Consumer Education and Research Society vs General Manager, Western Railway

THIS public interest litigation has been filed by two complainants. Complainant No.1 is the Consumer Education & Research Society (hereinafter referred to as CERS) which is a registered voluntary Consumer Association. The. complainant No. 2 is the consumer who had paid excess charges for parking his vehicle at the Ahmedabad Railway Station parking plot. Opponent Nos.1 and 2 are the officers of the Western Railway and Opponent No.3 is the contractor. The CERS is undertaking research and investigation into various consumer problems in different fields and has agitated the cause of the consumers and other persons before various High Courts, MRTP Commission and the Supreme Court of India. The complainants have alleged that the opponent No. 3 was granted the licence by the Western Railway for the period of two years commencing from 7.9.88 to 6.9.90 for managing the parking plot No.2 at the Ahmadabad Railway Station. The agreement between the contractor-the Opponent No. 3 and the Railway Administration is produced at Annexure-A. That in consideration of lumpsum amount of Rs. 2,02,222/- license was granted for the storage and safe custody of motor cars on the terms and conditions mentioned in the said contract. Under the licence the licensee was given right to recover the parking charges of motor cars which was Re. 1/- for every four hours or part thereof. In Clause 7 it is specifically provided that in case the licensee is found charging higher rates, than those prescribed or reported misbehaving with the customers, the contract shall be terminated and the security deposit will stand forfeited. Clause 8 of the contract provides that the licensee shall put a black board showing the authorised charges as shown in clause. The licensee shall also display a board indicating that the Railway Administration has only licensed premises for parking of motor cars. Depositors are advised that their transaction is with the contractors and not with the Railway and Railway Administration takes no responsibility for the loss and damage to the cars deposited or parked at this stand. Clause 9 which has some importance reads as under: "The licensee shall be directly responsible for all claims which may be preferred by an owner of a vehicle against the licensee on account of any loss or damage to his vehicle. The licensee shall also indemnify against and reimburse to the Railway Administration all demands, claims, costs, charges and expenses which may arise and Which may be incurred or paid in connection with the motor cars parked in the stand."

IT is alleged that the complainant No.l received some complaints from individual consumers regarding the malpractice of opponent No.2 in violaion of agreement. One consumer Mr. Zaveri wrote a letter dated 24.2.90 requesting the Station Superintendent, Ahmedabad Railway Station to prevent the aforesaid malpractice forthwith. A xerox copy of the letter is produced. The complaint appears to be : (1) that the contractor was charging higher charges for parking; (2) that no sign board displaying parking charges was displayed and in spite of several complaints having been made the malpractice is continued by the contractor. Therefore, the representative of CERS visited the parking plot several times for conducting detailed survey. Thereafter the complainant wrote two letters in March, 90, to the Opponent No. 2 Mr. P.C. Wadhwa, Area Manager, Western Railway, Ahmedabad drawing his attention to the irregularities and illegalities being committed by the contractor in collecting the parking charges. IT was also requested to display on the board the authorised parking rates in Gujarati, Hindi and English at prominent place and to charge official rates only. Xerox copy of these letters are produced. The Railway Administration replied that the contractor was fined, however, the contractor was still misbehaving and, therefore, the suggestion was made to terminate the agreement but no positive response was received. However, when this dereliction of duty on the part of the opponents was mentioned by the Managing Trustee of complainant No. l at Railway Staff Training College, Baroda during his lecture, the message went around and Opponent No. 2, Area Manager informed the complainant that the concerned contractor has been found on different occasions charging more than the prescribed rates and appropriate steps were being taken in this regard. According to the complainants these were false promises and Opponent No. 2 did not take action recommended until the complainant served a notice on Opponent No. 2. Opponent No. 2 informed the complainant by his communication dated 13.12.90 that the contractor''s licence has been terminated w.e.f. 6.12.90 but this date was contradicted by a letter of even number dated 7.1.91 wherein it was mentioned that the contract was terminated from 6.1.91. On the aforesaid facts and circumstances the complainants have alleged that the Railway Authorities have failed and neglected to perform their duty which they owed to the consumer, the visitors to the parking plot, that they would be chaiged strictly according to the rates prescribed for the purpose and the rates are prominently displayed in English and Gujarati. The further grievance of the complainants is that the coupon/ ticket issued by Opponent No. 3 did not carry any information about the charges to be paid by the consumer. This was possible only because of the inaction and negligence of the Railway Authority, though the same was brought to the notice of the Railway Authorities. Opponent No. 2 has failed to exercise supervisory control over the opponent No. 3 which amounts to gross negligence. IT is further alleged that the Complainant No. 1 conducted a research for the purpose of ascertaining the facts with the assistance of its staff consisting of Mrs. Niharika Dave and Ms. Sujata Shukla. Mrs. Dave was research coordinator with MBA degree and has vide experience of working in NGOs. Ms. Shukla holds Master''s Degree in English and was research assistant and also experienced researcher. The report made by them has been produced at Annexure-K. These two researchers have made 15 visits from 24.8.90 to 14.5.90 and 13 visits from 26.5.90 to 31.5.90 to Ahmedabad Railway Station and conducted interviews with consumers, care takers and railway officials. A count of total cars was taken to determine the average number of cars parked in a day. This observational study formed the basis for calculating the amount illegally collected by opponent No. 3 with the consent or connivance of opponent No. 2, his servants and agents. The complainants have, therefore, concluded that the estimated amount on account of this malpractice for a period of 23 months amounts to Rs. 2,84,448/-. The research team also found that: (1) in the parking plot rate board was not found displayed; (2) there was only one notice board depicting that the Railway Authorities are not responsible for any loss or damage to the vehicles. The complainants have further alleged that the licensee of this parking plot indulged in unfair trade practice to pocket money belonging to the consumers who have been taken by surprise. The striking feature was alleged to be lack of action on the part of Railway Authorities inspite of being fully aware of this scandal. Further averment of the complainants is that though the licensee is responsible for this malpractice, the main responsibility is that of the Railway Authorities because they are the principals. The complainants have ultimately prayed that the Commission may pass an order directing the opponent Nos.1, 2 and 3 jointly and severally to pay the compensation of Rs. 4,04,548/- the excess amount charged as refund to the consumers after identifying them, if possible. The complainants have further prayed that if it is not possible to identify the eligible consumers, the Commission may be pleased to pass an order directing the opponent Nos.1 and 2 to place this amount in a separate irrevocable Public Charitable Trust for the benefit of Consumers of Railway with nominees of the Commission, Railway and Consumer Organisation and the State Government of Gujarat. That the Commission may be pleased to pass an order to pay Rs. 25,000/- to the complainant society towards the cost of the complaint and expenses incurred for research, publication of research survey and out of pocket expenses etc.

The complainants have also submitted that in other democratic countries the Courts have recognised the role of voluntary organisations in promoting public interest and protecting the rights of the persons exploited. Even the Hon''ble Supreme Court in the case of Mr. M.C. Mehta for initiating public interest litigation concerning environmental pollution ordered payment of Rs. 50,000/- as costs to him. The CERS therefore should be paid the cost having regard to the important service rendered to the community etc.

THE opponents have filed the written statements and have resisted the claim of the complainants. THE complainants and opponent Nos. 1 and 2 have led evidence also but opponent No. 3, the contractor has not stepped into the witness box and has raised written contentions. In para 9 of the written statement, the opponent Nos. 1 and 2 have stated that the opponent No. 3 was to recover Re. 1/- for every four hours as parking charges and under Clause 8 the contractor was obliged to pul black board showing the authorised charges and that the Railway Administration was not responsible for any loss or damage to the cars deposited or parked at the stand. THEy have also stated that the contractor was fined four times i.e. between 1.6.90 and 28.11.90 on the grounds shown in para 12. However, this to our opinion is done after the research personnel made the survey and the lecture of the Managing Trustee of the complainant No.1 at Railway Staff College, Baroda. We have anxiously considered the averments of both the parties, the licence agreement and deposition of witness examined on behalf of the complainant and the Railway Administration. On perusal of these evidence there appears no doubt regarding the following facts. (1) that the contractor was to charge parking fees @ Re. 1/- for four hours or less; (2) that the contractor has not displayed any sign board showing the rates; (3) that the coupons tickets which were given to the persons who park their vehicles also do not show the rates for parking; (4) that for a very long time i.e. more than 1 years the railway authorities have not cared to take any notice or cognizance of this illegality and malpractice; (5) that there is no doubt that the contractor was charging higher parking charges than permitted and that is the reason why he did not display the board or show the charges in the coupon/ticket; (6) that the research team has investigated these facts and their estimate has not been seriously challenged by any other evidence; (7) that when the public organisations like Railways having battalions of servants, inspectors and officers do not take any action or try to implement the provisions of the contract, there is no recourse for the consumer activists or the associations except to carry out the research survey and estimate the damages suffered by the consumers at large by malpractice and/or exploitation; (8) that the Railway Inspector has remained totally indifferent, inactive and appears to have connived to the malpractice followed by the contractor. That his evidence does not inspire any confidence and replies are evasive.

THAT the important documentary evidence in this case is the ticket/receipt given by the contractor at Annexure-B which has serial number, date, column for vehicle number and time but does not mention the amount either recovered or payable in contradiction to the Bombay parking plot ticket. The Bombay parking plot tickets have been produced by the complainants at Annexure-I which shows the name of the contractor, receipt number, date, car number and amount of Re. 1/-. For the purpose of comparison both the tickets are shown at Annexure-N. Now, even though the contractor is giving the receipt with printed serial number, the contractor has not produced either the duplicate of these tickets or the account books which he might be maintaining or any other evidence though a specific amount of claim has been made by the complainants. In these circumstances, there is no alternative for us except to draw adverse inference that, had he produced the counterfoils of these parking receipts or the account books, the same would be against his interest and might help the complainants. There is no iota of doubt to us that the contractor has not put up the boards showing the rate for the parking, coupled with the fact that even the parking tickets/receipts issued by him also do not show the amount recovered clearly suggested that it was a deliberate act of the contractor to extract more money taking advantage of the gullible consumers who are always in haste to pick up the train for their guests or coming to receive the guests. The complainants have averred that the opponent No. 3 the contractor was appointed as licensee for parking plot No. 2 for the duration of 2 years beginning from 7.9.88 and he was following this malpractice of collecting more money and it appears that the h Administration has also fined him only in the year 1990 clearly show that the Railway Authority gave some attention only considering the seriousness of the matter when the complainants appointed a research team which visited the premises frequently and letters were also written by the complainants. It may also be noted that though there were incidents of malpractice brought to the notice of the Railway Administration, they did not care to terminate the contract which they were entitled to do. But, on the contrary, the term of the contract appears to have been extended for further period for reasons which do not appeal us at all. According to our opinion, merely because the contractor was fined will not absolve the Railway Authority from the responsibilities. Nobody has stated as to what steps the Railway Authorities took to prevent these malpractices or to force the contractor to put up boards. An Inspector has been appointed but with regret we have to say that he has failed to discharge his duties. Moreover, the officer who is directly dealing with the contractor has not entered into the witness box. There is an evidence Mr. Manmohan Singh, who appears to be quite vigilant, but does not help the railways much.

CONSIDERING these facts and circumstances, we are of the opinion that there is a deficiency in service by the contractor who was appointed by the Railway Administration which has also remained dormant spectator.

DR. Saraf has relied upon the case of Leoyd v. Grace, Smith and Company, (1912) AC 716 (HL) followed by Privy Council in the case of United Africa Company Limited v. Saka Owade, 1955 AC 130 (PC) in support of his arguments that the master is liable for the act of his servants though the servant has done that act for his own benefit or for the benefit of some other persons other than the master. However, the decision of the Hon''ble National Commission in the case of Indian Airlines v. S.N. Sinha reported in I (1992) CPJ 62 (NC)=1991 (1) CPR Page 213 is also cited by the complainant. In this case the airline was serving food to the passengers on board the aircraft. A passenger, Mr. Sinha was travelling in the flight No. IC 295 of Indian airlines which took off from Patna late in the evening. The dinner was served to the passengers by the Airline on board the aircraft. While taking the said food Mr. Sinha suddenly experienced some pain in his mouth because of hard substance piercing his gum. He inserted his finger into his mouth and pulled out a piece of metalic wire from his gum. Mr. Sinha therefore filed a complaint before the State Commission, Patna for recovery of Rs. 50,000/- for compensation for pain and suffering and Rs. 50,000/- as compensation for mental shock and suffering etc. In this case the airlines, the opposite party contended that providing meals or snacks to the passengers is not the main function of the airlines. That the function of the airline is only to transport the members of the public from one city to another etc. The airlines further contended that the food was not supplied by the airlines but by the caterers appointed by it and as such the person responsible for any defect noticed in the food is only the caterer who supplied the food. Delivering the judgment his Lordship the President has observed as under : "We are unable to accept the contention advanced by the Counsel appearing on behalf of the Indian Airlines that the inflight supply of food to the passengers while on board the aircraft is not part of "service" rendered by the Airline. As rightly pointed out by the State Commission, the cost of providing food to the passengers during the course of the flight is a factor that would certainly have gone into the computation while arriving at the fare structure and hence it cannot certainly be said that the food served to the passengers was given gratis, x x x x We are in complete agreement with the view expressed by the State Commis -sion that the caterer who had actually supplied the food can only be regarded as agent of the Airline and in the event of there being any defect in the food supplied by the caterers, the principal namely, the Indian Airlines will have to bear the responsibility for the same."

This decision to our opinion support Dr. Saraf''s contention. In the case before us the parking plot is provided by the railways and instead of collecting the charges for the parking directly, the railways appointed a contractor on lumpsum basis who collects the charges for the parking of vehicles on the property of the railways. The parking plot is also a requirement on every Railway Station because if a person who enters the premises of the Railway Station has to park his vehicle on the premises of the railway. The passengers who are coming from outside will take the vehicle parked on the .ailway premises and hence providing parking plot is one of the services provided by the Railway Administration for consideration. Either Railway Administration itself may collect the charges or appoint contractor or agent to collect the same makes no difference. The charges are payable to the contractor for the purpose of Railway Administration. The contractor derives the authority to collect the charges from the Railway Administration and hence the railway administration, to our opinion, is also responsible for the wrongful collection made by the contractor who can be said to be the agent of the Railway Administration.

We are, therefore, of the opinion that the Railway Administration is also liable for deficiency in service or collection of more charges than provided under the rules. According to the rules and instructions, a person who parks his vehicle has to pay Re. 1/- only for parking for four hours or less and if anything more is collected than prescribed under the rules and under the contract entered into with the contractor, the recovery is obviously illegal and both the contractor as well as the Railway Administration can be said to be liable to return the same to the owners of the vehicles. Here, the real difficulty arises as to what relief can be granted to the complainant and what is the amount that has been wrongly recovered from the persons who have parked their vehicles. We have evidence that the contractor was recovering double the amount and the consideration for the agreement is about Rs. 2 lakhs, it can therefore be presumed that the contractor who keeps the contract for Rs. 2 lakhs is bound to earn more than Rs. 2 lakhs and if the collection is double for the entire period, the wrongful colection should be presumed to be more than Rs. 2 lakhs. However, these are our assumptions based upon the estimates made by the Team. Even if we take the most conservative view, we can estimate that the contractor must have recovered more than Rs. 51,000/- and, therefore, we are inclined to consider the wrongful recovery at Rs. 51,000/- only by taking all the facts and circumstances into consideration.

AGAIN, the difficulty arises as to whom these damages should be awarded. Dr. Saraf has relied upon the decision of the Hon''ble Supreme Court in the case of The Nawabganj Sugar Mills Co. Ltd. & Ors. v. The Union of India and Ors. reported in AIR 1976 SC 1152. In that case, the price of levy sugar was pegged down by the State Government. The Mill owners impeached the validity of the control and obtained stay order of operation of the order. Under the cover of the Court''s stay order the null owners recovered higher price. The Hon''ble Supreme Court held that indubitably, the appellants are in uprighteous enjoyment of colossal sums which belong to small consumers. But having faced with the difficulty as to how the money can be returned to the small consumers, the Hon''ble Supreme Court directed that the security by way of bank guarantee furnished by mill owners will be encashed by the Registrar and kept in short-term deposit in the State Bank of India. The Registrar was further directed to hand over the money to State Government and dispose of all claims from the ultimate consumers for excess price paid on proper proof. Whatever amount remains unclaimed after one year that will be kept in the deposit and suggested that any legislation dealing with this subject were to be made before the amounts are disbursed, the legislative scheme will pro tanto prevail over the directions given above. Dr. Saraf therefore submits that after the case before the Supreme Court, the Central Government has enacted Consumer Welfare Fund Rules by notification dated 25.11.92 and that the money may be handed over to this Welfare Fund which may ultimately be utilised for the welfare of the consumers. Considering the complexity involved in this case, we ourselves have tried to find out the decided cases. We are of the opinion that merely because the persons who paid the amount are not available, the Court should not hesitate to grant the relief when it comes to the conclusion that there is unjust enrichment by the contractor taking advantage of the situation. We also agree with the contention of Dr. Saraf that to collect more money taking advantage of the haste and necessity of vehicle owners is also an unfair trade practice and such a practice shall have to be stopped by providing adequate relief and unless such a relief is given, such unfair trade practice will not come to an end. We have considered the arguments of both parties and we are of the opinion that new situation arisen needs new approach and relief and the Consumer Protection Act has been enacted for the benefit of the consumers and to discourage the exploitation and if we stop on account of non-availability of appropriate provisions regarding relief we shall be failing in our duties not to grant any relief after having come to the conclusion that there is an open violation of rules and instructions. We, therefore, are of the opinion that the amount of Rs. 51,000/- which We estimated to have been collected by the contractor should be given to the Consumer Welfare Fund when the same is deposited by the responsible parties. We find that both the contractor and the railways are responsible for the illegal recovery of estimated amount of Rs. 51,000/- which they should deposit before us and the Registrar is directed to send the amount, if deposited to the Consumer Welfare Fund. ORDER The complaint is allowed. Both the opponents viz. the contractor Mr. B.N. Virani as well as the Western Railways are jointly and serverally liable for the excess amount of Rs. 51,000/- recovered and are directed to deposit the same in this Commission and on such deposit being made, the Registrar of the Commission shall send the said amount to the Consumer Welfare Fund as established by the Central Government. Both the opponents jointly and severally will pay the cost of Rs. 5,000/- to the complainant No. 1 for spending and agitating for public cause. Complaint allowed with costs.