JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          The complainant/appellant is a Public Limited Company running a multi-specialty hospital in Thrissur in Kerala.  The petitioner company has availed loan facilities comprising term loan, over draft and cash credit facility from Punjab National Bank, for running its business.  The appellant filed a Consumer Complaint before the State Commission alleging several deficiencies on the part of the respondent Punjab National Bank in rendering services to it.  The deficiencies alleged by the petitioner/complainant can be summarized as under:

1. Dishonour of cheques issued by the appellant company, on the ground of want of sufficient funds, despite sufficient funds being available in the account of the complainant.

2. Unauthorized transfers from the account of the complainant company.

3. Recovery of cheque return charges despite the cheque having been cleared.

4. Unauthorized debits in the account of the complainant.

2.      The complaint was resisted by the respondent Punjab National Bank on several grounds stated in its written version. 

3.      The State Commission, vide impugned order dated 06.04.2018, dismissed the Consumer Complaint solely on the ground that the complainant is not a Consumer within the meaning of the Consumer Protection Act.  Being aggrieved from the order passed by the State Commission, the appellant is before this Commission by way of this statutory appeal. 

4.       The term ‘consumer’ has been defined in Section 2(1)(d) of the Consumer Protection Act, which to the extent it is relevant for the purpose of this petition means a person who buys goods or hires or avails services for consideration but does not include a person who obtains goods for resale or who purchases goods or avails services for any commercial purpose.  As per the explanation, inserted with effect from 15.3.2003, for the purpose of the above referred clause, commercial purpose does not include use of the goods or services exclusively for the purpose of the earning livelihood by means of self-employment.

5.      The term ‘Consumer’ used in Section 2(1)(d) of the Consumer Protection Act came up for consideration of a Three-Members Bench of this Commission in Revision Petition No.2833 of 2018 decided on 06.01.2020 and after considering several decisions on the issue, including Synco Textiles Pvt. Ltd. Vs. Greaves Cotton & Company Ltd. I (1991) CPJ, 499 (NC), Cheema Engineering Services Vs. Rajan Singh (1997) 1 SCC 131, Madan Kumar Singh (Dead) through L.R. Vs. District Magistrate, Sultanpur & Ors. (2009) 9 SCC 79 and Paramount Digital Colour Lab & Ors. Vs. Agfa India Private Limited & Ors. (2018) 14 SCC 81, the larger Bench inter-alia held as under:

(a)     Only a person engaged in large scale commercial activities for the purpose of making profit is not a consumer;

(b)     There should be a direct nexus between the large scale commercial activities in which a person is engaged and the goods purchased or the services hired or availed by him, before he can be excluded from the purview of the term ‘consumer’.  Therefore any goods purchased or the services hired or availed even by a person carrying on business activities on a large scale for the purpose of making profit will not take him out of the definition of the term ‘consumer’, if the transaction of purchases of goods or hiring or availing of services is not intended to generate profit through the large scale commercial activity undertaken by him and does not contribute to or form an essential part of his large scale commercial activities.

(c)     What is crucial for the purpose of determining whether a person is a ‘consumer’ or not is the purpose for which the goods were purchased or the services were hired or availed and not the scale of his commercial activities.

6.      It would thus be seen that a person engaged in large scale commercial activities intended to make profit, is not a consumer and what is crucial for the purpose of deciding whether a person is a consumer or not is the purpose of which the goods are purchased or the services are hired or availed, as the case may be. 

7.      The complainant/appellant hired the services of the respondent Punjab National Bank by opening a current account with the said bank and availing term loan, overdraft facility and Cash Credit facility.  Admittedly, the Overdraft facility and the Cash Credit facility were linked to the current account which the appellant company had opened with the respondent Punjab National Bank.  It is also not in dispute that the cheques dishonored by the bank, were issued from the said current account.  Similarly, it is also not in dispute that the transfers and debits subject matter of the Consumer Complaint, were also made from the current account which the appellant company had opened with Punjab National Bank and to which the Overdraft facility and Cash Credit facility had been linked.  Since the bank account was opened and the Overdraft facility as well as the Cash Credit facility were availed by the complainant company for the purpose of its business of running a multi-specialty hospital, it can hardly be disputed that the services of the respondent bank were hired or availed by the appellant for its commercial purpose.  Therefore, the complainant company cannot be said to be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. 

8.      It is pointed out by the learned counsel for the appellant that no objection in the written version has been taken disputing the locus standii of the complainant to maintain a Consumer Complaint on the ground that it is not within the meaning of Section 2(1)(d) of the Consumer Protection Act.  The aforesaid factor, in my view, would not be much material since the issue involved is purely a legal issue determination of the said issue does not depend upon the disputed question of fact otherwise arising in the Consumer Complaint, and the matter was at an initial stage, when the complaint was dismissed.   

9.      The learned counsel for the appellant has referred to the decision of this Commission in State Bank of India Vs. U.P. Cooperative Federation Ltd. and Others First Appeal No.826 of 2015, decided on 23.04.2019.  The aforesaid decision however, is not applicable at all to the present case which pertains to the deficiencies alleged in the services hired by a company for the purpose of running its business.  The learned counsel for the complainant/appellant also refers to the decision of this Commission in FA No.42 of 2014 M/s Metco Export International Vs. Federal Bank Ltd. & Ors. decided on 06.02.2018.  The aforesaid decision also would be of no avail to the complainant, which is a company which had hired the services of the respondent purely for a commercial purpose.  On the other hand, the question as to whether a company taking credit facility from a bank can be said to be a  consumer within the meaning of the C.P. Act has come up for consideration of this Commission in several decisions including Revision Petition No.1750 of 2017 – Union Bank of India & Anr. Vs. M/s Learning Spiral Pvt. Ltd. & Ors., decided on 30.7.2018 and the following was the view taken by this Commission:-

If the business activities of a company cannot be conveniently undertaken without the goods purchased or the services hired or availed by a company, such purchase or hiring/availing as the case may be, would be for a commercial purpose, because the objective behind such purchase of goods or hiring or availing of the services would be to enable the company to earn profits by undertaking and advancing its business activities.

6.       In Subhash Motilal Shah & Ors. Vs. Malegaon Merchants Co.-op Bank Ltd., R.P.No.2571 of 2012 decided on 12-02-2013,  the petitioner which had a current account with the bank  had alleged deficiency in service on the part of the bank. The State Commission dismissed the complaint, holding inter alia as under:

"Admittedly, since Rainbow Corporation is a firm of Ajay Subhash Shah (HUF), i.e., juristic person, there arise no question of self-employment so as to cover the case under explanation to section 2(1)(d)(ii) of the Consumer Protection Act, 1986 ('Act' for brevity). It is a case relating to an action related with services given while operating the Current Account of Appellant Rainbow Corporation which was admittedly opened and used for business purpose, of the business of 'commission agent' and business of 'yarn sale'. Therefore, since the account itself is connected and related to the business transactions and such banking activity is required for the functioning of a given business enterprise of the appellant/complainant, services hired for that purpose would fall within the category of hiring services for commercial purpose. A useful reference can be made to free dictionary by FARLEX (on Internet) which defines the 'Business Activity' as the activity undertaken as a part of commercial enterprise.  Further, reference can be made to an article available on the internet Website Wise Geek (copyright protected 2003-12 by Conjecture Corporation) and which is written by Alexis. W, edited by Heater Bailey.  Under the circumstances, prima facie appellant/complainant Rainbow Corporation cannot be a consumer within the meaning of Section 2(1)(d)(ii) of the Act".

Being aggrieved from the order of the State Commission, the complainant in the said case approached this Commission by way of a revision petition and it was contended by the complainant that considering the aims and objectives behind enactment of the Act, the expression 'consumer' and 'service' as defined under the Act should be construed in a comprehensive manner so as to include the services of commercial and trade oriented nature. In other words, the contention was that any person who hires services for consideration shall be deemed to be a consumer, even if the services were obtained in connection with a commercial activity. However, relying upon the amendment made in the Act with effect from 15-03-2003 the revision petition was dismissed by this Commission thereby upholding the view taken by the State Commission.

7.    In M/s. Sam Fine O Chem Limited Vs. Union Bank of India, C.C.No.39 of 2013, decided on 12-04-2013, the complainant had availed credit facility from Union Bank of India. Alleging deficiency in the services provided by the bank he preferred a complaint before this Commission. Rejecting the complaint this Commission inter alia noted that the complainant had availed the credit facility service of the bank for expansion of its manufacturing activity which was a commercial purpose and, therefore, the complainant did not fall within the definition of 'consumer' given in Section 2(1)(d) of the Act.

In CC No.11 of 2007, Samkit Art & Craft Pvt. Ltd. Vs. State Bank of India & Ors., decided on 14-10-2014, the complainant which was engaged in the business of export had obtained cash credit limit and term loan facility from the State Bank of India. He filed a complaint alleging deficiency on the part of the bank in the services rendered to him. It was held by this Commission that obtaining cash credit facility for the purpose of export of goods was a commercial purpose and, therefore, the complainant company was not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.

10.      The complainant/appellant had opened a current account with the respondent bank for the purpose of carrying out its business activities. The purpose behind opening the said account therefore was to serve the commercial interests of the company.  The business activities of the complainant could not have been conveniently carried out without hiring or availing the services of a bank.  Therefore, it can hardly be disputed that the services of the bank were hired or availed by the complainant for a commercial purpose.

11.    For the reasons stated hereinabove, I find no merit in the appeal which is accordingly dismissed, with no order as to costs.