R.G. Agencies Vs. Continental Engineers and Consultants Ltd. - Court Judgment

Mrs. J. Ananda Lakshmi, Member:

1. This complaint was filed u/Sec. 12 r/w Section 17(a)(i) of the Consumer Protection Act.

2. The facts of the case are briefly stated as follows :

The complainant is a partnership firm. The opposite party is a Company incorporated under the Companies Act having its registered office at Delhi The opposite party Company published an advertisement in the newspaper circulted in New Delhi somewhere in the first quarter of 1993 stating that it obtained approval of Government of India to produce and distribute Liquid Petroleum Gas Cylinders and inviting applications for appointment as distributors for its L.P.G. Cylinders. On seeing the said advertisement, the Managing Partner of complainant firm contacted the opposite party and came to know about the further details regarding the formalities and other conditions for getting distributorship and constituted the complainant firm for the purpose of doing business in filling and distributing Liquid Petroleum Gas Cyliners as distributor of the opposite party Company in the twin cities of Hyderabad and Secunderabad and adjoining Industrial areas. The opposite party when contacted by the complainant deputed their. representative S.K. Singh, an Engineer of their Company to Secunderabad to finalise the deal with the complainant's firm in the month of May, 1993. After informal discussisions, the representative of the opposite party offered to give distributorship of Liquid Petroleum Gas Cylinders to the complainant on the following terms and conditions :

(a) The complainant shall deposit a sum of Rs. 1,00,000/- (Rupees one lakh only) as application money for obtaining the distributorship and the said deposit shall carry interest at the rate of 15% per annum.

(b) The opposite party shall give a model of basic structure and shall depute their technical officers to set up storage tank and distribution centre for the complainant in the site meant for the purpose.

(c) The interest amount payable on application money of one lakh at the rate of 15% p.a. for a period of one year shall be treated as consideration for hiring the service of the opposite party for setting of the storage tank and distribution centre etc. for the complainant.

(d) The opposite party shall supply Liquid Petroleum Gas Cylinders to the complainant within a period of one year from the date of payment of Rs. 1,00,000/- (Rupees one lakh only).

(e) The application money of Rupees one lakh shall be treated as fixed deposit for two years from the date of payment of application money in case the opposite party fails to render the agreed service and to supply Liquid Petroleum Gas Cylinders within the stipulated period of one year.

3. The complainant and the opposite party after some deliberations agreed for the above mentioned terms and conditions at Secunderabad. Thereafter the opposite party issued a letter dated 9.6.1993 appointing the complainant as distributor, as evidenced by Ex. A-1. The complainant firm paid a total amount of Rs. 1,00,000/- by way of Demand Draft No. 058323 dated 5.6.1993 for Rs. 45,000/-; another Demand Draft No. 058324 dated 5.6.1993 for Rs. 45,000/- and also a Demand Draft No. 855649 dated 5.6.1993 Rs. 10,000/- issued by the State Bank of Hyderabad, Prendarghas Road, Secunderabad Branch in favour of the opposite party Company, which were delivered at New Delhi through one Ch. Sreepornaiah, a relation of the partner of the complainant firm. Thereupon the opposite party issued an official receipt dated 7.7.1993 i.e. Ex. A-2 acknowledging the receipt of the said amount. It also senta letter dated 7.7.1993, Ex. A-3 asking the complainant to send the details of complainant's site plan and surrounding details. The complainant made necessary arrangements by securing suitable site on lease for setting up the Liquid Petroleum Gas Station and obtained "No Objection" Certificate from the Panchayat of Dommarapochampalli village and also from the Station Fire Officer, Fi re Station, Jeedimetla and sent the same to the opposite party alongwith site plan. These three documents are Exs. A-4, A-5 and A-6. Thereupon the opposite party sent Ex. A-7 letter dated 22.10.1993 imposing certain restrictions regarding distribution of Liquid Petroleum Gas Cylinders. The complainant approached the concerned authorities for obtaining the required licences and certificates. While so, the opposite party sent Ex. A-8 letter dated 14.2.1994 informing the complainant that the Blue Print of the site plan was forwarded to the complainant for record purpose. The complainant was expecting despatch of Liquid Petroleum Gas Cylinders from the opposite party. In the meanwhile, the opposite party sent another letter dated 21.12.1994 Ex. A-9 informing the complainant that the opposite party started delivery of their "Grahini" Liquid Petroleum Gas connections in Northern India and they were in a position to supply the said connection, as per the requirement of the complainant. Believing the said version of the opposite party, the complainant sent an application dated 14.2.1995 Ex. A-10 to the Deputy Chief Controller of Explosives, Madras together with demand draft for Rs. 50 /- towards licence fee, three copies of site and layout plans and letter of indent requesting for accord of approval to construct the godown for storage of Liquid Petroleum Gas Cylinders. But the opposite party has not deputed any of its Officers to give guidelines to the complainant for setting up the plant, nor there was any communication from the opposite party for a long time. The silence on the part of the opposite party gave an impression that the opposite party was not in a position to supply Liquid Petroleum Gas connections to the complainant as agreed. The complainant thereupon decided to opt out of the project and to request the opposite party for refund of the deposit amount of Rs. 1,00,000/-, since the opposite party committed deficiency in service in not sending its Officers to give guidelines to the complainant for setting up the plant, though the complainant deposited the amount of Rs. 1,00,000/- as per the terms of the contract, and made necessary arrangements to set up the storage tank. Accordingly the complainant sent a letter dated 22.10.1995 Ex. A-1 requesting the opposite party to refund the deposited amount of Rs. 1,00,000/-. As there was no response from the opposite party for a long time Sri K.T.K. Prasad a partner of the complainant firm went to New Delhi and met Sri Pradeep Kapur, the Managing Director of the opposite party on 16.7.1996 and requested him to arrange for refund of the deposited amount. The said Pradeep Kapur promised to arrange for repayment of the deposit amount with interest and expenses within a short time, but failed. Subsequently also the complainant's partner met him and requested for payment of the deposit amount, but in vain. Then the complainant got issued a legal notice to the opposite party on 15.11.1996 demanding payment of the deposit amount of Rs.1,00,000/- with interest @ 24% per annum from 7.7.1993 and also damages for mental agony. The said notice was returned un-served. Ex. A-12 is the office copy of the legal notice and Ex. A-13 is the returned notice. According to the terms of the agreement between the parties, the opposite party has to render service to the complainant firm by deputing their technical officers to guide the complainant firm in setting up the Liquid Petroleum Gas storage tank and distribution centre in the site meant for that purpose and the interest accrued on the deposit amount of Rs. 1,00,000/- is the consideration for hiring the services to be rendered by the opposite party in that regard, and since no officer of the opposite party came to the proposed site for giving necessary guidance for setting up the storage tank and distribution centre, though the complainant parted with his money by way of deposit of Rs. l,00,000/- and the interest accrued thereon, there is deficiency of service on the part of opposite party. The complainant firm spent huge amount for securing suitable site for setting up the plant for obtaining the required licences and certificates, forgoing to New Delhi on several occasion; in connection with the setting up of the project and the partners of the complainant firm suffered much hardship, inconvenience and mental agony. The complainant, therefore prays for a direction to the opposite party to repay the deposit amount of Rs. 1,00,000/- an amount of Rs. 55,000/- representing the interest thereon @ 15% per annum from 7.7.1993 till the date of complaint, Rs, 60,000/- towards expenses incurred by die complainant and Rs. 3,00,000/- towards compensation for inconvenience, hardship and mental agony totalling to an amount of Rs. 5,15,000/-. The cause of action arose at Secunderabad where there was an oral agreement between the parties with regard to this transaction. Hence, this Hon'ble State Commission has territorial jurisdiction. Accordingly, the complainant prays for a direction to the opposite party to pay to the complainant a total amount of Rs. 5,15,000/- and costs of Rs. 10,000/- as mentioned above.

4. Notice of the complaint was sent to the opposite party and it was served. But the opposite party did not choose to contest the matter. Counter was also not filed. At the time of hearing, the complaint filed, his proof affidavit and got Exs. A-l to A-13A marked in supportof his contention.

5. The points for consideration are : (1) whether there is deficiency of service on the part of opposite party (2) to what relief ?

Point No. 1 :

6. The case of the complainant is that after issuing the advertisement by the opposite party in the newspaper circulated in New Delhi somewhere in the first quarter of 1993 stating that the opposite parties obtained approval from the Government of India to produce and distribute Liquid Petroleum Gas Cylinders and inviting applications for appointment of distributors for the said Cylinders, the complainant entered into an agreement with the opposite party for distributorship for twin cities of Hyderabad and Secunderabad and adjoining industrial areas at Secunderabad and the opposite party was represented by its Engineer S.K. Singh to finalise the deal. According to the said oral agreement, the complainant has to deposit application money of Rs. 1,00,000/- for getting the distributorship of the opposite party and the opposite party shall despatch the Cylinders within one year failing which the opposite party shall keep the deposit amount of Rs. 1,00,000/- with it for a period of two (2) years and pay the interest thereon at the rate of 15% per annum. The complainant in the complaint and in his affidavit, stated that the deposit amount of Rs. 1,00,000/- was paid by way of Demand Drafts i.e. one for Rs. 45,000/- another for Rs. 45,000/- and another for Rs. 10,000/- in all a sum of Rs. 1,00,000/- and the demand drafts were delivered at New Delhi to the opposite party through one Ch. Sreepoomaiah, a relation of the partner of the complainant firm. Ex. A-1 is the appointment order of the opposite party appointing the complainant firm as the opposite party's Distributor for Liquid Petroleum Gas Cylinders. Ex. A-2 is the xerox copy of the receipt dated 7.7.1993 issued by the opposite party acknowledging the receipt of D.D. No. 058323 dated 5.6.1993 for Rs. 45,000/-; D.D. No. 058324 dated 5.6.1993 for Rs. 45,000/- and another D.D. 855649 dated 5.6.1993 for Rs. 10,000/- issued by the State Bank of Hyderabad. Therefore, it has to be concluded that the opposite party received the total sum of Rs. 1,00,000/- paid by the complainant firm by way of the above mentioned demand drafts. Ex. A-3 shows that the opposite party informed the complainant that they have already finalised the tank, cylinders, etc. and that they required the site plan and copy of the complainant's plant, so that they can give model of basic structure to be constructed. Exs. A-4, A-5 and A-6 show that the complainant firm obtained "No Objection" certificate from the concerned Panchayat, from the Station Fire Officer, Jeedimetla and got a Blue Print prepared in regard to the proposed plan. Ex. A-7 shows that the opposite party stipulated certain conditions with regard to the sale of the Liquid Petroleum Gas Cylinders by the complainant. Ex. A-8 is the letter written by the opposite party to the complainant stating that the site plan copy is forwarded to the complainant for record purpose. Ex. A-9 is the another letter written by the opposite party to the complainant assuring the complainant that the opposite party would give regular un-interrupted supply of Liquid Petroleum Gas Cylinders to me customers of the complainant firm.

7. The case of the complainant is that though the deposit of Rupees one lakh was made in July, 1993, there was no response from the opposite party till December, 1994 that no officer was deputed by the opposite party for giving the guidance required for setting up the plant in the proposed site and therefore, they decided to opt out of the project and then addressed a letter to the opposite party requesting for refund of the deposit amount. Ex. A-10 is the letter dated 22.10.1995 written by the complainant to the Deputy Chief Controller of Explosives, Madras. Ex. A-11 is the letter dated 22.10.1995 written by the complainant requesting the opposite party to arrange for refund of the deposit amount of Rs. 1,00,000/-. Ex. A-12 is the office copy of the legal notice got issued by the complainant to the opposite party demanding payment of the deposit amount with interest and expenses. The complainant stated all these facts on oath in his proof affidavit. The opposite party has not chosen to contest the matter even though notice was served on it. Relying on Exs. A-l and A-2, we hold that the opposite party appointed the complainant firm and the comp lainant firm paid a sum of Rs. 1,00,000/- and it was received by the opposite party as evidenced by Ex. A-2 receipt issued by it. The opposite party has not denied the case of the complainant that according to the agreement between the parties, the opposite party has not sent its officers to guide the complainant in setting up the storage tank in the proposed site and that interest payable on the said amount of Rs. 1,00,000/- has to be treated as the consideration for the services to be rendered by the opposite party for setting up of the storage tank at Secunderabad as agreed to between the parties. Hence we accept the affidavit evidence and that there is deficiency of service on the part of opposite party in not deputing any of its officers to the plant site for giving necessary guidance to the complainant for setting up the plant.

Point No. 2 :

8. The complainant says that he spent huge amount for obtaining the "No Objection" Certificate from the concerned Gram Panchayat and the Fire Station Officer, Jeedimetla and to approach the Chief Controller of Explosives, Madras for obtaining necessary approval. Ex. A- 4 says that the concerned Panchayat issued "No Objection" certificate to the complainant firm and Ex. A-5 shows that the concerned Fire Station Officer issued "No Objection" certificate. Ex. A- 6 shows that a Blue Print plan was got prepared by the complainant for the proposed storage tank. Ex. A-11 shows that the complainant approached the Deputy Chief Controller of Explosives, Madras for necessary approval. It has to be therefore concluded that the complainant firm must have spent considerable amount for obtaining the required licences and certificates, etc. Though the opposite party appointed the complainant as Distributor for its Liquid Petroleum Gas Cylinders in June, 1993, there was no favourable response from the opposite party till today, in the matter of despatch of Liquid Petroleum Gas Cylinders. It is quite likely that the complainant's partners might have made repeated visits to New Delhi in this connection. We are, therefore, of the opinion that apart from interest on the deposit amount of Rs. 1,00,000/- from the date of deposit till the date of payment which the opposite party has to pay as per the agreement, the complainant firm is entitled to some compensation keeping in view the expenditure incurred by the complainant firm forgetting me required licences and certificates. The complainant claimed the rate of interest @ 15% per annum. There is no denial from the opposite party.

9. In these circumstances, we hold that the complainant firm is entitled to refund of Rs. 1,00,000/- together with interest @ 15% per annum from the date of deposit i.e., 7.7.1993 till the date of realisation and also an amount of Rs. 25,000/- by way of compensation towards the expenses incurred for securing suitable site on lease and for obtaining the required licences and certificates.

10. In the result, the complaint is allowed in part and the opposite party is directed to pay an amount of Rs. 1,00,000/- (Rupees one lakh only) together with interest @ 15% from 7.7.1993 till the date of realisation and also to pay a sum of Rs. 25,000/- (Rupees twenty five thousand only) towards compensation for the expenses incurred by the complainant firm in securing the suitable site, required licences and certificates for setting up the storage tank and for getting a Blue Print prepared for setting up the plant and also a sum of Rs. 2,000/- as costs, within two (2) months from the date of this order, failing which the amount of compensation of Rs. 25,000/- shall carry interest at the rate of 15% per annum from the date of expiry.

Complaint partly allowed.