State Consumer Disputes Redressal Commission
M/S.Cjp Industries Rep. By Its ... vs M/S. Tecpro Systems Limited, Rep. By Its ... on 5 June, 2023
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IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MADURAI.
Present: THIRU.N. RAJASEKAR, PRESIDING JUDICIAL MEMBER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER
C.C.No.09/2017
MONDAY, THE 05th DAY OF JUNE 2023
M/s. CJP Industries,
Represented by its Proprietor,
Mr.S.Julius,
W 166/167, Sidco Industrial Estate,
Valavanthankottai, Trichy - 620 015. Complainant
-Vs-
1. M/s.Teepro Systems Limited,
Represented by its Managing Director,
Teepro Towers, 11-A17, 5th Cross Road,
SIPCOT IT Park, Siruseri,
Chennai 603 103. 1 st Opposite Party
2. The Branch Manager,
State Bank of India,
Leather and International Branch,
MVJ Towers, 177/1, Poonamallee High Road,
Kilpauk, Chennai - 600 010. 2nd Opposite Party
3. The Branch Manager,
Canara Bank,
21, Shree Complex, Madurai Road,
Trichy - 620 008. 3 rd Opposite Party
Counsel for Complainant : Mr.R.Nambi, Advocate.
Counsel for Opposite Party-1 : Ex-parte.
Counsel for Opposite Party-2 : Mr.S.Elangovan, Advocate.
Counsel for Opposite Party-3 : Mr.C.Jawahar Ravindran, Advocate.
This complaint coming before us for final hearing on 08.02.2023 and upon
perusing the material records this Commission made the following:-
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ORDER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER.
1. This complaint has been filed by the complainant under section 17 (1) (a) (i) of the Consumer Protection Act, 1986 praying this Commission to direct all the opposite parties to pay Rs.97.00 lakhs towards compensation with interest at 18% per annum and to grant payment of interim damages atleast to the extent of 25% of the damages and also cost of the proceedings.
2. The complainant case :
Before adverting to deal with entire facts of the case we make it clear that we perused the entire pleading and written version filed by Op2 & Op3, their affidavit and documents. The complaint ran into more than 30 page In view of the order we proposed to pass we abridged the pleadings of the complainant and narrate the facts succinctly. That the complainant is a Registered Micro Enterprise having the manufacturing process and doing the business of manufacturing cum fabricating certain engineering and pressure parts for Boilers. The first opposite party is the purchaser who placed purchase order with the complainant. The second opposite party State Bank of India is the banker of the first opposite party who offered Letters of Credit facilities. The third opposite party Canara Bank is the banker of the complainant. The first opposite party placed two purchase order to the tune of Rs.65,58,972/- + Rs.6,10,478/- totally 1,07,38,256/-. After proper inspection the placement order was completed in all respect by the opposite party and some consignment was delivered to the first opposite party. Inspite of repeated demand for the purchase price the first opposite party issued only two cheques for a small amount they were also returned for want of sufficient funds. An advocate notice was 3 also sent about dishonour. Subsequently, the first opposite party under Corporate Dept Restructuring package (CDR) made an arrangement with their banker State Bank of India/second opposite party for a Letter of Credit facility. Though, the complainant raised Bill of Exchange through third opposite party to the second opposite party the facility was denied to the complainant pointing out certain discrepancies in the presentation of the bills and finally the second opposite party declared that the Letter of Credit facility was expired. The complainant also lodged a proceeding before the Micro and small Enterprise facilitation council against the opposite party. Because of the deficiency in service and torts committed by the opposite parties, the complainant lost his reputation, and lost his money and hence this complaint is filed praying to direct the opposite parties to pay Rs.97.00 lakhs towards compensation with interest at 18% per annum and to grant payment of interim damages atleast to the extent of 25% of the damages and also cost of the proceedings.
3. The first opposite party did not appear and he was set ex-parte before this Commission.
4. The second opposite party admitted that their bank issue Letter of Credit in favour of complainant for Rs.1,19,58,600/- on behalf of the first opposite party. The expiry date is 21.07.2014. The complainant had drawn a bill on 07.07.2014 for Rs.41,79,291/- it was lodged by third opposite party on 09.07.2014. The above bill was returned for rectifying certain discrepancies and it was again represented without rectifying the same and so it was again returned by the bank. The bank did not commit any deficiency in service and the complainant is not at all a consumer. Since the bank did not offer any service directly to the complainant and Letter of 4 Credit facilities is only a commercial transactions. Hence, the complaint is liable to be dismissed.
5. The third opposite party filed their written version stating that, there is no allegations made in the complaint against their service and they are not liable to pay any compensation and the complaint is liable to be dismissed against them.
6. Both sides filed their proof affidavit and Ex.A1 to Ex.A34 and Ex.B1 were marked.
7. The learned counsel for the complainant submitted that, the complainant is a consumer as he availed the services of the bank as a beneficiary of the first opposite party. It is his further submission that, he availed the services of the bank and the Letter of Credit Facility is not commercial in nature and hence return by the second opposite party without honouring the purchase order made by the first opposite party amounts to deficiency in service and he relied upon the definition of Consumer Protection Act Section 2(1)(d)(ii). On the other hand, the second opposite party mainly contended that the complainant is not a consumer and admittedly he is doing business and it is an industry and nature of Letter of Credit Facilities is commercial in nature for which he relied upon the Judgement of the National Consumer Disputes Redressal Commission (1) II (2020) CPJ 258 (NC) in Bird Machines Private Limited .Vs. Indusind Bank Limited & Another. (2) II (2022) CPJ 9 (SC) Supreme Court of India in Shrikant G.Mantri .Vs. Punjab National Bank.
8. Now the point for consideration is:
1. Whether the complainant is a consumer or not?
2. Whether the complaint is maintainable or not?5
Point no.1 As already stated the complainant clearly admitted that, it is an industry doing manufacturing and fabricating process. The first opposite party placed purchase order with the complainant. As far as this transaction is concerned the complainant is a service provider cum seller of an article or goods. So, this transaction is concerned he cannot be claimed as a consumer and this transactions naturally a business to business involving profit motive and hence he cannot be termed as a consumer in any way.
9. As per the case of the complainant the second opposite party State Bank of India offered Letter of Credit Facilities to the first opposite party. Absolutely, there is no direct relationship between the complainant and the second opposite party. Even the service of Letter of Credit facility offered to the first opposite party is not a service for livelihood of first opposite party. But as per the CDR scheme which means Corporate Debt Restructuring scheme, that is for the Debt incurred by a Corporate Business company the bank undertook a scheme and this is also not a services but it is a banking commercial transactions. The bank did not provide any service to any single person who is earning for his livelihood. On the other hand, the scheme intended to uplift a prospective but sick Unit. Even assuming that as a beneficiary of the first opposite party the complainant is entitled for the service of the bank it is not a consumer service provider relationship but a business to business profit motive transaction which is purely commercial in nature.
10. The National Consumer Disputes Redressal Commission in Shushma Goel .Vs. Punjab National Bank, II (2011) CPJ 270 (NC) has held that:-
""7.From this and the evidence produced on behalf of the Complainant before the Fora below, it is abundantly clear that the entire matter in the 6 complaint filed by Smt. Sushma Goel relates to operation of a bank account maintained by a commercial organization for a commercial purpose. The revision petition itself claims in para 3.1 that -
"Revisionist is engaged in business of the share trading and is an authorized agent of M/s Bonanza Portfolio Ltd (herein referred to as "Company") a company incorporated under Companies Act 1956 having its registered office at 4353/4C, Ansari Road, Darya Ganj, New Delhi".
8 .By this admission, the complaint will fall within the exception clause contained in Section 2(1)(d)(ii) of the Consumer Protection Act, as amended in 2002. In terms of this provision, the RP/Complainant does not qualify to be a consumer for the purposes of the Consumer Protection Act, 1986."
In yet another decision in Victory Electericals Ltd. .Vs. IDBI, Bank Ltd. & Ors. I (2012) CPJ 55 (NC). It has been held that:-
"Consumer Protection Act, 1986- Sections 2(1)(C), 2(1)(d), 21(a)(i)- Banking and Financial Institutions Services - Jurisdiction - Complaint- Maintainability of- Consumer- Commercial Purpose- Letter of credit issued by OP/IDBI Bank- Bank failed to pay full amount under letter of credit- Hence, complaint- After going by nature of transactions between parties it is found that complainant had availed services of OP for purely commercial purpose- It cannot be said that services were availed by complainant for ancillary purpose- Complainant is not consumer within meaning of Act and not entitled to invoke jurisdiction of this Commission 7 for redressal of its grievance--Present complaint is misconceived and rejected."
11. Likewise the Supreme Court of India in Rajeev Metal Works & Ors .Vs. The Mineral & Metal Trading Corpn. ... on 1 December, 1995 Equivalent citations: 1996 AIR 1083, JT 1995 (9) 250 has held as follows:
Thus considered, we are of the opinion that the appellants are not consumers by virtue of the exclusionary clause under Section 2(1)(d)(ii). Therefore, they would not come under Section 2(1)(d)(ii) of the Act. Since the object of the supply and purchase of the goods was commercial purpose, it would certainly come within the exclusionary clause of Section 2(1)(d)(ii)". It is clearly held the service offered by the bank under Letter of Credit facility is purely commercial in nature and Consumer Protection Act is not applicable to those proceedings."
The above point has been reiterated by the Judgements referred by the opposite parties side counsel which is as follows:- The National Consumer Disputes Redressal Commission (1) II (2020) CPJ 258 (NC) in Bird Machines Private Limited -Vs- Indusind Bank Limited & Another. (2) II (2022) CPJ 9 (SC) Supreme Court of India in Shrikant G.Mantri -Vs- Punjab National Bank.
12. So, we held that, the transaction is commercial transactions and there is no relationship directly between the complainant and the second opposite party as such the complaint is liable to be dismissed against 1st and 2nd opposite parties. As far as the third opposite party is concerned they acted only as the banker and no 8 allegations were leveled against them. Hence, the complaint is also liable to be dismissed against third opposite party and we answered the point no.1.
13. Point no.2 As per the allegations of the complainant all the cause of action accrued in the year 2014. But, the complaint was lodged only in the year 2017. The complaint is barred by limitation and the complainant is not a consumer as discussed earlier there is no deficiency in service committed by second and third opposite parties since they have acted as per their Regulations. If there has been any tort as alleged by the complainant and the company suffers any injury to its goodwill, reputation and loss of income these are all question of facts they cannot be decided in a consumer complaint which is a summary proceeding. So, in every respect the complaint is liable to be dismissed. Considering the circumstances of the case there is no order as to cost in the complaint and we answered the point no.2 accordingly.
14. In the result,
1. The complaint is dismissed.
2. No cost.
Dictated to the Steno-typist transcribed and typed by her corrected and pronounced by us on this the 05th day of June 2023.
Sd/-xxxxxxxx Sd/-xxxxxxxxxx
S.KARUPPIAH, N. RAJASEKAR,
JUDICIAL MEMBER. PRESIDING JUDICIAL MEMBER.
ANNEXURE
List of documents filed on the side of the complainant Ex.A1 12.03.2013 Purchase Order given by 1 st opposite party Ex.A2 12.06.2013 Inspection Report 9 Ex.A3 27.06.2013 Inspection Certificate Ex.A4 11.07.2013 Further Purchase Order Ex.A5 19.11.2013 Performa Invoice Ex.A6 31.12.2013 Purchase order for transportation and coatong Ex.A7 16.02.2014 Return memo of Cheque dishonored Ex.A8 20.02.2014 Mail sent by complainant Ex.A9 23.04.2014 1st opposite party admitting letter Ex.A10 25.04.2014 Letter to MSEFC Ex.A11 29.03.2014 Return memo of Cheque dishonored Ex.A12 09.06.2014 Insurance Particulars 16.06.2014 Ex.A13 30.02.2014 Joint Inspection Report Ex.A14 26.05.2014 LC Received by mail Ex.A15 29.05.2014 Legal notice sent by complainant through advocate.
Ex.A16 30.05.2014 Email sent to 1st opposite party
Ex.A17 04.06.2014 Letter sent to 1st opposite party and MSEFC
Ex.A18 12.06.2014 Letter sent to 1st opposite party by MSEFC
20.06.2014
Ex.A19 09.06.2014 Invoices for finished goods
19.06.2014
Ex.A20 03.09.2014 Joint Inspection Report, Receipt cum Voucher
Ex.A21 30.07.2014 Letter sent by 1st opposite party to 2nd opposite party
Ex.A22 07.07.2014 Bill of Exchange
Ex.A23 09.07.2014 Submission of bills by 3rd opposite party to 2nd opposite party
Ex.A24 14.07.2014 Reply sent by 2nd opposite party to 3rd opposite party
Ex.A25 14.07.2014 Filling cheque cases before the Judicial Magistrate No.2 Trichy
Ex.A26 17.07.2014 Reply sent by 3rd opposite party to 2nd opposite party
Ex.A27 Without date, Reply letter sent by 2 nd opposite party to 3rd opposite party 09.08.2014 10 Ex.A28 19.08.2014 Letter for clarification by complainant, reply mail by 2 nd opposite party Ex.A29 11.09.2014 Reply letter sent by 3rd opposite party to 2nd opposite party Ex.A30 12.09.2014 Reply sent by 3rd opposite party to 2nd opposite party Ex.A31 17.10.2014 Letter to DIC Ex.A32 19.11.2014 Letter by 1st opposite party about CDR Package Ex.A33 24.11.2014 Legal notice to 1st & 2nd opposite party by complainant Ex.A34 05.01.2014 Letter sent by 3rd opposite party to 2nd opposite party List of documents filed on the side of opposite parties Ex.B1 26.12.2017 State Bank of Account relating to 1st opposite party Sd/-xxxxxxxx Sd/-xxxxxxxxx S.KARUPPIAH, N. RAJASEKAR, JUDICIAL MEMBER. PRESIDING JUDICIAL MEMBER.
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