State Consumer Disputes Redressal Commission
The South Indian Bank Ltd., And Another vs M/S. S.P. Handlooms on 15 October, 2009
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT THIRU Pon. GUNASEKARAN B.A.,B.L., MEMBER - I A.P.NO.177/2003 (Against order in O.P.No.356/2000 on the file of the DCDRF, Chennai (North) DATED THIS THE 15th DAY OF OCTOBER 2009 1.
The South Indian Bank Ltd., Nungambakkam Branch Rep.
by its Senior Manager Village Road, Nungambakkam Chennai 600 034
2. The South Indian Bank Ltd., Trichur-
680 001, Kerala Rep.
by its Chief Manager Appellants / Opposite parties Vs. M/s. S.P. Handlooms Rep. by its Proprietor K.K. Subramanian No.40/12, Kamarajar Nagar III Street Extension Choolaimedu Chennai 600 094 Respondent / Complainant The respondent as complainant filed a complaint before the District Forum against the appellants claiming Rs.2,47,880/- with 20% p.a., and Rs.1 lakh as damages and cost. The District Forum allowed the complaint against the opposite party. Against the said impugned order, this appeal is preferred praying to set aside the order of the District Forum dt.29.11.2002 in CC No.356/2000.
Counsel for the Appellants / Opposite parties: M/s. Rank Associates Counsel for the Respondent/ Complainant : Mr. R. Elango Honble M. THANIKACHALAM J, PRESIDENT.
1. The appellants, as opposite parties, who suffered an adverse order in the hands of District Forum, Chennai (North), in O.P.No.356/2000, have come to this Commission, challenging the same.
2. The respondent herein as complainant, has approached the District Forum, seeking for the refund of a sum of Rs.2,47,880/-, and for the recovery of a sum of Rs.1 lakh as damages for mental strain, tension, etc, alleging that the 1st opposite party had been debiting interest @ 13% p.a., on the overdraft amount, much against the RBI guidelines, which was questioned, that ultimately they debited a sum of Rs.2,47,880/- on 30.9.1997, without furnishing the details, that despite of complaints to the opposite parties, they have failed to deduct the said amount from the accounts, that the complainant being a consumer and the bank being the service provider, failed in their duty, and that for the deficiency in service, they should be directed to pay the said amount, with compensation.
3. The opposite parties/ appellants, in their written version, denying all the allegations in general, specifically have stated that the claim of the complainant is barred by limitation, that the claim for refund of the amount before the consumer forum is barred, and if at all civil suit ought have been filed, that the complainant being not a consumer, he is not entitled to maintain the complaint, that as per the guidelines issued by the Reserve Bank of India, and as agreed between parties, at the time of extending overdraft facilities, as well as at the time of depositing the amounts as Fixed Deposit, for which overdraft facilities were provided, interest were debited, that when the same was questioned, furnishing details, explained to the complainant, and this being the position, question of refunding the amount, debited to the current account of the complainant is not at all maintainable.
4. Based upon the pleadings of the parties, as well as scanning the documents exhibited on the side of the complainant, and perusing the affidavits of either parties, the District Forum came to the conclusion that debiting interest, amounting to Rs.2,47,880/-; in spite of several representations of the complainant, is erroneous, that the opposite parties have not adduced any substantial evidence, to show that the interest rate claimed is as per the guidelines of the Reserve Bank of India; that they have not produced any terms of the agreement to prove that they can charge rate of interest on the amount, outstanding for the discounting facility; that the complainant having account in the opposite parties bank, comes within the meaning of consumer, since the bank assured rendering service; and that the complainant is not entitled to compensation, in view of the fact that interest would be awarded for the amount claimed. Thus concluding, a direction came to be issued on 29.11.2002, which is under challenge.
5. Heard the learned counsel for appellant as well as the respondents, perused the written submission in addition to the documents filed by them.
6. It is the submission of the learned counsel for the appellants that the appellants are entitled to succeed on two grounds mainly viz. (1) claim is barred by limitation, (2) since elaborate enquiry is contemplated to workout or find out the actual amount, the same could not be done by the Consumer Forum, which adopts summary procedure, in addition to reason on another ground viz. that the complainant is not a consumer, in view of the fact that loan facilities or overdraft facilities were extended purely for commercial transaction.
7. Per contra, it is the submission of the learned counsel for the respondent / complainant, that the question of limitation does not arise for consideration, because of the fact that there was continuous cause of action, and within two years, claim was lodged before the Forum concerned, that the complainant comes squarely within the definition of consumer, because of the fact, whether it is commercial or otherwise, it was agreed by the bank, to render service, charging interest, which is also specifically included in the definition and that no complicated question arises to fix the liability. Elaborating the above points, further submissions were made on either side.
8. We have given our anxious thought, deep consideration, based upon pleadings as well as careful reading of the order of the District Forum. Our considered opinion is that the District Forum, has not properly understood the scope of this case, as well as it failed to record findings on the disputed points, raised by either side, and our reasons to upset the findings are hereunder.
9. As alleged in the complaint, it is not disputed, the complainant is a manufacturer and exporter of handlooms to foreign countries, and for that purpose alone, the complainant had current account with 1st opposite party, on and from 3.3.97 as well raised loan. It is also an admitted fact that the complainant made certain Fixed Deposits or the opposite parties taken the amount from the account of the complainant and created a Fixed Deposit, with the consent of the opposite parties, as the case may be. For the purpose of the said business, it is also further admitted, that overdraft facilities were extended by the bank, for which the complainant had also agreed to pay interest. We do not have any materials, what are the terms of the agreement, between the parties, at the time of extending overdraft or at the time of granting or sanctioning loan, on the basis of the Fixed Deposit etc. Thus, the commission is left in dark, to decide what is the quantum of interest agreed, what is the penal interest, if the advance or loan amount was not paid in time or what is the guidelines issued by the Reserve Bank of India, etc., in this kind of business transaction. Without considering all these things, it is not known, how the District Forum has recorded a finding, directing opposite party to refund the amount, taking into account the debit entry alone, forgetting the fact to decide also, whether that entry is in accordance with law, or it is erroneous, etc.
10. When the case was filed in the year 2000, before the District Forum, after the disposal, the appeal came to be filed before this commission in the year 2003. From the records it is seen, that my learned predecessors have taken the matter for hearing and they also felt, probably that without records or without verification of the accounts any order passed would be unjustifiable. In this view, it appears, one of my learned predecessor, passed an order on 24.9.2007, appointing a Chartered Accountant, to look into the details of the account, and to report, as to the correct position, with regard to the claim of the complainant, since the interest calculation filed by both parties had wide gap. M/s. K.Gopalan & Co., Chartered Accountant, was also unable to go through the accounts, on the face of the records available, and therefore it seems they sought direction from this Commission, directing the complainant and opposite parties to submit certain documents, as well as to answer some queries.
For that, though it is said, that documents were filed, the Chrtered Accountant, not satisfied expressed his inability to go through account and submit a report, as requested. When the matter came up once again, before the State Commission, my learned predecessor Mr.N. Kannadasan, has passed an order dt.21.8.2008, directing the parties to produce the documents, required by the Chartered Accountant and issuing further direction to report, whether the documents required by him were produced or not. It seems, direction not complied, resulting the Chartered Accountant, filing a report dt.18.8.2009, wherein he has stated that In the absence of FD applications, we do not know who had created the fixed deposits by debiting the current account. In the absence of Sanction Letters specifying the rates of interest agreed upon, Limits fixed, copy of the borrowal documents, we could not verify the interest charged/payable by the borrower. Kindly direct the bankers to file relevant details sought .
Records reveal, there after no progress and the matter was posted for arguments, as per the order dt.21.11.2008.
Thereafter, the case was taken for hearing by us. From the procedure adopted, as narrated above it is seen, to find out the actual rate of interest as well as the excess amount if any claimed by the bank, not only voluminous of evidence is required, but also sufficient oral evidence is also required, with reference to clarification of the document etc, which cannot be done by this Consumer Forum, since this Forum/Commission, adopts summary procedure, as contemplated under the Consumer Protection Act, which is also the dictum of Honble Supreme Court in Oriental Insurance Company Ltd., Vs. Munimahesh Patel, reported in 2007-2-L.W.661, wherein it is observed that The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate Court of Law and not by the Commission. In this view, it is to be held, the matter should be referred to Civil Court, by the parties.
11. The main submission of the learned counsel for the appellant is, that the claim is barred by limitation, and we are of the considered view that this submission cannot be ignored. In the complaint, in the cause of action paragraph, it is said, that cause of action had arisen on 30.9.1997, ofcourse giving the subsequent date also, on which complaint has issued notice to the opposite parties, which will not renew the cause of action or cannot be taken as the acknowledgement, to give life to the cause of action, if the claim is otherwise barred. The entire reading of the complaint would go to show, that the case is filed for the refund of the amount, said to have been collected by the opposite parties, as per the entry dt.30.9.1997. From the attending circumstances of the case, it is seen that previously also, interest should have been debited, and subsequently in the current account, total amount is debited. Therefore, the amount claimed must be the one collected before 30.9.97, and that alone should be the date of cause of action. It is not the case of the complainant anywhere; that he did not know about the debit entry or the opposite party acknowledged the debit entry at later point of time, assuring to give credit or refund, and therefore, that should be taken as the fresh cause of action, etc. Thus settling the date of cause of action as 30.9.97, it should be seen, whether the claim is in time.
12. Sec.
24(A) of the Consumer Protection Act, 1986, rules that the District Forum, State Commission or the National Commission, as the case may be, shall not admit a complaint unless it is filed within two years, from the date on which the cause of action has arisen. Though a proviso is appended to Sec.24 (A), to relax the period, no relaxation or exemption was sought for, to execuse the delay in not filing the complaint, within the above said period. The complaint came to be filed before the District Forum, only on 24.10.00, i.e. more than two years viz. 3 years and 24 days. When this was pointed out, the learned counsel for complainant / respondent, urged before us, that the cause of action available in this case is a continuous one, and therefore the case could not be dismissed on the ground of limitation, in which, we are unable to find any usual reasoning acceptable in nature.
As pointed out by us supra, the communication exchanged of notices between the parties, will not extend the cause of action or starting point of limitation, which had arisen on 30.9.97.
Once the limitation has started, it never stops and in this view, on the basis of the continuous cause of action or otherwise, we are unable to bring the case within time and consequentially, we are constrained to hold that the claim is barred by limitation, which is also supported by the decision rendered by the National Commission, in M/s. Ravin Bharati Land Development & Finance P. Ltd., Vs. Punjab National Bank & Ors., wherein it is held that once limitation had commenced, it is to run and the correspondence will not stop or renew the cause of action. This point was not at all considered by the District Forum, and therefore, on this ground, the appeal deserves acceptance.
13. The learned counsel for the appellant argued that the complainant is not a consumer since the transaction is commercial in nature, and therefore, maintaining the case before the consumer forum, for deficiency in service, are not at all possible and in support of this submission, the definition for consumer was drawn to our attention.
14. As defined under Sec.2 (1) (d) (ii), which deals hiring or availing of any service for consideration, where in it is said but does not include a person who avails of such services for any commercial purpose. Under Explanation commercial purpose is also defined, which reads as For the purpose 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.
By going through the complaint, we find no allegation of any kind, to bring this complainant, within the explanation, as if though he was doing business, this loan was obtained, exclusively for the purpose of earning his livelihood, by means of employment. Not only there is absence of allegation, to attract the above provisions, where as allegations are available to oust the complainant, from the jurisdiction of the consumer.
15. The complaint reads, as the complainant is a manufacturer and exporter of handloom to Nepal and other foreign countries, thereby showing the overdraft facilities or loan was not obtained or sanctioned to him, for his livelihood, whereas for profit motive, to enrich himself. It is the specific case of the opposite parties, that the loan facilities, Overdraft facilities, are extended to the complainant only for commercial purpose, which is not seriously challenged. Having the above pleadings in mind, if we analyse the definition as extracted above, the irresistible conclusion that could be drawn by this commission, should be, that this is a commercial transaction, not attracting the Consumer Protection Act, though there was hiring of service, while having the bank transaction.
16. The learned counsel in support of the above submission also invited our attention to a case reported in 2002 (3) CPR 106 (NC), held in India Export Corporation & Ors., Vs. Chairman-cum-Managing Director, Syndicate Bank and Ors., wherein the National Commission has decided the important point viz. where the complaint alleging bank services, deficiency was found, connected with commercial purpose, the consumer complaint would not be maintainable, which is again reiterated in Mohammed Zuber Vs. State Bank of India, reported in 2004 CTJ 226 (CP) (NCDRC)..
17. In the State Bank of India case, the complainant in order to bring the case within the jurisdiction of the Consumer forum, appears to have pleaded, that he has obtained the loan from the bank for earning his livelihood by self-employment. Considering the magnitude of the business, it is held by the National Commission, Although it is pleaded that the purpose of his request to the bank was for earning his livelihood by self-employment, this plea cannot be accepted considering the kind of the scale of business he was carrying on for earning profit. The complainant is thus not a consumer and his complaint is dismissed.
18. In the case reported in 2005 CTJ 141 (CP) (NCDRC), a question came up for consideration, whether a person, who had purchased the goods or services hired, used the same in any activity directly intended to generate profit, would come within the meaning of for any commercial purpose. After elaborate discussion, considering the definition of the section concerned, and analysing the previous cases also, it is held that if a person purchases materials for manufacturing of goods, would not be a consumer, as he purchases the same for commercial purpose. We have already pointed out, that it is the case of the complainant that he is a manufacturer and exporter of handlooms not only to Nepal, but also to other foreign countries, and only for that purpose overdraft facilities or loan facilities were extended. If we apply the dictum, enunciated in the above case, the complainant automatically goes out of the jurisdiction, of the consumer Forum. The District Forum, without considering any of the points, raised by the parties, came to an erroneous conclusion that the complainant has the cause of action, and the debit of Rs.2,47,880/-, is neither based on any terms of the agreement, or any guidelines, which are prima-facie not based upon any substantial materials, and these kind of findings should certainly be erased. For the foregoing reasons, the appeal deserves to be accepted, hence accepted.
19. In the result, the appeal is allowed, setting aside the order of the District Forum in O.P.No.356/2000 dt.29.11.2002, and the complaint is dismissed. In view of the facts and circumstances of the case, there will be no order as to cost in the appeal.
PON GUNASEKARAN M. THANIKACHALAM MEMBER-I PRESIDENT INDEX : YES / NO Rsh/d/mtj/bank