News Citation : 2026 LN (CGSCDRC) 14
February 18, 2026 : Chhattisgarh State Consumer Disputes Redressal Commission has overturned a district consumer forum’s order that had directed a cooperative bank to release ₹7.71 lakh to a farmer, holding that the bank was justified in freezing the amount due to a pending criminal investigation linked to paddy procurement records.
The appeal was filed by the Lakhanpur branch of Jila Sahkari Kendriya Bank against an order of the District Consumer Commission, Ambikapur, which had earlier ruled in favour of Dev Kumar Rajwade. The state commission pronounced its decision on February 18, 2026, allowing the bank’s appeal and dismissing the consumer complaint.
The dispute arose during the 2023–24 paddy procurement season. Rajwade had sold 200 quintals of paddy on December 22, 2023, and 137.20 quintals on January 12, 2024, through an Adivasi cooperative society in Amelbhitthi village of Surguja district. After adjusting a crop loan of ₹2,06,680 taken for seeds and fertilizers, a balance amount of ₹7,71,900 was transferred to his savings account at the Lakhanpur branch of the cooperative bank.
On March 12, 2024, the bank placed a hold on the credited amount, restricting withdrawals. Rajwade maintained that there were no outstanding dues against him and that the freeze was arbitrary. He submitted a written request in August 2024 seeking removal of the hold, followed by a legal notice in October. When the bank did not lift the restriction, he approached the District Consumer Commission alleging deficiency in service.
In February 2025, the district commission partly allowed his complaint and directed the bank to lift the hold within 45 days, restore normal account operations and pay interest on the deposited amount. It also ordered compensation of ₹5,000 for mental and financial distress and ₹3,000 towards litigation expenses if the order was not complied with.
Challenging that ruling, the bank argued that a physical verification conducted on January 20, 2024, at the cooperative society had revealed discrepancies in paddy stock records. According to the bank, an additional entry of 249 quintals of paddy had been recorded in Rajwade’s name beyond the actual stock available. While procurement records showed over 6,600 quintals of paddy, physical counting indicated a significant shortfall of more than 800 quintals.
The bank stated that the accounts of farmers whose names appeared in the excess entries were placed under hold pending investigation. An FIR had also been registered against officials of the cooperative society for alleged irregularities in procurement records. The bank contended that until the criminal proceedings were concluded, it was within its rights to restrict withdrawals from accounts linked to disputed transactions.
After examining the pleadings, affidavits and documentary evidence, the state commission found that the amount credited to Rajwade’s account was connected to the alleged excess paddy entry of 249 quintals. It observed that criminal proceedings relating to the procurement discrepancies were still pending and no material had been presented to show their conclusion.
In these circumstances, the commission held that the bank’s action in freezing the disputed amount did not amount to deficiency in service under the Consumer Protection Act, 2019. It concluded that the district commission had erred in directing release of the funds. The earlier order dated February 25, 2025, was set aside, and Rajwade’s complaint was dismissed.
Case Reference : Appeal No. SC/22/FA/178/2025: Branch Manager, Jila Sahkari Kendriya Bank vs. Dev Kumar Rajwade
