National Consumer Disputes Redressal
M/S. Maa Pet Pvt. Ltd. vs Bank Of Baroda on 24 February, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 1219 OF 2015 1. M/S. MAA PET PVT. LTD. G-8, Sector 11, Noida, G.B. Nagar, U.P. ...........Complainant(s) Versus 1. BANK OF BARODA 1st Floor, 19/31, Community Centre, Preet Vihar, New Delhi - 110 092. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Mr. Ajit Sharma, Advocate
Mr. Mayank Aggarwal, Advocate For the Opp.Party :
Dated : 24 Feb 2016 ORDER JUDGMENT
JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)
The complainant, which is a company registered under the provisions of Companies Act, applied for a loan of Rs. 7 crores for commercial purposes. The case of the complainant is that under an impression that the said loan will be sanctioned, it booked a machine paying advance to the extent of Euro 30,000. The total cost of the machinery was Rs. 3,80,000/-. The grievance of the complainant is that the aforesaid loan of Rs. 7 crores applied by it was not sanctioned by the bank despite the bank having earlier agreed in principal to sanction the said term loan. It would be pertinent to note here that even before applying for the aforesaid term loan of Rs. 7 crores, the petitioner company was enjoying credit facility from the respondent bank.
2. Section 2(1)(d) of the Consumer Protection Act to the extent it is relevant, provides that the term consumer does not include a person, who hires or avails services for a commercial purpose. The explanation below the aforesaid clause excludes from the ambit of the terms commercial purpose, use by a person of the goods used or bought by him and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment.
3. In the case before us, since the complainant is a company, the above referred explanation is clearly inapplicable in its case. Therefore, the only question would be whether the cash credit facility was sought by the complainant for a commercial purpose or not. The learned counsel for the complainant has today submitted to us a letter sent to the Bank forwarding a loan proposal for grant of fresh term loan of Rs. 5 crores and to increase the cash credit limit to Rs. 5 crore from the then existing limit of Rs. 2 crores. The aforesaid letter to the extent it is relevant reads as under:-
"Assistant General Manager Bank of Baroda Sector- 29, Noida Sub: Credit Facilities for Rs. 5 Cr. as Term Loan & Rs. 5 Cr. as Working Capital Sir, We, at Maa Pet Private Limiter, G-8, Sector-11, Noida, are submitting a loan proposal to you for granting of fresh term loan Rs. 5 Cr. from existing limit for Rs. 2 Cr.
We have been in the business of manufacturing of polypropylene thermoformed containers, made with the semi-automatic machines more than a decade to fulfil the requirement of our wide range of customers as below:-
- Haldiram group of companies
- Bikaner group of companies
- Yum restaurant Marketing Pvt. Ltd. (KFC)
- Jubilant Food works limited
- Barista coffee company ltd.
Presently, our turnover is more than Rs. 20 Cr. in this financial year with the existing installed semi-automatic plant. The new automatic plant will enhance our turnover up to Rs. 35 Cr. Year wise sales performance is as under:
Year 2010-11 2011-12 2012-13 Gross Sales 10.73 Cr. 15.13 Cr. 20.43 Cr.
Cost of Plant & Machinery to be purchased is Rs. 670 Lacs as per List of Machinery attached herewith for your kind perusal."
It is thus evident from a bare perusal of the aforesaid letter that the complainant company is engaged in the business of manufacturing polypropylene thermoformed containers made with semi-automatic machines and the said manufacturing was started by it more than ten years before the above referred letter was written to the Bank. The purpose of seeking term loan was to start an automatic machinery plant, which could be used for expanding manufacturing activity of the complainant. It is thus evident that the cash credit facility was applied by the complainant for the purpose of expanding its manufacturing activity, which would be nothing, but a commercial purpose. The manufacturing activity involves purchase of raw materials, applying a process through use of machinery or otherwise, to the said raw material and converting it into a finished product, which is then sold to the customers of the manufacturers. Such an activity is clearly a commercial activity, the purpose being to earn profit by undertaking such an activity. Therefore, it can hardly be disputed that the cash credit facility by the Bank was sought to be availed by the complainant for a commercial purpose. Consequently, there is no escape from the conclusion that a consumer forum has no jurisdiction to entertain this complaint.
4. The complaint alongwith with accompanying application is accordingly dismissed. It is, however, made clear that dismissal of the complaint will not come in the way of the complainant approaching a Court or a Forum other than a Consumer Forum for the redressal of its grievances.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER