IMPORTANT POINT
Award of compensation must have some sound basis.

Anupam Dasgupta, Member

First Appeals no. 104 and 126 of 2004

These two appeals challenge a common order dated 10.02.2004 passed by the Chandigarh Union Territory Consumer Disputes Redressal Commission, Chandigarh (in short, ‘the State Commission’) in complaint case no. 30 of 1998. By this order, the State Commission partly allowed the complaint and directed as under:

“It is not disputed the complainants suffered a total loss of poplar plants out purchased by him @ Rs.52.50 per plant. All these plants were to be properly cared for and proper guidance or service was to be provided by OPs no. 1 and 2 to the complainant, which they failed to provide and the plants were destroyed and the complainant was put to loss thereof. The OPs no.1 and 2 are thus liable for the deficiency in service on their part. However, under Clause 8 of the Agreement, the liability of OPs 1 and 2 is to the extent of 10% of the ETPs sold under the Agreement and they are required to replace these plants to the complainant, which it failed to do so. The complainant would thus be entitled to get the value of 10% of 1000 plants i.e. of 100 plants @ Rs.52.50 per plant, which would come to Rs.5250/-. Apart from this, the complainants are entitled to get compensation for the loss occasioned to him, which we assess at a sum of Rs.47,250/- which is the actual loss suffered by the complainants.

Resultantly, the complaint succeeds partly and is allowed to the extent that the OPs no. 1 and 2 are directed to pay a sum of Rs.5250/- the value of 10% of 1000 plants i.e. of 100 plants @ Rs.52.50 per plant. The OPs no. 1 and 2 shall further pay a sum of Rs.47,250/- to the complainant as compensation on account of actual loss suffered by him within a period of two months from the date of receipt of certified copy of this order, failing which the said amount shall carry interest @ 7% per annum till payment. The amount, if any, already paid to the complainant by the OPs shall be adjusted from a sum of Rs.47,250/-. The complainant is also awarded a sum of Rs.5000/- as litigation expenses. The complaint against the remaining OPs i.e. OPs no. 3 and 4 is dismissed leaving the parties to bear their own costs”.

(ii) While the original OPs 1&2 have filed appeal no. 104/2004 challenging the finding of the State Commission regarding deficiency in service on their part, appeal no. 126/2004 has been filed by the original complainant seeking enhancement of the relief awarded by the State Commission.

(iii) For convenience, we refer to the parties in these appeals by their status before the State Commission.

2 (i) It is undisputed that the OPs 1&2 started a scheme to encourage farmers to undertake plantation of poplar trees by supplying “entire transplant of poplar” (ETPs) and also necessary extension services. It would appear that in this context refinancing by NABARD at concessional rate of interest was available to scheduled/nationalised banks which would lend money to farmers/agriculturists undertaking to plant poplar saplings to be supplied by OP 1. OP 1 had designed a standard Agreement to be entered into with each farmer participating in the scheme. The Agreement provided, inter alia, for payments by the farmer to OP ½, in 8 annual instalments, covering both the costs of plants and supply of requisite inputs as well as technical services/guidance. Under the Agreement, at the end of the 8-year period during which the farmer concerned was to tend the plants and grow them to their full potential, with technical support of the OPs 1&2, the latter agreed to buy the fully-grown trees, of defined “harvestable size” under a buy-back arrangement. The interest of OP 1 in the scheme was essentially in the fact that being a manufacturer of safety matches, it was keen to ensure uninterrupted supply of quality poplar wood (used in making matchsticks) at reasonable/pre-determined prices.

(ii) It is also undisputed that in accordance with such an Agreement dated 31.12.1987 between the parties,