Mr. Justice J.M. Malik, Presiding Member:
1. The main question which falls for consideration is, œWhether this complaint is maintainable, before this Commission??. M/s. Heights Trade (P) Ltd., the complainant in this case, in May-June, 2013, obtained orders from abroad for export of rice IR 36 quality, for a total consideration of USD 10 Million, (INR 55 crores). Copy of the contract is placed on record, as Annexure-1. The complainant booked forward contracts with UCO Bank, OP1, to secure exchange rate of amount, equivalent to export orders at the time of signing export contracts at the hedging rate as available and applicable on that particular day, which varies from USD 1, equivalent of INR 55.07 to Rs. 61.76. The complainant had ensured that whatever was the exchange rate applicable on the date of establishing of foreign contract, would be the rate ensured by the Bank, on the date of receiving the remittance of price of exported goods. It is averred that to explain the norms regarding such forward contracts for exchange value, it may be considered as an example that if any exporter is expecting to receive USD 2,00,000 during the month of August, 2013, then he enters into a contract with the Bank to sell to the Bank, the said amount of USD 2,00,000, at an agreed exchange rate, on the agreed future scheduled date of receiving the price of exported goods whole or in part. The remittance could come at any time during the forward contract period, i.e., up to the specified date and credit would be given at the agreed forward contract rate.
2. The forward contract could be terminated freely at any time, in advance of the expiry of the contract, subject only to the condition that where the contract is reduced in writing, providing for payment of difference, either way,viz., if the exchange value has gone up, then the bank will debit the difference between the assured rate and the current value on the date of cancellation, and in case, the rupee gains against the dollar, then, even in the event of pre-cancellation, the exporter will get credit of the difference.
3. However, no contract document was ever signed between the complainant and the OP. There was simply an e-mail from the Banks side which also does not, either recite or even refer to general terms and conditions. In the absence of any contract, in writing, it is for the OP Bank to justify under what general principles of law, it is entitled to charge from the complainant, the difference in the rate of USD, as agreed at the time of forward contract and as prevailing on the scheduled date of receipt of price from abroad. The forward contracts were booked not only upon complainants request but to increase the revenue generation of the Gurgaon Branch of OP Bank. On coming to know of complainants huge turn-over from exports, the Gurgaon Branch, offered hedging facility in relation to the anticipated receivables from the export business, even though complainant was an absolutely new company and new business which was less than one year old, with no track record of three years, as required by RBI. Copies of e-mails have been placed on record as Annexure 2.
4. It is explained that Banks, like the OP, did not have any back to back arrangements with foreign institution regarding individual hedging contracts, such as entered with the complainant. The Banks carry on day-to-day assessment of their foreign exchange holdings due to remittances to be made and to be received. In other words, the treasury departments of the Bank carry out this commercial activity in such a manner that the Bank should earn profit by way of fees, bank charges and difference in currency conversion rates.
5. On 9.7.2013, the foreign buyer cancelled all the orders on account of fluctuation of currency, problem of heavy monsoon, etc. True copy of e-mail dated 9.7.2013 has been placed on record as Annexure 3. The State Government of Chhattisgarh banned the export of rice. All the contracted rice of the complainant was to be procured from Chhattisgarh. The ban resulted in cancellation of above mentioned export contracts. The change in Government policy amounts to force majeure clause which operates to relieve the complainant of the forward contract with UCO Bank regarding the receivables in USD, since the change in government policy had the effect of rendering the receivables to be, no longer receivable at all. Simultaneously, with the above developments, the complainants contractual arrangements with the foreign party was experiencing difficulty due to high volatility in the currency market, uncertainty in the price of the rice because of heavy rainfall and accumulated water at fields and because of logistic problems at that point of time making it difficult to export obligations, resulting in cancellation of contract by the foreign buyers.
6. The complainant has requested the OP Bank to cancel the forward contractsvide communication dated 25.7.2013. The prevailing exchange rate on 25.7.2013 was USD 1=INR 58.80 ps. As per prescribed practice, the complainant submitted the cancellation letter at the local branch which forwarded the same to the UCO Bank Headquarters, at Parliament Street, New Delhi. The Bank was asked to cancel all the 15 forward contracts due to cancellation of the foreign buyer. Till 8.8.2013, it cancelled only one of the above said contracts at the agreed rate of Rs. 58.80ps, on 26.8.2013. They did not cancel 14 forward contracts. In the meantime, two Members of the family of the complainant expired and an amount of Rs. 38,98,207 was debited despite clear request for cancellation. A complaint for deficiency was made to the DGM of UCO Bank on 20.8.2013, which went unresponded. A true copy of the complaint of deficiency has been placed on record as Annexure 7. Reminder dated 20.8.2013 was also sent. On the contrary, the OP Bank called upon the complainant to deposit further amount of Rs. 32,28,162.75 in relation to other 10 contracts. Copy of the Banks letter dated 21.8.2013 has been placed on record as Annexure 9.
7. In the meantime, the complainant preferred a Writ Petition before the Honble High Court of Delhi on 22.8.2013. The Honble High Court on 17.9.2013, passed the following order:
œAfter some arguments, Mr. Shameet Mukherjee, learned Counsel for petitioner wishes to withdraw the present petition with liberty to approach the Reserve Bank of India (RBI) for redressal of his grievances.?
œConsequently, present writ petition is dismissed as withdrawn with liberty to petitioner to approach the RBI for redressal of its grievances. All rights and contentions of all the parties are left open. Petitioner is also granted liberty to approach this Court in the event it is aggrieved by the decision of the RBI.?
8. A meeting was convened by UCO Bank higher officials and requested the complainant to withdraw the complaint dated 4.9.2013 and gave the following assurances:
œ(a) UCO Bank will convert into term loan for the total wrongly debited amounts against all cancellations, with interest free 6 months gap;
(b) In the meantime, the value of the Dollar will come down and Heights Trade Pvt. Ltd., will be helped to recover its losses by being providing with ongoing forward contracts facility;
(c) Emotional blackmail was also done that due to negligence, a number of UCO Bank staff may lose their jobs.?
The complainant withdrew the complaint on 12.9.2013. It is alleged that the UCO Bank waddled out of their commitments and assurances and it is alleged that it appeared that they are trying to gain time.
9. The negotiations between the parties did not ring the bell. Under these circumstances, the present complaint was filed before this Commission, on 8.11.2013, wherein the following prayers were made:
(a) Hold the Respondent Bank liable for deficiency of banking services as detailed herein-above in this complaint and direct the Respondent Bank to pay to the complainant company, compensation to the tune of Rs. 2,89,55,290.16;
(b) In the event of any further debits/overdrafts being raised by the Respondent Bank in relation to same cause of action, to hold the same to be also and equally vitiated, bad in law and of no effect and to amount to deficiency of banking services on the part of Respondent Bank; and
(c) Grant such other or further order(s) as this Honble Commission may deem fit and proper in the facts and circumstances of the present matter.?
10. Learned Counsel for the complainant has invited my attention towards the following authorities. In M/s. Harsolia Motors v. National Insurance Co. Ltd., I (2005) CPJ 27 (NC)=First Appeal Nos. 159, 160 and 161 of 2004, decided on 3.12.2004, this Commission has held, as under:
œ13. Further, hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose. The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured.
23. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words for any commercial purpose, it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
24. In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemni-fication and actual loss. It is not intended to generate profit.?
11. In Standard Chartered Bank Ltd. v. Dr. B.N. Raman, III (2006) CPJ 1 (SC)=V (2006) SLT 400, it was held, as under:
œBanking is a commercial function. Banking means, acceptance, for the purposes of lending or investment of deposit of money from the public, repayable on demand or otherwise. [See Section 5(b) of Banking Regulation Act, 1949]. The intention of the 1986 Act is to protect consumers of such services rendered by the banks. Banks provide or render service/facility to its customers or even non-customers. They render facilities/services such as remittances, accepting deposits, providing for lockers, facility for discounting of cheques, collection of cheques, collection of cheques, issue of bank drafts, etc. In Vimal Chandra Grover v. Bank of India, AIR 2000 SC 2181, this Court has held that banking is business transaction between bank and customers. Such customers are consumers within the meaning of Section 2(1)(d)(ii) of the Act.?
12. In Victory Electricals Ltd. v. IDBI Bank Ltd. and Ors., I (2012) CPJ 55 (NC), in Para 6 of the judgment, it was held, as under:
œHaving considered the matter in its entirety and going by the nature of the transactions which the complainant had with the opposite party-Bank, there cannot be any escape from the conclusion that complainant had availed the services of the opposite party-Bank for purely commercial purpose. We are, therefore, of the view that complainant is not a consumer, within the meaning of Section 2(1)(d) of the Act, and, is not entitled to invoke the jurisdiction of this Commission for the redressal of its grievance. That apart, we may notice that gamut of controversy raised in the present case cannot be decided by a Consumer Forum established under the Act, in its summary jurisdiction.?
However, the aforesaid judgment goes against the complainant, in this case.
13. In support of her case, Counsel for the complainant also cited the judgment reported in Kishore Lal v. Chairman, Employees State Insurance Corporation, I (2008) CPJ 13 (SC)=2007 (4) SCC 579.
14. In Trans Mediterranean Airways v. Universal Exports and Anr., IV (2011) CPJ 13 (SC)=VII (2011) SLT 339=JT 2011 (10) SC 624, it was held as under:
œ7. The definition of œconsumer? in the CP Act, is apparently wide enough and encompasses within its fold, not only the goods but also the services, bought or hired, for consideration. Such consideration may be paid or promised or partly paid or partly promised, under any system of deferred payment and includes any beneficiary of such person other than the person who hires the service for consideration. The Act being a beneficial legis-lation, aims to protect the interests of a consumer as understood in the business parlance. The important characteristics of goods and services under the Act are that they are supplied at a price to cover the costs and generate profit or income for the seller of goods or provider of services. The comprehensive definition aims at covering every man who pays money as the price or cost of goods and services. However, by virtue of the definition, the person who obtains goods for resale or for any commercial purpose is excluded, but the services hired for consi-deration even for commercial purposes are not excluded. The term œservice? unambiguously indicates in the definition that the definition is not restrictive and includes within its ambit such services as well which are specified therein. However, a service hired or availed, which does not cost anything or can be said free of charge, or under a contract of personal service, is not included within the meaning of œservice? for the purposes of the CP Act.?
15. It must be borne in mind that instead of touching the heart of the problem, the learned Counsel for the complainant, just skirted it. It must be borne in mind that the definition œconsumer?, has been amended, from time-to-time. The main question is, when the cause of action was arisen. The definition œconsumer?, was amended by Act 50 of 1993, w.e.f. 18.6.1993. Again, it was amended in the year 2003 by Act 62 of 2002, w.e.f. 15.3.2003. Earlier expression was inserted by Act 50 of 1993. It was further substituted w.e.f. 15.3.2003. The complaint was filed on 8.11.2013. On that day, as today, the word œconsumer?, reads as follows:
(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) œhires 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 mentioned person but does not include a person who avails of such services for any commercial purpose.?
[Explanation”For the purposes of this clause, œcommercial purpose? does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment].
16. Most of the authorities referred by the Counsel for the complainant are not germane to the present controversy. The latest authorities made the distinction between the œconsumer?, under the Old Act and the œconsumer?, under the New Act. The Honble Apex Court in the celebrated authority, in Laxmi Engineering Works v. PSG Industrial Institute, II (1995) CPJ 1 (SC)=1995 (3) SCC 583, has held, as under:
œ11. Now coming back to the definition of the expression consumer in Section 2(d), a consumer means in so far as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the considera-tion is paid or promised, or partly paid and partly promised, or whether the payment of consi-deration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration, (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression œresale? is clear enough. Contro-versy has, however, arisen with respect to meaning of the expression œcommercial purpose?. It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. œCommercial? denotes œpertaining to commerce? (Chambers Twentieth Century Dictionary); it means œconnected with, or engaged in commerce; mercantile; having profit as the main aim? (Collins English Dictionary) whereas the word commerce means œfinancial transactions especially buying and selling of merchandise, on a large scale? (Concise Oxford Dictionary). The National Commis-sion appears to have been taking a consistent view that where a person purchases goods œwith a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit? he will not be a consumer, within the meaning of Section 2(1)(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion”the expression œlarge scale? is not a very precise expression”Parliament stepped in and added the expla-nation to Section 2(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression œcommercial purpose?”a case of exception to an exception.?
17. Reliance was also placed on Morgan Stanley Mutual Fund v. Kartick Das, II (1994) CPJ 7 (SC)=(1994) 4 SCC 383.
18. It must be borne in mind that the complainant has no legs to stand. It has never averred in the complaint that it is a consumer and how. That column is conspicuously missing. In New India Assurance Co. Ltd. v. G.N. Sainani, III (1997) CPJ 1 (SC)=(1997) 6 SCC 383, it has been held, as under:
œThe Act is not a general law for all remedies. It is for the protection of the consumer as defined in the Act. To succeed in the present case, the complainant must show that he is a consumer and that there has been deficiency in service by the insurer. This, he has been unable to show. He, therefore, could not maintain complaint under the Act.?
19. The present case is covered under Foreign Exchange Management Act. Counsel for the opposite party has cited the following authorities. Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement and Anr., III (2010) SLT 369=2010 (4) SCC 772. In respect of FEMA, UT Chandigarh Administration and Anr. v. Amarjeet Singh and Ors., II (2009) CPJ 1 (SC)=II (2009) SLT 736=(2009) 4 SCC 660, it was held that public auction of existing land sites, purchaser/lessee were held to be not a consumer and owner is not a Trader or service provider. In Union Bank of India v. Seppo Rally Oy and Anr., III (1999) CPJ 10 (SC)=VII (1999) SLT 633=(1998) 8 SCC 357, it was observed, as under:
œWe would, however, like to point out that when it is a question of remittances of foreign exchange and permission of RBI is required and there is a query raised by RBI, it would be more appropriate to discuss the matter with the officials concerned of RBI than to have a prolonged correspondence?. [See para 9 of the judgment].
20. Opposite party has also cited Bank of India Finance Ltd. v. Custodian and Ors., III (1997) CLT 81 (SC)=(1997) 10 SCC 488 and para 2 of Topline Shoes Ltd. and Anr. v. Corporation Bank and Anr., II (2002) CPJ 7 (SC)=IV (2002) SLT 235=(2002) 10 SCC 358 .
21. I was also able to locate a few authorities. In Monstera Estate Pvt. Ltd. v. Ardee Infrastructure Pvt. Ltd., IV (2010) CPJ 299 (NC), this Commission has held that:
œHousing”Purchase of space for commercial purpose”There was delay in possession”Complainant was a private limited company”Complainant was nominated for allotment of showroom”Possession not given”Sale deed was not executed”Deficiency in service was alleged”It was held that even if private limited company was treated as person, purchase of space could not be for earning its livelihood. Purchase of space was for commercial purpose.?
22. In Consumer Complaint No. 112 of 2012, M/s. Purusharath Builders Pvt. Ltd. v. M/s. Uppal Housing Ltd. and Anr., III (2012) CPJ 500 (NC)=decided by this Commission, comprising Justice J.M. Malik, Presiding Member and Sh. Vinay Kumar, Honble Member, on 5.7.2012, held as under:
œM/s. Purusharath Builders had purchased flats for the use of its officers. Learned Counsel for the complainant argued that these flats will be used for the officers of the company. Learned Counsel for the complainant could not deny that those officers would transact the commercial activity. A bare-look on this Resolution clearly goes to show that these flats would be meant for commercial purposes.?
Aggrieved by that order, SLP was filed by the complainant, before the Honble Supreme Court. The Honble Supreme Court in Civil Appeal Nos. 8990-8991 of 2012, vide order dated 7.1.2013, held:
œWe have heard learned Counsel for the appellants, and perused the record. We do not see any cogent reason to entertain the appeals. The judgment impugned does not warrant any interference. The Civil Appeals are dismissed.?
23. Last, but not the least, intricate and complicated questions swirl around this case. It would be difficult to decide the case on mere documents. The evidence of Experts and Record of RBI will have to be looked into. This is the case of entailing accounts which require proper investigation and full probe. It will be too early to speak my piece on this knotty matter. These questions must be discussed by an appropriate Forum or Civil Court. The Consumer Commission must refrain from arrogating those powers which it does not possess.
24. Consequently, I find that this complaint is not maintainable, therefore, I dismiss the same. No order as to costs. However, the complainant can seek redressal of its grievances from any other Forum, Civil Court, High Court, etc. The complainant may take advantage of the ruling of the Supreme Court in Laxmi Engineering Works v. PSG Industrial Institute (supra), to seek exclusion of the time spent in prosecuting this complaint, before this Commission.
Petition dismissed.