Dr Dhananjaya Y Chandrachud, J
1 Leave granted.
2 The appeals arise from two orders of the National Consumer Disputes Redressal
Commission1, namely, (i) an order dated 7 May 2019 by which the NCDRC
dismissed the appeal as withdrawn with liberty to approach the appropriate
forum on the request of the counsel for the appellant; and (ii) an order dated 25
July 2019 of the NCDRC dismissing the application for review.
3 The appellant instituted a consumer complaint before the State Consumer
Disputes Redressal Commission2 at Lucknow. The case of the appellant was that
he and his father, the fourth respondent, opened a joint Fixed Deposit3 account
on 7 January 2016, at the Agra Branch of the first respondent4. The FD was in
the amount of INR 75 lakhs for a period 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 the appellant, on 31 May 2016, the appellant and his father
jointly gave written instructions 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 stay with his other son,
the appellant’s elder brother. The appellant alleges that on 2 June 2016, his
father submitted a letter to the Manager of the respondent bank at its Adajan
Branch, Surat requesting encashment of the entire FD amount of INR 77 lakhs to
his (the father’s) individual savings account at Agra. On 3 June 2016, the
appellant wrote to the respondent bank with instructions to not transfer the FD
amount to any individual bank account. However, contrary to the instructions,
the proceeds 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 bank stating
that they had credited INR 77 lakhs to the appellant’s account. However, the
appellant alleges that no such amount was credited to his account.
5 The appellant moved a consumer complaint on the allegation that there was a
deficiency of service by the respondent bank. The SCDRC, by its judgment
dated 24 October 2018, declined to entertain the complaint on the ground that
the dispute essentially was between the appellant and his father and did not
fulfill the description of a consumer dispute. During the course of its judgment,
the SCDRC held that from the statement made by both the parties, it was
evident that the amount had been deposited jointly in the name of the appellant
3 “FD” 4 “Respondent bank”
and his father for a period of 145 days, the maturity date being 31 May 2016.
While the case of the appellant was that upon the maturity of the FD, both the
appellant and his father had jointly issued a direction to the bank for renewing it
for a period of ten days, the bank claimed that the FD amount was credited to
the account of appellant’s father on the request made by the appellant’s father
on 31 May 2016. The SCDRC noted the submission of the appellant that since
the FD amount was deposited in the joint name of the appellant and his father, it
could not be credited solely into the account of the father. The SCDRC was of the
view that the dispute was primarily between the appellant and his father on the
issue of the FD amount deposited, and therefore only a civil court was
competent to deal with such a dispute. Having recorded the rival submissions,
the SCDRC relegated the appellant to the remedy of a civil suit before the
competent forum.
6 The appellant instituted an appeal against the decision of the SCDRC under
section 19 of the Consumer Protection Act, 19865 (as it was then in operation).
The appeal which was filed before the NCDRC was 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 approach the appropriate Forum.
Accordingly, this appeal is dismissed as withdrawn with
liberty to the appellant to approach the appropriate
Forum.”
7 The appellant then filed a review application along with an affidavit stating that
he was present before the NCDRC and had not furnished any instructions to the
counsel to withdraw the appeal. The appellant also alleged that the previous
counsel had only provided a truncated copy of the FD document without the
5 “1986 Act”
reverse, which contained the terms and conditions of the FD. The application for
review has been rejected on 25 July 2019. The observations of the NCDRC are
extracted below:
“It is not at all the case that the impugned order under
review had been passed because the FD produced was in a
truncated form or any such fact. The order under review is
crystal clear in that it had only allowed the counsel for the
appellant to withdraw the present appeal with liberty to
approach the appropriate forum. It is also clear from the
order that this was done after some arguments in respect of
the appeal had been heard.
It is as well to mention that earlier, it had been noted in
the Commission’s order dated 8.1.2019 that there was an
issue of maintainability of this complaint, as it appeared to
be father-son dispute and was therefore not in the nature of
consumer complaint for the Consumer Fora.
In view of the above, I see no reason to review the order
dated 7.5.2019. 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 on behalf of the
appellant and Mr Arvind Nayar, senior counsel appearing on behalf of the
respondents nos. 1 to 3.
9 Having set out the rival cases in the manner in which the consumer complaint
was considered by the SCDRC, it becomes apparent that the appellant’s
complaint is that there is a deficiency of service on the part of the respondent
bank. Essentially, the case of the appellant is that:
(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 made at
the Agra Branch of the respondent bank for renewing it for ten days;
and
(iii) The Bank was not justified in law in entertaining the unilateral
request of his father for crediting the proceeds to his account.
On this basis, it has been submitted that there is a clear deficiency of service on
the part of the respondent bank.
10 Counsel appearing on behalf of the appellant has adverted to a communication
which was addressed by the appellant to the respondent bank, which was
received by the bank at 9.35 am on 3 June 2016. By his communication, the
appellant stated that since the FD representing the amount of INR 77 lakhs was
to be renewed in terms of the request which was submitted on 31 May 2016, the
respondent bank ought not to act on contrary instructions since the amount
belonged jointly to the appellant and his father. Through the said
communication, the appellant also 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 the
communication dated 3 June 2016 of the appellant, stating that the amount of
INR 77 lakhs had been credited on 4 June 2016 to the account of the appellant.
The appellant submits that the statement that the amount was credited to his
account was palpably incorrect since the money was credited in the account of
his father contrary to the instructions which were jointly issued on 31 May 2016.
11 In a counter filed on behalf of respondents 1 to 3, it was averred that the joint FD
in the name of the appellant and his father of INR 75 lakhs was redeemed on 31
May 2016 and an amount of INR 77 lakhs was credited on 31 May 2016 in the
account of appellant’s father. It was averred that thereafter the appellant
approached the respondent bank with a request signed by his father for creating
another FD of INR 77 lakhs. Further, the appellant allegedly informed the
respondent bank that his father could not have visited the bank personally due
to old age and ill-health. Based on the representation made by appellant, the
respondent bank put the FD request in process and debited INR 77 lakhs from
the account of appellant’s father. Upon becoming aware of this, appellant’s
father approached respondent bank with instructions to not book the FD request
and credit the said amount in his account for his personal use. Respondent 1 to
3 allege that the appellant misrepresented the age and health of his father to
booked the second FD. Therefore, the respondent bank credited back INR 77
lakhs in the account of appellant’s father.
12 Respondents 1 to 3 seek to controvert the correctness of the claim of the
appellant. However, at this stage, the narrow issue before the Court is as to
whether the consumer complaint was correctly disposed of by the SCDRC
without going into the merits of the claim of a deficiency of service on the
ground that the appropriate remedy of the appellant would lie before the civil
court.
13 The main contention of the appellant is that the premature encashment of the
FD by respondent bank is in contravention of the terms and conditions of the
joint FD and would amount to a deficiency of service under Section 2(1)(g) of the
1986 Act. At this point, it is pertinent to enumerate the relevant terms and
conditions relating to the joint FD:
“In the case of premature encashment, all signatories to the
deposit must sign the encashment instruction.”
14 The present case arises under the 1986 Act, which was enacted to protect the
welfare and interest of consumers. It will be helpful 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 as under:
“(d) “consumer” means any person who, -
(ii) hires 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 purposes.
Explanation – For the purposes of this clause, “commercial
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”
15 Section 2(1)(g) of the Consumer Protection Act, 1986 defines ‘deficiency’ as:
“(g) “deficiency” means any fault, imperfection,
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 a
contract or otherwise in relation to any service;”
16 A two-judge bench of this Court consisting of Justice D K Jain and Justice H L
Dattu (as the Chief Justice was then) in Maharashtra State Financial
Corporation v. Sanjay Shankarsa Mamarde6 observed that the scope of
‘deficiency’ as defined under clause 2(1)(g) of the 1986 Act is wide and is to be
determined on the basis of the facts and circumstances of a particular case. The
court observed:
“20. It is manifest from the language employed in the
clause that its scope is also very wide but no single test as
decisive in the determination of the extent of fault,
imperfection, nature and manner of performance, etc.
required to be maintained can be laid down. It must depend
on the facts of the particular case, having regard to the
nature of the “service” to be provided.“
6 (2010) 7 SCC 489
17 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
made available to potential users and includes, but not
limited to, the provision 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, but does not
include the rendering of any service free of charge or under
a contract of personal service;
18 A bench of this Court in Vodafone Idea Cellular Limited v. Ajay Kumar
Agarwal7 (of which one of us, Dr Justice DY Chandrachud, was part) explained
that service of every description will fall within the ambit of the definition of
‘services’ under section 2(1)(o) of the 1986 Act. The relevant extract reads as
follows:
“12. The definition of the expression “service” is couched
in wide terms. The width of statutory language emerges
from the manner in which the definition is cast. Parliament
has used the expression “service of any description which is
made available to potential users”. The definition employs
the “means and includes formula”. The means part of the
definition incorporates service of “any” description. The
inclusive part incorporates services by way of illustration,
such as facilities in connection with banking, finance,
insurance, transport, processing, supply of electrical and
other energy, board or lodging and housing construction.
The inclusive part is prefaced by the clarification that the
services which are specified are not exhaustive. This is
apparent from the expression “but not limited to”. The last
part of the definition excludes (i) the rendering of any
service free of charge; and (ii) services under a contract of
personal service. Parliament has confined the exclusion only
to two specified categories. The initial part of the definition
however makes it abundantly clear that the expression
“service” is defined to mean service of any description. In
other words, a service of every description would fall within
the ambit of the statutory provision.”
19 The respondent bank does not dispute that the appellant, along with his father,
7 (2022) 6 SCC 496.
opened a joint FD with the bank. A person who avails of any service from a bank
will fall under the purview of the definition of a ‘consumer’ under the 1986 Act.
As a consequence, it would be open to such a consumer to seek recourse to the
remedies provided under the 1986 Act.
20 There was a manifest error on the part of the SCDRC in declining to entertain the
consumer complaint on merits. Whether the appellant is able to establish his
case is a matter which has to be decided within the parameters of law as it
emerges from the provisions of the 1986 Act. The essence of the complaint of
the appellant is that there was a deficiency on the part of the respondent bank
in proceeding to credit the proceeds of a joint FD exclusively to the account of
his father. The SCDRC ought to have determined whether the complaint related
to deficiency of service as defined under the 1986 Act. The SCDRC had no
justification to relegate the appellant to pursue his claim before a civil court. The
appellant did not, in the proceedings before the SCDRC, raise any claim against
his father. Therefore, the SCDRC was wrong deducing 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 complaint that there was a deficiency of service was against the
bank.
21 The appellant instituted an application for review before the NCDRC categorically
stating on affidavit that he had not furnished instructions to his counsel to apply
for withdrawal of the appeal. In this view of the matter, the NCDRC ought to
have entertained the review and should have set down the appeal for hearing.
The NCDRC having failed to do so, we pass the following order:
(i) The orders of the NCDRC dated 7 May 2019 and 25 July 2019 are set aside.
First Appeal No 2262 of 2018 is restored to the file of the NCDRC; and
(ii) Since the consumer complaint was instituted before the SCDRC in 2016,
the entirety of the dispute shall be resolved on merits by the NCDRC.
(iii) All the rights and contentions of the parties, including the defence of the
respondent Nos 1 to 3 on merits, are kept open;
(iv) The respondent Nos 1 to 3 would be at liberty to file an additional affidavit
setting out any further defence it has, within a period of four weeks;
(v) The NCDRC shall dispose of the appeal within a period of four months of
the date on which a certified copy is placed on the record.
(vi) Save and except for holding that the consumer complaint is maintainable,
no observation has been made by this Court on the merits of the rival
contentions.
22 The appeals are allowed in the above terms.
23 Pending application, if any, stands disposed of.
[Dr Dhananjaya Y Chandrachud]
[A S Bopanna] New Delhi; August 08, 2022 -S-