State Consumer Disputes Redressal Commission
Standard Auto Agencies vs State Bank Of India on 2 June, 2022
Daily Order M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PLOT NO.76, ARERA HILLS, BHOPAL CONSUMER COMPLAINT NO. 55 OF 2019 FILED ON 16.04.2019 DECIDED ON 02.06.2022 STANDARD AUTO AGENCIES, PLOT NO.8/1B, NAPIER TOWN, JABALPUR HOSPITAL ROAD, JABALPUR, THROUGH ITS PROPRIETOR, DEEPAK ARORA, S/O LT.SHRI K.L.BILLA ... COMPLAINANT. VERSUS 1. STATE BANK OF INDIA, THROUGH CHIEF MANAGER, S.M.E.BRANCH, OPPOSITE RISHI AGENCY CIVIL LINES, JABALPUR. 2. REGIONAL MANAGER, STATE BANK OF INDIA, VIJAY NAGAR, JABALPUR. 3. CHAIRMAN, STATE BANK OF INDIA (HEAD OFFICE) 18, 19, DEVDAS KAMLLEG BLOCK, SYNERGY BUILDING, BANDRA KURLA COMPLEX, BANDRA EAS, MUMBAI-400051 ... OPPOSITE PARTIES BEFORE : HON'BLE SHRI JUSTICE SHANTANU S. KEMKAR : PRESIDENT HON'BLE SHRI S. S. BANSAL : MEMBER HON'BLE SHRI A. K. TIWARI : JUDICIAL MEMBER COUNSEL FOR PARTIES: Shri N. S. Ruprah, learned counsel for the complainant. Shri Vijay Shahani, learned counsel for opposite parties. -2- O R D E R
(Passed On 02.06.2022) The following order of the Commission was delivered by A. K. Tiwari, Judicial Member:
This complaint has been filed under Section 17 Read with Section 12/13 of the Consumer Protection Act, 1986 (for short 'Act').
2. Brief facts of the case as stated by the complainant are that the complainant is a proprietorship concern. The complainant is the dealer of Maruti Suzuki. The complainant was sanctioned credit facilities by the opposite party bank since 2004. During the period of 2013-14 to 2018-19, the amount of interest and bank charges were regularly paid by the complainant. It is alleged that from eDFS (Electronic Dealer Fund System) account of the complainant, an amount of Rs. 63,27,208.74 has been debited on 30.06.2018. The complainant has filed statement of account of June 2018 which is annexed as (Annexure A-2). Since there is no outstanding amount against the complainant, the complainant approached the bank to enquire why this amount was debited. On enquiry being made, it was informed that an amount of Rs.1,08,00,000/- was sent by the bank to Maruti Suzuki India Limited on instructions of the complainant on 24-25.10.2013 through online transaction against the CC/eFDS limit of the complainant, but no interest was charged on this amount of Rs.1,08,00,000/- due to mistake of the bank. When this mistake was -3- revealed after a period of five years, the total interest from 25.10.2013 to 30.06.2018 comes to Rs.63,27,208.74 which was now being charged from the complainant. It was further informed by the bank that this amount was reverted on the very next date but inspite of that it had to be accounted for as after all an amount of Rs.1,08,00,000/- had been debited on the account of the complainant and interest thereupon had to be calculated and imposed. Copy of bank ledger regarding complainant's account of October-2013 is filed as Annexure A-3, which shows that an amount of Rs.1,08,00,000/- had reverted on the very next date i.e. on 25.10.2013. Thus the amount of Rs.1,08,00,000/- had not been used by the complainant at all but the complainant is being made to pay interest thereupon.
3. It is further submitted that recovery of any amount due for more than five years is also time barred. It is the duty of the bank to maintain the accounts properly, the customer/consumer cannot be made to pay such a huge amount of Rs.63,27,208.74. The recovery of the said amount from the complainant amounts to an unfair trade practice and failure to maintain proper account amounts to a gross deficiency in service. The complainant therefore filed the present complaint against the opposite parties seeking refund of Rs.63,27,208.74 as wrongly debited from the complainant's account on 30.06.2018 along with compensation of Rs.10lakhs and Rs.3lakhs as litigation expenses. The complainant has filed Annexure A-1 -4- to A-5 along with affidavit of Deepak Arora, Proprietor of the complainant firm.
4. The opposite party no.1, 2 and 3 resisted the complaint by filing written statement along with preliminary objection that the complainant is not a consumer as defined under Section 2(1)(d) of the Act. The complainant, a proprietorship firm availed a Cash Credit (Hypothecation) loan facility amounting to Rs.11crore and Cash Credit (EFDC/Channel) Funding) loan of Rs.33.50crores totaling Rs.44.50crores for the business of his Maruti Cars dealership. The complainant has filed present complaint challenging an interest amount of Rs.63,27,208.74 allegedly charged by the opposite parties against the payment of Rs.1,08,00,000/- allegedly paid to Maruti Udyog Limited. The complainant has nowhere pleaded in its complaint that the complainant is running said business for the sole purpose of earning self-livelihood or the loan facility was availed by the complainant for the purpose of sole livelihood. The complainant has pleaded about the huge commercial profits in its business which itself proves the fact that the present dispute is related to commercial transaction and therefore the complainant is not a 'consumer' as defined under the Act. Further, it is submitted that the disputes regarding calculations of interest amount requires detailed evidence and same cannot be adjudicated in the summary proceedings before the Commission. It is submitted that a proprietorship -5- firm is not a legal entity and therefore the proprietorship firm cannot sue or file a complaint or a suit in the court of law in its name. The complainant has filed this complaint on the basis of false, frivolous and vexatious grounds. The complainant has failed to prove any act of deficiency in service and unfair trade practice against the opposite parties. It is prayed that the complaint is not maintainable as per provisions of the Act and same is liable to be dismissed in toto.
5. The opposite parties after raising preliminary objections filed parawise reply to the complaint in which the aforesaid grounds were reiterated that the complainant is not a consumer and the complaint is not maintainable under the Act. It is further submitted that on 24.10.2013 a sum of Rs.15,38,84,303.60 was outstanding against the complainant for repayment and after the deduction of Rs.1,08,00,000/- a total sum of Rs.16,46,84,358.60 was outstanding against the complainant for repayment and after the deduction of Rs.1,08,00,000/- a total sum of Rs.16,46,84,358.60 was outstanding against the complainant. In the instant case when the credit of Rs.1,08,00,055.00 was received in the account due to RTGS rejection, the system of said EDFS account construed it as repayment of oldest outstanding invoices as on 25.10.2013 and marked these invoices as repaid and stopped calculating interest on these invoices. If no technical error would have occurred system would have created a fresh -6- invoice of Rs.1,08,00,055.00 on 25.10.2013 and calculated interest thereon. It is worth to mention over here that the complainant has admitted about the earning profits out of the loan facility services availed by it from the respondent bank. It is also worth to mention here that the opposite party bank had every right to recover the said amount in view of the written authority issued by the complainant itself in favour of the bank. Further, there is no prescribed limitation with regard to recovery of said amount. The complainant itself knew that due to system error the interest amount on the outstanding amount as on 23.10.2013 could not be charged and the complainant had mischievously kept silent for a period of 5 years and had unlawfully enjoyed the money of the opposite party bank.
6. It is also emphatically submitted that the complainant was equally duty bound to inform about the said error of non-calculation of interest amount which was already withdrawn from the loan account by the complainant but the complainant preferred to be silent and had unlawfully enjoyed the money belonging to the opposite party-bank. It is further submitted that the complainant has wrongly averred that the alleged interest amount has been charged against the amount of Rs.1,08,00,000/- which was reverted back on the very next day. However, the true fact is that the alleged recovered interest amount has been charged on the basis of the fact that, when said amount of Rs.1,08,00,000/- was reverted the system of the -7- opposite party bank had erroneously taken said amount as repayment of part outstanding amount as on 25.10.2013 and therefore after 25.10.2013 no interest was charged on the said amount which has resulted the accumulation of interest amount on 30.06.2018. Thus, the complainant cannot take advantage of its own wrong doings. The complainant has made false and baseless allegations in the complaint. The complainant is not entitled to claim any relief against the opposite party bank. The complainant has filed the present complaint with ill intention to grab unlawful monetary relief against the bank which is not acceptable in the eyes of law. The opposite party-bank has not committed any deficiency in service. The complaint is devoid of merit and is liable to be dismissed in-limine.
7. Learned counsel for complainant argued that the opposite party bank has committed deficiency in service in debiting an amount of Rs. 63,27,208.74 on 30.06.2018,from eDFS (Electronic Dealer Fund System) account of the complainant. He further argued that recovery of any amount due for more than five years is also time barred. It is the duty of the bank to maintain the accounts properly, the customer cannot be made to suffer top pay such a huge amount of Rs.63,27,208.74, therefore, the opposite party bank be directed to refund of Rs.63,27,208.74 as wrongly debited from the complainant's account on 30.06.2018 along with compensation of Rs.10 lakhs and Rs.3 lakhs as litigation expenses. He submitted that since the -8- complainant is engaged in profession of dealer of Maruti Suzuki and since the services of the bank were taken for the complainant's profession, the services rendered by the bank were exclusively for the purposes of earning his livelihood by means of self-employment.
8. In support of his submissions, learned counsel for the complainant relied on the following judgments of Hon'ble Supreme Court, and National Commission:
(2016) 1 SCC 363 Bharat Sanchar Nigam Ltd Vs Pawan Kumar Gupta.
(2019) 9 SCC 158 Vashdeo R. Bhojwani Vs Abhyudaya Co-operative Bank Limited and Another.
I (2020) CPJ 34 (SC) DAV Public School Vs The Senior Manager, Indian Bank Midnapur Branch & Ors.
II (2020) CPJ 92 (NC) Punjab National Bank & Anr Vs Leader Valves Ltd.
I (2018) CPJ 259 (NC) Maa Tarini Transport Ltd. Vs Keonjhar Central Co-operative Bank.
Consumer Case No.56/2013 M/S V and S International (P).Ltd. Vs Axis Bank & Ors decided by the National Commission on 09.05.2019.
(2007) 4 SCC 579 Kishore Lal Vs Chairman Employees State Insurance Corporation.
2014 SCC Online NCDRC 495 Kaveri Telecom Ltd. Vs Vijaya Bank & Another.
-9-(2000) 5 SCC 122 Vimal Chand Grover Vs Bank of India.
II (2019) CPJ 249 (NC) Sanjivani Cold Storage Ice Factory Vs Shripal Ram Avtar (2015) 1 SCC 617 Bhagwati Vanaspati Traders Vs Superintendent of Post Offices, Meerut.
(2006) 5 SCC 727 Standard Chartered Bank Ltd. Vs Dr. B. N. Raman.
9. On the other hand, learned counsel for opposite party submits that prima facie the complainant is a commercial organization and is not a consumer as defined under the Act. The opposite party bank has not committed any unfair trade practice or deficiency in service in charging the interest on the amount, which the complainant enjoyed for such a long period. The bank has right to recover the said amount in view of the written authority given by the complainant in favour of opposite party bank. The question of payment of alleged compensation does not arise in any manner. The present complaint is devoid of merits and deserves to be dismissed. In support of reply, affidavit of Shri Anurag Shah, Chief Manager, State Bank of India, SME Branch, Jabalpur has also been filed. To support his submissions, he relied on the following judgments:
-10-ICICI Home Finance Ltd. Vs Manish Jain, IV (2019) CPJ 314 (NC) Sutlej Industries Limited Vs Punjab National Bank I (2018) CPJ 593 (NC).
Miracle Coro Plast Pvt. Ltd. Vs United Bank of India & Ors. II (2018) CPJ 29 (NC) Union Bank of India Vs Learning Spiral Pvt. Ltd. & Ors. III (2018) CPJ 514 (NC) Bank of India Vs Punjab Hide Co. & Ors. I (2017) CPJ 52 (NC) Dynamic Designer Company Vs Sandeep Singh Arora & Ors. IV (2019) CPJ CN 6A (MP) Laxmi Engineering Works Vs P. S. G. Industrial Institute II (1995) CPJ 1 (SC)
10. We have perused the complaint along with annexures A-1 to A-5 & affidavits, preliminary objections, reply filed along with documents R-1 to R-6 and affidavits and rejoinder and considered the arguments advanced by the learned counsels for parties in depth.
11. The complainant made an averment in the complaint that the bank had committed deficiency in service in charging interest Rs.63,27,208.74 for the period 25.10.2013 to 30.06.2018. On the other hand, the opposite party-bank raised a preliminary objection with regard to maintainability of complaint on the ground that the complainant is not a consumer as envisaged under Section 2(1)(d) of the Act.
-11-12. The first and foremost question to decide this complaint is whether the dispute involved falls within the purview of 'consumer dispute' and whether the complainant could be termed as 'consumer' as defined under the Consumer Protection Act, 1986. It is also to be seen that whether the services availed by the complainant from the opposite party-bank would fall within the term 'commercial purpose'. The other question also have to be answered that as to whether such services are availed by the complainant exclusively for the purposes of earning his livelihood by means of self-employment.
13. To decide the preliminary objections raised by the opposite party, it is necessary to refer relevant provisions of the Act with regard to definition of 'consumer' as defined in Section 2(1)(d), which is as follows:-
(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 service 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 purpose).-12-
Explanation--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.
14. It is thus clear from the aforesaid that for filing a complaint before the Commission, the complainant has to be a 'consumer' as defined under Section 2(1)(d) of the Act or he hires or avails of any service for a consideration paid.
15. On perusal of complaint we find that though the complainant is a proprietorship firm but being a dealer of Maruti Suzuki Company Limited has a huge turnover worth crores of rupees. The complainant has made huge profits out of the loan facility availed by it from the opposite party-bank. Thus it cannot be said that the business of the complainant and loan facility availed by the complainant from the opposite party-bank solely for the purpose of earning livelihood of the complainant's proprietor by means of self-employment. The complainant nowhere in his complaint has stated that he has hired or availed services of the opposite party-bank exclusively for the purposes of earning his livelihood by means of self-employment. On objection being taken by the opposite party-bank in its reply, the complainant in his affidavit (rejoinder) has stated that he availed services for the purposes of earning his livelihood.
16. We find that the Act is a special statute enacted with the purpose of providing a speedy and simple redressal to consumer disputes and if the -13- definition of 'consumer is expanded so as to include such a person who avails of such services for any commercial purpose, the very purpose of this Act would be defeated. From the definition of 'consumer' as defined under Section 2(1)(d)(ii) and explanation, it is lucidly clear that whenever a person avails of any services for commercial purposes, he would not be a consumer, it is further clarified that the '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.
17. If a person buys goods for commercial purpose or avails services for commercial purpose, he would have been out of the ambit of the term 'consumer' by virtue of Explanation, which is now common to both Sections 2 (1)(d)(i) and 2(1)(d)(ii) of the Act, he would have been come within the ambit of term 'consumer', only if purchase of such goods or availing of such services was exclusively for the purposes of earning his livelihood by means of self-employment.
18. The decisions of the Hon'ble Supreme Court in Bharat Sanchar Nigam, Vashdeo R. Bhojwani, Kishore Lal and Vimal Chand Grover and the decisions of the Hon'ble National Commission in M/S Chambal Fertilizers, and Sanjivani Cold Storage, relied upon by counsel for -14- complainant are distinguishable on facts and are not applicable to the case in hand.
19. So far as the other decisions referred by learned counsel for the complainant are concerned:
In the decision of the Hon'ble Supreme Court in DAV Public School, the bank has rendered themselves liable by enabling net banking facility by linking individual account of school's Principal to the school's account but the facts of the case in hand are different.
In the decision of the National Commission in Punjab National Bank, though it is held that any systemic failure, whether by malfeasance on part of its functionaries or by any other person (except consumer/account holder) is its responsibility and not of consumer. Complainant on his part had been diligent and dutiful in bringing unauthorized transfers to the notice of the bank without undue delay, but in the case in hand, the complainant used such a huge amount for such a long period on account of system failure of the bank and could not bring the same to the knowledge of the bank. Even otherwise, in the cited case, there were unauthorized transfers.
In the case of Maa Tarini Transport Ltd, the State Commission dismissed the complaint at the admission stage without notice to the other side. The National Commission held that the Consumer Forums are supposed to go into all relevant aspects of the matter including the -15- maintainability of the complaint. The case in hand is different from that point of view.
In the case of M/S V and S International (P) Ltd, the opposite party bank honoured the cheques despite instructions of the complainant for stop payment of said cheques, the National Commission therefore held the bank deficient in service. The case in hand is quite different.
In the case of Kaveri Telecom Ltd, the allegation of the complainant was that the opposite party bank collected excess amount as interest in violation of terms and conditions of the sanction letter. The complaint has been dismissed by the National Commission holding that the bank has right to charge interest as per sanction letter. Here the facts are totally different of the present case.
In the case of Bhagwati Vanaspati Traders, the complainant a proprietorship firm purchased NSC but on maturity, the Post Office rejected the claim on maturity on the ground that NSC sold to proprietorship concern contrary to rules. The National Commission directed the Post Office to regularize the defect by transferring the same in personal capacity of Proprietor and to pay the maturity amount to him. The case in hand is different.
In the case of Standard Chartered Bank, the complainant sought premature withdrawal of the deposit made in foreign currency, the -16- State Commission allowed the complaint, the National Commission dismissed the appeal of the bank. The Apex Court remanded the matter holding that neither State Commission nor National Commission has examined the question regarding selection of appropriate date, appropriate rate of exchange on that particular date as also the rate of interest which the bank was required to pay to the complainant. The case in hand is different on the facts.
Thus the decisions relied by learned counsel for the complainant will not apply to the present case.
20. Hon'ble Supreme Court in Laxmi Engineering Works Vs P. S. G. Industrial Institute 6 (1995) 3 SCC 583=II (1995) CPJ 1 SC has held that a person who buys goods and use them himself, exclusively for the purpose of earning his livelihood by means of self-employment is within the definition of the expression 'consumer'. It has also been held that whether the purpose for which a person has bought goods is a 'commercial purpose' within the meaning of definition of expression 'consumer' in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case. Here in the present case, from the facts and circumstances, it is clearly established from the complaint itself that the complainant had hired services of opposite party-bank for expansion of business and gaining huge profits. Thus there is relation between the -17- complainant and the opposite party-bank is business to business and not business to consumer, therefore, it cannot be said that the complainant had availed services exclusively for the purpose of earning his livelihood by means of self-employment. The complainant is therefore cannot be termed as 'consumer'.
21. Hon'ble Supreme Court in the recent judgment in Shrikant G. Mantri Vs Punjab National Bank II (2022) CPJ 9 (SC) has held that "The relation between the appellant and the respondent is purely "business to business" relationship. As such transactions would clearly come within the ambit of 'commercial purpose'. It cannot be said that the services were availed " exclusively for the purposes of earning his livelihood" by means of "self-employment". If the interpretation as sought to be placed by the appellant is to be accepted, then the 'business to business' disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes."
22. In the present case, the complainant a proprietorship firm availed Cash Credit (Hypothecation) loan facility of more than Rs.Forty crores for Maruti Cars dealership business. The complainant is a big business enterprises employing about more than 200 employees as stated by the counsel for complainant during the course of arguments and the loan facility was availed only to earn profit in business. The complainant has -18- pleaded about huge commercial profits in its business and therefore the present dispute is related to commercial transaction. The complainant has not availed the services of the bank exclusively for the purposes of earning his livelihood by means of self-employment but for commercial purpose. The complainant is therefore not at all falls within the purview of 'consumer' as defined under Section 2(1)(d)(ii) of the Act and it cannot be said that he had hired services of the opposite party bank exclusively for the purposes of earning his livelihood by means of self-employment.
23. In view of the above discussion, we find that the complaint is not maintainable in law or in facts and is liable to be dismissed in limine. The complaint is therefore dismissed. There shall be no order as to costs.
(Justice Shantanu S. Kemkar) (S. S. Bansal) (A. K. Tiwari) President Member Judicial Member