State Consumer Disputes Redressal Commission
M/S. Sbi Cards & Payment Services Pvt. ... vs The Director, Consumer Affairs & Fair ... on 7 July, 2010
State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission West Bengal BHABANI BHAVAN (GROUND FLOOR) 31, BELVEDERE ROAD, ALIPORE KOLKATA 700 027 S.C. CASE NO.FA/100/2010 DATE OF FILING:25/02/2010 DATE OF FINAL ORDER: 07.07.2010 APPELLANTS/OPPOSITE PARTIES NO.2 1) M/s. SBI Cards & Payment Services Pvt. Ltd. F.M.C. Fortuna Buildings Having its registered office at FMC Fortuna Buildings 234/3A, AJC Bose Road, P.S. - Bhowanipore Kolkata 700 020 2) M/s. SBI Cards & Payment Services Pvt. Ltd. Having its registered office at 90-A, Udyog Vihar Sector-18, Gurgaon, Haryana 122 015 RESPONDENT/COMPLAINANT 1) The Director Consumer Affairs & Fair Business Practices 8B, Nelie Sengupta Sarani, 6th Floor Kolkata 700 087 RESPONDENT/OPPOSITE PARTY NO.3 2) State Bank of India 1, Strand Road Kolkata 700 001 BEFORE : HONBLE JUSTICE MR. A. CHAKRABARTI, PRESIDENT MEMBER : MRS. S. MAJUMDER MEMBER : MR. S. COARI FOR THE APPELLANTS : Ms. S. Dutta, Advocate FOR THE RESPONDENT : Mr. B. Ghosh, Advocate (No.1) Mr. G.C. Bandyopadhyay, Advocate (No.2) : O R D E R :
HONBLE JUSTICE MR. A. CHAKRABARTI, PRESIDENT OPs 1 & 2 preferred appeal being FA/100/2010 and OP3 preferred appeal being FA/129/2010 against order no.26 dated 15.01.2010 passed by District Consumer Disputes Redressal Forum, Kolkata Unit-I in Complaint Case No.208/2007 whereby the complaint petition was allowed on contest against OPs 1 & 2 with cost and without cost against OP3. Complainant was awarded a compensation of Rs.18 lacs and litigation cost of Rs.5,000/- which must be deposited by OPs 1 & 2 jointly and severally to the State Consumer Welfare Fund and to use the same for the purpose of protection and welfare of the indigent consumers as per rules.
OPs 1 & 2 are directed to pay the said cost of Rs.18,05,000/- positively within 45 days from the date of communication of the order failing which it carries interest @ 10% per annum till realization. OP3 was directed to publish in the daily newspaper in English, Bengali, Hindi and through electronic media with regard to their clear position, views and obligations with regard to using logo by OPs 1 & 2 with the customers. Interim order passed on 12.9.07 was made absolute.
Both the appeals were heard analogously.
The aforementioned complaint was filed by the Director of Consumer Affairs and Fair Business Practices, Government of West Bengal under Section 12(1)(d) of Consumer Protection Act, 1986. The facts stated in the complaint, in brief, are that 18 credit card holders complained against their service provider M/s. SBI Cards & Payment Services Pvt. Ltd having failed to get redressal from the OPs and prayer was made by the said credit card holders for settlement of their disputes through mediatory process undertaken by the Directorate as its general programme for protecting consumers interests. The allegations were of deficiency in service as defined in Section 2(1)(g) caused by adoption of unfair trade practice as defined under Section 2(1) (r) of the Act. The said allegations being of serious nature, illustrating violation of guidelines for implementing credit card operations by RBI, a team of officers of the Directorate of Consumer Affairs & Fair Business Practices, Government of West Bengal went to the Office of the Regional Relationship Manager, SBI Cards and Payment Services Pvt. Ltd. on 30.6.06 for preliminary enquiry. The said officers were denied entry into the office. The incident was brought to the notice of the Regional Director, Division of Banking and Development, RBI under the Office Memo. Dated 26.9.06 who referred the matter to the Secretary, Office of the Banking Ombudsman. Even said authoritys queries were not paid any heed to by the OPs.
It was also learnt from letter dated 30.10.06 of Banking Ombudsman that the Office of the Banking Ombudsman too receives various complains in large proportions against the OPs. The allegations against the OPs 1 & 2 include fictitious billing, imposition of unjust interest and charges, issuance of unsolicited card and insurance policy, irregular sending of bills resulting in expiry of due date, withdrawal of card operational facility without notice and also application of humiliating measures including intimidation/harassment to the card holders and even to their family members. Apart from the said complainant card holders, interest of rest unidentifiable consumers were also taken into account. In the welcome kit four ways of reaching SBI card are mentioned but they do not include the conventional way of interaction across the table. A SBI card holder is not allowed to enter into his service providers premises for official purpose. For the purpose of terminating membership of a credit card, the card holder is to follow the procedure which does not include acknowledgement of surrender of the card. The OPs 1 & 2 use the logo of SBI and thereby uses the fame and goodwill of SBI.
After the OP3 appeared an interim injunction order was passed on 12.9.07. The OPs 1 & 2 filed a joint written version and OP3 filed its written version. OP3 filed additional written version and complainant filed replies to the written versions filed by OP3 and by OPs1 & 2. The OPs 1 & 2 filed joint written argument and OP3 also filed its written argument. Complainant filed evidence on affidavit adopting the statements made in the complaint as the evidence of the complainant.
Heard Ms. S. Dutta, the Ld. Advocate for the OPs 1 & 2, Mr. B. Ghosh, the Ld. Advocate for the Complainant and Mr. G.C. Bandyopadhyay, the Ld. Advocate for the OP3/SBI. All the parties relied on their respective brief notes of argument.
The first contention of the OPs 1 & 2 is that the card business activity is regulated by RBI and the OPs 1 & 2 company strictly adhere to the said guidelines and this fact allegedly was not considered by the Forum. Next contention is while recording finding as regards unfair trade practice by the OPs 1 & 2, the practices with reference to Section 2(r) of the Act have not been considered or mentioned. The compensation has been awarded though there is no finding of any loss or injury suffered by the consumer. The fact that no prohibitive direction against the OPs in the proceeding shows clearly that no unfair trade practice was found by the Forum as proved.
Reference has been made to the judgments in the case of Premier Engineers-Vs-Taj Rubber Industries reported in JT 2005(7) SC 384, Colgate Palmolive India Ltd.-Vs-MRTP Commission reported in JT 2002(9) SC 464. Reference was also made to another case without giving even the citation or copy of the judgment. The contention has also been made by the appellant that neither any leave was obtained nor any specific case was found in respect of suffering parties and no reason was given as regards computation of loss and damage. It is also stated that Director has no jurisdiction to file the complaint nor the Act permits filing of such a case by any official of any Government Department.
On behalf of the OP3/State Bank of India the contention is the OP1 company is incorporated under the Provisions of Companies Act, 1956 whereas State Bank of India is a body corporate established under the State Bank of India Act, 1955 having 60% of the stake of SBI cards and remaining 40% being owned by General Electric Corporation through its investment arm GE Consumer (Mauritius) Investment Ltd. The day to day affairs of the card business is handled exclusively by SBI cards. It is also contended that SBI is one of the shareholders of the said company having no interest in the property of the company and the company is a juristic person distinct from the shareholders. As shareholders SBI cannot be made liable for any action of the company. As regards use of the logo and a part of the name of SBI it is stated that the same was permitted by SBI pursuant to terms and conditions in the shareholders agreement dated 22.01.98 between SBI and General Electric Capital Corporation. It is argued that SBI has seven associate banks and has several subsidiaries and joint venture companies most of which have names using SBI as a part of it. On behalf of the Complainant it has been contended that upon receipt of the complains from 18 credit card holders attempt was made initially for a settlement of the disputes between the OPs1 & 2 and the credit card holders but the officers sent for the purpose were not allowed entry by OPs 1 & 2. Even the queries made on behalf of the authority referred by Division of Banking and Development, RBI were not paid any heed to.
From the Banking Ombudsman also it was learnt that complains are received by them against deficiency in service by the OPs 1 & 2 to the SBI credit card holders. The complaint was ultimately lodged under Section 12(1)(d) of the Act. The grievance against OP3 SBI is that it allowed the OPs 1 & 2 to use the logo of SBI. The findings of the Forum have been reiterated. It is also contended that the complainant filed affidavit of examination in chief whereas none of the OPs had filed any such affidavit of evidence.
After considering the respective contentions of the parties and upon perusal of the records including the records of the Forum, I find that complains were received from 18 SBI credit card holders. The officials of Directorate, Consumer Affairs and Fair Business Practices tried to meet the appellants for an amicable settlement but the said team of officers were even denied entry into the office of the appellants. When the said incident was brought to the notice of the Regional Director, Division of Banking and Development, RBI, the matter was referred to the Secretary, Office of the Banking Ombudsman, RBI Building. But the OPs 1 & 2 did not pay any heed to the queries by the authority.
In the circumstances the present complaint was filed under Section 12(1)(d). The said provision permits Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of the interests of the consumers in general, may file a complaint before a District Forum in respect of complains in relation to any goods sold or delivered or any service provided or agreed to be provided. As there is no material produced on the part of the OPs in the Forum relating to the complains of the 18 SBI card holders, the present complaint when was filed by the present complainant being authorized by Joint Secretary to the Government of West Bengal on behalf of the Director of Consumer Affairs and Fair Business Practices, Government of West Bengal, it does not appear any irregularity therein. In fact no argument has been advanced either by the OPs1 & 2 or by the OP3/SBI alleging any specific identified irregularity in the complaint.
As regards the grievances of the 18 SBI card holders it appears that in the complaint specific mention has been made relating thereto and copies of the said complains by the SBI card holders have been annexed to the complaint along with their respective enclosures. The OPs in their written objections have not effectively disputed any of the contentions of the said 18 SBI card holders and have not made any assertion denying effectively their allegations against services provided by the OPs1 & 2. In paragraph 1 the fact of such complains by 18 SBI credit card holders against their service provider OPs 1 & 2 have been stated. Paragraphs 5 & 6 contained statements of some particulars about the grievances against service providers OPs 1 & 2. The taking up of the cause of appropriate authority under Section 12(1)(d) of the Act has been mentioned in paragraph 7 of the complaint. In paragraph 8 & 9 certain other particulars of the grievances have been mentioned. In paragraph 10 user of logo of SBI has been mentioned. In prayer a itself OPs were called upon to produce records pertaining to credit cards.
OPs 1 & 2 in their written statement, grievances of the said 18 SBI credit card holders have not been effectively dealt with disclosing the details of the accounts/records from which the correctness of the allegations could be ascertained. In various sub-paragraphs of paragraph 2 of the written statement merely mention was made of the communications made to the concerned SBI card holders and their contents.
As regards procedure followed by the OPs1 & 2 the specific complain that no personal access to officials of OPs 1 & 2 is made available to the SBI credit card holders in respect of their grievances/complains, has not been dealt with. The modes made available in respect of such grievances do not make a negotiation possible between the credit card holders and the officials of OPs 1 & 2 wherein redress can be asked for.
The documents enclosed to the said written statements do not show either disclosure of the relevant particulars relating to the said 18 card holders or any statement of account relating to them from which it can be assessed as to which version is correct and whether the complains are correct or stand of the OPs1 & 2 is correct. Therefore, such denial of the OPs do not amount to effective denial by the said OPs. Moreover, the said written statement is not supported by any affidavit nor the OPs have filed any affidavit disclosing any facts which can be treated as evidence.
Therefore, allegations made by the complainant in the complaint itself read with the affidavit filed by the complainant as examination in chief adopting the statement in the complaint proved the case of the complainants.
As regards Ms. Sarbani Ganguli the specific complains in Annexure 1 to the complaint of payment of dues of two transactions dt.21.4.04 and 5.5.04 by one cheque dt.6.5.04 and its late encashment by OPs 1 & 2 and thereafter charging interest for late payment of dues, have not been specifically dealt with or denied by OPs 1 & 2 nor copies of relevant records have been produced by OPs 1 & 2.
As regards Mr. Dipankar Bhattacharya the specific complains in Annexure2 to the complaint of his payment of all dues, receiving no statement, challenging payment of Rs.12,000/- have neither been specifically dealt with or denied nor any document showing sending of statement, application for Rs.12,000/- or its receipt has been produced by OPs 1 & 2.
Mere statement not even supported by affidavit does not amount to proving the case of OPs 1 & 2.
Annexure 3 and its enclosures in the complaint show categorical complain of Sri Dulal Kumar Mukherjee as regards of closure of earlier card account, nil statement of said account and issuance of new card thereafter have not been dealt with by OPs 1 & 2 producing necessary records.
Similarly the other complains have not been dealt with or denied by the OPs 1 & 2 even at the stage of hearing before the Forum nor any records have been produced. Only bald allegations were made without proving the case producing either affidavit evidence or documentary evidence and not even cross-examining the witness of complainant by filing any questionnaire, and thus allowing the evidence of complainant to stand proved.
The letters with enclosures disclosed by OPs 1 & 2 along with their written statement are all either undated or of dates after the complaint was filed and admitted on 03.7.07. Even by those letters actual grievances of the said SBI card holders have not been dealt with or disproved.
On the basis of the said materials the complains having been found to be correct, there are deficiency in service by the OPs 1 & 2 as regards the said 18 SBI card holders.
In above view of the facts taking up of the cause of such good number of SBI card holders justify filing of the complaint under Section 12(1)(d) of the Act particularly when attempt to settlement failed due to non-cooperation of OPs 1&2. This action is appropriate application of the said provision of law as cause of consumers in general has been taken up by the authority after attempts to hold enquiry and to cause a settlement of grievances of such consumer failed by reason of attitude of the service providers. The concerned authorities have thus helped implementation of the intention of the legislature which is appreciated hereby.
As against OP3 the grievance is that OPs 1 & 2 are handling the SBI cards using the logo of SBI. As SBI functions under the Rules and Regulations as also statutory provisions governing SBI and supervised by RBI, SBI enjoys a reputation.
The OPs1 & 2 though are not parts of SBI but they are doing business for profits using the logo and the name of SBI.
None of the documents indicate that such SBI cards are dealt with by a company completely separate from SBI and people in general are misguided and mislead by user of logo and name of SBI.
This is unfair trade practice.
Therefore, this coming directly within Section 2(1)(r) of the Act the complaint is rightly filed.
As complaint was under Section 12(1)(d) dealing with 18 specific complainants and innumerable unidentified similar consumers, the assessment of compensation cannot be on specific data. The award of compensation in such a case is preventive in nature and is imposed to restrict such service provider and their collaborators from continuing such wrong misleading the people at large.
The law cited by the OPs 1 & 2 do not appear to be applicable in the present facts.
In the aforesaid circumstances I am of the opinion that compensation has been assessed at a very moderate level. The direction for publication of advertisement, as directed by the Forum, is perfectly justified as members of public are entitled to know that the actual transactions relating to SBI cards are dealt with by a company completely separate from SBI. The fact that SBI is shareholder does not make any difference as the services standard of SBI is not reflected from the service of OPs 1&2.
I am of the opinion that such advertisement is vitally required not only within India but also world wide so that all concerned as may be found interested in dealing with such SBI cards may know first that it is not a subject dealt with by SBI.
In view of above findings no interference with impugned order is found required and both the appeals being FA/100/2010 and FA/129/2010 are hereby dismissed.
(S. Majumder) (S. Coari) (Justice A. Chakrabarti) MEMBER(L) MEMBER PRESIDENT