National Consumer Disputes Redressal
The Federal Bank, Bistupur, Jamshedpur vs Bijon Mishra on 18 May, 1989
JUDGMENT V. Balakrishna Eradi, J.
(1) The appellant before us the Federal Bank Lid, is a Scheduled Bank which has its registered office at Alwaye in Kerala. It has more than 350 Branches spread all over the country including two in the State of Bihar, one at Jamshedpur and the other at Patna. In or about November, 1988 the Award employees of the Bank had put forward certain demands and in an attempt to arrive at a mutually acceptable settlement of the issues several meetings were held between the management representatives of the employees Union, some of which were held in the presence ol' the Assistant Labour Officer (C), Ernakulam, While conciliation proceedings were pending before the Assistant Labour Officer, the award employees of the Bank in all the Branches of the country went on an indefinite strike from January 21, 1988 and as a result thereof the functioning of the Bank in all its Branches throughout India was completely paralysed. A settlement was ultimately reached between the management and the employees Union at Ernakulam on March 11, 1988 and with effect from that very day the normal work was resumed in all the Branches.
(2) The respondent Shri Bijon Mishra in his capacity as Managing Trustee of the Consumer Guidance Society ot Jamasedpur had a savings 287 Baank account in the Bistupur Branch of the Bank at Jamshedpur. There was a balance of Rs. 155 lakhs in the said account as on January 21, 1988. On March 22, 1988, the respondent wrote a letter to the Chairman of the appellant-Bank demanding full compensation to the consumers for the clesure of the Branch at Jamshedpur from 21-1-1988 to 11-3 1988 and in that letter he threatened the Chairman of the that if no positive reponse was received from the Chairman the Society would be compelled to appeal to all the account holders of the Bank to close their accounts immediately and also to launch a "Satyagrah'' from April 1, 1988 "for the fulfilment of their justified demands." He further stated that the Society would also be referring the matter to the State Commission Consstituted at Patna under the Consumer Protection Act. 1986 There was no indication in this letter of the quantum of compensation that was being claimed. Subsequently, on April 7, 1988, the respondent filed a complaint before the State Commission Patna stating that because of the closure of the Bank for the period of 51 days, the Society could not bring to use and right fully invest the money lying to its credit in the savings bank account with the Bank during the said period and 'its good-will in the market had been damaged as it could not complete on time iti project of establishing a food Testing Laboratory. On these grounds it was prayed that the State Commission should award compensation to the Society to the tune of Rs. 155 lakhs "for the damages of good-will, financial loss and also welfare of consumers."
(3) The appellant Bank filed a detailed reply before the State Comnuislion denying liability for payment of any compensation to the complainant. It was submitted-therein that the strike launched by the employees was during the pendency of conciliation proceedings was illegal inasmuch as Banking had been declared as a 'public utility service' under the provisions of the Industrial Disputes Act and any strike in a public utility service during the pendency of conciliation proceedings is illegal under Section 22 of the said Act. It was further submitted on behalf of the Bank before the State Commission that since the striking employees were sitting in front of the entrance of the Bank on all the working days and physically preventing officers and willing workers from entry into the Bank premises, it became totally impossible for the Bank to open the Branch and render service to the customers. Though requests were made by the Manager ot the Jamshedpur Branch of the Bank to the concerned officers of the Police Department for grant of police protection, those requests did not evoke any favourable response with the consequence that no banking operation could be conducted in the Branch due to circumstances totally beyond the control of the Bank. According to the reply-statement, the Manager and other officers of the Bank used together in front of the Bank regularly every morning during the strike period at the time prescribed for commencement of the work ot the Branch but because of the physical obstruction and threat of violence by the striking employees they were unable to enter the premises Dealing with the complainant's plea that he was unable to withdraw the amount from its savings Bank account with the Bank during (he period of the strike, it was submitted before the State Commission on behall' of the Bank that no request was made at anytime by the complainant to the Manager or to any of the officers of the Bank during the strike period for making alternative arrangements for payment of any part of the amount lying to the credit of the society in the savings bank account. It was pointed out in the reply statement that the complainant has his office in the very same building on its first floor and he was meeting the Manager and other officers almost every .day while they were gathered in front of the entrance of the Bank. According to the reply statement, if any request for payment had been made by the complainant to the Manager, the latter would have endeavoured to comply with the same by issuing a cheque on the Jamshedpur Branch of the State Bank of India with which the appellant Bank had an account. It was pointed out that in similar circumstances such a course was resorted to by the Branch Manager of the appellant Bank to meet the urgent requirement of another constituent of the Bank. Stress has been laid in the reply statement on the fact that even after the Bank resumed its normal working on the March 11, 1988, the complainant did not immediately withdraw any portion of the amount from the savings bank account of the Society and it was only on March 19, 1988 that be made some withdrawals from that account. It was therefore submitted before the State Commission on behalf of the Bank that the grievance put forward by the complainant was not genuine and was merely the result of an afterthought and the proceedings bad been initiated by the complainant mainly with a view to harass the Bank which bad incurred his displeasure because of the Branch Manager having expressed his inability to accede to a request made by the complainant sometime prior to the commencement of the strike for advancing of a loan of Rs. 20,000.00 without any security to a firm M/s Suman Services of which the complainant is the proprietor. Mention was also made in the reply of the fact that another trustee of the consumer Guidance Society Mr. Gyan Taneja who is the proprietor of a firm namely M/s Wheels had defaulted in payment of a loan which be had taken from the Bank and since all persuasion had failed the Bank was compelled to institute a suit which ended in a decree and even after the decree the said person had not cared to discharge the decretal debt. The respondent before the State Commission also produced along with the reply statement as Annexures G and H, copies of two advertisements published by the complainant Society in English and Hindi newspapers after the strike had ended exhorting all account holders to close their accounts with the Bank by March 31,1988. These facts and circumstances were relied on before the State Commission in support of the submission of the Bank that the present proceedings were not really motivated by a bonafide desire to uphold the legitimate rights of the consumers but that they constitute a misuse of the redressal machinery provided by the Act for collateral purpose of injuriously affecting the credit and reputation of the Bank out of personal grouse. After selling out the pleadings and contentions advanced by the two contesting parties, the State Commission disposed of the matter in a short paragraph which reads as follows : "AFTERhearing both the parties and in the circumstances of the case, the Commission feels that to any dispute within the Bank there are not only two panics, i.e. the Management and the Employees but also a third party namely, the customers or the consumers while handling any situation of the strike, the interests of this third party, which is equally paramount, if not more, cannot be ignored. Unfortunately, this does not appear to be duly recognised in the prevailing circumstances in the country. In the particular case in question, it took 50 days for the Management to come to a settlement with its employees and during the entire period the customers were unable to plan and draw their money from the Bank The customers know the Bank and did not divide the Bank between the Management and the Employees Customers are entitled to some service from the Bank, which they did not get in the present case from 21st January. 1988 to 10th March, 1988. There is, therefore, merit in the grievance of the complainant, but in view of the general prevailing circumstance we are not awarding any compensation. However, since the amount of the complainant remained with the Bank a¯ blocked money for the period of strike and the complainant could not plan to withdraw the money, the Commission feels that the credit amount should be considered like a long-term deposit and the maximum rate of interest applicable to such deposit viz. 10 per cent be given to the complainant for the period of the strike."
(4) Aggrieved by the direction issued by the State Commission that the appellant Bank should treat the amount which was at the credit of (he complainant trust in the saving' bank account with the Book as a long-lerm deposit and give the maximum rate of interest of ten per cent to such deposit tor the period of the strike, the Bank has preferred this appeal before us (5) The Indian Bank Association which claims to be a representative body o!' all the Banks functioning as a coordinating agency for the Banking Industry in the country filed Application No. 4 of 1989 seeking permission to intervene in the proceedings on the ground that the order of' the State Commission if allowed to stand, would have serious repercussions on all the Banks in the country who are members oi the applicant's association. By our order dated 27-2- 1989, we granted the prayer o! the Association to intervene and make its submissions in this appeal.
(6) The appellant was represented before us by Shri C.V. Francis, Advocate The respondent Shri Bejon Mishra appeared and presented his case in person. On behalf ot the intervener Shri Lalit Bhasin, Advocate appeared before us and addressed arguments.
(7) The facts of the case lie in a very narrow compass. There was an illigal strike by the award staff of the appellant Bank in all its Branches in all its Branches in India from 21-1-1998 to 3-3-1988.
(8) The nature of the sgiation and demonstrations carried on b-'the striking employees and their sympatharsers was such that entyy into and exit from the premises of the Bank in to Branch at Jamshedpur were rendered totally impossible Though the Manager of the Branch requested the Station House Officer of the police Station , whose jurisdiction the Branch at Jamshedpur Was situated requesting for police help, it did not evoke any favnurable response The complainant who had his office in the first floor of the same building in which the Branch Office of the Bank in Jamshedpur is situated un the ground floor had not made any request to the Branch Manager or other officers of the Bank who used togethter in front of the entrance of the Bank at the commencement of the working hours on all she working days during the strike for being enabled to withdraw any amount his savings bank account with the Bank wherein a balance of Rs 1.55 lakhs was available as on 21-1-1998. There is evidence to show that in the case of another customer who made a pressing request for withdrawal .of some amount from his account during the strike period, ihe Bank Manager made some altrnative arrarngement. by issuing a cheque on another local Bank. The strike having been launched by the award staff of the Bank on an all India basis, negoriations including conciliation pro- ceedings were being carried on at Ernakulam since the registered officer of the Bank is situated in the neighbouring town of Alwaye. There was hardly any role that the Branch Manager or the officers of the Bank at Jamshedpur could play Id the matter of negotiating a settlement of the dispute between the Management and the striking staff. Ultimately a settlement was reached between the Management and the All India Union representing the award staff at Ernakulam on the 11th March, 1988 and with effect from the same day normal banking operations were resumed in all the Branches of the Bank including the one at Jamshedpur.
(9) The real question that called for decision by the State Commission was whether under the provisions of the Consumer Protection Act, 1986 thereinafter called the 'Act'), a Bank can be made liable to pay compensation to its customers (consumers) for any loss or injury suffered by them on account of its failure to carry on banking operations during the period of an illegal strike by a section of the staff of the Bank involving physical obstruction and prevention of the entry into the premises of the Branch Office of the Bank by the officers and willing members of the staff. Unfortunately. there is absolutely no discussion at all of this question in the order passed by the State Commission. We find only a general observation made by the State Commission that "to any dispute between the Bank there are not only two parties namely, the Management and the employees but also a third party namely, the customers or consumers and that while handling any situation of the strike, the interests of this third party, which is equally paramount, if not more than, cannot be ignored." After making the afore- said observation the Commission proceeded to state categorically that "though there is merit in the grievance of the complainant that the customers of the Bank did not get any service from 21-1-1988 to10 10-3-1988,inviewof the general prevailing circumstance we are not awarding any compensation". Surprisingly, after recording this finding the Commission has without any further discussion proceeded to issue the impugned direction for treating the amount lying to the credit of the complainant in his savings bank account with the Bank as on the date of the commencement of the strike as a longterm deposit and allowed interest at 10 per cent thereon for the period of the sirike.
(10) In the order passed by us today in Original petition No.2 of 1988 in the case of Consumer Unity and Trust Society, Calcutta v. The Chairman and Managing Director, Bank of Baroda we have discussed at length the question whether there is any liability on the part of a Bank to pay compensation to its consumers under the provisions of the Act for the loss or injury suffered by them on account of the suspension of the business of tbe Bank during the period of an illegal strike involving physical obstruction to the entry of the officers and willing members ofthe staff into the Bank's offices. After adverting to the provisions of Section 14 of the Act and the general law governing the topic of liability for damages in circumstances constituting "force majeure", we have recorded the conclusion that a claim for compensation against a Banking Company cannot be sustained under the Act if the failure to render service was occasioned by reasons wholly beyond the control of the Bank and was not attributable to any negligence on the part of the Bank.
(11) In the light of the said decision rendered by us, it must follow that no relief could be legally given in the present case to the complainant (respondent) by the State Commission by way of award of compensation under Section 14(1)(d) of the Act. As already noticed, after the State Commission, albeit without any discussion of the legal position, recorded the conclusion that it was not awarding any compensation, it has nevertheless proceeded to give a direction that the Bank should treat the credit balance which the complainant bad in his savings bank account on 21-1-1988 as a long-term deposit and give him interest on that amouat at 10 per cent for the period tof the strike. In our opinion this direction was altogethber unwarranted in law. It is well established principle of law that what cannot be done directly cannot be done indirectly. Once it bad been specifically found by the State Commission that the complainant wa(r) not entitled to the award of compensation it should have merely dismissed 'the complain since the only relief which it could grant in such a case under Section 14(1)(d) of the Act, is the award of compensation. Instead, after finding that compensation could not be awarded what has been done by the State Commission is to issue a direction that the Bank should compensate the complainant by the grant of 10 per cent interest on the balance that was available in his lavings bank account. This direction was manifestly inconsistent with the Stale Commission's categorical finding that no case for awarding of compensation has been made out. The issuance of such a direction after having recorded a clear finding that compensation was not liable to be awarded was clearly beyond the jurisdiction and power of the State Commission under Section 14(l)(d)of the Act.
(12) We are therefore, constrained to set aside the order of the State Commission in so far as it has directed the appellant Bank to treat the amount lying to the credit of the respondent trust in its saving's bank account of the Bank as a long-term deposit and give the maximum rate of interesy namely, 10 per cent thereon for the period of the strike.
(13) Before parting with this case we feel constrained to observe that there is considerable force in the contention put forward on behalf of the appellant-Bank that initiating the proceeding before the State Commission which has given rise to this appeal, the respondent herein was motivated not really by considerations of genuine consumer interest but by extraneous factors. We are totally unable to regard as proper the conduct of the respondent in publishing in all the local newspapers, immediately after the strike by the Bank's award staff was over, an appeal exhorting all account holders of the bank to close their accounts with the bank. In our opinion such conduct particularly in relation to a Banking institution does not certainly serve the best interests of the consumers namely, its depositore and account holders. This appeal is accordingly allowed but in the circumstances without any order as to costs In case any amount has been paid over to the complainant by the Bank in enforcement of the impugned order of the State Commission the same will be refunded to the appellant-Bank within one month from today.