ARUN BHATIYA versus HDFC BANK & ORS. on 8 August 2022

1. Leave granted.

2. The appeals arise from two orders of the National ConsumerDisputes Redressal Commission[1], namely, (i) an order dated 7 May 2019by which the NCDRC dismissed the appeal as withdrawn with liberty toapproach the appropriate forum on the request of the counsel for theappellant; and (ii) an order dated 25 July 2019 of the NCDRC dismissingthe application for review.

3. The appellant instituted a consumer complaint before the StateConsumer Disputes Redressal Commission[2] at Lucknow. The case ofthe appellant was that he and his father, the fourth respondent, opened ajoint Fixed Deposit[3] account on 7 January 2016, at the Agra Branch ofthe first respondent[4]. The FD was in the amount of INR 75 lakhs for aperiod of 145 days, interest being payable at the rate of 7.5% per annum.The amount of the FD on maturity was INR 77 lakhs. According to theappellant, on 31 May 2016, the appellant and his father jointly gave writteninstructions to the respondent bank to renew the joint FD for ten days,while retaining the joint mode of operation.

4. On 1 June 2016, appellant’s father travelled to Surat to staywith his other son, the appellant’s elder brother. The appellant allegesthat on 2 June 2016, his father submitted a letter to the Manager of therespondent bank at its Adajan Branch, Surat requesting encashment ofthe entire FD amount of INR 77 lakhs to his (the father’s) individualsavings account at Agra. On 3 June 2016, the appellant wrote to therespondent bank with instructions to not transfer the FD amount to anyindividual bank account. However, contrary to the instructions, theproceeds of the FD were credited to the account of the appellant’s father.On 4 June 2016, the appellant received an email from the respondent 1 “NCDRC”

2 “SCDRC”

3 “FD”

4 “Respondent bank”

A

B

C

D

E

F

G

H

Abank stating that they had credited INR 77 lakhs to the appellant’saccount. However, the appellant alleges that no such amount was creditedto his account.

5. The appellant moved a consumer complaint on the allegationthat there was a deficiency of service by the respondent bank. TheBSCDRC, by its judgment dated 24 October 2018, declined to entertainthe complaint on the ground that the dispute essentially was between theappellant and his father and did not fulfill the description of a consumerdispute. During the course of its judgment, the SCDRC held that fromthe statement made by both the parties, it was evident that the amounthad been deposited jointly in the name of the appellant and his father forCa period of 145 days, the maturity date being 31 May 2016. While thecase of the appellant was that upon the maturity of the FD, both theappellant and his father had jointly issued a direction to the bank forrenewing it for a period of ten days, the bank claimed that the FD amountwas credited to the account of appellant’s father on the request made by

Dthe appellant’s father on 31 May 2016. The SCDRC noted the submissionof the appellant that since the FD amount was deposited in the jointname of the appellant and his father, it could not be credited solely intothe account of the father. The SCDRC was of the view that the disputewas primarily between the appellant and his father on the issue of theFD amount deposited, and therefore only a civil court was competent toEdeal with such a dispute. Having recorded the rival submissions, theSCDRC relegated the appellant to the remedy of a civil suit before thecompetent forum.

6. The appellant instituted an appeal against the decision of theSCDRC under section 19 of the Consumer Protection Act, 1986[5] (as itFwas then in operation). The appeal which was filed before the NCDRCwas disposed of on 7 May 2019, in terms of the following order:

“After some arguments, counsel for the appellant, upon instructions,seeks to withdraw the present appeal, with liberty to approachthe appropriate Forum.GAccordingly, this appeal is dismissed as withdrawn with liberty tothe appellant to approach the appropriate Forum.”

7. The appellant then filed a review application along with anaffidavit stating that he was present before the NCDRC and had notH5 “1986 Act”

furnished any instructions to the counsel to withdraw the appeal. Theappellant also alleged that the previous counsel had only provided atruncated copy of the FD document without the reverse, which containedthe terms and conditions of the FD. The application for review has beenrejected on 25 July 2019. The observations of the NCDRC are extractedbelow:

“It is not at all the case that the impugned order under review hadbeen passed because the FD produced was in a truncated formor any such fact. The order under review is crystal clear in that ithad only allowed the counsel for the appellant to withdraw thepresent appeal with liberty to approach the appropriate forum. Itis also clear from the order that this was done after some argumentsin respect of the appeal had been heard.

It is as well to mention that earlier, it had been noted in theCommission’s order dated 8.1.2019 that there was an issue ofmaintainability of this complaint, as it appeared to be father-sondispute and was therefore not in the nature of consumer complaintfor the Consumer Fora.

In view of the above, I see no reason to review the order dated7.5.2019. This review Application No. 221 of 2019 alongwith I.A.No. 11513 of 2019 are accordingly dismissed.”

8. We have heard Mr Kushagra Pandey, counsel appearing onbehalf of the appellant and Mr Arvind Nayar, senior counsel appearingon behalf of the respondents nos. 1 to 3.

9. Having set out the rival cases in the manner in which theconsumer complaint was considered by the SCDRC, it becomes apparentthat the appellant’s complaint is that there is a deficiency of service onthe part of the respondent bank. Essentially, the case of the appellant isthat:

(i) The FD was in the joint names of the appellant and his father;

(ii) Upon the FD maturing for payment, a request was jointly madeat the Agra Branch of the respondent bank for renewing it for tendays; and

(iii) The Bank was not justified in law in entertaining the unilateralrequest of his father for crediting the proceeds to his account.

On this basis, it has been submitted that there is a clear deficiencyof service on the part of the respondent bank.

A

B

C

D

E

F

G

H

A10. Counsel appearing on behalf of the appellant has adverted toa communication which was addressed by the appellant to the respondentbank, which was received by the bank at 9.35 am on 3 June 2016. By hiscommunication, the appellant stated that since the FD representing theamount of INR 77 lakhs was to be renewed in terms of the requestwhich was submitted on 31 May 2016, the respondent bank ought not toBact on contrary instructions since the amount belonged jointly to theappellant and his father. Through the said communication, the appellantalso instructed the bank to not transfer the FD amount to any single-person account. However, it has been submitted that, on 4 June 2016,the bank addressed an email to the appellant, in response to theCcommunication dated 3 June 2016 of the appellant, stating that the amountof INR 77 lakhs had been credited on 4 June 2016 to the account of theappellant. The appellant submits that the statement that the amount wascredited to his account was palpably incorrect since the money wascredited in the account of his father contrary to the instructions whichwere jointly issued on 31 May 2016.D

11. In a counter filed on behalf of respondents 1 to 3, it was averredthat the joint FD in the name of the appellant and his father of INR 75lakhs was redeemed on 31 May 2016 and an amount of INR 77 lakhswas credited on 31 May 2016 in the account of appellant’s father. It wasaverred that thereafter the appellant approached the respondent bankEwith a request signed by his father for creating another FD of INR 77lakhs. Further, the appellant allegedly informed the respondent bank thathis father could not have visited the bank personally due to old age andill-health. Based on the representation made by appellant, the respondentbank put the FD request in process and debited INR 77 lakhs from the Faccount of appellant’s father. Upon becoming aware of this, appellant’sfather approached respondent bank with instructions to not book the FDrequest and credit the said amount in his account for his personal use.Respondent 1 to 3 allege that the appellant misrepresented the age andhealth of his father to booked the second FD. Therefore, the respondentbank credited back INR 77 lakhs in the account of appellant’s father.G

12. Respondents 1 to 3 seek to controvert the correctness of theclaim of the appellant. However, at this stage, the narrow issue beforethe Court is as to whether the consumer complaint was correctly disposedof by the SCDRC without going into the merits of the claim of a deficiencyof service on the ground that the appropriate remedy of the appellantHwould lie before the civil court.

13. The main contention of the appellant is that the prematureencashment of the FD by respondent bank is in contravention of theterms and conditions of the joint FD and would amount to a deficiencyof service under Section 2(1)(g) of the 1986 Act. At this point, it ispertinent to enumerate the relevant terms and conditions relating to thejoint FD:

“In the case of premature encashment, all signatories to the depositmust sign the encashment instruction.”

14. The present case arises under the 1986 Act, which wasenacted to protect the welfare and interest of consumers. It will behelpful to look at the specific provisions of law relied upon by the appellant.The relevant provision, namely, section 2(1)(d)(ii) of the 1986, reads asunder:

“(d) “consumer” means any person who, -

(ii) hires or avails of any services for a consideration which hasbeen paid or promised or partly paid and partly promised, or underany system of deferred payment and includes any beneficiary ofsuch services other than the person who hires or avails of theservices for consideration paid or promised, or partly paid andpartly promised, or under any system of deferred payment, whensuch services are availed of with the approval of the first mentionedperson but does not include a person who avails of such servicesfor any commercial purposes.

Explanation – For the purposes of this clause, “commercialpurpose” does not include use by a person of goods bought andused by him and services availed by him exclusively for thepurposes of earning his livelihood by means of self-employment”

15. Section 2(1)(g) of the Consumer Protection Act, 1986 defines‘deficiency’ as:

“(g) “deficiency” means any fault, imperfection, shortcoming, orinadequacy in the quality, nature and manner of performance whichis required to be maintained by or under any law for the timebeing in force or has been undertaken to be performed by a personin pursuance of a contract or otherwise in relation to any service;”

16. A two-judge bench of this Court consisting of Justice D KJain and Justice H L Dattu (as the Chief Justice was then) in A

B

C

DE

F

G

H

AMaharashtra State Financial Corporation v. Sanjay ShankarsaMamarde[6] observed that the scope of ‘deficiency’ as defined underclause 2(1)(g) of the 1986 Act is wide and is to be determined on thebasis of the facts and circumstances of a particular case. The courtobserved:

B“20. It is manifest from the language employed in the clause thatits scope is also very wide but no single test as decisive in thedetermination of the extent of fault, imperfection, nature andmanner of performance, etc. required to be maintained can belaid down. It must depend on the facts of the particular case,having regard to the nature of the “service” to be provided.”C17. The expression ‘service’ has been defined in Section 2(1)(o)of the 1986 Act as follows:

(o) “service” means service of any description which is madeavailable to potential users and includes, but not limited to, theDprovision of facilities in connection with banking, financing,insurance, transport, processing, supply of electrical or other energy,board or lodging or both, housing construction, entertainment,amusement or the purveying of news or other information, butdoes not include the rendering of any service free of charge orunder a contract of personal service;E

18. A bench of this Court in Vodafone Idea Cellular Limited v.Ajay Kumar Agarwal[7] (of which one of us, Dr Justice DY Chandrachud,was part) explained that service of every description will fall within theambit of the definition of ‘services’ under section 2(1)(o) of the 1986Act. The relevant extract reads as follows:F

“12. The definition of the expression “service” is couched in wideterms. The width of statutory language emerges from the mannerin which the definition is cast. Parliament has used the expression“service of any description which is made available to potentialusers”. The definition employs the “means and includes formula”.GThe means part of the definition incorporates service of “any”description. The inclusive part incorporates services by way ofillustration, such as facilities in connection with banking, finance,insurance, transport, processing, supply of electrical and other 6 (2010) 7 SCC 489H7 (2022) 6 SCC 496.

6 (2010) 7 SCC 489H7 (2022) 6 SCC 496.

energy, board or lodging and housing construction. The inclusivepart is prefaced by the clarification that the services which arespecified are not exhaustive. This is apparent from the expression“but not limited to”. The last part of the definition excludes (i) therendering of any service free of charge; and (ii) services under acontract of personal service. Parliament has confined the exclusiononly to two specified categories. The initial part of the definitionhowever makes it abundantly clear that the expression “service”is defined to mean service of any description. In other words, aservice of every description would fall within the ambit of thestatutory provision.”

19. The respondent bank does not dispute that the appellant, alongwith his father, opened a joint FD with the bank. A person who avails ofany service from a bank will fall under the purview of the definition ofa ‘consumer’ under the 1986 Act. As a consequence, it would be opento such a consumer to seek recourse to the remedies provided under the1986 Act.

20. There was a manifest error on the part of the SCDRC indeclining to entertain the consumer complaint on merits. Whether theappellant is able to establish his case is a matter which has to be decidedwithin the parameters of law as it emerges from the provisions of the1986 Act. The essence of the complaint of the appellant is that therewas a deficiency on the part of the respondent bank in proceeding tocredit the proceeds of a joint FD exclusively to the account of his father.The SCDRC ought to have determined whether the complaint related todeficiency of service as defined under the 1986 Act. The SCDRC hadno justification to relegate the appellant to pursue his claim before a civilcourt. The appellant did not, in the proceedings before the SCDRC,raise any claim against his father. Therefore, the SCDRC was wrongdeducing that there was dispute between appellant and his father.Assuming that there was a dispute between the appellant and his father,that was not the subject matter of the consumer complaint. The complaintthat there was a deficiency of service was against the bank.

21. The appellant instituted an application for review before theNCDRC categorically stating on affidavit that he had not furnishedinstructions to his counsel to apply for withdrawal of the appeal. In thisview of the matter, the NCDRC ought to have entertained the reviewand should have set down the appeal for hearing. The NCDRC havingfailed to do so, we pass the following order:

AB

C

D

EF

G

H

A(i)The orders of the NCDRC dated 7 May 2019 and 25 July2019 are set aside. First Appeal No 2262 of 2018 is restoredto the file of the NCDRC; and

(ii) Since the consumer complaint was instituted before theSCDRC in 2016, the entirety of the dispute shall be resolvedBon merits by the NCDRC.

(iii) All the rights and contentions of the parties, including thedefence of the appellant on merits, are kept open;

(iv) The appellant would be at liberty to file an additional affidavitsetting out any further defence it has, within a period of fourCweeks;

(v) The NCDRC shall dispose of the appeal within a period offour months of the date on which a certified copy is placedon the record.

(vi) Save and except for holding that the consumer complaint ismaintainable, no observation has been made by this Court onthe merits of the rival contentions.

D

22. The appeals are allowed in the above terms.

23. Pending application, if any, stands disposed of.

E

Ankit Gyan(Assisted by : Rahul Rathi, LCRA)

Appeals allowed.

F

G

H