State Consumer Disputes Redressal Commission M/S. S. Kumars Online Ltd., And Another ... vs C. Ravi Kumar Medak on 12 September, 2008 A BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. F.A. 1743/2005 against C.D. 1/2005, Dist. Forum, Medak at Sanga Reddy Between: 1. M/s. S. Kumars Online Ltd., Regd. Office at Avadh Avadesh Parisar, GK Marg Worli, Mumbai400 018. 2. Mr. Kumar Head, Franchise Operations S. Kumar.Com Ltd. Regd. Office at Avadh Avadesh Parisar, GK Marg Worli, Mumbai400 018. *** Appellant/ Opposite Parties. And C. Ravi Kumar, S/o. C. Prakash Age: 27 years, R/o. H. No. 4725/17B, Balajinagar, Opp. Venkateswara Temple Sanga Reddy Medak Dist. . *** Respondent/ Complainant. Counsel for the Appellant: Mr. K. Visweshwara Rao Counsel for the Resp: M/s. Gopi Rajesh Associates. QUORUM: HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT SMT. M. SHREESHA, MEMBER & SRI G. BHOOPATHI REDDY, MEMBER FRIDAY, THIS THE TWELFTH DAY OF SEPTEMBER TWO THOUSAND EIGHT Oral Order: (Per Honble Justice D. Appa Rao, President) ***** This is an appeal preferred by the opposite parties against the order of the Dist. Forum, Medak at Sanga Reddy in directing them to pay Rs. 1,42,898/ with interest and Rs. 50,000/ towards compensation besides costs of Rs. 1,000/. The case of the complainant in brief is that he is an educated unemployed having completed his MBA. R1/Appellant herein sought to establish and maintain a net work of computers through Very Small Aperture Terminals (VSAT) and intends to provide all the services to the customers through franchisee. The franchisee offers to sell the services by providing access to the networking. On that he applied for franchisee of R1 at Sanga Reddy. As per the terms and conditions of brochure he paid Rs. 500/ towards application which was accepted by the appellant and through their letter Dt. 10.5.2000 directed him to pay Rs. 2 lakhs towards the cost of machinery, VSAT dish. Both of them accordingly executed an agreement on 28.7.2000 at Sanga Reddy. He paid the entire amount. R2 is the head of franchisee and he also promised to supply the machinery. On repeated demands they supplied the machinery worth Rs. 51,102/. They did not supply VSAT dish costing around Rs. 1,50,000/ without which he could not start the net working. By 13.11.2000 he paid the entire Rs. 2 lakhs. In view of the fact that the appellant could not supply the dish etc., he could not earn any amount. On the other hand he was burdened with payment of interest for the amount borrowed in this regard. Despite his persistent efforts he could not get the machinery. He sent a letter terminating the agreement and requested the appellant to refund balance of Rs. 1,42,898/ along with interest and loss of profit. In fact, the appellant assured that he would earn Rs. 26,000/ per month. Therefore, he filed the complaint for refund of Rs. 1,42,898/ towards balance of deposit with interest, and Rs. 3,38,000/ towards damages together with costs. The appellants/Opposite Parties filed counter resisting the case. While denying the averments made in the complaint, it was alleged that the Dist. Forum has no jurisdiction. The complainant is not a consumer, but a business associate, a franchisee. The agreement provides for reference to arbitration in case of dispute. The territorial jurisdiction has been restricted to Mumbai Courts. The complaint was also barred by limitation. Since there was no hiring of any service as stipulated u/s 2(i)(o) of the Consumer Protection Act, the complaint was not maintainable. On the other hand, they hired the services of the complainant for the purpose of promoting their business. In fact they were the consumers and not the complainant. The various Fora in this regard opined that franchisee is not a consumer. They were not aware that the complainant was an unemployee and searching for self employment. They never induced him to apply for franchisee. While admitting payment of Rs. 500/ towards application fee and Rs. 5,000/ towards EMD alleged that there was delay of one month in payment of remaining instalments of Rs. 74,500/. So also in payment of second instalment of Rs. 1,20,000/. By the time of payment there was change in the government policy in supplying VSAT. Due to delay in releasing the KU band which was in use for operating VSAT earlier in India. In fact most of the franchisees are doing business even without VSAT but with terrestrial connection. The complainant was also doing business all through. Therefore, he