Supreme Court Dismisses Complaint, Establishes Distinction between Deficiency in Service and Tortious Acts

In a recent judgment delivered on March 27, 2023, the Supreme Court of India dismissed a complaint filed against the Chairman and Managing Director of City Union Bank Ltd., establishing a crucial distinction between deficiency in service and tortious acts. Justice Bela M. Trivedi, while delivering the judgment, emphasized, "The deficiency in service has to be distinguished from the tortious acts of the respondent. In the absence of deficiency in service, the aggrieved person may have a remedy under the common law to file a suit for damages but cannot insist on relief under the Consumer Protection Act for the alleged acts of commission and omission attributable to the respondent, which otherwise do not amount to deficiency in service." This landmark decision clarifies the scope of proceedings before consumer commissions and the burden of proof required to establish deficiency in service.

The case, Civil Appeal No. 7289 of 2009, originated from a complaint filed by R. Chandramohan against the appellants, seeking the re-credit of two demand drafts totaling eight lakhs rupees in his current account with City Union Bank. Chandramohan alleged that the drafts were not credited to his account and accused the appellants of collusion and negligence. The State and National Consumer Disputes Redressal Commissions ruled in favor of Chandramohan, leading the appellants to appeal the decision in the Supreme Court.

During the proceedings, the appellants argued that there was no deficiency in service on their part and that the complaint was not maintainable. They contended that the drafts were issued in the name of "D-Cube Construction" and were credited to a separate account opened by one of the directors. They further stated that the bank employees acted bona fide and followed the due procedure, thereby negating any willful fault, imperfection, or shortcoming that could be termed as deficiency in service.

Justice Trivedi, in her judgment, examined the facts of the case and referred to precedents to support her decision. She stated, "When the Current Account No. 4160 was opened by R. Thulasiram as the proprietor of 'D-Cube Construction', relying upon the letter dated 15.02.1997 written on behalf of 'D-Cube Constructions (P) Ltd.', and when the disputed two drafts in question which were in the name of 'D-Cube Construction' were credited in the account of 'D-Cube Construction', it could not be said that there was any willful default or imperfection or shortcoming so as to term it as the deficiency in service on the part of the appellant-bank."

Date of Decision: March 27, 2023

THE CHAIRMAN & MANAGING DIRECTOR,CITY UNION BANK LTD.  & ANR.  VS CHANDRAMOHAN