Union of India vs STANDARD MOTORS

THIS appeal under Sec. 15 of the Consumer Protection Act, 1986 ("the Act" herein) has been filed by the opposite parties against the order dated 3.7.91 passed by the District Forum, Bikaner in Complaint Case No. 183 of 1990 by which the opposite parties were directed to adjust the amount of Rs. 15,450/- in future bills and to pay an amount of Rs. 10,000/- as compensation to the complainant respondents. We may briefly notice the facts leading to this appeal. The complaint was filed by M/s Standard Motors, Ganga Shahar Road, Bikaner through partner Shri Surendra Prakash against the Union of India and Telecom District Engineer, Bikaner alleging that complainant had taken two telephones. Their numbers being 3747 and 3522 from the opposite parties. Complainant No. 1 (Firm) carries on the business of automobiles. The opposite parties gave the last bill dated 1.5.90 issued in the name of the complainants and that amount was paid on 30.5.90 and no amount was outstanding. It was alleged that one Shri R.C. Gupta, Assistant Financial Officer in the Telecom Department has filed a complaint against the complainant (Firm). A reply was given by complainant No. 1 (Firm). When the true facts were placed, Shri R.C. Gupta became annoyed and in order to take undue advantage, he put forward his co-officers and employees to harass the complainants and put obstacles in daily work and caused loss in business. According to the complainants both the telephones were disconnected on 25.6.1990 without any reason. As the business of the complainants started suffering on account of the disconnection of the telephones, the complainants contacted the officers at Bikaner but proper reply to the information asked for by the complainant was not given and indecent language was used. On insistence he was asked to contact phone No. 3015. The complainant talked on phone and told that no amount is outstanding then the complainant was told that for printing block letters or printing names in the Directory, fee was due, on account of that the telephone was disconnected. The complainant told that there was no information for the payment of the amount and no bill was sent and so how the telephone was disconnected. The complainant contacted the officers of the department and they were told that on 26.6.90 for telephone No. 3747 Rs. 7140/- and telephone No. 3522 Rs. 8310/- total Rs. 15450/- are to be deposited for which a demand note was given. The complainant has alleged that after the receipt of the demand note dated 1.5.90 he deposited the amount on 30.5.90 and after that even two months had not passed and arbitrarily the amount was found due and after that the telephone was disconnected. It was denied that the aforesaid two sums were outstanding on account of the two telephones and as it is disputed it may be got settled by arbitration under Rule 7B of the Indian Telegraph Act, 1885 and in the absence of that disconnection of the telephone was against the principles of natural justice. The complainants were told that on deposit of Rs. 15,450/- telephone can be reconnected. The telephone was disconnected without any reason and so the complainants were suffering loss in business. The prestige was lowered on account of the disconnection of the telephone. It was said that all this was done at the instigation of Shri R.C. Gupta by the officers of opposite party No. 2. In the complaint the prayers made are. as under :- (1) that both the telephones were disconnected without any reason. So they may be reconnected and an amount of Rs. 320/- which was deposited by them for reconnection should be ordered to be refunded together with interest @ 12% p.m. (2) that the amount of Rs. 15,450/- which was deposited without the amount being due, may be ordered to be returned together with interest @ 12%. (3) that the matter may be referred to arbitration with respect to the disputed amount of Rs. 15,450/- . (4) that a sum of Rs. 50,000/- may be awarded as compensation as disconnection was made in violation of the principles of natural justice and the prestige was lowered down. In support of that, complainant No. 2 (partner) submitted his affidavit.

THE opposite parties submitted version of the case traversing the allegations made in the complaint. It was admitted that on 26.6.90 for telephone No. 3747 a demand note for Rs. 7140/- and for telephone No. 3522 a demand note for Rs. 8310/- were issued. It was stated that in the bill it was specifically mentioned that the amount is for security deposit and they were personally told also. A supplementary bill (demand note) was with respect to the extra entry being made in the Directory and which was dated 25.4.90 for Rs. 160/- . It was sent in accordance with Exs. 1 and 2. As the payment was not received within 15 days, for making payment on telephone the complainants were reminded, for Rs. 160/- twice on telephone on 7.6.90 at 10.29 A.M. to Shri Bhajan Lal and at 3 RM. to Shri Surendra. THE payment was not received though the reminders were given on 7.6.90. Payments were not received upto 26.6.90 and so both the telephones were temporarily disconnected under the provisions of Indian Telegraph Act, 1885. Reference was made to Rule 443 of Indian Telegraph Rules, 1951 and it was submitted that after disconnection of the. telephone according to P & T Vol. XIV para .215 the Accounts Officer has been authorised to charge rent and recover security deposit and so the amount was realised for which the department was fully authorised. THE action taken by the opposite parties was said to be justified on the basis of the rules contending that nothing illegal was done. Parties did not produce any oral evidence before the District Forum as is evident from the proceedings dated 25.10.90 wherein it is recorded that the complainant had already filed the affidavit in support of the complaint and he did not want to adduce any other evidence. On behalf of the opposite parties it was stated that they don''t want to file any affidavit. THE opposite parties submitted written arguments before the District Forum on 18.2.91. THE complainant gave reply to the written arguments of the opposite parties. THEreafter the District Forum passed the impugned order on July 3,1991 making the following directions :- (1) that a sum of Rs. 15,450/- which was deposited by the complainant is to be adjusted by the opposite parties in the subsequent bills. (2) that a direction for the refund of Rs. 320/- which were deposited by the complainants for reconnection and (3) that a sum of Rs. 10,000/- as compensation at the rate Rs. 5,000/- per telephone was ordered to be paid to the complainants.

The opposite parties did not remain satisfied with the order and they have filed the appeal assailing the order of the District Forum, Bikaner. Learned Counsel appearing for the appellants has raised the following contentions :- (1) that the District Forum seriously erred in relying on the affidavit of the complainant in its order dated 3.7.91 as no copy of the affidavit was delivered to the appellants and as such they were deprived of their legal right to controvert the averments made in the affidavit. (2) that the District Forum was not right in holding that on account of certain disputes which Mr. R.C. Gupta, an Assistant Finance Officer had with the complainants, the appellants have taken action against the complainant. It further erred in observing that the appellants should have filed the affidavit of Shri R.C. Gupta. (3) that the District Forum committed an error when it held that the telephone was disconnected without notice and that the disconnection of the telephones on 25.6.90 was not proper. (4) that the direction of the District Forum for adjustment of Rs. 15,450/- in future bills is illegal and unwarranted and (5) that the award of Rs. 10,000/- as compensation is illegal, arbitrary, capricious and it is not based on any material on record. It lost sight of the fact that the telephone being disconnected virtually for one day and such huge amount at the rate of Rs. 5000/- for one day for two telephones is against the well recognised principles for the award of compensation under Sec. 14(1)(d) of the Act.

Nobody appeared on behalf of the respondent on 19.2.92 and, therefore, we were left with no alternative but to hear the arguments of the learned Counsel for the appellants.

AN affidavit in support of the complaint was submitted with the complaint. A perusal of the proceedings dated 25.10.90 shows that it was stated on behalf of the complainant that affidavit has already been filed previously and the complainant does not want to file any other affidavit. On that day also opposite parties stated that they don''t want to file any affidavit. At the time when the proceedings dated 25.10.90 were written the opposite parties did not raise any objection that they have not received the copy of the affidavit when it was stated that affidavit had already been filed previously. No such objection was raised at any subsequent stage during the pendency of the complaint. There is no force in the submission of the learned Counsel for the appellants that the copy of the affidavit has not been received and no adverse inference could be drawn against them for failure of the opposite parties-appellants for not filing the affidavit of Shri R.C. Gupta. The fact remains that certain averments were made and they were denied by the opposite parties-appellants. On the basis of the affidavit of the complainant in these circumstances adverse finding cannot be recorded against the appellants. Mr. U.D. Sharma submitted that Shri R.C. Gupta was not employed in the Telecom Department, Bikaner in any capacity and, therefore, the appellants were not having any knowledge about the identity and as such they have no option but to deny the averments and it was impossible for the appellants to have procured an affidavit from Shri R.C. Gupta. It was for the Complainant-respondent to discharge the burden that Shri R.C. Gupta was an employee of the Department. He pressed that on enquiries being made Shri R.C. Gupta was an employee of the Indian Telephone Industries Ltd., a Company incorporated under the Indian Companies Act which is a distinct and separate entity, not in any manner connected with the Telecom Department and as such he cannot influence the actions taken by the appellants in the discharge of their statutory duties and functions. We do not want to make a deep investigation into this contention for the simple reason that we have to see whether adjudication of the dispute is possible on the basis of the material on record.

THE District Forum has held that the disconnection of the telephones of the complainant was improper for no amount was outstanding against the complainant. THE case of the appellants is that bills for Rs. 160/- for telephone No. 3747 and 3522 were sent to the complainant-respondent on 25.6.90 and as the bills were not paid within the stipulated period oral intimation was conveyed to the complainant on 7.6.90 through Shri Bhajan Lal on telephone No. 3522 and Shri Surendra Prakash on phone No. 3747. THE registered letter is said to have been delivered on 25.4.90. THE copy of the letter was not before the District Forum. However the photostat copies of the acknowledgment and register of parcel branch were produced before the District Forum. A demand for Rs. 8310/- in respect of telephone No. 3522 and Rs. 7140/- in regard to telephone No. 3747 including Rs. 160/- towards charges for Bold letters in the Directory and Rs. 100/- as re-connection fee for each of the telephones was made. According to the opposite parties-appellants the security amount comes to Rs. 8050/- for telephone No. 3522 and Rs. 6880/- for telephone No. 3747. THE amounts were deposited by the complainant on 26.6.90 without raising any demur or protest. It may be recalled that the registered letters were sent on 25.4.90 and oral information was conveyed on 7.6.90. THE disconnection took place on 25.6.90 and the amount was deposited on 26.6.90 and the. telephone was restored on the, same day i.e. on 26.6.90. Now the question is whether the complainants were coerced to deposit the security amount after the disconnection of the telephone. In this connection we may read rules 440, 443 and 445 of the Indian Telegraph Rules, 1951 which are as follows :- "440. Responsibility of Subscriber to pay bills. (1) Save as provided in sub-rules (2) and (3), a subscriber shall be personally responsible for all calls (local and trunk) made and phonograms sent for onward transmission from his telephone and for the payment of call charges thereof. (2) For collect calls and reversed charge calls the charge shall be. payable by the called subscriber. In case the called subscriber on a colled call does not agree to pay the charges the call will not be set up but an appropriate charge to cover the work done by the exchange shall be payable by the subscriber from whose telephone the call was booked or by the person who booked the call from a public call office. (3) For calls made with credit card facility the charge shall be payable by the subscriber in whose name the credit card has been issued and whose telephone number has been specified in the credit card for debiting the charges. 443. Default of payment. - If, on or before the due date, the rent or other charges in respect of the telephone service provided are not paid by the subscriber in accordance with these rules, or bills for charges in respect of calls (local and trunk) or phonograms or other dues from the subscriber are. not duly paid by him; any telephone or telephones or any telex service rented by him may be disconnected without notice. THE telephone or telephones or the telex so disconnected may, if the Telegraph Authority thinks fit, be restored if the defaulting subscriber pays the outstanding dues and the reconnection fee together with the rental for such portion of the intervening period (during which the telephone remains disconnected) as may be prescribed by the Telegraph Authority from time to time. THE subscriber shall pay all the above charges within such period as may be prescribed by the Telegraph Authority from time to time. 445. Security for charges - THE Telegraph Authority may, a! any time, before or during the period for which a telephone or other like service is provided, require a subscriber to deposit as security such amount as it may consider necessary and if the subscriber fails to comply with such demand within such period as it may specify, the Telegraph Authority may withdraw the service and remove any telephone or oilier apparatus belonging to the Telegraph Authority. Where the security deposit is paid, any amount due from the subscriber by way of fee or other charges under these rules may be adjusted against the amount so deposited".

Rule 440 deals with the responsibility of the subscribers to pay bills. A perusal of Rule 443 shows that on or before the due date amongst other charges in respect of the telephone service .provided are not paid by the subscriber or other dues are not duly paid by him, telephone or telephones rented by him may be disconnected without notice. Thus for default of payment notice is not envisaged. It is permissible under Rule 443 that after disconnection if the Telegraph Authority thinks fit the telephone may be restored if the subscriber pays of deposits the outstanding dues and the reconnection fee together with rental of such portion for the intervening period. Rule 445 provides for security charges. According to it the Telegraph Authority at any time before or during the period for which the telephone or other service line is provided require a subscriber to deposit such amount as it may consider necessary and if the subscriber fails to comply with such demand within the period as specified by the Telegraph Authority, it may ask for depositing Security charges. Thus under Rule 445 recovery of security charges is permissible. It is the discretion of the Telegraph Authority to ask for it. Not only that before the District Forum para 215 relating to deposits, photostat copy thereof was submitted. Sub clauses (a) and (b) of Clause 5 of para 215 are material for our purpose. It is as follows :- "5. Security Deposit: (a) For providing telephone service and/or any special facility subscribers may be required to pay at any time a security deposit of such amounts as is considered necessary. (b) The Accounts Officer has the discretion to call for a security deposit of such amounts as he may consider necessary from the existing defaulting subscribers whose financial soundness is considered as unreliable. The deposits may be obtained freely from the subscribers who show dilatoriness in the settlement of their bills. In such a case a Demand Note for the deposit amount will be sent to the subscriber under the covering letter and the subscriber asked to make the payment within a specified time. When the payment is received and intimated by the post office or the Divisional Office counter the amount of the deposit will be noted in the register of Deposits in Form ACE. 100. If the subscriber fails to comply with the demand within the specified period, the Telegraphs Authority shall not provide or may withdraw the service as the case may be and remove the telephone or other apparatus, belonging to Telegraph Authority. Where the security deposit is paid, any amount due from subscriber by way of the fees or the charges under these rules will be adjusted against the among so deposited".

It is clear that bills Ex.1 & Ex.2 for Rs. 160/- which were sent to the complainants and they were received by them. They failed to make payment. Those bills related to the charges for printing names in block letters in the Directory which fall in the category of other dues. It is evident that they were received. We don''t want to enter into a detailed investigation in view of the fact that they were received and the acknowledgments have been produced certified by the Post Master that they were delivered. Oral reminder is said to have been given on 7.6.90 for which the documents have been produced. The law as it stands today if the dues are outstanding then without notice the telephone can be disconnected under Rule 443. The decisions of Guahati High Court and Gujarat High Court were considered and we have not subscribed to the view taken by the Guahati High. Court. The District Forum was, therefore, not right in holding that the disconnection of the telephone as made was improper because it was permissible to disconnect the telephone under Rule 443 of the Indian Telegraph Rules, 1951.

AS stated above under para 215 (5) the security can be demanded. Rule 445 gives discretion to the Telegraph Authority. There is no doubt that under Rule 445 the Telegraph Authority can demand from the subscriber consisting of security such amount as it may consider necessary. This is the discretionary power which has to be exercised by the Telegraph Authority not arbitrarily or in high handed manner. Para 215 (5) (b) mentions useful guidelines for demanding security from a defaulting subscriber.

WE must point out that under Rule 445 the authority is a Telegraph Authority whereas under Rule 215 (5) (b) it is the Accounts Officer. Before we proceed further we may pause here. It is not in dispute as per finding recorded by the District Forum that the complainant had committed default in payment of Rs. 320/- of two telephones at the rate of Rs. 160/- and this falls in the category of other dues mentioned in Rule 443. 215(5) (b) gives discretion to the Accounts Officer to demand security amount as he considers necessary from the existing defaulting subscribers : (1) whose financial soundness is considered as unreliable of defaulting subscribers and default should have been completed and (2) they are not financially sound so as to make payment in future as they have committed defaults in payment of the bills or other dues.

The difficult task is how to reconcile Rule 445 and para 215 (5) (a) & (b). In both the provisions under Rule 445 and para 215 (5)(a) and 215(5)(b) the expression "may consider necessary" has been used. This requires an objective approach while demanding the amount of security. The object of rule 445 is that while providing the telecom services to the public the Department has to take some precautions to safeguard the interest of the Department. By making an objective approach the officers of the Department have to take into consideration the financial position of the subscriber, the status of the person and whether he has committed any default and what is generally his bill. The purpose for which the power can be invoked is to secure the charges of the bills in respect of the facilities provided. See AIR 1972 Delhi 5. The amount that was outstanding against the complainant-respondent is not with respect to the telephone rental or trunk call charges or for the apparatus used by him. The payment due was in respect of the entries made in the Directory. The amount of Rs. 320/- is trival one it is not the case of the Department that the complainants are defaulters or they are financially weak. In the facts of the case and surrounding circumstances we are firinly of the opinion that the opposite parties-appellants have not exercised their discretionary power under Rule 445 or for that matter under para 215 (5) (b) in a proper manner after considering the relevant facts and factors. However the complainant has deposited security amounts of Rs. 8050/- for telephone No. 3522 and Rs. 6880/- for telephone No. 3747. The District Forum has given a direction that these amount should be adjusted in future bills. We direct that if the amounts have been adjusted towards the bills, nothing need be done and if the entire amount has not been adjusted then subject to the amount which is outstanding against the complainants in respect of the bills, the balance should be refunded by the opposite parties-appellants to the complainants-respondents within one month from the date of the receipt of the order. At the risk of repetition we may state that if the entire amount has been adjusted then the complainants have to deposit the amount of the bills as and when received. We however make it clear that it will be open to the opposite parties-appellants to demand security from the complainants-respondents in future if they commit any default in payment or does not settle the bills in time. This order will not come in the way of the opposite parties-appellants. As stated above the telephone was rightly disconnected on 25.6.90 on account of outstanding bills and other dues under Rule 443. In this case notice was given in accordance with Rules 441 and 442 and so reconnection fee was rightly charged for both the telephones. The opposite parties are not liable to refund the reconnection amount of Rs. 320/- .

The District Forum has awarded Rs. 5000/- for each of the telephones i.e. Rs. 10,000/- as compensation keeping in view that the telephone was wrongly disconnected and the complainant was deprived of the use for one day. The amount of compensation awarded to the complainants is excessive, exorbitant and arbitrary and against the well recognised principles for award of compensation and quantification thereof. As held by us, the telephones of the complainants on account of the dues were rightly disconnected and soon after the deposit of the amount, they were restored. Therefore no amount of compensation can be awarded to the complainant for wrongful disconnection of the telephones. We find no justification for the award of compensation. Therefore the direction for payment of Rs. 10,000/- as compensation is set aside.

THE result is that we maintain the direction in terms of what has been stated above in regard to Rs. 14,930/- only and set aside the direction relating to the refund of Rs. 320/- . The appeal is allowed and the order dated 3.7.91 passed by the District Forum, Bikaner in Complaint Case No. 183/90 is modified to the extent stated hereinabove. The parties are left to bear their own costs. Appeal allowed.