THROUGH the judgement of the case- Sant Rohidas Leather Industries and Charmakar Development Corporation Ltd. v. Vijaya Bank, delivered on March 19, 2026, Justice P Sri Narsimha and Justice Manoj Misra, at the Supreme Court, have expressed the view that the National consumer Disputes Redressal Commission (NCDRC) at New Delhi, was justified in dismissing the complaint even though the reasons recorded by it for such dismissal may not be entirely correct. The statutory appeal in this case arose from a judgement and order of the NCDRC, New Delhi, of March 13, 2023 in Consumer Complaint 2866/2017, whereby the consumer complaint was dismissed on the ground that the complainant (the appellant herein) is not a “consumer” as per section 2(1)(d) of the Consumer Protection Act, 1986.

 

The appellant-Company filed a consumer complaint against Vijaya Bank, alleging that it had invested a sum of Rs nine crore, By way of a fixed deposit, with the Bank for a period of one year, with effect from February 28, 2014, and evidencing a transaction a fixed deposit receipt of March 3, 2014 was issued to the appellant and even the interest payable on the said FDR was credited in the account of the appellant on March 26, 2014 after deducting TDS. However, on June 27, 2014, the appellant received a letter from the Bank about sanction of a loan/ credit facility/overdraft of Rs 8.10 crore against the FDR. Suspecting foul play in sanction of loan/credit facility/ overdraft against the FDR the appellant lodged a complaint with the Economic Offences Wing, Crime Branch, Mumbai on July 16, 2014. A letter was also sent to the Bank to reverse the ‘entries qua the fraudulent overdraft account’. The Bank, however, did nor accede to the request. As a result, the matter was reported to the Reserve Bank of India. Subsequently, on March 4, 2017, the Bank informed the appellant that the overdraft facility has been closed by adjusting the amount outstanding thereunder against maturity value of the FDR and the remaining balance of Rs. 50,58,847 was remitted vide DD No. 245983 of March 4, 2017.

 

The appellant neither accepted adjustment nor remission and requested the Bank to make payment of the entire FDR amount. As the Bank failed to refund the amount, consumer complaint was filed with a prayer that the Bank be directed to pay the principal amount of Rs 9 crore along with interest at the rate of 9.75% per annum from February 28, 2014 along with compensation as well as costs. The Bank contested the complaint on merits as well on its maintainability on the grounds: (a) The allegations of fraud/forgery etc. can be decided either by a civil court or a criminal court and not in summary proceedings under the 1986 act; and (b) The complainant-Company is engaged in commercial activity; the alleged investment was to augment profits, therefore, the complainant is not a consumer as defined in section 2(1)(d) of the 1986 Act. NCDRC by placing reliance on the definition of ‘consumer’ as defined in section 2(1)(d) of the 1986 Act, as also a decision of the Supreme Court in the case- Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and others-Civil Appeal No 4841/2023, held that the deposit made by the appellant with the Bank had a direct nexus to generation of profits, that is, earning interest on surplus funds), therefore, the banking services were availed for commercial purpose.

 

In the decision- Ravneet Singh Bagga v. KLM Royal Dutch Airlines and Another- (2000) 1 SCC 66, the Supreme Court had the occasion to construe the words ‘service’ as defined in section 2(1)(o) and ‘deficiency’ as defined in section 2(1)(g) of the 1986 Act. The SC has held in the judgement that the deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person, who alleges it. The deficiency in service has to be distinguished from the tortuous acts of the respondent. In the absence of deficiency in service the aggrieved person may have a remedy under the common law to file a suit for damages but cannot insist on grant of relief under the Act for the alleged acts of commission and omission attributable to the respondent which otherwise do not amount to deficiency in service. Following the Ravneet Singh Bagga decision, in the case, C-MD, City Union Bank Ltd. v. R Chandramohan –(2023) 7 SCC 775, it was held by the SC that “14.

 

The proceedings before the Commission being summary in nature, the complaints involving highly disputed questions of facts or the questions involving tortuous acts or criminality like fraud or cheating, could not be decided by the Forum/Commission under the said Act. The “deficiency in service”, as well- settled has to be distinguished from the criminal acts or tortuous acts. Though one of the objects of the 1986 Act is to provide speedy and simple redressal to consumer disputes, its object is not to deal with complex and factual issues pertaining to criminal or tortuous liability in a summary manner. According to the allegations in the complaint, the appellant had invested Rs 9 crore by way of a term deposit with the Bank. It is also the case of the appellant that the said term deposit was fraudulently hypothecated for availing overdraft without the sanction of the appellant-Company. It is important to note that when the overdraft against the FDR was brought to the notice of the appellant, a complaint was made with the respondent-Bank.

 

The response of the Bank to that complaint is important, in as much as the Banks claims that the original of the FDR is with the Bank and the same stands pledged for availing overdraft. Besides, the Bank claimed that the FDR which the appellant claims to be in its possession is a forged document. In the complaint itself, the appellant has admitted that this matter was reported to the Economic Offences Wing. The complaint allegations cannot be adjudicated upon in a proceeding under the 1986 Act, as those allegations could be appropriately addressed in a regular criminal or civil proceeding. As a result, the appeal lacks merit and was, accordingly, dismissed.