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High Court Of Calcutta
SATYABRATA SINGH
ANZ GRINDLAYS BANK - Appellant
Versus
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - Respondent
Matter 750 Of 1994
Decided On : 01/05/1995
CONSUMER PROTECTION ACT - JURISDICTION - BANKING SERVICES - LOAN DENIAL - DEFICIENCY IN SERVICE - CONSUMER DISPUTE: 1. A bank's refusal to grant a loan, even if it is within its discretion, may constitute a deficiency in service if it results from arbitrary or unreasonable actions by the bank. 2. Such deficiency in service may give rise to a consumer dispute under the Consumer Protection Act, 1986, as banking transactions fall within the ambit of the Act. 3. The appropriate forum for resolving such disputes is the consumer forum established under the Act, which has the expertise and jurisdiction to determine whether there has been a deficiency in service and to provide appropriate relief.
Fact of the Case:
The petitioners, who had an account with the petitioner-bank under the Cashette Scheme, alleged that the bank refused to release their shares, which were kept as security for a loan, despite their request to withdraw them. They filed a complaint before the consumer forum, alleging deficiency in service.
Finding of the Court:
The court held that the consumer forum had jurisdiction to entertain the complaint, as banking transactions fall within the ambit of the Consumer Protection Act, 1986. The court observed that the bank's refusal to release the shares, if arbitrary or unreasonable, could constitute a deficiency in service.
Issues: 1. Whether a bank's refusal to grant a loan constitutes a deficiency in service under the Consumer Protection Act, 1986. 2. Whether the consumer forum has jurisdiction to entertain a complaint alleging deficiency in banking services.
Ratio Decidendi: 1. The court held that a bank's refusal to grant a loan, even if it is within its discretion, may constitute a deficiency in service if it results from arbitrary or unreasonable actions by the bank. 2. The court also held that banking transactions fall within the ambit of the Consumer Protection Act, 1986, and that the consumer forum has jurisdiction to entertain complaints alleging deficiency in banking services.
Final Decision: The court dismissed the writ petition filed by the bank, holding that the petitioners should raise their grievances before the consumer forum. The court clarified that its observations on the merits of the case were limited to determining whether the consumer forum had jurisdiction to entertain the complaint.
( 1 ) IN this writ application the petitioners have, inter alia, prayed for issuance of writ of certiorari for quashing the proceedings being C. D. F. Case No. 94 of 1994 (Sarita Agarwal v. ANZ Grindlays Bank) pending before the respondent No. 1.
( 2 ) THE fact of the matter lies in a very narrow compass. The respondents Nos. 2 and 3 opened an account for availing banking services under the Cashette Scheme of the petitioner-bank (hereinafter referred to as 'the Bank' ). In terms of the said scheme credit limit/ overdraft limit is allowed to the extent of 50% of the market value of the shares kept with the bank. The respondents Nos. 2 and 3 made a request to the bank for withdrawal of shares of Tube Investment of India Ltd. on 20-9-93. It is admitted that the sanctioned credit limit of the respondents Nos. 2 and 3 was Rs. 73,600. 00- and out of the said amount they utilised a sum of Rs. 61,939. 00.
( 3 ) THE respondent No. 3 on or about 24-9-93 stated that the sale proceeds would be deposited in the bank account as the respondents were in the process of closing the account in view of the deteriorating quality of services of the bank. The said shares, however, were not released.
( 4 ) ACCORDING to the respondents some alternative proposal to the bank had been given but, according to the bank, the said respondents did not act in terms of its suggestions. On 18-10-93 the Bank Manager of the petitioner-bank refused to release the shares. The respondents contend that the said purported reasons are flimsy and unjustified. A copy of the said letter is contained in Annexure 'd' to the writ application.
( 5 ) FURTHER allegation of the respondents Nos. 2 and 3 is that the shares of the Tube Investments of India Ltd. were bought by them from the market at a higher price in order to fulfil their obligations to their buyers, as a result whereof they suffered financial loss.
( 6 ) THE said respondents filed a complaint petition before the respondent No. 1 on 7-1-94, which was markes as CDF 95 of 1994. The petitioner-bank filed an application for adjustment. However, in the meanwhile, this Writ application was filed and an interim order was passed on 25-4-94 for a limited period, which was later on extended.
( 7 ) THE contention of the petitioner is that the complaint petition, even if given face value and taken to be correct in its entirety, does not make out a complaint within the meaning of the said Act, which can be entertained by the respondent No. 1. It has been contended that the question as to whether a loan would be granted by a commercial bank to a customer or not is within the exclusive discretion of the bank and thus the same cannot form a subject-matter of a complaint in terms of the provisions of the Consumer Protection Act, 1986. It is further contended that refusal to grant loan is neither hiring or availing of services within the meaning of the provisions of Consumers Protection Act, 1986 (hereinafter referred to as 'the said Act' ). Reliance, in this connection, has been placed on Smt. Saraswati Mehrotra v. State of West Bengal reported in (1994) 1 Cal HN 167 wherein a Division Bench of this Court held that ordinarily this Court should not exercise its jurisdiction under Article 226 of the Constitution of India over such matters. In the Calcutta Metropolitan Development Authority v. Union of India, reported in AIR 1993 Cal 4 a complaint was made assailing construction of pay and use toilets in the public park and it was held by the learned single Judge of this Court that such complaint does not come within the purview of the said Act. The said decision has no application to the facts of the present case. The Learned Counsel further submitted that as the respondent No. 1 lacks inherent jurisdiction, this Court may issue a Writ of Prohibition. Reliance in this connection has been placed on AIR 1962 SC 1893.
( 8 ) MR. G. S. Pal, learned counsel appearing on behalf of the respondents Nos. 2 and 3, howe
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