STATE CONSUMER DISPUTES REDRESSAL COMMISSION

ANDAMAN AND NICOBAR ISLANDS

PORT BLAIR

Original Case No. 06 of 2002

Present:       1. Justice S.N. Bhattacharjee

President, State Commission

2. Shri D.P. Mukhopadhyay

Member, State Commission

Shri Shrinath Vashistha                     ......Complainant

-vs-

S. Kumar Dot Com Ltd.

On Line Ltd.

Mumbai                                              ......Respondent

This is an application filed by complainant under Section 17 of the. Consumer’s Protection Act, 1986 (hereinafter called “the Act”).

The opposite party is a registered Company intending to establish and maintain a network of computers spread across India connected through Very Small Aperture Terminals (VSATs) or such other means of activity (the network) for the purpose of providing services to the customers through franchisees appointed for the purpose in various cities, towns and villages across India. The OP advertised in various national dailies inviting applications from those interested hi working as franchisees under the company and the complainant was selected as franchisees on his application. A franchisees agreement (annexure 2 B) entered upon by the party and the complainant paid Ra. 2.00 lakhs including the cost of UPS and VSATS.

The company dispatched all the equipments which arc received by the complainant except UPS and the VSAT. On the complainant’s enquiry the OP regretted its inability to supply VSAT and for that propose offered to refund a sum of Rs. 64,500/- to the complainant and other franchisees who were not interested in getting the VSAT as network could be run with internet as well. The complainant by notice wanted the refund of entire amount as he was not interested in associating his name as a franchisee of the company. The company has not replied to his notice. The complainant has filed this application claiming relief of Rs. 10,56,201/- against  the OP. .

The opposite party entered appearance and contested the application by raising a legal defence that the complainant being a franchise is not a consumer and as such he is not entitled to get any relief under this Act. According to it the Court having no jurisdiction to entertain the application, the application merits dismissal.

Admittedly, the complainant is a franchisee as the same will appear from the petition of complainant from the agreement annexed thereto and from different conespondences filed by the complainant before this Commission. The only question is whether a franchisee is a consumer within the definition under Section 2 (1) (d) of the Act

In the Oxford dictionary (Xth edition) the word franchisee has been defined as an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities or right to vote in a public election. In Wharterm Law Lexicom (XIVth edition) “franchisee” means incorporeal heriditament synonymous with liberty A well privilege or branch of the Crowns prerogative subsisting in the hands of a subject. There are number of decisions wherein it has been held that franchisee is not a consumer and a franchisee holder cannot be held to have hired the services of the principal. In General Manager, Madras Telephones and Ors -Vs- R. Kannan reported m 1 (1994) CPJ 4(NC), the National Commission held that a franchisee holder is only a licence of the granter of the franchise. In that case the Commission while examining the relationship between the operator of STDIPCO and the Telephone Department observed

“A franchisee holder is only a licence of the granter of the franchise for operating. In this case the STD/PCO are collecting the call charges on behalf of the franchiser. It is the franchise holder who is rendering services to the grantor of the franchise ... A franchise holder renders service to those who use the public call office which is performed by the Telecom Department directly wherever there is no franchiser to manage the public call office.”

In Professor P. Narayana Kutty —Vs- Uptron India Ltd., reported in 1 (1996) CPJ 340 it has been held that “we are of the opinion that in the present case the complainant cannot. be said to be a consumer qua the opposite parties under the agreement dated 29th March, 1990 for running a franchise center in Calicut The opposite parties were only supplies of  technical know-how and other materials to the franchisee as per terms of the said agreement on payment.

In Mysore Sales International Ltd -Vs- M.N. Mishra reported in 2 (1996) CPJ 64(NC). The Commission examined the consequences of failure to appoint the complainant as a selling agent and observed

“There is no hiring of service of the petitioner herein by the complainant for consideration. Failure to appoint the complainant as a selling agent is  breach of contract. For that remedy lies before the Civil Court and not before the Consumer Forum.”

In the instant case the complainant was appointed as franchisee under the opposite party on the basis of some terms and conditions laid down in the agreement. But the opposite party received a sum from the complainant undertaking to supply some materials and equipments including UPS and VSAT to the complainant but fail to supply the UPS and VSAT. Failure to supply such materials to the complainant may or may be not in violation of the terms and conditions of the agreement A dispute may arise between the parties hi the wake of such violation, The agreement contains an arbitration clause for resolution of any such dispute. The complainant being a franchisee and not a consumer is not entitled to any relief before this forum and its remedy lies within the agreement which is a agreed procedure between the parties for resolution of any dispute arising out of such agreement.

This being the position of law we are unable to entertain the application and the same is dismissed. Parties to bear their own cost