Delhi

StateCommission

FA/12/1033

ICICI BANK LTD. - Complainant(s)

Versus

CENTURY SEEDS PVT.LTD. - Opp.Party(s)

26 Aug 2016

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

                                                             Date of Decision: 26.08.2016

First Appeal No. 1033/2012

(Arising out of the order dated 08.06.2012 passed in Complaint Case No. 1894/2005 by the District Consumer Disputes Redressal Forum VI, ‘M’ Block, Ist Floor, Vikas Bhawan, I.P.Estate, New Delhi)

In the matter of:

ICICI Bank Ltd.

2^nd Floor, NBCC Place

Bhishma Pitamah Marg

New Delhi-110003                                           .........Appellant

 

Versus

 

Century Seeds Pvt. Ltd.

BA-22-24, Phase II

Mangol Puri Industrial Area

New Delhi-110034                                           ..........Respondent

                                                                  

CORAM

 

N P KAUSHIK                         -                  Member (Judicial)

 

1.         Whether reporters of local newspaper be allowed to see the judgment?                   Yes

2.         To be referred to the reporter or not?                                                                  Yes

 

N P KAUSHIK – MEMBER (JUDICIAL)

 

JUDGEMENT

1.         Present appeal is directed against the orders dated 08.06.2012 passed by the Ld. District Forum VI Vikas Bhawan Delhi. Vide impugned orders, Ld. District Forum directed the appellant herein to refund to the respondent/complainant an amount of Rs. 1,60,000/- alongwith interest @ 9% p.a. w.e.f. 08.06.2005. Compensation including litigation costs to the tune of Rs. 35,000/- were also awarded.Parties hereinafter shall be referred to by their original status as it was in the District Forum.
2.         Facts in brief are that the complainant admittedly is the company incorporated under the Companies Registration Act 1956. Complainant got sanctioned a loan for an amount of Rs. 17.3 million against the overdraft credit facility of ICICI Bank Ltd. (OP).  OP charged processing fee @ 1.10%. Loan was sanctioned on 02.12.2004. It was to be disbursed only after an NOC in relation to mortgage of property was issued by DDA. Complainant received permission from DDA only on 05.04.2005. Sanction issued by the OP towards loan was valid for two months only. The OP bank did not disburse the loan amount for the reason that the NOC was received late from DDA. For this purpose, OP sought to appropriate processing fee of Rs. 1,60,000/- from the current account of the complainant. The amount was accordingly appropriated.
3.         Ld. District Forum allowed the complaint observing that the loan stood sanctioned subject to issuance of NOC by DDA. OP ought have kept alive the disbursement of loan till issuance of NOC by DDA. Appropriating the processing fee was held as ‘unfair trade practice’.
4.         I have heard the arguments addressed by the Counsel for the Appellant Sh. Hemant Gupta Advocate and the Counsel for the Respondent Sh. Bhupesh Chandna Advocate, at length.
5.         Ld. Counsel for the OP has submitted that the complainant was not a ‘consumer’ within the meaning of the definition provided under Section 2(1)(d) of the Consumer Protection Act 1986. Contention of the OP is that the complainant was carrying on a ‘commercial activity’ and for that reason was not a ‘consumer’. Ld. Counsel has relied upon the case of the Gangar Opticians Pvt. Ltd. v. HDFC Bank Ltd. & Ors. III (2012) CPJ 687 (NC). Relevant Para 5 of the Judgment is reproduced below:

“In the first place it needs to be noted that the judgment of the Apex Court cited by Mr. Sharma was prior to the amendment to the Act that became effective from 15.3.2003. After that amendment, a person availing of services for any ‘commercial’ purpose was excluded from the definition of “consumer” under Section 2(1)(d)(ii) like the situation was, prior to that date, only in respect of a buyer of goods for “commercial” purpose. Secondly, the decision of this Commission in Harsolia Motors related to whether a company operating for commercial purpose and availing of insurance for indemnification of loss in connection with its business activity could be termed a “consumer” within the meaning under Section 2(1)(d)(ii) of the Act. The view taken by this Commission was that even a commercial entity availing of insurance facility would be a “consumer” of the service of insurance under the Act because availing of insurance service/policy did not per se lead to generation of profit/loss, insurance being always for only indemnification of a permissible loss due to specified perils and “indemnification” by definition excluded any profit. In this case, it is quite clear that the merchant overdraft facility was directly related to the business of the complainant’s company. It will be far-fetched to argue that the overdraft facility per se was not meant to earn any profit even though the business carried out with the money that was provided under the overdraft facility was admittedly “commercial”, i.e. for earning profit.”

 

6.         The Hon’ble National Commission has distinguished the proposition of indemnification of loss by an insurance company from the overdraft facility. It was observed that the overdraft facility was meant to earn profits. The present case clearly relates to availing of the services of the OP bank for enjoying an overdraft facility. Clearly, it was a commercial activity done for earning profits only. I am, therefore, of the considered opinion that the complainant is not a ‘consumer’ within the purview of the Section 2(1)(d) of the Consumer Protection Act 1986. Appeal is hence allowed. Complaint is dismissed. Complainant is however at liberty to approach the Civil Court for seeking appropriate remedy.
7.         Copy of the orders be made available to the parties free of costs as per rules and thereafter the file be consigned to Records.
8.         FDR, if any, deposited by the appellant be released as per rules.

 

 

(N P KAUSHIK)
MEMBER (JUDICIAL)