State Consumer Disputes Redressal Commission
Smt.Ashalata vs M.G.Agro Brk Energy Foods Ltd. on 2 May, 2017
M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PLOT NO. 76, ARERA HILLS, BHOPAL (M.P.)
CC No. 52 / 2016.
FILED ON : 2.7.2016
DECIDED ON : 2.5.2017.
Smt. Ashalata,
w/o Shri Balkrishna Shah,
R/o G- 2, Prabhuvandna Apartment,
F.G. - 33/34, Scheme No.54,
Vijay Nagar, Indore.
.... Complainant.
Versus
M. P. Agro B.R. K. Energy Foods Ltd.,
through Director
Shri Rahul Kumawat
s/o Shri Bherulal Kumawat,
R/o 71, B & C Industrial Area No.1,
A. B. Road, Dewas (M.P.).
.... Opposite Party.
BEFORE:
HON'BLE SHRI JUSTICE RAKESH SAKSENA, PRESIDENT
HON'BLE SHRI SUBHASH JAIN, MEMBER
HON'BLE SHRI S. D. AGARWAL, MEMBER
COUNSEL APPEARING FOR THE PARTIES :
SHRI R. S. SONI AND SHRI PANKAJ KHANDELWAL,
LEARNED COUNSEL FOR COMPLAINANT.
SHRI DEEPESH JOSHI, LEARNED COUNSEL
FOR OPPOSITE PARTY.
ORDER
The following order of the Commission was delivered by Rakesh Saksena, J. :
This order shall govern the disposal of preliminary objections raised by the opposite party about the maintainability of the complaint alleging
- 2- lack of pecuniary jurisdiction of the Commission to entertain the complaint and on the ground that the complainant is not a consumer in terms of the definition of 'consumer' provided under the Consumer Protection Act, 1986 (for short the "Act") in Section 2 (1) (d).
2. In short the facts of the case are that complainant is a devotee of Mahamandleshwar Swami Premanandpuriji Maharaj. In the memory of her late parents-in-law, she decided to distribute packets of dry fruits having picture of Swami Premanandji free of cost to devotees coming to attend Simhastha at Ujjain. For that purpose she agreed to purchase the packets containing dry fruits from opposite party viz. M.P. Agro B. R. K. Energy Foods Ltd., Dewas. As per terms of the agreement the opposite party had to supply the packets containing 40 gms of dry fruits of high quality. The price of each packet was settled to be Rs.13:25. It is alleged that complainant on the basis of a draft agreement given by the opposite party signed the blank stamp papers on which the said agreement was to be recorded. The complainant, on various dates, paid Rs.37 lacs in cash and through bank account to the opposite party towards advance payment. It is alleged that on 21.4.2016 in the first instalment when 40000 packets of dry fruits worth Rs.5,30,000/- were supplied in Simhastha fair, complainant noticed that the dry fruits were defective, containing small pieces and insects. On assurance given by the opposite party that the defective packets shall be taken back and the next instalment of the packets would contain the dry fruits of high quality, the complainant asked opposite party to continue the supply. However, on one pretext or other the opposite party failed to supply the packets. The complainant was then compelled to demand back the amount of Rs.37 lacs from him, but no amount was paid back and the complainant was insulted and intimidated. Aggrieved by the conduct of opposite party, -3- complainant has filed this complaint alleging unfair trade practice on the part of opposite party.
3. The complainant prayed relief of return of amount of Rs.37 lacs paid to opposite party as advance with interest at the rate of 24% per annum with compensation for mental harassment Rs.5 lacs and financial loss of Rs.5 lacs. A cost of litigation has been valued Rs.50,000/-. Thus, the total valuation of the claim came to be Rs.47,50,000/- + interest.
4. The opposite party filed application raising preliminary objections about the maintainability of the complaint. The argument of the learned counsel is two fold : (i) that the complainant is not a consumer in view of the definition of 'consumer' as given under section 2 (1) (d) of the Act and (ii) that the complaint is not maintainable before the State Commission since the value of the goods or service agreed to be provided by the opposite party exceeded Rs. 1 crore. The complaint could not be entertained in view of the provision of section 17 (1) (a) (i) of the Act.
5. So far as the first objection is concerned, learned counsel for the opposite party submitted that in view of an excessively big order for supply of the dry fruit packets worth Rs.13:25 crores, it could be assumed that the transaction was not for individual purpose. It prima facie indicated that it was a commercial transaction. It was not possible for the complainant to have consumed the dry fruits in such a large quantity. She definitely purchased the same for resale in Simhastha fair in the garb of her devotion towards Swami Premanandpuriji Maharaj. Learned counsel for the complainant referring to the averments made in the complaint submitted that it has been categorically -4- recorded that the complaint was distributing the dry fruit packets in Simhastha fair in the memory of her late parents-in-law. Since the complainant was devotee of Swami Premanandpuriji, she ordered the packets with picture of Swami Premanandpuriji Maharaj.
6. After going through the averments made in the complaint, the document of draft agreement and the copy of the agreement filed by the opposite party we are of the view that there is no iota of evidence to indicate that the complainant agreed to purchase the dry fruit packets for resale. It has been specifically mentioned in the complaint that the packets were to be distributed free of cost to devotees in Simhastha fair region. Merely by the quantity of goods purchased by the complainant, in the absence of any other evidence, it cannot be presumed that the same were purchased for resale or for other commercial purpose. The first objection raised by the opposite party is, therefore, rejected and it is held that the complainant falls within the definition of 'consumer'.
7. In regard to the second objection, learned counsel for the opposite party submitted that though it has not been specifically mentioned in the complaint as to what number of packets were agreed to be supplied, but it is apparent from the draft agreement filed by the complainant himself that the opposite party had to supply atleast one crore packets of Prasad, and the cost of each packet was Rs.13:25. Counsel for the complainant submitted that it was simply a blank draft, therefore, it cannot be taken into consideration. From the averments made in the complaint, it is revealed that the draft was supplied by the opposite party and that on the basis of the said draft the complainant signed the stamp paper on which the contents of agreement were recorded. Copy of the agreement recorded on stamp paper had been filed by the opposite party -5- alongwith the preliminary objections. This agreement clearly purports to have been signed by the complainant and the opposite party. It has been categorically recorded in the agreement that atleast one crore packets of Prasad at the rate of Rs.13:25 per packet had to be supplied. It is undisputed that the amount of Rs.37 lacs had been paid by the complainant to opposite party by cash and back account on various dates.
8. Shri Pankaj Khandelwal, learned counsel for the complainant submitted that since an amount of Rs.37 lacs only had been paid and the packets worth Rs.5,30,000/- only had been supplied by the opposite party, the valuation for the purpose of jurisdiction would be only Rs.37 lacs + Rs.10 lacs compensation +Rs.50,000/- cost. As such the complaint is maintainable before the State Commission.
9. Shri Deepesh Joshi, learned counsel for the opposite party placing reliance on the decision rendered by the National Commission in case of Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC) submitted that the consideration paid or agreed to be paid by a consumer at the time of purchasing the goods or hiring or availing of service, as the case may be, has to be considered alongwith the compensation claimed in the complaint to determine the pecuniary jurisdiction of the consumer forum. Since the agreement for purchase of dry fruits packets was Rs.13:25 crores, the State Commission had no pecuniary jurisdiction to entertain the complaint. Per contra, learned counsel for the complainant submitted that the complaint has rightly been filed before the State Commission since the claim was valued by the complainant only for Rs.47,50,000/-.
- 6- 10 It is to be noted that Section 2 (1) (d) of the Act defines consumer as "a person who 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 -----------." As per provisions of Sale of Goods Act, 1930, a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Whereunder a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. In the instant case, after the agreement was executed, the price of the goods was partly paid and the goods were delivered to the complainant in part. Therefore, it has to be held that the consumer / complainant entered into an agreement for supply of dry fruits packets by the opposite party worth Rs.13:25 crores.
11. Now, the question is whether the claim of the complainant could be valued on the basis of the part of price paid by her to the opposite party or on the basis of value of the goods agreed to be supplied by the opposite party ?
12. This question has been directly dealt with by the Three Judges Bench of the National Commission in case of Ambrish Kumar Shukla, (supra). It is a case where similar question was referred by a single Member Bench of the National Commission to a larger Bench for the decision. The relevant extract of the said decision is quoted hereunder :-
"2. Vide order dated 11.8.2016, passed in First Appeal No.166 of 2016, First Appeal No.504 of 2016 and First Appeal No.505 of 2016, the following issues were referred, by a single Member Bench of this Commission to the larger Bench :
- 7-
(i) In a situation, where the possession of a housing unit has already been delivered to the complainants and may be, sale deeds, etc. Also executed, but some deficiencies are pointed out in the construction / development of the property, whether the pecuniary jurisdiction is to be determined, taking the value of such property as a whole, OR the extent of deficiency alleged is to be considered for the purpose of determining such pecuniary jurisdiction.
(ii) Whether the interest claimed on such value by way of compensation or otherwise, is to be taken into account for determining the pecuniary jurisdiction of a particular Consumer Forum ? ---------."
The issue has been decided as under :
"Reference order dated 11.8.2016 Issue No. (i)
14. It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it's the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum. The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer. Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction, if the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs.1.00 crore, it is this
- 8-
Commission alone which would have the pecuniary
jurisdiction to entertain the complaint. For instance if a
person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10,00 lacs, it is the aggregate of the said consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum. Similarly, if for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore."
13. It is also revelant to refer to the provision of Section 17 of the Act which reads as under :-
"17. Jurisdiction of the State Commission.--(1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction -
(a) to entertain -
(i) Complaints where the value of the goods or services
and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore:
and ------------."
14. Taking into consideration facts and circumstances of the instant case in the light of the above proposition laid down by the National Commission and the provision of Section 17 of the Act, we are of the view that since the value of the dry fruit packets agreed to be supplied by the opposite party had been worth Rs.13:25 crores, this Commission has no jurisdiction to entertain the complaint, even if, the complainant has under-valued the claim.
- 9-
15. The complaint is, therefore, rejected with the observation that the complainant shall be at liberty to file a fresh complaint of the same cause of action before the National Commission.
(Justice Rakesh Saksena) (Subhash Jain) (S. D. Agarwal)
PRESIDENT MEMBER MEMBER
Phadke