State Consumer Disputes Redressal Commission
Bhupinder Malik vs Uco Bank on 22 December, 2025
1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Appeal No. : 242 of 2025
Date of Institution : 04.08.2025
Date of Decision : 22.12.2025
Bhupinder Malik, age 44 years, S/o Sh. Ram Chander Malik
Permanent Address: H.No.926, Sector-12, HUDA, Panipat, Haryana 132103
Correspondence Address: Flat No.O-803, Jal Vayu Towers, Tower-O, Sector-
125, Greater Mohali, Punjab 140301
Appellant/Complainant
VERSUS
1] UCO Bank, SCO-283, Sector-35, Chandigarh through Branch
Manager
2] UCO Bank, Zonal office Chandigarh, SCO 55-56-57 Bank Square,
Sector-17-B, Chandigarh-UT-160017 through Deputy General
Manager
3] National Housing Bank (wholly owned by Reserve Bank of India),
Regional office, Ground Floor, Jeevan deep Building, Sector 17-A,
Chandigarh-160017 through Assistant General Manager
4] Pradhan Mantri Awas Yojana-Urban (PMAY-U), Housing for All (HFA)
Mission Division, Ministry of Housing and Urban Affairs, Government
of India, Nirman Bhawan, Maulana Azad Road, New Delhi 110011
through Mission Director: (Respondent No.4 deleted by District
Commission vide order dated 01.05.2025)
....Respondents/Opposite Parties
BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT
MRS. PADMA PANDEY, MEMBER
ARGUED BY:-
Sh. Bhupinder Malik, appellant in person Sh. Sumit Narang, Advocate for respondents No.1 to 3 (already proceeded exparte vide order dated 19.09.2025) Name of respondent No.4 deleted from the array of the parties vide order dated 18.11.2025 2 PER PADMA PANDEY, MEMBER The instant appeal has been filed by the complainant - Sh. Bhupinder Malik (appellant herein) for setting aside of order dated 01.07.2025 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (referred to as the 'District Commission') vide which consumer complaint No.533 of 2024 filed by him has been dismissed by the District Commission.
2] Briefly stated the case of the appellant-complainant before the District Commission was that the complainant and his wife purchased Flat No.O-803 in Jal Vayu Towers, Sector-125, Mohali for Rs.38 lakh in December 2020 and approached opposite party No.1 for a home loan, where the bank officials assured him of lowest rate of interest and subsidy of Rs.2,67,000/- under CLSS, PMAY (Urban). After submission of all required documents and signing of forms, including the Self Declaration-Income Certificate filled by opposite party No.1, a home loan of Rs.28,50,000/- was sanctioned and an application number for subsidy was issued. Despite repeated visits and assurances that the subsidy claim was processed and forwarded, no subsidy was released and the complainant was never informed of any ineligibility. Only through the RBI Ombudsman's email dated 25.07.2024 did the complainant learn that opposite party No.2 had declared him ineligible on grounds of income and carpet area, which was contrary to record, as the declared household income of Rs.4,88,430/- fell under PMAY-LIG criteria and if wife's income was included, the complainant qualified under PMAY-MIG-I. It was further the case of the complainants that they were never informed of these grounds earlier and the real reason for non-release of subsidy appeared to be failure of opposite party No.2 to upload documents on the CNA portal. The complainant termed the acts of the opposite parties amounted to deficiency in service and unfair trade practice, which resulted into filing of a consumer complaint before the District Commission.
3] Opposite Parties No.1 & 2, in their reply filed before the District Commission, while admitting the sanction of a home loan of Rs.28.50 lacs to 3 the complainant, stated that the complainant, at his own volition, opted to avail subsidy under PMAY and was clearly made aware that grant of subsidy is the sole prerogative of the National Housing Bank (NHB). It was further stated that the opposite parties only lodged the claim to facilitate the complainant and had no role in disbursement of subsidy and therefore, could not be held liable if the subsidy was rejected by NHB.
4] Opposite Party No.3, in its separate reply filed before the District Commission, stated that there was no record, matching the Application ID C0002275942 as provided by the complainant, was found among the claims accepted for processing in the PMAY-CLSS portal maintained by NHB as a CNA. It was further stated that based on the search made with the Application ID, a claim had been found among the list of rejected cases.
5] Contesting parties led evidence by way of affidavits and documents in support of their respective cases.
6] After hearing the parties and going through the record, the District Commission dismissed the consumer complaint as stated above.
7] Order dated 01.07.2025 passed by the District Commission has been assailed by the appellant/complainant on the ground that the District Commission has failed to appreciate that the appellant was a consumer of respondent - UCO Bank and was not claiming subsidy as a matter of right but was seeking compensation for loss caused due to negligence and deficiency in service of respondents No.1 and 2 as specifically pleaded in the prayer clause. It has further been stated that the District Commission wrongly held the complaint to be non-maintainable by relying upon an old judgment, while ignoring later binding precedents holding that a complainant is a consumer insofar as deficiency in service by the bank is concerned. It has further been stated that the District Commission also ignored clear evidence on record proving negligence of respondents No.1 and 2 as respondent No.3 categorically admitted that the appellant's subsidy claim was rejected not due to ineligibility but because the respondent - Bank wrongly uploaded the appellant's loan account number against another borrower causing rejection of the appellant's claim and consequent loss of 4 Rs.2.67 lakhs. It has further been stated that the District Commission failed to consider that respondents No.1 and 2 were rendering paid services in processing subsidy claims under the scheme making the appellant a consumer under the Act. It has further been stated that the respondents failed to explain the alleged ineligibility of the appellant and wrongly shifted their statutory duty of ascertaining eligibility onto him and the replication filed by the appellant was also not considered rendering the impugned order erroneous.
8] On behalf of respondents No.1 to 3 (opposite parties No.1 to 3 before the District Commission), it has been argued that the appellant- complainant is not a "consumer" under the Consumer Protection Act, 2019 as no consideration was paid or promised for grant of subsidy and payment of subsidy does not fall within the definition of service, relying upon judgment of Hon'ble National Consumer Disputes Redressal Commission in case titled 'Chaudhari Ashok Yadav Vs. Rewari Central Cooperative Bank & Anr.', RP/4894/2012 decided by on 19.12.2019. It has further been argued that the appellant-complainant was ineligible for subsidy as per policy and therefore suffered no loss and that banks have no role in disbursement of subsidy under PMAY. It has further been argued that the joint annual income of the appellant-complainant and his wife was Rs.9,04,710/-, exceeding the PMAY-LIG eligibility limit and that the carpet area of the flat was 120.77 sq. mtrs., beyond the permissible limit of 60 sq. mtrs., rendering the appellant-complainant ineligible on both counts. It has further been argued that the complaint was bad for non-joinder of the co-borrower, Mrs. Jyoti Rani. It has further been argued that the District Commission has rightly dismissed the consumer complaint of the appellant/ complainant, which is a well reasoned order and as such, the appeal be dismissed.
9] We have given our thoughtful consideration to the rival submissions, the grounds of appeal, the record of the District Commission, written arguments of the parties and the legal position governing the issue. The principal and foundational ground urged by the appellant -complainant is that the District Commission erred in holding that the appellant is not a 5 "consumer" under the Consumer Protection Act, 2019 and consequently, in dismissing the complaint as not maintainable. Since the maintainability of the consumer complaint goes to the very root of the matter, the said ground deserves to be examined first. At the outset, it was not in dispute that the appellant availed a housing loan of ₹28.50 lakhs from Opposite Party No.1- UCO Bank. It was also not in dispute that the appellant applied for benefit of interest subsidy under the Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) in connection with the said loan. It was equally undisputed that the subsidy was not released in favour of the appellant. The controversy, however, does not end here. The crucial question is whether the grievance raised by the appellant falls within the jurisdiction of the Consumer Fora and whether, for the purpose of such grievance, the appellant can be regarded as a "consumer" within the meaning of the Act.
10] A careful reading of the complaint, including the prayer clause, clearly reveal that the dominant grievance of the appellant is the non-release of interest subsidy of ₹2,67,000/- under the PMAY-CLSS. Though the appellant has attempted to give the grievance a colour of "compensation for loss caused due to negligence and deficiency in service," in substance and effect, the claim emanates directly from the alleged denial of subsidy under a Government scheme. The alleged loss quantified by the appellant is nothing but the amount of subsidy which, according to him, he ought to have received.
11] The Consumer Protection Act, 2019 defines a "consumer" as a person who buys goods or hires or avails of any services for a consideration which has been paid, partly paid or promised. The element of "consideration" for the specific service complained of is thus an essential and indispensable requirement. In the present case, while the appellant did pay consideration to the Bank in the form of interest and other charges for availing the housing loan, nothing was brought on record by the appellant - complainant to show that any consideration was paid or promised by the appellant to the Bank for grant or facilitation of subsidy under PMAY. The subsidy is a welfare measure framed by the Government of India and is 6 disbursed, if at all, by the National Housing Bank acting as the Central Nodal Agency. The subsidy does not flow from a contractual relationship between the borrower and the lending bank, but from a statutory policy decision of the Government.
12] The appellant has strenuously argued that since the Bank processed the loan and forwarded the subsidy claim, any negligence in that process would amount to deficiency in service. This argument, though attractive at first blush, does not withstand legal scrutiny in view of the settled law. The act of forwarding or uploading subsidy claims by the Bank is merely a facilitative or ministerial function performed under the scheme guidelines and not a "service" hired for consideration by the borrower. The borrower does not have a vested or enforceable right to receive subsidy merely by applying for it nor can the Bank guarantee its release.
13] The District Commission has rightly relied upon the authoritative pronouncement of the Hon'ble National Consumer Disputes Redressal Commission in Chaudhary Ashok Yadav vs. Rewari Central Co- operative Bank & Anr., R.P. No.4894 of 2012 decided on 08.02.2013, wherein it has been categorically held that a person seeking benefit of subsidy under a scheme is not a "consumer" and that subsidy does not constitute a service under the Consumer Protection Act. This principle has been consistently reiterated in subsequent judgments, including Madan Lal vs. Punsup Gas Service & Ors. and Deepinder Singh & Anr. vs. The Primary Co-operative Agricultural Development Bank Ltd. & Ors., wherein it has been unequivocally held that disputes relating to grant or non-grant of subsidy are outside the purview of Consumer Fora.
14] The appellant has attempted to distinguish the present case by contending that he is not claiming subsidy per se but compensation for its loss. This distinction, in our considered view, is artificial and illusory. What cannot be claimed directly cannot be permitted to be claimed indirectly. If the law does not recognize the appellant as a consumer for the purpose of claiming subsidy, the appellant cannot bypass this legal bar by couching the relief as "compensation" equivalent to the subsidy amount. Granting such 7 relief would, in effect, amount to awarding the subsidy itself, which is impermissible under the Act.
15] The argument that the Bank receives or is entitled to processing charges under the scheme guidelines also does not advance the appellant's case. The guidelines governing inter se arrangements between the Government and the lending institutions cannot confer consumer status upon a borrower unless consideration for the specific service complained of flows from the borrower to the service provider. At best, such guidelines regulate administrative or financial arrangements between the Government and the participating institutions and do not create a consumer-service provider relationship between the borrower and the Bank in respect of subsidy.
16] Equally without merit is the contention that negligence on the part of the Bank in uploading incorrect details would clothe the appellant with the status of a consumer. Negligence, by itself, is not sufficient to invoke the jurisdiction of the Consumer Fora unless it arises out of deficiency in a service hired for consideration. In the absence of such a relationship, the remedy, if any, lies before a Civil Court or other competent forum and not under the Consumer Protection Act, as rightly held by the District Commission.
17] We also find no infirmity in the reasoning of the District Commission that the eligibility or otherwise of the appellant under the PMAY scheme further reinforces the conclusion that the complaint is not maintainable. Once it is held that Consumer Fora lack jurisdiction to adjudicate disputes relating to subsidy, the question of examining eligibility, alleged negligence or shifting of responsibility becomes academic.
18] The reliance placed by the appellant on other judgments taking a different view does not persuade us to take a contrary position, particularly when the District Commission has followed binding precedents of the Hon'ble National Commission directly covering the issue. Judicial 8 discipline requires that such precedents be followed unless set aside by a higher Fora.
19] In view of the foregoing discussion, we are in complete agreement with the findings and observations of the District Commission that the appellant does not fall within the definition of a "consumer" insofar as the claim relating to PMAY subsidy is concerned and that the consumer complaint was not maintainable. The District Commission has applied the correct legal principles, appreciated the facts in their proper perspective and has passed a reasoned and well-considered order.
20] Accordingly, the grounds of appeal raised by the appellant on the issue of consumer status are rejected. The order of the District Commission, to the extent it holds the complaint to be not maintainable for want of consumer relationship, calls for no interference.
21] For the reasons recorded above, the appeal being devoid of any merit is dismissed with no order as to costs.
22] Pending miscellaneous application(s), if any, in this appeal stands disposed of accordingly.
23] Certified copies of this order be sent to the parties free of charge forthwith.
24] File be consigned to the record room after completion.
Pronounced.
22.12.2025 (RAJ SHEKHAR ATTRI) PRESIDENT (PADMA PANDEY) MEMBER *Ad* 9