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2025 Supreme(Online)(SCDRC) 38020
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sunita Yadav, President, Monika Malik, Member
Narmada Malwa Gramin Bank – Appellant
Versus
Suresh Singh Bhatia – Respondent
FIRST APPEAL NO. SC/23/A/16/119|FIRST APPEAL NO. 1198 OF 2015|FIRST APPEAL NO. 119 OF 2016
For the Appellants/Petitioners: Ajay Dubey
For the Respondents: Ruchir Chaturvedi
Claims related to the disbursement of subsidies are not maintainable under the Consumer Protection Act as subsidy is not a 'service' and the claimant is not a 'consumer'. Additionally, courts generally do not substitute their judgment for a bank's discretion in granting loans.
Headnote:The matter concerns two cross-appeals arising from a District Commission order where a complainant alleged deficiency in service as a bank failed to disburse a loan for a crusher machine despite a subsidy of Rs.6,25,000/- being deposited by the Khadi Tatha Gramudyog Vibhag under the Prime Minister Employment Generation Program (PMEG). The District Commission had partly allowed the complaint, directing the return of earnest money and the deposit of the subsidy with the government department. The primary issues were whether the bank's refusal to disburse the loan constituted a deficiency in service and whether a claim for subsidy is maintainable under the Consumer Protection Act. The court reasoned that banks possess considerable discretion in granting credit and that the disbursement of subsidies does not constitute a 'service' for consideration, meaning the claimant cannot be treated as a 'consumer' for such benefits. As a result, the First Appeal No.1198/2015 filed by the opposite party-bank succeeds and is hereby allowed and the First Appeal No.119/2016 filed by the complainant is hereby dismissed.
| Table of Content |
|---|
| 1. procedural history and factual background of the loan application and district commission's initial ruling. (Para 1 , 2 , 3 , 4 , 5) |
| 2. arguments regarding non-compliance with loan terms and the nature of subsidy payments. (Para 6 , 7) |
| 3. legal determination that subsidy seekers are not 'consumers' and banks have discretion in loan granting. (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 4. final determination setting aside the lower court order due to lack of maintainability. (Para 14 , 15 , 16) |
ORDER
M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PLOT NO.76, ARERA HILLS, BHOPAL
FIRST APPEAL NO. 1198 OF 2015
(Arising out of order dated 09.09.2015 passed in C.C.No.388/2012 by District Commission, Ujjain)
1. NARMADA MALWA GRAMIN BANK
NOW KNOWN AS NARMADA JHABUA GRAMIN BANK,
HAVING ITS BRANCH AT 52, DANI GATE, UJJAIN (M.P.)
2. NARMADA MALWA GRAMIN BANK
NOW KNOWN AS NARMADA JHABUA GRAMIN BANK,
HAVING ITS BRANCH AT 52, DANI GATE, UJJAIN (M.P.) … APPELLANTS.
Versus
SURESH SINGH BHATIA
S/O SHRI BABU SINGH BHATIA,
R/O 15/12, HARI RAM CHOUBEY MARG,
UJJAIN (M.P.) …. RESPONDENT.
FIRST APPEAL NO. 119 OF 2016
(Arising out of order dated 09.09.2015 passed in C.C.No.388/2012 by District Commission, Ujjain)
SURESH SINGH BHATIA
S/O SHRI BABU SINGH BHATIA,
R/O 15/12, HARI RAM CHOUBEY MARG,
UJJAIN (M.P.) … APPELLANT.
Versus
1. NARMADA MALWA GRAMIN BANK
NOW KNOWN AS NARMADA JHABUA GRAMIN BANK,
HAVING ITS BRANCH AT 52, DANI GATE, UJJAIN (M.P.)
2. NARMADA MALWA GRAMIN BANK
NOW KNOWN AS NARMADA JHABUA GRAMIN BANK,
HAVING ITS BRANCH AT 52, DANI GATE, UJJAIN (M.P.) …. RESPONDENTS.
BEFORE :
HON’BLE JUSTICE SUNITA YADAV : PRESIDENT
HON’BLE DR. MONIKA MALIK : MEMBER
COUNSEL FOR PARTIES :
Shri Ajay Dubey, learned counsel for the complainant.
Shri Ruchir Chaturvedi, learned counsel for the opposite party-bank.
O R D E R
(Passed On 10.09.2025)
Per Say Justice Sunita Yadav, President:
Aforesaid appeals arise out of the same order dated 09.09.2015 passed by the District Consumer Disputes Redressal
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Commission, Ujjain (for short ‘District Commission’) in C.C.No.388/2012 therefore they are taken up together and are being disposed of by this common order.
2. The opposite party-bank has filed First Appeal No.1198/2015 for setting aside the impugned order whereas the complainant has filed First Appeal No. 119/2016 for enhancement of compensation awarded by the District Commission. For convenience facts are taken up from First Appeal No.1198/2015 unless otherwise stated.
3. The facts of the case as narrated by the complainant (hereinafter referred to as ‘complainant’) are that in order to purchase one crusher machine he had applied for loan for a sum of Rs.22,50,000/- to the opposite party no.1-bank through Khadi Tatha Gramudyog Vibhag under Prime Minister Employment Generation Program (PMEG) and by way of margin money he had deposited Rs.2,50,000/-. It is submitted that a subsidy of Rs.6,25,000/- was allowed by Khadi Tatha Gramudyog Vibhag and deposited the said sum with the bank. It is alleged by the complainant that despite of sanction of loan by the opposite party-bank and even depositing the earnest money as well receiving the subsidy of Rs.6,25,000/- from Khadi Tatha Gramudyog Vibhag, the opposite party-bank did not disburse the loan amount to the complainant due to which he could not purchase the crusher machine. The complainant therefore
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alleging deficiency in service on part of opposite parties-bank approached the District Commission seeking relief.
4. The opposite parties-bank in their reply submitted that the bank had sanctioned loan amount in accordance with the terms and conditions laid down in loan sanction letter dated 29.08.2011 and accordingly, the complainant for the purpose of operation of loan account and for making repayments was required to execute the guarantee agreement from the guarantors. The complainant did not deposit Rs.2,50,000/- against the earnest money instead had deposited this sum by way of Fixed Deposit. The complai
