1995 (1) TMI 384 - SC - Indian Laws

Whether a banking company which renders service within meaning of clause (g) of Section 2 of the Consumer Protection Act 1986 is liable to compensate its customers for loss of service due to illegal strike by its employees? Held that - The provisions of Section 14(1)(d) are attracted if the person from whom damages are claimed is found to have acted negligently and such negligence must result in some loss to the person claiming damages. In other words loss or injury if any must flow from negligence. Mere loss or injury without negligence is not contemplated by this Section. The bank has not been found to be negligent in discharge of its duties. Therefore even if any loss or damage was caused to any depositor but it was not caused due to negligence of bank then no claim of damages under the Act was maintainable. Appeals dismissed.

Summary

Issues:
1. Liability of a banking company for compensating customers for loss of service due to illegal strike by employees.

Analysis:
The judgment in question deals with the issue of whether a banking company is liable to compensate its customers for the loss of service caused by an illegal strike by its employees. The court considered the definition of "service" under the Consumer Protection Act, 1986, and the concept of deficiency in service. The appellant, a registered voluntary consumer association, sought various forms of compensation for the loss suffered by customers during a 54-day strike, including interest on overdraft accounts, reimbursement of interest, and other related costs. However, the court noted that the deficiency in service must arise due to a fault, imperfection, or inadequacy in the quality or manner of performance required by law. In this case, the court found that the failure of the bank to render service was not due to any deficiency on its part but was a result of the illegal strike by employees, who physically prevented the bank from functioning.

The court also examined the provisions of Section 14(1)(d) of the Consumer Protection Act, which allows for compensation to consumers for loss or injury suffered due to the negligence of the opposite party. The court emphasized that negligence must result in some loss or injury to the consumer, and mere loss or injury without negligence is not actionable under the Act. In this case, the bank was not found to be negligent in discharging its duties, and therefore, the court held that no claim for damages under the Act was maintainable. The court highlighted that for damages to be claimed under Section 14(1)(d), the negligence of the party causing the loss must be established, and the loss or injury must flow from such negligence.

In conclusion, the court dismissed the appeal, stating that the bank was not liable to compensate customers for the loss of service due to the illegal strike by its employees. The court also ruled that there would be no order as to costs in this matter.