UNION OF INDIA vs JAGDAMBA RICE MILLS

THIS is an appeal against the order dated 8th January, 1991 passed by the Consumer Disputes Redressal Commission, Haryana at Chandigarh. The present respondent, M/s. Jagdamba Rice Mills, Tararoi, District Karnal, (hereinafter referred to as the ''Mills'') was the claimant while the present appellants were respondents before the said State Commission.

THE case of the complainant was that they were of considerable standing and repute, carrying on the business of large scale export of rice at Tararoi, which is a well-known centre therefor. The Mills got installed Telex No. 241 in their premises at Tararoi on 31st October, 1985, after completing necessary formalities therefor. The Telex system was not installed by them to keep in touch with foreign countries about the latest position of rates, demand and dispatches of rice from time to time. The main telex exchange is located at Karnal, which is the District Headquarters. The connection at Tararoi was provided as long distance one from Karnal. The distance between these two places is about 18 kms. Despite some efforts made by some mechanics and technicians of Telecommunications Department, Haryana Circle, the Telex could not be brought into working order and did not give any service worth the name to the Mills from the very date of installation. The Mills did not lodge any complaint initially with the hope that the defects therein would get removed in due course. However, when this did not happen, the Mills were convinced that there was patently a major defect in the Telex and they lodged a complaint dated 10th September, 1986, with the Department. In response thereto, the technicians inspected the Telex and changed the machine thereof apparently because of its defective nature, but failed to provide an attachment, called by way of abbreviation as ''LIT necessitating another complaint dated the 10th November, 1986. The Technicians corrected the machinery during the month of November, 1986, after repairs etc. However, the Telex lines remained out of order for considerable time. As the Telex was not working, no bills were forwarded to the Mills by the Department. As a matter of abundant caution, the Mills wrote to the D.E.T., Karnal, on 19th November, 1986, intimating that they had not received any bills for the last six months or more and those should be forwarded for payment. In spite of innumerable complaints made telephone cally, verbally and also personally at the top levels, the functioning of the Telex failed to improve. As a last resort, the Mills addressed a representation dated the 28th November, 1986 to the then Minister of Communications, Government of India, to highlight the failure of the Telex and the consequential loss to the Mills. Ultimately, the mechanics and technicians sent by the Department to repair the Telex expressed their inability to correct the machine and declared that there was some manufacturing defect in the equipment provided. Meanwhile, another communication was addressed as a reminder to the Department asking them to send bills, if any, expeditiously. The complainant, further alleged that on finding that the Telex could not be made operational at Tararoi by the Department, perhaps because of the long distance from the exchange, they asked the Department to shift it to York Hotel, G.T. Road, Karnal, in the hope that it would be able to function effectively therefrom. A formal request was made on the 19th December, 1987 in which it was especially mentioned that the Telex was virtually lying dead and there was thus no alternative, but to shift it to Karnal to make use of it. The Department raised financial and technical objections, with the result that the telex could not be shifted to Karnal. As a last resort, the Mills wrote a letter dated the 19th December, 1988 addressed to the Director, Telecommunications (North) Ambala Cantt. informing them that the Telex had become useless to them because of the failaure of the Department to make it functional, and the same may be removed from their premises and the amount of Rs. 24,671/- deposited by them with the Department may be refunded within a fortnight from the date of the issue of the letter. It was also requested in the letter that if a new connection could be made functional at Tararoi, the same may be installed at the Complainant''s premises as they were in need of its service regularly. Instead of acceding to the request of the Mills, the Department wrote a letter to the Mills informing them that the above said Telex had been disconnected on 27th October, 1988 due to nonpayment of the bills. In order to show the falsity of the Department''s stand in this connection, the complainant Mills produced on the file a communication issued from the Department in December, 1988, which reads as follows: "Your complaint dated 19.12.1988. In this connection it is intimated that your complaint has been received and action is being taken please."

The complainant further stated that the Department, instead of either making the Telex truly functional or acceding to their request to remove the same in case of their inability to do so, raised an unwarranted demand of Rs. 1,55,381/- against the Mills vide letter dated the 31st January,1990. The Department also directed the Mills to pay the said amount. It was also alleged by the Mills that in order to pressurise them to pay the unwarranted demand aforesaid, the Department had disconnected and threatened to disconnect their telephone connections both at Tararoi and Karnal and further to hinder or refuse their applications for further telephone connections. It was also mentioned by the Mills in their complaint that as the telex facility was essential to their business, they were compelled to open an office at Delhi and arrange for another Telex connection therefor, when they found that the Telex No. 241 at Tararoi could not be made operational either at its original place or at the alternative site at Karnal. The Mills estimated the loss to the tune of Rs. 7 lakhs for the failure of the Department to provide a Telex and remove the deficiency there in. They also denied liability for the alleged demand of Rs. 1,55,381/-made by the Department. It also claimed the amount deposited by them as security for the Telex.

THE appellants, who were the opposite party in the complaint, contested the complaint of the Mills and pleaded that the Telex at Tararoi was working as a long distance telex connection and the lines were passing across jungle, canal, Railway doubling and the trucks used to break the wire. The Telex was working on overhead line media. That T.D. machine was provided after thorough checking etc. as per the stores available with the Department. The repeated complaints and faults in the telex line were attended to and remedied as soon as reasonably possible. All pending bills were issued well in time. The Telex could not be shifted to Karnal due to technical reasons. The Telex was disconnected on 27th October, 1988, for non-payment of bills. There was no question of refund of amount of Rs. 24,671/-originally paid because the same had been provided at a rent and guarantee basis.

IT was asserted by the Department that the Mills availed services of the Telex, except barring duration of faults as evidenced from the Fault Card, and, consequently, the Mills were liable to pay the bills issued against them. The final bill dated the 22nd January, 1990 was issued under the Department''s rules and regulations with regard to the Rent and Guarantee Service and also included the arrears arising out of the under-payment of rent etc. which is said to have been pointed out by the Audit party. The remaining rent and guarantee period with effect from 1st April, 1988 to 31st October, 1995, comes to the amount of Rs. 1,48,939/- and the Mills were liable to pay the same. The Department also denied the liability to pay the financial loss claimed by the Mills. The plea of actual or threatened disconnection of the telephones of the Mills and similar connections of the Mills was sought to be justified. The Department also took a preliminary objection about the maintainability of the complaint on the ground that according to Sec. 7B of the Indian Telegraph Act, the Mills were duty bound to ask for arbitration of the dispute and therefore they should first initiate proceedings for an appointment of arbitrator in this regard.

AFTER going through the evidence led before the Commission and hearing the parties, they gave the following findings: 1. Section 7B of the Indian Telegraph Act did not come into play in disputes raised under the Consumer Protection Act, 1986. 2. The Telex connection for large spans of time was non-functional and provided a virtually non-existent, or, in any case a wholly deficient service, so far as, communications or receipt of messages from abroad or long distance communications within the country was concerned. 3. That to cover up the virtual breakdown of the Telex connection, the Department was laying the blame at the door of the Mills on the unsure, untenable ground of disconnection for the alleged non-payment of outstanding bills. 4. That the unilateral disconnection of the telex was unauthorised and contrary to the contractual agreement, violative of the Department''s Rules on the point and patently counter to the principle laid down in Santokh Singh v. Divisional Engineer, Telephones, Shillong, AIR 1990 Gauhati 47. 5. The claim of the Department for Rs. 1,43,939/- could not be supported or rested on the memorandum of the Agreement between the parties. 6. All the bills submitted by the Department were paid by the Mills and there was no default on this score. 7. The allegations in the complaint against the Department were substantially proved. The Telex services provided to them from the very inception suffered from such grave deficiency therein as to be virtually non-operational. 8. The total demand of Rs. 1,55,381/- made by the Department was wholly unsustainable and that the Department was restrained from recovering the same (it may be mentioned here that this demand included the rent for the unexpired guarantee period from the 1st April, 1988 to 31st October, 1995 at the rate of Rs. 18,981/-per annum). 9. There was no meaningful foundation for the claim of damages to the tune of Rs. 7 lakhs. As a result of the above finding, the complainant''s claim for damages was rejected. The Department was directed to refund the security and any other refundable amount in regard to the said Telex due to the Mills without any delay. One months'' time was given to the Department to execute the operative parts of the order.

FEELING aggrieved of the order, the appellants have come to this Commission in appeal. The learned Counsel for the appellants could not challenge the findings of the State Commission given on the merits of the case. We have gone through the judgment carefully and find that each point has been discussed in detail and the findings are supported by documents produced before the Commission. The main argument of the learned Counsel for the appellant before us was about the maintainability of the complaint. It was contended that the provisions of Section 7B of the Indian Telegraph Act are mandatory and the dispute between the parties had necessarily to be determined by an arbitrator whose award had been made conclusive between the parses and not questionable in any Court by virtuextf sub-Section (2) thereof. We are of the opinion that this contention of the appellants cannot be upheld. The State Commission has discussed this point in detail after taking into consideration the judgments of various High Courts cited before them. They have come to the conclusion that Sec. 7B of the Indian Telegraph Act has no relevance to the disputes raised before the different Forums constituted under the Consumer Protection Act, 1986. We may also quote the following passage from the Union of India and Ors. v. Mrs. S. Prakash and Ors. (1990) Civil Cases, 732. It has been quoted by the State Commission in the order. This passage will also meet the argument of learned advocate for the appellant that Section 7B of the Indian Telegraph Act is a specific provision for the disputes arising under that Act: "In view of the fact that a subscriber is a consumer within the meaning of Consumer Protection Act, the Consumer Forum has got full jurisdiction to entertain a complaint in the matter of services rendered by the Telecommunication Department. The Consumer Protection Act is a latter act and it received the assent of the President subsequently and the disputes raised by the consumers are to be adjudicated upon under the Consumer Protection Act, and the Arbitration Clause under Section 7B of the Indian Telegraph Act will not oust the jurisdiction of the Consumer Forum and the plea that the dispute of this nature is to be raised under Section 7B of the Indian Telegraph Act is not sustainable and the nature of the dispute raised in this petition can be said to be outside the purview of Section 7B of the Indian Telegraph Act and even if it would be said that such disputes are covered by Section 7B of the Act, it cannot be an alternative remedy for redressal of the grievances raised in this petition. The ultimate relief which a person can get under Section 7B of the Indian Telegraph Act, obviously cannot stand in the way of speedy and effective relief which can be granted by the Consumer Forums."

THIS Commission has also held similar view in Union of India v. Nilesh Agarwal, 1 (1991) CPJ 203. This Commission remarked: "Counsel for the revision petitioner in his written submissions has raised a point based on Section 7B of the Indian Telegraph Act, which provides for arbitration, the contention being that in view of the existence of the said provision for arbitration, the remedies provided under the Consumer Protection Act cannot be invoked by an aggrieved subscriber. Having regard to the scope, object and purpose of the Act which is a special statute subsequently enacted by Parliament specifically for the creation of a machinery for granting cheap and speedy redressal to aggrieved consumers, we are prima facie of the view that there is no substance at all in this contention especially since the Redressal Forums constituted under the Act are not Civil Courts. However, we refrain from expressing any final opinion on this aspect since this ground was not raised before the District Forum in either of the preliminary objections set out in the application filed before it nor has the point been considered by the State Commission.

We still hold that view.

IT would not be out of place to mention here that the Government of India has itself taken a policy decision to the effect that all requests for reference to arbitration under the Indian Telegraph Act shall be rejected and arbitrator shall be appointed only in such cases where subscriber approaches a Court with a request to appoint an arbitrator and the Court or4ers for the same. These instructions were issued in April, 1989. Those instructions have been referred to in para 33 of Santokh Singh''s case (Supra). The State Commission has also relied upon those instructions as discussed in paragraph No. 04 of the order. When the Government of India have issued the above referred instructions it is futile to argue that a subscriber should adopt the remedy provided under Sec. 7B of the Indian Telegraph Act. As a result of the above discussions, we dismiss the present appeal with no order as to costs.