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Judgment
Dr. Inder Jit Singh,Presiding Member
The present First Appeal (FA) has been filed by the Appellant against Respondent as detailed above, under section 19 of Consumer Protection Act 1986, against the order dated 09.05.2017 of the State Consumer Disputes Redressal Commission Uttarakhand (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) No. 12 of 2015 inter alia praying for setting aside the order dated 09.05.2017 of the State Commission.
While the Appellant was Complainant, Respondents were Opposite Parties in the said CC No. 13 of 2015 before the State Commission. Notice was issued to the Respondent(s) on 01.12.2017. Parties filed Written Arguments / Synopsis on 05.12.2022 and 19.05.2023 respectively.
Brief facts of the case, as emerged from the FA, Order of the State Commission and other case records are that Complainant is engaged in business of Software and Website Development and Services and same is only source of his livelihood. Complainant submitted an application with Respondent No.1 to open a Corporate Current Account but respondent no.1 instead of opening a Corporate Current Account, opened a Retail Current Account having account no. 182900210024317. For running the business, complainant required Corporate internet Banking, ATM Card and Credit Card from the Respondents. When the complainant applied for Corporate Current Account on 21.05.2012, he was given assurance that all the facilities will be made available but immediately thereafter ATM Debit Card No. 5126520146449058 which was issued to the complainant after having opened the account, it was taken back on 26.06.2012 on the pretext that since Complainant is a partnership firm, facility of ATM card cannot be made available to the complainant. Even, the facilities like Credit Card, Corporate Internet Banking and RTGS were not provided to the Complainant. Being aggrieved of the said act of the Respondents, Complainant filed a CC before the State Commission. The Opposite Parties moved an application dated 21.04.2016 for dismissal of the CC stating therein that complainant is a partnership firm and, therefore, does not fall under the definition of ‘consumer’ and having a current account for commercial purpose. The Complainant filed objections dated 09.05.2016 against the application dated 21.04.2016 moved by the opposite parties stating therein that it is a consumer and denied that partnership firm is doing the work for commercial purpose. The State Commission decided the application dated 21.04.2016 moved by the opposite parties, and held that complainant is not a consumer and dismissed the CC on this ground alone. Hence the Complainant is before this Commission now in the present FA.
Appellant has challenged the Order dated 09.05.2017 of the State Commission mainly on following grounds:
i. The Respondent had not challenged the interim order dated 29.03.2016 declining to take on record the written statement filed by the Respondent Bank before this Commission or Hon’ble Supreme Court and, therefore, the said interim order passed by State Commission attained its finality and Respondent had no legal rights to challenge the maintainability of the CC on the ground which they had earlier raised in the written statement.
ii. The State Commission erroneously, illegally, arbitrarily and with jurisdictional error entertained the application dated 21.04.2016 filed by the respondent raising the same ground which were taken in their written statement and, therefore said application is not maintainable.
iii. After service of summons in the said CC, the counsel for the respondent appeared only on behalf of concerned branch of PNB located at Jwalapur i.e. only the OP No.1 without any legally valid Authority letter on record issued by the Competent Authority of the Punjab National Bank, whereas OP No.2 was not represented before the State Commission through any counsel or person as no vakalatnama or legally valid Authority letter or Resolution passed by the concerned bank had been placed on record.
iv. The Appellant Firm is not engaged in any commercial activity and the services availed by the complainant through its partner Shri Atul Kumar Mehta is exclusively for the purpose of earning livelihood by means of livelihood and complainant falls within the definition of ‘consumer’.
v. The State Commission erroneously observed that CC is highly overvalued. However, respondent Bank had never objected to the claimed compensation of Rs.86,53,620/- and mental agony of Rs.10,00,000/- and the State Commission only at the stage of final hearing of the complaint on merits could have the occasion to determine the actual compensation that is payable.
vi. The Complaint has been filed by Shri Atul Kumar Mehta, partner on behalf of firm as per Partnership Act 1932 and has relied on the case of Vimal Chandra Grover Vs. Bank of India ( AIR 2000 SC 2181).
vii. OP No.1 has deducted the service charge multiple times and, therefore, service user is the consumer.
viii. Every bank is directed by RBI to open current account only in the name of Partnership Firm and no bank can open saving account in the name of Partnership Firm and the current account no. 1829002100024317 has been opened on the name of the partnership firm NG Technology and that purpose of current account is limited for deposit and withdrawal at any time and not for commercial purpose.
ix. The Complainant is a consumer qua the respondent and within the jurisdiction of State Commission since it is undisputed fact that complainant is a partnership firm and partners are son and mother in relation wherein the son Sh. Atul Kumar Mehta is the only active partner and the purpose of firm and availing of services from the respondent bank is only for earning livelihood by means of self employment.
x. The order dated 09.05.2017 is erroneous and illegal as it failed to take note of the fact that Hon’ble Supreme Court vide its judgment dated 19.08.2011 passed in Rajeev Hitendra Pathak and Ors. Vs. Achyut Kashinath Karrekar and Anr ( 2011) 9SCC 541 has held that District Forum and State Commission do not have power to recall their own orders.
Heard both sides. Contentions/pleas of the parties, on various issues raised in the FA, based on their FA/Reply, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
5.1. Appellant – Atul Kumar Mehta who appeared in person, apart from the repeating the points which are stated in para 4, argued that account is operated by a single person Atul Kumar Mehta and second partner had authorised him by a mandate letter dated 27.5.2012 and, therefore, Atul Kumar Mehta is the potential user of the applied services. He further argued that Appellant is consumer and has relied judgment of this Commission in CC No. 2121 of 2016 passed on 23.02.2007. Reliance is also placed on Lakshmi Engineering Works Vs. P.S.G. Industrial Estate ( 1995) 3 SCC 583. Appellant further argued that he has already submitted the written arguments dated 16.08.2018 along with supporting case laws on 09.08.2019 in support of maintainability of CC which was never objected by the OPs. Even the written objections were never objected by the OP. The State Commission did not disclose the fact of rejection of written statement of OPs in the order dated 09.05.2017 and allowed the application dated 21.04.2016 of the OP in contravention of the judgment of Hon’ble Supreme Court in Hilli Multipurpose ( supra ).
5.2 Counsel for the Respondent argued appeal has been filed by a Partnership firm which is not a legal person. The appeal has been signed by one of the partner i.e. Atul Kumar Mehta whereas it should have been signed by both the partners of M/s N.G.Technology. Counsel argued that provision of Section 2 ( 1) ( d) (ii) of Consumer Protection Act, 1986 bars a partnership firm from filing the complaint as it is not covered under the definition of ‘consumer’ and has relied on following judgments of this Commission
(a) Edit II Productions Vs. Standard Chartered Bank Ltd. decided on 10.04.2015.
(b) Union Bank of India Vs. Ramayan Yadav and Anr. II ( 2015) CPJ 838 (NC )
(c ) Satya Sai Agencies Vs. Punjab National Bank and Ors. ( 2016) 1 CPR 612 ( NC)
d. Nav Bharat Press ( Raipur ) through its Partner Sh. Sameer Vs. Sahara Prime City Ltd. through its Authorised Officer & Ors. IV ( 2013) CPJ 227 NC.
e. Punjab National Bank and Anr. Vs. Manish Aggarwal, First Appeal No. 163 of 2013 decided on 17.03.2016.
5.3. It is further argued by the counsel for the Respondent that aim of business carried out by the Appellant was to generate profit which ousts the Appellant from the definition of ‘consumer’ and, therefore, the present Appeal is not maintainable. Further, in the Partnership Deed dated 02.04.2012 it is nowhere stated that firm has been created by the partners for the purpose of earning livelihood by means of self-employment. The ATM / Debit Card cannot be issued in a partnership firm until and unless a mandate is given by all the parties. The compensation claimed by the Appellant is highly overvalued and excessive and no detail or bifurcation of compensation is given. No copy of previous ITRs are filed to justify the loss or compensation. Counsel for the Respondent further argued that appellant has been provided all the relevant information about its account from time to time and no fake account was opened by the Respondent.
In this case, the State Commission has dismissed the complaint on the ground that the partnership firm is not a consumer. The Appellant has produced certain judgments in support of his contention that Partnership firm is to be considered a consumer under the Consumer Protection Act and has argued that as per general terms and conditions issued by the bank customer has been defined which include Partnership firm. The Respondent on the other hand initially contended that the general terms and conditions being relied upon by the Appellant are applicable only for overseas operations of the banks and not in the domestic sector, however, he had not placed on record similar corresponding terms and conditions for customers within the country. He contended that partnership firm is not juristic person and not a consumer and they have been set up for business purposes and not for earning of livelihood.
One of the ground for challenging the order of the State Commission taken by the Appellant is that vide order dated 29.03.2016, written statement filed by the OP, being beyond 45 days statutory timeline, was not accepted on record. Order dated 29.03.2016 of the State Commission is reproduced below:
“29.03.16
Sh.Sudhanshu Dwivedi, Advocate has filed Vakalatnama on behalf of the complainant. The same be placed on record.
The written statement has been filed by the opposite parties on 22.03.2016. Vide order dated 01.02.2016, 30 days time was granted to the opposite parties for filing the written statement. Even then, the written statement was not filed by the opposite parties within the said period of 30 days’ and the written statement was filed on 22.03.16. Therefore, in view of the judgment of the Hon’ble Apex Court in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. 2015 ( 4) CCC 909 9SC), the written statement filed by the opposite parties cannot be accepted on record since 45 days’ time for filing the written statement has already lapsed. The objection filed by the learned counsel for the complainant for not taking the written statement on record, stand disposed of accordingly.
Put up on 21.04.16 for complainant’s evidence.”
It is contended by the Appellant that this order having not being challenged, has attained finality. Hence, the Respondent had no legal right to challenge the maintainability of the CC on the ground which they had earlier raised in the written statement. We see merit in this argument of the Appellant and are of the view that what the OP could not do through the time barred written statement, which was not taken on record, cannot be allowed to do through a subsequent application dated 21.04.2016, thereby defeating the order of State Commission rejecting his written submissions. Situations where written submissions of OP have not been taken on record, the only liberty generally given to the OP is to argue the case orally and / or file written arguments based on available records.
Relying on the judgment of Hon’ble Supreme Court in Tanna & Modi Vs. C.I.T.Mumbai Xvv and Others ( 2007) 7 SCC 434, the Respondent has argued that firm is the conglomeration of its partners, and is not a juristic person. Further, relying on the judgment of Hon’ble Supreme Court in N. Khadervali Saheb (Dead) by Lrs. Vs N. Gudu Sahib (Dead) and Ors. ( 2003) 2 SCC 349, Respondent argued that a partnership firm is not an independent legal entity, the partners are the real owners of the assets of the partnership firm. Relying on V.Subramaniam Vs. Rajesh Raghuvandra Rao (2009) 5 SCC 608, the Respondent argued that a partnership firm, unlike a Company registered under the Indian Companies Act, is not a distinct legal entity, and is only a compendium of its partners. Even the Registration of a Firm does not mean that it becomes a distinct legal entity like a Company. Respondent further argued that this Commission in Sathya Sai Agencies Vs. Punjab National Bank & Ors., Revision Petition No. 1085 of 2015 decided on 20.01.2016 observed that the Partnership firm being an unnatural person, by no stretch of imagination can avail of the benefit of the Explanation.
Appellant on the other hand, has argued that Section 18 and Section 19 of the Partnership Act 1932 covers the definition of ‘person’ of Consumer Protection Act, 1986, hence the Complainant is a Consumer. Under Section 18, every partner is the agent of firm, he can act on the behalf of firm. Under Section 19, any action done by partners on behalf of firm binds the firm for each action of partner. Hence, the Complaint is maintainable under Consumer Protection Act. Section 2 ( m) (i) defines ‘person’ which includes a firm, whether registered or not. Relying on the judgment of Hon’ble Supreme Court in Vimal Chandra Grover Vs. Bank of India (AIR 2000 SC 2181), the Appellant argued that the banking is business transaction between Bank and customer, such customers are consumer within the meaning of Section 2 (1) (d) of Act and the same has been admitted by OP No.1 under their 1.1. Definitions by their ‘General terms and conditions for our customers’ title that ‘You’ or ‘Your’ or ‘Customer’ means the individual(s), sole trader, partnership, association, company or other body whether corporate or incorporated and any partner or member of any association or other incorporated body which holds the account(s). Hence, Complainant is a Consumer. Appellant further states that every bank is directed by RBI to open current account only in the name of Partnership firm. No bank can open saving account in the name of Partnership firm. Hence, a current account had been opened in the name of Partnership firm and the purpose of current account is limited for deposit and withdrawal at any time and not for commercial purpose. As per registration certificate, the firm has been registered for livelihood and self-employment purposes. The Appellant relied upon judgment of this Commission in Dr. Hemant and Anr. Vs. M/s Zenal Construction Pvt. Ltd. & Anr., CC no. 2121 of 2016 decided on 23.02.2017 and judgment of Hon’ble Supreme Court in Lakshmi Engineering Works Vs. P.S.G.Industrial Institute ( 1995) 3 SCC 583. Relying on judgment of Hon’ble Supreme Court in Rajeev Hitendra Pathak and Ors. Vs. Achyut Kashinath Karrekar and Anr. ( 2011) 9 SCC 541, the Appellant argued that District Forum and State Commission do not have power to set aside or recall their own orders. But the State Commission has recalled this order and allowed OP application dated 21.04.2016 after disallowing the written statement in view of Hon’ble Supreme Court in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage ( P) Ltd. (2020) 5 SCC 757.
A larger Bench of this Commission while deciding a reference on 16.03.2020 in Springdale Care Consultants Pvt. Ltd. Vs. Pioneer Urban Land and Infrastructure Ltd. ( in CC No. 349 of 2017) held as under :
“1. It is the purpose for which the residential plot / house is booked / purchased, which is material for determining whether the purchaser is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. The legal status of the purchaser, be it an individual, a partnership, an Association of Persons, a Trust, a Society or a Company is immaterial for such determination.
If a house / residential plot is booked / purchased by a company for the residential use of its Directors / employees the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking / purchase is concerned.
If a house / residential plot is bought / booked by a company as a part of its business activities and such purchase / booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act as far as such a purchase / booking is concerned.”
In Karnataka Power Transmission Corpn. And Anr. Vs. Ashok Iron Works Pvt. Ltd. Civil Appeal No. 1879 of 2003, Hon’ble Supreme Court while dealing with the question whether a Private Ltd. Company is a ‘person’ under Consumer Protection Act, observed as follows:
“15. Section 2(1)(m) which enumerates four categories namely,
(i) a firm whether registered or not; (ii) a Hindu undivided family; (iii) a co-operative society; and (iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not while defining `person' cannot be held to be restrictive and confined to these four categories as it is not said in terms that `person' shall mean one or other of the things which are enumerated, but that it shall `include' them.
The General Clauses Act, 1897 in Section 3(42) defines `person':
"Person shall include any company or association or body of individuals whether incorporated or not."
Section 3 of the Act, 1986 upon which reliance is placed by learned counsel for KPTC provides that the provisions of the Act are in addition to and not in derogation of any other law for the time being in force. This provision instead of helping the contention of KPTC would rather suggest that the access to the remedy provided to the Act of 1986 is an addition to the provisions of any other law for the time being in force. It does not in any way give any clue to restrict the definition of the `person'.
Section 2(1)(m), is beyond all questions, an interpretation clause, and must have been intended by the Legislature to be taken into account in construing the expression `person' as it occurs in Section 2(1)(d). While defining `person' in Section 2(1)(m), the Legislature never intended to exclude a juristic person like company. As a matter of fact, the four categories by way of enumeration mentioned therein is indicative, categories (i), (ii) & (iv) being unincorporate and category (iii) corporate, of its intention to include body corporate as well as body un-incorporate. The definition of `person' in Section 2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly.
xxx xxx xxx
In what we have discussed above, the complaint made by the company before the District Forum cannot be said to be not maintainable and we hold, as we must, that complaint is maintainable.”
In view of the foregoing, we hold that Partnership firm is a ‘person’ under Section 2 (1) ( m) of Consumer Protection Act, hence can be treated as Consumer under Section 2 (1)(d) of the Act, subject to fulfilment of the condition under this Section.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the FA is allowed, order dated 09.05.2017 of the State Commission is set aside, matter is remanded back to the State Commission for fresh disposal on merits. Parties to appear before the State Commission on 04.10.2023. Parties to bear their respective costs.
The pending IAs in the case, if any, also stand disposed off.