Sandeep Industries vs State Bank of India

IN this complaint, the complainant has alleged deficiency in the service of State Bank of INdia, New Delhi.

SHORTLY stated, the facts are that Sandeep Industries are manufacturing plastic parts at Nagpur having its main Office at Bombay. The complainant Sandeep Industries had business dealings with M/s. S .N. Home Appliances Pvt. Ltd. and Bharat Electrical Industries at New Delhi since the year 1986. The complainant further alleged that during the course of the business, the complainant used to forward usance and hundies according to their terms and conditions of business. It is further alleged that the complainant''s bankers were State Bank of Indore at Bombay who had hired the services of opposite party, the State Bank of India, New Delhi, the opposite party. It has been alleged that the complainant''s banker had informed the opposite party that documents are to be accepted by the S .N. Home Appliances Pvt. Ltd. and Bharat Electrical complainant''s account with State Bank of Indore after 60 days from the date of hundi. According to the complainant, the aforesaid practice was being followed since 1986 till March, 1988 and that the departure was made by the opposite party for the first time in 1988. It is further alleged that the Office of the State Bank of India is situated in the house of Managing Director of S.N. Home Appliances and Partner of Bharat Electrical Industry. The complainant further alleged that the opposite party did not collect the amount of Hundies for Rs. 4,72,575.16 from S.N. Home Appliances Pvt. Ltd. and Rs. 3,15,070.29 from Bharat Electrical Industry, respectively. It is therefore, alleged that the opposite party was negligent in its service to be rendered to the complainant through their Agent, State Bank of Indore as a result of which the complainant is put to a financial loss of the aforesaid amount of Rs. 7,87,645.45. The complainant has, therefore, claimed the aforesaid amount as compensation together with interest. A notice was sent to the opposite party with a direction to file the written version. The opposite party, the State Bank of India filed a preliminary objection raising the questions of jurisdiction of this Commission and also denied the claim of the complainant. Both the parties filed their respective affidavits and the documents on record.

We have heard Mrs. S.D. Nanavati, Mr. R.D. Dhanuka, with Mrs. Anita Dhanuka, Advocates for the complainant and Mr. M.D. Siodia with Ms. Anjali Seth instructed by Mr. R. Dayal for Bhasin and Company.

MRS. Nanavati submitted that the complaint is precisely regarding the deficiency in the service of the opposite party hired by complainant''s Agent. State Bank of Indore for complainant. It is further contended that the practice of sending hundies with documents to the opposite party was being followed since 1986 and the opposite party used to remit the payments of the hundies to the complainant''s account with State Bank of Indore at Bombay. MRS. Nanavati submitted that for the first time in March, 1988 this practice was not followed without assigning any reasons by the opposite party which constitutes deficiency in the service of the opposite party. According to MRS. Nanavati, the complainant had to part with the goods sent by complainant without obtaining the consideration of Rs. 7,87,645.45 as a result of deficiency in the service of the opposite party. In order to support her arguments, MRS. Nanavati drew our attention to a letter dated 12.10.1988 filed at Exh. ''F'' addressed by complainant to the Regional Manager of State Bank of India, New Delhi. In that letter the terms and conditions for the supply of goods to M/s. Bharat Electrical Industries as well as M/s. S.N. Home Appliances Pvt. Ltd. and the manner of payment are elaborately stated. Three conditions in para 3 of that letter are relevant. They are reproduced below : - (a) Delivery of all documents on acceptance of hundi; (b) Collection of payment on due date, 60 days from sight; (c) Remittance back to State Bank of Indore, Bombay. It is, therefore, argued on behalf of the complainant that the opposite party allowed the goods to be received by the M/s. Bharat Electrical Industries and M/s. S.N. Home Appliances without acceptance of hundies and remitting back the amount to the complainant''s account in State Bank of Indore at Bombay. It is, therefore, submitted that non-compliance of the aforesaid three conditions which were agreed by the opposite party in relation to the transactions in question is an act of negligence on the part of the opposite party. The complainant submitted that due to the aforesaid act of negligence on the part of the opposite party, the complainant has been put to a loss of Rs. 7,87,645.45/-. According to Mrs. Nanavati since the complainants are put to financial loss as aforesaid due to the negligent act of opposite party, the loss caused to the complainant is required to be compensated. It is further submitted that the opposite party is a tenant in the premise of Managing Director of S.N. Home Appliances and the partner of Bharat Electrical Industries, and, therefore, the opposite party acted in collusion and put the complainant in huge losses. Mrs. Nanavati further argued that Exh. A which is a letter addressed to the State Bank of Indore, Bombay dated 11.3.1988 very clearly gives the description of the hundies to the party through their Bankers, State Bank of India, New Delhi for acceptance and collection of payment on due date and simultaneously discount the hundi and credit the proceeds to cash credit account of the complainant. Exh. ''B'', shows the list of hundies returned, unaccepted and unpaid by S.N. Home Appliances. Similarly, Exh. C is the list of hundies returned unaccepted by Bharat Electrical Industries. The complainant has also placed on record the copies of the invoices, letters and telegrams. According to Mrs. Nanavati a perusal of all these documents clearly indicate the stipulation as regards the transaction in question and, therefore, non-compliance of those conditions by the opposite party amounts to deficiency in the service of the opposite party. It is further submitted that the service of the opposite party was hired by the complainant through their agent State Bank of Indore for collection of hundies and making the remittance in their account with State Bank of Indore. Mrs. Nanavati, therefore, submitted that the complainant is entitled to the claim of compensation which is set out separately in Exh. ''G'' Rs. 2,50,000/-.

MR. M.D. Siodia opposed the claim of complainant on two technical grounds. The first contention raised by MR. Siodia is that the complainant is not a consumer within the meaning of Section 2(d)(ii) of the Consumer Protection Act, 1986 since the complainant had no privacy of contract in hiring the services of opposite party. According to MR. Siodia, the contract if any was with State Bank of Indore and not with complainant directly. The undisputed facts of this complaint are that the complainant had hired the services of State Bank of Indore for collection of amount of hundies. The amount of hundies was ultimately to be credited in the account of the complainant in State Bank of Indore at Bombay after receiving the payments from the opposite party. Ultimately, the beneficiary of the collection of amount was the complainant. The definition of "consumer" appearing in Section 2(d)(ii) provides that "a consumer means any person who hires 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 the services for consideration ..." The aforesaid definition clearly clothes a beneficiary of any services to be a consumer. In the instant case, the complainant is the beneficiary of the services of the opposite party hired by State Bank of Indore for accepting the hundies. In this view of the matter we find that the complainant is the consumer and, therefore, entitled to approach this Commission. It was further tried to be argued that the transaction in question was and, therefore, the complaint was not maintainable. We are not impressed by this submission inasmuch as the exception of "commercial purpose" contained under Section 2(d)(i) applies to goods only and not to services. The instant case is about the deficiency in the service of the opposite party and not in relation to any goods. In view of this legal situation, the objection about the jurisdiction raised by MR. Siodia has to be rejected. The next contention raised by Mr. Siodia is that this Commission has no territorial jurisdiction to decide this complaint as the cause of action arose at Delhi. We do not agree with this contention since the partly the cause "of action arose at Bombay. Moreover, we find that the opposite party, the State Bank of India carries on the business at Bombay also and, therefore, under Section 11 of the Consumer Protection Act, this Commission has jurisdiction to decide this complaint as the cause of action partly arose within the territorial jurisdiction of this Commission. Mr. Siodia raised the main objection regarding the maintainability of the complaint on the ground that the complainant had already filed a suk in Delhi High Court bearing No. 2355/91 claiming the recovery of Rs. 9,78,434.53 from M/s. S.N. Home Appliances, Usha International Ltd. and another and that suit is pending. It is, therefore, argued that this Complaint is not maintainable. We have perused the plaint of the aforesaid Civil Suit. The suit was filed in July, 1991, subsequent to the filing of this complaint. This complaint was presented before this Commission on 22.4.1991. The claim in the Civil Suit is for the recovery of the amount which includes the amount of hundies which are the subject matter of this complaint. In our view, although the amount of the hundies described in this complaint are the subject matter of that suit, the opposite party is not the defendant in that suit and there are no allegations made by the complainant against the State Bank of India on account of its negligence in rendering the service. The present complaint made by the complainant is regarding the negligence of the opposite party, the State Bank of India for rendering the deficiency service and the compensation for the loss caused to the complainant due to deficiency in the service. Such a claim is not the subject-matter of the suit filed in Delhi High Court. Therefore, the objection of regarding maintainability of this complaint cannot survive for consideration. Section 3 of the Consumer Protection Act clearly provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other Law for the time being in force. In view of this provision, the claim of the complainant claiming compensation regarding the deficiency in the service of the opposite party survives before this Commission for consideration despite the tendency of Civil Suit mentioned above. The Consumer Protection Act provides the forum to the consumer who has any grievance about the deficiency in the service. The contention of Mr. Siodia, therefore, has to be rejected.

LASTLY, Mr. Siodia argued that the State Bank of Indore ought to have been made the necessary party and since State Bank of Indore has not been added as an opposite party the complaint suffers for want of necessary party. In our view, the State Bank of Indore is not a necessary party in this complaint since no deficiency is alleged by the complainant in the service of the State Bank of Indore.

CONSIDERING the allegations and the facts proved and the circumstances of this case, we find that the complainant has proved the allegations made in this complaint. We have, therefore, to find out the loss suffered by the complainant due to the negligence and deficiency in the service of the opposite party. The complainant has claimed total Rs. 2,50,000/- as the amount of compensation. The complainant has claimed Rs. 75,000/- as traveling expenses and Rs. 50,000/- on account of telephone expenses and Rs. 80,000/- on account of the salary of staff engaged for recovery of the dues. The complainant has not placed on record the details in support of the amount shown in Exh. G. However, it is found that the complainant must have incurred the expenses on all the three counts mentioned in Exh. G and, therefore, it will meet the ends of justice if the complainant is granted Rs. 5000/- (Rs. Five thousand only) towards the amount of compensation on all three counts. Since the suit is pending in Delhi High Court as regards the amount of Hundies we decline to pass any order on the count. Hence, we pass the following order : ORDER The complaint is allowed. Complaint allowed.