BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE (ADDL. BENCH)

DATED THIS THE 18^th DAY OF APRIL 2023

PRESENT

MR. RAVISHANKAR                        : JUDICIAL MEMBER

MRS. SUNITA CHANNABASAPPA BAGEWADI :  MEMBER

CONSUMER COMPLAINT NO. 155/2015

V/s

ORDER

BY SMT.SUNITA.C.BAGEWADI, MEMBER

1.      This is a complaint filed by the complainant praying for a direction against the Opposite Party to refund Rs.35,00,000/- with interest at 18% p.a. from the date of cause of action towards wrongful loss sustained by him by way of loss of income, overpricing, mental agony and loss of not owing to dream project.  Further prayed to direct the OP to return the advance amount of Rs.2,12,000/- along with costs.

2.      The brief facts of the complaint are as under:-

The complainant alleges that the School is a unit of M/s Brundavan Trust which is an Educational Trust formed under the Trusts Act and registered as Document No:522/2001-02 on 18/02/2002 in the office of the Senior Sub-Registrar, Bengaluru South Taluk, Bengaluru.  After Registration, the said Trust has obtained No Objection Certificate from the Government of Karnataka vide No.ED110PGC 2003 dated 30.08.2003 for affiliation to Council for the Indian School Certificate Examinations, New Delhi and has authorized its President Sri.J.V.R. Sharma to represent the school in this Complainant.  That during January, 2012, the Opponent Company’s authorized person for marketing by name Ms.RiCha Bajpai approached the Complainant’s school in order to persuade for installation of Tata class edge Educational Programme under the pretext that the said program would benefit the students of the Complainant’s school.  But, the Complainant was reluctant to avail the said facility since its utility and test result details were not made available to the Complainant in addition to the cost factor explained by her.  The said Representative convinced the Complainant by delivering a copy of the Company’s broacher containing the details of the said educational programme. Thereafter anticipating the benefits for children, the Complainant reluctantly accepted the offer and agreed for the said installation of the equipments required for thee said programme.  Further, the Complainant was assured by the opponent company that the entire hard ware equipments including projectors would be installed at their cost and ownership only and the same would be covered with required insurance also.  In addition to the above, the Opponent Company would provide suitable software along with internet connection to put the equipment into usage.  The Opponent Company assured the Complainant that the entire installation process would be completed within 2 months from the date of commencement.  That, being impressed by her presentation as to the utility and services guaranteed on behalf of the Opponent Company, the Complainant permitted the Opponent Company’s representatives to proceed with the necessary formalities required for installation for which the Complainant was advised to enter into an agreement and the same would be provided after acceptance of the Opponent Company’s offer by paying initial advance of Rs.35,000/-.

3.      Further, Opponent Company also assured that one trained coordinator would be made available after completion of the installation process in order to train the teachers and to resolve any technical issues that may arises.  After completion of the installation programme contrary to the accepted terms and have unlawfully demanded payment of the proposed charges for her services even though the said Coordinator could not deliver any service since the installation is incomplete.  The said Opponent Company’s authorized person visited the complainant school on different dates from February to July 2012 and delivered a specimen formal of the agreement, wherein both the parties were required to contribute signatures.  Thereafter the said authorized person obtained Complainant’s signature on the original agreement wherein the details of pricing as well as maintenance charges were included along with other terms and condition stipulated therein.  After obtaining the signature, the said authorized person confirmed that original agreement would be forwarded to her Company for the signatures of the company’s competent authority and a signed copy would be provided after adhering to the required formalities.  Whereas surprisingly Opponent has failed to provide the same till date, whereby Complainant is unaware of the terms and conditions stipulate therein.   Further, in spite of constant demand and persuasion both orally and in writing, Opponent has neither responded to the said request nor has given satisfactory reasons for not providing a copy of the same but has been simply postponing on one or the other pretext.   However, based on the representation made by the Opponent’s authorized persons, the Complainant again permitted them for installation with specific instructions to complainant the entire process and to put the same for usage with in undertaken period of Two months promised at the time of initial discussions.  But till date Opponent has failed to install in total by providing necessary infrastructure and internet services required for completing the installation and thereafter usage of the equipment because of the inability of Opponent’s personnel for completion of the installation within the accepted time frame, the Opponent Company requested the Complainant to contribute signature for a ‘LETTER OF ADDENDUM’ instead of entering into an extension agreement seeking further time for completion of the incomplete installation.  That in the said letter of addendum, Opponent Company included certain objectionable and ambiguous terms under clause 1.3 & 1.4 detrimental to the interest of Complainant as well as contrary to the purported original terms of the agreement mentioned in the specimen format of the Agreement.  Hence, Complainant has denied to contribute signature for the said addendum letter on the grounds that the installation is incomplete even after lapse of three years.  At the time of Offer and Acceptance, the Complainant paid Rs.35,000/- as initial advance as requested by the Opponent Company’s representative by way of Cheque No.735240 dated 12.05.2012 drawn on State Bank of India, Jigani Branch, Bengaluru and the receipt of which is duly acknowledged by the Opponent Company.

4.      Subsequently, the Opponent Company has unilaterally started to demand the proposed monthly maintenance charges at the rate of Rs.35,000/- by raising bills and invoices, wherein the cost of the hardware component has also been added in addition to soft ware services even before the completion of the installation process for which the Complainant made strong objections orally and in writing.  For the said objections Opponent Company pleaded certain financial difficulties which they are facing with their further assurance that only after improving their ability to face the market competition, they would be raised by them during the period of installation and subsequently also based on the oral and written request of Opponent’s authorized representative, the Complainant extended additional financial support with a prior condition that in case of their failure to complete the installation, the entire amount has to be refunded and the equipment and hardware components are to be withdrawn.  According to the said mutual understanding, Complainant extended additional financial support with a prior condition that in case of their failure to complete the installation, the entire amount has to be refunded and the equipment and hardware components are to be withdrawn.  According to the said mutual understanding, Complainant issued two cheques bearing No:065283 and 065282 drawn on corporation Bank, Jigini, Bengaluru.  Out of the said cheques, the cheque for Rs.64,300/- was issued towards future payment that would falls due only during December 2012 subject to completion of the installation process.  The Opponent Company encashed the Cheque for Rs.99,300/- on 16.10.2012 and simultaneously without examining the date of the another cheque which was postdated, was also presented by the Opponent Company which was reported to have been returned to the Opponent Company immediately on the grounds that, the said cheque was post dated.  Complainant made payment of the said amount also by way of RTGS/NEFT on 29.07.2013 which is duly acknowledged by Opponent on the same day.   In fact the Opponent Company has not provided required UPS backup and has connected to an old H.P. Server which is unable to support for installation due to malfunctioning.

5.      Further, the complainant School has been subjected to unwarranted financial Loss and hardship due to the permanent damage to the School building structure resulting in water seepage and weakening of the roof portion and because of dumping of poor quality and obsolete equipments, the peaceful and harmonious atmosphere maintained prior to the commencement of the installation, has adversely affected the students’ progress in education has resulted in serious damage to the fame and name of the Complainant as well as social status and reputation of the Educational Trust viz., M/s Brindavan Trust which is running the School. On 18.11.2013 vide letter to the Complainant, the Opponent Company demanded for payment for the arrears of maintenance amount of Rs.4,20,000/- and again on 28.11.2013 further demanded for the payment of the same along with a message that they are not agreeable to insure the hardware equipments even though the ownership of the same vested with them only on the pretext that the said equipments are lying in the Complainant’s School premises and protection of the same is not their responsibility even though they had accepted to insure at their cost during the period of initial discussions. The Opponent Company, the Complainant sent a belated letter on 22.01.2014 subsequent to Complainant’s insistence informing that the ‘Agreement stands terminated’ for the said letter a benefitting reply was given by the Complainant on 01.02.2014. Thereafter, the Opponent Company to cover up their lapses with regard to failure to complete the installation process with in the undertaken period, has unlawfully demanded payment of the purported default amount of Rs.12,53,493/- by way of a Legal Recovery Notice on 13.05.2015 received by the Complainant has caused a reply Notice on 06.06.2015. 

6.      After service of the notice OP appeared through Counsel and filed version along with list of documents and denied all the allegations of complaint.  Further, contended that the complaint filed by the complainant a beyond territorial jurisdiction of this Commission as because as per the clause-9 of the contract entered between both parties mentioned that any disputes arising out of contract will be subjected to the exclusive jurisdiction of courts of Mumbai and hence, it is liable to be dismissed and also produce some citation regarding the same.  Further, the OP contended that both parties have entered into a commercial agreement. Hence, it was a commercial transaction and complainant is not a consumer as per CP Act.  The OP further contended that the Commission will not have a pecuniary jurisdiction to trial the compliant as per the CP Act.

7.      The OP further contended that the complaint is barred by limitations as the complainant himself has alleged that the OP have promised to completed the entire process within 2 months from date of commencement i.e.,15.08.2012.  However, fail to comply and hence, cause of action arose on 15.10.2012 and complaint filed by the Complainant was on 17.06.15 after lapse of more than 2 years.  The OP further contended that the complainant apart from the initial payment has never paid any amount to the OP even after reminders and he was a defaulter in making the payment and prays to dismiss the complainant.     

8.      Complainant files evidence affidavit and marked the documents as exhibits C-1 to C-16 OP also filed his evidence affidavit and marked documents as exhibit R-1 to R-11.  Both parties have filed notes of arguments.

9.      On perusal, the following points will arise for our consideration;

(i)       Whether the complainant has proved the deficiency of service on the part of the Opposite Parties?

(ii)      Whether the complainant is entitled for the reliefs as sought?

(iii)     What is the order?

          10.    The findings to the above points are;

                   (i)       Affirmative

                   (ii)      Partly affirmative

                   (ii)      As per final order

REASONS

11.   POINT NOs.1 & 2 : Perused the contents of the complainant, objections filed by the OP evidence affidavit of both parties and documents produce by both parties we noticed that OP has admitted the initial payment of Rs.35,000/- made by the complainant and denied all other allegations made by the complainant and denies all the allegations.   The OP contended that the complaint filed by the complainant is beyond the territorial      jurisdiction of this Commission as because as per the clause-9 of contract entered between both parties on mentioned that any dispute arising out of contract will be subjected to the exclusive of Jurisdiction of courts of Mumbai and hence, it is liable to be dismissed.

12.    Perused R-1 the copy of the agreement dated 22.05.2012.  We noticed that there is a clause-9 is worded in the following manner “The agreement shall be interpreted and constructed in accordance with the law of the republic of India” all dispute arising agreement which the parties failed to resolve through amicable through mutual discussions followed by the arbitration shall be subjected to exclusive jurisdiction courts of  Mumbai.  However, parties cannot decide the territorial jurisdiction in agreement or contract in which lacks the jurisdiction.  In present case complainant has availed service from the OP and CP Act is an additional remedy to consumer to resolve the disputes. As per the CP Act -1986;

Territorial jurisdiction

 (2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction,-

(a) the opposite party or each of the opposite parties where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain ; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite party who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or

(c)  the cause of action, wholly or in part, arises.

The complainant has signed the agreement in Bangalore and OP has supplied and installed the materials in school of the complainant at Bangalore.   Hence, cause of action arosed at Bangalore.  Hence, as per CP Act, the complainant has right to file the compliant before this commission and this commission as territorial jurisdiction as per the CP Act to entertain the complaint.

13.   The OP further contended that both parties have entered into a commercial agreements hence, it was on commercial transaction and complainant is not a consumer as per CP Act. Perused the documents and we noticed that complainant is a consumer and OP is a service provider as per the provisions Consumer Protection Act,2019.

CONSUMER DEFINITION: As per the Consumer Protection Act, 2019, the definition of ‘Consumer’ in Sec.2 (7) reads as under;

“CONSUMER” means any person who–

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

2. hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person, but does not include a person who avails of such service for any commercial purpose.

1. The expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;

2. The expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.

In present case complainant availed the service of the OP by paying amount for the benefits of the students of this school.  Hence, it is a burden as OP to prove the complainant has engaged in commercial activity and availed service from the OP was to restudy.  Hence, as per the CP Act complainant is a consumer and he has availed the service for the benefit of the students and not for the commercial activity.

14.   The OP further contented that the Commission will not have pecuniary jurisdiction to trial complainant.  As per the CP Act 1986.

PECUNIARY JURISDICTION

Pecuniary Jurisdiction of the State Commission was;

1.      is to entertain-

1. Complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore.

In present case, the complainant has paid the amount included compensation comes more than 20 lakhs, as per CP Act 1986.   Hence, the State Commission has pecuniary jurisdiction to try the complaint filed by the complainant as per CP Act 1986. Further, the complainant contended that the compliant is barred by limitation as the complainant himself has alleged that OP is promised to complete the entire process within 2 months from date of commencement i.e., 15.08.2012.  However, the OP as availed to comply the cause of action aroused on 15.08.2012 and the complainant filed compliant on 17.06.2015 after lapse of more than years.  Perused the documents it is true that OP has promised to complete within 2 months from 15.08.2012.   However, he was failed.  As per Sec 24 (A) of 1986 Act now it is Sec of CP Act 2019. LIMITATION PERIOD – (1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

In present case, the OP has sent a letter on 22.01.2014 informing the complainant that the “Agreement Stands Terminated” hence, in our opinion limitation starts from 22.01.2014.  The complaint has filed by the complainant on 17.06.2015 within 2 years.  Hence, it is well within the limitation period.  The OP further contended that the compliant apart from the initial payment had never paid any amount to the OP even after several reminders and he was default in making payment.  Perused the version and documents.  We noticed that OP himself admitted in para-12 (h) in that after prolonged “follow ups’’ the complainant had issued cheques towards the outstanding installments, means the complainant had paid initial payment of Rs.35,000/- and apart from that also issued cheques towards the outstanding installment.

15.    The Complainant alleged that OP has caused permanent damage to the school building structure resulting water                       seepage and weakening of roof portion.  Also provided poor quality of equipments which affected the student’s progress in education and also demanded for payment of arrears of maintenance charges etc.,.Moreover, even the complainant insisted for withdrawal of equipments but instead of withdrawal,  the OP send letter dated 22.01.2014 informing that “ The agreements stands terminated and issued legal recovery notice on 13.05.2015 and same was replied by the complainant even OP fail to complete the installment within stipulated  period of 2 months.  Per contra as per the contention of the OP complainant has signed and executed the acceptance certificate confirming that OP had installed all the equipments as part of Tata class Edge agreement also signed and executed the installation certificate.

16.   Perused the acceptance certificate and installation certificate it is true that the complainant has signed both the certificates.  However, the OP has not produced any photographs to show that he has completed the installation within stipulated period as per contract.  When the OP contained that he has supplied and installed the materials then onus shifted on the OP to establish it and disprove the allegations of the complainant.  Mere, taken contention in the version without sufficient documents cannot be believable and acceptable.  Moreover, perused the letter dated 22.01.2014, the OP himself informed to the complainant that “agreement stands terminated” as because the complainant is defaulter in payment. If there is no agreement between the complainant and OP then, it is duty of the OP to disconnect the access to the Class Edge Terminated offering.  Hence, considering the facts and discussion made here we are the opinion of that the complainant has proved deficiency of the service on the part of OP.  Hence, the following;

O R D E R

The complaint is allowed in part.

OP is directed to pay Rs.2,12,000/- paid by the complainant as an advance amount along with 9% interest from the payment date of first till realization. 

The OP is further directed to pay a compensation of Rs.2,00,000/- to the complainant by way of loss of Income and mental agony along with Rs.25,000/- towards costs of litigation.

The OP is directed to comply the Order within 45 days from the date of receipt of this Order.

Send a copy of this order to both parties.

     Sd/-                                                                Sd/-

MEMBER                                           JUDICIAL MEMBER

SP*