Calcutta High Court Exonerates Bank and Jute Corporation from Deficiency in Service Claims

Court Rules No Liability Under Consumer Protection Act Due to Lack of Evidence and Circumstantial Considerations

In a significant ruling, the Calcutta High Court, Circuit Bench at Jalpaiguri, has set aside previous orders by the District, State, and National Consumer Commissions that held the Uttarbanga Kshetriya Gramin Bank and the Jute Corporation of India (JCI) liable for deficiency in service. The case revolved around allegations made by a group of farmers who claimed that the bank failed to sell pledged jute goods in a timely manner, and the JCI did not purchase the goods at the minimum support price (MSP) as stipulated in a government scheme.

The farmers had originally approached the District Consumer Forum, which ruled in their favor, citing a deficiency in service by both the bank and JCI. This decision was upheld by the State Commission and concurred by the National Commission. However, the parties were allowed to seek redressal from the High Court following a Special Leave Petition.

Justice Debangsu Basak, presiding over the matter, examined the intricacies of the case, where the farmers had pledged their jute goods to the bank in exchange for loans. Despite a recall notice, the bank did not initiate any recovery proceedings, nor did it sell the pledged goods. Simultaneously, the JCI was accused of not purchasing the jute goods at the MSP, a scheme intended to support farmers.

The High Court found no evidence of the bank's failure to mitigate damages, as it did not initiate recovery actions, which would have been necessary to establish a deficiency in service. Moreover, there was no conclusive evidence showing that the farmers had actually offered the pledged jute goods to JCI at the MSP. JCI's role in implementing the government scheme was questioned, but the court concluded that the service rendered was free of charge, thus falling outside the purview of the Consumer Protection Act, 1986.

The judgment emphasized the importance of substantial evidence, stating that oral claims without corroborative support do not meet the legal standards required for such allegations. Consequently, the court ruled that neither the bank nor JCI could be held liable under the Consumer Protection Act due to the lack of evidence and the particular circumstances of the case.

The decision underscores the judiciary's rigorous standards in adjudicating claims of deficiency in service, particularly when public sector entities and government schemes are involved. The judgment is expected to have implications for similar cases where allegations of service deficiency are made without substantial evidence.

Bottom Line:

Farmers filed a complaint alleging deficiency of service against a bank and Jute Corporation of India (JCI) for failing to sell pledged goods and implement a government scheme respectively. The High Court ruled that neither the bank nor JCI could be held liable for deficiency in service under the Consumer Protection Act, 1986, due to lack of evidence and circumstances surrounding the case.

Statutory provision(s): Consumer Protection Act, 1986, Section 2(o)

Branch Manager, Uttarbanga Kshetriya Gramin Bank v. Sri Dulal Ch. Chandra, (Calcutta)(Circuit Bench At Jalpaiguri) : Law Finder Doc Id # 2815118