Radiant Infosystem Pvt. Ltd. vs D. Adhilakshmi

COMMON Order dated 13.12.2011 in First Appeal Nos. 1011 of 2009, 1012 of 2009, 1013 of 2009, 1014 of 2009 and 1015 of 2009 and common order dated 6.2.2012 passed in First Appeal Nos. 57 of 2010, 58 of 2010, 59 of 2010, 60 of 2010 and 61 of 2010 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (for short the ''State Commission '') are sought to be challenged through these petitions filed under Section 21(b) of the Consumer Protection Act, 1986. The appeal Nos. 1011 to 1015 of 2009 were also filed by the petitioner herein, against the orders passed by the District Forum, Vijayawada in the complaints filed by the complainant while the appeal. Nos. 57 of 2010 to 61 of 2010 were filed by the petitioners against the order dated 12.6.2009 passed by the District Forum, Prakasam at Ongole in the complaints. By the said orders, the said District Forums had partly allowed the complainants and directed the opposite parties (petitioners herein) to refund the deposited amounts to the complainants and to pay litigation cost with the stipulation that the amount shall be paid within one month from the date of the orders, failing which the awarded amount shall carry interest @ 9% per annum till the date of payment. Though several pleas were raised by the petitioners in order to assail the said finding and orders passed by the District Fora but they did not find favour of the State Commission and the State Commission dismissed the appeals and affirmed the orders passed by the District Fora. Aggrieved by the same, the petitioners have approached this Commission.

THE facts and circumstances which led to the filing of the complaints by the complainants in these cases are amply noted in the orders passed by the Fora below and need no repetition at our end. The complaints were filed alleging deficiency in service on the part of the opposite parties inasmuch as it was alleged that the opposite parties failed to provide remaining 63 services as prescribed in their Project Information document and had provided only one such service. The complaints were resisted inter alia on the ground that the complainants were not consumer inasmuch as the agreement between the complainant and opposite party were in commercial nature i.e. collecting the bills from the citizens, receiving the commission on the basis of bills received from the citizens and therefore they did not come under the definition of ''consumers ''. Another objection with regard to the maintainability of the complaints before the concerned District Forum was that the agreement between the parties was entered into at Hyderabad and as per Clause 15 of the said agreement, the jurisdiction to agitate any dispute was restricted to Hyderabad Courts only. The District Forum considered the said objections bearing in mind the legal position as settled by the Hon ''ble Supreme Court and this Commission in number of decisions and rejected both the objections by observing as under: "In a case reported in AIR 2003 Supreme Court at Page No. 1177 it was held that "It is well settled principle that by agreement the parties cannot confer jurisdiction. " In another case reported in 2007 (2) ALT I (CPA) (NC) it was held that "The fact that the appellant visited the premises of the complainant in Kerala for the purpose of inspection of erection of machinery further confirms that the appellants have undertaken to erect and install the machinery at the premises at Kerala. In terms of Clause (C) of Sub-section (2) of Section 11 of the Consumer Protection Act, the cause of action thus arose at least in part in Kerala and consequently the Consumer Forum in Kerala, would have territorial jurisdiction to entertain the matter. "

In the present case also opposite parties visited the Internet Centre of the complainant and installed equipment necessary for running the Centre at the premises of the complainant. Thus part of cause of action arose within the jurisdiction of the District Forum at Ongole. Therefore, we are of the opinion that the Forum at Ongole has territorial jurisdiction to entertain the case. The learned Counsel for the opposite parties further argued that the agreement dated 20.1.2006 marked as Ex.A4 entered into between the parties is a commercial transaction and hence the complainant cannot be considered as a consumer and the present complaint is not maintainable. He relied upon a decision reported in CPR 1991 (NC) at page No. 615 in which it was held that "The word ''commercial '' is an adjective defining the nature of a transaction or activity irrespective of the fact whether that transaction or activity is on a large scale or on a small scale. If any activity or transaction is for the purpose of profit making it becomes commercial. "

In the present case opposite parties 1 and 2 collected fee for providing services to the complainant and the complainant utilized the services by paying fee. The complainant and other unemployed youth approached the opposite parties for starting Internet Centres for their livelihood and paid required fee and availed the services provided by opposite parties 1 and 2. A person who availed services for his livelihood cannot be considered as commercial purpose. The complainant started Rajiv Internet Centre not to generate profits but for their livelihood. Therefore, it is not a commercial purpose and the complainant is a consumer within the meaning of Section 2(1)(d) of the Act and the present complaint filed by the complainant is maintainable. " On merits of the complaints, the District Forum held the opposite party guilty of deficiency in service by holding that the despite a promise to provide all possible Government services as and when made available by the EDS to the franchises (complainants). The opposite parties had failed to take any steps in that direction to help the franchises as a result of which the project became unviable for the complainants, each of whom had invested about three lacs of rupees by depositing the amount with the opposite parties and providing the furnished space.

THE same objections and pleas were raised by the opposite parties before the State Commission in appeals and the State Commission has upheld the findings of the District Fora by observing as under: "16. The two questions that arose for consideration in the appeal on the basis of the grounds of appeal are that whether the complainant being a franchisee a consumer and the other question is in regard to the jurisdiction of District Forum, Ongole. The franchise agreement providing for employment to the franchisee to eke out his livelihood cannot be considered as a commercial document and the transaction commercial purpose. In S. Kumars Com Ltd. v. Amarendra Raiguru, reported in II (2008) CPJ 177 (NC), the National Commission held that: If a person enters into a contractual agreement for supply of certain goods for the purpose of rendering service as a franchisee to others after receiving services from the petitioner for providing the services to the customers and the term ''consumer '' as per 108 of the Agreement mean "any person who avails the service(s) offered by the Company through the Network ", the agreement to enforce the supplying complete syste -meaningful in the context could be enforced by an individual even in relation to commercial transaction entered into to earn his livelihood.

In a number of batch cases filed against the very same appellants herein, this Commission held that the complainants vis-a-vis the appellants herein are the consumers and the complaint filed by them is maintainable under the provisions of the C.P. Act. It was held in F.A. No. 1637 of 2008 in "Yadagiri Shaganti v. Radiant Infosystems Pvt. Ltd. and Another that - We may mention herein that in a batch of complaints filed by various complainants against the very same respondent (R1) in C.C. 28/2008 and batch amounts were directed to be returned. On an appeal this Commission confirmed the order, against which was a revision was preferred. The National Commission confirmed the same in R.P. 2809/2010 by order dated 25.10.2010. "It is not disputed before us that the petitioner had failed to provide the promised service to the respondent. The Fora below have rightly come to the conclusion that the petitioner has failed to provide the services promised by it, as it had not taken clearance from the various departments while collecting the sum of Rs. 2 lakh from each of the respondents. We do not find any infirmity in the order passed by the Fora below. Revision Petitions are dismissed. Counsel for the petitioner states that the petitioner had supplied certain goods to the respondents. If that be so, the respondents are directed to return the goods/equipments received by them, on receipt of the awarded amount. "

In the aforesaid circumstances, we do not have any hesitation to hold the complainant as consumer under the provisions of the Consumer Protection Act. The point is answered against the opposite party Nos. 1 and 2. 19. The objection of the opposite parties is that the District Forum Ongole has no jurisdiction to entertain the complaint in view of the condition incorporated in the agreement excluding the jurisdiction of any other Court in respect of jurisdiction arising under the agreement and limiting the jurisdiction to the Courts at Hyderabad. It is not disputed that the parties had agreed to restrict the jurisdiction of the Courts to the Courts at Hyderabad. However, such restriction has lost its significance in the light of the decision of the Hon ''ble Supreme Court in Ethopian Airlines v. Ganesh Narain Saboo, Civil Appeal No. 7037 of 2004 decided on 9.8.2011. In that case the Apex Court held that the restriction of jurisdiction to a particular Court need not be given any importance in the circumstances of the case. As such the objection of the opposite parties that the District Forum Ongole has no jurisdiction to try the matter does not held water. "

WE have heard Mr. Vijay Kumar, Advocate, learned Counsel representing the petitioners in these cases and Ms. Radha Rao, Counsel representing the respondent/Caveator and have considered their submissions. Although, in the revision petition the impugned order passed by the State Commission is sought to be challenged on a variety of grounds but during the course of his arguments, learned Counsel for the petitioners has confined his attack to the said order only on the ground that the District Fora where the complaints were filed had no territorial jurisdiction to entertain and adjudicate the dispute raised in the complaints and the orders passed by the said Forum being without jurisdiction are non est in the eyes of law. Therefore, the scope for consideration of these petitions is restricted to the above aspect. Learned Counsel for the petitioner has vehemently argued that the parties were free to enter into an agreement restricting the jurisdiction to a particular Court or Tribunal at a particular places and such a contract is not hit by the provisions of Sections 23 and 28 of the Indian Contract Act. In support of his contention he relied upon the decisions of the Hon ''ble Supreme Court in the Judgment dated 17.1.2012 titled as AVM Sales Corporation v. M/s. Anuradha Chemicals Private Ltd., I (2012) CLT 208 (SC)=I (2012) SLT 422=SLP (C) No. 10184 of 2008. He submits that since the complainant with open eyes had agreed that any dispute in relation to the said contract could only be settled in accordance with law as applicable in the State of Andhra Pradesh and at Hyderabad, the District Forum of Vijaywada and Prakasam at Ongole had no territorial jurisdiction to entertain the complaints. That apart it is pleaded that the disputes could only be settled through the alternative Dispute Redressal mechanism of Arbitration. In this connection our attention has been invited to Clauses 15 and 16 of the Agreement executed between the parties: "15. Proper Law and Jurisdiction: This agreement shall be governed by Indian Laws as applicable in the State of Andhra Pradesh and the place of jurisdiction for all purposes shall be at Hyderabad only. Arbitration: 16. Any dispute or difference arising out of or in connection with the terms of this contract shall be settled by the parties, herein, through amicable negotiations. Upon the parties failing to reach an amicable settlement, the dispute/difference shall be referred to Arbitration and the same is in accordance with the Arbitration and Reconciliation Act, 1996. "

COUNSEL for the respondent does not dispute the existence of these clauses in their respective agreements but she contended that despite that, there was no bar for the complainants to approach the District Forums with complainants for the redressal of their grievances. The submission is based on two aspects. Firstly, because the provisions of Consumer Protection Act, 1986 (for short ''the Act '') are in addition to the provisions of any other law for the time being in force. In this connection, she has made a reference to Section 11 of the Act, which we would like to reproduce here: "11. Jurisdiction of the District Forum -(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed (does not exceed Rupees twenty lakh). (2) A complaint shall be instituted in a District Forum within the local 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 District Forum is given, or the opposite parties who do not reside, or (carry on business or have a branch office), or personally work for gain, as the case may be, acquiesce in such institution; or (c) The cause of action, wholly or in part, arises. "

A bare reading of the above provisions of law make it abundantly clear that the complaints got filed before a District Forum within the local jurisdiction in which the opposite party or each of the opposite parties voluntarily resided or worked for gain or any of the opposite parties resides or works or where the cause of action wholly or in part. In the case in hand going by the terms and conditions of the agreement and that the franchisee were to run the centres at their respective villages/places and that the 64 services talked in the agreement were to be provided at the said centres and that the complainants had suffered loss and injury due to the deficiency in service committed by the opposite party at the said centres, there is no escape from the conclusion that the cause of action in these cases had arisen at the places which fell within the local limits of the concerned District Forums. If the complainants were to be called upon to approach the State headquarters the very purpose of establishing the District Consumer Forums at the District level, would be lost. The very object of establishing the District Forum in each District of the State/Country was to take justice to the doorsteps of the consumer. In this view, we are fortified with the Hon ''ble Supreme Court decision dated 9.8.2011 passed in the Civil Appeal No. 7037 of 2004 in the case of Ethiopian Airlines v. Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)=VII (2011) SLT 371, where it has been held that the restriction of jurisdiction to a particular Court need not be given any importance in the circumstances of the cases. Thus looked the matter from any angle we are of the view that both the Fora below have taken just view of the matter and the impugned orders do not suffer from any illegality, material irregularity or any jurisdictional error. The objection in regard to the territorial jurisdiction has been correctly decided by the Fora below.

AS regards the compensation awarded to the complainants, the same also appears to be fully justified having regard to the nature and extent of the deficiency in service as noted by the Fora below. No interference is called for. The Revision Petitions are accordingly dismissed. Ordered accordingly.