National Research Development Corporation. Vs. VipIn Kumar Gupta - Court Judgment

SooperKanoon Citationsooperkanoon.com/1113964
CourtDelhi State Consumer Disputes Redressal Commission SCDRC New Delhi
Decided OnMar-26-1997
Case NumberCase No. A-418 of 1995
JudgeA.P. CHOWDHRI, PRESIDENT & DESH BANDHU, MEMBER
AppellantNational Research Development Corporation.
RespondentVipIn Kumar Gupta
Excerpt:
consumer protection act, 1986 - section 15 - comparative citation: 1997 (2) cpj 327a.p. chowdhri, president: 1. the appellant. national research development corporation (nrdc) is a government of india undertaking engaged in the business of licencing and transferring various technical know-how to entrepreneurs on lump sum premium and recurring royalty basis. the respondent approached the appellant for getting technical know-how for the production of menthol from mint oil for commercial purposes. the complainant applied on the prescribed format for licencing of a project for the manufacture of menthol crystals alongwith offer of premium of rs. 10,000/-by his letter dated 7.2.92. in reply he received an undated letter from dr. t.k. chakravarthy, development engineer (exports) to the effect that the lump sum premium was rs. 20,000/-and recurring royalty 1.5% on ex-factory sale. the period of licence was seven years and it was non-exclusive, the complainant was further advised to send the application form duly filled in to enable the opposite party to sign the agreement and take further appropriate action in transferring the technical know-how. along with the letter was enclosed a cyclostyled note broadly dealing with the process, inputs, equipments and project specifications. the complainant appears to have discussed the matter on telephone with opposite party and with reference to the same sent a pay order for rs. 20,000/-. this was followed by another letter dated 4.3.92 from the complainant referring to opposite party letter dated 24.2.92 with which opposite party had sent draft agreement in writing showing that he had obtained opinion of his legal advisor and he sought certain clarifications required by his advisor. a copy of the advice received by him dated 29.2.92 was enclosed. on the same date, the opposite party wrote to its regional research laboratory, jammu tawi to the effect that the complainant had raised certain objections with regard to certain clauses of agreement and until the matter was settled, the laboratory was directed not to release the technical know-how. a copy of the letter was sent to the complainant by its letter dated 6.3.92. the laboratory rendered some of the clarifications. the complainant wrote letter dated march 16, 1992 pointing out various discrepancies in the price which had been taken as the basis for calculation in the note received from opposite party vide their letter dated 6.3.92 and showing that based on those prices the project's total recovery would not cover even the actual cost of expenditure. it was further stared by the complainant in the letter that there was thus no justification for the payment of any royalty, at all. what the complainant wanted was that a lump sum royalty of rs. 10,000/-be charged for the transfer of the know-how. if that was acceptable, the complainant might be informed so that the agreement could be executed failing which the amount of rs. 20,000/-be refunded to the complainant. in reply dated 19.3.92, opposite party stated that the calculations were only model calculations and not the exact project documents. the complainant was, therefore, advised to contact nrdc, new delhi. the complainant appears to have served a legal notice which was replied by the opposite party by its letter dated 7/8 jan., 1993. reference was made to their earlier letter dated 21.12.92 enclosing a cheque for rs. 15,000/-dated 14.12.92 being 75% of the amount paid by the complainant as a refund of the premium and with regard to the balance amount, it was stated that the guidelines formulated by the board of directors had to be followed. the balance amount could not be refunded. the complainant filed the present complaint which has given rise to this appeal claiming the balance amount of rs. 5,000/-and interest on the entire amount, 2. on a consideration of the material before it, district forum-ii held that there was no justification for the forfeiture of rs. 5,000/-. it was not supported by any rule or regulation and accordingly directed opposite party to refund the said amount of rs. 5,000/-with interest @ 12% per annum from 1.1.93 and further pay interest at the rate of 12% on total sum of rs. 20,000/-from 7.2.92 to 22.12.92 besides rs. 1,000/-as costs. 3. aggrieved by the order, the opposite party has preferred this appeal. 4. the contention of mr. jasbir singh, learned counsel for the appellant is that a copy of the guidelines dated 12.3.87 had been filed with the written statement and it was, therefore, not correct to say that the forfeiture had been made without there being any rules or regulations. copy of the guidelines insofar as the present case is concerned may be seen at page 44 of the paper book. according to the decision of the board of directors, the corporation had discretion to refund the full amount of premium in case the opposite party decided not to transfer technology to particular entrepreneur at any stage after signing the licence agreement. the corporation had further discretion to refund up to 75% of the premium in case the refund is claimed by the entrepreneur before signing the licence agreement. since the licence agreement in the present case had not been signed by the complainant, 75% premium was refunded and the remaining forfeited. 5. after carefully going through the correspondence placed on record, we are of the view that there was no completed contract in this case. the question arises whether in the absence of a completed contract, the complainant can be deemed to have hired the services of the opposite party. if he had not, whether he should be referred to the civil court for claiming the refund of the amount. we are of the view that when the complainant tendered rs. 20,000/-it was implied that there would be an agreement between the parties regarding transfer of technical know how. as the parties did not agree on the terms, the execution of the final licence agreement did not mature. under the implied agreement for hiring the services, the complainant must be deemed to be entitled to the rendering of service upto the execution of the licence agreement. we have not been referred to any material to show that the complainant was informed at the relevant stage that the opposite party reserved its discretion to forfeit the whole or 25% of the amount of premium if the agreement is not signed for any reason. in the absence of any such notice, the condition referred to in the guidelines, could not, in our view be enforced. we, therefore, affirm the findings of the district forum with regard to the refund of the amount of rs. 5,000/-. we are, however, of the view that the complainant is not entitled to interest either on the whole amount or on the sum of rs. 5,000/-. admittedly the appellant is not carrying on the work of inviting money for deposit and paying interest thereon. the appellant cannot, therefore, be saddled with liability to pay interest. accordingly, the appeal is partly allowed. the direction to refund rs. 5,000/-is affirmed but direction to pay interest on that amount or the whole of the amount is set aside. the parties are left to bear their own costs in the appeal. a copy of this order be communicated to both the parties as well as district forum-ii. appeal partly allowed.
Judgment:

A.P. Chowdhri, President:

1. The appellant. National Research Development Corporation (NRDC) is a Government of India Undertaking engaged in the business of licencing and transferring various technical know-how to entrepreneurs on lump sum premium and recurring royalty basis. The respondent approached the appellant for getting technical know-how for the production of menthol from mint oil for commercial purposes. The complainant applied on the prescribed format for licencing of a project for the manufacture of menthol crystals alongwith offer of premium of Rs. 10,000/-by his letter dated 7.2.92. In reply he received an undated letter from Dr. T.K. Chakravarthy, Development Engineer (Exports) to the effect that the lump sum premium was Rs. 20,000/-and recurring royalty 1.5% on ex-factory sale. The period of licence was seven years and it was non-exclusive, the complainant was further advised to send the application form duly filled in to enable the opposite party to sign the agreement and take further appropriate action in transferring the technical know-how. Along with the letter was enclosed a cyclostyled note broadly dealing with the process, inputs, equipments and project specifications. The complainant appears to have discussed the matter on telephone with opposite party and with reference to the same sent a pay order for Rs. 20,000/-. This was followed by another letter dated 4.3.92 from the complainant referring to opposite party letter dated 24.2.92 with which opposite party had sent draft agreement in writing showing that he had obtained opinion of his legal advisor and he sought certain clarifications required by his advisor. A copy of the advice received by him dated 29.2.92 was enclosed. On the same date, the opposite party wrote to its Regional Research Laboratory, Jammu Tawi to the effect that the complainant had raised certain objections with regard to certain clauses of agreement and until the matter was settled, the laboratory was directed not to release the technical know-how. A copy of the letter was sent to the complainant by its letter dated 6.3.92. The laboratory rendered some of the clarifications. The complainant wrote letter dated March 16, 1992 pointing out various discrepancies in the price which had been taken as the basis for calculation in the note received from opposite party vide their letter dated 6.3.92 and showing that based on those prices the project's total recovery would not cover even the actual cost of expenditure. It was further stared by the complainant in the letter that there was thus no justification for the payment of any royalty, at all. What the complainant wanted was that a lump sum royalty of Rs. 10,000/-be charged for the transfer of the know-how. If that was acceptable, the complainant might be informed so that the Agreement could be executed failing which the amount of Rs. 20,000/-be refunded to the complainant. In reply dated 19.3.92, opposite party stated that the calculations were only model calculations and not the exact project documents. The complainant was, therefore, advised to contact NRDC, New Delhi. The complainant appears to have served a legal notice which was replied by the opposite party by its letter dated 7/8 Jan., 1993. Reference was made to their earlier letter dated 21.12.92 enclosing a cheque for Rs. 15,000/-dated 14.12.92 being 75% of the amount paid by the complainant as a refund of the premium and with regard to the balance amount, it was stated that the guidelines formulated by the Board of Directors had to be followed. The balance amount could not be refunded. The complainant filed the present complaint which has given rise to this appeal claiming the balance amount of Rs. 5,000/-and interest on the entire amount,

2. On a consideration of the material before it, District Forum-II held that there was no justification for the forfeiture of Rs. 5,000/-. It was not supported by any Rule or Regulation and accordingly directed opposite party to refund the said amount of Rs. 5,000/-with interest @ 12% per annum from 1.1.93 and further pay interest at the rate of 12% on total sum of Rs. 20,000/-from 7.2.92 to 22.12.92 besides Rs. 1,000/-as costs.

3. Aggrieved by the order, the opposite party has preferred this appeal.

4. The contention of Mr. Jasbir Singh, learned Counsel for the appellant is that a copy of the guidelines dated 12.3.87 had been filed with the written statement and it was, therefore, not correct to say that the forfeiture had been made without there being any Rules or Regulations. Copy of the guidelines insofar as the present case is concerned may be seen at page 44 of the paper book. According to the decision of the Board of Directors, the Corporation had discretion to refund the full amount of premium in case the opposite party decided not to transfer technology to particular entrepreneur at any stage after signing the Licence Agreement. The Corporation had further discretion to refund up to 75% of the premium in case the refund is claimed by the entrepreneur before signing the Licence Agreement. Since the Licence Agreement in the present case had not been signed by the complainant, 75% premium was refunded and the remaining forfeited.

5. After carefully going through the correspondence placed on record, we are of the view that there was no completed contract in this case. The question arises whether in the absence of a completed contract, the complainant can be deemed to have hired the services of the opposite party. If he had not, whether he should be referred to the Civil Court for claiming the refund of the amount. We are of the view that when the complainant tendered Rs. 20,000/-it was implied that there would be an agreement between the parties regarding transfer of technical know how. As the parties did not agree on the terms, the execution of the final Licence Agreement did not mature. Under the implied agreement for hiring the services, the complainant must be deemed to be entitled to the rendering of service upto the execution of the Licence Agreement. We have not been referred to any material to show that the complainant was informed at the relevant stage that the opposite party reserved its discretion to forfeit the whole or 25% of the amount of premium if the agreement is not signed for any reason. In the absence of any such notice, the condition referred to in the guidelines, could not, in our view be enforced. We, therefore, affirm the findings of the District Forum with regard to the refund of the amount of Rs. 5,000/-.

We are, however, of the view that the complainant is not entitled to interest either on the whole amount or on the sum of Rs. 5,000/-. Admittedly the appellant is not carrying on the work of inviting money for deposit and paying interest thereon. The appellant cannot, therefore, be saddled with liability to pay interest. Accordingly, the appeal is partly allowed. The direction to refund Rs. 5,000/-is affirmed but direction to pay interest on that amount or the whole of the amount is set aside. The parties are left to bear their own costs in the appeal. A copy of this order be communicated to both the parties as well as District Forum-II.

Appeal partly allowed.