Supreme Court passes a judgement in regards to inadequacy in performance of services

Case title:

Sapient Corporation Employees Provident Fund Trust DLF Cyber                        Greens v/s HDFC Bank Ltd. & Others

Date of Order:

1st November 2012

Bench:

Justice J M Malik

Parties:

Petitioner: Sapient Corporation Employees Provident Fund Trust DLF Cyber Greens 

Defendant: HDFC Bank Ltd. & Others

Facts:

• Organizations called consumer forums help people understand their rights as consumers. Consumers who believe their rights have been abused must be protected. Their presence guarantees that consumers are not taken advantage of and that issues they encounter in a market are adequately addressed. Nonetheless, occasionally persons will file cases that are either frivolous, vexatious, or intended only to bother the opposing party. In these circumstances, consumer forums may reject the petition and issue sanctions for wasting the court's time and bringing false accusations against the other party. A case study that addresses this problem is Sapient Corporation Employees Provident Fund Trust v. HDFC Bank Ltd. & 2 Others. Here, the idea of a lack of service is explored.
• The respondent, or HDFC bank, was accused of providing inadequate service by the complaint. A deficiency is "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 about any service," according to Section 2(1)(g) of the Consumer Protection Act, 1986.
• Deficit in service can therefore be asserted when a loss happens as a direct result of the actions of a person who has been hired for his service. The individual may then seek recourse in court.
• In accordance with the complaint submitted by the complainant, on August 21, 2010, the managers of HDFC bank notified the company's officials that they had received an order from the Employee Provident Fund Organization (EPFO) dated August 20, 2010, ordering the recovery of Rs. 1,47,52,766 (Rupees One Crore Forty-Seven Lac Fifty-Two Thousand Seven Hundred Six Only) against the company, and also forbidding it from making any payments to M/s. Sapient Corpor Also, in order to reinstate the account that had been placed on hold, the corporation needed to submit the stay order by noon on August 23.
• Due to the legal distinction between the trust and the firm, the Operators were advised not to debit the trust account. However, on August 25, 2010, the managers informed the company that they had already submitted a demand draught in response to the EPFO's warning, which was dated August 20, 2010.
• In response, HDFC bank and its two managers were named as respondents in a complaint from M/s. Sapient Corporation Workers Provident Fund Trust. The issue at hand was whether the bank had provided a deficient level of service by debiting the complainant's account despite the fact that the company, which was targeted for recovery, is a separate legal entity and has its own existence. The Consumer Protection Act of 1986 defines inadequacy in terms of service deficiencies.
• For paying an amount of Rs. 1,47,52,766/- (Rupees One Crore forty-seven lakh fifty-two thousand seven hundred sixty-six only) improperly and without authorization from the complainant's account, the complainant claimed that supervisors acted with intentional ignorance. They should therefore be held responsible for the poor service. The complainant requested a return, as well as interest, damages, the cost of filing the case, and other legal services.

Issues Raised:

• By paying a payment that was due as a statutory due according to a court order, has the bank violated the terms of the agreement?
• Will a bank be charged with service failure for paying legitimate dues?
• Are the supervisors liable in any way for this?

Arguments:

• According to the court in this case, OP-bank provided adequate service, and the complainant's arguments are without merit. It is impossible to claim that an action is intentional neglect or a lack of service when it complies with regulatory authority like EPFO's instructions. The bank also informed the trust and provided them adequate notice as its client. As a result, the behaviour is appropriate and legal.
• The Assistant Provident Fund Commissioner, Gurgaon, had issued the Bank an order with the number HR/GGN/COMP-I/26147/5466 dated 20.08.2010. It directed the bank to pay a sum of Rs. 14752766/- (Rupees one Crore forty-seven lakhs fifty-two thousand seven hundred and sixty-six) only to the credit of the Regional Provident Fund Commissioner through a demand draught. It mentioned the account no. as C/A- 00031110000846, which is the number of the account held by the complainant Trust with the OP Bank.
• Duplicates of emails the complaint created and kept on file revealed that the bank had been told by the authority, under pain of legal action, to present immediate proof of payment having been made in accordance with the order to the undersigned (EPFA). Furthermore, neither the complaint petition nor the complainant's solicitor have made an effort to define what constitutes deliberate negligence and service deficiencies when performed in accordance with regulatory authority advice.
• As a result, the court declared: Given the careful analysis of the facts and circumstances of the issue before us, we hold that the action taken by OP bank was proper, legal, and done so after giving the complainant adequate notice. There is no lack of service here, and no cause of action would result from it. Hence, we reject the complainant's argument that the cause of action first arose when the bank informed the business of the notice it had received from the EPFO on 21.8.2010 and then reappeared when the OP debited the complainant's account on 23.8.2010. In light of this, it is determined that the complaint petition has no merit.
• The complaint was also deemed to lack seriousness by the court and to have been filed improperly. Hence, it was decided that the complaint was pointless, vexatious, and a waste of the court's time. According to EPFAT's directive, the EPFO has already received the return. Because there were no arguments for getting interest in the EPFAT appeal, the complaint made no attempt to specify what the additional loss was that should be recovered from the OP bank.
• As a result, the court dismissed the complaint as being without merit and ordered the complainant to pay a cost of Rs. 25,000 within three months of receiving the ruling.

Analysis:

• The complaint trust in this case, Sapient Corporation Workers Provident Fund Trust, claimed that their bank account, which was held with the HDFC bank, had been improperly debited. 
• The Employee Provident Fund Organization had earlier given the bank instructions that the fund trust must pay their debt of rupees 1.47 crore and that no more payments may be made by the trust until their debt is paid in full. The trust then gave the bank the go-ahead to hold off on paying off their debt until additional instructions were provided.
• Nonetheless, the bank debits the account with Rs. 1.47 crores after providing adequate notice in order to fulfil the EPFO's legal debt. The bank has been ordered by the trust to pay the money deducted, plus interest, damages, and legal fees. The trust has challenged this as a service failure.
• The National Commission observed that the payment was only made following the statutory authority's instructions and following proper notice to the fund. The Commission considers it vital to guard against the possibility of bogus complaints being filed because there are no court costs. 
• Due to the complaint's lack of seriousness and the fact that it was presented without the required reasons, the Commission penalised the complainant with rupees 25,000 under section 26 of the Act.

Conclusion:

According to the Consumer Protection Act of 1986, there are three different types of consumer redressal commissions: district, state, and national. The "creation of consumer dispute redressal agencies" is addressed in Section 9 of the Act. In order to protect consumer interests, complaints from customers are addressed nationwide. This is so because consumers are crucial to sustaining the nation's economic activities. In India, consumer protection councils and dispute resolution organisations have been established in order to protect consumers from situations involving money between buyers and sellers.

Nonetheless, under the Consumer Protection Act, some parts or provisions have been put in place for situations where the complaints submitted in the forum are baseless and without substance. The court has the authority to punish those who file complaints without merit because it needs to protect itself from cases that take up valuable time. To guarantee that consumers are informed of and cautious of market fraud, the phrase "caveat venditor" has been replaced with "caveat emptor." In order to advance the implementation and knowledge of consumer rights, a number of redressal commissions and other dispute mechanisms still need to be established.