7. During August – September 2016 as there were no calls from the second opposite party seeking authorisation of transfers and the investors were demanding that the loans were not being repaid, the complainant got concerned and suspicious about the affairs in the joint account operations. Thereafter the complainants tried to reconcile his account and the complainant was shocked to find a number of transfers amounting to Rs.1,76,78,030/- were processed by opposite party 1 which were without its knowledge and approval causing direct losses in the joint account. The idea of a Business Essential Account, which was a joint account, was to carry forward transaction with the consent and approval of both the parties involved. The S2B joint account transactions using two Digi Pass security device by the joint account holders that generated token numbers which authorises each other’s transfers. This is normally, processed by the bank like any other cheque of joint account holders which mandated both parties signature to be endorsed on the cheque. Failure of this authentication process in several transfers by the first opposite party Bank amounted to gross negligence and has caused huge financial loss to the business, loss of reputation of the complainant’s business and also future business prospects with the same and certain new investors.
8. The complainant in an attempt to rectify the matter took up the issue with the officers of the first opposite party. Several calls followed by e mail were sent immediately seeking statement of accounts and rectification regarding the unauthorised transfers processed by the Bank. After many weeks of follow up, still no reply was received and the complainant was at a loss to understand what the backend team was trying to conceal, as no explanation was forthcoming for the invalid transfers processed by the bank. The complainant was frayed, harassed and left perplexed with no reply, relief or remedy for several months. Finally on 27th April 2017 after the so called investigations, one Jaganath Govardan, Service Manager, replied in a rather perfunctory manner that the mode of operation is jointly and wherever transactions happened both debit and credit has been processed and based on both the authorisation only. This reply of the Bank contradicts its very statement of accounts which evidences that the Bank has processed invalid transfers amounting to more than Rs.1.76 crores from the joint account of the complainant without the authorization of the complainant.
9. Not having received a suitable reply or remedy the complainants was constrained to issue a legal notice to the first opposite party on 05.06.2017. In spite of this the full information demanded by the complainant was still not given as no reply was received from the Bank. Hence, on 21.06.2017, the complainant got issued another notice to the first opposite party.
10. Having no other option, the complainant was constrained to approach the Hon’ble Forum seeking redressal of the grievance against the opposite party Bank for loss of business reputation harassment due to deficiency in services caused by the gross negligence and misconduct of the opposite party bank on the following amongst other grounds with the following prayer:
Summon the opposite parties and initiate proceedings under the relevant provisions of the Consumer Protection Act, 1986;
Direct opposite party no.1 and 2 to reverse the unauthorised invalid transfers amounting to Rs.1,76,78,030/- along with interest @ 24% per annum;
Direct the opposite party no.1 to pay a sum of Rs.50,00,000/- towards compensation for loss of business and loss of reputation caused due to the negligence and misconduct of the first opposite party Bank;
Direct the opposite party no. 1 to pay a sum of Rs.50,00,000/- towards compensation for mental agony and harassment caused due to the deficiency of service;
To award a sum of Rs.10,00,000/- in favour of the complainant and against the opposite parties towards legal and other incidental cost incurred to successfully prosecute the present complaint; and
Any other relief which this Commission deems fit and proper in the circumstances of the case be awarded in favour of the complainant and against the opposite parties, in the interest of justice and equity.
11. I have heard the learned counsel for the complainant. Counsel for the complainant has admitted that the complainant is a financial consultancy company in business in generating funds and providing a platform to bring business and investors. She has also admitted that they had opened the Business Essential Account jointly with M/s Instonz Impex – OP 2 in furtherance of their deal with OP 2.
12. Before disposing of the case I would like to advert to section 2 (d) of the Consumer Protection Act, 1986, which reads as under:
(d) "consumer" means 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 or partly promised, or under any system of deferred payment when such use is made with the 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 a 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 of such services for any commercial purposes;
Explanation.— For the purposes 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 his livelihood by means of self-employment;
13. Admittedly in this case, the complainant is a company which has opened a Business Essential Account with OP no. 1 jointly with OP 2, i.e., M/s Instonz Impex to facilitate the large size deal with the OP 2 where they would generate funds for OP 2 by receiving funds from small investors. The Business Essential Account is as per the complainant a current account which offers enhanced transactional convenience like straight2bank, cheque pick-up and debit card offering. Admittedly, the two companies had a joint account of business current account to facilitate commercial activities. Hence, the transactions between the complainant and the bank are for commercial purpose which are not covered under the exception clause carved out under section 2 (d) of the Consumer Protection Act, 1986.
14. Counsel for the complainant has furnished some citations to support her contentions that the services hired by the complainant from the first opposite party was not for commercial purposes as there was no profit making element directly with the opposite party.
15. The first citation is of Laxmi Engineering Works vs P S G Industrial Institute decided on 4th April 1995. The purport of this order is that there should be a close nexus between the transaction of purchase of goods/ services and the large scale activity carried on (by the company) for earning profit. In the instant case, the Business Essential Account was opened in the course of their business to generate funds for OP 2 and thereby to earn profit from the said transactions and it was not a savings account.
16. In the same citation it is important to note that it has been said that “whether the purpose for which a person has brought goods is for commercial purpose within the meaning of the definition of expression in section 2 (d) of the Act is always a question of fact to be decided in the facts and circumstances of each case”.
17. In the second citation is of M/s Sushant Minerals Pvt. Ltd., vs M/s Indusind Bank Ltd., decided on 12th December 2014, the facts of the case are not relevant to the instant case.
18. The third citation – Canara Bank vs M/s Jain Motor Trading Company decided on 29th July 2013, in fact does not support the contention of the counsel for the complainant. Commercial concerns per se are not excluded from filing a complaint under the Consumer Protection Act, 1986, if the Banks services were sought from the Banks to help and resolve the financial difficulties being faced by commercial concern. In this case, the Business Essential Account was opened only to facilitate their financial dealing of business transactions of OP 2 and it involves directly generating profit for the complainant in the course of its business.
19. The fourth and the last citation cited by the learned counsel for the complainant is of M/s Edit Ii Productions vs Standard Chartered Bank decided on 14th July 2016. This citation also does not support the case of the complainant, as it concludes that where the services of the bank are obtained in relation to the business of the complainant it is for a “commercial purpose”. In the said case the complainant had availed of cash credit facility against the amount opened in the bank in relation to its production business. Thus, it was clear that the services of the Bank were availed by the complainant for commercial purpose, i.e., in respect of his business. That being the case, it was held that the complainant was not a consumer as envisaged under section 2 (1) (d) of the Act. In the instant case, admittedly the Business Essential Account was opened with the OP no. 2 in relation to the business activities of the complainant which acts a platform to bring together the business and investor by creating an appropriate deal structure in each case based on profit and loss sharing model. In paragraph five of the complaint, the complainant has itself has admitted that the deal with the opposite party was one of its large size deals.
20. In view of the discussion above, the complainant is not a consumer as envisaged in section 2 (1) (d) of the Consumer Protection Act, 1986. That being the case, the complainant has no locus standi to maintain the consumer complaint. The consumer complaint is therefore, dismissed.
