M/s. Samkit Art & Craft Pvt. Ltd. v. State Bank Of India,

Spain but the Bank never traced the said bills. Later the bank debited amount of ₹14,84,810.00ps. to the account of the complainant company against the above- referred bill, on 23.11.2005. Since the amount of the aforesaid bills was not credited to its account, the complainant requested the OP Bank to return the Bills so that it could recover the amount from the importer, but no reply was received from the Bank.

2. This is also the grievance of the complainant that it had requested the Bank to release money against EPC limit of ₹35 lakh sanctioned by it, against purchase orders of the value of British Pound 93,849.02, but the Bank did not release the aforesaid amount. As a result, the complainant had to arrange money from other sources, to complete its production. On account of the failure of the complainant to send the goods to the importer in time, the purchase order were cancelled, causing a loss of Rs.25 lakh to the complainant. Yet another allegation of the complainant is that the Bank did not release amount sanctioned against MTL limit which resulted in delay in manufacturing of goods and caused loss of ₹1.5 lakh to it.

3. The complainant company also alleges that the Bank had declined payment of two cheques of ₹22,750/- each which it had taken towards payment of freight charges, which resulted in the complainant suffering a loss of ₹2.5 lakh besides losing business. The complainant company claims loss of business on account of aforesaid acts of the Bank and the said loss is estimated by the complainant at ₹1,61,25,000/-.

4. Consumer Complaint No. 12/2007 has been filed by Shree Vadera Textiles Mills (P) Ltd. against State Bank of India and its officers. This company was also sanctioned Cash Credit (Hpy.), Cash Credit (EPC) and Cash Credit (SME) facilities by the aforesaid Bank. According to the said complainant, it had submitted three export bills to the bank for collecting their amount from M/s. Sheesham Antique, Netherlands but the Bank never traced the said bills. Later the bank debited a sum of ₹37,73,825.00 being amount of these bills to the account of the complainant company. The grievance of the complainant also is that had the bills been returned to it, it could have taken action against the overseas buyers for non-payment of the said bills.

5. Another grievance of this complainant is that it had export orders from other overseas buyers in its hands and the value of the said export orders was ₹78,59,200/- but the Bank

2

declined to sanction advance against those five export orders in the form of renewal of working capital as a result of which the said export orders were cancelled and the complainant was put to a great loss. Yet, another allegation of this complainant is that on account of the aforesaid acts and omissions of the Bank, it suffered loss to the extent of ₹86,95,000/- on account of non- implementation of its project plan. A total claim of this complainant against the Bank is for ₹2,06,00,165/- alongwith interest @12% p.a.

6. Section 2(d) of the Consumer Protection Act, 1986 after its amendment with effect from 15-03-2003 to the extent it is relevant 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"

7. The question as to whether a company operating a current account with a bank avails the banking services for commercial purpose or not, came up for consideration of this Commission in Subhash Motilal Shah & Ors. Vs. Malegaon Merchants Co.-op Bank Ltd., R.P.No.2571

3

of 2012 decided on 12-02-2013. In the aforesaid case, the petitioner had alleged deficiency in service on the part of the bank. The State Commission dismissed the complaint, holding inter alia as under:

"Admittedly, since Rainbow Corporation is a firm of Ajay Subhash Shah (HUF), i.e., juristic person, there arise no question of self-employment so as to cover the case under explanation to section 2(1)(d)(ii) of the Consumer Protection Act, 1986 ('Act' for brevity). It is a case relating to an action related with services given while operating the Current Account of Appellant Rainbow Corporation which was admittedly opened and used for business purpose, of the business of 'commission agent' and business of 'yarn sale'. Therefore, since the account itself is connected and related to the business transactions and such banking activity is required for the functioning of a given business enterprise of the appellant/complainant, services hired for that purpose would fall within the category of hiring services for commercial purpose. A useful reference can be made to free dictionary by FARLEX (on Internet) which defines the 'Business Activity' as the activity undertaken as a part of commercial enterprise. Further, reference can be made to an article available on the internet Website Wise Geek (copyright protected 2003-12 by Conjecture Corporation) and which is written by Alexis. W, edited by Heater Bailey. Under the circumstances, prima facie appellant/complainant Rainbow Corporation cannot be a consumer within the meaning of Section 2(1)(d)(ii) of the Act".

Being aggrieved from the order of the State Commission, the complainant in the said case approached this Commission by way of a revision petition and it was contended by the complainant that considering the aims and objectives behind enactment of the Act, the expression 'consumer' and 'service' as defined under the Act should be construed in a comprehensive manner so as to include the services of commercial and trade oriented nature. In other words, the contention was that any person who hires services for consideration shall be deemed to be a consumer, even if the services were obtained in connection with a commercial activity. However, relying upon the amendment made in the Act with effect from 15-03-2003 the revision petition was dismissed by this Commission thereby upholding the view taken by the State Commission.

8. In M/s. Sam Fine O Chem Limited Vs. Union Bank of India, C.C.No.39 of 2013, decided on 12-04-2013, the complainant had availed credit facility from Union Bank of India. Alleging deficiency in the services provided by the bank he preferred a complaint before this Commission. Rejecting the complaint this Commission inter alia noted that the complainant had availed the credit facility service of the bank for expansion of its manufacturing activity which was a commercial purpose and, therefore, the complainant did not fall within the definition of 'consumer' given in Section 2(1)(d) of the Act.

4

9. Learned counsel for the Opposite Party has drawn our attention to the order dated 2.05.2006 passed by this Commission in OP No. 2/2006 "Vishwa Electronics (India) Ltd. versus Industrial Development Bank of India & Anr.", where, this Commission held that the alleged deficiency in service was relatable to the commercial purpose which had been excluded from the purview of the Consumer Protection Act, 1986.

10. In view of the above referred decisions of this Commission, the issue under consideration is no more res integra, as far as this Commission is concerned. The complainants had obtained various cash credit facilities for the purpose of export of goods, which undeniably was a commercial purpose. We, therefore, hold that the complainant companies are not a consumer within the meaning of Section 2(1)(d) of the Act. Accordingly, the complaints are hereby dismissed. However, liberty is granted to the complainant to approach the appropriate forum/civil court for redressal of its grievance in accordance with law.

11. If the complainant approaches the civil court for redressal of its grievance, it shall be open to the complainant to take benefit of the provisions of Section 14 of the Limitation Act, in case such a benefit is otherwise available to it in law.

......................J

V.K. JAIN

PRESIDING MEMBER

......................

DR. B.C. GUPTA

MEMBER

5