State Consumer Disputes Redressal Commission
Smt. Lata Negi. vs Hdfc Bank. & Ors. on 14 March, 2018
H. P. STATE CONSUMER DISPUTES REDRESSAL
COMMISSION SHIMLA
First Appeal No. : 255/2017
Date of Presentation: 21.09.2017
Order Reserved on : 05.01.2018
Date of Order : 14.03.2018
......
Smt. Lata Negi w/o Shri R.S. Negi r/o Jagdish Bhawan below
Motoworld Navbahar Shimla H.P.171002.
...... Appellant/Complainant
Versus
1. HDFC Bank The Mall Shimla through its Manager.
2. HDFC Bank Ramon House 169 Backbay Reclamation
H.T. Parekh Marg Church Gate Mumbai 400020 through
its Managing Director.
3. Manager HDFC Bank Card Division PO Box No.8654
Thiruvanmiyur Chennai-600041.
4. R.B.I. Central Vista Sector-17 Chandigarh 160017 through
Regional Manager.
5. HDFC Ergo General Insurance Company Limited
6th Floor Leela Business Park Andheri Kurla Road
Andheri East Mumbai - 400059 Through Managing
Director.
......Respondent s/Opposite parties.
Coram
Hon'ble Justice P.S. Rana (R) President
Hon'ble Mr. Vijay Pal Khachi Member
Whether approved for reporting?1 Yes.
For Appellant : Mr. Arun Kumar Advocate.
For Respondents No.1to 3 : Ex-Parte.
For Respondent No.4: None.
For Respondent No.5: Mr. Harshvardhan Advocate vice
Mr. Chandan Goel Advocate.
1
Whether reporters of the local papers may be allowed to see the order? Yes.
Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017)
JUSTICE P.S. RANA (R) PRESIDENT:
O R D E R :-
1. Present appeal is filed under section 15 of Consumer Protection Act 1986 against order dated 25.08.2017 passed by Learned District Forum in consumer complaint No.108/2013 title Smt. Lata Negi Versus HDFC Bank & Ors. Brief facts of consumer complaint:
2. Complainant Lata Negi filed consumer complaint under section 12 of Consumer Protection Act 1986 pleaded therein that complainant is credit card holder of opposite party No.1 and her credit card number is 4346781102206554. It is pleaded that complainant has bank account No.05241000049875 in opposite parties bank. It is pleaded that complainant lastly used the credit card on dated 04.03.2010. It is further pleaded that thereafter complainant received calls from the opposite parties for repayment of outstanding amount against use of credit card No. 4346781102206554 which she never used. It is further pleaded that opposite parties Bank informed the complainant that complainant took the policy by way of using her credit card. It is further pleaded that complainant requested the opposite parties to supply information pertaining to sale and purchase made by her through credit card but opposite parties did not supply the information. It is further pleaded that thereafter complainant 2 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) also asked opposite parties to supply the proposal form duly signed by her and use of credit card by the complainant but opposite parties bank did not supply the information sought by the complainant. It is further pleaded that opposite parties bank without the consent of complainant issued insurance policy and also deducted amount of Rs.16000/- (Sixteen thousand) from the credit account of complainant without her consent. It is further pleaded that opposite parties bank also raised outstanding loan by way of misusing the credit card of complainant. It is further pleaded that thereafter complainant cancelled her credit card from opposite parties bank and also closed the bank account. It is pleaded that HDFC Bank and HDFC Ergo General Insurance Company Ltd. have nexus with each other and managed by persons closely connected with each other. Complainant sought relief of refund of Rs.16000/- (Sixteen thousand) and complainant also sought compensation to the tune of Rs.20000/- (Twenty thousand) alongwith interest @18%. Prayer for acceptance of consumer complaint sought.
3. Per contra version filed on behalf of opposite parties No.1 to 3 pleaded therein that complainant did not approach the District Forum with clean hands. It is pleaded that complainant after 04.03.2010 utilized the credit card for purchase of two insurance policies from HDFC Ergo and converted the same into installments. It is further pleaded that as per request of the complainant payment of two HDFC Ergo insurance policies was 3 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) made through credit card. It is further pleaded that complainant availed the policy from third party namely HDFC Ergo General Insurance Company but complainant did not implead HDFC Ergo General Insurance Company as co-party in the consumer complaint. It is further pleaded that HDFC Ergo is necessary party for the adjudication of the consumer complaint. It is further pleaded that notices were sent to the complainant to clear the outstanding dues. It is further pleaded that present dispute inter se parties is relating to settlement of accounts. It is further pleaded that matter relating to settlement of account does not fall within the definition of Consumer Fora. It is further pleaded that opposite parties were legally entitled to recover the amount due from the complainant. It is further pleaded that opposite parties did not commit any deficiency in service and did not commit any unfair trade practice. Prayer for dismissal of consumer complaint sought.
4. Per contra separate version filed on behalf of opposite party No.4 pleaded therein that complainant has no cause of action against opposite party No.4. It is pleaded that complainant is not consumer of Reserve Bank. It is further pleaded that Reserve Bank of India exercises the powers and discharges its statutory functions under the Reserve Bank of India Act 1934, Banking Regulation Act 1949, The Foreign Exchange Management Act 1999. It is further pleaded that complainant has no cause of action against opposite party No.4. 4
Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) Prayer for dismissal of complaint against opposite party No.4 sought.
5. Per contra separate version filed on behalf of opposite party No.5 pleaded therein that complainant has no cause of action against opposite party No.5. It is pleaded that two insurance policies were issued by opposite party No.5 in favour of complainant as per consent given by the complainant by way of telephone. It is pleaded that complainant obtained insurance policies voluntarily. It is further pleaded that complainant is estopped from alleging that insurance policies were obtained without her consent. It is further pleaded that opposite party No.5 submitted the entire oral conversation between complainant and official of opposite party No.5 annexure R-1 recorded in CD. It is further pleaded that complainant herself agreed for deduction of premium through her credit card. It is further pleaded that complainant did not plead true facts before the Consumer Forum. Prayer for dismissal of consumer complaint against opposite party No.5 sought.
6. Insurance Regulatory and Development Authority (IRDA) did not appear before learned District Forum despite service and did not file any version before learned District Forum. Learned District Forum proceeded ex-parte against Insurance Regulatory and Development Authority (IRDA). 5
Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017)
7. Complainant filed rejoinder and reasserted the allegations mentioned in the complaint.
8. Learned District Forum held that complaint was not maintainable before learned District Forum and dismissed the complainant.
9. Feeling aggrieved against order passed by Learned District Forum complainant filed present appeal before State Commission.
10. Respondents No. 1, 2 and 3 did not appear before State Commission and they were proceeded ex-parte by State Commission. None appeared on behalf of co-respondent No.4 at the time of final arguments. We have heard learned advocates appearing on behalf of appellant and co-respondent No. 5 and we have also perused entire record carefully.
11. Following points arise for determination in present appeal.
1. Whether appeal filed by appellant is liable to be accepted as mentioned in memorandum of grounds of appeal?
2. Final order.
Findings upon point No.1 with reasons:
12. Complainant filed affidavit by way of evidence. There is recital in the affidavit that deponent was credit card holder of 6 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) HDFC bank. There is further recital in the affidavit that deponent lastly used the credit card on dated 04.03.2010. There is further recital in the affidavit that HDFC bank without the consent of deponent issued two insurance policies and debited amount of Rs.16000/- (Sixteen thousand) from the credit account of complainant without the consent of complainant and committed deficiency in service and unfair trade practice.
Complainant tendered in evidence annexures C-1 and C-2. State Commission has carefully perused annexures C-1 and C-2.
13. Opposite parties No.1 to 3 filed affidavit of Aman Gupta Manager Legal in evidence. There is recital in the affidavit that complainant after 04.03.2010 utilized the credit card for the purchase of two insurance policies from HDFC Ergo Insurance Company. There is further recital in the affidavit that amount of premium of insurance policies was paid through credit card. There is further recital in the affidavit that settlement of account dispute does not fall within the jurisdiction of consumer forum.
14. HDFC Ergo General Insurance Company also filed affidavit of Pankaj Kumar in evidence. There is recital in the affidavit that complainant has suppressed material facts from learned District Forum and did not approach learned District Forum with clean hands. There is further recital in the affidavit that complainant has no cause of action against HDFC Ergo General Insurance Company. There is further recital in the 7 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) affidavit that complainant voluntarily obtained two insurance policies by way of telephone conversation. There is further recital in the affidavit that telephone conversation between the complainant and HDFC Ergo General Insurance Company was recorded in CD annexure R-1. Deponent has also given certificate of CD recording under section 65B of the Indian Evidence Act. Insurance company also tendered in evidence CD annexure R-1.
15. Submission of the learned advocate appearing on behalf of complainant that learned District Forum did not properly appreciate the evidence of parties filed by way of affidavits and annexures and on this ground appeal be allowed is decided accordingly. It is proved on record that credit card facility was issued in favour of complainant by HDFC Bank and credit card No.4346781102206554 was issued in favour of the complainant. State Commission is of the opinion that credit card was issued in favour of complainant by HDFC Bank for the convenience of credit card holder only. State Commission is of the opinion that amount could be debited from the credit card only after receiving command of debit from the credit card holder. HDFC Bank did not adduce any evidence in order to prove that command was given by complainant namely Lata Negi to debit amount from credit account. State Commission is of the opinion that deduction of amount from credit account without obtaining written request or without obtaining e-mail 8 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) from complainant amounts to deficiency in service and unfair trade practice on the part of HDFC Bank.
16. State Commission is of the opinion that HDFC Ergo General Insurance Company was also under legal obligation to obtain proposal form from the complainant relating to insurance policies. State Commission is of the opinion that HDFC Ergo General Insurance Company was also under legal obligation to obtain written consent of the complainant for issuance of insurance policies. No proposal form for the issuance of insurance policies placed on record by HDFC Ergo General Insurance Company. State Commission is of the opinion that simply oral conversation between complainant and HDFC Ergo General Insurance Company by way of telephone call and recording of telephone call by way of CD is not sufficient unless proposal form for issuance of insurance policies was obtained from the complainant in written manner. State Commission is of the opinion that in the absence of written proposal form for the issuance of insurance policies preparation of oral telephone call CD is not sufficient to exonerate HDFC Ergo General Insurance Company from the mandatory guidelines issued by IRDA. As per guidelines issued by IRDA written proposal form should be obtained by insurance company from insured and written consent should be obtained from insured for acceptance of insurance policy. IRDA has not issued any instructions that consent of insured should be obtained by way of telephone oral 9 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) CD conversation. Complainant has refuted CD conversation. Voice test report not placed on record. It is not expedient in the ends of justice and on the principles of natural justice to rely upon CD conversation placed without voice test. It is well settled law that proceedings under Consumer Protection Act 1986 are quasi-judicial proceedings.
17. Plea of HDFC Bank that in view of credit card account statement HDFC Bank is not liable is decided accordingly. HDFC bank has simply placed on record duplicate statement of credit card prepared by HDFC Bank unilaterally itself. HDFC Bank did not place on record any application sent by complainant wherein complainant requested the HDFC Bank to debit the insurance premium amount in favour of HDFC Ergo General Insurance Company from credit account. No reason assigned by the HDFC Bank as to why HDFC Bank debited the amount from the credit account without obtaining written application from complainant or e-mail from complainant in favour of third party i.e. HDFC Ergo General Insurance Company. HDFC Bank did not place on record any e-mail sent by complainant to HDFC Bank for debit of amount from credit account. Above stated facts amount to deficiency on the part of HDFC Bank.
18. Submission of learned advocate appearing on behalf of insurance company that dispute inter se parties is relating to settlement of accounts and on this ground appeal be dismissed 10 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) is decided accordingly. State Commission is of the opinion that dispute inter se parties is only relating to service of HDFC Bank and service of HDFC Ergo General Insurance Company only which falls within the definition of section 2(o) of Consumer Protection Act 1986 i.e. service of any description of bank and insurance company.
19. Submission of learned advocate appearing on behalf of insurance company that matter is complicated in nature and complainant be relegated to civil court is decided accordingly. State Commission is of the opinion that matter could be decided in summary manner under Consumer Protection Act 1986. It is not expedient in the ends of justice and on the principles of natural justice to relegate complainant to civil court.
20. Submission of learned advocate appearing on behalf of HDFC Ergo General Insurance Company that in view of CD conversation placed on record complaint against HDFC Ergo General Insurance Company be dismissed is decided accordingly. State Commission is of the opinion that HDFC Ergo General Insurance Company was under legal obligation to comply Insurance Regulatory and Development Authority (IRDA) instructions issued from time to time. Insurance Regulatory and Development Authority (IRDA) has issued instructions that insurance policy would be issued after obtaining written proposal form from the insured. No explanation given by HDFC Ergo General Insurance Company as to why two insurance 11 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) policies were issued in favour of complainant without obtaining written proposal form. No satisfactory explanation given by HDFC Ergo General Insurance Company as to why written consent for issuance of insurance policy not obtained from complainant violating the guidelines issued by Insurance Regulatory and Development Authority (IRDA). State Commission is of the opinion that HDFC Bank and HDFC Ergo General Insurance Company are closely connected with each other and has close affinity with each other. Above stated facts amount to deficiency on the part of HDFC Ergo General Insurance Company. Point No.1 is decided accordingly. Point No.2: Final Order
21. In view of findings upon point No.1 above appeal is allowed and order of learned District Forum is set aside. It is ordered that HDFC Bank and HDFC Ergo General Insurance Company would jointly and severally refund amount of Rs.16000/- (Sixteen thousand) to the complainant alongwith interest @ 9% per annum from the date of institution of complaint till realization. It is further ordered that HDFC Bank and HDFC Ergo General Insurance Company would jointly and severally pay compensation to the tune of Rs.10000/- (Ten thousand) to the complainant. It is further ordered that HDFC Bank and HDFC Ergo General Insurance Company would jointly and severally pay costs of ligation to the tune of Rs.10000/- (Ten thousand) to the complainant. File of learned District Forum 12 Lata Negi Versus HDFC Bank & Ors. (F.A. No.255/2017) alongwith certified copy of order be sent back forthwith and file of State Commission be consigned to record room after due completion forthwith. Certified copy of order be transmitted to parties forthwith free of costs strictly as per rules. Appeal is disposed of. Pending application(s) if any also disposed of.
Justice P.S. Rana (R) President Vijay Pal Khachi Member 14.03.2018.
*GUPTA* 13