Chandigarh

StateCommission

CC/70/2022

M/s BR Aluminum - Complainant(s)

Versus

M/s Audi Chandigarh - Opp.Party(s)

Devinder Kumar Adv.

13 Dec 2022

ORDER

  STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	70 of 2022
Date of Institution	:	27.09.2022
Date of Decision	:	13.12.2022

 

M/s BR Aluminum, Bhagwanpura Road, Sunam, District: Sangrur, Punjab through its Partner Sh. Sunil Jain competent and duly authorized.

•  

Versus

 

M/s Audi Chandigarh M/s Ashwani Automobiles Private Limited, 54, Industrial Area, Chandigarh-160002 through its Managing Director.

Email: info@audichandigarh.in

…..Opposite party

BEFORE:             JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MR.RAJESH K. ARYA, MEMBER

                   

 Present:-             Sh.Devinder Kumar, Advocate for the complainant.

       Sh.Gaurav Bhardwaj, Advocate for  the opposite party.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                    The prime question to be discussed in this case is, as to whether, the opposite party is entitled to forfeit the booking amount of the car in question, when the customer/complainant had got it cancelled?

2.           The facts in brief are that Sh.Sunil Jain, partner of the complainant firm (in short the complainant), allured by  various newspapers, other sources of media, internet as well as printed material booked one Audi A-6 Grey Colour, on 19.07.2022 with the opposite party, for a total price of Rs.60 lacs. For booking of the said car, the opposite party obtained the signature of the complainant on Sales Contract/booking form (Annexure C-2), which one is a standard format agreement. An amount of Rs.1,00,000/- was paid by the complainant via NEFT UTR:PUNBH22201470949 dated 20.07.2022 to the opposite party, towards the said booking.  Due to some financial reason, the complainant postponed the idea to purchase the said car and vide Letter dated 28.07.2022 (Annexure C-4), requested  the opposite party to cancel the booking and refund the booking amount of Rs. 1,00,000/-.  However, the opposite party refused to refund the booking amount. Resultantly, the complainant wrote email dated 28.07.2022 (Annexure C-5), to the manufacturer and explained all the facts with the request to cancel the booking and to refund of the amount of Rs.1,00,000/- by the opposite party. In response, manufacturer replied vide email dated 28.07.2022 (Annexure C-6) assured the complainant that it will consider his concern.  Thereafter, the opposite party sent email dated 28.07.2022 at 7.04 PM (Annexure C-7) to the manufacturer, with copy to the complainant, mentioning therein that the request of the complainant for refund of the booking amount is not genuine. In addition, the opposite party sent  another email dated 28.07.2022 at 7.46 PM (Annexure C-8) to the complainant, intimating that "We are reviewing your case and will get back to you shortly with more details". Instead of refunding the amount to the complainant, opposite party with malafide intentions sent email dated 01.08.2022 (Annexure C-9) to the complainant and intimated that "Since the car is being ordered on demand the booking amount will not be refundable no matter what so ever be the reason. The sales contract was signed post your agreement on the same". Thereafter, the manufacturer also sent email dated 02.08.2022 (Annexure C-10) to the complainant, taking the same stand as taken by the opposite party in email dated 01.08.2022 and refused to consider the genuine request of the complainant.  Under those circumstances, the complainant again sent email dated 06.08.2022, (Annexure C-11)  to the manufacturer and explained all the facts and denied the allegations of opposite party leveled against the complainant but to no avail.  Hence this complaint has been filed, seeking following relief:-

1. To set aside the terms and condition of the Sales Contract dated 19.07.2022 and declare the same as null and void being illegal on account of being an "unfair contract", as defined under Section-2 (46) of the Consumer Protection Act, 2019.
2. To refund the amount of Rs. 1,00,000/- along with interest @ 18% p.a. from the date deposit to till realization of the amount.
3. A sum of Rs. 1,00,000/- be imposed upon the opposite party as compensation for the physical and mental harassment caused to the complainant and as deterrent damages for adopting various unfair trade practices
4.  to pay a further sum of Rs. 1,00,000/- as punitive damages for the unfair trade practice and UNFAIR CONTRACT adopted by them.
5. To pay a sum of Rs. 55,000/- as legal expenses incurred by the complainant due to the wrongful acts of the opposite party.
6. Any other relief which this Hon'ble Commission deems fit in the facts and circumstances of the complaint may also be granted in favour of the complainant

 

3.           The claim of the complainant has been contested by the opposite party on numerous grounds, inter alia, that this complaint is not maintainable, the complainant is not a consumer etc. It has been stated in para no.2 and 3 of the written reply as under:-

“2. That the O.P has  acted in a very transparent and fair manner by providing complete details of the contract to the complainant and after going through the same and satisfying himself, the complainant duly signed the sales contract on 19.07.2022. That as per the sales contract the cancellation charges are clearly mentioned, if the cancellation is done within 7 days of booking then Rs.1,00,000/- or 25% of the booking amount whichever is higher. Though complainant made the request on 28.07.2022 i.e after 7 days and the O.P could have deducted Rs.3,00,000/- but it refunded the entire loan amount back and only kept the cancellation charges as per first condition.

 

3. That the complainant has also not provided the complete information in the complaint and has concealed a material fact with regard to the refund of the amount. That apart from Rs.1,00,000/- paid as booking amount, an amount of Rs.49,16,984/- was also received through RTGS from the ICICI bank as the loan was approved and the loan amount for the car of the complainant was sent to the O.P, however, after the cancellation request was received, the said amount of Rs.49,16,984/- was duly refunded to the ICICI Bank without any delay but the complainant has concealed this fact from this Hon'ble Commission”

 

4.           It has been further stated that as per terms and conditions of the contract, the booking amount paid was not refundable; that the contract was signed by the complainant voluntarily; and that the complainant was in touch with other dealer who offered him more discount and it was on account of that reason that the complainant cancelled the booking of the car in question with the opposite party. The remaining averments made by the complainant in his complaint have been denied being wrong.
5.           The complainant filed rejoinder wherein, he reiterated all the averments contained in the complaint and controverted those contained the written reply of  the opposite party.
6.           This Commission has afforded adequate opportunities to the contesting parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, the parties have adduced evidence by way of affidavits and also produced numerous documents including written arguments.
7.           We have heard the contesting parties and have also gone through the entire record of the case, including the rejoinder as well as written arguments aforesaid, very carefully.
8.           The following facts are not in dispute in this case:-
   1. Booking of the car in question with the opposite party on 19.07.2022, for total sale consideration of Rs.60 lacs;
   2. Payment of booking amount of Rs.1 lac by the complainant to the opposite party on 20.07.2022, through NEFT, (Annexure C-3);
   3. Transfer of amount of car loan amounting to Rs.49,16,984/- in the account of the opposite party, through ICICI bank;
   4. Email dated 28.07.2022 (Annexure C-4) sent by the complainant requesting the opposite party to cancel the booking of the car in question;
   5. Exchange of emails for the period from 28.07.2022 to 06.08.2022 between the parties, regarding refund of the amount paid by the complainant;
   6. Refusal of refund of the booking amount by the opposite party vide email dated 01.08.2022 (Annexure C-9)

 

9.           Counsel for the opposite party submitted that the terms and conditions attached with the document (Annexure C-2) be treated as contract duly signed by the parties. He further submitted that as per terms of cancellation of booking, it is stipulated that for cancellation notice received within the first seven calendar days of booking date;INR 100000/- or 25% of booking amount, whichever is higher was to be forfeited. According to him, the complainant is not entitled to refund of the booking amount.
10.           On the other hand, counsel for the complainant submitted that cancellation of booking of the car in question was made on 28.07.2022. However, the terms and conditions which were got signed by the complainant on dotted lines were highly unfair, unreasonable and one sided, therefore the complainant is not bound by the same. Those be ignored and the opposite party has no right to withhold the booking amount of the complainant, without providing him any service, to enrich itself.
11.           After hearing the rival contention of the parties, following questions have emerged for determination:-
    1. Whether the terms and conditions of the agreement Annexure C-2, authorizing the opposite party to forfeit the booking amount of Rs.1 lac are one-sided, oppressive, unfair and unreasonable and are liable to be ignored and set aside?
    2. Whether the complainant is entitled to any relief and if yes, to what extent?
12.           Firstly, this Commission will discuss the relevant terms and conditions with regard to cancellation of booking, as contained in Annexure C-2:-

• A Booking can only be cancelled by a Customer by sending the Dealer a cancellation notice in writing. Cancellation requests will only be accepted by the Dealer if they are duly signed by the Customer who has signed the Sales Contract.
• Cancellation charges: The Dealer reserves the right to retain as cancellation charge, any advance paid by the Customer towards booking of the Vehicle and as per the below criteria. The Customer agrees/accepts to forfeit the same, without any demur to /on the Dealer.
• For cancellation notice received within the first seven calendar days of booking date: INR 1,00,000 (Rupees One Lakh Only) or 25% of booking amount, whichever is higher.
• For cancellation notice received after seven calendar days of booking date: INR 3,00,000 (Rupees Three Lakh Only) or 50% of booking amount, whichever is higher
• For cancellation notice received for any customized Car: 100% of the booking amount, irrespective of date of cancellation in case the booking  amount is funded by a Finance Company / Bank, the cancellation notice must be sent via the same.
• Finance Company/Bank, such notice being in writing and signed by the Authorised representative of the Finance Company/Bank.
• In an unfortunate event that the Customer or his company becomes bankrupt or insolvent or makes an arrangement with his/its creditors or goes into liquidation or passes into the hands of a receiver, the Dealer may at his discretion cancel the Sales Contract and in such a case, the Dealer shall be free to sell the Vehicle to a new buyer. In such a case, the Dealer also reserves the right to fully retain any advance paid by the Customer towards booking of the Vehicle and the Customer, agrees/ accepts to forfeit the same, without any demur to/ on the Dealer.
• Any notice given under this sub-clause must be in writing and sent by either Registered Post with acknowledgement due or by hand delivery with acknowledgement due to the Dealer at the place of business of the Dealer.

 

13.           It may be stated here that as per the provisions of Section 2 (46) of the Consumer Protection Act, 2019 (CPA 2019), “unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, which includes imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; and imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage. Relevant sub-clauses (ii) and (vi) of Section 2 (46) of CPA 2019 reads as under:

“(i)…….

(ii) imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or

(iii) to (v) ……….

(vi) imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage….”

 

14.           In the case in hand, the opposite party has failed to establish any loss suffered by it due to cancellation of booking of the car in question,  by the complainant. It is also not the case of the opposite party that after its booking was cancelled by the complainant, the said car remained unsold, Mere taking signatures of the complainant on a standard format contract i.e. on the dotted lines, Annexure C-2 is unfair and unreasonable. We did not find anything mentioned in Annexure C-2 that in case the opposite party fails to deliver the car in question within the promised period or failed to deliver the same for any reason, the opposite party will pay double the booking amount to the purchaser/complainant. Thus, it is proved from the terms and conditions of Annexure C-2 that there is an inequality of bargaining power for the complainant, which has resulted into great disparity for him. 
15.           It is well settled law that, the courts have power to strike down the unfair and unreasonable clause(s) contained in a standard format contract, especially, when the parties are not equal in bargaining power. It is also well settled law that the terms and condition of the contract should be reasonable and if the same are unreasonable and opposed to public policy, they will not be enforced. Under similar circumstances, in the case Central Inland Water Transport Corporation Ltd. & Anr. Etc. vs Brojo Nath Ganguly & Anr. 1986 AIR 1571, 1986 SCR (2) 278, the Hon’ble Supreme Court struck down unfair and unreasonable clause in a contract while holding as under:-

“……The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infra-structural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances……”

 

16.           Similar view was taken by the Hon’ble Punjab and Haryana High Court in IFFCO TOKIO General Insurance Company Ltd. Vs. Permanent Lok Adalat (Public Utility Services), LPA No.1537 of 2011 decided on 26.08.2011, wherein also it was held as under:-

“………The law is well settled with regard to the exclusion clauses in standard forms of contracts. When the bargaining powers of the parties is unequal and a consumer has no real freedom to contract then such a power may be considered unfair. The principle deducible from various precedents is that the Courts would not enforce and when called upon to do so, strike down such an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. For instance, the above principle would apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It would also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. The types of contract to which the principle formulated above applies to terms which are so unfair and unreasonable that they shock the conscience of the Court.………”.

 

17.           In our considered opinion, in the present case also, the conditions contained in the standard form of contract (Annexure C-2) which provide forfeiting of booking amount, in case of cancellation of booking of car is against the public policy and required to be adjudged as void and ignored, especially, when it has not been proved by the opposite party, as to what loss it has suffered, on account of cancellation of booking by the complainant. Apart from it, if this condition is allowed to continue, it will amount to undue enrichment to the opposite party, which will go against the interests of the consumer and public policy. In this view of the matter, we are of the considered view that the terms and conditions of Annexure C-2 vide which, the booking amount has been forfeited by the opposite party are one-sided, oppressive, unfair and unreasonable and are liable to be ignored and set aside. As such, the said terms and conditions are ignored and set aside and it is held that the complainant is entitled to get refund of booking amount of Rs.1 lac. 
18.           It is not out of place to mention here that what to speak of any loss suffered by the opposite party in the matter, as per its own version in para no.3 of the written reply, the opposite party has candidly admitted that it had received the amount of Rs.49,16,984/-, through RTGS from ICICI bank against the car loan obtained by the complainant and the said huge amount of Rs.49,16,984/- and also Rs.1 lac (booking amount) was retained and utilized by the opposite party for quite long time and only the amount of  Rs.49,16,984/- was returned without any interest, on cancellation of booking of car. Thus, in these circumstances, the opposite party by retaining this amount, has infact, been benefited by earning interest thereon or otherwise, as no services against the said amount was provided by it to the complainant.
19.           Under above circumstances, we are of the consideration view that by not refunding the booking amount to the complainant, especially, when no services were provided to him by the opposite party and also at the same time, the opposite party has enriched itself, by utilizing the amount of Rs.49,16,984/- and also Rs.1 lac (booking amount)  for sufficient time, the  complainant has been caused a lot of mental agony, harassment and financial loss, for which he needs to be compensated  over and above refund of the amount paid by him.
20.           For the reasons recorded above, this complaint is partly accepted with costs and the opposite party is directed as under:-
    1. To refund the amount of Rs.1 lac to the complainant alongwith interest @9%  p.a. from the date of payment i.e. from 20.07.2022,  within a period of 30 days from the date of receipt of a certified copy of this order, failing which the said amount shall carry interest @12% p.a. from the date of default till realization.
    2. To pay Rs.25,000/-, towards compensation for causing mental agony and harassment to the complainant and also cost of litigation to the tune of Rs.11,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @9% p.a. from the date of default till realization.
21.           Certified Copies of this order be sent to the parties, free of charge.
22.           The file be consigned to Record Room, after completion.

 

Pronounced

13.12.2022

 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

Sd/-

 (RAJESH K. ARYA)

MEMBER

 

Rg.