1.      Heard Mr. Pavan Kumar Agarwal, the proprietor, in person, for the complainant and Mr. Vakul Sharma, Advocate, for the opposite party.

2.      PPS International has filed above complaint for directing the opposite party to pay (i) Rs.11300000/- along with interest @18%  per annum from the date of loss till the date of actual payment, (ii)  Rs.2/- crores, as compensation for loss of business, mental agony and harassment, and (iii) to cost of litigation.

3.      The facts as stated in the complaint and emerged from the documents attached with it are as follows:- 

(a)     Pavan Kumar Agarwal (sole proprietor of the complainant) did Engineering (Mechanical) from Aligarh Muslim University, in 1988 and MBA from IMT Ghaziabad in 1993. After working for 15 years in different Engineering Industry, mainly dealing with Indian Railways, Pavan Kumar Agarwal set up an agency and trading business from 01.08.2003 and established three companies, namely (i) PPS International, (ii) SIM International and (iii) PT Communication System Pvt. Ltd. (a Joint Venture with a Belgium Company). The complainant was engaged in dealing with foreign companies to sell and to provide after sale service in India for their very high tech electrical and electronic products used in Railways. He mainly deals Indian Railways or the big companies associated with Railways and manufacturing their product for Railways application, like BHEL, Bombardier, Alstom, Siemens etc. The complainant brought and introduced the new technology products in Indian Railways. He mainly deals with at Railway Board level as introduction of new technology is policy decision and used to be taken by Railway Board.

(b)     Total turnover of the complainant was nearly Rs.100/- crore in terms of both sales in Indian currency as well as obtaining orders directly in the name of their Principals in foreign currency. The complainant was a regular Income Tax payee since two decades. In financial year 2007-08, the complainant paid Rs.2.32/- crores as Income tax. In subsequent financial year he had deposited Rs.3.85/- crores as advance Income tax. For full financial year 2008-09, his Income tax liability would be approximately Rs.4.5 crores.

(c)     Punjab National Bank was a nationalized bank and operates its banking business throughout in India. It provides various banking services to its customers, including operation of Bank Account through Internet Banking. The opposite party claimed that it enjoyed strong fundamentals, large franchise value and good brand image and fully committed to its guiding principles of sound and prudent banking and had computerized functioning. They were using Information Technology for the implementation of Core Banking Solution, in 3503 service outlets at around centre, which facilitates “anytime anywhere” banking. The opposite party widely claimed that about 37 million satisfied customers over its 4589 branches were using Internet Banking and had leadership position in this field among the nationalized banks in India. 

(d) Being fully assured by the officers of the opposite party about safety, the complainant opened Current Account vide Account No.2726002100046578, in PNB Branch at Sector-27, Noida, for managing funds generated from the business of the complainant. The complainant used to deposit its hard earned money in this account under full belief that his money would be safe. The complainant used this Current Account for paying government taxes, while for other daily business activities, the complainant was using its other Current Accounts with HDFC and HSBC banks. The complainants used to get payment from Railways in several crores and most of the time, these amounts were first deposited in HSBC bank (as the high value clearing was fast in private banks) and then the complainant used to transfer the amount to PNB bank.

(e) The opposite party offered the complainant to use Internet Banking and assured that it was safe and secure, then he started using facility of Internet Banking. The complainant strictly followed all the guidelines of using Internet Banking and always acted with due caution while operating the said bank account.

(f) On 03.10.2008, Pavan Kumar Agarwal tried to login into his account with PNB to make payment of government dues, but the access was denied, mentioning “wrong password”. Pavan Kumar Agarwal called the branch of the bank and apprised them about the problem. The officers of the bank informed that it could be a server problem and suggested to try logging again after some time. Due to shortage of time, he did not try to login again as he had to prepare for an abroad trip from 05.10.2008. On 05.10.2008, Pavan Kumar Agarwal flew to Indonesia, for his family holidays and carried his mobile phone, which had international roaming facility as he had to contact with his office and customers as and when required.

(g) On 07.10.2008 around 12:00 hours, one Mr. N. Venkateshwaran, who had Internet Banking with PNB at Coimbatore noticed that Rs.20/- lacs was credited in his account from unknown sources. Mr. N. Venkateshwaran immediately informed PNB at Coimbatore about the credit in his account. PNB at Coimbatore sought clarification immediately from PNB Noida about the transfer of the fund to which the accountant replied in negative and disconnected phone abruptly.

(h) Mr. N. Venkateshwaran, had another account in PNB at Coimbatore, in other branch. He immediately checked his other account and found that Rs.45/- lacs was canalized from his account on 29.09.2008, without his knowledge. He informed about this incident also to PNB at Coimbatore. PNB at Coimbatore immediately withdrew Rs.28/- lacs from the account of Mr. N. Venkateshwaran, in which Rs.20/- lacs of the complainant was transferred and saved it.

(i) PNB Noida did not inform Pavan Kumar Agarwal about the aforesaid transaction although mobile number and office landline number were registered with the branch office, which shows their lethargic approach. On 07.10.2008, the Manager, PNB Noida was working in the bank till late hours as they were trying to locate difference of few hundred rupee cash difference. On 10.10.2008, the bank peon went to the old address of the complainant, where its CA was residing. The peon requested the CA of the complainant to come to the branch office of the bank. Then CA visited the branch office of PNB Noida, where he was told that there was some heavy transaction in the account of the complainant during that month. On 10.10.2008 at 15:30 hours, CA contacted Pavan Kumar Agarwal on his mobile phone and informed about heavy transactions in the account of the complainant. At that time Pavan Kumar Agrawal was at Singapore. On coming to know about it, he took earliest flight at 18:30 hours and came back to Delhi around 22:00 hour.

(j) During travel, Pavan Kumar Agrawal tried to check his account on internet but access was denied to him. On 11.10.2008, Pavan Kumar Agrawal went to the branch of PNB Noida along with his CA and inquired from the Branch Manager. The Branch Manager, in an unprofessional manner, informed that heavy transactions were done in the account of the complainant in that month, due to which, the account was ceased on 07.10.2008. A statement of the account was provided to Pavan Kumar Agrawal but the details of the accounts, branch office etc., in which, money was transferred from the account of the complainant were not provided.

(k)  Pavan Kumar Agrawal approached Senior Superintendent of Police, Noida, on his mobile phone, who advised to visit Police Station, Sector-39, Noida. Pavan Kumar Agrawal reached there and narrated entire incident. The office of Senior Superintendent of Police made a telephone call to PNB Noida and directed them that none of the concern officer would leave the bank premised till preliminary inquiry was completed. As required by the police, details of the accounts and branch office etc., in which, money was transferred from the account of the complainant was provided to the police at about 16:00 hours on 11.10.2008. Then it was noticed at during 29.09.2008 to 07.10.2008, various unauthorised transactions amounting to Rs.16652500/- were made from the account of the complainant. FIR of the incident was registered on 11.10.2008 at 20:00 hours, as Case Crime No.1384/2008. Pavan Kumar Agarwal requested the bank officials to open the account for credit facility so that due to police efforts some amount could be recovered. During investigation, total Rs.54/- lacs were recovered time to time. 

(l) The complainant wrote a letter to Managing Director of PNB Bank, about the incident, who referred the case to General Manager (IT), Mr. R.I.S. Sandhu, who did not take the matter seriously. He was adamant in saying that there was no problem in his system and accused Pavan Kumar Agarwal that he might have made these transactions from their own men. He asked Pavan Kumar Agarwal to leave his chamber and met with his junior officers. The PNB bank failed to take any step to recover illegal transfers of money from the account of the complainant.

(m)    During investigation, the police found that initially money was transferred from the account of the complainant from PNB bank to other branch of PNB bank, using Internet Banking, from where money was transferred to account of some other bank or withdrew in cash. On 29.09.2008, Rs.2051500/- was transferred to the account of M/s. A-1 Channel Logistic Pvt. Ltd. at PNB Mumbai. On the same day, within two hours of deposit, Rs.16/- lacs was withdrawn in cash and a demand draft of Rs.4/- lacs was issued. On 29.09.2008, Rs.45/- lacs were transferred from the account of the complainant to Account No.0098000100066824, in PNB bank Coimbatore and on the same day an amount of Rs.15/- lacs was transferred to Standard Charted Bank, Mumbai and Rs.30/- lacs were transferred to ICICI Bank Mumbai. On 01.10.2008, Rs.1000/- was transferred to Account No.0098000100066824. From where the hacker transferred it to his account. On 01.10.2008, Rs.81/- was transferred from the account of the complainant to PNB Goa, in Account No.253100210004926, in the name of M/s Minrani Exporters & Importers, Goa. The hacker transferred Rs.80/- lacs on 06.10.2008 to Account No.001505003066 in ICICI Bank, Goa in the name of M/s. Asiatic Estate Developers Pvt. Ltd. Goa, from where, it was withdrawn in cash. On 07.10.2008, Rs.20/- lacs was transferred from the account of the complainant to Account No.4379000108808004, in PNB Coimbatore, which was saved due to complaint of Mr. Venkateshwaran.

(n) The complainant made representation dated 24.10.2008 to PNB, copies of which were sent to Banking Ombudsman, Reserve Bank of India and Hon’ble Finance Minister, Government of India but nothing was done. This complaint was filed on 30.04.2009, claiming deficiency in service, negligence and non-cooperation of the officers of bank etc. 

4.      The opposite party filed its written reply on 11.11.2009 in which, the material facts have not been denied. It has been stated that the complainant opened Current Account vide Account No.2726002100046578, in PNB Branch at Sector-27, Noida, w.e.f 05.05.2006 with Smart Roamer Account facility. PNB started Internet Banking Services in August, 2003 with the approval of Reserve Bank of India as per RBI guidelines issued in June, 2001. Internet banking facility is available to retail customers and corporate customers on all the branches of PNB. For corporate Internet Banking, the corporate has to submit resolution of the Board of Directors, authorising a particular person for using the services. Internet Banking system of PNB was fully secured and in conformity of international standards. The PNB has employed all security measures which were internally acclaimed and reputed. For operating Internet Banking, login identity and password was issued to the complainant. Without login identity and password, account cannot be operated through Internet Banking. The website of PNB can be accessed from links (i) www.netpnb.com and (ii) www.pnbindia.com. First page of the website displays the following important notice/icons to all the visitors/account holders i.e. (a) important message, (b) security features, (c) safeguards, (d) Precaution for net banking and (e) Beware of fraudulent mails. On clicking on aforesaid links, respective window will open, wherein detailed guidelines have been given by the bank regarding use of internet facility and how to secure against any email frauds. The bank emphasizes that the bank will never contact any of the customers and ask for login details or password or any other personal information over email. The bank provides that the customer should be beware of fraudulent website deceptively similar to PNB’s banking website of scam emails which may contain virus or be linked to fraudulent website. The bank always insists to look at the padlock symbol on the right hand corner of the web page to ensure that the customer is connected to secure PNB’s website and the customer should logout, when he/she intends to exit internet banking to ensure that the secured session is terminated. The opposite party has provided a checklist while accessing the account through internet as under (a) Keep user ID and password a secret, (b) select password which is difficult to guess, (c) Never write or disclose your password to anyone including officials in the bank, (d) Destroy the password mailer after changing the password, (e) change the password periodically, (f) Use all virtual/dynamic keyboard shown on the screen to enter the password (g) Avoid accessing internet from cyber café or share network, (h) Protect the computer with adequate anti-virus solution and (i) Never click on a website link/attachment in unknown/suspicious email. Due to fault of the complainant, important data of login identity and password might have leaked, on the basis of which unauthorised transaction were made. The complainant has lodged FIR of the incident. The police is investing the case and may come to a definite conclusion. Although Rs.54/- lacs has been recovered during investigation but involvement of the employees of PNB in the incidents has not been surfaced. There was no deficiency in service or negligence on the part of the employees of the bank in unauthorised withdrawal from the account of the complainant through Internet Banking. Preliminary issues that the complainant was not a consumer as defined under Consumer Protection Act, 1986 and the complaint is not maintainable and complicated issues of facts are involved in the present case, which cannot be determined in summary proceeding, have also been raised. 

5.      The complainant filed Rejoinder Reply on 02.03.2010, in which, the facts stated in the complaint were reiterated. The complainant filed Affidavit of Evidence of Pavan Kumar Agarwal, Additional Affidavit of Evidence of Pavan Kumar Agarwal and various documentary evidence. The opposite party filed Affidavit of Evidence of Devinder Kumar Gupta, Chief Manager and various documents. Both the parties filed their short synopsis.

6.      I have considered the arguments of the counsel for the parties and examined the record. The opposite parties raised a preliminary objection that the complainant is not a ‘consumer’ within the meaning of Section-2(1) (d) (ii) of Consumer Protection Act, 1986 (hereinafter referred to as the Act) as such the complaint is not maintainable. The complainant stated that after working for 15 years in different Engineering Industry, mainly dealing with Indian Railways, Pavan Kumar Agarwal set up an agency and trading business from 01.08.2003 and established three companies, namely (i) PPS International, (ii) SIM International and (iii) PT Communication System Pvt. Ltd. (a Joint Venture with a Belgium Company). The complainant was engaged in dealing with foreign companies to sell and to provide after sale service in India for their very high tech electrical and electronic products used in Railways. He mainly deals Indian Railways or the big companies associated with Railways and manufacturing their product for Railways application, like BHEL, Bombardier, Alstom, Siemens etc. The complainant brought and introduced the new technology products in Indian Railways. He mainly deals with at Railway Board level as introduction of new technology is policy decision and used to be taken by Railway Board. Total turnover of the complainant was nearly Rs.100/- crore in terms of both sales in Indian currency as well as obtaining orders directly in the name of their Principals in foreign currency. The complainant was a regular Income Tax payee since two decades. In financial year 2007-08, the complainant paid Rs.2.32/- crores as Income tax. In subsequent financial year he had deposited Rs.3.85/- crores as advance Income tax. For full financial year 2008-09, his Income tax liability would be approximately Rs.4.5 crores. The complainant opened Current Account No.2726002100046578, in PNB Branch at Sector-27, Noida, on 05.05.2006. From this account, unauthorised withdrawal of Rs.16652500/- was made through Internet Banking during 29.09.2008 to 07.10.2008, which are alleged due to deficiency in service on behalf of the opposite party, in the present complaint.

7.      The word “consumer” has been defined under Section 2 (1) (d) and word “service” has been defined under Section 2 (1) (o) of the Consumer Protection Act, 1986, (hereinafter referred to as the Act) which are quoted below:-

Section-2 (1) (d).- “consumer” mean any person who,-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such use is made with approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails such services for any commercial purpose;

Explanation.- For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning livelihood by means of self employment.

Section 2(1) (o):- “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

8.      Earlier the Explanation was added by Act No. 50 of 1993 w.e.f. 18.06.1993 under Sction-2(1) (d) (i) of the Act. By Act No. 62 of 2002, w.e.f. 15.03.2003, Section-2(1) (d) (ii) was also amended and the term “but does not include a person who avails such services for any commercial purpose” has been added in it and the Explanation was placed in last, making it applicable to both the sub-section. Scope of the Explanation as well as expressions “commercial purpose” and “the purposes of earning livelihood by means of self-employment” came up for consideration before Supreme Court in relation to purchase of goods in Laxmi Engineering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583. In which, it has been held that the Explanation was an exception to an exception. Expression “commercial purpose” was not defined, as such, its dictionary meaning has to be taken into consideration. “Commerce” means financial transaction, especially buying and selling of merchandise on large scale. As in the Explanation, the purposes of earning livelihood by means of self-employment, has been excluded from the purview of commercial purpose as such purchase of commercial goods for earning livelihood by means of self-employment, will not exclude such buyer from the purview of the “consumer” so long as it is used by the buyer or his family members or with the help of one or two other persons. It is question of fact and has to be decided in each case independently. In this case, three generator sets were purchased for the purposes of the factory by the complainant and it was held that it was for commercial purpose.

9.      A four Members Bench of this Commission in Synco Textiles Pvt. Ltd. Vs. Greaves Colton & Company Ltd., 1990 SCC OnLine NCDRC 3, held that the expression “for any commercial purpose” are wide enough to take in all cases, where goods are purchased for being used in any activity directly intended to generate profit. Going to the plain dictionary meaning of the words used in the definition section, the intension of the Parliament must be understood to be to exclude from the scope of the expression ‘consumer’ any person who buys goods for the purposes of their being used in any activity engaged on a large scale for the purposes of making profit. The Parliament wanted to exclude from the scope of the definition not merely persons who obtains goods for resale but also those who purchase goods with a view of using such goods for carrying on any activity on a large scale for the purposes of earning profit. This judgement has been approved in Laxmi Engineering’s case (supra).

10.    The cases relate to the availing of the ‘service’ came for consideration in Banga Danial Babu Vs. Sri Basudeva Constructions, (2016) 8 SCC 429, Sunil Kohli Vs. Purearth Infrastructure Ltd., (2020) 12 SCC 235 and Leelawati Kirtilal Mehta Trust Vs. Unique Shanti Developer, (2020) 2 SCC 26. Supreme Court held that a person engaged in commercial activity can buy the goods/avail the services for self-use and the complainant was held as a ‘consumer’.

11.    Supreme Court in Civil Appeal No.11397 of 2016, Shrikant G. Mantri Vs. Punjab National Bank, (decided on 22.02.2022), held that ordinarily “commercial purpose” is understood to include manufacturing/industrial activities or business to business transactions between commercial entities; that the purpose of the good or service should have a close and direct nexus with a profit penetrating activity; that the identity of the person making the purchase or the value of the transaction is not conclusive for determining the question as to whether it is a commercial purpose or not. What is relevant is the dominant intention or dominant purpose for the transaction and as to whether the same was to facilitate some kind of profit generation for the purchaser and or their beneficiary. If the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and or their beneficiary or is otherwise not linked to any commercial activity then the question of whether such purchase was for the purpose of “generating livelihood by means of self-employment” need not be looked. 

12.    From the own allegation in the complainant, on the date of opening account in Punjab National Bank, on 05.05.2006, Pavan Kumar Agarwal was running three companies from 01.08.2003, namely (i) PPS International, (ii) SIM International and (iii) PT Communication System Pvt. Ltd. Turn over of these companies were more than Rs.100/- crore. These companies were not established for the purposes of earning livelihood by means of self employment rather for earning profit on large scale. As such, the complainant was a commercial company and does not fall within the definition of “consumer” as defined under Section 2 (1) (d) of the Consumer Protection Act, 1986. The present complaint is not maintainable.                                                

O R D E R

In view of the aforesaid discussion, the complainant is dismissed as not maintainable with liberty to approach appropriate forum for the required relieves.