KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C.No.87/2019

JUDGEMENT DATED: 20.10.2022

PRESENT:

APPELLANT:

(by Advs. George Mathew & P. Rakesh Kumar)

Vs.

RESPONDENTS:

(by Adv. Shyam Padman)

JUDGEMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN: PRESIDENT

            This complaint comes up before us for hearing on the question of maintainability.

          2.       The complainant is a Co-operative Society registered under the provisions of the Kerala Co-operative Societies Act, 1969.  The gist of the complaint is that, the opposite parties who are engaged in the business of developing, marketing, supplying, installing and maintaining etc. of computer software and related activities are guilty of deficiency in service and unfair trade practice.  As part of modernization and automation of the Head Office and branches of the complainant, tenders were issued inviting quotations for installation of Core Banking Solutions and related softwares.  The opposite parties submitted their quotation as per the proposal.  After negotiations a Software License Agreement was executed on 27.04.2016.  Separate agreements were executed for providing other related services also.  However, it is alleged that the software provided by them was defective in many aspects and was found to be unworkable.  Therefore they have sought for return of the amounts paid by them.  They have also claimed a compensation of twelve lakhs towards the loss of business, loss of prospective customers, loss of goodwill etc.

          3.       On entering appearance, the opposite parties have disputed the maintainability of the complaint.  A petition has been filed contending that, the complaint is not maintainable before this Commission.  The complainant has not filed counter affidavit to the said petition.  Therefore, we have been posting the matter for hearing on the question of maintainability from 04.03.2020 onwards.  But, there has been no representation for the complainant.  There is no representation for the complainant today also.

          4.       In the above circumstances we have heard Advocate Shyam Padman who appears for the opposite parties.  The learned counsel contends that even going by the case pleaded in the complaint, the complainant is a business establishment, actively engaged in conduct of the business of a bank with a Head Office and branches established for the purpose.  Therefore, the complainant cannot be considered to be a consumer coming within the definition of the said expression contained in the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’ for short).  According to the learned counsel, the prayer in the complaint for the grant of rupees twelve lakhs as compensation is claimed towards their loss of business, loss of prospective customers, loss of goodwill etc.  In view of the above, the counsel prays for dismissal of the complaint as not maintainable.

          5.       We have carefully perused the statements made in this complaint.  The nature of the activity in which the complainant is engaged, is described in paragraph 1 of the complaint as follows:

“The main function of society is collection of deposits and issuing loans and advances to its members and other connected services to its members.  The business activities of complainant are being performed under computer system.”

In paragraph 7 of the complaint, it is stated that the complainant’s bank was not properly functioning during the trial run period of the software installed by the opposite parties and therefore, they lost a large number of customers, a lot of business and also their reputation.  It is stated that the customers also lost faith in the bank, resulting in severe loss to the establishment.  The complaint further goes on to state in paragraph 9 that due to defects in the software and the omission of the opposite parties to abide by the terms of their agreements, serious problems were caused to the customers and business of the complainants.

          6.       Apart from the above, the complainant has claimed in paragraph 11 of the complaint an amount of rupees twelve lakhs as compensation inter alia, on account of loss of business, loss of prospective customers, loss of goodwill etc.  The 2^nd prayer in the complaint is also for the grant of the said amount as compensation.  Therefore, the case of the complainant itself is that they are engaged in a business activity.

          7.       As per Section 2(1)(d) of the Act, it is provided that the term, “consumer” does not include a person who purchases goods or hires or avails services for a commercial purpose.  The only exception is a person who is engaged in a business activity exclusively for the purpose of earning his livelihood by means of self employment.  The complainant herein being a Co-operative Society and a bank, cannot claim the benefit of the exception contained in the said definition.  It was for improving the business of the complainant that modernization and automation of the Head Office and its branches was proposed.

          8.       The counsel for the opposite parties has placed reliance on the decision of the National Commission in Consumer Case No.173/2015 Kanpur Plastipack Ltd. Vs. Infor Global Solution (India) Pvt. Ltd., wherein under similar circumstances, a complaint filed by a company has been held to be not maintainable since the software in the said case was purchased for business purposes.

          9.       In the above scenario, we have no hesitation to hold that the transaction between the complainant and the opposite parties in this case was a commercial one.  Since the complainant would not come within the exception contained in Section 2(1)(d) of the Act, we hold that this complaint is not maintainable.  The same is accordingly dismissed as not maintainable.

SL