Tamil Nadu

StateCommission

CC/45/2014

Vummidi Bangaru Jewelers - Complainant(s)

Versus

The Manager,CITI Bank - Opp.Party(s)

Sanjay pinto-complt

30 Nov 2022

ORDER

Date of filing : 30.12.2013

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present: Hon’ble Thiru Justice R.SUBBIAH       ... PRESIDENT

             Thiru.R VENKATESAPERUMAL … MEMBER

 

C.C. No.45 of 2014

 

                                 Orders pronounced on:  30.11.2022

Vummidi Bangaru Jewellers,

rep. by its partner V.Raghunath,

No.603, 1st Floor,

Rani Seethai Hall,

Anna Salai, Chennai 600 006.                     ... Complainant

 

vs.

 

Citibank N.A.,

rep. by its Manager,

Mail Room, No.2, Club House Road,

Chennai 600 002.                                    .. Opposite Party

 

                     For Complainant      : M/s.Sanjay Pinto

                     For Opposite Party   : M/s.V.V.Giridhar

 

This Complaint came up for final hearing on 13.09.2022 and, after hearing the arguments of the counsels for the parties and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

 

O R D E R

R.Subbiah, J. – President.

 

             The present complaint has been filed, seeking the following directions against the OP/Bank:-

                a) to return a sum of Rs.15,22,860/- from A/c. No.0276235443 and Rs.5,19,849/- from A/c. No.0276234447, both accounts belonging to the complainant, along with interest from the respective dates of debit @ 24% p.a. till the date of payment;

                b) to pay a sum of Rs.10 lakhs towards compensation for deficiency in service, unfair trade practice, illegal debit of charges and towards hardship and mental agony; and

                c) to pay the costs of the complaint.

 

             2. The case of the complainant is concisely given hereunder:-

                     During 2009, the OP/Bank's representative had approached the complainant for opening a Bank Account with them by assuring many facilities and features, whereupon, Current Account Nos.0276235443 and 0276234447 were opened in that year with the OP Bank which had extended the privileged services like Free Cash Pickup, Free RTGS Money Transfers, etc.  In respect of Free Cash Pickup Services (in short FCPS), the complainant had entered into an additional agreement with the OP and clause-5 thereof states that the OP reserves the right to charge a fee for this service and to increase the fee with prior intimation to the customer.  While so, without any prior intimation to the complainant, the OP started levying hefty charges for the FCPS from August, 2012 and the said factum came to be noticed by the complainant only after receipt of the quarterly statement from the OP.  When the complainant objected to it with the Bank, initially, they replied that the levy seemed to have been made mechanically and that they would take steps to reverse it soon.  But, to the shock and surprise of the complainant, the Bank sent an email, dated 28.03.2013, stating that the charges were levied after prior intimation in July, 2012 itself, but the fact remains, no such intimation was either sent by the OP or ever received by the complainant in July, 2012. In fact, for the purpose of availing the FCPS, the complainant has always been maintaining a minimum balance of Rs.30 lakh, as demanded by the Bank,.  Although the officials of the Bank promised that they would take steps for reversal of the demand, they did not honour such promise that prompted the complainant to write a letter, dated 04.04.2013, to the Bank but in vain.  Consequently, the complainant approached the Banking Ombudsman by lodging two complaints, however, the same were prematurely closed by acting upon the misleading version of the OP. For the legal notice, dated 07.10.2013, sent by the complainant, a false reply was given by the OP with contradictory statements. The OP has, without any authorization,  deducted a sum of Rs.20,42,709/- along with interest from the current accounts of the complainant, causing them severe loss, hardship and mental agony. The said action of the Bank is nothing but a clear instance of unfair trade practice &  service deficiency; hence, the present complaint, seeking this Commission to issue the directions, as aforementioned.

 

             3. The OP/Bank resists the complaint by filing a written version, inter alia, stating thus:-

             The complainant is a commercial organization and the issue sought to be raised over the service availed by them also pertains to business transaction and hence, the present consumer complaint cannot be legally maintained.

             It is true that, in respect of the two current accounts that were opened by the complainant with this Bank, they availed privileged services including FCPS and that it is also true that an additional agreement was entered into between them making it clear that the OP/Bank reserves the right to charge a fee for the FCPS and to increase the fee with prior intimation to the complainant.

             The averment of the complainant that no communication was sent by the OP before levying cash handling charges from August, 2012 is per se false, since the Bank duly sent a communication to the complainant's mailing address in June, 2012, through First Flight Couriers under Airway Bill Nos.C09803415, C09803416, C09803886 and C09803895. The complainant was also periodically receiving the statement of accounts through emails only as per their request.  The Bank sent the revised schedule of charges along with the statement of accounts for June & July, 2012, and also the information regarding change in schedule of charges to the complainant's Citibank Online Inbox which is available to them through the Citibank online banking facility.  Inasmuch as the OP was prompt enough to inform the complainant in advance about the change in the schedule of charges through several modes, the contrary averments of the complainant are absolutely false.

             Never the complainant was advised or instructed by the OP to maintain a minimum balance of Rs.30 lakh in the current accounts. At no point of time, the Bank has ever assured the complainant that there would not be any change in the schedule of charges or that they would not levy charges for the FCPS. Similarly, no official of the Bank has assured that the levy towards FCPS would be reversed.  With the same set of allegations, the complainant had approached the Banking Ombudsman and, it was only after hearing both sides and perusing the records, the said Authority dismissed the petitions of the complainant, who has now filed this Complaint without any cause of action and it is liable to be dismissed  by imposing costs.

 

             4. In support of the claim and counter-claim, both sides have filed their respective proof affidavits and, while the complainant has filed 18 documents as Exs.A1 to A18, on the side of the OP, 3 documents have been marked as Exs.B1 to B3.

 

             5. Learned counsel for the complainant, by stating that, it was only based upon the assurance of the Bank that it would provide privileged services including FCPS to the complainant, the latter had opened the two current accounts and, as instructed by the Bank, they also continued to maintain a minimum balance of Rs.30 lakh for the purpose of availing the FCPS,  submits primarily that the nature of transaction is only a safety measure to avoid cash loss by theft, burglary, etc. and such secure cash transportation service availed by the complainant from the Bank can never be construed as a commercial transaction. Learned counsel draws our attention to Ex.A1 - dated 10.07.2009/Agreement for Cash Pickup, refers to clause-5 thereof which states that 'Citibank N.A. reserves the right to change a fee for this service and to increase the fee with prior intimation to the customer' and states that, from the time of opening the Accounts in 2009, for three years, the Bank had not levied any service charge for the facility, as could be seen from the entries in the Bank Statements filed as Ex.B14.  While so, for the period from August to December, 2012, they auto-debited from the current accounts of the complainants, a sum of Rs.20,24,912/- for the FCPS without even any intimation to the complainant and the said unilateral act of the Bank runs totally contrary to the Cash Pickup Agreement under Ex.A1.  Further, to mislead this Commission, the Bank cites an amount of Rs.18,02,165/- by excluding the service tax & cess.  For very same services availed by the complainant from another Private Bank/HDFC, they charge only a sum of Rs.36,000/- plus Service Tax  with a monthly cash pick-up limit of Rs.19 crore.  This would go to show that the OP/Bank has been fleecing the complainant with more than ten times the prevailing industry rates.  Learned counsel emphasizes the point that, in the present case where the services of the OP/Bank are hired to ensure safe transport of cash from one point to another, nothing is directly intended to generate profits so as to term it to be a commercial purpose, thus, the defence of the OP by raising a contrary contention on this aspect would be of no avail.  In this regard, he has relied upon a handful of case-laws including the one reported in 2013-SCC Online-NCDRC-656 (Canara Bank vs. M/s.Jain Motor Trading Company), wherein, the National Commission has held that commercial concerns per se are not excluded from filing a complaint under the CP Act, 1987, if it does not involve direct generation of profits or resale. In the present case also, the facility was availed only as a safety measure which per se was not a commercial activity to generate any profit and hence, this complaint is well maintainable.  Further, the unauthorized deduction of  service charges from the current accounts of the complainant was never preceded by any intimation to them, reflecting  a clear instance of unfair trade practice, for which, by holding the Bank liable, the directions sought for may be issued by this Commission, learned counsel pleaded ultimately.

 

             6. Countering the same, learned counsel for the OP-Bank, at the first instance, points out that FCPS is extended only to those commercial institutions that have abundant cash flow and the Bank sends their security personnel to collect the huge cash from them for depositing it to the credit of their current accounts; that such services facilitate the lofty establishments like the complainant to be secure from theft and prevent them from incurring loss of money; and that such service is hired by the commercial instructions to safeguard both the collections and profits derived from the day-to-day business;  and submits that, admittedly, the complainant is a commercial establishment/jewellers with turnover running to several crores and the entire line of services including the FCPS availed by them from the OP are directly connected to their multi-crore jewel business and the claim now raised also revolves around a business to business agreement that will never be covered under the consumer law; as such, at no stretch of imagination, the complainant can be brought under the anvil of consumer as defined in the CP Act.  The colour of consumer dispute is totally invisible and out-shadowed on the face of the factual scenario clearly portraying the commercial and business transaction involved, as such, the complaint is liable to be dismissed at the threshold.  In support of his argument, learned counsel has pressed into service more than a couple of decisions including the one rendered by the Apex Court in Srikant G. Mantri vs. Punjab National Bank (Manu/SC/0225/2022) and referred to the following passages there-from:-

        " 42. It is thus clear, that this Court has held that the question, as to whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, “commercial purpose” is understood to include manufacturing/industrial activity or business ­to ­business transactions between commercial entities; that the purchase of the good or service should have a close and direct nexus with a profit generating 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 for 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. It has further been held that if the dominant purpose behind purchasing the good or service was for the personal use and the consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, then the question of whether such a purchase was for the purpose of “generating livelihood by means of self­ employment” need not be looked into.

            45. It could thus be seen, that when a person avails a service for a commercial purpose, to come within the meaning of ‘consumer’ as defined in the said Act, he will have to establish that the services were availed exclusively for the purposes of earning his livelihood by means of self­ employment. There cannot be any straitjacket formula and such a question will have to be decided in the facts of each case, depending upon the evidence placed on record.

            47. In the present case, the Commission has come to a finding that the appellant had opened an account with the respondent­ Bank, took overdraft facility to expand his business profits, and subsequently from time to time the overdraft facility was enhanced so as to further expand his business and increase his profits. The relations between the appellant and the respondent is purely “business to business” relationship. As such, the transactions would clearly come within the ambit of ‘commercial purpose’. It cannot be said that the services were availed “exclusively for the purposes of earning his livelihood” “by means of self­ employment”. If the interpretation as sought to be placed by the appellant is to be accepted, then the ‘business to business’ disputes would also have to be construed as consumer disputes, thereby defeating the very purpose of providing speedy and simple redressal to consumer disputes."

Here also, the service availed by the complainant is, without any ambiguity, a business to business transaction and, in such circumstances, if the factual scenario is appreciated in the wrong perspective of the complainant, then every business dispute will have to be construed to be a consumer case.  Further, the other argument of the complainant that the Bank started unilaterally levying the cash handling charges from August 2012, without any prior intimation to them, is absolutely false for the reason that a communication was sent well in advance to the complainant's mailing address through First Flight Couriers.  In addition to that, the statements of accounts for June and July, 2012, which is very much available in the customer's inbox accessible through the online banking facility already availed by the complainant, reflect the change in schedule of charges and, on the face of it, the allegation of the complainant about non-intimation is nothing but a mere falsity. The complaint completely lacks cause of action for a consumer dispute and, on that basis, learned counsel seeks for dismissal of the complaint with exemplary costs.

 

             7. In the light of the rival submissions made on either side,  the only issue that needs to be answered in this complaint is -        

        " Does this case, warranting adjudication upon the core issue 'as to whether the OP-Bank has resorted to an unfair trade practice by allegedly making unauthorized & illegal deductions towards FCPS from the customer's current accounts without any prior intimation to the customer or getting their consent', has or lack the trait of a consumer dispute?

 

             8. After a careful analysis of the facts in the light of the material placed before us, we hasten to add that this case has no consumer color or flavor for more than one reason. 

              Firstly, it is not the case of the complainant that the services availed by them from the OP/Bank are predominantly for earning their livelihood or connected to the self-employment. Seemingly, such services were to safely carry the daily business collection from the place of the complainant to the Bank for its secure deposit. Merely because the safety aspect is involved in the service availed/provided that itself will not blunt the predominant commercial purpose.

             Secondly, the nature of the account held with the Bank by the complainant would denote the true essence of the transaction.  It is common knowledge that, unlike the SB Account that is generally opened by individuals mostly from salaried class, a current account, loosely called a business account or demand deposit that carries no interest because of the extra liquidity provisions, is opened by businessmen because their need is mainly for liquidity to handle huge volumes of business transactions.  Even according to the complainant, as stated in their arguments and as evident from Ex.A18, they have availed similar service "from 23.02.2013"  with another Bank-HDFC, for a cash pickup limit of Rs.19 crore per month. The subject matter/colossal cash, for which the 'facility/service' was availed by the complainant and provided by the Bank/OP,  is inseparable from the jewel business which is run therewith only to generate profits and that itself intrinsically exhibits the predominant commercial purpose. As such, the transaction between both the parties, stemming from a 'business to business agreement',  completely lacks the cause of action to raise or maintain a consumer dispute. 

             Further, although it is the claim of the complainant that the auto-deduction of service charges from their accounts was not preceded by any intimation or it was upon soliciting their consent, the OP/Bank, by referring to Ex.B2, states that they duly sent the prior intimation through a courier service.  According to them, in addition to that, the complainant was well aware of the revised schedule of charges that has been time and again reflected in the statement of accounts accessible by the complainant through the net-banking.  In our opinion, prima facie, it appears, the intimation relating to levy of charges was sent/conveyed by the OP and there is no violation of the Cash Pickup Agreement, but, the complainant disputes the same, thus, it has become a disputed question of fact.  When there exists a disputed question of fact, this Commission is not supposed to delve into the same in these proceedings, which are summary in nature, and the proper forum is only the competent civil court where the parties can let in elaborate evidence with the broad opportunity to cross-examine the witnesses.  By merely looking into the pleadings, version and handful of documents, this Commission cannot come to a just conclusion on a disputed question of fact.  For these reasons, we have no other option except to dismiss the complaint.

                     9. In the result, the complaint fails and it is dismissed, however, there shall be no order as to costs.                               

      Sd/-                                                                                                                  Sd/-

R VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT

 

 

 

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT

 

•       Date            Description of Documents

 

		Copy of Agreement for cash pickup entered into between the complainant and opposite party
		Copy of letter sent by the complainant to the opposite party
		Copy of online complaint vide Ref No.201213006006538 before the Banking Ombudsman, RBI by the complainant
		Copy of online complaint vide Ref No.201213006006539 before the Banking Ombudsman, RBI by the complainant
		Copy of letter received from the opposite party
		Copy of reply received from the office of the Banking Ombudsman to the online complaints filed by the complainant
		Copy of representation sent by the complainant to the opposite party and Banking Ombudsman along with postal acknowledgement
		Copy of applicationunder Right to Information (RTI) Act sent to the Reserve Bank of India
		Copy of acknowledgement vide Ref. No.4581/07.05.01/2013-14 received from Reserve Bank of India to the RTI Application
Ex.A10		Copy of legal notice sent by Speed Post to the opposite party’s branches / offices along with speed post receipts
		Copy of reply received from the Reserve Bank of India vide Ref No.DBOD.CO.DIR.No.6661/13.23.00/2013-14 received in response to the complainant RTI Application
		Copy of acknowledgement received from the opposite party’s Counsel to the complainant’s legal notice
		Copy of the reply received from the opposite party’s Counsel in response to the complainant’s legal notice
	03.11.2009, 24.11.2010 & 31.12.2011	Copies of Corresponding entries in Statements matching Cash Pick Up Challans
	24.11.2010 & 31.12.2011	Copy of Challans issued by the opposite party
	01.09.2012 to 24.12.2012	Copy of the complainant’s bank statement for Account No.0276235443
	01.09.2012 to 26.12.2012	Copy of the complainant’s bank statement for Account No.0276234447
	25.02.2013	Copy of the acceptance letter for Doorstep Banking Services of the respondent’s direct competitor, HDFC Bank

     

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE OPs

•       Date            Description of Documents

 

 

		Copy of commercial Bank Account opening form with terms and conditions
		Copy of Revision of schedule of charges for the current account with the courier slip
		Statement of Accounts for the period from 1st June 2012 to 01 August 2012

 

 

 

 

       Sd/-                                                                                                                   Sd/-

R VENKATESAPERUMAL                                                                         R.SUBBIAH                        

             MEMBER                                                                                         PRESIDENT