MPSIDC ordered to pay Rs 1 cr to BIS
STATE CONSUMER Commission has ordered the M P State Industrial Development Corporation (MPSIDC) to pay about Rs one crore to Bureau of Indian Standards (BIS) towards payment of interest on its investment in non-convertible redeemable bonds of MPSIDC in July 2001. The State Government was also a party in the litigation, but the Commission dismissed BIS?s claim against the Government.india Updated: Dec 30, 2006 14:11 IST
STATE CONSUMER Commission has ordered the M P State Industrial Development Corporation (MPSIDC) to pay about Rs one crore to Bureau of Indian Standards (BIS) towards payment of interest on its investment in non-convertible redeemable bonds of MPSIDC in July 2001. The State Government was also a party in the litigation, but the Commission dismissed BIS’s claim against the Government.
The BIS had sought interest of Rs 99,36,000 on its investment of Rs 3,45,00,000 with the MPSIDC for the period of 1-11-2001 to 31-02-2003. BIS counsel Robert Anthony said BIS prayed the commission for a limited period because for a compensation of beyond Rs 1 crore, it would have been required to go to the National Consumer Commission.
The BIS had purchased a total of 345 MPSIDC’s bonds at face value of Rs 1,00,000 each in July 2001.The MPSIDC had floated the bond in open market, promising an interest of 14.40 per cent per annum payable half yearly i.e. first day of May and November each. Interest was paid up to October 31, 2001 but discontinued later.
After the BIS filed a suit in the State Consumer Commission seeking interest on its investment for a period of 1-11-2201 to 31-02-2003 against the MPSIDC and the State Government, they contended that the complaint was not maintainable as complainant was not a ‘consumer’ as envisaged in the provisions of Consumer Protection Act.
While the MPSIDC did not deny its liability to pay the interest on BIS’s investment, the State Government denied its liability to pay any such amount as it was in no manner privy to the said transaction and did not incur any liability for repayment of the amount in question.
The Commission, while holding the only question required to be determined by it is whether the complaint was maintainable under the provisions of Consumer Protection Act, said the MPSIDC counsel contended the BIS had invested funds with the MPSIDC for ‘commercial purpose’ and therefore, it could not be termed as ‘consumer’ as defined by section 2 (1) (d) of the
Consumer Protection Act after the amendment of the year 2002.
He referred to decision of the National Consumer Commission in the case of Sree Anantha Grameena Bank Vs The Industrial Finance Corporation of India in this regard.
However, counsel for the complainant Robert Anthony contended that unlike a commercial bank, BIS was a service-oriented organisation to help people in general and the consumer in particular.
Persuaded by his argument, the Commission held that the fee charged by the Bureau of Indian Standards (BIS) for various works carried out by it is required for payment of salary, allowances and other remuneration of its employees and officers and meet other expenses of the bureau. Bureau of Indian Standards (BIS) Rules, 1987, also provide for investment of the money earned by the bureau and it was under these rules that the bureau had invested money with the MPSIDC.
“By no stretch of imagination can it be said the investment made by the complainant was for commercial purpose. Neither the activity of the complainant is commercial in nature and it was like any other consumer that the complainant in order to raise its funds and with a view to meet is expenses and carry out its functions under the Act of 1986 that it invested a part of its money with the MPSIDC,” the commission held.
Accordingly, the MPSIDC was ordered to pay the desired amount of interest within three months beyond which it would attract an interest of nine per cent from the date of the order to the payment. Further, MPSIDC has been directed to bear the complainant’s cost of litigation quantified at Rs 10,000.
First Published: Dec 30, 2006 14:11 IST