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NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice D.P. Wadhwa, President; Mr. Justice J.K. Mehra,
Mrs. Rajyalakshmi Rao & Mr. B.K. Taimni, Members
SOFTSPEC SOFTWARE PVT. LTD.—Complainant
versus
DIGITAL EQUIPMENT (INDIA) LTD. & ORS.—Opposite Parties
Original Petition No. 145 of 1997—Decided on 5.11.2001
For the Complainant :Mr. Manoj Swarup, Mr. P.S. Bajwa & Mr. Ajay Gupta, Advocates.
For the Opposite Party No. 1 :Mr. A.N. Haksar, Sr. Adv. with Mr. Aditya Bhagat, Advocate.
For the Opposite Party No. 2 :Mr. Sanjay Yadav, Advocate.
Headnote:Consumer Protection Act, 1986 - Section 2(1)(d) and (g) -Consumer-Deficiency in service-Complainant entered into a Licence Agreement with Digital USA and Digital India to establish and run a franchisee Centre for Digital Authorised Training Centre to impart computer education-Complaint alleging deficiency in service for unilateral termination of agreement and claim for compensation -Relationship between parties was one of grantor of franchise holders the complainant-It was purely a commercial transaction between parties-Grantor of franchise could not be said providing services to its customer-Complainant could not be said to a consumer or that opposite party was to provide any service to complainant or that there was any deficiency in service.
As to what is the relationship between grantor of franchise and the franchisee holder certainly depends on the terms of the agreement between the parties. Ordinarily a grantor of franchise allows the franchisee holder to use the name of the grantor and to sell the product of the grantor strictly in accordance with the agreement while the grantor keeps a watch over the activities of the franchisee to see that there was no breach of the agreement and the franchisee does not act in a manner which brings the name of the grantor in disrepute. In such circumstances a grantor of franchise does not provide services to its customers.
Complainant in the present case cannot use the Logo Digital and the first opposite party Digital India had offered to provide its services for the whole period of agreement. Considering the terms of the two agreements referred to above it cannot be said that the complainant was a consumer or that the opposite party was to provide any service to the complainant.
Mr. Justice D.P. Wadhwa, President—In this complaint when originally filed there were two opposite parties namely, Digital Equipment Corporation, USA [‘Digital USA’] and Digital Equipment (India) Ltd. [‘Digital India’]. Complainant claims to be carrying on business of computer training. An agreement dated 12.5.1993 was entered into between the three parties under which Digital USA and Digital India were to provide diverse support services to the complainant by way of consultation, training staff, technical assistance, course material, support material, etc. There was yet another agreement dated 20.6.1993 between the complainant and Digital USA for use by the complainant of the Logo Digital. On 22.12.1995 Digital India informed the complainant that Digital USA had announced a business alliance with Global Knowledge Network Inc. (GKN) in terms of which Digital Learning Services would be transferred to GKN. Digital USA was, however, to continue develop courseware for its products. It was stated that transfer of Learning Services business was globally and covers India as well. Again on 22.5.1996 complainant was informed that it should not register any fresh students for training as the Learning Services business of Digital USA had been sold off to GKN. The letter added :
“We are now freezing on the same and will be issuing Digital certificates only to those students who are currently registered with you. Basically these would be names which figure till the last monthly report sent by you on May 27, whichever is earlier.”
By letter dated 4.6.1996 Digital USA gave notice to the complainant of termination of the Logo Agreement w.e.f. 31.12.1996. Complainant was told to ensure compliance with the terms of agreement relating to the consequences of termination. Complainant was also informed that Digital India would be advising it in regard to Licence Agreement. It is the stand of the Digital India, which has not been rebutted, that Digital India would continue to provide existing levels of support and issue the existing Certificate without the Digital Logo for the balance duration of the Licence Agreement.
2. Complaining deficiency in service on account of unilateral termination of the agreement resulting in withdrawal of support services this complaint has been filed on 2.6.1997 for an award of compensation of Rs. 153.47 lakhs with interest @ 18% per annum and damages amounting to Rs. 10.00 lakhs towards harassment and further sum of Rs. 20.00 lakhs as exemplary damages ‘for totally unwarranted conduct of both the parties’.
3. During the pendency of these proceedings, by order dated 9.5.2000 Compaq Computer India Pvt. Ltd. was added as an opposite party. By order dated 7.8.2000 Global Knowledge Network Inc. (GKN) was also added as an opposite party. Complainant gave up Digital USA as an opposite party. Thus presently there are three opposite parties and these are, (i) Digital India, (ii) Compaq Computer India Pvt. Ltd., and (iii) Global Knowledge Network Inc. (GKN).
4. Complainant has not cared to file any amended complaint to contend as to how Compaq Computer India Ltd. or Global Knowledge Network Inc. (GKN) would be liable. These two parties were added on the allegation that Digital USA had been sold to Compaq Computer Corporation, USA which wholly owns Compaq Computer (India) Pvt. Ltd. Earlier Digital USA had sold its Training Services (Learning Services) to Global knowledge Network Inc. (GKN).
5. Digital India has raised preliminary objection that complaint was not maintainable as complainant was not a consumer within the meaning of Clause (d) of Sub-section (1) of Section 2 of the Consumer Protection Act, 1986 (Act for short). It was submitted that as far as termination of Logo Agreement of the use of Digital by Digital USA is concerned it was beyond challenge as Clause 6.2.7 of the Agreement dated 20.6.1993 clearly stipulated that “notwithstanding any of the aforesaid provisions, Digital USA shall be entitled to terminate this Ag
