KUNDAN KUMAR KUMAI

This is an appeal u/s 41 of the Consumer Protection Act, 2019, preferred against the judgement dated 15/02/2023, passed by the Ld. DCDRC, Darjeeling, in CC/15/2021.

The Appellants’ case in brief, is that, the Respondent/Complainant, being a
Company incorporated under the provisions of the Companies Act, 1956 and represented by its Managing Director, on the basis of the Board Resolution dated 27/09/2016, had provided service for comprehensive solid waste management, in Kalimpong Municipality area, from 01/08/2014 to 30/09/2015, on the basis of a Memorandum of Agreement dated 27/05/2014, for the period of three years. Pursuant to the Agreement, the Respondent/Complainant/Company, had provided all necessary services to the full satisfaction of the Appellants and after such satisfactory performances, the Appellants had even issued the Certificate of Appreciation, dated 07/09/2015. After such successful completion of the work assigned per month, the Respondent/Complainant/Company, raised invoices as per the terms and conditions, of the above Memorandum of Agreement, being Rs.15,77,950/- (Rupees fifteen lakhs seventy-seven thousand nine hundred fifty) only and Rs.18,43,811/- (Rupees eighteen lakhs forty-three thousand eight hundred eleven) only, for the financial years 2014-15 & 2015-16 respectively, making the total claim of Rs. 34,21,726/- (Rupees thirty-four lakhs twenty-one thousand seven hundred twenty-six) only. Thus, an approximate amount of Rs.34,00000/- (Rupees thirty-four lakhs) only, with admissible interest was due from the Appellants.

The Respondent/Complainant/Company came to know that the Appellants, had declared the above Agreement dated 27/05/2014, as null and void, from the letter dated 28/09/2015, long before its expiry and the Respondent/Complainant/Company, had been asked not to provide any further services. It was further intimated that the Appellants would initiate the payment of the outstanding amount. But, as no payments had been made the Respondent/Complainant/Company, had written several letters from 28/07/2015 to 09/02/2017 and lastly on 18/04/2019, but with no response. Hence, it can be seen that the intention of the Appellants, was not a bona fide one and the Appellants wanted to travel beyond the Clauses of the Agreement dated 28/07/2015, without having any rational justification, with a view to oust the Respondent/Complainant/Company, from getting the payment of the justified outstanding dues. Finding no alternative, the Respondent/Complainant/Company filed this claim before the Ld. DCDRC, Darjeeling, with necessary prayers.

The Appellants entered appearance to contest the claim by filing a joint written version, wherein the claim of the Respondent/Complainant/Company, was not only denied, but also raised the appropriateness of the Consumer Forum in deciding this matter, as the Respondent/Complainant/Company was not a consumer as per the definitions of the Consumer Protection Act, 2019, as the service provided was for commercial purpose.

It was admitted that the Respondent/Complainant/Company, approached the Appellants to provide services relating to waste disposal problems, as mentioned in the second paragraph of the Memorandum of Agreement dated 27/05/2014 and para 5 of the said Agreement also clearly stated that the Agreement was executed on trial basis and the Agreement would be guided only by performance. But as the scheme was a total failure and the Audit Report filed by the Sr. Audit Officer, being explicit, the Agreement dated 27/05/2014, had been discontinued from 01/10/2015. Moreover, from the terms and conditions of the Agreement, it was agreed to impose charges of Rs.100/- per month on residential unit and Rs.250/- per month on commercial unit and Rs.150/- per month for shops, in the markets and the Respondent/Complainant/Company was to be paid @ Rs.90/- per month for residential unit, Rs.200/- for commercial unit and Rs.125/- per month, for the shops in the market and the Respondent/Complainant/Company was also required to recruit waste collecting personnels and pay for their services, with the Appellants not being responsible, for the payment of their renumeration. The survey estimated a collection of Rs.25,71,750/- (Rupees twenty-five lakhs seventy-one thousand seven hundred fifty) only per month, out of which Rs.7,00,000/- (Rupees seven lakhs) only, would be the share of the Appellants. It was also agreed that the sum of Rs.34,00,000/- (Rupees thirty-four lakhs) only, which the Respondent/Complainant/Company had invested, would be refunded by the Appellants, from the revenue earned from the waste beneficiary charges @ Rs.309090/- (Rupees three lakhs nine thousand ninety) only, for 11 months, totaling to Rs.34,00000/- (Rupees thirty-four lakhs) only, till the invested amount had been refunded. As per the Audit Report dated 06/01/2017, an amount of Rs.98,81,124/- (Rupees ninety-eight lakhs eighty-one thousand one hundred twenty-four) only, had been paid to the Respondent/Complainant/Company out of Municipal Fund, for the period from Sept. 2014 to Sept. 2015. As per the BOC meeting dated 25/06/2015, it was stated that money collected from waste producing units was Rs.47,74,566/- (Rupees forty-seven lakhs seventy-four thousand five hundred sixty-six) only and the money already paid Respondent/Complainant/Company, Rs.92,55,451/- (Rupees ninety-two lakhs fifty-five thousand four hundred fifty-one) only, for the period from Aug. 2014 to Sept. 2015. As regards the issuance of Certificate of Appreciation is concerned it had been done, as till that period everything was working well, but scrutiny of the records and the audit report, irregularities had been revealed thereafter, to the Appellants.

It had been found that the Respondent/Complainant/Company, had not invested any single rupee till the project tenure, in violation of the MoU and had received a total sum of Rs.19,81,000/- (Rupees nineteen lakhs eighty-one thousand) only. The survey of the WPU’s on the solid waste management programme, had been faulty and the collection of user charges, in the MoU was inflated. The survey should have been done by an independent agency, well before the finalization of the Agreement and cross-checked by the Ward Committee or other Municipal Body, to deter any chance of manipulation. It was also found that the rate fixed was not realistic or based on the ability of the citizen to pay, following which the citizens stopped to pay the service charges. It was also found that the Respondent/Complainant/Company, did not distribute service cards as per MoU and continued to raise inflated bills. The amount of collection paid by the Respondent/Complainant/Company, was based on faulty survey and they did not take any initiative to clear the defect and continued to raise the bill, by putting up inflated bills showing no. of WPUs, which were not provided with service. It was also found, that the advance paid to the Respondent/Complainant/Company, had been utilized for purchase of one vehicle and miscellaneous items, but the ownership and title of the vehicle and assets were not transferred, to the Appellant/Municipality. It was also observed that the Agreement was executed on trial basis for 3 years, without considering the performance, was irregular, as the Agreement ought to have been executed for shorter periods, which could have been revised. Moreover, the MoU was faulty on revenue sharing basis between the parties, as the Appellant/Municipality was to get only 5% of the revenue collected from WPUs whereas 80 – 90 per cent of the collections, to be paid to the Respondent/Complainant/Company and the remaining to the collectors as commission. The Appellant/Municipality had paid excess amount of Rs.80,81,124/- (Rupees eighty lakhs eighty-one thousand one hundred twenty-four) only, being 90 per cent of Rs.48,54,116/- (Rupees forty-eight lakhs fifty-four thousand one hundred sixteen) only, amounting to Rs.37,12,420/- (Rupees thirty-seven lakhs twelve thousand four hundred twenty) only. The Respondent/Complainant/Company, had paid Rs.1,41,022/- (Rupees one lakh forty-one thousand twenty-two) only, as hire charges for the vehicle and Rs.53,412/- (Rupees fifty-three thousand four hundred twelve) only, as fuel charges and had recovered 50 per cent of the total payment.

Finally, it was stated that the Respondent/Complainant/Company was not entitled to get any relief under the provisions of the Consumer Protection Act, 2019 and the case may be dismissed.

After going through the materials and evidence on record, the Ld. DCDRC, Darjeeling by the impugned majority judgement, directed the Appellant no.1, to pay a sum of Rs.34,21,726/- (Rupees thirty-four lakhs twenty-one thousand seven hundred twenty-six) only and further amount of Rs.50,000/- (Rupees fifty thousand) only, as compensation along with interest @ 15% per annum.

Being aggrieved by the impugned judgement, the Appellants preferred this instant appeal, on the ground that the impugned majority judgement passed by the Ld. DCDRC, Darjeeling, was erroneous in law and facts.

                                                                        Decisions with Reasons

Ld. Advocate for the Appellants, at the time of final hearing, had submitted that as the notice of the instant appeal could not be served with the postal remark “door locked” and on going through the website it was found that the Respondent/Complainant/Company being a Private Ltd. Co., whose status had been reflected as “Strike Off”, meaning, under the provisions of the Companies Act, 2013, the Respondent/Complainant/Company, ceased to exist as a corporate entity from 24/08/2018 itself and therefore the Respondent/Complainant/Company, being represented by the Managing Director, had been falsely claimed and thus had no locus standi to file this complainant case, thereby misleading the Ld. DCDRC, Darjeeling to pass an erroneous judgement. It was further argued that the Respondent/Complainant/Company, did not fall within the definition of consumer as the Agreement between the Appellants and the Respondent/Complainant/Company was for purely commercial purpose. The Respondent/Complainant/Company, had neither consumed, used or hired goods or services and thus the Respondent/Complainant/Company cannot be termed as a consumer.

Moreover, the cause of action for the impugned case, arose on 28/09/2015, when the Memorandum of Agreement had been unilaterally cancelled, by the Appellants and intimated by a letter dated 28/09/2015. But the case before the Ld. DCDRC, Darjeeling, had not been filed within the stipulated period of 2 years nor any application for condonation of the delay had been filed. Hence, when the Ld. DCDRC, Darjeeling, passed the impugned order, the same was found to be erroneous on the above grounds. Ld. Advocate for the Appellant has relied on the judgement passed in Shrikant Ji Mantri Vs. Punjab National Bank passed by the Hon’ble Supreme Court in Civil Appeal No. 11397 of 2016, Rohit Chaudhary Vs. M/s. Vipul Limited passed by the Hon’ble Supreme Court in Civil Appeal No.5858 of 2015 on 09/08/2023, in National Insurance Co. Ltd. Vs. Harsolia Motors & Ors. passed by the Hon’ble Supreme Court in Civil Appeal No. 5352-5353 of 2007 on 13/04/2023, National Insurance Co. Ltd. Vs. Biswadeb Koley & Ors. passed by the Hon’ble NCDRC on 12/03/2020, Prem Devi Vs. Delhi Development Authority passed by the Hon’ble NCDRC in Revision Petition 504 of 2017 on 20/03/2020, and in CLP India Pvt. Ltd. Vs. Gujarat Urja Vikas Nigam Ltd. & Anr. passed by the Hon’ble Supreme Court on 06/05/2020.

Ld. Advocate for the Respondent/Complainant/Company, had countered the above, by submitting, that the Respondent/Complainant/Company, was a consumer and the Consumer Protection Act, was a socially beneficial legislation, meant for protection of the consumers. That apart the Respondent/Complainant/Company, had provided all the necessary services to the full satisfaction of the Appellants, who had also issued a Certificate of Appreciation dated 07/09/2015. But, immediately on 17/09/2015, the Appellants in a Board meeting had cancelled the Agreement and conveyed the same on 28/09/2015, but thereafter in spite of repeated requests, the Appellants had been unwilling to repay the dues of the Respondent/Complainant/Company. Even during the proceedings before the Ld. DCDRC, Darjeeling, the Appellants had been negligent in attending the proceedings, following which, the case had been decided ex-parte, vide the impugned order, which needed to be upheld. That apart, the instant appeal had been barred by limitation and there was no reasonable ground cited, which could have been invoked in overlooking the delay. He had relied in the judgement passed in State of UP through Executive Engineer & Anr. Vs. Amar Nath Yadav by the Hon’ble Supreme Court in Special Leave Petition (Civil) No.882/2014 on 10/01/2014, in Collector Land Acquisition Vs. Katiji following the principles laid by the Hon’ble Supreme Court in G Rame Gowda Vs. Special Land Acquisition Officer and in Office of the Chief Post Master & Ors. Vs. Living Media India Ltd. & Anr. passed by the Hon’ble Supreme Court in Civil Appeal No.2474-2475 of 2012 on 24/02/2012.

The facts of the case are not disputed. The only point of dispute is with regard to the applicability of the provisions of the Consumer Protection Act to resolve the dispute between the parties. In this regard, the case before the Ld. DCDRC, Darjeeling, had been filed by the Respondent/Complainant/Company being represented by its Managing Director, to provide its service to the Appellants for the solid waste disposal scheme, as per the tariff sharing basis, subject to certain terms and conditions, agreed between the parties under the MoU, resulting in the execution of the Memorandum of Agreement dated 27/05/2014. Thus, on the basis of such facts firstly the question of service as enumerated in Section 2 (42) of the Consumer Protection Act, 2019 needs to be satisfied. The definition of “service” is reproduced, as provided in the Act “means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement of purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”. But from the facts of the case, the Respondent/Complainant/Company, was in the service of providing not only expertise, but also to execute the solid waste disposal scheme, under the Municipality of Kalimpong. Therefore, the complaint before the Ld. DCDRC, Darjeeling, ought to have been as per the definition of “complaint” as laid down in the provisions of Section 2(6) of the Consumer Protection Act, 2019. But the facts itself reveal that the Respondent/Complainant/Company was in the role of providing service to the Appellants, in the management of the solid waste disposal of the residents under the Kalimpong Municipality. Under such circumstance, the question of the Respondent/Complainant/Company being an aggrieved person under the Consumer Protection Laws does not arise. Therefore, the Ld. DCDRC, Darjeeling, while admitting the case and providing relief through the impugned order appears to have erred massively.

That apart the Respondent/Complainant/Company being a Private Ltd. Co. registered under the Companies Act, had entered into an Agreement with the Appellants on a profit-sharing basis and therefore the entire Agreement could not have been for any other purpose except for commercial purpose. Moreover, the Annexures A, B & C filed on behalf of the Appellant clearly go to show that the Respondent/Complainant/Company ceased to be in existence since 24/08/2018, which is prior to the filing of the complaint before the Ld. DCDRC, Darjeeling, in the year 2021 and the appeal before this Commission in the year 2023, misleading the Ld. DCDRC, Darjeeling completely and trying to mislead this Commission also, by swearing false affidavit and thus on the ground also the instant appeal succeeds.

Hence in view of the discussions and observations made above, the complaint filed by the Respondent/Complainant/Company before the Ld. DCDRC, Darjeeling being rendered de hors, the limitation points with regard to the filing of the case, before the Ld. DCDRC, Darjeeling, raised by the Appellants, is not being discussed herein.

On the other hand, in response to the argument of limitation, with regard to this appeal, it can be stated that the limitation point had been overlooked in view of the facts and circumstances of the case, leading to the impugned judgement. Had it not been done so, based on the facts and circumstances of the case the impugned majority judgement, which had already appeared to be not only perverse, but such perversity would also have allowed to prevail. Thus, the rulings cited in this regard, could not be applied, considering the above facts and circumstances of the case. Under the circumstance, the instant appeal succeeds.

It is therefore,

                                                    ORDERED

That the instant appeal be and the same is allowed on contest, but without cost.

The impugned order is hereby set aside.

Copy of the order be sent to the parties, free of cost.

Copy of the order be sent to the Ld. DCDRC, Darjeeling, for necessary information.

Statutory deposits, if any, be returned from whom received.

Jt. Registrar, Siliguri Circuit Bench of WBSCDRC, Kolkata, to do the needful.