Summary
A State corporation's consumer complaint against a bank, which had adjusted its Rs. 9 crore fixed deposit against an overdraft the corporation said was fraudulently created on a pledge of that deposit, was held not maintainable before the NCDRC. Although merely earning interest on a deposit does not make banking service commercial, the complaint turned on allegations of fraud and forgery fit for a civil or criminal court.
Issues
- Whether a body corporate depositing surplus funds in an interest-bearing fixed deposit is a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986.
- Whether the allegations of fraud and forged pledge took the complaint outside summary proceedings under the 1986 Act.
Provisions considered
- Section 2(1)(d)(ii) and Explanation, Consumer Protection Act, 1986Construed the exclusion of services availed for a commercial purpose by reference to the dominant purpose of the transaction and its close nexus with profit generation; the status of the person as a body corporate is a relevant but not determining factor. (¶¶ 12, 15, 18, 21, 22, 23, 26, 27)
- Section 2(1)(m), Consumer Protection Act, 1986Relied on the reading of the inclusive definition of 'person' as covering a body corporate. (¶ 13)
- Section 2(1)(o), Consumer Protection Act, 1986Held that a bank accepting a deposit and agreeing to pay interest provides a banking service, making the depositor a service recipient to that extent. (¶¶ 20, 28)
- Section 2(1)(g), Consumer Protection Act, 1986Applied the settled view that deficiency in service must be proved by the complainant and is distinct from criminal or tortious acts of the service provider. (¶¶ 28, 29, 30)
Held
- Whether goods or services are taken for a commercial purpose depends on the dominant object of the transaction and the nature of the goods or services, decided on the facts of each case; the identity of the purchaser, individual or body corporate, and the value of the transaction are not conclusive. (¶¶ 15, 18, 23)
- The burden of proving that services were availed for a commercial purpose lies on the opposite party, while the complainant must prove the availing of service for consideration and, if relevant, the self-employment Explanation. (¶ 19)
- A deposit does not become a commercial transaction merely because it earns interest, since money may be deposited for safe-keeping or to comply with law; parking surplus funds with a bank is ordinarily not a commercial purpose, and the NCDRC's contrary reasoning was not approved. A deposit made to leverage credit facilities for business, however, has a direct nexus with profit and may be commercial. (¶¶ 21, 22, 26)
- As the bank set up a pledge of the deposit for an overdraft, which the appellant called fraudulent, whether the service was availed for a commercial purpose could not be decided without first determining the allegations of fraud and forgery. (¶¶ 25, 27)
- Proceedings under the 1986 Act are summary and are not meant to decide complex questions of criminal or tortious liability; since the complaint in substance challenged the bank's adjustment based on an allegedly fraudulent pledge, already reported to the Economic Offences Wing, it was not maintainable and those allegations belong in regular civil or criminal proceedings. (¶¶ 30, 32)
Result
Appeal dismissed; NCDRC's dismissal of the complaint upheld on the ground of non-maintainability, though not entirely for its reasons; dismissal not to bar the appellant from appropriate proceedings before the proper court or forum; no costs.