Sapient Corporation Employees Provident Fund Trust v HDFC & Ors.

In the National Consumer Disputes Redressal Commission, New Delhi

Name of the caseSapient Corporation Employees vs HDFC Bank Ltd. & Others
ComplainantM/s. Sapient Corporation Employees Provident Fund Trust
RespondentHDFC Bank Ltd
Acts involvedConsumer Protection Act, 1986

A vigilant consumer is a powerful consumer. To make sure that people are aware of their consumer rights and are not victimized by the sellers, Consumer Protection Act, 1986 was formed. However, the consumers need to not just beware sellers but also other people who infringe their rights; and sellers need to be protected from harassment by the consumer. This article traces the case of Sapient Corporation Employees Provident Fund Trust v. HDFC bank ltd. and 2 ors. The concept of deficiency of service and the court’s power in handling frivolous matters is explored. The liability of banks regarding statutory dues is also studied in this article.


Consumer Forums are organizations that guide people regarding consumer rights. They must protect consumers who feel their rights have been violated. Their presence ensures that consumers are not exploited, and problems faced by them in a market are dealt with properly.  However, sometimes people file cases that are either frivolous, vexatious, or meant to harass the other party without any legitimate claims. In such cases, consumer fora may dismiss the petition and penalty may be imposed as such for wasting the court’s time and making false allegations on the other party. Sapient Corporation Employees Provident Fund Trust Versus HDFC Bank Ltd. & 2 Others is a case law that deals with this issue. The concept of deficiency of service is explored here.

Background of the Case

The complainant had alleged a deficiency of service being provided by the respondent, that is, HDFC bank. Section 2(1)(g) of the Consumer Protection Act[1], 1986 defines deficiency as “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.”

Therefore, deficiency in service can be claimed when a loss occurs directly due to the acts of an individual who is hired for his service. The person then may approach the court for redressal.

Facts of the Case

According to the petition filed by the complainant, on 21.08.2010, the managers of HDFC bank informed the officials of the company that they have received an order dated 20.08.2010 from Employee Provident Fund Organization (EPFO) for the recovery of Rs.1,47,52,766/- (Rupees One Crore Forty-Seven Lac Fifty Two Thousand Seven Hundred Sixty Six only) against the Company and also prohibited the company to make any payments which are lying in the credit of M/s. Sapient Corporation Pvt. Ltd. Also, the company needed to bring the stay order by noon of 23rd August to make the account which had been put on hold operational again.

The trust and company have different legal identities therefore the Ops were advised not to debit the trust account. However, on 25.8.2010 the managers told the Company that they have already issued a demand draft on 23rd august in compliance with the notice of the EPFO which was dated 20.8.2010.

M/s. Sapient Corporation Employees Provident Fund Trust thus filed a consumer complaint against the respondent, HDFC bank, and its two managers. The point of contention was whether the bank has performed a deficiency in service by debiting the account of the complainant though the demand for recovery was from the company which is a separate legal entity and therefore has a different existence altogether. Deficiency of service would be with regards to deficiency as defined under the Consumer Protection Act, 1986.

The complainant alleged that there is willful ignorance on the part of managers for wrongfully paying an amount of Rs.1,47,52,766/- (Rupees One Crore forty-seven lakh fifty-two thousand seven hundred sixty-six only), without any mandate or authority from the account of the complainant. Thus, they should be held accountable for the deficiency of service. The complainant asked for a refund along with interest and damages, cost of the complaint as well as other legal services.

“Accordingly, the Complaint Petition seeks the following reliefs: –

a. ORIGINAL AMOUNT Rs. 1,47,52,766 (Rupees One Crore forty-seven lakh fifty-two thousand seven hundred sixty-six only).

b. INTEREST @ 36% per annum from the date of debiting the account of the complainant i.e. 23.08.2010 till the date of realization.

c. DAMAGES on account of deficiency in service causing harassment misery, hardships, and agony, etc. being Rs.50,00,000/- (Rupees Fifty Lac Only).

d. LEGAL Expenses incurred by the Complainant, computed at Rs.1,10,000/- (Rupees One Lac ten thousand only.)” [2]


  • Has the bank committed a default by paying a sum that was payable by judicial order as a statutory due?
  • Will a bank be accused of service deficiency for paying valid dues?
  • Do the managers have any liability regarding the same?


The court in this case held that there was no deficiency of service on the part of OP-bank and the arguments of the complainant are baseless.  A behavior that conforms to the direction of regulatory authority such as EPFO cannot be said to be wilful neglect or service deficiency. As its client, the bank also told the trust and gave them due time. The conduct is, therefore, lawful and proper.

“The Bank had received order no.HR/GGN/COMP-I/26147/5466 dated 20.08.2010 from the Assistant Provident Fund Commissioner, Gurgaon. 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 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 draft. [3]

Duplicates of e-mails the complainant generated on record showed that the bank, under the threat of legal action, had been directed by the authority, that evidence of payment having been made in compliance with said order may be produced before the undersigned (EPFA) immediately. Moreover, neither the complaint petition nor the counsel of the complainant has attempted to clarify how to conduct in conjunction with the guidance of a regulatory authority becomes wilful negligence and service deficiency.

The court, therefore, held that: “Given the detailed consideration of the facts and circumstances of the case before us, we hold that the action taken by OP bank was proper, legal and after reasonable notice to the complainant. It does not amount to a deficiency of service and no cause of action would arise from it. We, therefore, reject the contention of the complainant that the cause of action first arose when the bank informed the company on 21.8.2010 about the communication received from the EPFO and arose again when the OP debited the account of the complainant on 23.8.2010. The complaint petition is accordingly held to be devoid of any merit.”

The court also found that the complaint lacked seriousness and was filed without a proper cause. The complaint, therefore, was deemed frivolous and vexatious and a waste of court’s time. The EPFO already received the refund as per EPFAT ‘s order. The lawsuit made no effort to clarify what is the other loss to be recovered from the OP bank, as the EPFAT appeal never contained any arguments for obtaining interest.

The court thus declared the complaint to be without merit and imposed a cost of Rs. 25,000 on the complainant, to be paid within 3 months of receiving the order.

Related Case Laws

Saraswati Co-Op Bank Ltd Vs. Dean Leslie Roy 1 (2008) CPJ 163 (NC)

wherein it was held that, without his permission, the unauthorized debit in the complainant’s account amounted to a deficiency in service.

Delhi Development Authority v. DC Sharma (2014)

wherein the petitioner was ordered to pay five lakhs for indulging in unfair business practices and abusing the respondent unduly for over eighteen years.


There are three kinds of consumer redressal commissions: District, State, and National under the Consumer Protection Act, 1986. Section 9 of the Act provides for “establishment of consumer dispute redressal agencies”. [4]All over the country, the grievances of consumers are tackled so that consumer interest is not compromised. This is because consumers play a key role in maintaining the economic activity in the country. To protect the consumers from incidents happening regarding money between buyers and sellers, certain provisions have been laid down along with consumer protection councils and redressal agencies in India. However, for times when the complaints made in the forum are frivolous and do not have merit in them, certain sections or provisions have been set in place under the Consumer Protection Act. The court must also protect itself from cases that waste its precious time and so it has the power to fine people who file cases without merit. The doctrine of ‘caveat venditor’ is now ‘caveat emptor’ to ensure that the consumer is aware as well as beware of malpractices in the marketplace. There still needs to be the establishment of various redressal commissions and alternate dispute mechanisms that can help in furthering the implementation and awareness of consumer rights.    


  • [1] Consumer Protection Act 1986, s. 2(1)(g)
  • [2] Sapient Corporation Employees Provident Fund Trust Versus Hdfc Bank Ltd. & 2 Others Lnindord 2012 Ncdrc 6834
  • [3] Sapient Corporation Employees Provident Fund Trust Versus Hdfc Bank Ltd. & 2 Others Lnindord 2012 Ncdrc 6834
  • [4] Consumer Protection Act 1986, s. 9

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