Consumer Complaint Barred by Limitation if Filed Years After DRT Recovery Proceedings Commence: Chhattisgarh State Consumer Commission - 2025-07-26

State Consumer Commission Dismisses Appeal, Upholds Dismissal of Complaint Against Canara Bank Citing 1965-Day Delay

Raipur, Chhattisgarh - The State Consumer Disputes Redressal Commission, Chhattisgarh, has upheld a District Commission order, dismissing an appeal filed by a borrower against Canara Bank. The Commission ruled that the complaint was severely time-barred, having been filed approximately 1,965 days after the cause of action arose, and thus, was not maintainable.

The bench, comprising Justice Gautam Chourdiya (President) and Mr. Pramod Kumar Verma (Member), affirmed the decision of the District Consumer Commission, Ambikapur, which had initially dismissed the complaint against the bank and its former manager for alleged deficiency in service.

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Background of the Dispute

The case originates from a housing loan taken by the appellant, Rajesh Kumar Gupta, and his late wife, Poonam Jaiswal. In 2015, the couple agreed to purchase a house under construction for ₹25 lakh from a builder, Mrs. Neha Singh. After making an initial payment of ₹10 lakh, they secured a housing loan of ₹15 lakh from Canara Bank's Ambikapur branch to pay the remaining amount.

The loan agreement stipulated that funds would be disbursed to the builder in stages, contingent upon the progress of the construction, which was to be verified by the bank.

Allegations of the Complainant

Mr. Gupta alleged that the then Branch Manager, in collusion with the builder, disbursed ₹10 lakh from the sanctioned loan amount to the builder on the very day the loan was approved (December 8, 2015). He claimed this was done: -

In direct violation of the construction-linked disbursement terms. -

Without any site inspection, work progress report, or architect's certificate. -

Without his knowledge or consent, by misusing signed documents.

Gupta contended that the construction had not progressed to the stage that would justify such a large disbursement, and this constituted a gross "deficiency in service" by the bank, causing him wrongful financial loss. The issue came to a head when the bank initiated recovery proceedings against him in the Debt Recovery Tribunal (DRT), Jabalpur.

The Bank's Defense

Canara Bank and its former manager refuted the allegations, arguing that: -

The disbursement was made in good faith and with the borrower's consent. -

A demand letter for the funds was jointly submitted by the borrower and the builder. -

The payment was processed only after obtaining the borrower's wife's signature on the transaction slip. -

The bank had already initiated legal proceedings for loan recovery at the DRT, Jabalpur, in 2018, and the consumer complaint filed in 2024 was merely a tactic to evade repayment.

Commission's Findings on Limitation

The State Commission, after reviewing the records and arguments, focused on the critical issue of the limitation period for filing the complaint.

The Commission observed, "The Debt Recovery Tribunal, Jabalpur, had issued a summons to the complainants for recovery of ₹11,99,026.50 on 29-12-2018. This date is when the actual cause of action arose."

The judgment highlighted that the consumer complaint was filed before the District Commission only on May 17, 2024, nearly five and a half years (approximately 1,965 days) after the cause of action arose. Under the Consumer Protection Act, a complaint must be filed within two years from the date on which the cause of action arises.

The Commission noted that the appellants failed to provide any reasonable justification or file an application to condone this substantial delay.

Final Verdict and Implications

While acknowledging the complainant's grievance regarding the bank's alleged premature disbursement, the Commission concluded that the legal bar of limitation was absolute in this case. The bench stated, "Consequently, we find the appeal filed by the appellants/complainants to be without merit and the complaint to be time-barred."

The Commission confirmed the District Commission's order dated September 25, 2024, and dismissed the appeal. The decision reinforces the stringent requirement for consumers to adhere to the statutory limitation periods when approaching consumer forums, underscoring that a delay without sufficient cause can be fatal to a case, regardless of its underlying merits.