FIELD MARSHAL K.M.CARIAPPA FOUNDATON vs M.ACHUTHA BASRITHYA

IN these 25 appeals, common points of law are involved. Learned Counsel appearing on either side, submitted that they be clubbed together and common judgment be delivered. Hence, as desired by both the sides, we have taken up these appeals for disposal by a common judgment.

THE appellant in each of the aforesaid 25 appeals, who is the opposite party before the District Forum, is M/s. Field Marshal K.M. Cariappa Foundation, which is a registered trust. THE respondents in each of the appeals are the complainants before the District Forum. The complaints relating to Appeal Nos. 183/97 to 197/97 are shown to have decided by a common judgment by the District Forum; similarly, the complaints relating to Appeal Nos. 341/96 to 344/1996 are shown to have decided by a common judgment by the District Forum; the other appeals have arisen out of an order in each of the complaints referred to in the respective appeals memos.

Field Marshal Cariappa Foundation, as mentioned earlier, is a registered trust. It had undertaken to provide residential plots to its members, who are the personnel of the army, either in service or retired. The complainants are the members of the trust. They had paid the membership fees. They applied for plots after paying registration fees. They had deposited certain amount towards the cost of the sites applied for. It appears that the trust was not in a position to effectively sail through the acquisition of land to form a lay-out and to distribute the sites. As can be seen from the stand taken by the trust, though they made all efforts the same did not fructify, either because of the change in the attitude of the Government or because of the difference with developers and/land owners culminating in litigation in costs. The complainants were obviously frustrated because they did not get the site though number of years had elapsed since after they deposited their hard earned money. Their efforts to get back atleast the money deposited by them with a view to look out for a site from elsewhere, also did not yield any dividend. It appears that they received back a small portion of the money deposited by them. Compelled by the conspiracy of circumstances, the complainants appreached the District Forum praying for the reliefs reflected in their complaints against the opposite party (Field Marshal K.M. Cariappa Foundation).

THE opposite party (appellant in each of these appeals) resisted each of the complaints on various grounds. It prayed for the dismissal of the complaints. Both the parties are shown to have filed their affidavits before the District Forum and had produced certain documents.

THE District Forum, by its orders referred to earlier, granted the reliefs reflected in the respective orders. Hence, the instant appeals by the opposite party. We have heard the learned Counsel appearing for the appellant in each of these appeals, as also the learned Counsel representing the respondents in some of the appeals. We have also heard the respondents present in some of the appeals where they were not represented by Counsel. The point for consideration in these appeals is as to whether the order passed by the District Forum is not sustainable.

THE answer to the question raised for decision depends upon the examination of various questions. If, on a reappraisal of the materials on record and on examination of various aspects, the conclusion arrived at by the District Forum is found correct, the Commission will have to uphold the orders passed by the District Forum, unless of course, the orders passed by the District Forum suffers from serious infirmities affecting the jurisdiction of the Forum or the merits of the case.

IT will have to be seen as to whether the complainants can be said to be ''Consumers'' within the meaning of that expression under Section 2(1)(d) of the Consumer Protection Act, 1986 (for short "The Act''). At this juncture, it would be refreshing to refer to the provisions of Section 2(1)(d) of the Act. IT reads as under : "2(1)(d) "Consumer" means any person who- (i) 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 (ii) hires or avails of any services 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 services other than the person who hires or avails of the services for consideration paid or promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person; .."

We may observe here that it is mainly Section 2(1)(d)(ii) of the Act which would be relevant for consideration in the context of the facts and circumstances of the case under consideration. A careful perusal of the said provision would go to show that before a person can clothe himself as a ''consumer'' he will have to hire or avail of any service for consideration either paid or promised or partly paid and partly promised. Further, under Section 14 of the Act, direction regarding one or the other things enumerated under Section 14(1)(a) to (b) of the Act, can be given to the complainant if the complainants prove any of the allegations about ''service''. In other words, the complainants will have to show that the opposite party is guilty of ''Deficiency in Service''.

The question is as to whether the complainants can be said to have hired the services of the opposite party and if so, as to whether the opposite party is guilty of deficiency in service, will have to be examined in the context of the facts of each case and taking aid wherever necessary of the principles laid down in decided cases which have the effect of finding precedents.

IT is not in dispute that the opposite party has undertaken to provide the complainants with residential sites. IT is also not in dispute that the complainants have paid consideration towards the cost of the site, either in full or in part. IT is also not in dispute that they have paid the registration fees. IT is further not in dispute that they have also paid the membership fees. IT is further seen that though lot of time had elapsed since after they paid the aforesaid amounts, they are not provided with a site. Further, the circumstances highlighted by the opposite party would also go to show that the prospects of the complainants getting a site in the for ceable future are dim. IT is in the context of these undisputed facts, the question regarding the status of the complainants as ''consumers'' will have to be decided. We will have also occasion to marshal some other circumstances which will have a bearing on the question in controversy. Mr. Anantharaman, the learned Counsel for the appellant, submitted that there was no element of profit in the undertaking of the trust to provide sites to the complainants, since the same was undertaken on ''No profit no loss'' basis. The learned Counsel therefore contended that the complainants cannot be said to have either availed or hired the services of the opposite party for consideration. It is pointed out by the learned Counsel that a token payment of registration fee cannot be construed as consideration. Relying on the observations of the Hon''ble Supreme Court in Lucknow Development Authority v. M.K. Gupta, reported in III (1993) CPJ 7 (SC)=AIR 1994 SC 787, particularly at para-3 therein, the learned Counsel pointed out that the complainants cannot come within the purview of the provisions of the Act. It was also pointed out by the learned Counsel that the decision of the Hon''ble National Commission in Lt. Col. B.L. Gupta v. Managing Director, Army Welfare Housing Organisation, reported in 1986-96 National Commission & SC on Consumer Cases 2783 (NS) will have to be deemed as having been superceded by the latter decision of the National Commission in Brig. K.G. Kuthiala v. Army Welfare Housing Organisation, reported in I (1998) CPJ 52 (NC)=1986-96 National Commission & SC on Consumer Cases 2052 (NS). It was stressed by the learned Counsel that in the instant case no service charges are recovered from the complainants by the opposite party as was done in Kuthuila''s case, and that therefore it is a clear case of undertaking by the opposite party on ''No profit no loss'' basis.

WITHOUT prejudice to the aforesaid submission, the learned Counsel argued that non-allotment of plot and non refund of the full amount deposited by the complainants was due to circumstances beyond the control of the opposite party which were explained fully in its pleadings before the District Forum. Addressing his arguments, with reference to several clauses of Sub-section (1) of Section 14 of the Act, Mr. Anantharaman, the learned Counsel, pointed out that since the opposite party has not paid any service charges. Clause (c) of Section 14(1) does not come into play at all. It was also argued by the learned Counsel that Clause (d) relating to compensation also cannot be invoked, since none of the complainants has alleged much less proved negligence on the part of the opposite party. Reliance is also placed on the decisions reported in 1995 (1) CPR 420 and 1991 (1) CPR 46 in this behalf. It was also argued by the learned Counsel that interest at the rate more than the one stipulated (@5% p.a.) in the rules, in the event of delayed payment of the amount deposited cannot be granted at all by the District Forum. On these submissions, in substance, the learned Counsel contended that all the appeals deserve to be allowed. On the other hand, the learned Counsels for the respondents, contended that there is no substance in the submission made by the learned Counsel Mr. Anantharaman that the undertaking to allot a site to each of the complainants- respondents is on ''No profit no loss'' basis. It was argued by them that the agreement between the complainants and the opposite party was for consideration. It is pointed out by them that the opposite party, apart from receiving consideration for the allotment of sites, recovered membership and registration charges. Further, they argued that the amount collected from them also earned interest for the opposite party. They submitted that the opposite party is also receiving donations from the public for the activities conducted by it. They therefore contended that the service rendered by the opposite party is not a free service, comparable to the one received in a Government Hospital. They also relied on the decision in Kuthmla''s case (referred to earlier). Reliance is also placed on the decision reported in I (1998) CPJ 96. They have also cited some other decisions, which will be referred to at the appropriate place herein below wherever they are necessary.

WE have given a careful consideration to the submissions made on either side.

IT is seen that a printed copy of the rules is placed before the District Forum; the same is available at page-5 of the District Forum papers in Appeal No. 183/1997. IT is stated therein that the allotment of sites is strictly in accordance with the paras thereunder. A careful perusal of the said rules would go to show that the opposite party-Foundation is carrying on the activity of allotment of sites and also of building flats. Further, the note below Rule-16 would go to show that there is provision for receiving donations also. IT is also noticed from the title of the rules that the project of the opposite party- Field Marshal K.M. Cariappa Foundation is a programme of constructing a township. IT is further noticed that the payment towards the cost is by instalments, the first instalment being alongwith the application and last one being on 30.6.1990. IT is further seen from Rule-18 that an option is given to the applicants for site, to give refund of the entire amount in the event of the Foundation not being able to allot a site to the applicants, either due to over subscription or for any other reason (emphasis supplied), and there is an undertaking that the whole amount will be paid within 90 days. Further, the basis of the price fixed for the site in advance is also one of the factors that will have to be taken into consideration. IT is presumed that the Foundation (appellant-opposite party) has taken into consideration the administrative experiences also while fixing the price for each site. IT is idle to believe that the same is defrayed from any other source. IT is in the con text of these circumstances marshalled hereinabove, the submissions made by Mr. Anantharaman, the learned Counsel for the appellant, will have to be examined. The Hon''ble Supreme Court in Lucknow Development Authority''s case (supra) has, in para-5 of its judgment, observed as under: "5. This takes us to the larger issue if the public authorities are amenable to jurisdiction under the Act. It was vehemently argued that the local authorities or Government bodies develop land and construct houses in discharge of their statutory function, therefore, they could not be subjected to provisions of the Act. The learned Counsel urged that if the ambit of the Act would be widened to include even such authorities it would vitally affect functioning of official bodies. The learned Counsel submitted that the entire objective of the Act is to protect a consumer against malpractises in business. The argument proceeded on complete misapprehension of the purpose of Act and even its explicit language. In fact the Act requires provider of service to be more in public services. When private undertakings are taken over by the Government or Corporations are created to discharge what is otherwise State''s function, one of the inherent objectives of such social welfare measures is to provide better, efficient and cheaper services to the people. Any attempt, therefore, to exclude services offered by statutory or official bodies to the common man would be against the provisions of the Act and spirit enforcement of the Act there is a demand and even political pressure is built up to exclude one of the other class from operation of the Act. How ironical it is that official or semi-official bodies which insist on numerous benefits, which are otherwise available in private sector, succeed in bargaining for it on threat of strike mainly because of larger income accruing due to rise in number of consumers and not due to better and efficient functioning claim exclusion when it comes to accountability from operation of the Act. The spirit of consumerism is so feeble and dormant that no association public or private spirited, raisesanyfinger on regular hike in prises not because it is necessary but either because it has not been done for sometime or because the operational cost has gone up irrespective of the efficiency without any regard to its impact on the common man. In our opinion, the entire argument found on being statutory bodies does not appear to have any substance. A Government or semi-Government body or a local authority is as much amenable to the Act as any other private body rendering similar service. Truly speaking it would be a service to the society if such bodies instead of claiming exclusion subject themselves to the Act and let their acts and omissions scrutinised as public accountability is necessary for healty growth of society."

We hasten to add here that the Supreme Court''s observation is not in relation to a trust as such. However, the spirit of the ratio laid down by the Hon''ble Supreme Court will have to be assimilated and applied to such other cases mutatis mutandis. Field Marshal K.M. Cariappa Foundation has undertaken the responsibility of bringing into being a township and has undertaken to provide sites to its members who are the army personnel, either retired or in service. Further, as pointed out earlier, it is also collecting donations from the public. It has received consideration from the complainants, may be that the same is called as costs towards the site. The Foundation while carrying on its activities is bound to have its own staff. It has got its legal advisers. These people are required to be paid. It is therefore reasonable to presume logically that all these factors must have entered into the decision of the trust while fixing the price of the sites. At this juncture, it is necessary to point out that the decision of the Hon''ble National Commission in Kuthiala ''s case (referred to earlier) is not of any assistance to the learned Counsel for the appellant. It is significant to notice here that the National Commission at para-3 therein has, among other things, observed as under: "It would thus be seen from the facts brought to our notice that AWHO is carrying on systematic activity of construction of houses/flats for allotment to its members against consideration. Whether AWHO only promotes housing schemes for retired and serving armed personnel at a ''no profit no loss basis'' is not the relevant factor for consideration whether the activities of AWHO constitutes service within the contemplated under Section 2(1)(o) of the Consumer Protection Act, 1986. AWHO is engaged in rendering service for consideration and clearly come within the ambit of the scope of the definition of service."

IN our view, the observation of the National Commission is not of any assistance to the appellant. On the other hand, the same cuts at the very root of the submission made by the learned Counsel for the appellant. For the reasons stated hereinabove, the submission of Mr. Anantharaman, the learned Counsel for the appellant, that the complainants cannot be said to have hired the services of the opposite party has no merit. Further, the observation of the Hon''ble Supreme Court in Lucknow Development Authority''s case at para-3 therein (at page 792) pressed into service by the learned Counsel for the appellant, is not at all applicable to the facts of the instant case.

AS pointed out earlier, it was also the submission of Mr. Anantharaman that there was no deficiency in service because the delay was for reasons beyond the control of the appellant inasmuch as there was a change in the attitude of the Government in the matter of acquisition of lands and was involved in Court litigation against the developers and/or land owners, culminating in the appointment of Arbitrators. It was also pointed out that huge amount was given by way of advance to the land owners. In our view, these developments cannot be pressed into service, as a matter beyond the control of the party, as a shield against the deficiency in service. It is necessary to mention here that the expression ''Deficiency'' is defined under Section 2(1)(g) of the Act as under : "2(1)(g) "Deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service."

A perspicacious examination of the above definition would go to show that a person who has undertaken a contractual obligation is required to see that there is no fault, shortcoming, inadequacy in quality, nature and the manner of performance in that undertaking. He is expected to exercise care, caution, imagination, and forethought, among other things, to show that his performance does not suffer from any infirmity amounting to deficiency. In the instant case, it is noticed that the opposite party is, in substance, a non-starter. If on account of want of effective plan, want of imagination and cautious approach, a person lands himself in a quandry; the same cannot be pleaded as a circumstance beyond his/its control. Under these circumstances, we are not impressed by the submissions made by Mr. Anantharaman in this behalf. Mr. Anantharaman also submitted that mere delay in either allotting the site or in refunding the amount, would not by itself, amount to deficiency in service. In this connection, he placed reliance on a decision in Indian Airlines v. Rajesh Kumar Upadhyay, reported in I (1991) CPJ 206 (NC)=1991 (1) CPR 46. That was a case where the complainant claimed compensation on the ground of delay in operation of the Indian Airlines flight. In connection with the claim, the National Commission has observed that there was no evidence to show that the delay was occasioned by any negligence of the Airline''s staff and that every possible action was taken by the staff to avoid waste of time or inconvenience to the passenger. In that context, the National Commission took the view that there was no deficiency in service on the part of Indian Airlines and the order passed by the State Commission was set aside. It is obvious that the ratio in the said case does not apply to the facts of this case at all. The facts of the said case can be clearly distinguished from the facts of the present case. In the instant case, the totality of the circumstances brought into being on record are not such as would warrant a conclusion that the opposite party is not at all responsible for the delay in the payment of the amount.

THE learned Counsel Mr. Anantharaman, had also tried to seek support from the decision in Consumer Unity & Trust Society, Jaipur v. Chairman of Managing Director, Bank of Baroda, Calcutta & Anr., reported in I (1995) CPJ 1 (SC)=1995 (1) CPR 420. That was a case where the depositors of a Bank were deprived of the services of the Bank on account of the illegal strike by its employees. In that context, the Hon''ble Supreme Court has taken the view that the Bank cannot be said to be guilty of deficiency in service in relation to its depositors. It will suffice if it is observed that the principles reflected in the decision given by the Hon''ble Supreme Court in the aforesaid case have no application to the facts of this case at all. THEy are clearly distinguishable.

MR. Anantharaman had also contended that the District Forum has erred in awarding the rate of interest higher than the one stipulated in the agreement. In our view, having regard to the fact that the opposite party has committed a breach of its agreement with the complainants, the opposite party would be liable to pay compensation. It is needless to a bear in mind that interest can be allowed by way of damages also. In that context, if interest is directed to be paid at a rate higher than the one stipulated by the agreement, the same cannot be found fault with. Thus, on a consideration of all the submissions made at the bar, we find that there is no merit in any of the aforesaid appeals. Incur view, all the appeals are liable to be dismissed.

In the result, all the above appeals are hereby dismissed. In the fact sand circumstances of the case, we make no order as to costs in any of these appeals.

THE original judgment shall be kept in Appeal No. 183/1997 and a copy thereof shall be kept in each of the rest of the appeals. Appeals dismissed.