When court fails consumer
Pushpa Girimaji

Justice delayed is justice denied—and that is exactly what happened to a consumer who went to a consumer court seeking justice. The long delay in the process of adjudication eventually defeated the very purpose of his going to the consumer court. This case is a sad reflection on the consumer justice system that is supposed to deliver quick redress of consumer complaints.

The case is all the more disturbing because it pertains to a welfare scheme initiated by the Central Government for unemployed youth and even after a long battle of nine years, the complainant could not derive any benefit from the scheme.

In 1998, the complainant applied for a loan under the Prime Minister’s Rozgar Yojana. Applications under the scheme had to be routed through the General Manager, District Industries Centre. In this case, the Industries Centre at Dhenkanal approved the application, and the State Bank of India’s Gobindpur branch, Orissa, sanctioned the loan. However, the loan was never released, despite several requests. Frustrated, the applicant filed a complaint before the District Consumer Disputes Redressal Forum in 1998.

The Forum, in January 1999, held that the bank was bound to disburse the loan and implement the scheme as prescribed by the Central Government. It dismissed the bank’s argument that it had not released the loan because the applicant, after applying for a loan to buy an auto-rickshaw, had changed his mind and decided to buy a Tata truck instead. Pointing out that the bank had not produced any evidence to prove this point, the Forum directed the bank to release the loan immediately.

The bank filed an appeal in 1999 before the State Consumer Disputes Redressal Commission in Cuttack. The Commission, in its order of May 2001, held that there was no justification whatsoever for the bank to deny the loan. The Commission pointed out that the bank had rejected the loan for unjustifiable reasons—that the complainant wanted to change the nature of trade for which he had applied for the loan.

This time, the bank filed a revision petition before the apex consumer court, the National Consumer Disputes Redressal Commission. The apex consumer court upheld the views of the lower courts and dismissed the bank’s contention that the applicant was not a consumer and, therefore, that this was not a consumer dispute. Pointing out that the bank was to disburse the loan under the scheme and the consumer was a beneficiary of the scheme, the apex consumer court said: the complaint certainly came under the purview of the consumer courts.

Besides, the loan had been sanctioned to the complainant and the bank was to recover interest on the amount. Thus, the person taking the loan would be a consumer and a beneficiary of the scheme and his complaint was maintainable under the Consumer Protection Act, the apex consumer court said.

The apex consumer court also expressed unhappiness over how welfare 
schemes framed by the Central Government were being frustrated by banks and government officials.

But this order of February 1, 2007—delivered after a delay of five years—could not bring relief to the consumer. Because, by the time this view was taken and the case was decided, the scheme was already over. And even though the apex consumer court commented on how public sector banks scuttled welfare programmes meant for the needy, it said that it would be difficult to give any direction to release the loan as directed by the District Forum at this stage. It therefore directed the bank to pay the consumer a compensation of Rs 10,000.

This is a classic case of a consumer fighting for a loan for nine long years, only to be told at the end of it that his victory had no meaning because it was too late for the bank to disburse the loan. Given the circumstances and the fact that the complaint pertained to a welfare scheme meant for the unemployed, the consumer court could have asked the bank to implement the order of the District Forum and also give as damages an amount that would compensate the consumer for not getting the loan all these years. In fact this was a fit case for awarding exemplary damages.

Instead, the consumer court actually failed the consumer. (The Branch manager, SBI vs Nirakar Sahoo, General manager, Revision Petition no 1055 of 2002, decided on February 1, 2007.)