Supreme Court Restores Consumer Forum Order in Bank Error Case: Sunil Kumar Maity vs. State Bank of India (2022)

Date of the Judgment: 21 January 2022

Citation: 2022 INSC 842

Judges: Sanjiv Khanna, J., Bela M. Trivedi, J.

Can a higher consumer forum introduce new evidence to overturn a lower forum’s decision? The Supreme Court recently addressed this critical issue in a case involving a bank error, highlighting the limits of revisional jurisdiction. The core issue revolved around whether the National Consumer Disputes Redressal Commission (NCDRC) was justified in overturning the State Consumer Disputes Redressal Commission’s (SCDRC) order based on a report it had called for on its own during the revision process. The Supreme Court bench, comprising Justices Sanjiv Khanna and Bela M. Trivedi, delivered the judgment, with Justice Bela M. Trivedi authoring the opinion.

Case Background

The case began when Sunil Kumar Maity, the appellant, discovered a discrepancy in his bank account at the State Bank of India (SBI). Mr. Maity had a savings account since January 2000, which underwent multiple account number changes. On 15 September 2012, when Mr. Maity went to deposit ₹500, he was given a new account number, 32432609504, by a bank staff member. Subsequently, on 16 January 2013, he deposited a cheque of ₹3,00,000. However, on 11 December 2013, when he updated his passbook, he found a balance of only ₹59. Upon inquiry, the bank informed him that the account number given to him on 15 September 2012 actually belonged to another customer named Sunil Maity (respondent no. 2), and that this other Sunil Maity had withdrawn ₹1,00,000 on 25 January 2013 and ₹2,00,000 on 28 January 2013 from that account. Mr. Maity, the appellant, then filed a complaint with the Consumer Forum against SBI and the other Sunil Maity.

Timeline

Course of Proceedings

The Consumer Forum initially ruled in favor of Mr. Maity on 14 May 2014, acknowledging the bank’s error. The State Consumer Disputes Redressal Commission, West Bengal, partly allowed the bank’s appeal on 25 October 2017, confirming the rest of the Consumer Forum’s order but striking off the fine of Rs. 100 per diem. The State Commission noted that the signature on the deposit slip for the disputed cheque matched Mr. Maity’s specimen signature, that Mr. Maity signed in English while the other Sunil Maity signed in Bengali, and that the source of the cheque was disclosed by Mr. Maity. The National Consumer Disputes Redressal Commission (NCDRC), however, overturned the State Commission’s decision on 7 June 2019, based on a report it had requested from SBI during the revision process. The NCDRC dismissed the complaint, granting liberty to Mr. Maity to approach a civil court. The NCDRC also stated that the bank would not press the issue of limitation if Mr. Maity chose to bring the action in a civil court. The Supreme Court noted that the National Commission sought a report from the bank at the revisional stage, which was not proper.

Legal Framework

The Supreme Court considered the revisional jurisdiction of the National Commission under Section 21(b) of the Consumer Protection Act. Section 21(b) of the Consumer Protection Act allows the National Commission to exercise revisional jurisdiction if the State Commission has:
✓ Exercised a jurisdiction not vested in it by law.
✓ Failed to exercise jurisdiction so vested, or
✓ Acted in the exercise of its jurisdiction illegally or with material irregularity.

The Supreme Court also discussed Order 41, Rule 27 of the Code of Civil Procedure, which deals with the production of additional evidence at the appellate stage. It states that the party has to establish that notwithstanding the exercise of due diligence, such evidence was not within its knowledge or could not even after due diligence, be produced by it at the time when the decree appealed against was passed.

The Court also noted that Section 5 of the Limitation Act, 1963, does not apply to the institution of civil suits in Civil Court.

Arguments

Appellant’s Arguments (Sunil Kumar Maity):

• The appellant argued that the bank was negligent in providing the wrong account number.
• The appellant contended that the State Commission had correctly appreciated the evidence and that the National Commission had erred in overturning its order based on a report it had called for suo moto.
• The appellant argued that he could not have known the account number of the other Sunil Maity, and that it was the bank’s responsibility to ensure that the correct account was credited.

Respondent’s Arguments (State Bank of India):

• The bank argued that there was no negligence on its part and that the appellant himself had provided the wrong account number.
• The bank relied on the report submitted by its Regional Manager to the National Commission, which suggested that the appellant had intentionally inserted the wrong account number or was negligent in keeping his passbook safe.
• The bank submitted that the National Commission was correct in allowing the revision petition as the lower forums had not done an in-depth appraisal of the case.

The innovativeness of the argument lies in the fact that the appellant was able to prove the negligence of the bank and the bank tried to shift the blame on the appellant. The bank also tried to introduce new evidence at the revisional stage, which was not allowed.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issues:

1. Whether the National Commission was justified in overturning the order of the State Commission in exercise of its revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986.
2. Whether the National Commission was justified in calling for a report from the respondent-bank during the pendency of the revision application, and relying upon such report.

Treatment of the Issue by the Court

Authorities

Cases Cited:

• CCI Chambers Coop. Hsg. Society Ltd. vs. Development Credit Bank Ltd. [(2003) 7 SCC 233] – The Supreme Court cited this case to reiterate that the requirement of leading detailed evidence could not be a ground to shut the doors of any forum created under the Consumer Protection Act. The anvil on which the entertainability of a complaint by a forum under the Act is to be determined is whether the questions, though complicated they may be, are capable of being determined by summary enquiry.

Legal Provisions Considered:

• Section 21(b) of the Consumer Protection Act – This section defines the revisional jurisdiction of the National Commission. The Court discussed the limits of this jurisdiction, stating that it should only be exercised when the State Commission has exceeded its jurisdiction or acted illegally or with material irregularity.
• Order 41, Rule 27 of the Code of Civil Procedure – This provision deals with the production of additional evidence at the appellate stage. The Court noted that the National Commission did not adhere to the requirements of this provision.
• Section 5 of the Limitation Act, 1963 – The Court clarified that this section does not apply to the institution of civil suits in Civil Courts.

Authority Analysis

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court followed CCI Chambers Coop. Hsg. Society Ltd. vs. Development Credit Bank Ltd. [(2003) 7 SCC 233]* to reiterate that consumer forums should not be shut down on the grounds of complicated evidence and that the questions should be capable of being determined by summary enquiry.
• The Court explained the scope and limitations of the National Commission’s revisional jurisdiction under Section 21(b) of the Consumer Protection Act.
• The Court clarified the conditions for producing additional evidence at the appellate stage under Order 41, Rule 27 of the Code of Civil Procedure and stated that the National Commission did not follow the same.
• The Court clarified that Section 5 of the Limitation Act, 1963 does not apply to civil suits.

What weighed in the mind of the Court?

The Supreme Court was primarily concerned with the procedural impropriety committed by the National Commission. The Court emphasized that the National Commission had exceeded its revisional jurisdiction by calling for a report from the bank and relying on it to overturn the findings of the lower forums. The Court also highlighted the fact that the State Commission had given sound reasoning for its decision, which the National Commission had failed to consider. The Court was also critical of the bank’s attempt to shift the blame onto the appellant, stating that the bank should have been more cautious, especially since both the appellant and the other Sunil Maity had accounts in the same branch.

Fact:Law Ratio

The Supreme Court’s decision was influenced more by the factual aspects of the case, particularly the bank’s negligence and the procedural impropriety of the National Commission, than by purely legal considerations.

Logical Reasoning

Judgment

The Supreme Court held that the National Commission had exceeded its revisional jurisdiction by calling for a report from the bank and relying on it to overturn the findings of the lower forums. The Court stated that the State Commission and the Consumer Forum had already appreciated the documents on record and passed reasoned orders. The Court also noted that the report that tried to absolve the respondent-bank of its liability was based on surmises and conjectures. The Court observed that the National Commission had not delved into the sound reasoning given by the State Commission. The Court also clarified that Section 5 of the Limitation Act, 1963 does not apply to the institution of civil suits in Civil Courts.

The Court stated, “It is needless to say that the revisional jurisdiction of the National Commission under Section 21(b) of the said Act is extremely limited. It should be exercised only in case as contemplated within the parameters specified in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity.”

The Court further added, “In the instant case, the National Commission itself had exceeded its revisional jurisdiction by calling for the report from the respondent-bank and solely relying upon such report, had come to the conclusion that the two fora below had erred in not undertaking the requisite in-depth appraisal of the case that was required.”

The Court also noted, “The report that tries to absolve the respondent-bank of its liability is based on surmises and conjectures as it abstrusely and without evidence holds that the bank has every reason to believe that wrong account number was intentionally inserted by the appellant himself for reasons best known to the appellant or on account of negligence by the appellant by not keeping the passbook in his safe and proper custody. The suppositions are contradictory as well as incredulous and fanciful.”

The Supreme Court set aside the order passed by the National Commission and restored the order passed by the State Commission. The appeal was allowed.

Key Takeaways

• The National Commission’s revisional jurisdiction is limited and should not be used to re-appreciate evidence already considered by lower forums.
• Consumer forums should not be shut down on the grounds of complicated evidence if the questions can be determined by summary enquiry.
• Banks are expected to be cautious and responsible in handling customer accounts, especially when there are similar names.
• Additional evidence should not be introduced at the revisional stage unless it meets the criteria set out in Order 41, Rule 27 of the Code of Civil Procedure.
• Section 5 of the Limitation Act does not apply to the institution of civil suits in Civil Courts.

This judgment reinforces the importance of adhering to procedural norms in consumer dispute resolution and ensures that the decisions of lower forums are not overturned without proper justification. It also highlights the responsibility of banks in handling customer accounts with due diligence.

Directions

The Supreme Court set aside the order passed by the National Commission and restored the order passed by the State Commission. The appeal was allowed.

Development of Law

The ratio decidendi of this case is that the National Commission cannot exceed its revisional jurisdiction by calling for a report from the respondent-bank and relying on it to overturn the findings of the lower forums. The Supreme Court has reaffirmed the principle that the revisional jurisdiction of the National Commission is limited and should be exercised only when the State Commission has acted illegally or with material irregularity. This judgment reinforces the established legal position on the scope of revisional jurisdiction under Section 21(b) of the Consumer Protection Act and the criteria for introducing additional evidence at the appellate stage under Order 41, Rule 27 of the Code of Civil Procedure. There is no change in the previous position of law.

Conclusion

The Supreme Court’s judgment in Sunil Kumar Maity vs. State Bank of India emphasizes the limited scope of the National Commission’s revisional powers. The Court held that the National Commission erred in overturning the State Commission’s order based on a report it had called for suo moto. The judgment reinforces the importance of procedural fairness and adherence to legal norms in consumer dispute resolution. It also underscores the responsibility of banks to handle customer accounts with due diligence. The Supreme Court restored the order of the State Commission, effectively ruling in favor of the appellant, Sunil Kumar Maity.