National Consumer Disputes Redressal
Prakash R. Shenai vs Canara Bank And Anr., Tata Engineering & ... on 11 November, 2002
ORDER
D.P. Wadhwa, J. (President)
1. By this order we propose to decide four matters which were listed on 7.11.2002 in which Mr. Prakash R. Shenai is either the complainant (O.P. No. 236/96, filed on 30.10.96) or Appellant (in FA 247/98) or Petitioner (in R.P. 1179/02 and RP 11880/92).
2. O.P. No. 236/96 is against the Canara Bank and Shenai has claimed compensation of Rs. 1,57,78,540/-. It is for withdrawal of various facilities granted by the Canara Bank. Particulars of claim are as under:-
"S.No. Claim Claim Amount
1. Claim arising out of stoppage of I.L.C. (Inland
Letter of Credit) & S.D.B. (Secured Demand Bill) Rs. 22,00,000/=
facilities and loss of goods purchased by the complainant
Add: Interest on Rs. 22,00,000/- @ 24.5% p.a. from
October 1, 1994 till the date of filing of complaint
(interest compounded quarterly)
2. Claim arising out of non payment of outstanding amount
by I.M.I.L. on withdrawal of performance Guarantee Rs. 83,39,020/=
by Bank.
3. Claim arising out of Loss of Business and Profit on
the contract with I.M.I.L. as the same was terminated
on withdrawal of Performance Bank Guarantee Rs. 87,49,520/=
4. Claim arising out of Loss of Business and profit there
on due to stoppage facilities illegally by the Bank. Rs. 5,63,40,000/-
5. Loss of Reputation and Mental Agony Rs. 3,00,00,000/=
6. Legal and such other costs Rs. 50,000/=
Total Claim Amount Rs. 10,57,78,540/-
+ add interest on Rs. 22,00,000/=
@24.5% p.a. from the date of filing
of complaint till order the decree."
3. FA No. 247/98 is also against the Canara Bank and Shenai, is in appeal before us against the order dated 19.12.97 of the Maharashtra State Consumer Disputes Redressal Commission dismissing the complaint of Shenai with cost of Rs. 5,000/-. The complaint before the State Commission was filed on 21.7.97. Here the claim was for Rs. 8,10,000/- with particulars of claim as under:
"Sl. No. Particulars Amount
1. Value of securities shares not returned by the
Opposite Party Rs. 2,70,000.00
2. Loss due to lapse 2 LIC policies Rs. 3,00,000.00 +
bonus available as
per LIC.
3. Business loss Rs. 1,50,000.00
4. Compensation for mental agony Rs. 60,000.00
5. Cost of legal expenses Rs. 30,000.00
6. Interest on Rs. 2,70,000/=@24% p.a. compounded
on quarterly basis from the date of filing till payment
and realisation ....."
4. At this stage we may also notice that Canara Bank also field a suit on 30.3.98 against Shenai and his wife for recovery of Rs. 1,41,81,825.95. Various other reliefs have been claimed in the suit. The was originally filed in the Bombay High Court and later on transferred to Debt Recovery Tribunal where it is stated to be pending. The amounts claimed under various heads are as under:
"S.No. Head of Account Liability
1. Open Cash Credit Rs. 27,46,989.40 ps.
2. Supply Bills Rs. 78,24,523.00 ps.
3. Deferred Payment Guarantee Rs. 10,20,922.05 ps.
4. Funded DPG/DPN Rs. 18,02,292.00 ps.
5. Demand Promissory Note Rs. 5,87,099.50 ps.
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Rs. 1,41,81,825.95 ps.
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Revision Petition Nos. 1179/02 and 1180/02:
5. In RP NO. 1179/2002 Shenai had claimed compensation of Rs. 1,96,000/- on the allegation that Tata Engineering and Locomotive Co. Ltd. (TELCO opposite party-respondent herein, supplied wrong spare parts of the value of 46,266.03 for the Tata Hitachi Excavator of Shenai. Shenai said he also suffered loss of Rs. 10,000/- per day because excavator could not work and for 15 days he claimed compensation of Rs. 1,50,000/-. Thus making total claim of Rs. 1,96,000/-. TELCO took the stand that the spare parts were not supplied by it and further that Shenai could not raise a consumer dispute as he had purchased the spare parts for use in business of excavator which was purely a commercial transaction. Stand of Shenai that he was self-employed an he was using the excavator for livelihood was squarely rejected by the District Forum. Against the order dated 9.7.98 of the District Forum dismissing the complaint, Shenai filed appeal before the Maharashtra State Consumer Disputes Redressal Commission. State Commission was also of the view that Shenai was carrying on business on large scale and had purchased the machinery for business purpose. It therefore, by order dated 14th May, 2002 upheld the order of the District Forum dismissing his complaint.
6. By the same common judgment appeal of Shenai against Vako Seals was also dismissed by the State Commission. In this case complaint before the District Forum was that Vako Seals, opposite party did not manufacture the ordered seals as per the specifications and were of inferior quality. Shenai asked for refund of the amount paid District Forum held that it was a commercial transaction and complaint was not maintainable under the Consumer Protection Act.
6. As far as these two revision petitions are concerned there is a concurrent findings of the District Forum and the State Commission that complaints did not raise consumer dispute and these were not maintainable under the Consumer Protection Act, 1986. There was no element of service in either of the two complaints and only commercial transaction was involved. Before us Shenai asserted that he was doing the business to earn his livelihood. This could not be true as O.P. No. 236 and FA 247/98 would show that Shenai is doing business in large scale. He is a Government Contractor and as a matter of fact, after looking into the facts of the appeal and the complaint to argument is needed to hold that Shenai is not truthful. Perhaps it has become practice for some to mislead the judicial forum without regard to the truth. Shenai seems to be one of such persons. A person who claim damages of over Rs. 5.63 crores for withdrawal of credit facilities by Bank cannot be said to be doing business as self employed to earn his livelihood.
7. Accordingly these two revision petitions are dismissed with costs of Rs. 5,000/- each.
FIRST APPEAL NO. 247/98:
8. In the complaint from where FA 247/98 arose, complainant said he and his wife Prabha Shenai and one Ms. B.D. Nagaratnarao held certain shares of various companies. This Ms. Nagratnaro is nothing but the wife of Shenai. These shares were lodged with the Canara Bank for availing over draft limit from it. Complaint is that in spite of various requests these share certificates were not returned. It is also the complaint that the life insurance policies were allowed to be lapsed for non-payment of premium by the Bank. Canara Bank said that the complaint was filed as Canara Bank initiated proceedings against Shenai and his wife for recovery of the amounts due to the Bank which was over Rs. 1.00 crores. Bank has recalled the facilities as Shenai failed to regularise his accounts and was under heavy liabilities to the Bank. It was submitted by the Bank that in order to shield himself from recovery proceedings this complaint which was false, was filed. It was denied that there was any fault on the part of the Bank in not paying the premium resulting in lapse of the insurance policies or that share certificates were not returned as alleged by the complainant. It is submitted that the shares were kept as security. State Commission after examining the documents on record held that there was clear document to show that the shares were given by way of security and were held by the Bank. There was no question of returning the shares which were retained as collateral security. State Commission said that the story of the complainant that there was wrong detention of the share certificates was palpably false to his knowledge
9. As regards insurance policies State Commission said that the same remarks would also apply. State Commission held that insurance policies were pledged with the Bank with the condition that the premiums would be paid by the complainant. Simply because premium notices were issued on the address of the Bank, would not make Bank responsible for paying the premium. As a matter of fact, there was no compulsion for the Bank to pay premium and then to increase the liability of the complainant which he owe to the Bank. State Commission accordingly dismissed the complaint with costs of Rs. 5,000/-.
10. We have not been able to find any flaw in the reasoning of the State Commission. Complaint was filed on 21.7.97 when to the knowledge of the complainant suit by the Bank against him was imminent. It is unfortunate that the face of the documents on record complainant should take up stand that the share certificates were unlawfully retained by the Bank of that there was any loss to him of the policies on account of any fault on the part of the Bank. There is nothing on the record to show as to how the loss of Rs. 1,50,000/- compensation for mental agony of Rs. 60,000/- and legal expenses of Rs. 30,000/- have been claimed. Shenai also claimed interest @24% on Rs. 2,70,000/-,, the value of the share certificates. This is a frivolous and vexatious complaint on the face of it and has been rightly dismissed by the State Commission.
11. In our view cost of Rs. 5000/- imposed by the State Commission was on the lower side inasmuch as complainant himself sought Rs. 30,000/- towards the expenses.
12. We would, therefore, dismiss this appeal with cost of Rs. 10,000/-.
Original Petition No. 236/97:
13. This complaint was filed on 30.10.96 and as noted above complainant claimed over Rs. 10.00 crores. There is no document in support of claims made by Shenai. In any case the question for consideration is if there is any deficiency in service rendered by the Bank as to entitle Shenai to claim damages. Shenai has not cared to file from his books of accounts the amounts due to the Bank. Bank has already filed a suit against Shenai and his wife claiming over Rs. 1.41 crores under various heads as due to it. Bank has brought on record various documents to support its claim that it was well within its right to withdraw the facilities granted to Shenai. Complainant has not shown as to how the Bank was not justified in withdrawing various facilities granted to it. As to the amount of loss, if any, suffered by Shenai would arise only after it is held that there has been deficiency in service rendered by the Bank entitling Shenai to claim damages. Shenai has stated that on the assurance given by the Bank for making facilities available to it various orders for manufacture of Diesel Generating Sets numbering 17 were obtained by him of various value ranging upto Rs. 90,000/- as given in the complaint, which it could not complete and on that account complainant suffered damages for Rs. 5.63 crores. He said he had also purchased the raw material for completing the manufacture and supply of Diesel Generating Sets. Simply because Bank withdrew the facilities, as alleged by Shenai, it is not enough to allege any deficiency in service and the complainant has to show that as far as he was concerned his dealing with the Bank were regular and that he had complied with the terms on which credit facilities were sanctioned and granted to him. He has failed to do that. Bank has to be alert if it finds that borrower has failed in his various obligations which included the liability to properly maintain its credit limit accounts for various facilities granted to it and to liquidate the outstanding in such accounts as per the agreed terms, it can take action to safeguard its interest. If the borrower, as Shenai in this case, fails to pass this test, Bank is well within its right to withdraw the facilities and claim the amounts due to it from Shenai. That apart, again we do not find any evidence as to how Shenai is claiming the amounts under various heads and as to how he has calculated these amounts totalling over Rs. 10.57 crores.
14. We do not think Shenai is either honest or reasonable in his approach. Simply because no court fee is payable when a person approaches a Consumer Forum, it does not mean that he can claim any amount by making any allegations whatsoever. We find this complaint to be gross abuse of the process of the National Commission and have no hesitation in dismissing the same with cost which we assess at Rs. 10,000/-.