By Smt. PREETHI SIVARAMAN.C, MEMBER
1.The complaint in short is as follows: -
Complainant approached the opposite parties to develop and e-commerce website and mobile applications (ios & Android) for their M/S FMANDM Global LLP for their livelihood. Complainant had discussed with the opposite parties regarding the said project in detail and opposite parties agreed to complete the said work positively within 4 - 5 weeks. Opposite parties fixed its cost as Rs.1,50,000/- and complainant accepted the same. Accordingly complainant entrusted the work of developing the E-commerce website and mobile applications (ios & android) for their firm to opposite parties on 12/11/2019. Opposite parties assured that the E-commerce website and mobile application will be delivered on or before 12/12/2019.
2. As demanded by the opposite parties, complainant had given to them Rs 1,25,000/- on different dates. Instead of completing the work within the said period and the said conditions and delivering the same to the complainant, the opposite parties again and again demanded more money and more time to complete the work. On seeing no other options complainant agreed to pay such increased amount and more time to opposite parties by believing they will complete the work. On 14/11/2019 after confirming the project work, opposite parties received Rs 10,000/- from complainant towards the project cost. Thereafter on 15/11/2019 itself opposite parties demanded Rs.75,000/- and complainant paid the same . Unfortunately opposite parties never complete the work as agreed and complainant contacted them over phone and communicated over email. All such attempts are vain. Hence complainant and his co-partners could not start their trade at all till this day in the absence of web designing portal and they sustained huge financial loss and other physical and mental agonies due to the unfair trade practice and deficiency of service of the opposite parties.
3. Thereafter complainant sent an email on 29/05/2020 directing the opposite parties to refund Rs. 1,25,000/- and to pay compensation of Rs. 2,40,000/- within 15 days. But opposite parties never acted on the above said communications of the complainant till date. Hence this complaint.
4. The prayer of the complainant is that, he is entitled to get Rs. 1,25000/- from opposite parties, the amount he had already paid to opposite parties, Rs. 2,40,000/- as compensation for the loss sustained by the complainant, Rs.1,00,000/- as compensation for the mental agony and hardship suffered by the complainant due to the act of opposite parties and Rs. 15,000/- as cost of the proceedings.
5. On admission of the complaint notice was issued to the opposite parties and
notice served on them and they appeared before the Commission through their counsel and filed version.
6. In their version, they stated that complaint is not maintainable before this commission either on fact or on law. Complainant had no locus standi to file this complaint as the complainant has not been hired any services from opposite parties for himself in his personal capacity. They again stated that they have not entered into any agreement with the complainant in his personal capacity. Complainant has approached and entered into an oral agreement which being a pre-incorporation agreement, for hiring the services of first opposite party representing him to be a designated partner of M/s FMM Global LLP (subsequently changed the name as M/s FMANDM Global LLP) and has hired the services of first opposite party to develop the E-commerce web portal and mobile app for the sole business purpose of M/s FMANDM Global Solutions LLP. So M/s FMANDM Global LLP, being a registered limited liability partnership, is a legal entity separate from its partners. Hence complaint is bad for non-joinder of necessary party.
7. The above complaint will not lie before this Commission as the complainant will not come under the purview of consumer. The hired/rendered services as stated in the complaint is purely a commercial services. Opposite parties denied paragraphs 2 of the complaint and stated that M/s FMANDM Global LLP is a limited liability partnership constituted for conducting big scale business. The activities of the partners of the said establishment is not for their livelihood. The first and second partners are designated partners of another LLP namely Right Thinkers LLP.
8. They again stated that they denied the averments in Para 4 of the complaint. But they admitted that they have received Rs. 1,25,000/- from complainant on 12/11/2019. But they denied the averment of the complainant that instead of completing the work opposite parties demanded more money and more time to finish the work. They again stated that the time for delivering the web portal has rectified as 8 weeks through an email dated 14/11/2019 with the complainant. In pursuance to the agreed schedule, the opposite parties had launched the Alfa presentation on 18/12/2019 and Beta launch on 02/01/2020. In between the scheduled Alfa launch and Beta Launch, complainant had placed change request pertaining to custom order tracking. In between Beta launch and live launch again the complainant had placed change request pertaining to the “Login with OTP” feature and High resolution App UI designs. Hence additional charges will be charged by opposite parties for change request and time also will be extended for completion of the work. That has been acknowledged/ accepted by the complainant which can be evidenced from the mail communication taken place between complainant and opposite parties. They again stated that the credentials of the web portal has been handed over to the complainant promptly on 22/04/2020.
9. As far as the development services agreed by opposite parties to develop the mobile app, opposite parties intimated the completion of the same and ready to upload in play store and App store. But the complainant had requested the opposite parties to upload the same in first opposite party’s account maintained with play store and app store. Even though the said service will not come under the scope of works, opposite party has accepted the request in the light of the relation maintained with the complainant and uploaded the said mobile app in play store through the first opposite party’s account maintained with play store and approved the same by play store. But the same has not been approved by the app store.
10. They again stated that opposite parties has charged Rs. 60,000/- as additional charge for change made in the web portal on change request placed by the complainant. So the total amount to be paid by the complainant to the opposite party is Rs. 2,40,000/- with 18% GST thereon and the complainant had paid Rs. 1,25,000/- so far. The complainant has to pay Rs. 1,15,000/- with 18% GST on total consideration of Rs. 2,40,000/- to the opposite parties. Despite the demand made by the opposite parties to the complainant for payment of balance consideration on several occasion, complainant reluctant to pay the same by saying excuses. Hence opposite parties are not liable to pay any amount as repayment and compensation to the complainant.
11. In order to substantiate the case of the complainant, he filed an affidavit in lieu of Chief examination and the documents he produced were marked as Ext. A1 to A13. Ext.A1 is the copy of the proposal No. 2019/1973-1 E-commerce Website and Mobile App Development dated 12/11/2019, Ext.A2 is the copy of email communication sent by opposite parties to complainant dated 14/11/2019, Ext.A3 is the copy of Email communication sent by complainant to opposite parties dated 03/12/2019, Ext.A4 is the copy of email communication sent by complainant to opposite parties dated 12/12/2019 , Ext. A5 is the copy of email communication sent by opposite parties to complainant dated 12/12/2019, Ext. A6 is the copy of email communication sent by complainant to opposite parties dated 12/12/2019. Ext. A7 is the copy of email communications sent by opposite parties to complainant dated 12/12/2019, Ext. A8 is the copy of email communication sent by complainant to opposite parties dated 18/12/2019, Ext. A9 is the copy of email communication sent by opposite parties to complainant dated 29/01/2020. Ext. A10 series are the copy of email communications sent by complainant to opposite parties dated 10/02/2020 & 17/02/2020, Ext. A11 is the copy of email communication sent by complainant to opposite parties dated 15/05/2020, Ext. A12 is the copy of email communication sent by complainant to opposite parties dated 29/05/2020, Ext. A13 is the copy of Statement of accounts of complainant’s firm dated 01/04/2020 to 31/12/2021.
Thereafter opposite parties field affidavit and documents that were marked as Ext. B1 to B3. Ext.B1 is the copy of the proposal No. 2019/1973-1 E-commerce Website and Mobile App Development dated 12/11/2019, Ext. B2 is the printed copy of comprehensive email communications exchanged between complainant and 1st opposite party pertaining to the transactions. Ext. B3 is the printed copy of Company Master Data downloaded from www.mca.gov.in.
12. Heard complainant and opposite parties. Perused affidavits and documents. The following points arise for consideration:-
- Whether this complaint is maintainable or not?
- Whether there is any deficiency of service and unfair trade practice on the part of opposite parties.
- If so, reliefs and cost.
13. Point No.1 :-
Case of the complainant is that, he had entrusted to develop and e-commerce website and mobile application (ios & android) for the firm M/s FMANDM Global LLP to opposite parties, but opposite parties not complied the terms and conditions in the proposals and not delivered to complainant. Hence complainant is compelled to approach another party to entrust the project to them after waiting the opposite parties for more than 6 months.
14. But opposite parties denied all the allegations raised by complainant against them and they said that the complaint is not maintainable because complainant is not a consumer under the Consumer Protection Act and the transaction is purely a business to business transactions. Complainant has no locus standi to file this complaint as no authorisation from M/s FMANDM Global LLP has been produced. Without impleading the above firm as a party to this proceeding, the complaint is bad for non-joinder of necessary parties. They again said that the amount fixed for rendering the service is Rs. 1,80,000/- excluding 18% GST. The delay in submission of the project caused due to the change request placed by the complainant between the Beta launch and the live version launch.
15. In this case the main contention of opposite parties are regarding maintainability of the matter. They argued that complainant hired their service for commercial purpose and hence the complaint does not come under the purview of definition of Section 2 (d) of the CP Act and consequently the matter cannot be decided by this Commission. They again stated that complainant has no case that he is a consumer. The complainant has nowhere pleaded in the complaint that he is a consumer nor he availed the service of his personal use. They again argued that complainant has no case that he hired the service for the purpose of earning his livelihood by means of self employment. They again stated that the subject matter transaction took place for and on behalf of M/s FMANDM Global LLP. It is well settled position that the pre incorporation transaction/agreement is binding on the company. Hence the above firm is a necessary party to this proceeding. But we are on the opinion that as per Section 2 (d) of Consumer Protection Act 1986 says that consumer means any person who (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person 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 or (ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of ] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person [but does not include a person who avails of such services for any commercial purpose This complaint filed on 16/07/2020, hence the old Consumer Protection Act 1986 prevails. The CP Act 1986 excludes “a person who obtains of such goods or services for resale or for commercial purposes.
In this case it is clear that complainant hired the service of opposite parties to develop the E-commerce website and mobile application (ios & android) for his own use only and not for resale at all. Complainant in his complaint stated that the above firm is formed for the livelihood of its five partners and this complaint is filed on behalf of its partners. Moreover complainant will conduct this business after developing the website and mobile application for his and his partners livelihood not for resale. Hence complainant has locus standi to file this complaint before this Commission. Hence complaint is maintainable because complainant is a consumer who availed a service from opposite parties for his livelihood by paying consideration.
16. Point No.2 & 3:-
The second aspect in the complaint is that whether there is any deficiency of service from the side of opposite parties. As per complainant’s case the time stipulated for delivering the web portal is 4-5 weeks, which is mentioned in Ext.A1 and Ext.B1. Thereafter opposite parties say that service delivery time has been mutually rescheduled by email dated 14/11/2019 which states as follows. Alfa launch - 4 weeks, Beta launch -2 weeks, live version launch -2 weeks. They again stated that the same has been acknowledged by the complainant through email dated 03/12/2019 as per Ext. B2. Opposite parties again stated that the main reason for the delay in the launch of the live version of the web portal is that there have been placed lots of change requests/additional features requested by the complainant between the beta launch and the live version. As per complainant’s case the date of issue of Ext. A1 document is 12/11/2019 and on the same day the order was confirmed. Hence the cut off date of the project is 12/12/2019. They again stated that as per Ext.A2 email communications that the delivery time of the web portal has not been rescheduled mutually as claimed by the opposite parties. After perusing Ext.A2 document it is seen that the opposite parties sent an email to complainant and said that “ Please disregard the delivery time mentioned in the quote”. The project delivery will be done in multiple phases and the schedule of Alfa launch - 4 weeks, Beta Launch - 2 weeks, live version launch- 2 weeks. After perusing Ext A1 and Ext. B1 documents there is nowhere mentioned about this kind of multiple phases and the schedule of the project delivery. So the contention of opposite parties about the mutually agreed reschedule of the project is unbelievable. If it is so, they will surely mention about this in Ext.A1 and Ext.B1 documents. The date of issue of project was 12/11/2019 and opposite parties rescheduled the project on 14/11/2019 and sent an email to complainant to inform about the change to complainant. It was a one sided act. Complainant accepted that proposal which was not in the original proposal made on 12/11/2019 between complainant and opposite parties. It is a deficiency in service from the side of opposite parties. As per the documents, we are on the opinion that it is only an information sent by opposite parties to the complainant after the reschedule has been done by them without the consent of complainant.
17. Another contention of opposite parties are that complainant placed change request or additional request to the opposite parties as their own. After perusing the documents we are on the opinion that as per Ext.A4 complainant sent an email dated 12/12/2019 to opposite parties and said that he is waiting for the call of opposite parties to know about Alfa launch, but none of the opposite parties contacted him. As per Ext.A6, complainant sent an email dated 12/12/2019 to opposite parties and said that “If something is not happening as per the schedule, please let complainant know well in advance”. Ext.A7 an email communication dated 12/12/2019 sent by opposite parties to complainant means that as per the discussion made between complainant and opposite parties through phone, opposite parties had re-scheduled the Alfa launch date to 17/12/2019. They again said that “there will not be any delay in the completion of project as earlier discussed.” They regretted for the inconvenience caused to the complainant. As per Ext.A8 document the email communication dated 18/12/2019 sent by complainant to opposite parties to enquire about the actual date of Alfa launch and he again stated that “hope you understand that we are counting on you, to proceed with our further plans”. As per Ext A9 document the email communication dated 29/01/2020 sent by opposite parties to complainant said that App development would need 5- 7 days after confirming the final features. From that letter, we realised that work is an extra feature. As per Ext.A10 document dated 10/02/2020 complainant sent an email to opposite parties and said that “opposite parties are taking much more time than expected for the Web/App development. They again stated that it is a simple e-commerce website with only one customization etc”. In that document page No.2 complainant was very much worried and said that they are totally stuck due to the App development and complainant wanted an unchangeable date from opposite party today itself .Complainant again says that “if we cannot pull this down in the next 10 days, we will lose all our spirit. I am really serious”. Thereafter complainant hopes that everything should be ready by 28th February. As per Ext.A11 dated 15/05/2020 the email communication sent by complainant to opposite parties says that, he was totally disappointed, his project is on stake because of opposite parties. Complainant asked to opposite parties that “why have you chosen Majento if you have no experts in Majento?, “Did you take this project as a learning for your developers”. From the above email communications we are on the opinion that complainant and opposite parties made a proposal on 12/11/2019 with a plan to complete the deal within 4-5 weeks time that means on or before 12/12/2019. Ext A4, A6, A7 are three email communications sent by complainant and opposite parties after one month that means 12/12/2019. As per Ext.A7 opposite parties said that as per the discussion both parties made over phone, opposite parties re-scheduled the Alfa launch date to 17/12/2019. But opposite parties not produced the evidence regarding the discussion between them over phone. From the documents, it is clear that even after six months , the opposite parties could not complete the project and deliver to the complainant. As per Ext.A11 dated 15/05/2020 which shows that after six months of the agreement, opposite parties did not finish the project and deliver to complainant. The proposal date was 12/11/2019 and this Ext.A11 email communication is dated 15/05/2020. From the agreement between complainant and opposite parties, it is clear that the website will deliver to complainant within 4- 5 weeks. From that document, we are on the opinion that complainant was totally disappointed and complainant wanted to provide them a smooth exit plan.
18. As per Ext B2, the email communication dated 03/12/2019, opposite parties says that “As per our mutually agreed schedule, the Alpha launch will be ready on or before 12th December. They again stated that ‘In the mean time, if there any inputs required from our side, please let us know’’. Ext.B2 email communication dated 18/12/2019 opposite parties sent an email to complainant and says that ‘’ thank you for your patience’’. We would like to inform you that we have uploaded the Alpha version of the website.’’ From the above mentioned document, it is clear that the opposite parties are uploaded the Alpha version only on 18/12/2019. On 31/12/2019 opposite parties in their email stated that “the additional request would extend the launch by 7 working days”. From the documents, it is clear that they are already late for the launching of the website and after 18 days of the scheduled launching date they sent an email to complainant to inform him that the launching day will be after 7 days due to the additional request made by the complainant. Thereafter on 01/01/2020 complainant sent an email to opposite parties and on that day itself opposite parties through an email apologise for the inconvenience and they stated that there was some misunderstanding on the order tracking feature. From the documents produced by complainant and opposite parties it is clear that there is a delay in launching the website, even if complainant had made additional request.
On 20/03/2020 opposite party sent an email to complainant that Covid-19 pandemic affected opposite party’s work place. They again stated that “current deadline for completing the mobile application development is March 31”. But 20/03/2020 is after 4 months of the scheduled launching of the website.
19. From the above documents, complaint, version and affidavits, it is clear that there is an inordinate delay in launching the website. The opposite parties stated that the main reason for the delay in launching of the live version of the web portal is that there have been placed lot of change requests or additional features requested by complainant. Thereafter they stated the reason for delay was spread of Covid-19 pandemic. As per Ext B2 the email communication dated 09/06/2020, opposite parties stated that the delivery time mentioned in the proposal was a clerical error and which was informed to the complainant. But as per documents, we are on the opinion that opposite parties informed this clerical mistake to complainant only through the email sent by them to complainant on 09/06/2020. In Ext A2 opposite parties said that that “ Please disregard the delivery time mentioned in the quote”. That means they admitted the latches from their side that there was delay in launching the website. The Commission was unaware about the website launching was happened or not. As per Ext A13 produced by complainant which shows that complainant had entrusted the work to another company and they made payments. But we are unable to come to a conclusion that complainant had entrusted the same work to this new company which he was entrusted to opposite parties. Sometimes complainant may have entrusted a different work to this new company. ExtA13 is not clear about the work entrusted to them and entrusted work was the same work entrusted to opposite parties or not. It is not clear through Ext A13 document that what are the overhead expenses incurred to complainant due to the default of opposite parties. Complainant not explained about that document before the Commission.
20. From the documents it is clear that complainant had paid Rs. 1,25,000/- to opposite parties for the website. Moreover complainant not explained what are the financial losses sustained to him due to the non delivering of the website to complainant by opposite parties. As per Ext.A1 and B1, the concerned page about the quotation summary it is seen that the quotation was for Rs.2,40,000/- and the net price after the special discount of 25% was Rs 1,80,000/- and 18% GST would be applicable. From the documents and from the complaint and from the admission of opposite parties, we are on the opinion that there was a delay. But it is not clear that the said website was launched or not and whether complainant is doing his business by using that app or not. Complainant also does not say in the complaint that the above website is not handed over to him. The complaint is the delay in launching of the website. Hence there is a clear deficiency in service and unfair trade practice from the side of opposite parties. Both parties are admitted that complainant paid Rs. 1,25,000/- to opposite parties. From the documents especially Ext.A12 it is clear that the App for complainant was not available in App store which opposite parties promised to upload that App to App Store on 17/4/2020. Then complainant alleged that opposite parties said to them that “we do not have an active app store account and other account has not been approved yet”. In that document complainant again said that they realised that opposite parties do not have a single app in the app store and they do not even have an active developer account. But opposite parties said that they uploaded the mobile app in App store, but the same has not been approved by the App Store. From the above facts it is clear that there was a delay caused from the side of opposite parties in launching the website and they stated the reason for delay was due to the additional change request made by the complainant.
But we are on the opinion that the reason submitted by opposite parties are not proved by them. Moreover they had submitted some wrong submission that the service delivery time has been mutually re-scheduled. But from the documents we are on the opinion that after 2 days of the agreement opposite parties informed the complainant about the re-scheduling of the delivery time. Complainant suppressed some details about that website and whether he is now doing the business with the website and regarding complainant’s income etc. From the complaint and version we are on the opinion that complainant had made some changes in the agreed services, but the delay in launching the website from opposite party’s side was unimaginable. Nearly 6 months delay caused from the side of opposite parties in launching the website. In Ext.B2 dated 12/12/2019 opposite parties sent an email to complainant and they regretted for the inconvenience caused. In the version and affidavit of opposite parties they submitted that the credentials of the web portal has been handed over to the complainant promptly on 22/04/2020. From the documents it is clear that complainant hired the service for an amount of Rs.1,80,000/- excluding 18% GST after granting 25% discount on gross amount and complainant had paid only Rs.1,25,000/- to opposite parties. Hence complainant is entitled to get compensation for the delay in launching the website. Hence the Commission finds that there is deficiency in service and unfair trade practice on the part of the opposite parties as alleged in the complaint. Hence we allow this complaint holding that opposite parties are deficient in service.
21. We allow this complaint as follows:-
- The opposite parties are directed to pay compensation of Rs.50,000/-(Rupees Fifty thousand only) to the complainant on account of deficiency in service on the part of opposite parties and thereby caused mental agony, physical hardships and sufferings to the complainant.
- The opposite parties also directed to pay Rs. 10,000/-(Rupees Ten thousand only) as cost of the proceedings.
If the above said amount is not paid to the complainant within 30 days from the date of receipt of copy of this order, the opposite parties are liable to pay the interest at the rate of 12% per annum on the said amount from the date of receipt of the copy of this order till realisation.
Dated this 17th day of January, 2023.
MOHANDASAN K., PRESIDENT
PREETHI SIVARAMAN C., MEMBER
MOHAMED ISMAYIL C.V., MEMBER
APPENDIX
Witness examined on the side of the complainant : Nil
Documents marked on the side of the complainant : Ext.A1to A13
Ext.A1 : Copy of the proposal No. 2019/1973-1 E-commerce Website and Mobile App
Development dated 12/11/2019.
Ext.A2 : Copy of email communication sent by opposite parties to complainant dated
14/11/2019.
Ext.A3 : Copy of Email communication sent by complainant to opposite parties dated
03/12/2019.
Ext.A4 : Copy of email communication sent by complainant to opposite parties dated
12/12/2019 .
Ext. A5: Copy of email communication sent by opposite parties to complainant dated
12/12/2019.
Ext. A6: Copy of email communication sent by complainant to opposite parties dated
12/12/2019.
Ext. A7: Copy of email communications sent by opposite parties to complainant
dated 12/12/2019.
Ext. A8 : Copy of email communication sent by complainant to opposite parties dated
18/12/2019.
Ext. A9: Copy of email communication sent by opposite parties to complainant dated
29/01/2020.
Ext.A10: Series are the copy of email communications sent by complainant to
opposite parties dated 10/02/2020 & 17/02/2020.
Ext.A11: Copy of email communication sent by complainant to opposite parties dated
15/05/2020.
Ext.A12: Copy of email communication sent by complainant to opposite parties dated
29/05/2020.
Ext.A13: Copy of Statement of accounts of complainant’s firm dated 01/04/2020 to
31/12/2021.
Witness examined on the side of the opposite party : Nil
Documents marked on the side of the opposite party : Ext. B1 to B3
Ext.B1 :Copy of the proposal No. 2019/1973-1 E-commerce Website and Mobile App
Development dated 12/11/2019.
Ext.B2 : Printed copy of comprehensive email communications exchanged between
complainant and 1st opposite party pertaining to the transactions.
Ext.B3 : Printed copy of Company Master Data downloaded from www.mca.gov.in.
MOHANDASAN K., PRESIDENT
PREETHI SIVARAMAN C., MEMBER
MOHAMED ISMAYIL C.V., MEMBER
