Spend More to Litigate for Less: A Tale from the Files of a Government Entity

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Gurgaon Grameen Bank v. Khazani (Civil Appeal 6261/2012, Supreme Court of India, dt. 4.9.12) is a case about a buffalo. Loan was taken by the Respondent to buy a buffalo. The poor animal was insured for Rs. 15,000. The buffalo died and the Respondent lodged a claim before the Insurer through the Appellant Bank. The Respondent was forced to file a complaint before the Gurgaon District Consumer Disputes Redressal Forum (DCDRF) for the lack of action by the Bank and the Insurer. The DCDRF ruled in favour of the Respondent insured. Appeals to the State CDRF and the National CDRF met with the same fate.

Ultimately, a SLP was filed and special leave was granted. When the matter came before a Bench consisting of KS Radhakrishnan & Dipak Mishra, JJ. it was found that about Rs. 13,000 was spent for a case of value Rs. 15,000. The cost would definitely be substantially more if costs pertaining to travel etc to the respective CDRFs and the Supreme Court were taken into account. Dismissing the appeal and imposing costs of Rs. 10,000, the Supreme Court held:

"Assuming that the  bank  is  right,  but  once  an  authority  like District Forum takes a view,  the bank should graciously  accept  it  rather than going in for further litigation  and  even  to  the  level  of  Supreme Court.   Driving  poor  gramins  to  various  litigative  forums  should  be strongly deprecated because they  have  also  to  spend  large  amounts  for conducting litigation.   We condemn this type of practice, unless the  stake is very high or the matter affects large number  of  persons  or  affects  a general policy of the Bank which has far reaching consequences."

This is the typical state of government litigation in India- Penny wise and pound...