Monopolies and Restrictive Trade Practices Commission
Mrs. Bandana Chadha And Ors. (Legal ... vs Sheri-Louise Slimming Centre on 14 May, 1990
Equivalent citations: [1991]70COMPCAS712(NULL)
JUDGMENT
H.C. Gupta, Acting Chairman
1. This order shall dispose of an application under Section 12B read with Regulation 84(c) of the Monopolies and Restrictive Trade Practices Act, 1969, for recovery of compensation for loss caused by the respondent. The applicant has claimed a sum of Rs. 4,07,110. It is stated in the application that he joined the slimming course of the respondent on April 4, 1985, under their 1056 anniversary discount scheme and paid a sum of Rs. 4,410 as membership fee, vide receipt No. 265, dated April 4, 1985, and also paid a further sum of Rs. 2,000 on May 15, 1985 ; he further says that he also paid a sum of Rs. 700 on May 28, 1985.
2. The applicant states that, under the said scheme of the respondent, he was enrolled as their member bearing No. C-21 and was periodically advised by the doctors and other staff to undergo the treatment as per specifications provided. As per the programme of the respondent, the applicant was allowed a cup of milk, that too skimmed milk, and for lunch he was provided with a meal supplement of which he was allowed to eat only half a packet, in between he was not supposed to eat anything and for his evening food, they had prescribed one slice of cucumber and papaya and for dinner the only meal prescribed by them was one chappati with either dal or boiled vegetables.
3. The applicant says that the advertisement of the respondent in newspapers, dailies and other magazines is completely misleading as the advertisements clearly claim that in order to reduce weight, one does not have to undergo any dieting, no exercise and no drugs ; doctors and other staff of the said centre prescribed treatment for each individual and under that treatment, for slimming dieting is a must, as the respondent fully controls one's intake of food throughout the day. Further, in case the weight was not falling, they advised you to go for walk in the morning or do some exercises. The applicant says that the money which they charged was collected under fraudulent means as, at the start of the course, the respondent did not reveal that the applicants will have to follow strict dieting. As per the programme of the slimming centre of the respondent, the applicant says that his weight was to be reduced by 10 kgs. within one month, but even after following the course honestly and regularly for nearly two months, the weight reduction could not be achieved. Further, due to heavy dieting and control of food intake, the applicant developed serious acidity pro-blems the direct result of which was that the applicant could not take any normal liquid diet which suited him before he joined the course and intake of solid food was out of the question. The applicant says that for the whole day his head used to spin and he would feel heaviness in the eyes which affected his work output adversely. The applicant further says that, because of remaining hungry, his liver became weak and he suffered low blood-pressure and anaemia. On an enquiry from the respondent, he was told that these are the early symptoms of weight losing process and that he would be alright very soon. That on account of the above reasons, he had to leave the treatment in the middle.
4. The applicant says that even after leaving the course he could not walk properly and started feeling extremely exhausted even after taking the smallest strain of work and pain in his abdomen and chest started increasing day by day. The tests conducted by the doctors confirmed that ulcer had developed in his oesophagus which was the direct result of starvation. A photostat copy of the doctor's report is annexed with the application as annexure 'D'. The applicant also in the application speaks about his mental agony and says that his friends and family members considered him a totally irritated personality which affected his standing in both professional and social circles. In short, the allegation in the application is that the respondent had ruined him both physically and mentally and the respondent has done this wrongful act with a motive to earn money. The respondent played with his life and the lives of hundreds of other people.
5. Notice of this application was sent to the respondent. The respondent filed a reply and the applicant also filed a rejoinder. In reply, the respondent totally denied the allegations made by the applicant in his application and also challenged the jurisdiction of the Monopolies and Restrictive Trade Practices Commission to entertain the application. The respondent, inter alia, took the objection that the programme for weight reduction rendered by the respondent under a contract of personal service is expressly excluded from the provisions of the Monopolies and Restrictive Trade Practices Act; the respondent also contended in reply that it is a condition precedent to any claim being made under Section 12B of the Act that the respondent has been found guilty of indulging in an unfair trade practice and, in the absence of any such finding against the respondent, the present application is not maintainable.
6. After the pleadings were completed, the following issues were framed :
1. Is the application not maintainable for the reasons stated in preliminary objection No. 1 contained in the reply of the respondent ?
2. Did the respondent indulge in unfair trade practices ?
3. What is the effect of an undertaking of respondents Nos. 5 to 8 in unfair trade practices enquiry No. 23 of 1985, on issue No. 2 ?
4. To what amount of compensation, if any, is the applicant entitled?
7. The case was fixed for evidence of the applicant to be recorded on October 20, 1987. The applicant filed the affidavits of two witnesses and learned counsel for the respondent communicated to the Commission that he wants to cross-examine them. Learned counsel for the applicant also tendered in evidence one document which is admitted by the respondent and the same was exhibited as A-1. Learned counsel for the respondent did not cross-examin'e the witnesses of the applicant in spite of several opportunities given by the Commission and, ultimately, vide order dated January 14, 1988, it was ordered that cross-examination stands closed and the case was posted for the evidence of the respondent to be recorded on September 8, 1988, at 2.30 p.m. On September 8, 1988, learned counsel did not adduce any evidence and sought an adjournment. The adjournment was granted on payment of Rs. 500 as costs. On February 10, 1989, which was the date fixed for the evidence of the respondent, the respondent did not appear either in person or through his advocate. The respondent did not pay the costs which was imposed upon him for non-production of the evidence. The proceedings against the respondent were ordered ex parte. The case was fixed for hearing on January 17, 1990. The arguments of the case were finally heard on April 6, 1990, and orders reserved.
8. Issue No. 1 : Is the application not maintainable for the reasons stated in preliminary objection No. 1 contained in the reply of the respondent ?
9. In preliminary objection No. 1, the respondent contended that the service rendered by the respondent under a contract of personal service is expressly excluded from the provisions of the Monopolies and Restrictive Trade Practices Act, 1969, and as such Section 12B of the Monopolies and Restrictive Trade Practices Act is not attracted. The term "service" has been defined in Section 2(r) of the Monopolies and Restrictive Trade Practices Act which reads as under :
"2(r). 'Service' means service of any description which is made available to potential users and includes the provision of facilities in connection with (banking, financing, insurance, transport, processing) supply of electrical or other energy, board or lodging or both, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service".
10. As per the above definition, what has been excluded from the definition of service is, namely :--
(i) rendering of any service free of charge, and
(ii) under a contract of personal service.
11. In the instant case, there is no contract of personal service entered into between the applicant and the respondent, nor can a contract of personal service be inferred from the attending circumstances. As is seen, everything started with the advertisement of the respondent in newspapers, dailies and other magazines and the applicant opted for his treatment and in no document tendered by the applicant or the respondent, there is any mention of a personal contract; by its very nature, when the respondent has employed so many employees to assist him, it cannot be a contract of personal service. The issue is, therefore, decided against the respondent.
12. Issues Nos. 2 and 3 : These two issues are inter-related and, therefore, I shall discuss them together:
13. It is seen that UTP Enquiry No. 23 of 1985 was initiated on the complaint of Consumer Education and Research Centre against the eight respondents. Respondent No. 6, in Trade Practices Enquiry No. 23 of 1985, is the respondent in the present application for compensation. The notice of enquiry in Enquiry No. 23 of 1985 was sent to all the eight respondents and, thereafter, respondents Nos. 5 to 8 filed an application before the Commission in that enquiry (Enquiry No. 23 of 1985) under Section 36D(2) of the Monopolies and Restrictive Trade Practices Act. In that application, respondents Nos. 5 to 8 which includes the present respondent clearly stated that they are willing to undertake such terms as are acceptable to the Commission to ensure that the slimming centre advertised by them do not indulge in unfair trade practice within the meaning of Section 36A of the Monopolies and Restrictive Trade Practices Act. The aforesaid application of respondents Nos. 5 to 8 including the present respondents were accepted under Section 36D(2) of the Monopolies and Restrictive Trade Practices Act However, it was made clear that this order will not affect in any way the applications under Section 12B of the Monopolies and Restrictive Trade Practices Act which have already been filed and which might be filed afterwards. The names of the persons who filed the application under Section 12B have also been mentioned in the order of the Commission dated February 19, 1987. The names mentioned are :--
Mr. Harish Chadha, S/o. late Sh. Bharat Ram Chada ;
Miss Neeru Gupta ;
Miss Neeru Anand ; and Shri Rajesh Batra.
14. In view of the clear admission of the respondent in the application under Section 36D (2) of the Monopolies and Restrictive Trade Practices Act filed in Enquiry No. 23 of 1985, we hold that the respondent has been indulging in unfair trade practices and the undertaking of respondent No. 6 in the Unfair Trade Practice Enquiry No. 23 of 1985 is binding upon the respondent and operates as res judicata.
15. Issue No. 4 : Now, the most vital question before us is as to what amount of compensation, if any, is the applicant entitled ?
16. The applicant has claimed a sum of Rs. 4,07,110 in his application under Section 12B of the Monopolies and Restrictive Trade Practices Act.
In support of this, the applicant has placed his own affidavit before the Commission. In para 4 of the affidavit, he has stated that he has claimed a sum of Rs. 7,110 paid on account of his membership for joining the slimming course and damages to the tune of Rs. 4,00,000 on account of pecuniary and non-pecuniary damages and Rs. 2,500 on account of costs for bringing the matter before the Hon'ble Commission. The details of the pecuniary damages are given below : --
17. Though as per details as given in annexure 'A' to annexure 'C', his total comes to Rs. 5,66,000, he says that he is only claiming on the basis of a conservative estimate a sum of Rs. 4,00,000.
18. "Compensation" in Section 12B is used in the sense of reparation for the loss or damage caused. The compensation is thus a monetary equivalent of any loss or damage and may include, namely :--
(i) the actual pecuniary loss sustained which can be quantified with precision ;
(ii) the indirect pecuniary loss which is nevertheless consequential to the alleged indulging in of an unfair trade practice, i.e., loss of profits, loss of reputation, loss of business or loss of credit;
(iii) the mental suffering like anxiety, worry, tension ; (iv) bodily suffering like pain, illness, loss of limb, etc.
19. The term "loss" refers to both pecuniary and non-pecuniary loss. "Damages" refers to the disadvantages that a person suffers as a result of the act or omission by another. While this is so, the measurement of compensation is probably one of the difficult aspects of the law as it stands at present, as the law nowhere provides any suitable yardstick to measure compensation for Joss or damage envisaged under Section 12B. In the absence of such a statutory yardstick, what should be awarded as compensation, or more rightly, what should be the proper measure of compensation becomes very important. It is well-settled law that all losses or damages are not capable of being compensated. Only those which have a causal connection with the unfair trade pratice or which are the proximate (and not remote) consequences of such unfair trade pratices are compensable. Subject to this broad and acceptable parameter, what should be the measure of compensation yet remains to be resolved, for, the measurement of compensation. In contracts is different from measurement of compensation in tort. In an action for damages for fraudulent misrepresentation, the amount of damages to which the applicant is entitled is, prima facie, "the amount by which the price he has paid exceeds the true value of the thing bought at the time when he bought it". A basic principle for measure of damages in tort is that there should be restitution in integrum. In an action for deceit, the proper starting point for the assessment of damages is to compare the position of the applicant as it was before the fraudulent statement was made to him with his position as it became as a result of reliance upon the statement. An important factor to be taken into account is whether the victim has endeavoured to mitigate the loss arising from the tortious act. The applicant must take reasonable steps in this regard. In short, it can be generally stated that restitution in integrum is the object of damages for pecuniary loss and compensation is the object of damages for non-pecuniary loss though both may overlap many a time. While this is so, the peculiar facts of this compensation application are that the proceedings against the respondents were ordered ex parte as on February 10, 1989, the respondent did not appear either in person or through his advocate. Whatever meagre evidence by way of affidavit or otherwise has been adduced by the applicant remains unrebutted. In view of this, I have little choice to undertake any scrutiny of the evidence produced by the applicant. As stated earlier, he has estimated a total loss of Rs. 5,66,000 ; however, he claimed only Rs. 4,07,110.
20. I have gone through the affidavit; I, therefore, hold that the applicant is entitled to a payment of Rs. 4,07,110 owing to the loss suffered by him as a result of unfair trade practice of the respondent. The applicant is also allowed a sum of Rs. 2,500 as claimed by him.
21. It is decreed accordingly in favour of the applicant and against the respondent. The present application for grant of compensation stands disposed of. A copy of this order shall be sent to the respondent for his information and for making payment. A copy of this shall be sent to the applicant also for his information and record. A copy of this order shall also be supplied to the Director-General.
22. Pronounced in the open court.