National Consumer Disputes Redressal
State Bank Of India vs M/S. Anurag Textiles on 11 February, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 541 OF 2011 (Against the Order dated 24/11/2011 in Complaint No. 71/2011 of the State Commission Uttar Pradesh) WITH IA/354/2013 1. STATE BANK OF INDIA Main Branch, Hathras, District- Maha Maya Nagar Uttar Pradesh-204201 ...........Appellant(s) Versus 1. M/S. ANURAG TEXTILES Through its Proprietor Sh. Anurag Varshney, Gali Dwarika Dheesh Moti Bazar, Hathras U.P-2042201 ...........Respondent(s) FIRST APPEAL NO. 542 OF 2011 (Against the Order dated 24/11/2011 in Complaint No. 72/2011 of the State Commission Uttar Pradesh) WITH
IA/354/2013 1. STATE BANK OF INDIA Main Branch, HATHRAS, District- Maha Maya Nagar, Uttar Pradesh-204101 ...........Appellant(s) Versus 1. M/S. RAKESH BROTHERS Through Its Proprietor Sh. Rakesh Kumar, Gali Dwarika Dheesh Moti Bazaar, HATHRAS U.P ...........Respondent(s) BEFORE: HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HON'BLE MR. VINAY KUMAR, MEMBER For the Appellant : NEMO For the Respondent : Ms. Tehseen Naz, Advocate Dated : 11 Feb 2015 ORDER Ms. Tehseen Naz, Advocate has submitted the authorization issued in her favour by counsel for the respondents.
2. By this order, we propose to dispose of above-noted two appeals which arise against the common impugned order of the State Commission involving similar question of law and fact.
3. Briefly stated, facts relevant for the disposal of these appeals are that the respondent in respective appeals preferred separate complains against the appellant/Bank claiming that the respondent firms are proprietorship firms and they were sanctioned cash credit limit by the opposite party/Bank. It is the case of the complainants that they were operating their respective accounts regularly in a disciplined manner. Despite that the appellant Bank without providing the account statement regarding the loan account of the respondents/complainants started demanding a sum of Rs.21,22,602/- and Rs.27,13,949/- respectively from the complainants and on the pretext of non-payment of said amount discontinued the cash credit limit. Claiming this to be deficiency in service, respective complaints were filed.
4. Appellant Bank in the respective written statements denied the allegations in the complaints. It was alleged that the complainants were in serious default in payment of loan and, therefore, proceedings under SARFAESI Act, 2002 for recovery of loan were initiated and the respective cash credit limits of the complainants firms were discontinued. The appellant took a preliminary objection that since the dispute falls within the purview of SARFAESI Act, 2002 the jurisdiction of the Consumer Fora is barred.
5. Since these appeals pertain to the year 2011 and the appellant has failed to put in appearance even on the adjourned hearing, instead of further adjourning the matter, we have decided to peruse the record and after hearing the respondent, decide the appeals. The first question which arises for consideration in these appeals is regarding the maintainability f the consumer complaint itself. On perusal of the record, it is clear that the complainants firms are engaged in business of cloth merchant and for this purpose, they obtained cash credit limit from appellant Bank. From this it is obvious that the loan/cash credit limit was obtained in connection with the business of the complainant firm. Therefore, the question arises whether after the amendment in Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986 w.e.f. 15.3.2003, the respondent/complainants are consumers?
6. In order to find answer to this question, it would be useful to have a look on the amended definition of the consumer as provided in Section 2 (1) (d) (ii), which is reproduced thus: -
"(d) "consumer" means any person who--
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;
Explanation.-- For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;"
7. On reading of the above, it is clear that consumer is a person who hires or avails of any service for consideration. However, by amendment dated 15.3.2003 exception was carved out by the Legislature in the above wide definition of the consumer by providing that the above definition does not include a person who avails of services for any commercial purpose. If we go by this amended definition, the respondents are not the consumers.
8. Learned counsel for the respondents has contended that this issue came up for consideration before the Co-ordinate Bench of this Commission in the matter of Secretary, Orrisa Khadi & Industries Board vs. Sri Abhimanyu Sahoo & Ors. 2009 ( (4) CPR 305 and in the said case the Co-ordinate Bench has held otherwise. We have gone through the said judgment. In our considered view, aforesaid judgment is not applicable to the facts of this case because in the said matter the dispute related to the period prior to the amendment of Section 2 (1) (d) (ii).
9. Learned counsel for the respondents has further contended that admittedly both the respondents are proprietorship concerns and the complainants obtained loan/cash credit limit for the purpose of earning livelihood by way of self-employment. In view of the explanation to Section 2 (1) (d) (ii) of the Consumer Protection Act, 1986, the cash credit limit was not taken for commercial purpose. In order to appreciate this contention, it is necessary to have a look on explanation to Section 2 (1) (d) (ii) reproduced above.
10. On reading of the above explanation, it is clear that the benefit of explanation is available to the person who avails the services exclusively for the purpose of earning his livelihood by means of self-employment. Since this explanation is in the nature of exception to the main Rule, the onus of proving that the respondents are covered by the explanation is on the respondents. The respondents/complainants were, therefore, required to plead and prove that the services of the Bank were availed exclusively for the purpose of earning livelihood by way of self employment. On reading of the complaint, we find that there is no such allegation nor there is any evidence to prove this. Therefore, we do not find merit in the contention of learned counsel for the respondents. Thus, we are of the view that services of the Bank were availed by the respondents/complainants in connection with their commercial business as such they do not fall within the definition of consumer as envisaged in the Act. As the respondents are not the consumers, they could not have maintained the consumer complaint. On this count alone, the consumer complaints are liable to be dismissed.
11. Further, from the record, it is evident that in respect of the subject cash credit limit of the respective respondents, securitization application was moved by the appellant Bank before the Debt Recovery Tribunal, U.P., Lucknow prior to filing of the complaints. An application under Section 14 of SARFAESI Act, 2002 was also moved by the opposite party Bank in the Court of District Magistrate, Maha Maya Nagar for taking possession of the mortgage properties of the respondents/complainants, which were allowed by the District Magistrate. As the SARFAESI proceedings had already been initiated, in view of Section 34 of SARFAESI Act, 2002, the jurisdiction of this Commission is barred. It appears that consumer complaints have been filed by the complainants with a view to put hurdle to the recovery proceedings initiated by the opposite party Bank under SARFAESI Act. In view of the discussion above, we are of the view that consumer complaints itself were not maintainable. Therefore, the order of the State Commission cannot be sustained.
12. In the result, both the appeals are allowed, impugned orders are set aside and the complaints are dismissed.
......................J AJIT BHARIHOKE PRESIDING MEMBER ...................... VINAY KUMAR MEMBER