Kerala

StateCommission

CC/14/127

kerala fashion jewellery - Complainant(s)

Versus

manager axis bank ltd - Opp.Party(s)

mathew skaria

21 Dec 2016

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

 

CC.NO.127/14

JUDGMENT DATED: 21.12.2016

PRESENT

 

SRI.K.CHANDRADAS NADAR   : JUDICIAL MEMBER

SMT.A.RADHA                         : MEMBER

 

COMPLAINANT

Kerala Fashion Jewellery,

Puzhakkal Trade Complex,

Manjeri Road, Pandikkad,

Malappuram,

 

(Registered Office at S.M.Arcade,

Marthandam, Kanyakumari District,

Tamil Nadu

Rep.by Agent and Power of Attorney Holder,

Sajil George, S/o.T.P.George,

Tharakan House,

Powerloom Stop, Avinissery.P.O

Anakkallu, Thrissur – 680 306

 

(By Adv.Sri.Mathew Skaria & Tomy Paul)

Vs

OPPOSITE PARTIES

1. Axis Bank Ltd,

Rep.by its Manager,

Pattom, Thiruvananthapuram – 695 004

 

2. Axis Bank Ltd,

Fort Street Building,

East Fort, Thrissur – 680 005

 

3. Dy.Vice President, SME Business Group,

Axis Bank, SME Centre, 1^st Floor,

Pukalakkat City Centre & Sivadas Towers,

Palarivattom, Kochi – 682 025

 

 

4. Vice President, Circle Head,

Axis Bank, Kerala Circle,

1/419, Fifth Floor, Chicago Plaza,

Kochi – 682 035

 

(By Adv.Sri.Martin George.S)

JUDGMENT

SRI.K.CHANDRADAS NADAR   : JUDICIAL MEMBER

                This is a complaint filed under section 17 of the Consumer Protection Act. The allegations in the complaint in brief are the following.  Complainant is a registered partnership firm doing retail business in jewellery. Complainant is having banking transactions with the first opposite party Axis Bank since 2009. Initially complainant availed cash credit facility of Rs.135 lakhs from the first opposite party. The limit was subsequently enhanced to Rs.14 crores. The complainant has to deposit sale proceeds from the retail business in the first opposite party bank and they were doing it promptly. Complainant came to know that the first opposite party has the policy of levying charges for deposit in cash into their account when such charges were debited to the complainant’s account. But the loan agreement between the complainant and the first opposite party did not provide for levy of such charges. Complainant approached the first opposite party to sanction cash deposit limit of Rs.100 lakhs per month in 2009 itself. But he was orally told that cash credit limit of Rupees .Fifty lakhs per month only was allowed though complainant’s turn over was later enhanced to Rs.8.25 crores. The complainant had no other option than to deposit the entire cash from the sale proceeds in the bank account of the first opposite party. From June 2009 to August 2013 an amount of Rs.5,97,252/- together with service charge of Rs.71,050/- was levied from the complainant by the opposite party for depositing cash in the cash credit account. When the matter was taken up before the third opposite party complainant was advised to open current account with them to avoid levy of such charges. Accordingly, complainant opened a current account with the second opposite party branch of the first opposite party bank in November 2012 and thereafter started depositing cash in the current account. Even then complainant noticed that amounts of Rs.4,40,575.77/- and Rs.4,91,743.62/- were debited to the current account of the complainant on 23.02.2013 and 27.04.2013 respectively. The State Bank of India does not levy any cash deposit charge. Despite complaints, an amount of Rs.25,70,018.88/- including service charge of Rs.2,82,771/- was levied from the complainant during the period from 29.12.2012 to 28.09.2013 which worked out to Rs.400/- per lakh of cash deposited. It is most unreasonable to charge this much amount. Though complainant took up the matter with the fourth opposite party, there was no favourable response.  Opposite parties 1 & 2 are making mockery of the whole banking system and are charging cash deposit charges taking undue advantage of the loop holes in the circular of the Reserve Bank of India dated 07.09.2011, where freedom is given to banks to decide service charges for various services offered to customers.

        2.     Complainant approached the Banking Ombudsman. Another complaint was also made when there was illegal demand of pre closure charges amounting to Rs.62,92,160/-. As there was no response from the Banking Ombudsman complainant approached the Hon’ble High Court of Kerala and filed Writ petition, WP (C) No.4985/14 W which was allowed. The Banking Ombudsman closed the complaint summarily as writ petition was pending before the Hon’ble High Court and the appeal was not entertained by the Appellant Authority. Opposite parties 1 & 2 committed unfair trade practice and deficiency in service by charging exorbitant amounts as cash deposit charges from the complainant. Levy of unconscionable cash deposit charges is illegal. Opposite parties 1 & 2 are liable to return the amount illegally debited from the account of the complainant. Complainant seeks a direction to the opposite parties to pay Rs.32, 38,320/- with interest along with compensation of Rs.10,00,000/- and cost of Rs.50,000/-.

        3.     Opposite parties 1 to 4 filed joint version raising the following contentions. Complainant is not a consumer within the provisions of the Consumer Protection Act. Civil dispute is involved as the prayer is for recovery of money. Hence the matter ought to have been agitated before a Civil Court and this commission lacks jurisdiction to entertain the complaint. According to the opposite parties complainant is having banking transactions with the opposite parties since 2007. The complainant approached them for working capital limit and also for cash credit facility. The working capital limit was finally enhanced to Rs.14 crores from 135 lakhs at the request of the complainant on the strength of sufficient security. Complainant started cash credit account in the branch of the first opposite party with cash credit limit of Rs.50 lakhs per month. Only if the customer exceeds the cash credit limit permitted, it leads to levy of charges as per the charge schedule for the scheme and the same was agreed by the parties in the agreement executed by them. The sanction letter dated 28.01.2013 categorically permits the bank to charge for various services rendered as per the banks standard schedule of charges. Further credit facilities granted will be subject to RBI guidelines or bank policies from time to time. First opposite party was levying cash deposit charges as agreed and as per prevailing bank rules. The first opposite party never insisted or interfered in matters of any of its customers to enhance cash credit limit etc. The third opposite party never advised or insisted the complainant to open a current account. Normally banking personnel will provide information to the queries of its customers. Cash credit charges are collected on the basis of schedule of charges applicable from time to time. Complainant opened current account with the second opposite party only for convenience of the complainant and for easy transactions and deposit of amounts. Subsequently complainant sought a normal current account with the minimum account balance of Rs.10,000/- on 23.08.2013. Complainant failed to comply with the terms and conditions of banking rules. The schedule of charges was already accepted by the partners of the complainant jewellery at the time of opening the account, Opposite party bank works under the guidance and instructions of RBI and its circulars. The bank has levied charges from the complainant just like other customers as per rules. The schedule of charges had been intimated to the complainant at the beginning itself. The Ombudsman dismissed the complaint as the opposite parties were not violating any rule or committing any illegality against the complainant. The present allegations are only an afterthought of the complainant to have unlawful gain. There is no deficiency in service or unfair trade practice on the part of the opposite parties. The transactions between the parties are purely commercial. The complaint is devoid of merit and is liable to be dismissed.

        4.     On the allegations in the complaint and contentions raised the following points arise for determination.

1. Whether the complainant has succeeded in proving the deficiency in service alleged against the opposite parties?

2. Whether the complaint is maintainable?

3. What are the reliefs if any to be granted?

        5.     The evidence in this case consists of the deposition of the complainant as PW1, Exts.A1 to A11 marked on his side, the oral evidence of one witness examined on the side of the opposite parties and Exts.B1 to B6 marked on their side. After recording evidence arguments were heard.

Point No.1

        6.     The complainant is a registered partnership firm doing retail business in jewellery. Admittedly, complainant availed cash credit facility from the Axis Bank which was initially for Rs.135 lakhs. There were subsequent enhancement of cash credit limit and finally the cash credit limit was enhanced to Rs.14 crores by 2013 – 2014. As per the agreement between the parties complainant had to deposit the sale proceeds from their retail jewellery shop into the first opposite party bank. The cash deposit limit allowed was Rs.50 lakhs per month. As per the agreement between the parties any deposit beyond this limit of Rs.50 lakhs was subject to levy of charge as per the schedule. The grievances of the complainant are mainly two fold. Firstly, it is alleged that the first opposite party bank had levied cash deposit charges though the agreement did not provide for such levy. Further, service tax was also levied and debited in the account of the complainant. As already mentioned according to the opposite parties levy of charges was as agreed between the parties. The opposite parties produced Ext.B1 agreement signed by the Managing Partner of the complainant. They also produced Exts.B2 & B3 schedules showing the service charges for various categories of service rendered. Ext.B4 sanction letter is also produced. It is pertinent to mention that the allegation in the complaint is not that there was any deficiency in service on the part of the Axis Bank in the matter of rendering services such as delayed accounting etc .The allegation is that the consideration for the services rendered was unauthorised and unconscionable. In the light of the agreement between the parties the opposite party bank was entitled to levy such charges fixed by it. The RBI Circulars also permitted that. The complainant produced Exts.A6, A7 & A8 to show that other banks charge very much less for similar services. But that by itself is no reason to hold that there was deficiency in service as the consideration for the service is something to be fixed by the parties or as per Law. This commission is not entitled to consider whether the levy was unconscionable. Even otherwise, there is no sufficient evidence to consider that aspect. Service tax is imposed as per Law and the complainant cannot have any grievance for the bank having deducted service tax. There is absolutely nothing to indicate that in debiting charges for exceeding cash credit limit any direction of the RBI is violated. At the same time the agreement between parties authorised the bank to levy such charges. Under the above circumstances it is only to be held that the complainant had failed to prove deficiency in service on the part of the opposite party bank

        7.     There is yet another aspect to be considered. The complainant approached the Banking Ombudsman and filed Ext.A1 complainant. It is seen from Ext.A3 that the complaint was closed as the matter was subjudice and writ petition filed by the complainant before the Hon’ble High Court of Kerala was pending. Ext.A4 shows that the Appellate Authority did not entertain the appeal for the same reason. Ext.A2 is the copy of judgment of the Hon’ble High Court of Kerala in WP (C) No.4985 (W) dated  19.03.2014. It is seen from Ext.A2  that the complainant challenged before the Hon’ble High Court a demand made by the Axis Bank, Pattom branch for Rs.62,92,160/- as pre closure charges of the loan account of the complainant. The bank sought to sustain the demand by arguing that actually penalty was intended. The Hon’ble High Court found that the demand for the said sum of Rs.62,92,160/- by the bank was not sustainable, as the fifth respondent before the Hon’ble High court took over the liability on completion of the tenure of the loan of the complainant. Accordingly the Honbe High Court held thus :     “ the stipulation made by the 3^rd respondent in Exts.P5 and P8, insisting the petitioner to pay a further sum of Rs.62,92,160/- so as to have the loan account taken over by the 5^th respondent Bank is not correct or sustainable. Accordingly, Exts.P5 and P8 are set aside to the said extent. The third respondent Bank is directed to serve a communication to the petitioner and the 5^th respondent Bank as to the balance amount, if at all any, to be remitted to close the loan account facilitating taking over, without including the amount stated as payable with reference to Clause 28 of Ext.P1. Such a statement as to the balance, if any, shall be given within 10 days from the date of receipt of this judgment; upon which , the said amount shall be cleared by the petitioner either directly or by making appropriate arrangements through the 5^th respondent Bank. On satisfaction of the due amount as above, the title deeds deposited with the 3^rd respondent Bank shall be handed over to the 5^th respondent Bank”.

        8.     Thus it is clear that the Hon’ble High Court of Kerala finally settled the issues between the parties. The debit of service charges for deposits exceeding cash credit limit was never challenged before the Hon’ble High Court. So any decision invalidating the levy of this charge or service tax would tantamount to reviewing or altering the order of the Hon’ble High Court for which this commission has no power. For this reason also the complaint is not sustainable. Hence point no.1 is found against the complainant.

Point no.2

        9.     The opposite parties have a contention that this commission has no territorial jurisdiction to entertain the compliant. The contention is raised because the registered office of the complainant is situate within the State of Tamilnadu. But the first opposite party is the Pattom Branch of the Axis Bank. The office of the remaining opposite parties are also situated within the State of Kerala. The complainant has jewellery outlets within the State of Kerala and the disputed transactions took place within the State of Kerala. So the above contention cannot be entertained.

        10.Yet another contention taken is that the complainant is not a consumer as defined under the provisions of the Consumer Protection Act. The reason for the argument is obvious. The complainant is a registered partnership firm .PW1, the power of attorney holder of the complainant firm admitted that the firm is constituted by seven partners. The volume of business done by the retail outlet of the complainant firm is also relevant. There is no allegation in the complaint at all the partners are deriving livelihood from the profit of the business. A firm cannot be a consumer whose source of livelihood is from the business. For these reasons this contention of the opposite parties is only to be sustained.

        11.   It is also contended that the complainant ought to have approached the Civil Court and not the Consumer commission. According to the opposite parties the prayer is in effect for recovery of money. As held already the issues raised are not really relating to deficiency in service on the part of the opposite parties. It relates to the consideration for the services rendered such as whether the consideration is unconscionable or contrary to Law. This aspect cannot be examined in a consumer complaint. At any rate in view of the finding of the point no.1 the complainant is not entitled to succeed.

Point No.3

        In the result, the complaint is devoid of merit and accordingly the complaint is dismissed but without costs.

K.CHANDRADAS NADAR : JUDICIAL MEMBER

 

A.RADHA         : MEMBER

APPENDIX

List of witness for the complainant

PW1                 - Sajil George

List of exhibits for the complainant

Ext.A1              - True copy of the complaint dated 27.01.2014 made

                           by the complainant before the Banking Ombudsman

 

Ext.A2              - True copy of the judgment of the Hon’ble High Court

                           of Kerala in W.P.(C) No.4985/2014 (W)

 

Ext.A3              -  True copy of the order of Banking Ombudsman

                           closing the complaint

 

Ext.A4              - True copy of the appeal filed by the complainant

                           before the appellate authority under the Banking

                           Ombudsman Scheme

 

Ext.A5              - True copy of the order of the Appellate Authority

                           under the Banking Ombudsman Scheme

 

Ext.A6              - Copy of Schedule of charges for cash handling in

                          Andra Bank

 

Ext.A7              - Copy of Schedule of charges for cash handling in

                          Federal Bank Ltd

 

Ext.A8              - Copy of Schedule of charges for cash handling in

                          South Indian Bank

 

Ext.A9              - Copy of judgment from High court of Kerala,

                          Ernakulam

 

Ext.A10            - Copy of details of cash handling charges & services

                           Tax

 

Ext.A11            - Copy of details of cash handling charges & services

                           Tax

 

List of witness for the opposite party

 

DW1                 - Sanil Kumar.C.K

 

List of exhibits for the opposite parties

 

Ext.B1             - Copy of letter of arrangement cash credit advances

 

Ext.B2             - Copy of revised charges list

 

Ext.B3             - Copy of revised charges list

 

Ext.B4             - Copy of sanctioned letter

 

Ext.B5             - Copy of changing the current account a/c status

 

Ext.B6             - Copy of schedule of charges 

 

        K.CHANDRADAS NADAR : JUDICIAL MEMBER

 

A.RADHA         : MEMBER

Be/

 

 

 

 

 

 

 

 

 

 

KERALA STATE

CONSUMER DISPUTES

REDRESSAL COMMISSION

 SISUVIHARLANE

VAZHUTHACADU

 THIRUVANANTHAPURAM

 

CC.NO.127/14

JUDGMENT DATED: 21.12.2016

 

 

                                                                           Be/