Delhi

West Delhi

CC/23/64

PREM CHAND GUPTA - Complainant(s)

Versus

STATE BANK OF INDIA - Opp.Party(s)

NITIN JAIN

05 Apr 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-III: WEST

GOVT. OF NCT OF DELHI

C-BLOCK, COMMUNITY CENTRE, PANKHA ROAD, JANAK PURI

NEW DELHI

 

Complaint Case No.  64/2023

 

In the matter of:

 

	Prem Chand Gupta S/o Om Prakash Verma R/o III-MR-18, Sector-13, Block-M, Nehru Nagar, Ghaziabad, UP – 201001.	......Complainants
	Versus

State Bank of India

Branch Address:

SARB – 1, 23, Najafgarh Road, New Delhi – 110015.        .............Opposite Party

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION       :

06.03.2023 31.03.2023 31.03.2023

 

 

Ms. Sonica Mehrotra, President

Ms. Richa Jindal, Member

Mr. Anil Kumar Koushal, Member

Order passed by Ms. Sonica Mehrotra, President

 

ORDER

1. Facts in brief sufficient for adjudication of complaint on maintainability are that the complainant had availed of loan against property (LAP) to the tune of Rs. 4 crores  taken by M/s Sudha Oil and Spices Pvt. Ltd. and complainant stood as guarantor of the said loan for business purpose and had created equitable mortgage of build a plot no. 25 M III admeasuring area 153.442 sq. mtrs in the layout plan of Nehru Cooperative Housing Society Ltd./ Nehru Nagar , Ghaziabad , UP. For loan default SARFAESI proceedings were initiated by OP against the complainant for his loan account being declared NPA (Non Performing Asset) and proceedings under section  13(2) and 13(4) of the said act were commenced by OP and Securitisation Application (S.A.) was filed by complainant in Debt Recovery Tribunal (DRT) in which proceedings settlement was arrived at between parties on 23.12.2020 for a total sum of Rs. 4,40,000,00/- which the complainant was directed by DRT to pay on or before 31.10.2021 with upfront amount of Rs. 50,000,00/- payable to OP and thereafter Rs. 1,50,000,00/- to be paid by complainant to OP before 31.03.2021 which the complainant duly adhered to and paid to OP within the stipulated/directed time. However, due to the said wave of corona virus pandemic in April 2021, the complainant was hit with financial crises and therefore could pay Rs. 25,000,00/- on 29.06.2021 and Rs. 5,000,00/- on 30.07.2021 to OP ad was verbally assured by officials of OP that no adverse action shall be taken against him but on 02.08.2021, OP sent a letter to the complainant declaring settlement dated 23.12.2021 to have failed for non-compliance of OTS despite OP having received Rs. 2,30,000,00/- from the complainant. The Complainant vide reply dated 05.08.2021 to OP requested for extension of time to repay the remaining outstanding amount between October to December 2021 as per revised schedule and extension of time was granted till 31.12.2021 for paying the amount of Rs. 4,40,000,00/- to OP by the said date out of which complainant paid Rs. 4,35,000,00/- to OP on 31.12.2021 and Rs. 5,000,00/- on 01.01.2022 but OP terminated the complainant settlement letter dated 05.08.2021 only due to one day delay in depositing the last balance of Rs. 5,000,00/-. The complainant vide letter dated 29.01.2021 to OP requested not to terminate the settlement letter just for a day’s delay but OP with malafide intension vide letter dated 02.02.2022 rejected the request made in complainant’s letter and informed the complainant that the bank has already instructed the resolution agent to take Physical Possession of the mortgage premises. Moreover, OP arbitrarily deducted a sum of Rs. 17,000,,/- from the FD account of complainant towards charging of penalty for delay of one day in payment of Rs. 5,000,00/- towards settlement of loan account. Complainant had submitted that till date he has paid Rs. 4,65,000,00/- to OP which is more than the settlement amount but OP has still deducted Rs. 17,000,00/- from his FD whereas it should have given NOC to the complainant after full and final settlement of loan account and return the title deeds of the mortgage property and this act/omission of OP is not arbitrarily but illegal and has caused mental agony to the complainant. The complainant issued a legal notice dated 17.06.2022 through counsel to OP demanding NOC and title deeds and refund of Rs. 17,000,00/- with interests and damages/compensation but to no avail. Therefore alleging deficiency of service on the part of OP for arbitrary deduction of Rs. 17,000,00/- from his FD account and non-issuance of NOC and return of title deeds despite full and final settlement of loan account, the complainant has filed the present complaint praying for issuance of direction to OP to return Rs. 17,000,00/- with 18% interest p.a. from the date of deduction from FD till realisation, to return original title deeds of the mortgaged property, issue NOC and to pay compensation of Rs. 50,000,00/-. Complainant has annexed  copy of letter dated 02.08.2021 send by OP, copy of letter dated 05.08.2021 sent by the complainant, copy of letter dated 29.01.2022 sent by the complainant, copy of letter dated 02.02.2022 sent by OP, copy of ledger account of the complainant, copy of the legal notice dated 17.06.2022 along with postal receipts sent by the complainant.

During the Course of arguments on admission it was admitted by complainant that Rs. 4 crores was a business loan availed by the Pvt. Ltd. company for which complainant stood as guarantor. The Loan is in the nature of loan against property wherein complainant had created equitable mortgage of the property at Nehru Nagar Ghaziabad and fledged the title deeds of the same with OP for securing the loan as collateral. The repayment was defaulted and loan account was declared NPA by OP and proceedings under SARFAESI act 2022 were initiated by way of possession notice and possession against which action securitisation application was filed by complainant in DRT during pendency of which OTS (One Time Settlement) has arrived at between parties for repayment details of which have already been mentioned earlier in this order. The grievance ofc complainant is that despite havingrepaid full and final OTS amount to OP, the OP just for one day delay in last payment levied penalty of Rs. 17,000,00/- from the FD account of complainant and neither issued NOC nor returned the title deeds of the mortgaged property. The arguments on maintainability were heard as is the settled law in the judgement of Rama Chandar Gehlot Vs. Hewlett Packard passed on 16.02.2004 in CA no. 7107/2003 passed by Hon’ble Apex court in which the Hon’ble Apex court has held that issue of maintainability has to be decided before proceedings with the complaint on merits. We have observed from the documents placed on record that firstly the services of OP were availed by the complainant for commercial purpose as it was a business loan and loan against property which Prima facia ousts the jurisdiction of consumer court as it is a purely commercial nature of services availed by complainant from OP. The Hon’ble Supreme Court in the recent judgement of Shrikant G Mantri Vs Punjab national Bank II (2022) CPJ 9(SC) in CA No. 11397/2016 decided on 22.2.2022 held that Consumer Protection Act revolves around Consumer and is designed to protect his interests - it provides for “Business to Consumer “disputes and not for “Business to Business” disputes and there cannot be a strait jacketed formula for deciding whether a person is availing service for commercial purpose or not to come within meaning of consumer for which he will have to establish that services were availed exclusively for purpose of earning his livelihood by means of self-employment. Even otherwise it was never the case of the complainant in pleadings or oral submission that it was a consumer within the meaning of Section 2(7)(ii) of the Act 2019 or that the services from OP were availed for self employment or generating livelihood and therefore cannot be construed within the service as defined Section 2(42) CPA 2019. The Hon'ble National Commission had therefore, dismissed the Freight (supra) complaint in limine on facts and on law.  Cash credit facility and working capital facility are loans in which the borrower uses equity of its industrial and / or residential property apart from land and building as collateral or equitable mortgage. LAP is commercial in nature and therefore outside the purview of this Commission. The complainant had created a collateral mortgage of its residential properties, industrial properties and factory land and building as security for sanction of cash credit facility from OP thereby pledging the said property for securing Business loan.  The Hon'ble National Commission in Shiv Shankar Lal Gupta Vs Kotak Mahindra Bank Ltd. II (2013) CPJ 56 (NC) held that loan against collateral security of immovable property is a commercial transaction which means the person entering into such a transaction is not a consumer. (emphasis supplied).

The Hon’ble National Commission in the judgment of Union Bank of India and Anr. Vs Learning Spiral Pvt. Ltd. III (2018) CPJ 514 (NC) in which the Hon’ble National Commission was faced with a complaint of illegal encashment of cheque from current account for business purpose and after considering the key question whether the complainant maintaining a current account with the bank can be said to be a consumer within the meaning of CPA, the Hon’ble National Commission following the view taken by itself in its previous decisions of Sutlej Industries Vs PNB I (2018) CPJ 593 (NC), Subhash Motilal Shah Vs Malegaon Merchants Co-op Bank Ltd in RP No. 2571/2012 decided on 12.02.2013, M/s Sam Fine O Chem Ltd Vs UBI in CC No. 39/13 decided on 12.04.2013 and Samkit Art and Craft Pvt. Ltd. Vs SBI and Ors in CC No. 11/2007 decided on 14.10.2014, held that the complainant cannot be said to be a consumer within the meaning of Consumer Protection Act as it had hired / availed of service of the bank for commercial purpose i.e. for running a current account for business purposes and if the business activity of a company cannot be conveniently undertaken without goods purchase or 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 services would be to enable the company to earn profits by undertaking and advancing its business activity. Therefore, the Hon’ble National Commission had dismissed all these complaints with liberty to the complainant to approach the appropriate Civil Court for redressal.

The Hon'ble National Commission in Primus Chemicals Ltd Vs IFCI Ltd I (2017) CPJ 615 (NC) held that availing services of a financial institution for loan which was for commercial purpose was availing services for commercial use and held complainant was not a consumer. The Hon'ble National Commission in Miracle Coro Plast Pvt. Ltd. Vs United Bank of India II (2018) CPJ 29 (NC) held that the term loan and credit limit availed from the bank was taken for business and therefore was a case of hiring / availing of services of bank for commercial purpose and therefore the complainant had no locus standi to file the consumer complaint as he was not a consumer.The Hon’ble NCDRC in the recent judgment of Parikshit Das Vs Allahabad Bank I (2020) CPJ 360 (NC) decided on 08.01.2020 held in a case of complainant availing overdraft facility from the bank and mortgaging immovable property as collateral security there against that the services of the bank were hired by the complainant for commercial purpose he having taken a business loan by way of overdraft from the bank and therefore was not a consumer as defined in the Act.

2. Secondly, the matter was already in DRT under securitisation act in which the OTS was arrived at and amounts paid as admitted by complainant. The settled provision of law in cases of recovery pending before DRT under RDDBFI Act or Securitisation Act is no more res integra as it is held that consumer fora cannot interfere once DRT is seized of the matter as per section 34 of SARFAESI act as held by Hon’ble National Commission in Yashwant G. Ghaisas Vs Bank of Maharashtra in CC no. 302/2012 and SBI vs G. Mahamaiah decided on 30.10.2015 and Bank of India Vs. Anil Ravindran decided on 03.03.2015 wherein it has been held that consumer courts cannot arrogate to itself powers of DRT. In Harinandan Prasad Vs SBI decided on 31.05.2012, the Hon’ble National Commission observed that “tribunals constituted under the statute are expected to exercise their jurisdiction in accordance with provisions of the acct under which they have been constituted”. There is a clear cut demarcation of the jurisdiction and powers amongst the various tribunals and no attempts should be made by one tribunal to userp the powers and jurisdiction of other either directly or indirectly”. After due appreciation of the settlement proposition of law both in terms of services availed for commercial purpose, loan against property and the grievance arising out of the proceedings under SA pending before DRT, we conclude that the complainant is not a consumer and the complaint is not a consumer dispute and on both the grounds the complaint is hereby dismissed as non-maintainable with no order as to costs.
3. Let the copy of this order be made available to complainant on application for free certified copy under the name of President of this Commission as per guidelines of Hon’ble  SCDRC.
4. Announced on 31.03.2023.
5. File be consigned to record room

 

 

 

 

Richa Jindal                              Anil Kumar Koushal                   Sonica Mehrotra

(Member)                                           (Member)                                (President)