National Consumer Disputes Redressal Commission, New Delhi

K S Chaudhari, Presiding Member and Dr B C Gupta, Member

M/s Monto Motors Ltd through its Director - Petitioner

Versus

M/s Sri Sai Motors through G Venkatesulu & Anr – Respondents

Revision Petition No. 4018 of 2006                                                                   Decided on 10.7.2013

(From the order dt 26-10-2006 in Appeal No. 2106 of 2005 of the State Consumer Disputes Redressal Commission, Karnataka)

Consumer Protection Act, 1986 - Sections 2(1)(d) and 11 – Automobile – Dealership - Non-payment of sales commission and discount to Complainant as agreed between parties - District Forum allowed complaint and directed Opposite Party to refund Rs. 2 Lakh with 10% interest and Rs. 5,000 as compensation and Rs. 2,000 as litigation cost - As security amount was deposited for obtaining dealership for the purpose of purchase and sale of vehicles, dispute regarding refund of security amount does not fall within purview of consumer disputes and complaint was not maintainable - Besides, cause of action also arose at Bellary - Complaint can be filed within local limits of District Forum in whose jurisdiction cause of action arises -Merely by mentioning that all disputes are subject to jurisdiction of Delhi Courts in letter of intent, jurisdiction of Court at Bellary is not ousted - Complainant has not come with clean hands and complaint filed by Complainant was not maintainable - Order of State Commission is liable to be set aside - Revision petition allowed. (Paras 9 to 13)

Important Point

Complaint can be filed within local limits of District Forum in whose jurisdiction cause of action arises.

Order

1.K S Chaudhari, Presiding Member – This revision petition has been filed by the Petitioner against impugned order dated 26-10-2006 passed by the learned State Consumer Disputes Redressal Commission, Karnataka (the State Commission) in Appeal No. 2106 of 2005 – M/s Monto Motors Ltd Vs M/s Sri Sai Motors & Ors, by which while dismissing the appeal, order of the District Forum allowing the complaint was upheld.

2.Brief facts of the case are that Complainant/Respondent No. 1, proprietor of Respondent No. 1, being an unemployed person wanted to start his own business for earning his livelihood. As per advertisement of Petitioner/OP No.1, Respondent No. 1 was appointed authorised dealer of the Petitioner on 17-09-2002 and in pursuance to agreement, Respondent No. 1 deposited Rs. 2 lakh as security amount with the Petitioner/OP No.1 and Respondent No. 1 opened his showroom in Bellary. Opposite Party No. 2/Respondent No. 2 being authorised distributor of Opposite Party No. 1 supplied 24 vehicles to the Complainant/Respondent No. 1. Complainant cleared all dues payable to Opposite Party No. 2 but Opposite Party No. 2 had not given the sales commission and discount to the Complainant as agreed between the parties. Complainant requested for refund of security amount, but amount was not refunded. Alleging deficiency on the part of the opposite parties, Complainant filed complaint before District Forum with a prayer for refund of security deposit of Rs. 2 lakh along with interest and other expenses. Opposite Party No. 1 submitted written statement and alleged that Complainant does not fall within the ambit of consumer under Consumer Protection Act, as dispute is of commercial nature. It was further alleged that District Forum has no jurisdiction to entertain the matter and denied any deficiency on the part of the Opposite Party and prayed that complaint be dismissed. Opposite Party No. 2 did not appear before District Forum and was proceeded ex-parte. Learned District Forum after hearing both the parties allowed complaint and directed Opposite Party No. 1 to refund Rs. 2 lakh with 10% p.a. interest from the date of filing complaint till realisation and Rs. 5,000 as compensation for mental agony and Rs. 2,000 as litigation cost. Appeal filed by the Petitioner was dismissed by learned State Commission vide impugned order, against which this revision petition has been filed.

3.Respondents did not appear; hence they were proceeded ex-parte.

4.Heard learned Counsel for the Petitioner and perused record.

5.Learned Counsel for the Petitioner submitted that as dealership was for the purpose of purchase and sale of vehicles and spare parts, Complainant does not fall within purview of consumer. As per letter of authority, disputes were subject to jurisdiction of Delhi Courts and District Forum, Bellary had no jurisdiction to entertain the complaint; even then District Forum committed error in allowing the complaint and learned State Commission further committed error in dismissing the appeal. It was further argued that Complainant has not come with clean  hands, as per authority letter, Complainant was partner of firm Sri Sai Motors whereas complaint has been filed by the Complainant showing himself to be proprietor of firm, hence revision petition be allowed and impugned order be set aside.

6.Perusal of record reveals that Complainant has signed authority letter dated 17-09-2002, letter of intent dated 17-09-2002, and commitment letter dated 26-09-2002 pretending himself as partner of the firm Sri Sai Motors. On the other hand, Complainant has filed complaint depicting himself as proprietor of the firm. Complaint could have been filed only by the firm through its partners. As the complaint had been filed by the Complainant as sole proprietor of the firm, it was not maintainable. The learned District Forum has committed error in allowing complaint and learned State Commission has committed error in dismissing the appeal.

7.Learned counsel for the Petitioner submitted that as dealership was for the purpose of purchase and sale of vehicles and spare parts, complaint does not fall within purview of consumer under Section 2(1)(d)(i) of the Consumer Protection Act. Admittedly, Sri Sai Motors, when appointed authorised dealer for Bellary for selling and servicing motorcycles, mopeds, fun bikes and spare parts by Opposite Party No. 1, deposited Rs. 2 lakh as security with the Opposite Party. Section 2(1)(d)(i) of Consumer Protection Act reads as under:-

“(i) buys any goods for a consideration which has been paid or promised of partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the persons 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.”

8.Learned State Commission while dealing with this aspect observed as under:- 

"The case of OP-1 is that since the contract between the parties is commercial in nature, the Complainant is not a consumer as defined under the Consumer Protection Act. It is true that the Complainant was appointed as a Dealer to sell the vehicles manufactured by OP-1. The dispute between the Complainant and OP-1 relates to the refund of the security deposit and it has nothing to do with the vehicles supplied by OP-1 through OP-2 to the Complainant and re-sale of the said vehicles by the Complainant to third parties. Hence, the complaint filed by the Complainant is maintainable, as the Complainant is a consumer. As such, there is “Deficiency in service” by OP-1 in not refunding the security deposit as per the terms of the contract."

9.We do not agree with the interpretation arrived at by learned State Commission. As security amount was deposited for obtaining dealership for the purpose of purchase and sale of vehicles, dispute regarding refund of security amount does not fall within the purview of consumer disputes under the Act and, in such circumstances, the complaint was not maintainable. Explanation to Section 2(1)( d)(i) has been added w.e.f. 15-03-2003, whereas dealership has been granted vide letter dated 17-09-2002. As such, the explanation excluding commercial purpose for the purpose of earning livelihood by self-employment is not applicable to the present case. In such circumstances, District Consumer Forum had no jurisdiction to entertain the complaint and has committed error in allowing complaint and learned State Commission further committed error in confirming order of District Forum.

10.Learned counsel for the Petitioner further submitted that District Forum, Bellary had no jurisdiction to entertain the complaint as disputes were subject to jurisdiction of Delhi Courts as per letter of intent dated 17-09-2002. We do not agree with this submission as dealership was granted for Bellary and showroom was also opened at Bellary and security amount was also given for running dealership at Bellary. In such circumstances, cause of action also arose at Bellary and as per Section 11 of Consumer Protection Act, complaint can be filed within the local limits of District Forum in whose jurisdiction cause of action arises. Merely by mentioning that all disputes are subject to jurisdiction of Delhi Courts in the letter of intent, jurisdiction of Court at Bellary is not ousted.

11.From the above discussion, it becomes clear that Complainant has not come with clean hands and complaint filed by the Complainant as sole proprietor of Sri Sai Motors, was not maintainable. The dispute does not fall within the purview of consumer dispute. Revision petition is to be allowed and order of learned State Commission is liable to be set aside.

12.During course of arguments, learned counsel for the Petitioner submitted that Petitioner is ready to refund the security amount to Sri Sai Motors subject to their returning of the documents, inventory and indemnifying loss caused to the Petitioner. We hope, Complainant will submit requisite documents along with inventory to the Petitioner and Petitioner will refund security amount to the Complainant.

13.Consequently, revision petition filed by the Petitioner is allowed and impugned order dated 26-10-2006 passed by learned State Commission in appeal No. 2106/2005 – M/s Monto Motors Ltd Vs M/s Sri Sai Motors & Anr is set aside and complaint is dismissed.

Revision petition allowed.

 

 

 

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