Supreme Court: Consumer Commissions Are Ineligible to Handle Cases Containing Highly Disputed Facts, Criminal Activity, or Tortious Actions.

Last Updated on March 30, 2023 by Administrator

Issue – The Supreme Court has reaffirmed that consumer tribunals cannot rule on complaints involving hotly contested factual issues, instances involving tortious behaviour, or crimes like fraud or deception. It stated that the “deficiency in service” notion under the Consumer Protection Act of 1986 needed to be set apart from unlawful or tortious behaviour.

Facts of the case – The Court was deliberating on an appeal brought by City Union Bank against the decisions of the consumer commissioners. 

An NRI from Malaysia submitted three draughts in this instance for the acquisition of three apartments. When a number of conflicts arose among the mentioned company’s directors. 

The State Commission ordered the appellants to pay the respondent Rs. 8 lakhs as well as compensation for mental anguish, loss, and hardship after allowing the complaint with costs on the basis of “deficiency in service.” Angered, the appellants filed an appeal with the National Forum, but it was denied. The Supreme Court eventually heard the case.

Arguments – The Court shouldn’t intervene when the two forums have repeatedly held the appellants accountable for the lack of service. Moreover, he claimed that the bank would be held vicariously accountable for the actions of its employees. There was no deliberate mistake, flaw, or shortcoming that qualified as a service deficit on the part of the appellant-bank under Section 2(g) of the relevant Act.

Reasoning – According to the records, there were occasional disagreements amongst the company’s directors, and if one of the directors was accused of defrauding or cheating, the bank’s workers could not be held accountable if they had performed honestly and in accordance with the correct procedures.

Judgement – The respondent-complainant, according to the Court, utterly failed to meet his burden of proof that the bank’s personnel at the appellants’ bank had rendered subpar service in violation of Section 2(1)(g) of the Act. The two consumer courts’ orders were subsequently annulled by the court.

Provisions used in the case – Section 2(1)(g) of Consumer Protection Act, 1986 .

Case title – The Chairman & Managing Director, City Union Bank Ltd. & Anr. Versus R. Chandramohan

Written by – Nikita Shankar