State Consumer Disputes Redressal Commission
Vibhu Bhakru vs Standard Chartered Bank on 20 February, 2007
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION:DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 20-02-2007 Complaint Case No. 83 of 2005 Mr. Vibhu Bhakru, S/o. Shri R.J. Bhakru, N-15, Chittaranjan Park, New Delhi. . . . Complainant In Person Versus Standard Chartered Bank, India Bank Card Centre, 3rd & 4th Floor, Raheja Point, Magarath Road, Bangalore Also at: Standard Chartered Bank, Allahabad Bank Building, 17-Parliament Street, New Delhi 110001. . . . Respondent CORAM: Justice J.D. Kapoor, President Mahesh Chandra, Member.
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor
1. It appears that the banks, particularly the Private Multi-National Banks, consider themselves above law and resort to illegal and uncivilized methods in recovering the loan or dues against the credit cards issued by them by employing recovery agents, musclemen and goons, who not only employ threats and abuses on the telephones but also visit the houses of the consumers with these threats. They chase the consumers, waylay them, get hold of their vehicles, beat and bruise them and sometimes create circumstances driving them to commit suicide. Houthnhyms of yesterday appear to have become yahoos of today.
2. No civilized society can brook such kind of methodology for recovery of any dues that are recoverable through civil legal remedy. This practice has become so rampant that the this Commission has been receiving large number of complaints from the consumers of these services in spite of the fact that this Commission has been administering warnings and reprimanding such banks not to resort to such methods which are not permissible under law. We live in a society, which is governed by the rule of law.
3. Here is a case where the complainant, who is an Advocate of standing, was not only given threats and abuses on the telephone by the recovery agents of the O.P bank, i.e. Standard Chartered Bank, but also at different times people were sent at his residence for recovery of the dues which were not due at all, as these dues were immediately withdrawn after filing of the instant complaint before this Commission and a No Dues Certificate was issued.
4. Relevant facts in brief are that the complainant was issued a Credit Card, being Visa Classic Card, by the O.P. Bank in the year 1999. He has been very regular and prompt in making payments against the said card as is projected from the credit history. He received a Statement dated 26-01-2004 indicating a balance of Rs. 35,338.32 on account of expenditure incurred from 22-12-2003 to 24-01-2004, which he duly cleared vide A/c Payee Cheque much prior to the due date. He received another statement / invoice dated 24-02-2004 whereby an amount of Rs. 7978.59 was shown to be payable by him.
The said amount also included an amount of Rs. 750/- on account of renewal charges of the Credit Card. Though the complainant had accumulated bonus points under the OP Banks scheme for awarding redeemable points on usage of the credit card and as such he requested for the redemption of accumulated points against the renewal charges, which he was assured. He did not receive any statement thereafter. His credit card expired in February / March, 2004. According to him he did not use the credit card at all after January, 2004. Since it was usual that the complainant received the renewed card a few days prior to the expiry of the current card, but this time he did not receive the renewed credit card, he contacted the customer care service and was assured that his request was noted, but still did not receive the card. He went on making telephone calls but to no avail. However, he never received the new credit card nor he received any statement reversal of renewal charges for the card in March.
5. He was shocked and taken aback to receive a telephone call from a person claiming to be the agent of O.P Bank in May, 2004 stating that an amount of Rs. 28,000/- was due and payable by him. His explanation that after expiry of the credit card he has not received any renewed card nor had he incurred any expenditure after February, 2004 fell on deaf ears. Again on 21-06-2004 a man claiming to be an agent of O.P. Bank visited his residence at Greater Kailash and demanded payment of Rs. 28,000/- against credit card usage. The said man refused to reveal his name. After two days another man turned up at his residence and demanded the disputed amount. On contacting the customer care service sometime on 12th or 13th of July, 2004, the complainant was assured that the matter would be looked into but instead he received a call from a person claiming himself as the agent of O.P. Bank, who again the demanded the payment.
6. That on 15-07-2004, the complainant sent a Fax Message to the O.P. Bank, inter alia, objecting to the visits and calls of the collection agents and called upon the OP Bank to issue a No Dues Certificate and collect the amount of Rs. 7128.58 towards the expenditure incurred in January, 2004. A dispute declaration form was forwarded to the complainant by the OP Bank with the entries for alleged transaction conducted in Mach-April, 2004. The complainant faxed the duly filled in and signed declaration form to the OP Bank but did not receive any response with regard to the dispute. Thereafter he started receiving threatening calls and also was threatened that the bank would put up his name in the Industry Wide Negative Bureau if the alleged outstanding payment against credit card was not made. When he contacted the customer care service, he was told that they have not received the dispute declaration form. He again faxed the same and also sent a letter by Registered post recording the above facts. In spite of this, he received on 11-12-2004 a threat to collect a levy of 20% on the above outstanding if he did not pay the outstanding amount within twenty days. He continued to receive telephone calls on his mobile by different persons.
Someone told his name as Sunil Kumar and the other as Gaurav.
7. The most disturbing fact was that Sunil Kumar was very abusive on the telephone and issued threats to the complainant that he would have him (complainant) picked up from his residence. One or the other agent of the bank continued calling several times and harassed the complainant. Under the facts of such threats he filed the instant complaint claiming compensation for mental agony and trauma suffered by him, for the unfair trade practice as well as loss of reputation, his credit worthiness because of his name having been put on the defaulters list in the Industry Wide Negative Bureau.
8. Any person who is classified as a defaulter by one bank is treated as a defaulter by all the banks and financial institutions and this deprives a consumer from availing credit facility or loans from any other banks or financial institutions and his reputation is irreparably harmed.
9. Upon notice of the complaint, the O.P. Bank filed the reply taking the plea that the complaint was frivolous and was filed with the sole intention of unjustly enriching himself at the cost of the O.P. Bank. That the grievance of the complaint was with respect to certain transactions which were disputed by him and were redressed way back in June, 2005 consequent to which the said entries were reversed and a No Dues Certificate dated 20th June, 2005 was also issued to him and thus there is no cause of action subsisting in the present complaint and the present complaint is liable to be dismissed.
10. Further that no loss or damage was caused to the complainant on account of the alleged deficiency in service by the O.P. On merits, the O.P. averred that the payment of Rs. 35,388.32 was credited in the account of the complainant on 16-02-2004 and thereafter to say that the complainant did not use his credit card after January, 2004 is incorrect as the perusal of the statements of accounts for February, March and April, 2004 clearly shows that the complainant had been using the card and was not even making the minimum payment due. O.P. also denied that the complainant did not receive the renewed card and thus contacted the O.P. through Customer Care Service in March, 2004. The Statement of Account for April, 2004 clearly shows that the said card was being used by the complainant and that there was no complaint or enquiry from the complainant that he has not received the renewed credit card.
11. Further that as per Statement of Account dated 24th February, 2004 a sum of Rs. 7978/- was payable by the complainant to the O.P. O.P. also denied that any recovery agent from the O.P. in May, 2004 contacted the complainant for recovery of Rs. 28,000/- payable by him and also denied that the complainant explained to the said collection agent that his credit card had expired in February/March 2004 and that he did not receive the renewed card. O.P. also denied that the complainant informed the O.P. that in view of the fact that no card was issued or delivered to him after the expiry of the earlier card there was no question of incurring any expenditure on the card after 2004.
12. O.P. denied that on 21st June 2004 another man claiming to be recovery agent of the O.P. visited the complainants house at W-129 Greater Kailash, Part-II, New Delhi and demanded payments in excess of Rs. 28000/- for alleged card usage or that after two days another man turned up at the residence of the complainant and demanded the disputed payment. O.P. further denied that on 14th July, 2004 the complainant again received a call from a person claiming himself from the O.P. demanding payments which the complainant had already explained were not due and payable. O.P. also denied that after sending the dispute declaration form the complainant received a letter dated 26th October, 2004 from the O.P. threatening that his name would be put in the defaulters list.
13. As per the affidavit of the complainant he had in the past availed loans from Citi Bank twice and a car loan from M/s. Associates Finance, which have been duly paid without any default. The complainant also holds four other credit cards and the credit history and record of the complainant are impeccable.
14. Aforesaid conspectus of facts and rival claims of the parties show that the O.P. only settled the dispute after filing of the complaint and for more than a year harassed the complainant and did not take any action on his representations made in writing sent through Fax and rather adopted such nefarious means by sending goons and recovery agents at the residence and by causing mental trauma and agony by using abusive language and employing threats on the telephone to pick him up and ultimately issuing No Due Certificate without having received any amount.
15. Conduct of the O.P Bank amounts to the grossest kind of deficiency in service on the part of the O.P. Bank and unfair trade practice as well as flagrant breach of terms of the contract as to the mode of recovery of dues and non-settlement of dispute for several months and rather had put the complainant on defaulters list which has the effect of causing irreparable and irreversible damage to the reputation of a person, his credibility and financial standing and creditworthiness. No person howsoever rich would pay to the bank or to any other financial institutions for nothing unless and until he owes something and therefore, to take the plea that the complainant has filed the complaint to become unjustly rich is like rubbing salt over the wound and adding insult to injury.
16. Such kind of activities indulged by the service providers like banks who first not only rush but provide home service to give loans and issue credit cards and then start harassing the consumers by raising illegal bills irrespective of the fact whether the consumer has transacted any business or not through these cards and go on inflating the recoverable amount without settling the dispute in spite of receiving the dispute declaration form and in spite of being called on telephone almost every day, there cannot be any worst kind of deficiency in service and unfair trade practice than this.
17. To create scenes at the residence of the consumers for the recovery of the amounts against loans or credit card and then use abusive language and sending goons causes such mental trauma, emotional suffering, agony and harassment and tension that it causes injury and damage not only to the health of a person but also to his reputation and his creditworthiness in the society, social standing amongst neighbours and co-professionals.
18. For the purpose of Consumer Protection Act, the word compensation has a wide connotation as has been provided by the Supreme Court in Ghaziabad Development Authority Vs Balbir Singh (2004) 7 CLD 861 (SC). The word Compensation appearing in section 14(i)(d) of the Act has been explained by the Supreme Court as under:-
The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/ Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law.
19. Taking a serious view of the matter as it was only after being forced and there being left with no other alternative than to seek redressal by filing a complaint as a consumer before this Commission, that a No Dues Certificate was issued by the bank, we as a deterrent impose a punitive damages of Rs. Ten Lacs to be deposited in favour of State Consumer Welfare Fund (Legal Aid) and award Rs. 20,000/- (Twenty Five Thousand) as a compensation to the complainant for trauma, mental agony, harassment and loss of reputation and creditworthiness because of threat of putting him on defaulters list.
20. Since, we have been receiving large number of such complaints against various banks, we, through this order, direct all the banks / financial institutions who provide loans and credit cards, not to resort to methods which are illegal and have no legal back up and not to use abusive and threatening languages on the telephone and not to visit the residence of the consumers for recovery of loans and by repossessing the vehicles through force and musclemen, and if they are found to be indulging in such practices and any complaint is made to the police, the SHO of the concerned police station shall register a criminal case against the CEO of the concerned bank / financial institution. If in future we receive any such complaint, the CEO of the concerned Bank / Finance Company shall face punishment as provided by Section 27 of the Consumer Protection Act, 1986, i.e. minimum sentence of one month imprisonment or fine or with both.
21. Complaint is disposed of in above terms. Order shall be complied with within one month from the date of receipt of this order.
22. A copy of the order as per statutory requirement be provided to the parties free of cost and thereafter the file be consigned to record room.
23. Copy be sent to the Presidents of all the District Fora.
(Justice J.D. Kapoor) President (Mahesh Chandra) Member HK