State Bank of India vs CHANDRA NATH SAH

STATE Bank of India, Almora Branch through its Chief Branch Manager filed this appeal feeling aggrieved by the order dated 2, August, 1995 passed by the District Forum, Almora in Case No. 54 of 1994. By this order the District Forum, Almora allowed the complaint and directed the appellant-opposite party (here the STATE Bank of India, Branch opposite party No. 1), in the case to pay Rs. 1,50,000/- as damages alongwith interest at the rate of 18% per annum and cost of the proceedings amounting to Rs. 2,000/- payable within, one months from the date of the said order.

MAIN grounds taken in the Appeal Memorandum are as under: (1) That the complainant (respondent here) is not the consumer as there has been no privity of contract between the appellant and the complainant nor any consideration has been passed on; (2) That the District Forum has no jurisdiction to adjudicate the proceedings; (3) That the District Forum has not correctly appreciated the evidence on record; and (4) That the relief of Rs. 1,50,000/- awarded was more than the relief of Rs. 96,000/- what was prayed for in the complaint; and lastly

(5) That it was not obligatory on the part of the Bank to intimate the complainant about the receipt of the invoices in question received from M/s Philips India Limited, Ghaziabad and it was for the complainant himself to find out within 15 days on receipt of the direction information from M/s. Philips India Limited and therefore, the appellant cannot be held to have committed any deficiency in service with regard to the returning of the invoices after waiting for 15 days.

The case of the complainant-respondent is that he deals in the sale of Philips, Texla Television and other electronics goods as dealer and distributor in the name and style of Shagun Emporium in Lala Bazar, Almora. He received on 22.6.94 intimation alongwith copies of 3 invoices No. 22578 dated 25.5.94 of Rs. 1686/-, No. 22962 dated 27.5.94 of Rs. 15097.50 and No. 22982 dated 27.5.94 of Rs. 44759.50 through postal Dak from M/s. Philips India Ltd., Ghaziabad on 23.6.94. He, thereupon, approached the State Bank of India, Almora and contacted one Shri R.K. Pant, opposite party number 2 (dealing clerk), and enquired from him about aforesaid invoices (Bilties). The clerk, opposite party No. 2 had arrogantly told him that the invoices in question had already been returned to M/s. Philips India Ltd., Ghaziabad and challenged him to do whatever he could do. Thereafter, the complainant contacted Sri Gurrani, Senior Officer Incharge of the Branch as the Manager Sri Bora was not available on that day. According to the complainant Sri Gurrani on the outset told him that the invoices could not have been returned without intimating the complainant first about them and he directed him to see Sri Bhatnagar who in turn told him the same thing that invoices would not have been returned without intimating the complainant by the dealing Assistant Sri R.K. Pant but the behaviour and dealing of Sri Pant was offensive and uncalled for. He also made a complaint in writing to Sri Gurrani regarding the havey damages caused to him and the responsibility of the Bank. The complainant has further stated that the opposite, party (Bank) maintains the register of the invoices so received and intimation thereof to the dealers concerned and the acknowledgement of the dealers. On receipt of the intimation from the Bank the dealer concerned makes the payment of the amount of the goods alongwith Commission of the Bank and get the invoices (Bilties) retired and take the delivery of the goods. But due to the aforesaid failure on the part of the Bank the complainant had to suffer loss of the business amounting to Rs. 50,000/- on account of apprehension of termination of his dealership by the M/s. Philips India Ltd., loss of Rs. 6,200/- due to return of the invoices in question, penalty equal to 20% of the goods returned, damages to his good will of the business of Rs. 60 lacs, damages of Rs. 40,000/- on account of the mental agony. He, therefore,, prayed for total relief for Rs. 96,000/- besides other reliefs at the discretion of the District Forum. The opposite party No. 1 (appellant), admitted that the invoices in question were returned after waiting for 15 days when the complainant did not turn up to make payment. The opposite party also denied its duty to send intimation to the complainant and the misbehavior by the opposite party No. 2. R.K. Pant dealing Assistant. According to opposite party no loss caused to the complainant.

We have heard Mr. D. P. Dwevedi, Advocate for the appellant and Mr. A.N. Verma and Sri Rakesh Kumar Gupta Counsels for the respondent-complainant and perused the material which is on record.

THE learned Counsel for the appellant has urged before us that in light of the admitted facts that three invoices sent by the M/s. Philips India Ltd., were returned on 22.6.94 without intimating to the complainant (respondent here), and there has been a practice in the Bank to maintain a register of the receipt of the invoices and their intimation to the dealers concerned as per the admission made in paragraph 5 of the written statement copy of which is enclosed with the affidavit of the respondent (Sri Chandra Nath Sah), filed in appeal but asserted that it was not obligatory on the part of the Bank to intimate about the receipt of the invoices invariably but as a matter of goodwill and in the interest of the Bank''s business the Bank used to send intimation to the dealers in some cases and in the present case no intimation has been sent. Besides there was no privity of contract between the complainant and the Bank and thus the appellant Bank can not be held to have committed any deficiency in service and thereby the complain ant is neither a consumer nor his complaint was maintainable and the District Forum has acted beyond it jurisdiction to allow it. THE learned Counsel has further argued that neither the complainant availed or hired any service from the appellant-opposite party nor the appellant-opposite party charged any consideration and therefore there is no consumer dispute between the complainant and the appellant-opposite party with regard to any service. Admittedly, M/s. Philips India Limited sent three invoices to the appellant-Bank for collection of money and to retire them in favour of the complaint but no such occasion had arisen as the complainant did not turn up to collect invoices for making of payment against them and hence there arose no cause of action in connection with any deficiency in service to the complainant to make any complaint under the provisions of the Consumer Protection Act, 1986. In reply to these arguments the learned Counsel for the complainant-respondent has pointed out as set out in paragraph 2 in the affidavit dated 27.3.96 of the complainant (Chandra Nath Sah), filed on 27.3.1996 in support of the application for vacation of the stay order that he used to receive invoices directly from the appellant-Bank Branch, Almora through which he had transacted business after depositing the amount alongwith Commission charges of the Bank, and get the delivery of the goods as per invoices. Annexures 1 and 2 which were filed with the said affidavit support the version of the complainant that there has been the practice in use that the appellant has sent the intimation of the invoices. Moreover, this fact has also been admitted by the appellant in averment made in paragraph 3 of the written statement filed before the District Forum in response to the notice of the complaint about which the District Forum has considered this fact in paragraph 6 of its order referring to the admission made by the appellant in letter dated 12.7.94 sent to the complainant that the Bank was under obligation to intimate the complainant regarding the invoices in dispute for making of the payment and getting them retired. The District Forum has further held that inspite of the direction to the opposite parties to produce the document, the Dakbahi/Register maintained in this regard was not produced before the District Forum and hence the inference was drawn against the opposite parties (appellant), and in result the District Forum concluded that it was the duty cast upon the opposite party (appellant) to intimate the dealer (here the complainant-respondent), about the receipt of the invoices for payment of the amount including the commission of Bank to get them retired for the delivery of the goods. Thus, it is futile on the part of the appellant to say that there was no obligation to intimate the complainant about the invoices in question on its part to and thereby the appellant has failed to discharge its obligation and thus committed the deficiency in rendering of service to the complainant.

NOW in the given and admitted facts as mentioned above we have to see whether the complainant in this case in ''consumer'' under Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 and if so whether the appellant-opposite party had committed deficiency in rendering of ''service'' to the complainant. Consumer as per definition given in Section 2(1)(d)(ii) means a person : "Who hires or avails of ~any service'' for 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."

From the above definition of the consumer the case of the complainant is covered because in this case three invoices (Bilities) were to be received through the appellant-Bank by the complainant and as per the procedure of dealing with the invoices the Bank on it part was under obligation to send the intimation to the complainant who is the proprietor of M/s. Shagun Emporium, Almora and the complainant would thereupon make payment alongwith the commission of the Bank and get the invoices released on the basis of which the delivery of the goods under invoices could be taken. Thus, the complainant was the beneficiary of the M/s. Philips India Ltd., and all the payment of the prices of the invoices in question alongwith the Commission of the appellant-Bank thereon was to be paid by the complainant as per the system of the deferred payment under the authority of the first person M/s. Philips India Ltd. Thus the appellant-Bank was under obligation to render the service of intimation of the receipt of the invoices in question to the complainant who would make payment thereof alongwith the Commission of the Bank. This view finds support from the decision of the State Consumer Disputes Redressal Commission, Madras in the case of Taraben N. Doshi and Others. v. M/s. Madhan & Co. & Another 1994 (3) CPR 295 wherein it was held that whenever someone has hired the services for a deferred consider a tion, he / she is a consumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986. This view as we have noticed above has further been strengthened by another case decided by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad in Lakshminarayana v. Divisional Electrical Engineer & Another II (1991) CPJ 303, wherein it was held that the person who availed the service with the approval of the person who hired the services is a consumer within the meaning of the term as provided under Section 2(1)(d)(ii) of the said Act (Consumer Protection Act, 1986). Similar view was also held by the National Commission in Revision petition M/s. Mohindra Gas Enterprises v. Jagdish Poswal and Others, I (1993) CPJ 90 (NC) in a matter of gas connection in which the Gas Agency (M/s. Mohandra Gas Enterprises), did not issue the Gas connection alongwith the Gas cylinder unless the complainant purchases the stove though in that case the payment of the consideration was not made since the Gas Agency insisted to purchase of the stove which the complainant did not agree but the National Commission considered the complainant to be the consumer being a beneficiary & potential user on the deferred system of the payment of the consideration as would be evident from the following observations : "If no payment is made at the time of registration it does not mean that a person getting registered for a gas connection with the distributor is not hiring any service. Service as defined in Section 2(1)(o) of the Consumer Protection Act, 1986 means'' service'' of any description which is made available to potential users. The consumer who hires a service has been defined in Section 2(1)(d)(ii) of the said Act. According to the definition it is not necessary that consideration could be paid at the time of hiring of service. If the transaction is supported by the consideration which has been paid or promised or partly paid or partly promised or under any deferred system of payment even then it will be a valid consideration for the "hiring of the service".

IN the present case the payment of the value of the invoices in question was Subject to deferred payment on the receipt thereof by the beneficiary who is the complainant being the proprietor of M/s. Shagun Emporium in whose favour M/s. Philips INdia Ltd., had sent the invoices to the Bank (appellant) for collection of the amount and the Commission payable to the Bank for its service which was to be rendered to the complainant. The complainant who is a beneficiary is consumer under Section 2(1)(d)(ii) and was entitled to the service as per the provision of Section 2(1)(o) of the Act from the appellant who failed to discharge its obligation and rendering of the service to the complainant as without intimation to the complainant it returned the invoices to M/s. Philips INdia Ltd., and thereby committed ''deficiency'' in rendering of the service.

DEFICIENCY in service means as given in Section 2(1)(g): "Privy fault, imperfection or shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of ''contract'' or otherwise in relation to any service."

The words ''in pursuance of contract or otherwise'' in the section makes it amply clear that a privity of contract is not required or needed under Section 2(1)(d)(ii) or 2(1)(g) of the Act for a claim to be made under the provision of the Consumer Protection Act, 1986 so long as there is hiring or availing of the service for consideration. According to this legal position the ground of the appellant that there was no privity of contract has no force because the complainant is the beneficiary in this case as already observed by us in forgoing paras.

As regards the question of having no jurisdiction to adjudicate this case by the District Forum, this was neither pressed before the District Forum as discussed in paras 3 its order dated 2.8.95 under appeal, nor it was pressed before us. Even otherwise we are not inclined to accept the plea as there has been constant view of this Commission as well of the National Commission that a matter like the present one are coginizable under the provisions of the Consumer Protection Act, 1986.

THE learned Counsel of the appellant has laid too much stress on the question of award of the compensation of Rs. 1,50,000/- on the ground that the District Forum has erred in exercise of its jurisdiction to award the higher compensation while the complainant as per his complaint has sought for the relief of Rs. 96,000/- as detailed below : 1. Loss of Business Rs. 50,000/- 2. Penalty @ 20% on return of the invoices Rs. 6,200/- 3. Mental agony & harassment Rs. 40,000/- Total Rs. 96,200/- We find from the order under appeal that the District Forum, Almora has taken care of the question of the compensation though did not spell out as to how it came to the conclusion in fixing of the quantum of the compensation of Rs. 1,50,000/- instead of Rs. 96,200/- prayed in the complaint. Our attention has been drawn to the paragraph (4) of the complaint copy of which was filed by the complainant in appeal with his affidavit dated 20.4.96 as Annexure A-1. In paras (4)(1), the complainant states that due to the act of the opposite party (appellant), of returning of three invoices of the total value of Rs. 61,539/- referred to paragraph (3) of the complaint, his dealership could be terminated and in that situation he would suffer a loss of Rs. 50,000/- per annum because he used to do the business of Rs. 12 lacs to Rs. 14 lacs in a year from M/s. Philips India Ltd. In para 4(2) he further alleged a loss of business of Rs. 6,200/- on account of return of the invoices (of Rs. 61539/-) and para (4) 3 the penalty at the rate of 20% of the value of the invoices returned as per the terms & conditions of M/s. Philips India Ltd., and per para 4(4) due to the Act and behaviour of the Bank and its employees he suffered mental agony for which he claims Rs. 40,000/- as damages.

FROM the above reliefs sought by the complainant it appears that the loss of Rs. 50,000/ has been shown which could take place in the event if his dealership could have been terminated by M/s. Philips India Ltd. But there is no such case of the termination of his dealership as no evidence has been filed before the District Forum, Almora or the State Commission. Hence there is no loss of Rs. 50,000/- at present or at the time of the filing of the complainant and as such remote loss which could not take place can not be taken into consideration though there may be apprehension in the mind of the complainant for such loss if his dealership is terminated at a future date. But the letter dated 11.8.94 (Annexure A-20), from M/s. Philips India Ltd., reveals that it has suspended the supply to the complainant till the time these problems are sorted out by the complainant which ultimately result in loss of business by the stoppage of the supply from M/s. Philips India Ltd., and therefore, it makes the appellant liable to make good of the loss. Since no specific details were given but considering the past history of his business for the year 1992-93 and 1993-94 as per balance sheet we are therefore, of the opinion that the compensation of Rs. 10,000/- will be reasonable and just to be paid by the appellant-Bank. However, there appears reasonable demand of Rs. 6,200/- for the loss of business on account of the return of the invoices of the value of Rs. 61593 and we presume that 10% loss of profit is reasonable. Similarly, 20% penalty may be accepted on the value of these invoices as claimed by the complainant which will be Rs. 12,400/- on Rs. 61,593/- again as per the letter dated 29.6.94 from M/s. Philips India Ltd. (Annexure A-19) to the affidavit of Sri Sah. As regards the claim of the compensation of Rs. 40,000/- on account of mental agony there is no quantification given by the complainant nor the District Forum, Almora has given any reason for it. It is, at the outset, clear that no specific scale or quantification can be given for the mental agony and physical harassment but considering the circumstances of the complainants case the reasonable compensation can be assessed to Rs. 10,000 / -.

THE learned Counsel of the complainant-respondent has drawn our attention that the complainant has also prayed for the compensation for the loss and setback to his good-will in the eyes of the business community and the M/s. Philips India Ltd., as would be evident from the letter dated 11.8.94 sent by it to the complainant. This letter is Annexure A-20 by which the supply of the articles had been suspended. THE complainant is entitled to be compensated by the appellant. In our opinion a compensation of Rs. 5,000/- for the loss of the goodwill will meet the end of justice on this count.

THE costs of Rs. 2,000/- awarded by the District Forum, Almora does not require any interference. Thus, in our opinion the complainant is entitled to Rs. 10,000/- on account of loss of business, Rs. 6,200/- on account of the loss of profit on the return of the invoices, Rs. 12,400/- on account of penalty to be paid by the complainant to the M/s. Philips India Ltd., Rs. 10,000/- for mental agony, Rs. 5,000/- damages to his goodwill and Rs. 2,000/- as cost of the proceedings awarded by the District Forum, Almora in order under appeal totalling to Rs. 45,600/- instead of Rs. 1,50,000/- and interest thereon. In result, we dispose of the appeal as observed above and direct the appellant to pay Rs. 45,600/- to the complainant-respondent within a month from the date of this order and if the amount is not paid in time, the complainant shall further be entitled to interest @ 18% per annum from the date of this order to the actual date of payment.

We leave the parties to bear their own costs. Let copy of this order be sent to the parties and District Forum, Almora by post within a week. Appeal disposed of.