15.2.2016
HON’BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDING MEMBER
The Complaint Case No. SC/4/O/2005 has been initiated by M/s. Kesoram Industries Ltd., a company incorporated under the provisions of Companies Act, 1956, against Allahabad Bank and its officers for deficiency of services. Another Complaint Case being No. SC/5/O/2005 has also been filed by the aforesaid Complainant against the OPs for deficiency of services on the part of them. Since both these matters between the self-same parties are in respect of alleging deficiency in services caused by the OPs, both were heard together and will be disposed of on the basis of a common judgment.
The Consumer Complaint being No. SC/4/O/2005 has been initiated by the Complainant alleging that for the purpose of hiring the services of the OP No. 1-Bank, the Complainant entered into an agreement with the OP No. 1, in terms of which the Complainant was enjoying bill discounting/cash credit facilities of the OP No.1 to the extent of Rs. 1.00 Crore. It was agreed upon by and between the parties that if the documents are not retired by the customers of the Complainant within 30 days from the date of presentation to them, the same required to be returned to the Complainant and unless and until the aforesaid documents, such as, bill R.R./Transport receipt and Hundi are retired to the Complainant, the amount in respect of this account cannot be debited in the account of the Complainant. Pursuant to the agreement with the OP No. 1, the Complainant made arrangement with its customers to the effect that the documents relating to dispatch of goods will be sent through the bank and the same will be retired with a week’s time from the date of presentation of the documents and as such, in the Hundi of the Complainant special instructions were given. The Complainant alleges that all on a sudden it was detected by them that the OP No. 1 had debited on 31.3.1996 a sum of Rs. 7,07,083.72 on account of old bills relating to earlier years prior to 1994 and also interest being Rs. 3,40,500/- upto 31.3.1996. After detection, the Complainant wrote a letter dt. 10.5.1996, it remained unheeded. Subsequently, several correspondences were made in between the parties, but the same yielded no result. Ultimately, the Complainant approached the Banking Ombudsman and lodged a Complaint before him on 14.9.1998. On 16.4.1999 the matter was heard and in the said meeting it was observed by the Ld. Ombudsman that the whole matter should be settled in a time-bound programme. Pursuant to the direction given by the Ld. Ombudsman the Bank intimated the Banking Ombudsman through its letter dt. 7.5.1999 that they refunded the amount against interest realized by them amounting to Rs. 71,536/- and Rs. 27,529/- on 17.9.1997 and 3.5.1999 respectively. The Complainant alleged that a considerable period has already passed and a sum of Rs. 11,14,969.39 was still outstanding as per the records of the Complainant in respect of the old bills being the principal and the interest both. Hence, the Complaint with a direction upon the OP No. 1 to return the related documents for the amount wrongly debited by them and to credit the interest calculated by the OP No. 1 on the aforesaid wrong debit in the account of the Complainant and alternatively, to pay an amount of Rs. 30,00,000/- as compensation and Rs. 20,000/- as litigation costs.
In Consumer Complaint No. SC/5/O/2005 the averment of the Petition of Complaint is almost same with a little exception that the OP’s functionaries are different at their addresses and variation in date of agreement, date of different letters exchanged between the parties and the claimed amount was Rs. 7,66,878.80 towards wrong debit with interest component of Rs. 11,73,325/- and compensation of Rs. 10,59,796.20 aggregating Rs. 30,00,000/-.
Since both the cases involve identical issues of similar services of identical agreements and since the nature of allegations is almost the same and all these happening at the same spell of time-frame, both the cases were heard analogously.
It would be pertinent to record that the instant Consumer Complaint was once disposed of by this Commission on 28.11.2008. Against the said order an Appeal was preferred before the Hon’ble National Commission and the Hon’ble National Commission by order dt. 10.11.2010 in First Appeal No. 237 of 2009 after allowing the Appeal remanded it back to the State Commission for deciding the same afresh in accordance with law after affording due opportunity to the parties to make their submissions on all possible aspects involved in the matters. Thereafter, by an order dt. 18.5.2012 this Commission once again dismissed the cases on contest. Again, an Appeal was preferred before the Hon’ble National Commission and the Hon’ble National Commission by an order dt. 22.4.2014 in connection with First Appeal No. 605/2015 after setting aside the order remanded back the cases to this Commission with a direction to decide the Complaints afresh in the light of the directions given by the Hon’ble National Commission by order dated 10.11.2010 in First Appeal No. 237 of 2009 and also to consider the question of limitation and maintainability of the Complaints.
Keeping in view the guidelines of the Hon’ble National Commission and considering the materials on record we think the following points are required to be adjudicated:-
- Are the Complaints maintainable? Is the Complainant a Consumer within the meaning of Section 2 (1)(d) of the Act?
- Are the Complaints barred by limitation?
- Was there any deficiency of services on the part of the Opposite Parties?
- Is the Complainant entitled to get relief(s) as prayed for?
DECISION WITH REASONS
Point No. 1 : In Paragraph-1 of the Petition of Complaint the Complainant claimed themselves as a Company incorporated under the provisions of Companies Act, 1956. In his Examination-in-Chief Sri Uma Shankar Asopa, Senior Vice President (Finance) of the Complainant-Company has stated that they hired banking services of the OP No. 1 for enjoying bill discounting/cash credit facilities of the OP No. 1 to the extent of Rs. 1.00 Crore. On behalf of the OPs the questionnaire was put to the witness of the Complainant. In Question No. 7 it was asked whether the Complainant is a Public Limited Company registered under Companies Act, engaged in commercial business, to which Sri Uma Shankar Asopa (PW-1) has replied that the Complainant is a Public Limited Company registered under the Companies Act, 1956 and is engaged in business of manufacturing of cement, tyres, cellphones, rayon yarn etc. Earlier its textile division was the manufacturer of textile clothes and yearn and the bill discount facilities with the opposite parties was in respect of textile division. In another question put on behalf of the opposite parties whether there were limits under the cash credit and bill discounting availed of by the Complainant for commercial purpose, to which the PW-1 replied that the limits under cash credit and bill discounted were availed by the Complainant for commercial purposes in respect of its textile division.
Mr. P.R.Bakshi, Ld. Advocate appearing for the opposite parties, has submitted that the Complainant being a Public Limited Company engaged in commercial business and was enjoying huge limits of United Industrial Bank Ltd. and upon merger with Allahabad Bank the Complainant used to avail of cash credit account and bill purchase account with the limit of Rs. 1.00 Crore with Allahabad Bank, Redcross Place Branch over a long period of time. Such a transaction was purely for commercial purpose and it does not come under the purview of the provisions of Section 2(1) of the Consumer Protection Act. He has further submitted that the provisions of law coupled with the decision of the Hon’ble National Commission reported in 1(2005) CPJ 27 (NC)-[M/s. Harsolia Motors Vs. National Insurance Co. Ltd.] the instant Complaints being commercial purposes would be excluded from the coverage of the Consumer Protection Act, 1986. The Ld. Advocate for the Complainant could not refute the contention of the Ld. Advocate for the opposite parties.
For the purpose of appreciation of the matter it would be worthwhile to have a look to the definitions of the words ‘Consumer’ and ‘Service’ under Sections 2(1)(d) and 2(1)(o) of the Act which reads as follows:
2. Definitions – (1) in this Act, unless the context otherwise requires, -
(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 or 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;
Explanation – For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him/her and services availed by him/her exclusively for the purposes of earning his/her livelihood by means of self-employment.
(o) “service” means of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.
Hon’ble National Commission in the said decision referring to the decision of Laxmi Engineering Works Vs. PSG Industrial Institute, reported in (1995) 3 SCC 583 has observed that if the goods are purchased for commercial purpose, then such consumer would be excluded from the coverage of the Consumer Protection Act, 1986. From the statement of the Complainant itself it reveals that the Complainant is a large-scale public limited company which is involved in business of manufacturing cement, tyres, Cellphones, rayon yarn, etc. Such a business cannot be used for purpose of earning livelihood by means of self-employment. The statement of the Complainant itself indicates that it is a large-scale industry and the object of the Complainant is directly intended to generate profit. Therefore, when profit is the main aim of commercial purpose and the Complainant is involved with a large-scale of business, we have no hesitation to hold that the Complainant does not come under the purview of ‘Consumer’ within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. Accordingly, the Complainant not being a ‘Consumer’ we have no hesitation to hold that the Complaint is not maintainable.
Therefore, the Point No. 1 is decided in the negative and against the Complainant.
Point No. 2 : The whole dispute cropped up in between the Complainant and the OP No. 1 with regard to enjoying bill discounting and cash credit facilities to the extent of Rs. 1.00 Crore. It is alleged by the Complainant that all on a sudden it was detected by them that the OP No. 1 had debited a sum of Rs. 7,07,083.70 on account of old bills relating to earlier years prior to 1994 and also interest being Rs. 3,40,500/- upto 31.3.1996. Thereafter, several correspondences took place between the Complainant and the bank authority, but no positive result came out. Ultimately, the Complainant lodged a Complaint with the Banking Ombudsman on 14.9.1998. The reconciliation attempt through the Banking Ombudsman failed on 13.10.1999. On 13.10.1999 the office of the Banking Ombudsman, Calcutta, addressed to the Complainant intimating that the matter can be sorted only by constant sincere efforts by both the parties. The solution does not require any decision or interpretation of law or rule etc. Both the Bank and the Complainant have to take care to bring the dispute to an end. The Complaint, therefore, treated as closed.
Mr. P.R.Bakshi, Ld. Advocate for the Opposite parties, has submitted that after a lapse of six years from the date of cause of action on 13.10.1999 the instant Complaint has been filed before this Commission on 22.2.2005. He has further submitted that the decision of the Banking Ombudsman cannot be a ground to condone the delay and there was no continuing effect of cause of action since the disputed amount reportedly debited to the Cash Credit Account of the Complainant on 31.3.1996. According to him, the continuous cause of action is not sustainable in view of the fact that the Complaint arose out of one particular entry, not on the running, continuous, current and mutual cash credit account. According to Ld. Advocate for the Opposite Parties, the cause of action arose on 13.10.1999 and the instant Complaint was initiated on 22.2.2005. Therefore, when the claim has been lodged beyond two years from the alleged date of cause of action, i.e. on 13.10.1999, it was barred by limitation as per Section 24-A(1) of the Consumer Protection Act, 1986. In reply to the same, on behalf of the Complainant it has been submitted that several correspondences were done by the parties and since there are correspondences between the parties, the Complaint has continuing cause of action.
It would be profitable on our part to have a look to the provisions of Section 24-A of the Consumer Protection Act which runs as follows:
“24-A. Limitation period : 1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1) a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period.
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.”
The above provision is clearly peremptory in nature requiring the Consumer Fora to see at the time of entertaining the complaint, whether it has been filed within the stipulated period of two years from the date of cause of action.
The Hon’ble Apex Court in case of Kandimalla Raghavaiah & Co. v. National Insurance Co. Ltd. and another took view of the observations made in case State Bank of India v. B.S.Agricultural Industries, as under:-
“12. Recently, in State Bank of India v. B.S.Agricultural Industries, 2009 CTJ 481 (SC)(CP) = JT 2009 (4) SC 191, this Court, while dealing with the same provision, has held;
8. It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, ‘shall not admit a complaint’ occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside.”
In Para No. 13, it has been held by the Hon’ble Supreme Court that:
“The term “cause of action” is neither defined in the Act or in the Code of Civil Procedure, 1908 but is of wide import. It has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. Generally, it is described as ‘bundle of facts’, which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, “cause of action” means the case of action for which the suit is brought. “Cause of action” is cause of action which gives occasion for and forms the foundation of the suit. In the context of limitation with reference to a fire insurance policy, undoubtedly, the date of accrual of cause of action has to be the date on which the fire breaks out.”
It is well settled that by serving the legal notice or by making representation, the period of limitation cannot be extended by the respondent. In this context, reference can be made to Kandimalla Raghavaiah & Co. (supra), in which it has been held:
“By no stretch of imagination, it can be said that Insurance Company’s reply dated 21st March, 1996 to the legal notice dated 4th January, 1996, declining to issue the forms for preferring a claim after a lapse of more than four years of the date of fire, resulted in extending the period of limitation for the purpose of Section 24A of the Act. We have no hesitation in holding the complaint filed on 24th October, 1997 and that too without any application for condonation of delay was manifestly barred by limitation and the Commission was justified in dismissing it on that short ground.”
Therefore, when the Complaint has been initiated on 22.2.2005 and it was not accompanied by an application for condonation of delay u/s 24-A(2) of the Consumer Protection Act, 1986, we have no hesitation to hold that the Complaint is hopelessly barred by limitation.
Therefore, this point is also decided in the negative and against the Complainant.
Point Nos. 3 & 4 : In view of our discussion in Point Nos. 1 & 2 when we find that the instant Consumer Complaint is not maintainable under the provisions of Consumer Protection Act, 1986 and further, it is hopelessly barred by limitation as per Section 24-A of the said Act, we think that any further discussion over the deficiency in services on the part of the Opposite Parties would be a sheer wastage of valuable public time. Accordingly, the Complainant is not entitled to any relief as prayed for. Both the points are disposed of accordingly.
In the result, the Complaints fail. It is, accordingly, ordered that the Complaints filed on behalf of the Complainant being SC/4/O/2005 and SC/5/O/2005 are dismissed on contest. However, we do not make any order as to costs.
