms and conditions of franchise and paid Rs.2,60,000/- by cheque towards furnishing and other works which were en-cashed by the Respondents.
9. The Respondents have admitted about the receipt of Rs.1,00,000/- and Rs.2,60,000/- and contended that the amount of Rs.1,00,000/- was paid by the complainant as his share of liability towards expenditure as per agreement and it is non refundable and Rs.2,60,000/- was utilized by them for payment to the vendor. However this contention of the Respondents is not tenable because there is no agreement executed as such between the complainant and Respondents with regard to the allotment of franchise/retailer ship to the complainant. As per the complainant he had signed the alleged agreement handed over to him by the Respondents official and the said agreement was not returned after the signature by the Respondents. Therefore there is no existence of the agreement entered into between the complainant and the Respondents. Therefore the contention of the Respondents that Rs.1,00,000/- as the complainant’s liability towards expenditure is without any basis. When there is no agreement at all the question of forfeiture of the amount paid by the complainant does not arise at all. Therefore the Respondents are liable to repay the amount of Rs.1,00,000/- to the complainant with interest. Besides this as the franchise/retailer ship was not allotted to the complainant by the Respondents and there being no agreement entered into between them with regard to the franchise/retailer ship, on this ground also the amount of Rs.1,00,000- has to be refunded to the complainant. Regarding the payment of Rs.2,60,000/- by the complainant and received by the Respondents their contention that they had carried out the furniture and fixture works and paid the said amount to the vendor who carried out the said work, is also not worth accepting because first of all as per the complainant he under took the fixture and furniture works in the proposed show room where the retailer ship has to be established and produced the receipts to that effect and the Respondents have not produced any receipts for having spent the amount of Rs.2,60,000/-towards furniture and fixture works. Mere saying that the amount of Rs.2,60,000/- has been spent for furniture and fixture works by the Respondents are not sufficient and they have to substantiate it with evidence. Further to carry out the fixture and furniture work the Respondent must come over to the place where the proposed show room has to be established which is at Raichur and there must be evidence that the Respondents came over here and under took the fixture and furniture works. But there is no such evidence. As per the evidence produced by the complainant he under took the said work and spent for the same. Therefore the Respondents are also liable to repay the said amount to the complainant with interest. Besides this the complainant claimed Rs.1,54,000/- towards rent paid to the building he had obtained for establishing the show room at the rate of Rs. 22,000/- per month. To substantiate this the complainant produced the rent agreement entered into between him and the owner of the building which is marked as Ex.P-23. The said agreement clearly goes to show that the complainant had obtained the show room building for rent of Rs.22,000/- per month. He produced his Bank account statement marked as Ex.P-8 to substantiate the payment of rent to the owner by name Umesh Patil. The complainant also claimed Rs.2,00,000/- towards POP, Lighting, beautification etc., and substantiated it by producing receipts marked as Ex.P-12 to Ex.P-20. The complainant is entitled for the said amount from the Respondents and thus the total amount claimed by the complainant amounts to Rs.7,14,000/-. The non payment of the said amount by the Respondents to the complainant amounts to deficiency in service on their part. The Respondents have not produced any evidence to substantiate their contention raised in written version. Accordingly this point is answered in the affirmative.
POINT NO.2:-
10. As the complainant has proved deficiency in service on the part of the Respondents he is entitled for the claim made in the complaint along with interest and cost of the proceedings which shall be as per final order. Accordingly, we answer this point partly in affirmative.
POINT NO.3:-
11. As per order below:
ORDER
The complaint filed by the complainant is partly allowed with cost.
The complainant is entitled to recover sum of Rs.7,14,000/- from Respondents towards deficiency in service.
The complainant is also entitled to recover interest at the rate of 6% p.a. on total sum of Rs. 7,14,000/- from the date of the complaint till realization of the full amount.
The complainant is also entitled to recover sum of Rs.1,000/- towards cost of the proceedings from the Respondents.
Respondents are given one month time from the date of this order for making payment of the above said amount.
Intimate the parties accordingly.
(Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 26-12-2013)
Smt.Pratibha Rani Hiremath Sri. Prakash Kumar
Member. President,
District Consumer Forum Raichur. . District Consumer Forum Raichur.
