Chandigarh

DF-I

CC/691/2016

Punj Security & Housekeeping Pvt. Ltd. - Complainant(s)

Versus

The managing Director and Chief Executive Officer Axis bank Ltd. - Opp.Party(s)

Ajaypal Singh Madaan

21 Sep 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

============

Consumer Complaint  No	:	CC/691/2016
Date  of  Institution	:	24/08/2016
Date   of   Decision	:	21/09/2017

 

 

 

 

 

Punj Security & Housekeeping Pvt. Limited, Daddu Majra, Near Daronacharya Stadium, U.T. Chandigarh, through Mr. Parag Sharma, Director.

……… Complainant.

Versus

 

1)   The Managing Director and Chief Executive Officer, AXIS Bank Limited, 2^nd Floor, AXIS House, C2, Bhatia International Center, P.B. Marg, Verli, Mumbai.

 

2)   The Branch Manager, AXIS Bank, Sector 35-B, Chandigarh.

……. Opposite Parties

 

BEFORE:   SMT.SURJEET KAUR             PRESIDING MEMEBR

          SH. SURESH KUMAR SARDANA     MEMBER

 

For Complainant	:	Sh. Ajaypal Singh Madaan, Advocate.
For Opposite Parties	:	Sh. David Sadiora, Proxy Counsel for Sh. Nitin Sharma, Advocate.

 

PER SURESH KUMAR SARDANA, MEMBER

 

 

          Punj Security & Housekeeping Pvt. Limited, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against the Managing Director & Executive Officer, Axis Bank Limited Another (hereinafter called the Opposite Parties), alleging that in order to meet with their day to day business requirements, the Complainant requested the Opposite Party No.2 to issue Bank Guarantee of Rs.1.25 crores and cash credit limit for an amount of Rs.1.25 crores in the month of March, 2015. For the said purpose, all the required/ demanded documents including property documents for collateral Security were provided and the entire expenses for T.I. Report and property valuation report amounting to Rs.10,000/- were also incurred by the Complainant. It has been averred that the Opposite Party No.2 assured the Complainant to release the Bank Guarantee and Cash Credit Limit. The Opposite Parties demanded the amount of Rs.1,40,450/- as processing charges from the Complainant, which was deposited vide Cheque No. 656793 dated 12.03.2015 in their account. Notwithstanding this, the Opposite Parties did not sanction the issue of Bank Guarantee of Rs.1.25 crores and cash credit limit for an amount of Rs.1.25 crores. The Complainant made number of requests to the Opposite Parties to issue the Bank Guarantee and Cash Credit limited for the amount of Rs.2.50 Crores, but in vain. Hence, alleging the aforesaid act & conduct of the Opposite Parties as deficiency in service and indulgence into unfair trade practice, the Complainant has preferred the present Complaint.     

 

2.      Notice of the complaint was sent to Opposite Parties seeking their version of the case.

 

3.      Opposite Parties in their reply, while admitting the factual matrix of the case, have pleaded that the service sought to be availed by the Complainant was for a commercial purpose, therefore, the same is outside the purview of the Consumer Protection Act. It has been asserted that the OP-Bank has sanctioned credit facilities of Rs.2.50 crores vide sanction letter dated 12.03.2015 which was duly signed and acknowledged by the Complainant and after that loan documents were prepared by Bank for execution and disbursement of loan facilities however later on the Complainant had refused to avail the said facilities due to unavoidable circumstances. Pleading that there is no deficiency in service or unfair trade practice on their part, Opposite Parties have prayed for dismissal of the complaint.

 

4.      The Complainant filed rejoinder wherein the averments as contained in the complaint have been reiterated and those as alleged in the reply by the Opposite Parties have been controverted.

 

5.      Parties were permitted to place their respective evidence on record in support of their contentions.

 

6.      We have heard the learned counsel for the parties and have also perused the record.

 

7.      The Complainant has contended that he is a customer of the OP-Bank and is availing their services. It was further contended that the relationship between Complainant and the OP-Bank is that of Customer and Banker and the OP-Bank is a Service Provider for which they receive collateral security documents, expenses for T.I. Report and property valuation report besides receiving Rs.1,40,450/- towards processing charges from the Complainant, and therefore the Complainant is a consumer under the Consumer Protection Act, 1986.

 

8.      Per contra the Opposite Parties have contended that the Complaint itself is not maintainable on the ground that the request for the loan in question was fully for commercial purpose and relief sought i.e. refund of the processing fee, is in furtherance of the said loan. It has been contended that once the Complainant has refused to avail the credit facilities vide letter dated 24.03.2015, the Complainant has no right to claim the processing fee which was rightly charged by the Bank as per the terms and conditions of the sanction letter dated 12.03.2015.

 

9.      Before determining any deficiency in service on the part of Opposite Parties, it would be just & proper to deal with the issue as to whether the Complaint filed by the Complainant is maintainable before this Forum and the Complainant falls under in the definition of ‘Consumer’ under the Consumer Protection Act, 1986 or not?

 

10.      Having bestowed our anxious consideration to the matter, we are of the opinion that in the light of the material on record, answer to the question posed has to be in affirmative.

 

11.      It would be appropriate for us to refer to the relevant provisions in the Consumer Protection Act - 1986 to decide the issue. The term consumer and service has been defined in the Consumer Protection Act 1986. Section 2 (1) (d) (ii) defines the term consumer which read as under:-

(d) consumer means any person who

(i). ...............................................................

(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;

          And the term service has been defined under Section 2 (1) (O) of the Consumer Protection Act 1986:-

(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;

 

12.      It would be relevant to refer to the judgment of Hon'ble National Commission in the case of Kaveri Telecom Limited Vs Vijaya Bank & Another reported in IV (2014) CPJ 302 (NC). wherein, at para 9 to 11 of its judgment, the Hon'ble National Commission, observed as under:-

Whether the complainant is a consumer?

9. We have heard the counsel for the parties. First of all, the controversy which revolves around the question is, ―Whether, the complainant is a consumer? The counsel for the OP has placed reliance on Laxmi Engineering Works Vs. PSG Industrial Institute - 1995 (3) SCC 583, wherein, it was held that the Act provides for business to consumer disputes and not for business to business disputes. It was further held that if a firm purchases the goods, the Members of the Firm should themselves play, operate or use the goods purchased. Same would be the case of purchase by Hindu Undivided Family, a Co-operative Society or any other Association of persons. They will come within the category of  consumer. The learned counsel for the OP stressed that the complainant is not a consumer because its dispute falls within the bracket of business to business dispute.

13.      In the case, reported in Kishore Lal Vs. Chairman, Employees' State Insurance Corporation, (2007) 4 SCC 579, at para 7 of its judgment, the Hon'ble Apex Court, observed as under:-

7. The definition of consumer in the CP Act is apparently wide enough and encompasses within its fold not only the goods but also the services, bought or hired, for consideration. Such consideration may be paid or promised or partly paid or partly promised under any system of deferred payment and includes any beneficiary of such person other than the person who hires the service for consideration. The Act being a beneficial legislation, aims to protect the interests of a consumer as understood in the business parlance. The important characteristics of goods and services under the Act are that they are supplied at a price to cover the costs and generate profit or income for the seller of goods or provider of services. The comprehensive definition aims at covering every man who pays money as the price or cost of goods and services. However, by virtue of the definition, the person who obtains goods for resale or for any commercial purpose is, excluded, but the services hired for consideration, even for any commercial purposes are not excluded. The term service unambiguously indicates in the definition that the definition is not restrictive and includes within its ambit such services as well which are specified therein. However, a service hired or availed, which does not cost anything or can be said free of charge, or under a contract of personal service, is not included within the meaning of service for the purposes of the CP Act.

14.      It must be clarified that the judgment of Laxmi Engineering Works Vs. PSG Industrial Institute 1995(3)SCC 583 was authored by two-Judges Bench of Hon'ble Supreme Court, but Kishore Lal case (Supra) was authored by a three- judges Bench. In view of the three-Judges Bench's judgment, it has to be held that the complainant is a consumer'. In the above judgment the Hon'ble National Commission has categorically and emphatically held that by virtue of the definition, the person who obtains goods for resale or for any commercial purpose is, excluded, but the services hired for consideration, even for any commercial purposes are not excluded and the term service unambiguously indicates in the definition that the definition is not restrictive and includes within its ambit such services as well which are specified therein.

 

15.      Admittedly, in the present case the complainant has availed the services of the opposite party to help resolve the financial difficulties being faced by the complainant which per se in our view is not a commercial activity for generation profits. This view is supported by the judgment of the Hon'ble National Commission in the case of Canara Bank & Another Vs Jain Motor Trading Company & Another reported in IV (2013) CPJ 336 (NC) wherein it observed as follows:-

10. We also do not accept the contention of the counsel for appellant/bank that the respondent being a commercial firm is not a consumer as per the provisions of the Consumer Protection Act, 1986. Commercial concerns per se are not excluded from filing a complaint under the Consumer Protection Act - 1986 if it does not involve direct generation of profits or resale. Also as stated in the instant case, the OCC facility was sought from appellant/bank to help resolve the financial difficulties being faced by respondent which was not per se a commercial activity generation profits. As pointed out by counsel for respondent, these aspects are well settled in number of judgments including of this Commission as also of Hon'ble Supreme Court e.g. Harsolia Motors vs National Insurance Co. Ltd. I (2005) CPJ 27 (NC) and Madam Kumar Singh vs District Magistrate, Sultanpur, VI (2009) SLT 269 = IV (2009) CPJ 3 (SC) = (2009) SCC 79 ‖ Both the above judgments of the Hon'ble National Commission are relevant and appropriate to the present case before us.

 

16.      Considering the facts and circumstances of the case and the relevant judgments rendered by the Hon'ble National Commission we are of the considered view that the complainant in the present complaint is a consumer and he has availed the services of the OP-Bank and the dispute raised in the complaint is a consumer dispute adjudicatable before the Consumer Forum set up under the Consumer Protection Act 1986 and as such the present complaint filed by the complainant is perfectly maintainable under the Consumer Protection Act 1986. The point is answered accordingly.

 

17.      Admittedly, the complainant had availed the services of the Opposite Parties with regard to the sanctioning and releasing of bank guarantee and cash credit limit by depositing the collateral security documents, incurring Rs.10,000/- for T.I. Report and property valuation report and paying Rs.1,40,450/- towards processing charges on 12.03.2015. It is contended that notwithstanding this, the Opposite Parties did not sanction the issue of Bank Guarantee and cash credit limit.

 

18.      It was in the aforesaid backdrop, that the Complainant had addressed a letter dated 29.05.2015 (Annexure C-1) to the Opposite Parties requesting them to issue Bank Guarantee and Cash Credit Limit. Having failed to get any response, the Complainant again vide letter dated 20.06.2015 (Annexure C-2) informed the Opposite Parties that if they do not interested to issue Bank Guarantee and Cash Credit Limit to the Complainant, in that eventuality, the amount of Rs.1,40,450/- be refunded along with interest. In response thereto, the Opposite Parties vide letter dated 22.06.2015 showed their inability to disburse the limits on the basis of sanction conveyed by the Bank. There is no dispute regarding the fact that in view of the urgent requirement of Bank Guarantee Limit and refusal of Cash Credit Limit and Bank Guarantee Limit by the Opposite Parties, the only substitute left with the Complainant was to approach the other Bank and obtain the said limit, for which surely & definitely the Complainant had to shell out extra amount on account of T.I. Report, Property Valuation Report and Bank Processing fee. There was, therefore, no legal malady, on the part of the Complainant in demanding back the processing charges, especially when the Complainant could not avail the Cash Credit Limit and Bank Guarantee from the Opposite Parties. In these set of circumstances, the stand taken by the Opposite Parties that once the Complainant has refused to avail the credit facilities vide letter dated 24.03.2015, the Complainant has no right to claim the processing fee, is devoid of any merit, and does not hold good. Thus, it is held that the Opposite Parties are liable to refund the processing charges to the Complainant, especially when the Complainant has never taken any kind of facilities from the OP-Bank. To our mind, the act and conduct of the Opposite Parties in non-refunding the amount of Rs.1,40,450/- to the Complainant amounts to deficiency in service and their indulgence into unfair trade practice, in as much as when they failed to provide any services to the Complainant, they have no right to charge processing fees or property evaluation and T.I. Report charges etc.

 

19.      Now coming to the quantum of compensation, it would be appropriate for us to refer the judgment of the Hon'ble Supreme Court of India in the case of Ghaziabad Development vs Balbir Singh reported (2004) 5 SCC 65 wherein the court has held that the word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/ Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law. We find the above judgement appropriate for us to arrive at the quantum of compensation. In view of the discussion made above and considering the facts and circumstances of the complaint, we feel that a sum of Rs.20,000/- as compensation for deficiency in service, unfair trade practice and loss suffered by the complainant would be just and reasonable. However the question of compensation of mental agony does not arise since the complainant is a private limited company.

 

20.      In the light of above observations, the present complaint of the Complainant deserves to succeed against the Opposite Parties, and the same is partly allowed, qua them. The Opposite Parties are, jointly and severally, directed:-

 

[a]  To refund the processing fee charges of Rs.1,40,450/- to the Complainant;

 

[b]  To refund Rs.10,000/- to the Complainant spent by the Complainant for T.I. Report and property valuation report;

 

[c]  To pay Rs.20,000/- as compensation for deficiency in service, for unfair trade practice and loss suffered by the Complainant; 

 

[d]  To pay Rs.10,000/- as costs of litigation.

 

 

21.      The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @12% p.a. on the amounts mentioned in sub-paras [a] to [c] above from the date of institution of this complaint, till it is paid, apart from cost of litigation as in sub-para [d].  

 

22.      Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

21^st Sept., 2017                                               Sd/-          

 (SURJEET KAUR)

       PRESIDING MEMBER

 

                                              Sd/- 

(SURESH KUMAR SARDANA)                                                                                                      MEMBER