DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs Uptron India Ltd.

THESE two petitions registered as U.T.P.E. No. 5/96 and C.A. No. 3/96 are being disposed of by a common order because the cause of action giving rise to these proceedings and the points of law and facts involved are identical in both the cases.

THE applicant has filed compensation application under Section 12-B of the Monopolies and Restrictive Trade Practices Act, 1969 for recovery of a sum of Rs. 4,50,000/- with interest at the rate of 18% per anum from 31.3.1990 till the date of realisation as well as cost of the proceedings. THE facts of the case are incorporated in paragraphs 1 to 5 of the application which may be reproduced below : "1. That the respondent is a Government of U.P. undertaking, carrying on its business in the field of electronics in the name and style of Uptron India Limited, with its registered Office at 10, Ashok Marg, Lucknow - 226001 and its regional office at Calcutta.

THE complainant is an educated unemployed youth who was in search of proper employment opportunity. In the year 1990, the complainant came across attractive advertisements of the respondents in various newspapers. A copy of one such advertisement is Annexure-A to this complaint. THE said advertisement proclaimed in bold letters, " A golden business opportunity with uptron". THE said advertisement stated, "Your Business Is Our Business". THE said advertisement further proclaimed as follows : "Now you can start your own Television Training and Service Centre in association with Uptron. A business that assures you a regular yearly income. This is possible through the servicing of Uptron televisions during the warranty period. In addition, your income will also be supplemented by professional training courses in the repair of consumer electronics products like V.C.Rs., audio systems and Two-in-ones of all types. All you need to have is an aptitude for this nature of business and the necessary finances. Uptron will provide you with professional training and the complete know-how on running your centre. This association with Uptron will mean being part of a Rs. 220 crore public sector electronics company, showing the fastest growth among five leading electronics companies in India. This multi product company manufacturing a range of electronics products is the largest among all State electronics corporations in the country. Depending upon the size and location of the centre, the initial investment would range upto Rs. 4 lakhs. If you are interested, write to us immediately with your back-ground details, location and investment plans. We will meet you at the earliest for further discussions. Rush in your details to any of the addresses in your region. Attracted by the advertisements, the complainant sent his response to the respondent. The said response was duly acknowledged by the respondent vide its letter dated 26.2.1990 and the respondent mailed a brochure captioned as "Uptron Service and Training Scheme". The scheme as proposed by the respondent contained tall claims and was highly attractive. A copy of the scheme is Annexure-''B'' to this complaint.

The proposed scheme of the respondents envisaged setting up of a number of Service and Training Centres (STCs) and Training Points (STPs) across the country depending upon the population of the place. All the STCs and STPs were to be approved by UPTRON and were to be run by private enterpreneurs who were to be selected keeping in view their technical, financial and managerial suitabilities. It is stated that all the small enterpreneurs, shall successfully manage STCs/STPs and will earn attractive profits. The return to the equity ratio was stated to be more than 40%.

IT was proposed that the respondent Uptron, shall provide : (a) Project, Report for setting up of STC; (b) Professional and Technical Documentation on Servicing; (c) Professional and Technical Documentation on Training; (d) Professional and Technical Documentation - Commercial; (e) Professional and Technical Documentation - Administraion.

As per the invoice dated 31.3.1990, the cost of the professinal and Technical Documentation was Rs. 2 lakhs. The complainant expressed his inability to pay such a huge sum, being an unemployed youth and requested the respondent for grant of instalments. The complainant was directed to bring a payment of Rs. 50,000/- on the ground that the balance amount of Rs. 1,50,000/- (Rupees one lakh fifty thousand only) can be paid later on. Complainant got prepared a bank draft for Rs. 50,000/- and approached the respondent. After taking the bank draft, the respondent filled in certain blanks in an already available agreement. The said agreement was dated 31.3.1990. Along with the said agreement, the respondent got signed a letter dated 31.3.1990. The said letter was stated to have been obtained for completing paper formalities. Against the payment of Rs. 50,000/- the complainant was handed over a project report. IT was falsely stated in the said letter against the wishes of the complainant, that in case he fails to remit the balance charges for professional and technical documentation by 30.4.1990, the amount of Rs. 50,000/- shall stand forfeited and the respondent shall have the right to recover the balance amount with interest at the rate of 18% per annum. Such a condition was contrary to the condition No. 2 of the agreement, which expressely stipulates that the professional and technical documentation shall be passed on to the promoter on payment of Rs. 1.90 lakhs. The amount of Rs. 1.90 lakhs was liable to forfeiture in case the promoter failed to take advantage of professional and technical documentation provided by the respondent within 180 days. IT would be pertinent to point out that the complainant was not given any professional and technical documentation on payment of Rs. 50,000/-. He was given only a project report. IT was stated by the respondent that their project report would immediately fetch ready finance from financial institution etc. and that the complainant could pay the balance amount after getting the project financed and obtain requisite professional and technical documentation thereafter". 3. A prima facie case having been made out, a Notice of Enquiry was issued in U.T.P.E. No. 5/96 and a Notice of Compensation under Section 12-B of the Monopolies and Restrictive Trade Practices Act, 1969 was issued in C.A. No. 3/96. The following issues were framed in these enquiries : U.T.P.E. No. 5/96 (1) Whether the respondent is or has been indulging in the unfair trade practices alleged in the NOE ? (2) Whether the alleged unfair trade practices are prejudicial to public interest or to the interest of consumer or consumers generally ? C.A. No. 3/96 (1) Whether the respondent has been indulging in or has indulged in the unfair trade practices listed in the C.A. ? (2) Whether the applicant has suffered any loss or damage as a consequence of the alleged unfair trade practices ? (3) Relief.

The applicant/complainant had also approached the State Consumer Disputes Redressal Commission, West Bengal, Calcutta. The order passed in favour of the applicant/complainant was set aside by the National Consumer Disputes Redressal Commission, New Delhi, on the limited ground of lack of jurisdictioan though liberty was granted to the applicant to pursue any other remedy which may be open to him in law. The short question which arises for consideration is as to whether in the facts as stated above, the applicant is entitled to a refund of payment of Rs. 50,000/- which was paid to the respondent on 31.3.1990. We need not refer to the evidence in detail as the factum of payment of Rs. 50,000/- was not denied by the respondent. The case of the applicant/complainant was also taken up by the Director General (Investigation and Registration) in U.T.P.E. No. 5/96. The amount of Rs. 50,000/- paid to the respondent is not denied and a communication was also sent to the applicant on 11.10.2001 with regard to the payment of Rs. 50,000/-. Repeated opportunities were given to the respondent to pay the amount, but neither the amount was paid nor the respondent chose to appear before the Commission on different dates. On 22.11.2002, none appeared on behalf of the respondent and therefore, the proceedings were set ex parte. In this view of the matter, we are inclined to grant refund of Rs. 50,000/- which was paid by the applicant/complainant and which the respondent is liable to refund. We, therefore, direct the respondent to refund the amount of Rs. 50,000/- with interest at the rate of 12% per annum from the date of deposit till the date of payment. We also direct the respondent to pay cost to the applicant/complainant which we quantify at Rs. 5,000/-. 5. Since the respondent, despite its commitment did not pay the amount to the applicant/complainant and chose to remain absent on various dates of hearing and as a consequence of which the respondent was proceeded ex parte at the arguments stage. Today, the gentleman present in the Court states that he is J.P.S. Chauhan, Assistant Officer of the respondent company. He, however, holds no brief for the respondent. The failure of the respondent to honour its commitment to pay the deposited amount to the applicant/complainant, is a deficiency in service amounting to unfair trade practice as defined in Section 36-A of the MRTP Act, 1969. The respondent is accordingly directed to cease the said unfair trade practices and desist from repeating the same in future.

THE respondent is further directed to ensure compliance of this order within six weeks from the date of issue and file on affidavit of compliance within two weeks thereafter. Petitions disposed of.