R.V.HUDDAR, PROP.NUTAN COMPUTER ACADEMY vs MEGABYTE COMPUTER ACADEMY

AN application was filed by R.V. Huddar, Proprietor Nutan Computer Academy, Raipur on 12.8.1996 under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (for brief the Act), claiming compensation from Megabyte Computer Academy, Bombay based on the findings of the Commission in R.T.P.E. No. 9/91 and U.T.P.E. No. 40/89 as contained in the Commission''s order dated 24.1.1995.

THE facts of the case as contained in the compensation application can be briefly summarised as below : THE applicant had made a complaint to the Commission earlier that respondent No. 1 compelled the applicant to issue advertisement and pay for it as a tie up for supply of computers and accessories. He had also complained that after sale service provided by the respondent was not satisfactory. THE Commission in its order dated 20.1.1995 in R.T.P.E. No. 9/1991 held that the respondent was guilty of indulging in a tie up sales inasmuch as the customers had to pay for advertisement of the respondent''s course in order to buy respondent''s products. This restrictive trade practice attracting the provisions of Section 33(1)(b) of the Act was held to be prejudicial to the public interest. In the same common order the Commission in U.T.P.E. No. 40/1989 held that the after sale service provided by the respondent was not satisfactory. The notice of the compensation application was duly served on the respondents both by the Commission as well as by the applicant. The proceedings against the respondent Company were set ex-parte by the Commission on 12.8.1998. The applicant filed an affidavit of evidence reiterating the averments made in the compensation application and claimed compensation as follows : (1) Refund of the licence charges paid by the applicant to the respondent amounting to Rs. 78,000/-. (2) Refund of the cost of computer and accessories amounting to Rs. 1,13,506.35. (3) Refund of the cost of advertisement of Rs. 7,300/-. (4) Refund of the cost of stationary amounting to Rs. 9,436/- which was returned to respondent No. 1. (5) Interest @ 22% on the above. (6) Compensation for loss of credibility and goodwill of the applicant and for mental agony - Rs. 1,00,000/-.

I gave a hearing to Mr. Jeevan Prakash, Advocate for the applicant. I have carefully gone through the records of the case and given due consideration to the claim of the applicant for compensation under various heads. The respondents have not defended the claims of the applicant as neither the reply to the compensation application was filed nor did they participate in the proceedings.

THE Commission in its order dated 24.1.1995 in R.T.P.E. No. 9/1991 clearly held that the respondent No. 1 was guilty of indulgence in restrictive trade practice insofar as its action in compelling the customers to pay for the advertisement for its courses as a tie up for buying for the respondent''s product. THE Commission has pointed out in its order that "the respondent has been unethical in requiring a licensee to pay for the respondent''s advertisements for the computer course without practically no mileage for the licensee". THE applicant in this case has clearly suffered loss and damage due to this practice and is entitled to claim compensation viz. Rs. 7,300/- being the cost of advertisement. The Commission in its order in regard to U.T.P.E. No. 40/1989 has observed that ''the evidence of Shri Huddar is significant. He has stated that "At the time of purchase I was told that CPM Technology is the only technology available in India and that the computer machine supplied would be compatible to CPM However, the machine was not compatible even to CPM I subsequently came to know that CPM was out-dated as against I.B.M. which was the current popular technology for this purpose. I made a complaint to that effect with the respondent who stated that they will provide all the support - software support so that the machine could be used both for IBM or CPM compatible".... "In the absence of full software being supplied to me I could not run the Diploma courses offered by the Academy. With whatever little software was supplied to me I was allowed to run a mini Academy for awarding certificate courses only" .... "No other courses could be run in the absence of full software". It is, therefore, obvious that neither the respondent supplied all the equipment nor did it supply compatible accessories''. The Commission also satisfied that after sale service provided was inferior. The Commission thus came to the conclusion that respondent No. 1 was guilty of indulgence in unfair trade practice under Section 36A(1)(i) and Section 36A(1)(viii) of the Act.

THE claims of the applicant for compensation are to be examined with reference to the above findings of the Commission in the light whether the applicant suffered loss or damage due to them. It is clear that the applicant could not run the courses, as respondent No. 1 did not honour the representation made by it. After-sale service was not satisfactory and compatible software were not provided. THEre is however no finding of the Commission that the equipment (hardware) provided by respondent No. 1 itself was defective. It is clear that the applicant has been making use of the same as he has stated during the unfair trade practice enquiry that "whatever little software supplied to me I was allowed to run a mini Academy for awarding certificate courses only" and "No other courses could be run in the absence of full software".

In view of this, while holding that the applicant is entitled to be compensated by way of refund the licence charges of Rs. 78,000/- and refund of the cost of stationary amounting to Rs. 9,436/-, there is no justification to direct the respondent No. 1 to refund the entire cost of the computer amounting to Rs. 1,13,506.35 as claimed. Since the applicant has stated that the price of the computer also included payment of supply of software programmes he is entitled for some compensation on this account. THE contention of the Advocate for the respondent that the hardware part of the computer was of no use to the complainant now being out-dated and the respondent could collect the same from the applicant is not acceptable. In the premises, I hold that since the respondent No. 1 has indulged in unfair and restrictive trade practices the applicant is entitled for compensation by way of refund of the entitled amount as well as damages. I, therefore, direct that the respondent No. 1 shall refund to the applicant the amount of Rs. 78,000/- collected as licence charges, Rs. 7,300/- being the cost of the advertisement paid by the applicant, and Rs. 9,436/- representing the cost of stationary returned by the applicant to respondent No. 1, which amounts to the total amount of Rs. 94,736/-. The respondent shall pay interest on this amount calculated at the rate of 18% per annum from the dates of receiving of the above amount till the date of refund. The respondent shall also pay damages and compensation to the applicant towards non-supply of software programmes, loss of goodwill of the applicant and expenses involved in the litigation. In the facts and circumstances of the case I assess this amount at Rs. 30,000/-. I also direct that the amounts as indicated above shall be paid by respondent No. 1 within 8 weeks of the receipt of this order subject to filing of affidavit of compliance within 2 weeks thereafter. There is no order as to costs. C.A. disposed of.