Consumer Alert
This is a very interesting case because I was confident that I would win the appeal. But the State Commission President said Kidzee would drag the Complainant to the Supreme Court and she would not be able to fight the Corporate.
I am thankful to the President of the State Commission and the Advocate for Kidzee for this settlement.
Binoy Gupta
CA – MAR 16 : SETTLED IN COURT
Housewife gets refund after KidZee franchise flops
A representative of Zee Interactive Learning Systems Ltd., Mumbai, met Kiran Yadav in July 2007. He persuaded her to open a KidZee centre at her Ahmedabad bungalow to earn some income. She entered into a franchise agreement paying Rs. 3.4 lakh. However, residents of Kiran’s society objected to the commercial activity. She asked for a refund and the company responded that the refund process would begin in January 2008. In spite of several reminders, this did not happen. Distressed, she approached CERS and a complaint was filed in the District Forum, Mumbai. The case was fought on behalf of CERS by advocate Dr. Binoy Gupta.
The company (now called ETC Networks Ltd.) contended that most of the amount paid consisted of franchisee fee which was non-refundable as per the agreement. CERS insisted that the agreement was void as Kiran’s society did not permit the centre to be set up. The Forum directed the company to refund Rs. 3.4 lakh to the complainant with interest at 9% and pay Rs. 25,000 towards litigation costs.
The verdict
Aggrieved, the company appealed to the Maharashtra State Commission which suggested that the matter be settled. The two parties arrived at an agreement as per which ETC Networks would pay Kiran Rs. 2 lakh.
Point of law
A franchise contract is void if it cannot be enforced because it is illegal to carry out commercial activity in a residential area
