Date of Filing 11.04.2023

                                                                                                             Date of Disposal: 08.01.2024

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                         …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL,                                                                                ……MEMBER-I

               THIRU.P.MURUGAN, M.Com.,ICWA(Inter), BL.,                                                           ……MEMBER-II

CC.No.59/2023

THIS MONDAY, THE 08^th DAY OF JANUARY 2024

Mr.Puviarasu Jayakumar,

S/o.Jayakumar,

No.692, Ayodhi Doss Street,

Ramapuram, Putlur, Thiruvallur -602 025.                                          ......Complainant.

                                                                              //Vs//

1.Vihaan Direct Selling (India) Private Limited,

    Regus Centre, Ground Floor, E1 Block (Beech),

    Manyata Embassy Business Park,

    Outer Ring Road, Bangalore,

    Karnataka – 560 045.

2.Mr.A.Lingesh,

    S/o.Anbarasan,

    No.74, Sivan Koil Street,

    Chithambakkam, Thiruvallur,

    Tamil Nadu 602 021.                                                                   ……. Opposite parties.

Counsel for the complainant                                            :  Miss.N.Madhavi, Advocate.

Counsel for the 1^st opposite party                                   :  M/s.S.Priya, Advocate.

Counsel for the 2^nd opposite party                                  : Exparte.

This complaint coming before us on various dates and finally on 29.12.2023 in the presence of Miss.N.Madhavi, counsel for the complainant and M/s.S.Priya, counsel for the 1^st opposite party and 2^nd opposite party was set exparte for non appearance and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY TMT.Dr.S.M. LATHA MAHESWARI, PRESIDENT

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite parties with respect to cheating the complainant along with a prayer to direct the opposite parties to refund Rs.3,00,000/- to the complainant and to direct the opposite parties 1 & 2 to pay a sum of Rs.1,00,000/- towards compensation for the mental agony and strain caused to the complainant.

Summary of facts culminating into complaint:-

2. Crux of the complaint was that he deposited Rs.3,00,000/- with the 2^nd opposite party who was said to be the distributor of the 1^st opposite party who does marketing business by entering into an agreement dated 28.10.2022.  Digital ID No.IM002117 was issued to complainant.  But till today no information about the exact nature of business by the 1^st opposite party was informed to the complainant.  Later, complainant came to know that the 1^st opposite party was not doing any business as alleged in the agreement.  2^nd opposite party asked the complainant to join some other persons so that he could get commission.  Both opposite parties 1 & 2 thus committed breach of trust and deficiency in service. Thus aggrieved, after serving legal notice present complaint was filed for unfair trade practice and deficiency in service and to direct the 1^st opposite party to refund Rs.3,00,000/- to the complainant and to direct the opposite parties 1 & 2 to pay a sum of Rs.1,00,000/- towards compensation for the mental agony and strain caused to the complainant.

The crux of the defence put forth by the 1^st opposite party:-

3. The 1^st opposite party filed written version disputing the complaint allegations contending inter alia that the opposite party was an e-commerce based Direct Selling Company which sells products and services directly to the end customers through its direct selling personnel, also referred to as Independent Representatives who earn commissions on conclusion of such sales. It was a sub-franchisee of Q Net Limited, Hong Kong. The 1^st opposite party was an entity entirely different and independent of Q Net Limited and so are the products and the terms and conditions associated with their sale. 1^st opposite party does not guarantee, assure, confirm or even allude for any returns, employment and interest to any of its customers and Direct Seller/IRs.  The policies and procedures followed by the 1^st opposite party which contains in ‘Income and earning disclaimer’ was prominently and mandatorily shown to all its customers, which clearly state that the commissions were payable only upon sale of products or services and in no other event.  The business was conducted through direct personal presentations and demonstrations usually in the homes or at offices or at mutually agreed places which is how the Directing Selling Business is conducted world over. People register themselves as Independent Representatives i.e., become part of the Direct Selling network with a view to earn commissions on onward sales of products.  Selling these products in the absence of retail shops require undertaking constant efforts.  Those who are unable to sell further are unable to earn commissions. In such case too, no loss ever occurs to an Independent Representative as in the very least the only money expended was the product value equivalent. In case the Independent Representative (as a customer) was dissatisfied with the product, was entitled to a full refund provided such refund requests are made within the stipulated period of 30 days.  On the other hand, those who are able to sell the product earn commissions on each such sale and make additional income through their efforts.  The 1^st opposite party systems make it abundantly clear to an Independent Representative at the time of registration that commissions are directly linked to the sales of products and that there are no other modes of earning. The 1^st opposite party does not take deposits or charge fees or commissions from those who intend to become an Independent Representative.  Similarly, no commission, charge, deposit or cost was paid upon an individual choosing to become an Independent Representative. Complainant registered himself with the 1^st opposite party as an Independent Representative on 17.03.2022.  While registering as an Independent Representative, the complainant agreed to the terms and conditions governing his relationship with the company and acknowledged the policy and procedure, compensation plan, code of ethics and the earning income disclaimer governing the business of the company. Acknowledgement letter signed by the complainant would clearly indicate that the complainant know about the products he was purchasing from the inception and was fully aware of the return and buy back policies of the companies.  On 01.10.2022, 11.08.2022 and on 17.03.2022 the complainant purchased several products such as NutriplusDiaba Heal Duo pack x4, Nutriplus Celesteal Apple Cinnamon Tea x 2, etc.  Complainant suppressed the fact that he has not availed an opportunity though it was his right to write an email and ask for the return or refund from the 1^st opposite party about his dispute. Complainant has never raised any grievances with respect to the quality of the said product or reported any deficiency thereof.  The reason for filing complaint was that the complainant was not able to do the business and want to keep the product with him and want to cheat the company and further he want to do all these things by suppressing the real facts. The complainant never approached the opposite party within stipulated time as agreed by him in his agreement.  As such there is no case made out against the opposite party for any unfair trade practice and deficiency in service alleged by the complainant. Instant application is nothing but, an attempt to mislead the court and does not qualify under the provision of the Consumer Protection Act, 2019 aimed to harass the 1^st opposite party and is devoid of any merits and should be dismissed with exemplary costs.

4. On the side of complainants proof affidavit was filed and documents marked as Ex.A1 to Ex A6 were submitted. On the side of 1^st opposite party proof affidavit was filed and documents marked as Ex.B1 to Ex.B5 was submitted. Though notice was served to the 2^nd opposite party he did not appear before this Commission to file Vakalath and written version and hence he was called absent and set exparte on 10.10.2023 for non filing of written version within the mandatory period as per stature.

Points for consideration:-

1. Whether the complaint as filed before this Commission is maintainable?
2. Whether the alleged deficiency in service on the part of the opposite parties has been successfully proved by the complainant by admissible evidence?
3. If so, to what reliefs the complainant is entitled to?

Point No.1:-

The following documents were filed on the side of complainant in support of their contentions;

1. Agreement dated 28.10.2022 was marked as Ex.A1;
2. The Digital ID card in favour of complainant was marked as Ex.A2;
3. The Statement of Account of complainant as on 31.10.2022 was marked as Ex.A3;
4. Legal notice issued by the complainant to the opposite parties dated 16.02.2023 was marked as Ex.A4;
5. The delivery receipt of 1^st opposite party was marked as Ex.A5;
6. Acknowledgement card for the proof of delivery to the 2^nd opposite party was marked as Ex.A6;

The following document was filed on the side of 1^st opposite party in support of their defence;

7. Online copy of QNet Policies and procedures was marked as Ex.B1;
8. Online copy of certificate of Incorporation was marked as Ex.B2;
9. Online copy of GST of 1^st opposite party was marked as Ex.B3;
10. Complainant Distributor Application Form and acknowledgement was marked as Ex.B4;
11. 2^nd opposite party application, acknowledgement GST etc was marked as Ex.B5;

5. It is seen that the crux of the complaint allegations is that he deposited Rs.3,00,000/- with the 2^nd opposite party who was the distributor of the 1^st opposite party for doing some business.  It is his contention that though certain products were given to him till today he was not explained about the nature of business and also he did not get any profit out of the said investment and he alleged that the opposite parties had cheated him by making him to deposit the amount.

6. The 1^st opposite party who appeared before this Commission stoutly disputed the complaint allegations contending that the complaint itself is not maintainable before this Commission and also that the complainant had entered into the business transaction only after knowing well about the nature of the business.  It is their contention that they had supplied the products worth for the amount paid by him. Thus they sought for the dismissal of the complaint.

7. Considering the nature of transactions involved between the parties, we tried to discuss the complaint allegations to decide the maintainability of the complaint at the preliminary stage.

8. It is seen that the complainant had entered into an agreement with the opposite party vide Ex.A1 dated 28.10.2022 for doing some business, under which he bought certain goods to be sold to the end consumers.  The transaction thus clearly was entered between the parties for the purpose of “Re-Sale” which purpose was clearly exempted under the Consumer Protection Act, 2019.  Further it is not stated by the complainant that he is doing the said business for earning his livelihood.  It is alleged by him that both opposite parties had committed cheating, breach of contract and deficiency in service by misleading him and making him to deposit Rs.3,00,000/-.  The nature of allegations amounts to criminal offences which could not be discussed/decided before this Commission.

9. It has been clearly held in the decision rendered by the Apex Court in C.A.No.11397/2016 dated 22.02.2022 in Srikanth.G.Mantri Vs Punjab National Bank that when the transaction amounts to business to business, the Consumer Commission does not have the jurisdiction to decide the complaint in its words as follows;

"Appellant had opened an account with the respondent-Bank, took overdraft facility to expand his business profits, and subsequently from time to time the overdraft facility was enhanced so as to further expand his business and increase his profits. The relations between the appellant and the respondent is purely “business to business” relationship. As such, the transactions would clearly come within the ambit of ‘commercial purpose’. It cannot be said that the services were availed “exclusively for the purposes of earning his livelihood” 16 “by means of self-employment”. If the interpretation as sought to be placed by the appellant is to be accepted, then the ‘business to business’ disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes."

Thus we are of the view that this Commission is not a proper forum for the complainant to adjudicate the present complaint.

 10. Also it has been already held in the decision rendered by the Apex Court in C.M.D .City Union Bank Limited Vs R.Chandramohan dated 27.03.2023 that when cheating and misrepresentation involved, the complaints could not be tried in a summary manner by the consumers in its words as follows;

The proceedings before the Commission being summary in nature, the complaints involving highly disputed questions of facts or the cases involving tortious acts or criminality like fraud or cheating, could not be decided by the Forum/Commission under the said Act. The “deficiency in service”, as well settled, has to be distinguished from the criminal acts or tortious acts. There could not be any presumption with regard to the willful fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance in service, as contemplated in Section 2(1)(g) of the Act. The burden of proving the deficiency in service would always be upon the person alleging it.

11. Thus we have no other option but to conclude that the present complaint has to be dismissed in limine on the ground of maintainability. We answer the point accordingly.

Point No.2&3:-

12. As we have held above that the complaint is not maintainable before this Commission we did not go into the merits of the complaint and left it un-discussed to be decided by any other appropriate Forum. Thus the complainant is not entitled to any relief.

In the result, the complaint is dismissed. No order as to cost.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 08^th January 2024.

    Sd/-                                                  Sd/-                                                                   Sd/- 

MEMBER-II                                   MEMBER-I                                                   PRESIDENT

List of document filed by the complainant:-

List of document filed by the 1^st opposite party:-

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 MEMBER-II                               MEMBER-I                                                      PRESIDENT