SUNNY GARG vs ZILS LIMITED

THE complaint was filed by the appellant being Complaint Case No. 31/2004 by Mr. Sunny Garg resident of House No. 6132, Modern Housing Complex, Manimajra (U.T.), Chandigarh against ZILS Limited, Mumbai; Shri Arvind Gujral, Zonal Manager, ZILS Limited, Zonal Office, New Delhi; Branch Manager, ZILS Limited, Sector 21, Chandigarh and Mr. Subhash Chandra, Chairman, Zee Telefilms, Mumbai seeking compensation for deficiency in service on the part of O.Ps. and sought refund of a total sum of Rs. 20 lacs.

THE appellant who had earlier took admission in the Punjab Engineering College, Chandigarh after clearing the entrance test and joined the same in July, 2000. After studying for about two months, he came across an advertisement published by the O.Ps. in newspaper THE Tribune, Chandigarh dated 4.9.2000 and felt interested in the proposal regarding technology proposed to be brought by the O.Ps. He left the Engineering course and preferred to be an entrepreneur by making him self-employed. He approached the O.Ps. for being appointed as an entrepreneur for various places including Chandigarh. THE O.Ps. had highlighted in the advertisement that Zee Livewire Network will converge IT, Satellite and Telecommunication technologies to transform the way people interact. THE complainant met Assistant Manager, Project Mr. Harjeet Chhabra on 4.9.2000 in Hotel Piccadily, Chandigarh and after discussion with him, he decided to run ZIL Franchise Centre, Model-I for territory of Chandigarh, Mohali and Panchkula on the terms and conditions agreed upon between the two. THE complainant deposited with the O.Ps. a sum of Rs. 11.59 lacs as initial amount through cheques and drafts on various dates and took on rent the ground floor building of S.C.O. No. 82-83, Sector 8-C, Chandigarh and created required infrastructure as per the guidelines of the O.Ps. and completed the interior within 15 days by spending about Rs. 5.50 lacs on the infrastructure as per the specification of the O.Ps. The entire infrastructure so set up was inspected by the O.Ps. and the same was found satisfactory. Under the terms and understanding between the complainant and the O.Ps., it was the sole responsibility of the O.Ps. to provide the complainant entire technical know-how of Zee Livewire System and support including marketing support. ZILS also assured to provide assistance/support/help from time-to-time in order to ensure smooth running of the interactive centre. It was alleged that the O.Ps. did not fulfil their commitment to provide Zee Livewire (Model-I) in time as a result of which the complainant suffered huge loss. A fax message dated 23.3.2001 was sent by the O.Ps. regarding the inordinate delay in the start of the centre and the day-to-day losses suffered by the complainant on account of building rent, interest on investment, depreciation, office and establishment expenses.

The complainant called upon the O.Ps. to fulfil the commitment at the earliest but there was no response. The complainant even talked to Mr. V. Saxena, Divisional Manager, ZILS Limited on telephone and apprised him about the inordinate delay in the start of the centre. It is alleged that the O.Ps. admitted deficiency in service on their part for not providing Zee Livewire System (Model-I) as promised but in order to pacify the complainant, offered him ZAC, which was contrary to the assurances given by the O.Ps. earlier and the same was not acceptable to the complainant. A letter dated 29.3.2001 was sent by the complainant to the O.Ps. who pressurized the complainant to shift from Sector 8 to Sector 17, Chandigarh as another ZEDCA Franchisee was already operating from Sector 8, Chandigarh. The complainant then hired new premises at SCO No. 93-94 in Sector 17-B, Chandigarh by spending huge expenditure and created new infrastructure there. Thereafter, O.Ps. vide their letter dated 18.6.2001 promised to pay a sum of Rs. 2.50 lacs, which the O.Ps. never paid. The letters were also written to Vice-President Shri A.S. Gujral regarding the deficiency in service on their part for not providing services/facilities promised by the O.Ps. The loss suffered was assessed by the complainant at a sum of Rs. 5 lacs on shifting of the premises from Sector 8 to Sector 17, Chandigarh.

WHEN no response was received from the O.Ps., the complainant requested the O.Ps. to refund the franchise fee and other expenses, which was also not refunded. A legal notice was also sent by the complainant, which was also served on the O.Ps. and thereafter the complaint was filed. This complaint came up for preliminary hearing before the District Forum under Section 12 of the Consumer Protection Act, 1986 (for short hereinafter to be referred as C.P. Act) and the same has been rejected in limine as not being maintainable under the C.P. Act on the ground that the complainant/appellant was only a licensee of the granter of the franchise, which in the instant case are the O.Ps. Reference was also made to a judgment of the Hon''ble Consumer Disputes Redressal Commission, New Delhi (for short hereinafter to be referred as National Commission) in the case of General Manager, Madras Telephones and Others v. R. Kannan, I (1994) CPJ 14 (NC) wherein it was held that a franchise holder even if described as hirer of PCO is not a consumer under the C.P. Act.

IT may be pointed out that in running the PCO, no service is to be provided to the franchisee who is to run the PCO. In the instant case, there are specific allegations made in the complaint case about the O.Ps. assuring to provide various items and facilities and the O.Ps. were to provide Zee Livewire (Model-I) system. It was specifically alleged that the O.Ps. failed to provide services promised for which they received the amount from the appellant/complainant and thus the services were to be rendered by the O.Ps. for consideration. The facts of this case are clearly distinguishable from the facts of the case relied on by the District Forum. In any case, the complaint as has, instead, been dismissed in limine, ought to have been taken for hearing and notice issued to the O.Ps. and their pleadings taken on record and, thereafter, any preliminary objection raised by the O.Ps. should have been considered after hearing both the sides and a decision taken by the District Forum. The Hon''ble Supreme Court in the case of CCI Chambers Co-op. Hsg. Society Ltd. v. Development Credit Bank Ltd., III (2003) CPJ 9 (SC)=V (2003) SLT 185=2003 CTJ 849 (Supreme Court) has held that the decision arrived at by the Hon''ble National Commission is premature. The Commission ought to have issued notice to the respondent and taken its pleadings on record. Only when the pleadings for both the parties were available should the Commission have formed an opinion as to the nature and scope of inquiry, i.e., whether it required a detailed and complicated investigation into the facts which was incapable of being undertaken in a summary and speedy manner. Then the Commission could have justifiably formed an opinion on the need of driving away the complainant to the Civil Court. In the case of CCI Chambers Co-op. Hsg. Society Ltd. (supra), the Hon''ble National Commission dismissed the complaint in limine on the ground that "...considering the allegations in the complaint and the time that will require to decide the matter, it cannot be perhaps possible for this Commission to take up this matter. Numerous documents would be required to be provided including about 150 cheques. Service of the experts will have to be requisitioned for proof of the signatures and the writing wherein the figures in cheques have been altered. Under the Consumer Protection Act, 1986, this Commission is expected to decide the matter within a set frame of time......" The Hon''ble Supreme Court held in Para 9 at Page 852, inter alia, as under: "....It should be kept in mind that the Legislature has provided an alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would also be a totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of fact are required to be dealt with or decided. The Act provides sufficient safeguards."

IN Para 10, the Hon''ble Supreme Court laid down the law regarding the stage when the Commission should have formed an opinion as to the nature and scope of inquiry. Para 10 reads as under : "10. IN our opinion, the decision arrived at by the NCDRC is premature. The Commission ought to have issued notice to the respondent and taken its pleadings on record. Only when the pleadings for both parties were available should the Commission have formed an opinion as to the nature and scope of inquiry, i.e., whether the questions arising for decision in the light of the pleadings of the parties required a detailed and complicated investigation into the facts which was incapable of being undertaken in summary and speedy manner. Then the Commission could have justifiably formed an opinion on the need of driving away the complainant to the Civil Court. Mere complicated nature of the facts and law arising for decision would not be decisive."

THE appellant/complainant has already mentioned in the complaint that the respondent to the advertisement of the O.Ps. to become an entrepreneur for earning his livelihood by self-employment and as such he is covered by the exclusionary clause contained in Section 2(1)(d)(ii) of the C.P. Act. In our considered opinion, the complaint has been dismissed prematurely without seriously considering the averments made in the complaint case and without issuing notice to the O.Ps. and without taking on record their pleadings. The appeal is allowed. The impugned judgment and order dated 1.6.2004 is thus unsustainable in law and is set aside. The complaint case is remanded to the District Forum-I, U.T., Chandigarh with the direction to take up the complaint case for adjudication according to law after issuing notice of the complaint to the O.Ps. The complainant is directed to appear before the District Forum-I, U.T., Chandigarh on 14.12.2004.

Copies of this order be sent to the parties free of charge. Appeal allowed.