A.P. SAHI, J. (PRESIDENT) This complaint has been framed alleging deficiency on the part of the Respondent Bank that has reduced the Credit Limit extended to the Complainant from Rs. 2,30,00,000/- to Rs. 1,50,00,000/- way back in the year 2014. The contention is that the Complainant could not carry out effective marketing of his Merchandise resulting in huge losses. On account of the acts and omissions of the Bank even thereafter as explained below, the trading of the Complainant was effected on account of Unfair Trade Practices adopted by the Bank. It is stated that there was no default on the part of the Complainant in complying with its obligations of timely payment of interest and other charges of the Bank of the loan account till 2020. Towards the end of February, 2020, the Complainant received an urgent Order for supply of 20,000 table mats and in order to cope up with immediate financial requirements the Complainant requested for a temporary overdraft of Rs. 30,00,000/- against which the Bank sanctioned only a sum of Rs. 17,00,000/- as a temporary overdraft facility to be repaid within 30 days on an interest @ 10%. The Complainant after procurement of the material was in the process of getting the product arranged when suddenly came the nation-wide lockdown from 24.03.2020 due to COVID-19 as such business operations came to a standstill. The Complainant alleges that the Finance Minister declared economic package for Micro, Small and Medium Enterprises (MSME) and also announced an Emergency Credit Line Guarantee Scheme (ECLGS) directing the Banks to provide additional working capital to the extent of 20% of their outstanding credit. This credit facility extended by the Banks was guaranteed by the Government of India. 2. The Complainant alleges that an amount of Rs. 34,00,000/- was sanctioned a Working Capital Term Loan (WCTL) under the Emergency Credit Line Guarantee Scheme (ECLGS) of the Government which was disbursed by the Bank to the account of the Complainant on 14.7.2020. But the Bank unjustifiably deducted a sum of Rs. 17,61,053/- from the account of the Complainant towards past arrears. The contention is that under the ECLGS there is a prohibition for adjustment of previous debts or doubtful recovery without obtaining prior consent from the Trust. This was yet another instance of the deficiencies alleged against the Bank. 3. The Complainant alleges that a devastating fire in the business and factory premises of the Complainant occurred which was intimated to the Opposite Party Bank on 7.12.2020 about destruction of the entire stock causing damage to the building, machine, fitting and fixtures etc. 4. The Complainant did not agree to any reduction of Credit Limit by Rs. 10,00,000/- per month as suggested by the Opposite Party. A request was made to convert the loan account i.e. CC limit of the Complainant into Loan Against Property (LAP) instead of loan against stocks as the property papers of the residential flat of the Complainant was already with the Opposite Party as security. Instead of the aforesaid proposed conversion, the Opposite Party reduced the drawing limit of the Complainant against the original sanctioned loan of Rs. 2,30,00,000/- to Rs. 143.45 lacs which was in effect to make the loan account of the Complainant in-operational and further went on to deduct interest and other charges. 5. The Bank started putting pressure on the Complainant for depositing money into the account from other sources and also calling upon the Complainant to do the needful or else the account of the Complainant would be declared as NPA. The consequences of recovery by way of attachment of residential premises of the Complainant was to follow. In-spite of a request on 11.3.2021 to reverse the various charges of penal interest etc. accrued during the Pandemic as per the Government Guidelines, no heed was paid and the Complainant had to arrange funds to meet the exigencies in-spite of the personal difficulties of the Complainant. 6. The Opposite Party Bank went on making deductions from the loan account as interest, penal interest etc. and the request of the Complainant to convert the Cash Credit Limit to Term Loan or Loan Against Property (LAP) was not accepted by the Bank for no justification. The Complainant had to face a demand raised vide letter dated 22.11.2021 to the tune of Rs. 77,40,074/- with a threat that failure to pay the said amount would result into coercive action. 7. On 29.11.2021, the account of the Complainant was declared as NPA. This was protested by the Complainant with a request that the Complainant was making efforts to liquidate his assets for a One Time Settlement yet the Bank proceeded to serve a Notice under the SARFESI Act on 28.2.2022 for repayment of a sum of Rs. 2,17,05,370.51 against the Cash Credit Limit and Working Capital Term Loan Facility within a period of 60 days. This figure is being disputed by the Complainant as false and incorrect. 8. In the meantime, the Insurance Claim of the Complainant in respect of the fire was reimbursed to the tune of Rs. 71,65,561/- that was credited in the loan account. A request was made to the Bank to restructure the loan account after the reimbursement from the Insurance Company. Instead a Notice under the SARFESI Act was served on 9.6.2022 again registering failure of deposit of Rs. 2,17,05,370.51/-. A possession Notice was issued on 13.6.2022 and being harassed the Complainant moved a proposal on 2.7.2022 for a One Time Settlement for the payment to be made in 4 quarterly instalments. However, the same was not accepted by the Bank and a revised proposal was sent on 13.7.2022 alongwith Demand Drafts with a promise to pay a certain amount in future. The Complainant sold off his land in Ranikhet to meet the demands and in between the Bank sent a proposal on 24.8.2022 sanctioning a One Time Settlement for Rs. 1,38,63,000/- alongwith interest @ 10% on a reducing balance. 9. The Complainant alleges that he went on to pay a sum of Rs. 1,01,00,000/- out of the proceeds of sale of land at Ranikhet and after having paid the said amount there was a very small deficit of Rs. 3,78,154/-. The Complainant states that he ran into difficulty once again and sought extension of time which was declined by the Bank on 23.12.2022. The Complainant however was informed by the Bank that the last instalment of the One Time Settlement of Rs. 37,00,000/- alongwith 10% interest on reducing balance has not been paid hence the One Time Settlement has become null and void. 10. The Complainant raised discrepancies with regard to the difference of the closing balance and also One Time Settlement. The factory had to be sold for Rs. 1.54 crores the worth whereof was Rs. 2.5 crores which was on account of compulsive circumstances. Several deductions were made which were not permissible according to the Complainant and the Opposite Party acted malafidely and contrary to the Government of India and RBI guidelines. 11. It is in the said background that the complaint has been filed claiming compensation of Rs. 5,00,00,000/- for rendering deficient services causing losses and harassment to the Complainant. The reliefs prayed for are as follows – “1. Allow the present complaint and direct the opposite party to pay a sum of Rs.5,00,00,000/- as compensation for deficiencies committed by the opposite party in rendering services and thereby running the business of the complainant besides ruining the complainant financially, socially and causing mental harassment. 2. Direct the opposite party to reverse all arbitrary deductions made and loaded against the loan account of the complainant in interest, penal interest, penal charges etc. 3. Direct the opposite party to return the property documents in respect of B-7/96/2 Safdarjung Enclave, New Delhi-110029.” 12. A perusal of the said reliefs indicate that the complainant claims to be compensated for the deficient services rendered by the Opposite Party ruining the financial status of the Complainant and causing mental harassment and further to reverse all the arbitrary deductions loaded against the Complainant against the loan account by way of interest, penal interest or penal charges etc. 13. The aforesaid facts raised doubt about the maintainability of the complaint and on 8.4.2024, the following Order was passed :- “Heard Mr. De, learned counsel for the complainant. At the outset he was requested to look into the issue of maintainability of the complaint from the point of view as to whether the complainant is a consumer or not. In the light of the fact that all the transactions regarding the reduction of credit limits or deductions of any amount that have been pleaded in the complaint, this has to be assessed in the light of the judgment of the Apex Court in the case of Shrikant G. Mantri Vs. Punjab National Bank, (2023) 5 SCC 42. Mr. De prays for two weeks’ time to further study the matter. List on 09.05.2024.” 14. Mr. De submits that with the new Act having come into force, deficiency in service has to be judged on facts where the Complainant is alleging deficiency against Bank in respect of the credit facilities, loan facilities and overdraft for running his loan account smoothly that was interrupted and disrupted by the Bank after 2020 in violation of RBI guidelines and norms as well as other elements of financial trade that govern Banking practices between MSME Firms like the Complainant and the Respondent Bank. Mr. De contends that the nature of the transactions including the One Time Settlement is a service which is rendered by the Bank to the Complainant who is a ‘Consumer’ and therefore this transaction is not business to business but is business on the part of the Banker, services whereof are extended to the Complainant as a ‘Consumer’. Thus, it is not a business to business transaction so as to bring it within the fold of ‘commercial purpose’ under the definition of the Consumer Protection Act, 2019 and this is a case of deficiency in service by the Bank towards the Complainant who is a ‘Consumer’ struggling to survive in his business which is his livelihood. The contention is that the Complainant had a secured loan through the services of the Opposite Party Bank who have arbitrarily proceeded to reduce the Cash Credit Limit unilaterally, have imposed arbitrary and penal interest charges, have made deductions which were not permissible in Law and have finally resorted to liquidating the properties offered as security on the basis of a totally incorrect procedure applied by the Bank which is arbitrary and is unfair trade practice compelling the Complainant to face consequences resulting in huge losses. 15. He submits that with the new Act having come into force, Goods and Services have been placed at par. In the instant case the services rendered by the Bank is a loaning service which by itself cannot be termed as a ‘commercial purpose’ activity. Otherwise also, the Complainant is a ‘Consumer’ in terms of the Consumer Protection Act, 2019 as the Complainant has availed the services of the Bank which have been deficient resulting in consequential losses, and therefore the complaint is maintainable before this Forum. 16. Mr. De has cited the definition clauses of the Consumer Protection Act, 2019, and has then invited the attention of the Bench to the recent decision of the Apex Court in the case “National Insurance Co. Ltd. Vs. Harsolia Motors and Ors.”, reported in 2023 Vol. 8 SCC page 362. He has invited attention of the Bench to Para 32 to urge that there is no nexus of the nature of the deficiency of service in the present case as mentioned above for any profit generation activity. It is incorrect and unwarranted deductions and saddling of arbitrary liability on the Complainant that is dis-service and deficiency in service. It is, therefore submitted that this is not a business to business transaction and therefore not a transaction that can be labelled as a commercial purpose venture. 17. Mr. De has then submitted that the judgment in the case of “Shrikant G. Mantri Vs. Punjab National Bank, (2023) 5 SCC 42”, is not applicable on the present controversy in as much as in that case the Complainant was a broker who had undertaken overdraft facilities to earn profits in shares. Thus, it was held that the complainant had been resorting to a profit generating exercise that had a direct nexus with his stock trading activity and therefore it was for a commercial purpose. Accordingly, the case of “Shrikant G. Mantri” is distinguishable from the facts of the present case where the Complainant is the Proprietor of a Firm seeking to survive in business for earning a livelihood which is not a commercial venture. Pointing out towards Para 35 of the Judgment in the case of “National Insurance Co. Ltd. Vs. Harsolia Motors and Ors.”, it is urged that the earlier judgments referred to by the Supreme Court have not been correctly appreciated and therefore the judgment in the case of “Shrikant G. Mantri” was incorrectly applied in that case. He, therefore, submits that the Complainant does not get excluded from the term ‘Consumer’ and the present complaint raises an issue which falls within the definition of a ‘Consumer Complaint. He, therefore, submits that the present complaint is maintainable and does not deserve to be thrown out on the ground as non-maintainable. 18. Having considered the submissions raised, the facts narrated in the complaint, clearly frame the pleadings alleging deficiency on the part of the Bank in the background of a loan transaction of 2014 and the subsequent negotiations and transactions of credit facilities. The Complainant defaulted in repayments that culminated into the proceedings under the SARFESI Act against the Complainant. 19. The contest of the complaint is with regard to the terms and conditions of the loan/cash credit facility/ other financial benefits that were negotiated by the Complainant with the Bank. The terms and conditions of the Banking Rules and Regulations in respect of the account in question demonstrate that the Complainant alleges breach in respect of the terms and conditions of the loan account and its cash credit limit as well as other overdraft facilities. It is admitted by the Complainant that his request for One Time Settlement was agreed upon by the Bank and the same was also partly implemented. This transaction is in respect of the same term loan account and the banking facilities as well as the conversion of the account into a NPA. The proceedings under the SARFESI Act with regard to the recovery is in respect of the same account. It is evident from the facts that the Complainant has admitted in having ran into difficulty in arranging further funds after settlement was reached. He also sought time for extension which was declined by the Bank. This fact is evident from the letter dated 24.8.2022 (Annexure- C-33) which is extracted hereinunder :- “Without Prejudice Ref-AXIS/RL&P/DEL/MATRIX/2022-23/01 Date: 24/08/2022 To, MATRIX THROUGH PROPRIETOR MR. RAJIV SAWHNEY 248-A, 3rd Floor, Rathi Complex Rama Market, Munrika, New Delhi-110067 Also at: B-287, Okhla Industrial Area, Phase-1 New Delhi-110020 (Applicant) Mr. RAJIV SAWHNEY DDA Flat no B-7/96/2, 1st Floor, Safdarjung Enclave, New Delhi-110029 (Guarantor & Mortgagor) K.A. MR. RAJIV SAWHNEY Ref: Your OTS proposal dated 13/07/2022 for settlement of dues of M/s Matrix A/c 914030026949184, 920060046435579 (Cust ID 853147292) Dear Sir/Madam. We refer to your aforesaid letter dated 13/07/2022 pertaining to settlement of dues of M/s Matrix. In this regard, based on your request letter and subsequent discussion held with you on subject matter, we have to advise you that we are agreeable for settlement of dues payable by M/s Matrix to Axis Bank Ltd. ("Bank") on the terms and conditions mentioned below. The position of outstanding in M/s Matrix as on 31/01/2022 as per demand notice dated 28/02/2022 is Rs. 2,17,05,370.51/- with further interest and penal charges thereon. The borrower concern/Mortgagors are liable to pay the above outstanding in M/s Matrix as on 31/01/2022 of Rs. 2,17,05,370.51/- as mentioned in the demand notice issued with further interest, penal interest, charges etc. Please note that Total outstanding amount in M/s Matrix as on 31.07.2022 is Rs. 1,55,86,384.62/- along with further interest, penal interest, charges till final payment/realization. The Borrower concern/Mortgagors hereby admit and accept the above liability/dues to the Bank. The aforesaid dues as well as the settlement amount in accordance with this sanction letter shall be due and payable jointly and severally by the borrower concern Mortgagors. 2. As per your OTS proposal. Bank agrees to settle the present outstanding dues at Rs. 1,38,63,000/- (Rupees One Crore Thirty Eight Lakh Sixty Three Thousand only) along with interest 10% on reducing balance along with last instalment subject to satisfactory payment in accordance with the terms and conditions contained herein. Apart from the above mentioned settlement amount, you are also agreed to pay a sum of Rs. 12500/- towards the legal expenses incurred by the Bank in the recovery proceeding initiated against you. 3. The above mentioned settlement amount of Rs. 1,38,63,000 (Rupees One Crore Thirty Eight Lakh Sixty Three Thousand only) along with 10% interest on reducing balance shall be payable as under. - Sr. No | Payment due date on or before | Amount | 1 | Immediate payment upon acceptance of Settlement Letter | Rs.25 lakh | 2 | Payment on before 25th September 22 | Rs.25 lakh | 3 | Payment on before 25th October 22 | Rs.25 lakh | 4 | Payment on before 25th November 22 | Rs.25 lakh | 5 | Payment on before 26th December 22 | Rs.38.63 lakh+10% Interest on reducing balance In last month | TOTAL | Rs. 138.63 lakh | Rs. 138.63 lakh + 10% interest on reducing balance in last month |
Please note that the borrower/guarantor to submit PDC's of Non Axis Bank account for rest of the tranches. 4. Apart from the above mentioned settlement amount you are also agreed to pay a sum of Rs. 12500/- towards the legal expenses incurred by the Bank in the recovery proceeding initiated against you. It may be noted that separate DD to the tune of Rs. 12500/- is to be issued by you in favor of Axis Bank ltd. at the time of acceptance of settlement letter. 5. All other terms and conditions as contained in all our earlier sanction letters/documents/notices etc. to the extent not contrary to the terms of this letter shall continue to be in effect and shall be binding on the borrower concern/Partner. All personal/corporate guarantees as well as securities charged in favour of the Bank shall continue to be valid and binding. 6. It is hereby agreed that upon receipt of the entire settlement amount in accordance with the terms and conditions of this settlement letter, the Bank as well as borrower concern/Guarantors/Mortgagor shall not have any contentions, claim/counter-claims against each other and shall withdraw all the Legal cases filed against each other in any court of law, tribunal and forum. Upon receipt of Rs.138.63 lakh along with interest @ 10% on reducing balance stated as above, Bank will release charge over property (if any), as per bank rules, guidelines and process. Equitable Mortgage of Residential property bearing DDA Flat no B-7/96/2, 1st Floor, Safdarjung Enclave, New Delhi-110029 Also release the personal guarantees of MR. Rajiv Sawhney 7. The said charge on above mentioned property will be released only after full payment of Rs 1,38,63,000/- along with interest @ 10% on reducing balance in last installment, as per the settlement terms and closure of credit facilities of M/s Matrix. 8. The Bank and the M/s Matrix will also enter into a consent Terms (and record the statements to that effect in SA filed in DRT Court to give effect to this OTS at the earliest possible date. Borrower has agreed that he unconditionally withdraw his S.A. immediately after filling the Consent Terms in DRT Court with respect to OTS. 9. That during the pendency of Proposed OTS payment. Bank will not permit any third party interest over mortgaged property in any manner. 10. In case of failure of the borrower concern/Guarantors/Mortgagors to pay the settlement amount or any part thereof in accordance with this letter or non-compliance of any terms and conditions of this letter, the present settlement accepted by the Bank shall stand automatically revoked without any further notice to the borrower concern/Guarantors/Mortgagors and the borrower concern/Guarantor/Mortgagors shall be liable for the entire dues together with up to date interest, penal interest, cost and damages. In such an eventuality, part amount, if any, paid by the Borrower Concern/Guarantor(s) under the present settlement approval shall be treated as amount paid towards reduction of the total amount payable by the Borrower Concern/Guarantors/Mortgagors for the respective account. 11. As you are aware that you have also filed SA against Bank in DRT court. So by accepting the OTS terms, you are unconditionally giving your consent to withdraw SA against Bank on immediate basis. 12. For your information and understanding we wish to advice you that as per the current procedure of credit bureaus, if a matter is settled by paying an amount which is less than the actual outstanding amount on a certain date, the credit bureau records will reflect the status as "settled" and the credit bureau does not delete the records in such cases. This is the standard procedure. Accordingly, your records in credit bureaus also reflect as "settled" as per normal procedure (except in written off cases where it shall reflect as "Write Off”) This approval/sanction letter is issued in duplicate. We request you to return one original of the letter duly accepted by authorised signatory of the borrower concern/firm and Guarantors/Mortgagors, as token of having accepted the terms and conditions of the letter latest by 26.08.2022 failing which this sanction shall automatically stand withdrawn/cancelled. Please note that all the mortgagors & Guarantor will sign the Settlement Letter before release of original property documents. Yours faithfully. ( ) Axis Bank Ltd. We agree and accept the above terms and conditions Mortgagor/Guarantor 1. ------------------------(MR. RAJIV SAWHNEY) Guarantor (M/s MATRIX)” The offer was accepted by the Complainant but the Complainant in Para 42 of the complaint mentions that he ran into difficulty and requested the Opposite Party Bank for extension of time by 03 months. This request was declined by the Bank vide Annexure- C-36 which is extracted hereinunder:- “From: Dheeraj2 Arora Dheeraj2 Arora@axisbank.com Subject: Re: Need a little help Date: 23 December 2022 at 6:07 PM To: Rajiv Sawhney rajiv.matrix@gmail.com Cc: Mandeep Singh Chandoak Mandeepsingh.Chandoak@axisbank.com Dear Mr. Rajiv, This is with reference to your request for extension in payment of balance settlement amount of Rs. 37 lakh along with 10% interest on reducing balance, which need to be paid with last month installment in December 2022. We've discussed your request internally and want to inform you that same is not possible. Time schedule was mentioned in OTS letter ref no AXIS/RL&P/DEL/MATRIX/2022- 23/01 and same was accepted by you. At the time of OTS, bank provided you considerable amount of waiver and entire OTS amount of Rs. 1.38 CR along with 10% interest on reducing balance needs to be paid as per agreed time schedule and it can't be extended. Hence, we request you to pay the remaining OTS amount of Rs. 37 lakh along with 10% interest on reducing balance, which needs to be paid with last month's installment in December 2022 only. Regards, Dheeraj Arora Zonal Collection Head North1 | Secured (SBB & CBG)” 20. With these developments on record and the default which seems to have been committed by the Complainant, the present dispute does not appear to be one for deficiency on the part of the Bank and is a pure accounting contractual dispute where the elements of any unfair trade practice or deficiency in service does not seem to be attracted for entertaining this complaint. On an overall conspectus, the attempt of the Complainant to enhance his business with finances from the Bank was to generate profits out of a commercial enterprise. 21. Otherwise also, it is evident that the entire saga of blaming the Bank from 2014 onwards is coupled with the fact that the Complainant originally started as a Proprietary Firm which is a MSME of which Mr. Rajiv Sawhney is the Sole Proprietor. He commenced his business for an in-pack and out-pack promotion of various items including small toys that are inserted in packets of chips and biscuits. The Unit therefore, according to the Complainant, was for procurement, trading and manufacturing of such items. The narrative in the complaint indicates that the Complainant wanted to expand its business for which he required more funds. The Complainant had an unsecured business loan of Rs. 40,00,000/- from United Bank of India under the Credit Guarantee Fund Trust for Micro and Small Enterprises but the same was not sufficient for his expansion. The expansion seems to be in a different field as narrated by the Complainant who became a Global Merchandise Partner of a film based on Sikh Gurus called “Charsahibzade”. It is this aspiration of the Complainant to expand business activities and earn more profits which led him to switch over his loan facilities to the Axis Bank. This was intended to generate profit through a film making project and it’s release in various parts of the World. To begin with, the Opposite Party Bank extended this benefit of a Cash Credit Facility of a sum of Rs.2,30,00,000/-. The Axis Bank, however, did not release the amount at one go and according to the Complainant a sum of Rs. 1,70,00,000/- was only released which according to the Complainant upset his business and the loan was unilaterally revised and then reduced. According to the Complainant, since the Opposite party did not release the balance of the sanctioned loan, the Complainant could not carry out the effective marketing of the film as was originally planned and it resulted in a huge loss. 22. It is because of these losses that the Complainant continued with his original business of trading and manufacturing of plastic and paper toys. The aforesaid fluctuations as opted by the Complainant himself clearly indicates that he was trading with the Bank for purely commercial ventures for his own advancement in business and for earning profits. The Bank in turn was extending the financial aid to the Complainant to secure its business interests. Thus, both the parties were equally involved in business to business transaction and this cannot be termed as a business to pure consumer transaction as it clearly involves the element of commercial venture that was set up by the Complainant. 23. Nonetheless, even the subsequent venture of the Complainant for supply of 20,000 table mats and not having been able to execute the same due to the Pandemic, was also a commercial venture for earning profits by supply of mats for which overdraft facilities were obtained. 24. The contention of the Complainant that the Working Capital Term Loan sanctioned under the Emergency Credit Line Guarantee Scheme faced a deduction of. Rs. 17,61,053/- which the Complainant alleges was unauthorized and without prior consent from the Trust. If that was so, the Complainant ought to have approached the competent Authority and or instituted proceedings immediately in 2020 itself. Nothing seems to have been attempted and in view of the subsequent defaults in payments led to the action of the Complainant being declared as NPA. This was followed by SARFESI proceedings and the sale of assets that were offered as collateral security. To avoid all this, the Complainant entered into a One Time Settlement where he defaulted once again as noted above. The Complainant on the one hand was attempting to reduce its losses and on the other trading with the Bank to minimise the loan liabilities. This activity therefore cannot be countenanced as a deficiency of service by the Bank or an unfair trade practice to attract the jurisdiction of this Commission. 25. To construe this to be a deficiency in service, reference be made to the ‘Definitions’ contained in Section 2.(6)(iii) of the Consumer Protection Act, 2019, extracted hereinunder:- “2.(6) “complaint” means any allegation in writing, made by a complainant for obtaining any relief provided by or under Act, that – (i) An unfair contract or unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider; (ii) The goods bought by him or agreed to be bought by him suffer from one or more defects; (iii) The service hired or availed or agreed to be hired or availed of by him suffer from any deficiency;………..” Further, reference be made to the word ‘Consumer’ defined in Section 2.(7) (ii), extracted hereinunder:- “2.(7) “Consumer’ means any person who – i) ..……………… 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 service 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 service for any commercial purpose. Explanation.- For the purposes of this clause,- (a) the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment; (b) the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing;” 26. A deficiency in service has to be understood while reading the aforesaid provisions coupled with the definition of the word ‘deficiency’ contained in Section 2.(11) of the Consumer Protection Act, 2019, which is extracted hereinunder:- “2.(11) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes – (i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and (ii) deliberate withholding of relevant information by such person to the consumer;” 27. Finally, the above definitions have to be read in consonance with the definition of the word “service” contained in Section 2.(42) of the Consumer Protection Act, 2019, which is extracted hereinunder – 2.(42) “service” means service 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, telecom, boarding 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;” 28. A reference can be made to ‘unfair trade practice’ contained in Section 2.(47). It is a complaint of such alleged deficiency in service that is within the scope of the Consumer Protection Act, 2019. The Explanation attached to Section 2 was an outcome of legislation that came to be amended from time to time redefining the status of a ‘Consumer’. Amendments were earlier carried out in 2002 in the Consumer Protection Act, 1986. This legislative journey came to be captured and explained by the Apex Court in the case of “Shrikant G. Mantri” (supra). The said judgment also referred to the earlier judgments on the subject which came to be considered in the case of “National Insurance Co. Ltd. Vs. Harsolia Motors and Ors.” (supra) that has been cited by Mr. De. Para Nos. 35 to 37 of the same is extracted hereinunder – “35. Thus, what is important is the transaction in reference to which the claim has been filed under the Act, 1986 by a person who claims himself to be a "consumer" covered under Section 2(1)(d) of the Act, 1986, such exposition of law on the subject has been further reiterated by this Court recently in Shrikant G. Mantri v. Punjab National Bank6 and after the analysis on the subject and taking note of the judgment of this Court in Lilavati Kirtilal Mehta Medical Trust (supra), of which reference has been made, examined the case on the facts in question and recorded a finding that the transaction in question would fall within the definition of the term "consumer" or "services" for the purpose of invoking jurisdiction under the Act, 1986. 36. Thus, what is culled out is that there is no such exclusion from the definition of the term "consumer" either to a commercial enterprise or to a person who is covered under the expression "person" defined in Section 2(1)(m) of the Act, 1986 merely because it is a commercial enterprise. To the contrary, a firm whether registered or not is a person who can always invoke the jurisdiction of the Act, 1986 provided it falls within the scope and ambit of the expression "consumer" as defined under Section 2(1)(d) of the Act, 1986. 37. Applying the above principles to the present case, what needs to be determined is whether the insurance service has a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. The fact that the insured is a commercial enterprise is unrelated to the determination of whether the insurance policy shall be counted as a commercial purpose within the purview of Section 2(1)(d) of the Act.” Applying the aforesaid Law, it is evident that the Complainant is in the business of trading and manufacturing of items and his canvas of business includes manufacturing of toys, film making and then finally supply of tablemats. This huge range of business is a commercial venture. The services availed by the Complainant from the Bank is therefore for a commercial purpose of running his manufacturing unit of toys etc., entering into marketing of films, and then the sale & purchase of tablemats, which of course was on the strength of the financial facilities undertaken by the Complainant to earn profits in such business. The Bank was also extending the financial facility for a commercial venture and therefore it was a business to business transaction with profit generation as a dominant purpose. In such circumstances and applying the ratio of Law laid down by the Supreme Court, the Consumer Forum is not available to the Complainant in the background of what has transpired in the business journey of the Complainant. The present complaint is therefore held to be not maintainable without prejudice to the rights of the Complainant to approach appropriate Forum for redressal of his grievances. The observations made herein are confined only for exercise of the jurisdiction relating to ‘deficiency in service’ and ‘unfair trade practice’ under the Consumer Protection Act, 2019. The Complaint is accordingly dismissed with the said observations. |
