MANGAL BIHARI vs RAJASTHAN HINDI GRANTH ACADEMY

THIS is an appeal under Section 15 of the Consumer Protection Act, 1986 (the ''Act'') against the order dated 31.3.2001 whereby the District Forum No. 2, Jaipur, dismissed appellant''s Complaint No. 848 of 1999 holding that the complainant was not a "consumer" and hence not entitled to maintain the complaint before the Forum.

FACTS relevant to and sufficient for disposal of the appeal are these : The appellant is a retired member of the Indian Administrative Services. He authored a book titled as "Prashasnic Chintan" and vide his letter dated 28.6.1997, proposed to the Rajasthan Hindi Granth Academy, the respondent to publish the same as it would serve as a useful reference material to the benefit of the students of Public Administration and trainees in IAS, RAS, etc., etc. By its letter dated 20.8.1998 the respondent Academy though appreciated that the book was of high standard yet declined to accept the proposal on the ground that the same was not according to the University curriculum and returned the manuscript of the book to the appellant. The appellant represented the matter to the President of the respondent Academy who directed the Director of the Academy to publish the book. The appellant re-submitted his manuscript and copyright afresh to the Academy in the year 1998. The Director of the Academy took up the matter once again and asked the appellant to inform him of his option of the mode of payment of his honorarium/remuneration of either receiving Rs. 75/- per thousand words and royalty at 10% or royalty at 20% of the sale-proceeds of the book. Brief introduction of the author as also of the book and forwarding note to it were also called for. The case of the complainant is that although, vide his letter dated 20.10.1998, he informed the Director of his option of the mode of payment of the honorarium/remuneration and submitted the required information to him and vide Superintendent''s letter dated 15.12.1998 computerised composed page Nos. 1 to 281 of the book were sent to his perusal and proof reading but all of a sudden on 5.4.1999 the Director of the respondent Academy required him to drop certain passages from the book which allegedly contained some objectionable remarks/reference against a particular political party and its leader. The case of the appellant further is that although he repeatedly requested the Director through letters and telephone calls to pin-point the so-called objectionable references and some unpleasant correspondence also took place between the two sides but the book was not published by the respondent Academy resulting in avoidable huge losses of honorarium/remuneration in the form of royalty to the appellant. The appellant thus attributed deficiency in service on the part of the respondent Academy and claimed Rs. 3 lakhs as compensation for mental agony and Rs. 1,000/- as cost of litigation.

Respondent''s version of the case, however, is that it is a registered society formed with the main object of producing and publishing Scientific and Technical Literature and Humanities Literature of University standard in Hindi language, that out of the subjects being taught in Universities only 32 subjects have been approved of by the respondent Academy for production and publication in Hindi language and that out of the books written on those 32 subjects such books only as are approved of for publication by the Subject Committee, comprising of reputed and learned acadenmicians in the subjects of the books, are published for the benefit of the students and others.

ELABORATING the practice and procedure, being adopted by it for achieving its above mentioned object, the respondent Academy averred that either the ambitious authors of books on a particular subjects are invited to write books on the given subjects or such authors themselves propose and offer their books to be published by the Committee, with or without alteration/modifications/suggestions, then further terms and conditions including the payment of honorarium, royalty or remunerations, as the case may be, are negotiated between the parties. In the course of such negotiations re-arrangement of topics, chapter, modification, alterations and deletions in the subject-matter are suggested in order to improve the utility and marketability of the book, it was averred that all these steps are taken before according its acceptance by the Academy of author''s proposal to publish his book. It was further contended that in the meeting of the Subject Committee, held on 11.8.1998 in the premises of the Academy, appellant''s proposal for publication of his book was taken up for examination and discussion and vide its resolution No. 2 the Subject Committee resolved not to accord its approval to the publication of the book on the ground that the same was not in accord with the University curriculum. This decision of the Subject Committee was duly communicated by the respondent Academy vide its letter dated 20.8.1998, to the appellant.

IT was further averred that subsequently the appellant made fresh efforts through good offices of the higher authorities of the Academy whereupon preliminaries before acceptance of the offer of the appellant were inititated. IT was thus averred that the preliminaries like asking the appellant to make his option regarding mode of receiving honorarium/remuneration and deleting the objectionable reference to a particular political party/political personality were still being made before according its acceptance of the proposal that the appellant filed his complaint. IT was submitted that such negotiations and exchange of correspondence between the parties do not go to make any contract between them and, therefore, the appellant was not a "consumer" within the meaning of the term defined in Section 2(1)(d) of the Act. The District Forum accepted the version of the case of the respondent Academy and held that since the appellant was not found to be a "consumer" in the facts and circumstances of the case, the complaint was not maintainable before the Forum. We heard the learned Counsel for the parties at considerable length and perused the material our attention was invited to.

WE fully agree with Mr. J.P. Sharma, the learned Counsel for the appellant, that ''royalty'' is a payment to a patentee by agreement on every article made according to his patent or to an author by a publisher on every copy of his book sold or to the owner of minerals for the right of working the same on every ton or weight raised. The term is especially used in reference to mines, patents and copy-rights. It is main features are that the payment made for the privilege of utilising the article/work is in proportion to the benefit drawn and the payment of royalty has its basis in some agreement between the parties. The payment may, however, be made in cash or in kind and also either in lumpsum or periodically under a scheme of deferred payment, as is agreed between the parties.

A "consumer", as defined in Section 2(1)(d) of the Act, may be either a ''buyer'' of goods for consideration or a ''hirer'' of services of another for consideration. In either case, a contract between the parties makes the very foundation of their inter se realtionship of either as a buyer and a seller of goods or as a hirer and a provider of services. The creation/existence of a contract between them, either for purchase and sale of goods or for hiring and providing services shall have, therefore, to be proved in order to make the purchaser of goods or hirer of services a "consumer" within the meaning of the term defined in Section 2(1)(d) of the Act. Needless to say that a contract can be said to have been formed by or created between the parties when the proposal or offer made by the proposer is accepted by the other party, called the acceptor.

The solution of the controversy between the parties hereto lies in the answer to the question as to whether a completed contract had come into existence between them. In order to find out the answer to this question it would be necessary to know of the nature of activities being carried on by the respondent Academy for what purpose. On making such an exercise in the present case we find that the main objects of the respondent Academy, inter alia, are "to establish at Jaipur within the State of Rajasthan the Rajasthan Hindi Granth Academy for the production and publication of Scientific and Techincal Literature and Humanities Literature of University Standard in Hindi language" and to promote and encourage the production of such literature. These objects are achieved by the Academy through its Executive Committee, which carries on its administration and executes the policies as laid down by the Council of Governors, which is the collective name of the first members of the Academy. The State Education Minister is the Chairman of the Council of Governors and also of the Executive Committee and all the other members of the Council are either eminent educationists like Vice-Chancellors of the Universities, Pricipals of Colleges, Deans of different Faculties in the Universities or actively engaged in the promotion and advancement of technical and scientific education in the State in different capacities. The Academy, with the approval of the State Government appoints a whole-time officer as its Director who carries out its day-to-day administration under the direction and control of the Executive Committee. All contracts for and on behalf of the Committee are required to be expressed in the name of the Academy and executed by its Director.

LOOKING to the objects to be achieved by the Academy, the composition of the Council of Governors and the Executive Committee and the nature of the activities it is required to carry on to achieve its main objects, the practice and procedure being adopted by it seems to fit in the mode of the discharge of its duties. The Academy may achieve its said objects either by inviting the ambitious authors to write books/articles for it on the given subjects or by accepting the proposals of such authors/writers received by it without such invitation. In either case the proposal has to come from authors or writers of books/articles, as in the former case, it would simply be an invitation to offer by the Academy to the prospective author/writer. In both the cases, whether the offer is received in answer to the invitation of the author/writer himself makes an offer to it for publication of his book, the Academy, before accepting the proposal, is necessarily required to undertake several steps, like approval of the standard of the book by the Subject Committee, honorarium/remuneration to be paid to the author, etc., etc. Clause 14 of the proforma on "invitation to offer", placed on the record of the District Forum, clearly mentions that it is only after making such exercise that the book/article, may be said to have been accepted/approved of for publication. A binding contract, giving rise to rights and obligations of the parties, would then come into existence. Coming now to the merits of appellant''s case, we find that the book, submitted by him for publication, contained 24 writeups, written by the appellant from time -to-time during his long career as an able and learned administrator with the Central and State Governments. The writeups deal with his personal and practical knowledge and experience of the working and functioning of different departments of the Governments and handling of such departments by the members of Civil Services and the political leadership at the relevant time. The compilation had earned to the appellant reward, recognition and appreciation in 1997 from Maharana Mewar Foundation. The book may be quite useful for students of Public Administration and IAS, RAS trainees. The appellant had made his proposal/offer to the Academy for its publication for the benefit of the above, mentioned class of readers. But the Subject Committee of the respondent Academy did not find it in accord with University curriculum and accordingly did not approve of its publication in its meeting held on 11.8.1998. The offer/proposal made by the appellant on 28.6.1997 was thus not accepted by the respondent Academy on 18.6.1998 and it communicated its rejection of appellant''s proposal to him on 28.6.1997. No binding contract thus came into existence between the parties.

THIS brings us to the second round of the efforts made by the appellant in the direction of seeing his book published by the respondent Academy. In this respect it was submitted that on the intervention by/instructions from the Chairman of the Academy namely, the then State Education Minister, the script of the book in question was accepted for publication and thus a completed contract of service came to be formed between the parties. The case of the appellant is that it was after the creation of contract of service between the parties that the Director required the appellant to opt for one of the two modes for receipt of his honorarium/remuneration/royalty-cum-remuneration and although the appellant duly exercised his option and communicated that fact to the Academy but the Director raised the issue of removal of certain unidentified and unpointed out so-called observations/remarks against a particular political party and/or its leadership. THIS, according to the appellant, amounted to "deficiency in service, on the part of the respondent Academy". In our opinion, this line of reasoning is not correct in the facts and circumstances of this case and the law applicable thereto. We have already seen that due to non-approval by the Subject Committee of appellant''s book for publication no completed contract came into existence creating rights and obligations of the parties. Acceptance of appellant''s proposal for publication of the book by the Academy was subject to the approval by the Subject Committee of the subject matter of the book and its standard and such approval was not granted by them. Neither the Memorandum of Association nor the Rules and Regulations of the respondent Academy deal with the powers of either the Chairman of the Council or the Director of the Committee in regard to the review or revision of the decision taken by the Subject Committee. In law the power to review an order/decision ordinarily vests in the very authority which has made such order/decision and the power of revision of an order/decision lies with the authority which is higher in hierarchy to the authority making the order/decision sought to be revised. There is, on the record of the Forum, neither any order of Subject Committee indicating the review by it of its earlier order/decision nor of the Academy itself or even of the Hon''ble Minister revising the decision of the Subject Committee taken on 18.8.1998. An oral direction of the Chairman of the Academy to its Director may, at the most, amount to an instruction for initiation of the process of getting the approval of the Subject Committee in the matter afresh. For, neither the Memorandum of the Association nor the Rules and Regulations of the Academy contain any provision vesting a veto power in either the Hon''ble Minister in his capacity as Chairman of the Council of Governors or Chairman of the Executive Committee or in the Director of the Academy to undo what the Academy or, for that matter, the Subject Committee had done at an earlier point of time. Requiring the appellant to exercise his option with regard to royalty/honorarium/remuneration, payable to him, and deleting certain objectionable remarks/observations from the subject-matter of the book are simply the steps taken by the Director, intended to be taken as per Condition No. 14 of the Proforma Agreement, in the direction of acceptance of the proposal. We may agree with Mr. Sharma that the act of taking decision on the issue as to whether certain remarks/objections/reference, made in the book against some institution/organisation/establishment or a person, is objectionable or not not lies within the domain of the Academy/Subject Committee and not of the Director who is simply to carry out day-to-day administration of the Academy under the direction and control of the Executive Committee as provided in Article 8 of the Memorandum of Association and Rule 8(c) of the Rules and Regulations of the Academy. But this factual and legal position does not alter the conclusion that the matter of publication of the book in question is still at the negotiating stage and has not reached the stage of formation of a contract between the parties, as it is not on record that the Academy/Executive Committee/Subject Committee has ever accorded its approval for publication of the book.

TO sum up, we, in agreement with the District Forum, hold that since no contract has still been formed between the parties, no relationship of consumer and provider of services was created between them. The complaint had, therefore, rightly been dismissed by the District Forum as being not maintainable.

IN view of the above discussion, we need not consider the question that since royalty is an honorarium paid by the publisher to an author of a book in lieu of the abdication of exclusiveness of the right of publication and re-publication of the book which otherwise vests in the author as a part of copy-right, a dispute about it may or may not attract the definition of the term "service" and "deficiency", as given in Sections 2(1)(o) and 2(1)(g) so as to make it or not to make it a "Consumer Dispute" within the meaning of the term defined in Section 2(1)(e) of the Act. Similarly, we find the cases reported in (1994) 1 SCC 243, II (1999) CPJ 177, II (1996) CPJ 31 (SC), (2000) 1 SCC 98 and (2000) 5 SCC 294, relied upon by the appellant, clearly distinguishable on facts from those obtaining in the case before us and, therefore, we need not discuss them. In the result we find no force in this appeal and dismiss it with no orders as to costs, but with liberty to the appellant to seek his remedy before appropriate competent authority, if so advised. Appeal dismissed.