Case Note & Summary
The Supreme Court allowed the appeals filed by the Maharashtra State Cooperative Bank Ltd. against the orders of the National Consumer Disputes Redressal Commission. The dispute originated from a housing scheme initiated by the bank in 1973 for its employees, wherein the bank acquired land from Nagpur Improvement Trust and constructed 28 tenements. The tenements were allotted to employees in 1976, and the lease of the land was executed in the bank's name. After the employees repaid their loans, the bank passed a resolution in 2004 to transfer the tenements to the employees, but formalities were not completed. In 2012, the employees' cooperative housing society filed a complaint before the State Commission seeking directions for lease renewal in the society's name and compensation for two vacant plots. The State Commission dismissed the complaint, but the National Commission allowed the appeal, directing the bank to pay the cost of the vacant plots and bear lease renewal expenses. The Supreme Court held that the complaint was not maintainable as the bank's housing scheme was a welfare measure, not a service for consideration, and the relationship was not that of a consumer and service provider. Additionally, the complaint was barred by limitation as the grievances arose from events in 1976 and 1979. The Court also found no evidence that the employees had paid for the vacant plots or that the bank had any obligation to transfer the lease. Consequently, the Supreme Court set aside the National Commission's orders and restored the State Commission's dismissal of the complaint.
Headnote
A) Consumer Law - Maintainability of Complaint - Housing Society vs. Bank - The complaint filed by the employees' cooperative housing society against the bank for alleged deficiency in service regarding transfer of leasehold land and compensation for vacant plots was held to be not maintainable as the relationship between the bank and its employees was not that of a 'consumer' and 'service provider' under the Consumer Protection Act, 1986. The bank had provided housing as a welfare measure, not as a commercial service. (Paras 2-10) B) Consumer Law - Limitation - Delay in Filing Complaint - The complaint was filed in 2012 alleging grievances arising from allotments made in 1976 and lease executed in 1979, which was grossly barred by limitation under the Consumer Protection Act, 1986. The National Commission erred in entertaining the complaint after such inordinate delay. (Paras 3-6) C) Property Law - Leasehold Rights - Transfer of Lease - The lease of the land was in the name of the bank, and the employees had no direct leasehold rights. The bank's resolution to transfer tenements did not create any enforceable right in favor of the society without completion of formalities. The National Commission's direction to renew lease in society's name was unsustainable. (Paras 3-5) D) Consumer Law - Compensation for Vacant Plots - The claim for compensation for two vacant plots was based on alleged sharing of cost by employees, but there was no evidence that the employees paid for those plots. The bank had borne the entire cost initially, and the employees only repaid loans for their respective tenements. Hence, no deficiency in service could be attributed to the bank. (Paras 4-7)
Issue of Consideration
Whether the National Commission was correct in directing the appellant-bank to pay the cost of two vacant plots and to bear the cost of lease renewal in favor of the respondent-society, and whether the complaint was maintainable before the consumer fora.
Final Decision
The Supreme Court allowed the appeals, set aside the orders of the National Commission, and restored the order of the State Commission dismissing the complaint.
Law Points
- Consumer Protection Act
- 1986
- Section 12
- Section 21
- Limitation
- Jurisdiction of Consumer Fora
- Leasehold Rights
- Transfer of Property
- Cooperative Housing Society
