Bangalore District Commission Holds Justdial Liable For Failure To Provide Customer Leads Despite Receiving Payment By Coaching Institute

Brief Facts:

M/s. Gate Indian Institute of Tutorials (“Complainant”) operated as a Registered Company under the Companies Act, functioning as a Proprietorship Firm. Represented by its proprietor, the Complainant offered both online and offline coaching programs exclusively for the purpose of earning livelihood through self-employment. Upon entering into four distinct packages with Justdial Pvt. Ltd., the agreements mainly revolve around the provision of details of end-users who have utilized Justdial's services to inquire about products or services, along with featuring the Complainant's advertisements in Phone, Web, and App searches with fixed positions. Despite not signing a formal agreement contract, the Complainant paid a total amount of Rs. 7,05,360/- to procure leads of consumers from a total of 360 categories and 182 pin codes. Justdial failed to deliver the promised leads, despite numerous requests for leads from it. Since the establishment of the institution and having paid close to Rs. 25 lakh to date, the Complainant requested Justdial to either reconsider and extend their services for another year or refund the entire amount from March 2020 due to the unsatisfactory service provided. The Complainant proposed to Justdial to deduct payment for two months of satisfactory service and refund Rs.6 lakh for the unsatisfactory service where Justdial failed to provide leads. Despite repeated promises from Justdial, there was no proper response or refund provided, leading to the issuance of a legal notice. Feeling aggrieved, the Complainant approached the III Additional Bangalore Urban District Consumer Disputes Redressal Commission, Bangalore (“District Commission”) and filed a consumer complaint against Justdial.

On the other hand, Justdial filed a detailed version partly denying the allegations made by the complainant. It debited any deficiency of service or unfair trade practices as alleged by the Complainant and argued that the Complainant do not qualify as a consumer.

Observations by the District Commission:

Regarding the consumer status of the Complainant, the District Commission held that the Complainant qualified as a consumer under Section 2(7) of the Consumer Protection Act, 2019 (“Act”), having paid for the services rendered by Justdial. It held that the nature of the Complainant's business, characterized as a coaching institute providing services to students without financial profit, does not disqualify it as a consumer, as per Section 2(7)(ii) and explanation (a).

The District Commission held that Justdial failed to provide the agreed leads to the Complainant despite receiving payment from it. It noted that the deficiency of service under Section 2(11) of the Act is defined as any fault, imperfection, or inadequacy in the quality, nature, or manner of performance required by law or contract. Additionally, the District Commission held that the failure of providing services by Justdial amounted to an unfair trade practice as outlined in Section 2(47)(i)(b) of the Act, which prohibits falsely representing services to be of a particular standard quality or grade. Therefore, it held Justdial liable of deficiency in services and unfair trade practices.

Furthermore, the District Commission noted that despite the Complainant's request for Justdial to cease its services and subsequent refund requests, Justdial denied such request. It directed Justdial refund Rs.6 lakhs from the date of the request email from Complainant to cease its services, along with an additional request for refund dated 01.08.2022, with interest at a rate of 9% per annum until realization. Justdial was also directed to pay a compensation of Rs. 30,000/- to the Complainant for the mental stress and financial hardship. Further, it was directed to pay Rs. 10,000/- for the litigation costs incurred by the Complainant.