Non -‘consumer’ borrower of the consumer protection law if taken with a loan: SC

A borrower cannot be called “consumer” under the consumer protection law if the loan was taken from the bank for a profit generation exercise, the Supreme Court said.

A Bank of Judges Sudhanshu Dhulia and Prashant Kumar Mishra listened to an appeal presented by the Central Bank of India against an order of the National Consumer Disputes Repair Commission (NCDRC).

The NCDRC had ordered the bank to pay a compensation of RS 75 Lakh together with the cost of litigation for the AD PVT Limited office for the alleged incorrect reports of the borrower as Mooring of the Indian Credit Information Office of India Limited (CIBIL).

In this case, the Central Bank had sanctioned a loan of RS 10 million rupees to the AD office for the postproduction of the protagonist of Rajinikanth Kochadaiyan.

After the office breached the payments, a litigation began before the debt recovery court and the matter was ended by a single payment of 3.56 million rupees.

The AD office argued that despite paying the amount according to the single agreement, the bank marked it as a dweller of the cybil, which resulted in its damage to the reputation and commercial loss.

Then, the company approached the NCDRC alleging service deficiency by the bank.

The NCDRC allowed the request of the AD (consumer complaint) office and ordered the bank to pay compensation of RS 75 Lakh and issue a certificate indicating that the loan account was liquidated and there were no pending quotas.

The Superior Court said: “We are aware of the fact that defendant No. 1 (company) would not be excluded from consumer definition simply due to the fact that it is a commercial entity/company.

“But what has weighed with us when it concludes that in the case of the case, it cannot be said that the defendant No. 1 is a” consumer “is the fact that the transaction in question, that is, to obtain a project loan, had a close link with an activity generating profits and, in fact, the dominant purpose to obtain this sanctioned loan was to generate the profits after the successful postproduction of the movie Titled ‘Kochadaiyaan, “said the loan.