YES BANK LTD. V/S DEEPAK MALHOTRA - Consumer Court Case

19. In Economic Transport Organization Vs. Charan Spinning Mills (P) Ltd., &Anr., I (2010) CPJ 4 (SC), a four Judge Bench, of the Hon’ble Apex Court, also held that, after the amendment of Section 2(d) of the Act w.e.f.15.03.2003, the services of the carriers, it had been availed of, for any commercial purpose, then the person availing of the services will not be a consumer. In Birla Technologies Ltd. Vs Neutral Glass and Allied Industries Ltd. 2011 (1), SCC 525 and Sanjay D.Ghodawat Vs R.R.B. Energy Ltd. IV(2010) CPJ178(NC), a case decided by a Full Bench of the Hon’ble National Commission, the similar principle of law was laid down. In Sushma Goel Vs Punjab National Bank 2011 Consumer Protection Judgments 270(NC), the complaint related to the operation of a bank account maintained by a commercial entity for commercial purposes. It was held that the complainant did not fall within the definition of a consumer. Since, the services of the Opposite Parties/respondents, in the instant case, were availed of, by the complainant/appellant, for the commercial purpose of earning huge profits, he did not fall within the ambit of a consumer, and, as such, the complaint was not maintainable.

20. According to Section 2(1)(d)(i) of the Act, the consumer does not include a person, who obtains such goods for resale or any commercial purpose. Section 2(1)(d)(ii), which was amended by Act 62 of 2002 w.e.f. 15.03.2003, clearly lays down that the person who hires or avails of the services for consideration, for any commercial purpose, shall not qualify, as a consumer. In the instant case, the complainant, availed of the services of the Opposite Parties, by obtaining a credit facility, in the sum of Rs.245 lacs, for commercial purposes. In other words, he took the credit facility for furthering his business, to generate huge profits, and, as such, he did not fall within the definition of a consumer.

21. Mtar Technologies Pvt Ltd., vs 1. State Bank Of India vide CCSR NO.4002 OF 2013 decided on 17 September 2013, wherein State Commission, Hyderabad observed that

“ As current account with overdraft facility was for commercial purpose, prima facie, complainant does not fall within the purview of consumer under the Consumer Protection Act and complaint is not maintainable.”

22. Hon’ble NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI in FIRST APPEAL NO. 337 OF 2017 in a case titled “KOSHY VARGHESE THAVALATHI HOUSE, MELE VETTIPURAM, PATHANAMTHITTA Versus HDFC BANK LTD. & 2 ORS.” Held that

“The loan against shares was an overdraft account opened by the appellant with the respondent bank against the security of equity shares pledged with them. Further investment in equity shares was in the nature of speculative investment made for commercial purpose. It is seen from the facts of the case that the Appellant has failed, either to plead or establish that he had obtained the overdraft facility for earning his livelihood by means of self-employment. Hence, the Appellant/Complainant is not a 'Consumer' as per Section (2) (1) (d) of the Act and the Complaint filed by the Appellant /Complainant is not maintainable and is liable to dismissed on this sole ground.”

23. Recently Hon’ble Supreme Court in “SHRIKANT G. MANTRI V. PUNJAB NATIONAL BANK,” 2022 SCeJ0263 , 2022 PLRonline 0742 held that

“ 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.We, therefore, find no error with the findings of the Commission. In any case, the Commission has already granted liberty to the appellant to avail of his remedy by approaching the appropriate forum, having jurisdiction.”

24. In the present case, it is evident from a bare perusal of the complaint and documents annexed thereto by the complainant himself that the complainant is trying to camouflage a business loan under the garb of a consumer dispute whereas it is a over draft facility Loan Against Property which is purely commercial. Since the account itself was connected and related to the commercial transaction of the complainant, the service hired for that purpose would fall within the category of hiring services for commercial purposes. Therefore, it is clear that the services of OP were hired by the complainant for commercial purposes in course of enhancement of income by virtue of having availed Overdraft facility with loan against property with OP to carry out its business activities, the purpose behind availing of such loan was to serve the commercial interest of its business for which the alleged loan was probably applied for and therefore is not a subject matter to be decided on merits by this Forum. Requirements of the restricted meaning of “Commercial Purpose” are that the complainant ought to have availed of the services of OP exclusively for purpose of earning livelihood by way of self-employment.”

25. A plain reading of Section 2(7)(ii) and Section 2(42) of the Act 2019 makes it clear that the complainant company which had availed services of a bank forpromoting business and earning profit is not a consumer under the Act 2019. The Hon'ble National Commission relying upon the verdict of the Hon'ble Supreme Court in the Lilavati Supra case where ‘broad principles’ including the yardstick of ‘close and direct nexus’ and ‘dominant purpose’ were laid down, observes that such tests would be extrapolated to juridical person depending on facts and circumstances of each case.

26. Applying the said ratio which is squarely relevant to the present case, the services availed by the complainant from OP had a ‘close and direct nexus’ to furthering business prospects for commercial profitability and the ‘dominant purpose’ behind availing such service was the link to large scale commercial activity and 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 law.

27. We are guided by the above-settled principle of law as discussed at length in the legal discourse of catena of judgments passed by Hon’ble Apex Court and Hon’ble NCDRC cited in forgoing paras and can be safely applied in the present case especially after appreciating the nature of transaction entered into between complainant and OP and the perusal of offer letter for seemed business loan against Loan against property (security)by mortgaging House no no. 51, Road 2 East Punjabi Bagh, Delhi and letter, project work order and emails exchanged between complainant and OP about the cash credit facility etc., placed on record by the complainant himself.

28. The case of the complainant relates to the relationship between the complainant and OP to further commercial activity for which the complainant had availed the services of OP for commercial purposes. Therefore, because of the inbuilt exception in the definition of consumer, the complainant cannot be termed as a consumer as envisaged under Section 2(7)(ii) of the Act.

29. According to Section 2(1)(d)(i) of the Act, the consumer does not include a person, who obtains such goods for resale or any commercial purpose. Section 2(1)(d)(ii), which was amended by Act 62 of 2002 w.e.f. 15.03.2003, clearly lays down that the person who hires or avails of the services for consideration, for any commercial purpose, shall not qualify, as a consumer. In the instant case, the complainant, availed of the services of the Opposite Parties, by obtaining a credit facility, in the sum of Rs.245 lacs, for commercial purposes. In other words, he took the credit facility for furthering his business, to generate huge profits, and, as such, he did not fall within the definition of a consumer.

30. That being the case, in view of the Act provides for “business-to-consumer” disputes and not for “business-to-business” disputes. Hence the complainant has no locus standi to file the present complaint before this Commission and therefore we have no hesitation in concluding inescapably that the complainant is not a consumer and, on this count, alone, dismiss the present complaint.

31. It is however made clear that denial to avail remedy before a consumer protection Commission to a ‘person’ who is not a ‘consumer’ and does not meet the ingredient of ‘consumer’ under the Act 2019 does not take away or affect his right to agitate his case in any appropriate forum/court as per law. Notwithstanding or having said so, on the present complaint which blatantly is a commercial dispute but has been filed before this Commission, we are guided by the observation of Hon'ble National Commission in Freight (Supra) case here that anyhow allowing anyone into consumer protection fora has adverse ramification, including inter alia: Evasion of court fee in Civil Courts; and Eroding into the time and resources of consumer protection Fora, which could otherwise be better devoted to the ordinary general consumers, who straightway fall, ex facie, in the definition of ‘consumer’ (without having to write a treatise to enable their anyhow entry into the Fora).

32. We, therefore, dismiss the present complaint as non-maintainable before this Commission without entering into merits of the dispute between the opposing sides and the complainant company is free to agitate its case in any appropriate court as per law. However, the complaint is given the liberty to file a fresh complaint. Accordingly, the complaint filed by the complainant is dismissed in limine without prejudice to the rights of the complainant to seek him appropriate remedy before the appropriate Court of law.

33. The time spent by him before the District Commission while prosecuting the complaint shall be excluded by that authority while computing the period of limitation for filing the case before appropriate authority, etc. as mandated by Hon’ble Supreme Court Judgement in a case titled as M/S Laxmi Engineering Works vs P.S.G. Industrial Institute; Equivalent citations: 1995 AIR 1428, 1995 SCC (3) 583

“The appeal accordingly fails and is dismissed but without costs. If the appellant chooses to file a suit for the relief claimed in these proceedings, he can do so according to law and in such a case he can claim the benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting the proceedings under the Consumer Protection Act while computing the period of limitation prescribed for such a suit. “

34. The complaint is therefore directed to be returned to the complainant along with annexures against acknowledgement. A copy of the complaint should be retained for records. The complaint is disposed of accordingly in the above terms.

35. A certify copy of the order may be given to the complainant after receiving the application for obtaining certify copy as per the direction received from Hon’ble State Commission. Order be sent to www.confonet.nic.in.

36. File be consigned to record room.

37. Announced on 11.10.2022.

(Richa Jindal)

Member

(Anil Kumar Koushal)

Member

(Sonica Mehrotra)

President

Delhi

West Delhi

CC/22/198

DEEPAK MALHOTRA - Complainant(s)

Versus

YES BANK LTD. - Opp.Party(s)

11 Oct 2022

ORDER

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