First Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.44 of 2012
Date of institution : 12.01.2012
Date of decision : 21.09.2015
Axis Bank Limited through its Branch Manager, Kotkapura, Faridkot Road, Kotkapura, Punjab through Sh. Atul Bansal, General Power of attorney holder of the Bank. …….Appellant/Opposite Party
Versus
M/s. Crop Chemicals India Limited having its Regd. Office at C-63-65, Focal Point, Industrial Area, Kotkapura through its Director, Rajinder Goel. …..…Respondent/Complainant
First Appeal against order dated 05.10.2011 passed by The District Consumer Disputes Redressal Forum, Faridkot.
Quorum:-
Mr. J. S. Klar, Presiding Judicial Member
Mr. H. S. Guram, Member.
Present:-
For the appellant : Sh. R.S. Bhatia, Advocate
For the respondent : Sh. Ashish Gupta, Advocate
H. S. GURAM, MEMBER:-
This appeal has been preferred by the appellant (OP in the complaint) against the respondent of this appeal (complainant in the complaint), assailing order dated 05.10.2011 passed by the District Consumer Disputes Redressal Forum Faridkot, (in short 'District Forum'), in CC No. 33 dated 01.02.2011, vide which, the complaint filed by the complainant was partly accepted by directing OP to refund an amount of Rs.5,51,500/- to the complainant, which has been illegally charged by the OP on 21.04.2009 alongwith interest @ 9% per annum from 21.04.2009 till realization of the amount. OP was also directed to refund interest charged in excess of the agreed rate as per terms and conditions of the sanctioned letter communicated to the complainant at the time of the sanction of original sanctioned credit facilities in favour of the complainant.
2. The brief facts of the case are that M/s. Crop Chemicals (India) limited was having its registered office situated at Focal Point industrial Area, Kotkapura and had availed two term loans vide account bearing No. 577010600000037 and 577010600000028 and having cash credit limit account No. 577010300000286 with the OP. These limits were duly sanctioned to the complainant by the OP as per request. However, complainant found from its account statement in the month of January 2009, that OP was charging higher rate of interest and not as per the loan sanctioned communications given to the complainant. In the month of February 2009, it was found that OP bank had charged interest @ 12.92% instead of 11% as per sanctioned letter. It was found that OP bank had been charging excess interest rate in its account and also charged consolidated charges and service taxes from 30.01.2009 to 30.03.2009. They gave a representation letter to the OP that in view of sanction letter, they have charged higher interest rate in their account. But, OP did not pay any heed to their grievances and ultimately complainant was forced to shift his account to Canara Bank on 31.03.2009 and Canara Bank took over the credit facilities of the complainant by remitting a sum of Rs.10 Crore and their account was cleared and no amount remained due and recoverable by the OP bank from the complainant due to shifting their account to Canara Bank. After account was taken over by Canara Bank, the OP bank debited their account by charging processing charges and renewal charges in their account without their consent. No financial information was sought by the OP Bank from renewal of their limit. The OP bank could not sanction and renew the limit without taking financial information and data from them. The complainant had already informed the OP of its intention to shift their cash accounts from OP bank and closed the cash credit limit on 31.03.2009. However, OP did not release the securities/title deeds and ultimately OP threatened it, that until and unless Rs.5,51,500/- were paid on account of renewal + service tax and repayment of the term loan account charges of Rs.99,430/-, till then the OP would not release the security in favour of Canara Bank. It was submitted that no consent was given by the party for renewal of their credit facilities to the OP bank and it had charged illegally a sum of Rs.6,50,930/- in their account and forced it to clear the same in order to get back its securities from OP. The title deeds were handed over by the OP Bank to Canara Bank by adjusting renewal charges of Rs.6,50,930/- by the complainant which was paid under protest. It was further submitted that complainant had written many letters to pay back the unauthorized amount charged from them to the tune of Rs.6,50,930/- by the OP Bank, but their requests were not considered. On failure to get any relief, the complainant was forced to file the consumer complainant in the District Forum and sought issuance of directions to the OP that the amounts which were charged in excess of the sanctioned rate of interest be given back to it amounting to Rs.16 lacs and same be returned alongwith interest@ 18% from the date of illegal recovery and litigation cost to the tune of Rs.10,000/- were also prayed for.
3. Upon notice, OP filed its written reply and took preliminary objections that the complainant is not its consumer. Complainant had already transferred their cash credit facilities to Canara Bank and closed their accounts with them. It was further submitted that District Forum has no jurisdiction to entertain and try the complaint filed by the complainant. Complainant should have filed their complaint before the Banking Ombudsman, which has been established for dealing with such matters. The OP denied the averments raised in the complaint by the complainant by contending that no excess amounts were charged from their account. The interest was charged from the complainant's account at PLR-2.75% per annum. Effective rate of interest charged from the complainant was as per PLR of the bank. The interest rates had been de-regulated by the Reserve Bank and the RBI had given powers to individual banks to reset their interest rates, which were to be charged on their loans given to their customers from time to time as per recommendations of their bank's assets liability management committees recommendations. The averments stated by complainant were alleged to be wrong as the bank had written a letter to them, vide letter dated 31.02.2009 to provide information to consider the enhancement of credit facilities from 10 crore to Rs. 12 crores in lieu of their letter dated 03.02.2009. The request letter was given to OP bank dated 03.03.2009 for enhancement of the limit and it was duly signed by its Director Sh. Rajinder Goyal for the enhancement of the Cash credit limits. This letter of the complainant seeking enhanced credit limits was forwarded to their Head Office situated at Ludhiana on 06.03.2009. The enhancement of limits which were applied for by the complaint were duly considered by their Regional Office and same were sanctioned on 25.03.2009. The OP denied all the averments of the complainant and prayed for dismissal of the complaint
4. Complainant tendered in evidence his affidavit Ex.C-1, copy of detail of interest as Ex.C-2, copy of detail of consolidated charges as Ex.C-3 & 4, copy of processing charges Ex.C-5, copy of interest detail Ex.C-6 and 7, copy of account statement Ex.C-8, copy of letters from Ex.C-9 to 13, copy of resolution Ex.C-14 and closed the evidence. OP tendered in evidence the affidavit of Manish Kumar as Ex.R-1/A, copy of sanction of credit facility as Ex.R-1, copies of letter regarding interest as Ex.R-2 to 4, copy of charges for CC limit Ex.R-5, copy of letter Ex.R-6, copy of audit report Ex.R-7, letter dated 05.03.2009 Ex.R-8, letter dated 06.03.2009 Ex.R-9, letter dated 25.03.2009 Ex.R-10 and closed the evidence. On conclusion of evidence and argument, the District Forum partly accepted the complaint of the complainant. Aggrieved by impugned order of District Forum, the OP now appellant has filed the appeal against the same seeking its reversal.
5. We have heard the learned counsel for the parties and also examined the record of the case. It has been agitated that the appellant had sanctioned credit facilities for business purposes to the complainant/respondent. The complainant would not fall under the definition of a Consumer, as defined under the Consumer Protection Act, 1986. From perusal of the definition, it is clear that if a consumer hires or avails service for any commercial purpose, then that person does not fall within the definition of a Consumer. The complainant is a private limited company and there is no question of its hiring the services of OP for earning its livelihood by means of self employment. The complaint is a juristic person and is not a natural living person. A private limited company always carries on its business for commercial purposes with the sole motive of earning profits. The complainant filed by the complainant being a private limited company does not fulfill the definition of consumer under Section 2 (1) (d) of the Act. The case of the complainant being a private limited company is not covered by the explanation appended to the above provision. The District Forum has failed to consider this vital factor in this case. Thus, a person who has availed services for commercial purposes would not be considered to be a consumer under the definition of Consumer Protection Act, 1986.
6. As a corollary of our above discussion, we hold that complainant is not proved to be the consumer of the OP. The order of the District Forum Faridkot dated 05.10.2011 is set aside in this appeal and appeal of the appellant is accepted with cost.
7. Appellant had deposited a sum of Rs.25,000/- at the time of filing this appeal in the commission and another sum of Rs.75,000/- deposited as per the directions of this Commission. The registry is hereby directed to remit Rs.25,000/- + Rs.75,000/- alongwith interest, if any accrued thereon, in favour of the appellant by way of a crossed cheque/demand draft after the expiry of 45 days from the date of this order.
8. The arguments in this appeal were heard on 09.09.2015 and the order was reserved. Now, the order be communicated to the parties as per rules.
9. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J.S. Klar)
Presiding Judicial Member
(H.S. Guram)
Member
September 21,2015
RK 2
