State Consumer Disputes Redressal Commission
M/S. Amrit Flour Mill & Another vs The Chairman, Bank Of India & Others on 26 May, 2010
State Consumer Disputes Redressal Commission
State Consumer Disputes Redressal
Commission
West Bengal
BHABANI BHAVAN
(GROUND FLOOR)
31, BELVEDERE ROAD,
ALIPORE
KOLKATA 700 027
S.C. CASE NO. : CC/08/27
DATE OF FILING :
26.05.2008 DATE OF FINAL ORDER:
26.05.2010
COMPLAINANTS
1. M/s.
Amrit Flour Mill
A
Proprietorship Firm carrying on its business from
H.C.L.
Road, Rangamatia (East)
P.O.
Rupnarayanpur Bazar
P.S.
Salanpur
Dist.
Burdwan.
2. Ms.
Sumitra Agarwal (Proprietor)
P.O.
Rupnarayanpur Bazar,
P.S.
Salanpur
Dist.
Burdwan.
OPPOSITE PARTIES
1. The Chairman
Bank of India
C-5 NG Block, Bandra East
Star House, Mumbai-51.
2. The Zonal Manager
Bank of India
Madhusudan Apartment
P-18, Dobson Lane
Howrah-711 101.
3. The Branch Manager
Bank of India
Chittaranjan Branch
P.O. Chittaranjan
Dist. Burdwan.
4. The Chairman-cum-Managing Director
National Insurance Company Limited
3, Middleton Street
Kolkata-700 017.
5. The Divisional Manager
National Insurance Co. Ltd.
Asansol Divisional Office
Shyama Apcar Garden
P.O. Asansol 713 304
Dist. Burdwan.
6. The Chief Regional Manager
National Insurance Company Limited
Kolkata Regional Office No. II
8, India Exchange Place
Kolkata-700 071.
BEFORE : MEMBER : MR. P.K.CHATTOPADHYAY
MEMBER : MR. S.COARI
FOR THE COMPLAINANT : Mr. Ashim Kr. Ghatak, Ld. Advocate
FOR THE OPPOSITE PARTIES
: Mr. S.K.Sengupta, Ld. Advocate
(Res.1,2&3)
Mr. S.N.Dutta,
Ld. Advocate (Res.4,5&6)
: O R D E R :
MR.
P.K.CHATTOPADHYAY, LD. MEMBER This complaint was filed by (1) M/s. Amrit Flour Mill and (2) Ms. Sumitra Agarwal (Proprietor) against the opposite parties namely (1) The Chairman, Bank of India (2) The Zonal Manager, Bank of India (3) The Branch Manager, Bank of India, Chittaranjan Branch, (4) The Chairman-cum-Managing Director, National Insurance Company Limited, (5) The Divisional Manager, National Insurance Co. Ltd. and (6) The Chief Regional Manager, National Insurance Company Limited, under Section 12 of the Consumer Protection Act, 1986 when the complainants case was that they were a proprietorship firm doing trading business in its premises.
The complainants started a current account with Bank of India, Chittaranjan Branch and later had a cash credit loan and took one insurance policy with National Insurance Co. Ltd., covering all risks against stock, materials, machineries, etc. with arrangement with the bank authority for paying the insurance premium therefor.
According to the complainants, between 4/5th June, 2006 a devastating fire engulfed the complainants premises and adjacent ones supposedly damaging huge stocks, furniture and fixtures and on 30.6.06 an insurance claim was filed on the OP Nos. 4 to 6 namely National Insurance Company Limited. A surveyor was appointed by the OP No. 4 and documents sought for were provided. However, till filing of the complaint case the claim was not finalized. Meanwhile, inspite of full knowledge of the foregoing position the OP No. 3 namely the Bank, started pressurizing the complainants to pay supposed dues on cash credit loan instead of pursuing the insurance claim and later most arbitrarily and wrongfully encashed the security money amounting to Rs. 9.00 lakhs to Rs. 10.00 lakhs approx. kept towards security against the said loan.
Subsequently, demand notice was supposedly sent though not received by the complainants and finally the OP Nos. 1 to 3 got the account of the complainants treated wrongfully as Non-Performing Asset and on 27.3.08 took illegal possession of the factory premises and other adjacent premises. It was pointed out that the OP Nos. 1 to 3 most illegally, wrongfully and criminally trespassed into the mortgaged property and also other non-mortgaged properties which grossly amounted on part of the bank authorities to defect and deficiency of service as well as unfair trade/business practice. Stating that while the complainants claim for Rs. 24,40,000/- on the insurance was not settled even after two years for no good and valid reason, it was pointed out that the OP Nos. 1 to 3 without any reference to court or Tribunal initiated action U/S 13(2) of the Securitization of Financial Assets and Enforcement of Security Act, 2002 and obtained illegal and wrongful possession in suppression of material fact, transgressing other properties, which were not mortgaged. It was submitted that due to continued inaction/illegal and arbitrary action/highhandedness on part of the Ops, the husband of the Complainant No. 2 namely Mr. Shankar Agarwal, suffered brain haemorrhage and after initial treatment at Asansol, had to be finally admitted/treated at AMRI Hospital, Dhakuria, Kolkata, involving life threatening medical conditions and very high expenditures. Thus, alleging deficiency of service and other mischief described hereinbefore the Complainants filed the case against the Ops as in the complaint, in terms of provisions of Consumer Protection Act, 1986, seeking damages as under :-
(i) Compensation/damages amounting to Rs. 24,40,000/- on account of fire from the Insurance Company with interest @ 18% till recovery from the date of claims.
(ii) Compensation towards business loss and other loss of Rs.
1,11,268/- (Rupees one lac eleven thousand two hundred sixty eight) only per month as detailed in the schedule A below with interest @ 18% p.a. since 27.03.08 till the date of payment.
(iii) To pay the proportionate 1/4th charges of the hospital and other medical charges amounting to Rs. 33125/- (Thirty three thousand one hundred twenty five only) as detailed in Schedule B below since 23.03.08 till date of order with interest @ 18% p.a.
(iv) To pay monthly charges till delivery of the Company premises wherever it applies.
(v) For further or other relief to which the complainants are entitled and other relief as may be allowed.
The Ops/Bank of India, entered appearance and challenged maintainability of the case on the plea that the possession of the charged assets/land & building thereto was taken through proceedings as per provisions of SARFAESI Act, 2002 and thus this Commission had no jurisdiction to adjudicate upon the case. It was further contended that the given loan having been taken by the complainants being for commercial purposes the complainants could not be deemed to be Consumers for the purposes of Consumer Protection Act, 1986, as amended and thus the complaint was not maintainable.
The OP No. 1 also drew attention to the fact that when there were two special statutes like Consumer Protection Act, 1986, as amended and SARFAESI Act, 2002 involving interpretation of Section 3 of Consumer Protection Act, 1986 and Section 35 of SARFAESI Act, 2002, both being non-obstinate clauses, the latter would prevail and accordingly, the complaint was sought to be dismissed being not maintainable.
The Ops/Insurance Company entered appearance and contended that firstly the proposal of the complainants suffered considerable number of gaps and non-disclosures and contained incorrect descriptions of property and/or locations thereof. Subsequent to filing of the claim by the complainants the Ops/Insurance Company took prompt measures in engaging surveyor, but the complainants did not care to file documents in totality as were necessary and/or sought and thus the Ops/Insurance Company could not take a final decision within possible time-frame. In spite of all the odds the OPs/Insurance Company settled the claim for an amount of Rs. 5,59,359/- and called upon the complainants to accept the settled claim amount subject of course to fulfillment of policy conditions of unqualified acceptance without raising dispute thereon, but the same having not been done the given amount could not be disbursed. Thus, the Ops/Insurance Co. argued that it had no deficiency of service on its part on the complainants and, therefore, the complaint case was not maintainable against them.
The matter was heard from respective sides with filing of WNA. In their WNA the Complainants namely 1) M/s. Amrit Flour Mill and (2) Ms. Sumitra Agarwal (Proprietor), reiterated the facts as stated in the petition of complaint where the total claim amount was more than Rs. 20.00 lakhs and less than Rs. 1.00 crore and thus the complaint was well within financial jurisdiction. Stating that Section 3 of Consumer Protection Act, 1986 and Section 35 of SARFAESI Act 2002 have no apparent contradiction as both were special and independent acts and there is no scope of overlapping of power or jurisdiction between the two and in that view it was argued that the Consumer Forum has every right to decide over issue of insurance claim and defects and deficiency of service/bad trade practice by the Bank. Stating that certain proceedings were pending before Debts Recovery Appellate Tribunal over order of dismissal dt. 17.8.09 of Debts Recovery Tribunal and the said order was also stayed by Honble High Court, Kolkata, it was submitted that the petition of complaint was on very cogent, legal and valid grounds, when even the surveyor of Insurance Company had failed to consider actual damages.
OPs/Bank in their WNA stated that M/s. Amrit Flour Mill took loan and advance from the Ops/Bank against the securities of hypothecation of stocks, machinery, movable assets etc. and mortgage of immovable properties lying and situated at Rupnarayanpur being the landed properties and the complainants committed default in payment of dues and violated the terms and conditions set down in the process of taking loan and, therefore, the Ops/Bank classified the Cash Credit Account of the complainants as Non Performing Assets as per guidelines of the RBI and under SARFAESI Act the mortgaged properties were seized by the Bank in presence of appropriate authority. The Bank also stated that the claim with the Insurance Company had hardly any connection with the Bank or SARFAESI Act, which dealt only with secured assets and not for any other property. Accordingly, the OPs/Bank sought dismissal of the present petition of complaint.
The OPs/Insurance Company in its WNA contended that the petiton of complaint was not maintainable as the Complainants were not consumers and placed citations in support. It also stated that the matter of insurance being based on utmost good faith and the Complainants having suppressed material facts have grossly violated said principles. Referring to two non-obstinate clauses in Consumer Protection Act and SARFAESI Act, it pointed out that the latter would prevail as per settled principles of interpretation of statutes and thus the petition of complaint is liable to be dismissed.
Citations relied by complainants and the Ops/Bank are as under :-
COMPLAINTS:-
1.
2008 (3) CPR 22 (NC) Champalal Verma Vs. The Oriental Insurance Co. Ltd.
2. 2008 (3) CPR 24 (NC) Somnath Punja Nerkar Vs. Ramesh Hiralal Kadam OPs/BANK
1. Kolkata Debts Recovery Tribunal No. 2 Amrit Flour Mill & Another Vs. Bank of India and 2 others (SA/74/2008).
2. (2001) 3 Supreme Court Cases 71 Solidaire India Ltd. Vs. Fairgrowth Financial Services Ltd.
3. First Appeal No. 84 of 2008 B.S.E.S. Rajdhani Power Ltd. Vs. M/s. Saraf Project Pvt. Ltd.
4. (2009) 2 CPJ 402 Meera Industries Vs. Modern Constructions
5. Misc. Case No. M.A.-263/09 arisen out of this Commissions Case No. CC/56/2009 DISCUSSION A. Having gone carefully through records filed by respective parties, we find that the complainants had no strong pleading or clinching proof whatsoever that the services availed by themselves from Ops/Bank or OPs/Insurance Co. were so availed for themselves exclusively for the purpose of earning livelihood by means of self-employment. In I (2005) CPJ 27 (NC) Harsolia Motors Vs. National Insurance Co. Ltd., the Honble National Commission inter alia decided as under-
Consumer Protection Act, 1986 Sections 2(1)(d), 2(1)(o) Consumer Service Commercial purpose Insurance policy taken by commercial units whether excluded from purview of C.P.Act Complainants availed service of insurance company for commercial purpose Complaint dismissed by State Commission as not maintainable Hence appeal Hiring of services of Insurance company by complainants who are carrying on commercial activities cannot be held to be a commercial purpose Policy is taken for reimbursement or indemnity for loss which may be suffered due to various perils No question of trading or carrying on commerce in insurance policy Contract of insurance generally belongs to general category of contract of indemnity Services may be for any connected commercial activity, yet it would be within purview of Act Commercial purpose means goods purchased or services hired should be used in activity directly intended to generate profit which is the main aim of commercial purpose Where goods purchased or services hired in activity which is directly not intended to generate profit, it would not be commercial purpose Person who takes insurance policy to cover envisaged risk not takes policy for commercial purpose Policy is only for indemnification of actual loss, not intended to generate profit Appeals allowed - Order of State Commission set aside Matter remitted back for being decided on merit.
This position underwent revisit in judgement in case of First Appeal No. 84 of 2008 B.S.E.S. Rajdhani Power Ltd. Vs. M/s. Saraf Project Pvt. Ltd. decided on 7.8.09 and Meera Industries Vs. Modern Constructions reported in (2009) 2 CPJ 402 where consequent upon amendment of Consumer Protection Act, 1986 in 2003 it was held as under :-
A person who avails of such services for any commercial purpose is excluded .. .Therefore, even the service availed for commercial purpose is excluded from the scope and ambit of consumer.
In the facts and circumstances of the complaint case under adjudication we find that the foregoing judgement of the Honble National Commission is aptly applicable and thus the complainants namely M/s. Amrit Flour Mill and its proprietor, Ms. Sumitra Agarwal, cannot be regarded as Consumers for the purposes of any adjudication under Consumer Protection Act, 1986, as amended.
In this regard our attention has been drawn to this Commissions Case No. CC/56/2009 where in a Misc. Application under number MA-263/09 arising out of the complaint case, this Commission held inter alia, considered the law referred to by the OP/Appellant in the two judgements cited by him. The position in law appears to have been settled by the said two judgements that after the amendment of Section 2(d)(ii) of the Consumer Protection Act, the definition of consumer has undergone a change and in respect of any cause arising after 15.3.03 the complainant is not a consumer if the Service Providers service has been taken for a commercial purpose. In the present case on facts it is apparent that contract was taken by the complainant for construction and maintenance of the road. Therefore, coverage of the policy being in aid of maintenance of the road, the same is a commercial purpose. No case has been made out that the complainant enjoys the benefit of the explanation i.e. the contract was for self-employment and for earning livelihood. Therefore, the complainant here is not a consumer and the complaint is not maintainable. Considering the facts and circumstances of the present case we hold the same view.
B. The other point agitated by the Ops is that the Debts Recovery Tribunal constituted under the provisions of the Recovery of Debts due to Banks & Financial Institutions Act 1993 having exclusive jurisdiction, the District Fora/ State Commission has no jurisdiction in the matter. This was further elaborated as under :-
a) The claim of the complainants as made in the complaint, being a debt as defined in Section 2(y) of the Recovery of Debts due to Banks & Financial Institutions Act, where debts have been defined as under :-
Debt means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on the date of the application.
b) The claim of the Ops/Insurance Co. being the debt in terms of Section 18 of DRT Act, other than Debts Recovery Tribunal no other court or authority has any jurisdiction to recover the debt.
c) DRT Act was enacted in 1993 while Consumer Protection Act was enacted in 1986. Section 34 of DRT Act has over-riding effect on other Acts.
In this regard reliance was had on the following citations
1) 1999 (4) SCC 69 Para-15
2) AIR 2003 Cal 7
3) AIR 2005 Cal 153 After careful consideration of aforesaid position we accept such interpretation of law as set down by Honble Apex Court and other superior courts.
C. Referring to interpretation of Section 3 of Consumer Protection Act, 1986 and Section 35 of SARFAESI Act, 2002 and reliance on citation of 2001 (3) SCC 71 Solidaire India Ltd. Vs. Fairgrowth Financial Services Ltd. & others, we rely on the view of the Honble Apex Court in the above citation wherein it has been held, Special Court (Trial of Offences relating to Transactions in Securities) Act 1992 Provisions of, held, would prevail over those of the earlier Sick Industrial Companies (Special Provisions) Act, 1985 as in case of conflict between two special Acts, the later one prevails Where respondents suit for recovery against appellant (for loan amount of Rs one crore along with interest) had been decreed by Special Court and during pendency of appeal before Supreme Court, appellant Company became sick and proceedings were initiated under Sick Industrial companies (Special Provisions) Act, 1985 held, the Special Court Act would have overriding effect despite contrary provisions in 1985 Act and despite the fact that proceedings were taking place before BIFR special Court rightly concluded the proceedings before it and rightly decreed respondents suit Interpretation of Statues Subsidiary Rules of Interpretation Leges posteriores priores contraries abrogant In case of conflict between two Special Acts, the later one prevails Interpretation of Statutes Internal aids Non obstante clause and no contrary ruling could be provided by the Complainants.
D. We, however, find that inspite of incomplete submission of documents by the Complainants, as were sought by the OPs/Insurance Co. and its surveyor(s), the OPs/Insurance Co. offered Rs. 5,59,359/- as full and final settlement of the claim of the Complainants, subject to their unqualified acceptance of such. In view of above position we are in favour of a meeting between the Complainants and the Insurance Co. subject to Complainants initiative where the details could be worked out to satisfaction and resolution of standing issues.
O R D E R The petition of Complaint is dismissed on contest without cost being not maintainable under law. The Complainants are, however, in the facts and circumstances of the case, given liberty to seek a meeting with OPs/Insurance Co. towards resolution of its insurance claim, subject to satisfaction/mutual agreement on the standing issues amongst themselves.
MEMBER MEMBER