State Consumer Disputes Redressal Commission
M/S Blue Beacon Infosys vs Punjab Ex Servicemen Corporation on 24 May, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.395 of 2015
Date of Institution: 10.04.2015
Order reserved on: 22.05.2017
Date of Decision : 24.05.2017
1. M/s Blue Beacon Infosys, Blue Beacon Complex, behind
Niper, Sector-67, SAS Nagar, Mohali.
2. Sh. T.S. Mann, Director M/s. Blue Beacon Infosys, Blue
Beacon Complex, behind Niper, Sector-67, SAS Nagar,
Mohali.
.....Appellants/Opposite Parties
Versus
Punjab Ex-servicemen Corporation (PESCO), its head office at
SCO No.89-90, Sector 34A, Chandigarh, through its General
Manager (Administration).
..........Respondent/complainant
Appeal against order dated
26.02.2015 passed by the District
Consumer Disputes Redressal
Forum, Mohali.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Smt. Surinder Pal Kaur, Member Present:-
For the appellants : Sh. P.S. Grewal, Advocate For respondent : Sh. I.S. Sidhu, Advcoate .......................................... F.A. No. 395 of 2015 2 SURINDER PAL KAUR, MEMBER :-
The appellants (the OPs in the complaint before District Forum) have filed this appeal against order dated 26.02.2015 of District Consumer Disputes Redressal Forum Mohali, (in short the 'District Forum'), vide which, complaint was allowed and OPs were directed to remove the defects and deficiencies, pointed out in Ex.OP-8 to the satisfaction of complainant against payment of balance amount of Rs.3,00,000/- within 15 days from the date of receipt of the order failing which to refund an amount of Rs.3,00,000/- along with interest @ 9% p.a. from the date of payment till actual payment and to pay lump sum compensation of Rs.50,000/- to the complainant for harassment, mental agony including costs of litigation. Respondent in this appeal is complainant and appellants of this appeal are OPs before the District Forum and they be referred as such hereinafter, as arrayed in the complaint.
2. Complainant filed the complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that it is a corporate body under the name and style of Punjab Ex-servicemen Corporation with perpetual succession and common seal under the Punjab Ex-Servicemen Corporation Act,1978. In response to the tender notice dated 04.11.2010, published in newspapers "The Tribune" and "Hindustan Times" dated 04.11.2010 by complainant, OPs submitted its technical and commercial proposal for software F.A. No. 395 of 2015 3 solution i.e. development/upgradation/conversion of existing software, vide its offer dated 15.11.2010 at the total cost of Rs.4 lacs for the following key modules:
i) payroll accounting & billing system;
ii) financial accounting system;
iii)payroll accounting system;
iv) loan accounting system.
Vide letter No.611/AD/PESCO dated 21.01.2011, OP No.1 was selected for Development and Up-gradation of existing DOS based software to web-based technology with WINDOWS at the Head Office of the complainant. The said software is to be used by the complainant corporation for its own use and not for any commercial purpose. OP No.1 also agreed to migrate, the existing data for the period from April, 1991 to April, 2011 to the tune of Rs.2 lacs. As per the agreement, complainant paid Rs.1.50 lacs on 11.02.2011 as 25% price of the software and further Rs.1.50 lac was paid on 06.07.2011. The first two modules were required to be submitted and got approved within a period of two months from the kick-off stage, but OP No.1 failed to comply with the agreed terms by not delivering first two modules within the prescribed time. He wrote letters dated 05.12.2011 and 07.01.2012, regarding services of the modules. But, OPs failed to fulfill their commitment and complete the work job, as per the agreement. Complainant was constrained to cancel the job order, vide letter No.611/AD/PESCO dated 27.05.2013 and requested F.A. No. 395 of 2015 4 the OP to refund the advance amount of Rs.3 lac with interest with damages on account of inconvenience and loss suffered by complainant. OP No.1 failed to complete the work/job to the satisfaction of the complainant, despite availing a period of more than 2 years. OP No.1 not only failed to complete the job as per agreed terms but deleted whatever little data was upgraded by it. This act amounts to unfair trade practice and deficiency on the part of OP No.1. The complainant issued legal notice dated 22.07.2013 to OPs in this regard. Hence, complaint was filed seeking following reliefs against OPs:-
i. to refund Rs.3 lac along with interest @ 18% p.a. from the date of payment i.e. 11.02.2011, till actual realization:
ii. to pay Rs.10,00,000/- as compensation on account of mental tension and harassment suffered by complainant.
3. Upon notice, written reply was filed by OPs No.1&2 by raising the preliminary objections that complainant had not approached District Consumer Forum with clean hands and suppressed the material facts from it. Complainant is not a consumer as defined under the Act. Complainant carries on commercial activities/business, as he employed more than 8000 employees in his office under it to run the business in the territories of Punjab, Haryana, Himachal Pradesh and New Delhi.
Complainant-corporation pays EPF and gratuity to its employees as well. It earns huge profits. On merits, it was averred that OPs F.A. No. 395 of 2015 5 gave a proposal for Redevelopment/Upgradation and Conversion of Existing DOS-based Software to windows based software at PESCO, Chandigarh, but denied this fact that OP No.1 agreed to migrate the existing data from April, 1991 to April, 2011 at an additional cost of Rs.2,00,000/-. OPs further submitted its techno- commercial proposal bid dated 15.11.2010 and complainant pressurized OPs to submit a proposal form, migration of data previous software to new software, but they were not aware of the structure and type of old database nature quality and quantity of data to be migrated. Migration job was not mentioned in tender invited by the complainant nor mentioned in letter dated 21.01.2011 written to OPs mentioning the selection of software development. It was imposed then at later stage, under compulsion. Under pressure, they submitted commercial proposal for data migration of "Accounts data only" for Rs.2,00,000/-. It was specifically mentioned in proposal that data migration work would start after successful delivery and implementation of proposed windows. The order for that windows-based software development and implementation was placed for Rs.4,00,000/-, whereas subsequent order for accounts data migration was placed for Rs.2,00,000/-, therefore, the total amount of the orders was Rs.6,00,000/- only. First payment of Rs.1,50,000/- i.e. 25% of the total order value was paid and Rs.1,50,000/- was paid to OP No.1 at the submission and acceptance of Software Requirement F.A. No. 395 of 2015 6 Specification (SRS) on 06.07.2011. Delay was not on the part of OPs rather it was on the part of the complainant as once SRS document was submitted by the OPs dated 11.05.2011, the same was to be returned as soon as possible, but complainant did not return the SRS document with approval after one month. OPs wrote number of letters to complainant to provide required details, which were mandatory for the completion of the work, but complainant did not provide the same. Inspite, of completion of work, complainant refused to pay the balance amount of Rs.3,00,000/- to OPs. Complainant just filed the false complaint to harass OPs. Other allegations raised in the complaint were denied by OPs. They prayed for dismissal of complaint with costs.
4. The complainant tendered in evidence affidavit of D.S. Mann, General Manager, Ex.CW1/1 and additional affidavit Ex.CW1/2 along with documents Ex.C-1 to C-9 and closed his evidence. As against it, OPs tendered in evidence affidavit of T.S. Mann, Director of M/S Blue Beacon Infosys Ex.OP-1/1 along with documents Ex.OP-1 to OP-10 and closed their evidence. On conclusion of evidence and arguments, the District Forum allowed the complaint against OPs, as detailed in impugned order. Dissatisfied with the above order of the District Forum, OPs now appellants filed this appeal against the same.
5. We have heard the learned counsel for the parties and have carefully gone through the record on the file. F.A. No. 395 of 2015 7
6. Firstly, we have to determine this point as to whether complaint is consumer and OPs are service providers to him in this case. It was argued by the counsel for OPs that District Forum wrongly accepted the complaint, whereas it is a corporation being a corporate body carrying on its business for commercial purposes only to generate profits. It was further canvassed that District Forum failed to appreciate the controversies and erroneously returned the findings that complainant is consumer of OPs as it availed the services of OPs to maintain the salary and ancillary accounts of its 5,000 employee. That fact itself shows that complainant corporation is having numerous employees for running its business. The forceful submission of OP is that this Forum is not competent to decide the case on the premise that complainant is not consumer of OPs.
7. On the other hand, counsel for the complainant urged that after considering all the facts, District Forum rightly allowed the complaint, as OPs were liable to indemnify the loss to the complainant. They prayed for dismissal of the appeal.
8. We have gone through the pleadings of both the parties and appraised the evidence produced by them in support of their cases. The first and foremost point to be decided is, whether the complainant corporation falls within the definition of consumer as prescribed under Consumer Protection Act,1986. It was held by the Hon'ble Supreme Court in (New India F.A. No. 395 of 2015 8 Assurance Co Ltd. vs. Shri B.N. Sainani) (1997) (2) CLT 271 (SC) that the Consumer Protection Act is not a general law for all remedies and it is for the protection of the consumers, as defined under the Act and to succeed in the case, the complainant must show that he is "consumer". The 'consumer' has been defined in Section 2(1)(d) of the Act; which reads as under:-
"2(1)(d) "consumer" means any person who,-
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;
Explanation - For the purpose of this clause, "commercial purpose' does not include use by a person of F.A. No. 395 of 2015 9 goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-
employment;"
9. The complaint is filed by corporation through its administrator Sh. D.S. Mann as pleaded in para no 2 of the complaint. OPs submitted the Technical Commercial proposal for Software Solution, vide its offer dated 15.11.2010 for Development / Upgradation / Conversion of existing software of complainant. As per explanation appended to Section 2(1)(d) of the Act by the legislature, the goods must be purchased or service must be availed exclusively by a person for earning his livelihood by means of self employment. Unless and until these ingredients as contained in explanation (supra) are pleaded and proved on the record, the complainant cannot be considered as a consumer. It is mandatory to prove the above essential ingredients before a person can be held to be a consumer under CP Act. The services availed by complainant have been obtained in connection with the business affairs of complainant-corporation and, as such, the services of the opposite parties was hired by the complainant for commercial purposes with the sole aim of generating profits. A corporate body is not supposed to earn its livelihood exclusively by means of self-employment, as required by the Act. It is thus that complainant does not fall within the definition of "Consumer", as prescribed under the Act. In the facts and circumstances of F.A. No. 395 of 2015 10 the case, since complainant is not consumer hence, complaint before the Consumer Forum is not competent.
10. For the reasons recorded above, the appeal of the appellant is accepted by setting aside the order of District Forum Mohali dated 26.02.2015 on the sole ground that there is no relationship of consumer and service provider between the parties, cognizable by Consumer Fora under the Act. Consequently, the complaint of complainant is dismissed on the ground that complainant is not proved to be consumer of OPs. The complaint dehors the jurisdiction of the Consumer Forum. The complainant shall be at liberty to approach the competent Forum/Court for redressal of its grievance. Complainant can invoke provision of Section 14 of Limitation Act, 1963 before the Competent Fourm/Court to seek exclusion of the period spend before the Consumer Forum by it.
11. The Appellant No.1/OP No.1 had deposited an amount of Rs.25,000/- with this Commission at the time of filing this appeal. This amount with interest, which accrued thereupon, if any, be remitted by the registry to appellant No.1/OP No.1 by way of a crossed cheque/demand draft after the expiry of 45 days from the date of receipt of copy of the order.
12. Arguments in this case were heard on 22.05.2017 and the order was reserved. The certified copies of order be communicated to the parties, as per rules.
F.A. No. 395 of 2015 11
13. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(J.S. KLAR)
PRESIDING JUDICIAL MEMBER
May 24 ,2017 (Surinder Pal Kaur)
DB MEMBER