State Consumer Disputes Redressal Commission
Sh. Vinod Kumar Tayal vs Manager, Punjab National Bank And ... on 24 December, 2008
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRA DUN
FIRST APPEAL NO. 76 / 2006
Sh. Vinod Kumar Tayal
Partner, M/s Prem Sukh Construction Company
B-28, Model House, New No. 2, G-40, Vidhi Vihar
New Tehri
......Appellant / Complainant
Versus
1. Manager, Punjab National Bank
New Tehri
2. Chairman-cum-Managing Director
THDC Limited
H.N: A-10, Sector-1
(Kribhco Bhawan, 4th Floor)
Noida - 201 301 (U.P.)
.....Respondents / Opposite Parties
Sh. S.R. Nagalia, Learned Counsel for the Appellant
Sh. Vijai Kumar Gupta, Learned Counsel for Respondent No. 1
Sh. Rajeshwar Singh, Learned Counsel for Respondent No. 2
Coram: Hon'ble Justice Irshad Hussain, President
C.C. Pant, Member
Smt. Kusum Lata Sharma, Member
Dated: 24.12.2008
ORDER
(Per: C.C. Pant, Member):
This appeal is directed against the order dated 28.03.2006 passed by the District Forum, Tehri Garhwal in consumer complaint No. 34 / 2005. Vide the impugned order, the District Forum has dismissed the complaint on the ground that it is barred by the provisions of the Arbitration Act and the agreement executed between the parties.
2. The facts of the case, in brief, are that the complainant Sh. Vinod Kumar Tayal, Partner, M/s Prem Sukh Construction Company 2 having its Head Office at Ghaziabad and Camp Office at New Tehri, has filed a consumer complaint before the District Forum, Tehri, wherein he has stated that the construction projects of the company are looked after by him and other partners have also been assigned different works of the company. The complainant has further stated that the company had undertaken the construction project of constructing an administrative building of the Tehri Hydropower Development Corporation (for short "THDC") - opposite party No. 2, which was handed over to THDC on 16.12.2000 after completion of the project. No complaint was made by the THDC in respect of the quality of or any defect in the said construction. The office of the opposite parties had been shifted to this new building in the month of April, 2001. The opposite parties have no right to make any complaint in respect of the quality or defects in construction after one year from the date of handing over the building. The complainant was asked by the opposite parties to furnish a security of Rs. 5,95,000/- in the form of bank guarantee at the time of executing the works contract. For this purpose, the complainant - company had taken a FDR for sum of Rs. 3,00,000/- from the Punjab National Bank (for short "bank") - opposite party No. 1 on 06.09.1997. The maturity value of this FDR on 28.11.2004 was Rs. 6,12,248/-. This FDR was pledged with the bank. It is alleged by the complainant that the bank had paid the maturity amount of the FDR to the opposite party No. 2 instead of paying the same to the complainant. After handing over the building, THDC - opposite party No. 2 had no right on the said FDR for the realisation / recovery of any amount. Thus, it has been alleged that the bank - opposite party No. 1 had made deficiency in service. It has also been stated in the complaint that notices were served upon the bank under the signatures of the complainant and also by the other partner Sh. Heera Lal, but no reply was given by the bank to the said notices. Upon this, a consumer complaint was filed before the District 3 Forum, Tehri, which was decided by the District Forum in the terms that the complaint was not maintainable, because it was barred under Clause 20.0 of the agreement in respect of the said Works Contract and also the provisions under the Arbitration Act. Aggrieved by the said order, the complainant has preferred this appeal.
3. We have heard the learned counsel for the parties and perused the material placed on record.
4. The District Forum has admitted the complaint accepting the plea of the complainant that he is a consumer. Had this matter been a simple case of taking a FDR from the bank and rendering of banking service, there would have been a relationship of a consumer (or user of services) and a service provider. In such a case, the consumer had a right to seek remedy under the provisions of the Consumer Protection Act, 1986, irrespective of what the clauses of contract for the said civil work state. Clause No. 20.0 of the contract (Paper No. 255) is in respect of the disputes and states that all the differences or disputes arising out of the contract or touching the subject matter of the contract, shall be decided by a process of settlement under the provisions of Arbitration Act, 1940. As soon as the District Forum derived its conclusion on the basis of this clause, the so-called relationship of consumer and service provider, ceases and the complaint becomes not maintainable under the provisions of the Consumer Protection Act, 1986, because in that case, the services have been rendered for commercial purpose. In our view, the decision of the District Forum that the complaint is barred by the provisions of Clause 20.0 of the Agreement for Works Contract and Arbitration Act, is not legally justifiable. The complaint may be not maintainable otherwise, but not on this ground. The opposite party No. 1 - bank has stated in its written statement (Paper Nos. 21 to 24), that the 4 complainant's case pertain to a commercial agreement and is beyond the jurisdiction of the Consumer Forum. We agree to it because, as stated above, the dispute is not with regard to a FDR and its payment on maturity, but the FDR has been used for commercial purpose. By pledging it with the bank, the complainant - appellant has deposited some cash with the bank as security. On the basis of this pledged FDR, the bank has executed an undertaking in the form of bank guarantee. The bank guarantee is for the purpose of security, to be furnished by the complainant for the execution of the Works Contract. So, it is crystal clear that the complainant had availed the services of the bank for a commercial purpose.
5. Otherwise also, if we consider the role of the bank in this case, we find that the bank had done what it had undertaken through the bank guarantee dated 08.09.1997 (Paper Nos. 27 to 33). Through the bank guarantee, the bank has accepted the security deposit of Rs. 5,95,000/- furnishable to THDC by the complainant. The FDR is pledged with the bank and in para 3 of the bank guarantee, it is clearly stated that it would be released on submitting a "No Demand Certificate" from the THDC. At no point of time, such a "No Demand Certificate" was submitted by the complainant. Further, initially it was undertaken by the bank that the bank guarantee would remain in force upto 07.09.1999, but at the same time, in para 4, the bank has also undertaken that it can be extended, if necessary. The paragraph No. 4 of the bank guarantee reads as under:
"4. Should it be necessary to extend this guarantee on account of any reason whatsoever, we undertake to extend the period of this Guarantee on your request till such time as may be required by you. Your decision in this respect shall be final and binding on us."5
6. Thus, the argument of the complainant that merely by writing a letter by THDC to the bank for extending the period of bank guarantee is not sufficient, is not tenable. The bank guarantee can be extended on THDC's request to the bank. Vide letter dated 17.01.2004 (Paper No. 38), the complainant itself has requested the bank to extend the validity of the bank guarantee upto 31.03.2004. Vide letter dated 30.03.2004 (Paper No. 228), THDC has asked the complainant for extending the bank guarantee upto 31.09.2005. A copy of this letter was also endorsed to the bank.
7. The important clause of the bank guarantee is paragraph No. 2, which reads as under:
"2. Notwithstanding anything to the contrary your decision as to whether the contractor has made any such default or defaults and the amount or amounts to which you are entitled by reasons thereof will be binding on us and we shall not be entitled to ask you to establish your claim or claims under this Guarantee but will unconditionally pay the same forthwith on your demand without any protest of demur."
8. This is what the bank has also said in the affidavit dated 27.08.2005 (Paper Nos. 25 to 26). As per the above clause, the bank paid the amount to the THDC. Thus, we are of the view that the bank has not made any deficiency in service by doing so.
9. In view of above, the complaint filed by the complainant, was not a consumer complaint and the District Forum has no jurisdiction to decide the same.
610. For the reasons aforesaid, the appeal is dismissed. No order as to cost.
(SMT. KUSUM LATA SHARMA) (C.C. PANT) (JUSTICE IRSHAD HUSSAIN) Kawal