1.      The complainant before us is a Regional Rural Bank, set up under the provisions of the Regional Rural Banks Act, 1976. The complainant bank deposited a sum of Rs.8,56,85,652/- with State Bank of India, Chatra Branch on 25-04-2009 for a period of 1000 days. The said deposit carried interest at the rate of 8.5% per annum and had maturity amount of Rs.10,78,79,712/-, payable on 26-12-2011. When the complainant approached the State Bank of India to receive the maturity proceeds of the FDR, it was informed that the said FDR had been restructured on      29-01-2008 by reducing the agreed rate of interest from 8.5% to 7% per annum. According to the complainant this was done unilaterally without any notice or information to the complainant bank. Since the protest lodged by the complainant with State Bank of India yielded no result, this complaint has been filed seeking a sum of Rs.1,25,09,208/-, that being the differential amount of interest and interest on the said differential amount.

2.      When this complaint came up for hearing on 09-10-2014, we requested the learned counsel for the complainant to satisfy us that the complainant is a ‘consumer’ within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. The learned counsel for the complainant filed additional documents and has made his submissions.

3.      Section 2(1)(d) of the Act, to the extent it is relevant, provides that the consumer does not include a person who hires or avails services for any commercial purpose. The contention of the learned counsel for the complainant is that since the objective behind the setting up of the complainant bank is to provide credit at interest especially to the small and marginal farmers, agricultural labourers and small entrepreneurs in rural areas, it cannot be said that the complainant bank was engaged in any commercial activity.

          The learned counsel in this regard has drawn our attention to the objective behind enactment of the Regional Rural Banks Act, 1976 and the report of NABARD placed on page 82 of the paper book which shows that as on 31-03-2013, 11 of the 64 regional rural banks had accumulated losses to the tune of Rs.1012 crore as against Rs.1333 crores on 31-03-2012.

4.      On a perusal of the provisions of the Regional Rural Banks Act, 1976 we find that a regional rural bank is not precluded by the said Act from making profits. Section 21 of the Act which deals with disposal of profits inter alia provides that the bank may, out of its net profit, declare a dividend. Thus, the Act permits a regional rural bank not only to make profits, but also to declare dividend out of its net profit. The dividend of course would have to go to the shareholders and as per the provisions of the Act, 50% of the capital of such a bank is to be subscribed by the Central Government, 15% by the concerned State Government and 35% by the sponsor bank. In our opinion, it would be immaterial as to who receives the dividend declared by the complainant bank out of its net profit. What is material is that the bank can make profit and also declare dividend out of the net profit it earns. In fact, the report of NABARD on which reliance is placed by the learned counsel for the complainant would show that in the year 2012-13, 63, out of 64 regional rural banks earned profit (before tax) to the extent of Rs.3281 crore and the said profit was higher than that of the previous years. After payment of income tax of Rs.896 crore the net profit of such banks aggregated to Rs.2385 crore. Only one regional rural bank namely Nagaland Regional Rural Bank incurred losses to the tune of Rs.2.07 crore in the year 2012-13. Thus it cannot be denied that even the complainant bank had been earning profits and it had earned profit in the year 2012-13. On course we do not know whether the complainant earned any profit in the year 2013-14 or not.

6.      The deposit made by the complainant bank with State Bank of India was an interest bearing deposit. The interest earned by the complainant bank would obviously be a part of the income of the bank and, therefore, would go towards augmenting its profit. It is not as if the complainant bank is required by law to function on a no profit no loss basis. Also, the act under which the bank is constituted does not mandate it to invest the profit earned by it, only in the operations of the bank. As noted earlier it can declare dividend out of the net profits earned by it. Therefore, in our opinion, the fixed deposit made by the complainant bank with State Bank of India was solely for a commercial purpose and, consequently, vis-a-vis the State Bank of India, the complainant bank is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986.

7.      The learned counsel for the complainant refers to the decision of this Commission in Punjab University Vs. Unit Trust of India & Ors., IV (2006) CPJ 301 (NC). A perusal of the above referred decision would show that in the aforesaid case, the amount in provident fund and other benefits of about 4000 employees of Punjab University was required to be invested at a safe place. The UTI came out with a scheme for deployment of funds out of the provident fund of employees and Punjab University made investment of the funds of the employees in the aforesaid scheme of UTI. The dividend declared under the Scheme was also reinvested in it. A dispute arose between the university and the UTI, as to whether the university was entitled to minimum interest of 13.5% on the reinvested amount. It was contended on behalf of the UTI that the Punjab University was not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. The said contention, however, was rejected by NCDRC. However, since this Commission found no deficiency in the services rendered by UTI the matter was taken by the university to the Hon’ble Supreme Court of India by way of appeal. The decision of the Apex Court came to be rendered on 09-07-2014 in Civil Appeal No.400 of 2007, Punjab University Vs. UTI & Ors.. Since the UTI maintained, even before the Hon’ble Supreme Court that the university was not a consumer within the meaning of the Consumer Protection Act, 1986, the university pointed out that no benefit by way of profit was to accrue to the university and it was submitted that the investors who had deposited their money in the UTI scheme were consumers. It was observed by the Apex Court that the words ‘commercial purpose’ would cover an undertaking the object of which is to make a profit out of the undertaking. It was held that since the services of UTI were availed by the university for the betterment of its employees and no benefit by way of profit was to accrue to the university improving its balance sheet, under no circumstances it could be said to be indulged in any commercial activity. It was observed in this regard that the intent of the university was not profiteering and the same was for benevolent interest and there was no intention whatsoever that the investment be made for any commercial purpose or gain. However, in the case before us, the profit by way of interest from the State Bank of India would go to the balance sheet of the complainant bank and augment its profit whereas in the case of Punjab University the profit in the form of dividend declared by UTI on the units was to go to the employees of the university. Therefore, it could not be said that the university was pursuing any commercial activity while investing money of its employees with UTI. Therefore, the reliance on the above referred decision, in our opinion, is misplaced.

8.      For the reasons stated hereinabove, we hold that since the complainant bank is not a consumer of State Bank of India, the complaint before us is not maintainable and the same is accordingly dismissed. It is, however, made clear that dismissal of the complaint shall not come in the way of the complainant availing such other remedy, if any, as may be open to it in law for redressal of its grievance against State Bank of India.