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Needle Industries (India) Private Limited v/s State Bank of India, Tamil Nadu & Another

    First Appeal No. 21 of 2016

    Decided On, 21 April 2022

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE R.K. AGRAWAL
    By, PRESIDENT & THE HONOURABLE DR. S.M. KANTIKAR
    By, MEMBER

    For the Appellant: Krishna Srinivasan, Advocate. For the Respondents: Nemo.



Judgment Text

R.K. Agrawal, J., President

1. This First Appeal has been filed by the original Complainant, namely, Needle Industries (India) Pvt. Ltd., against the order dated 17.08.2015, passed by the Tamil Nadu State Consumer Disputes Redressal Commission at Chennai (for short “the State Commission”) in Complaint Case No. 7/2007. By the impugned order, while holding that the Complainant/Appellant herein had not established its case of negligence and deficiency in service on the part of the Opposite Parties/Respondents herein (for short the Opposite Party/Respondent Bank), and, therefore, the Complainant/Appellant is not entitled to claim compensation, the State Commission has dismissed the Complaint, preferred by the Complainant/Appellant.

2. The facts, in brief, are that the Complainant/Appellant, a Private Limited Company, engaged in the manufacturing of hand sewing needles, knitting pins, surgical needles and other allied products, had a current account with the Opposite Party/Respondent Bank (Opposite Party/Respondent No.1) for the last over 25 years and was operational as on the date of filing of the Complaint (09.01.2007).

3. On 21.06.2006 and 24.06.2006 the Complainant/Appellant had raised two invoices on a Company called JAHBALT in South Africa. The total value of the said invoices was US $ 3544.00. On 21.07.2006 the Complainant/Appellant’s customer had made payment through State Bank of India, New York for onward transfer to the Complainant/Appellant’s Banker, i.e. State Bank of Travancore. Though the amount was received by the Opposite Party/Respondent Bank but for about a fortnight it denied having received the said amount. However, on 02.08.2006 the Complainant/Appellant came to know that the amount was received by the Opposite Party/Respondent Bank on 21.07.2006 and was lying with them since then.

4. In a subsequent incident, the Complainant/Appellant had raised two invoices dated 20.06.2006, valued at US $ 13,860.69, on the same customer at Sought Africa, which had made payment on 17.08.2006 through State Bank of India, New York. The amount was received on the same date by the Opposite Party/Respondent Bank but they denied having received the same till 05.10.2006. On 05.10.2006 the Complainant/Appellant contacted the Assistant General Manager of Opposite Party/Respondent Bank (Opposite Party/Respondent No.2), and got the response that payment had not been received by them. However, after about 15-20 minutes, a person, who did not disclose his name, contacted the Complainant/Appellant’s Banker State Bank of Travancore and informed that the money had been received by the Opposite Party/Respondent Bank on 17.08.2006. This negligence on the part of the Opposite Party/Respondent Bank resulted in misunderstanding between the Complainant/Appellant and its customers. The Complainant/Appellant immediately made a complaint to the Assistant General Manager of Opposite Party/Respondent Bank about the delay in the transactions but no action was taken on the same.

5. Further, the Opposite Party/Respondent Bank had misplaced a Cheque that had been deposited by the Complainant/Appellant towards remittance of ESI payment on 18.09.2006. The Complainant/Appellant’s staff, who had reached the Opposite Party/Respondent Bank to deposit the Cheque, was instructed to leave the same in the remittance tray and to obtain the endorsed Challan the next day. After several telephone calls and personal visits, the Opposite Party/Respondent Bank acknowledged receipt of the Cheque on 21.09.2006 and, even after issuing a letter of apology, did not issue the endorsed Challan to the Complainant/Appellant.

6. Alleging gross negligence and unfair trade practice on the part of the Opposite Party/Respondent Bank and the resultant hardships and mental agony faced by it, the Complainant/Appellant Company filed the afore-noted Complaint before the State Commission, praying for compensation of Rs.20,00,000/- towards loss caused to it and Rs.2,000/- as costs.

7. Upon notice, the Opposite Party/Respondent Bank contested the Complaint by filing the Written Version. It was stated on their behalf that the Complainant/Appellant had been availing banking facilities with the State Bank of Travancore and under the said facilities the Complainant/Appellant used to execute export orders and draw bills under LCs opened by the Importer in a foreign country, as in the present case. In both the transactions, the foreign Banker remitted the amount under the bills drawn under the LCs and the amount routed through State Bank of India, New York Branch. Since the Opposite Party/Respondent Bank was situated in Udhagamandalam and the amount remitted by the foreign Banker was payable to the Complainant/Appellant, State Bank of India, New York Branch remitted the funds under the transactions in question to the Opposite Party/Respondent Bank. The message in respect of the first transaction for US $ 3544 was received through the system on 22.07.2006, wherein though name of the Beneficiary was correct but account number did not tally with the current account of the Complainant/Appellant with the Opposite Party/Respondent Bank, necessitating steps to locate the payment center. The Opposite Party/Respondent Bank contacted the Complainant/Appellant’s Banker State Bank of Travancore on 26.07.2006, which instructed the Opposite Party/Respondent Bank to remit the amount back to Nostro account of State Bank of Travancore with J.P. Morgan Bank in US Dollars. As regards the second transaction of receipt of foreign remittance from the foreign Bank, it was submitted that the message relating to US $ 13,860.69 was not found in the system on the date of receipt. It was only when the State Bank of Travancore informed the date of receipt by the Opposite Party/Respondent Bank that the Opposite Party/Respondent Bank with the help of its technical officer located the message in the system on 05.10.2006. The delay was on account of introduction of new advance technical system, which could not be attributed to any official of the Opposite Party/Respondent Bank. The said amount was also remitted to Nostro account of State Bank of Travancore with JP Morgan Chase Bank under their instructions. As the Opposite Party/Respondent Bank acted only as an intermediary and correspondent Bank for the foreign remitting Bank, there was no relationship of Banker and customer between the Opposite Party/Respondent Bank and the Complainant/Appellant. With respect to the allegation of not sending the Cheque drawn in favour of ESI, deposited with the Opposite Party/Respondent Bank, it was stated that the delay of two days was due to technical problems, which surfaced during migration of the Opposite Party/Respondent Bank from the existing system to an advanced Core Banking System. The Opposite Party/Respondent Bank apologized to the Complainant/Appellant and the Complainant/Appellant had not suffered any loss because of this delay. In response to the legal notice dated 16.11.2006 issued by the Complainant, the Opposite Party/Respondent Bank sent a reply bringing to the knowledge of the Managing Director of the Complainant/Appellant that inconvenience/difficulties, if any, experienced by them were not on account of negligence but due to upgradation/migration/transition to Core Banking System. The Complainant/Appellant, a Body Corporate, had not suffered any loss or mental agony, as alleged, and the compensation of Rs.20,00,000/- as claimed is speculative and without any merit.

8. On appreciation of the evidence adduced by the parties and appraisal of the documents placed before it, the State Commission came to the conclusion that there was no negligence or deficiency in service on the part of the Opposite Parties, and, therefore, dismissed the Complaint. Hence, the present Appeal by the Complainant/Appellant.

9. The case of the Complainant/Appellant is that the State Commission was not justified in dismissing the Complaint while the Opposite Party/Respondent Bank after filing of the Complaint had admitted the delay in remitting the payments on two occasions and in clearing the Cheque issued by the Complainant/Appellant for making certain payment to ESI and had apologized for the same vide its letter of apology dated 14.03.2007. The Opposite Party/Respondent Bank changed its stand in the Written Version and attributed the delay to the alleged discrepancy in the account particulars and certain instructions received from the Banker of the Complainant/Appellant, i.e. State Bank of Travancore. Had it been so, there would have been a mention about the said discrepancy in the letter of apology issued by the Opposite Party/Respondent Bank on 14.03.2007. Further, upgradation of the Core Banking System was introduced in the month of September, 2006 while the transactions in questions had taken place in June – August, 2006 and, therefore, it cannot be accepted that the delay in remitting the payment to the Complainant/Appellant was because of the said reason, as stated by the Opposite Party/Respondent Bank in the Written Version. There was no genuine reason with the Opposite Party/Respondent Bank for the delay in making the payments and the State Commission was not justified in holding that the Complainant/Appellant was required to submit more documentary evidence to prove deficiency on the part of the Opposite Party/Respondent Bank.

10. On the other hand, the case of the Opposite Party/Respondent Bank is that the Complainant/Appellant is not a “consumer” within the meaning of Consumer Protection Act, 1986, as the Complainant/Appellant had availed its services for “commercial purposes”. Further, the delay in remitting the payment to the Complainant was on account of migration of the Bank from then existing system to an advance Core Banking System and, therefore, there was no deficiency in service on its part and the State Commission has rightly dismissed the Complaint filed by the Complainant though without adverting to its plea that the Complainant/Appellant was not a “consumer”.

11. We have considered the submissions of both the Parties and gone through the material on record. The foremost question to be decided in this Case is as to whether the Complainant/Appellant is a “consumer” or not within the meaning of the Consumer Protection Act, 1986. In this regard, the Opposite Party/Respondent Bank in its Written Version had stated that “the complainant is not a consumer within the meaning of the Consumer Protection Act”. Maybe, the said plea was taken by the Opposite Party/Respondent Bank in its Written Version in a routine manner and had not been argued before the State Commission when the matter was being finally heard, on account of which the State Commission did not deal with this aspect of the matter and proceeded to decide the Complaint on other grounds.

12. For a decision in the matter, a reference to Section 2(1)(d) of the Consumer Protection Act, 1986 is relevant. The said Section 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 mention person but does not include a person who avails of such services for any commercial purpose;

Explanation, - For the purpose 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 purpose of earning his livelihood by means of self-employment.”

13. In the present Case, the Complainant, a Private Limited Company, was admittedly engaged into manufacturing of hand sewing needles, knitting pins, surgical needles and other allied products and exporting the said products to its customers, including foreign buyers. It cannot be assumed that the business activities carried out by the Complainant/Appellant, which is a Private Limited Company, were not for any commercial purpose and were being carried out exclusively for the purpose of earning livelihood by means of self-employment nor it is their case. The services of the Opposite Party/Respondent Bank availed by the Complainant/Appellant were directly conn

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ected with its business activities, which were being carried out for commercial purpose in order to generate profit. The transactions in question between the foreign buyer and the Complainant/Appellant through the Opposite Party/Respondent Bank were the outcome of the exports made to the foreign buyer, who had sent the money to the Opposite Party/Respondent Bank for onward transfer to the Complainant/Appellant. The Complainant/Appellant has not been able to prove that it is a “consumer” within the meaning of Consumer Protection Act, 1986 and the Complaint filed by it was maintainable. The reliance placed by the Complainant/Appellant on a number of cases of the Hon’ble Supreme Court and this Commission is misconceived. Clearly, the Complainant was not a “consumer” within the meaning of Consumer Protection Act, 1986 and the Complaint filed by it was not maintainable and, therefore, the State Commission was justified in dismissing the Complaint though on different reasons. 14. Once we come to the aforesaid conclusion, it is not necessary for us to go into the questions as to whether there was any delay on the part of the Opposite Party/Respondent Bank in remitting the payment to the Complainant/Appellant or clearing the Cheque issued by it towards ESI payment and it had suffered loss or not. 15. In view of the aforesaid discussion, the Appeal filed by the Complainant/Appellant lacks merit and it is dismissed accordingly.
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