DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi- 110016
Case No.205/2014
Mrs. Shobha Sehgal
Wife of Mr. Anuj Sehgal
R/o C-89, Sector-47, Noida-201301
Uttar Pradesh. ….Complainant
Versus
M/s American Express Banking Corporation
Branch & Registered Office at:
MGF Metropolitan Tower, 7th Floor, Office Block,
District Centre Saket,
New Delhi-110017
….Opposite Party
Date of Institution : 29.05.2014
Date of Order :22.11.2021
Coram:
Ms. Monika Aggarwal Srivastava, President
Ms. Kiran Kaushal, Member
Sh. U.K. Tyagi, Member
ORDER
Member – Sh. U.K. Tyagi
Briefly put, the complaint has been filed in the registry of this Commission. The complainant is an individual and holder of American Express Credit Card issued by the Opposite Party i.e. M/s American Express banking Corporation. The credit limit under the said Credit Card was given Rs.2,50,000/- continuously since 2005 without any change, break or revision in the credit limit. The complainant had planned a holiday to Dubai in the Month of June, 2012 with her family. The complainant, accordingly purchased Five Air Tickets of Emirates Air on May 16.2012 for the said trip through the above mentioned card for a total amount of Rs.1,11,700/- only. Thereafter, on June 06, 2012, the complainant alongwith her family left for Dubai. Keeping in view the remaining available credit limit i.e. Rs.1,38,300/- had planned her finances accordingly.
On reaching Dubai on June 06, 2012, the complainant firstly used the above card only for authorization for Rs.400/-A.E.D. (approx. Rs.6,300/-) at Suite Novotel, Dubai as a deposit but the same was reversed later and the complainant did not avail it. Thereafter on June 08, 2012, the complainant presented her said credit card for making a payment of 2,500/- A.E.D. (approx. Rs.39,500/-) at hotel Savoy Crest at Dubai to make a part payment for the hotel stay. To her utter shock, embarrassment and disappointment, the said card was declined and not honoured at the end of the Opposite Party. The transaction was rejected with the remarks, “do not honour”. She has further stated that the said amount of 2,500/- A.E.D. (approx. Rs.39,500/-) was well within the credit limit and further there was no amount due as on that date. It is alleged that the Respondent’s negligent act and conduct of declining the said transaction was arbitrary and without any basis of reducing the credit limit when the complainant was in a foreign country. The Complainant then sent a complaint through email to respondent on June 9, 2012 pointing out the mistake of the Opposite Party by reducing the credit limit to Rs.1,19,000/- from the earlier Rs.2,50,000/- on the said card and calling upon to rectify the same immediately. That, admittedly a reply dated June 11, 2012 was sent by the respondent apologizing for the inconvenience caused to the complainant due to sudden unexplainable declining of the said credit limit. It was also stated that the Opposite Party restored the credit limit on the above card to Rs.2,50,000/- and sent a letter dated June 13, 2012 to this effect. It was also stated that the same has been done on further review of financial documents. The complainant submitted that how the financial documents were changed in two-three days. It seems that it is just an excuse to cover up its negligence and deficiency of service.
The complainant vide this complaint has prayed for:
- A sum of Rs.10,00,000/- as Compensation for mental trauma and agony, inconvenience, embarrassment, loss of reputation, extreme hardship and monetary loss suffered by complainant due to the wrong acts and total deficiency of service on part of the respondent.
- Interest @ 18% p.a. w.e.f. filing of the present complaint and further interest @ 18% p.a. till realization in full and
- Cost towards litigation expenses.
The Opposite Party vide his written statement has denied the charges/averments made in the complainant. The Opposite Party contended that the correct facts of the case are:-
After understanding the terms and conditions of credit card by the complainant the Credit Card Application Form was got signed and accepted to abide by the terms of the credit card. The credit card holder was also supplied with Most Important Terms and Conditions, at the time of issuance of card. MITC is a document which contains all the terms and conditions governing the credit card. It is duly supplied to all the card holders at the time of credit card facility. It is also stated that this discretion to review the credit limit of the customer is exercised by the Opposite Party keeping in view a number of factors such as past payment and account history of the customer and existing credit bureau score. The above term is also reflected in MITC and the Terms and conditions of the American Express Gold Credit Card. Clause 4 of the Terms and Condition of the same is found enclosed in the Written Statement of the Opposite Party.
On the basis of periodic review conducted on Card Account of the complainant in June, 2012 in accordance with clause 4 of the Terms and Conditions of the said card, the credit limit of Complainant’s card was revised to Rs.1,19,000/- w.e.f. June 08, 2012. The Opposite Party has also referred the decision held by Hon’ble National Commission in the matter of Director, Himachal Institute of Engineering & Technology vs Anil Kumar Gupta, 1994 (I) CPR 182 that the party to be awarded compensation has to show not only deficiency of services but also negligence of the other party and without finding of negligence, there cannot be any award.
Both the parties filed evidence through affidavit and written arguments. Oral Arguments were also heard and concluded.
The Opposite Party Bank had specifically stated in its averments that the credit limit extended to the Complainant was subject to periodic review at his discretion. This discretion is exercised by the Opposite Party on the basis of number of facts such as payment, account history of the customer and existing credit bureau score. The above terms is also reflected in Clause 4 of MITC and terms and conditions of the American Express Gold Credit Card. The said Clause 4 contains two important components i.e.:-
(i) The credit limit will also be shown on his monthly statement together with amount of available credit at the statement closing date. (X)
(ii) The declared personal resources of the card holder and past spending and payment pattern, the Opposite Party reserve the absolute right to revise/reduce the credit limit. (Y)
If we ponder over carefully on the above, on which both the parties are relying upon. As per averment of the Complainant, she was relying the remaining amount of Rs.1,19,000/- to her credit limit as per component (1) of above at ‘X’. At the same time, the Opposite Party Bank is also relying on the factum of Clause 4 that the Opposite Party Bank has absolute right to review the credit limit relying on as referred component (ii) above at ‘Y’.
When the complainant presented her card for payment, it was not honoured by the Opposite Party Bank even though she has a credit limit of Rs.1,19,000/- as per Clause 4 as stated at ‘X’ above . The Opposite Party Bank has contended that the credit limit was reviewed and reduced accordingly; hence, the said transaction was not honoured. Further stated that she was informed about the review of credit limit by the Opposite Party vide email dated 08.06.2012. When approached by the Complainant, the Opposite Party Bank enhanced the credit limit to the previous level i.e. Rs.2,50,000/- whereas, there was no change in any of parameters or financial status as laid down in the MITC and terms and conditions. It goes to show that decision of Opposite Party Bank was totally arbitrary,
After going through the facts and circumstances of the case, as mentioned above, it is necessary to refer the following:
“The terms of MITC and terms and conditions governing the credit card limit are not adhered to by the Opposite Party Bank itself as narrated in above Pars. It is also not understood why the transaction of Rs.39,500/- was not honoured by the Opposite Party Bank despite this fact that the complainant has a credit limit of Rs.1,19,000/- as accepted by the Opposite Party itself in its reply.”
This Commission is convinced that the review of Credit limit by the Opposite Party Bank on 08.06.2022 was arbitrary, erratic and baseless without having any regard for the criteria lays down in Clause 4 of MITC and terms and conditions. The Opposite Party Bank is held responsible for the deficiency of service as narrated above. The citations of the Hon’ble Courts as referred by the Opposite Party Bank in its reply are not applicable in this case as facts of this case are not similar. Accordingly, the Opposite Party Bank is directed to compensate the complainant with an amount of Rs.40,000/-. The said amount is to be paid by the Opposite Party Bank within two months from the date of this order.
Let a copy of this order be sent to the parties as per rules. Thereafter file be consigned to record room.
