APPEARED AT THE TIME OF ARGUMENTS

PRONOUNCED ON :  3^rd MAY 2017

O R D E R

PER DR. B.C. GUPTA, MEMBER

          This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the order dated 01.07.2013, passed by the Maharashtra State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in First Appeal No. FA/12/910, “Arti Krishnan versus HDFC Bank”, vide which, while allowing the appeal, the order dated 13.04.2012, passed by the District Forum Bandra East, Mumbai in consumer complaint No. 224/2010, filed by the present respondent, dismissing the said complaint, was set aside.

2.       Briefly stated, the facts of the case are that the complainant Ms. Arti Krishnan opened savings account No. 0545160113225 with OP HDFC Bank at their branch at Hyderabad, A.P.  In September 2005, the OP Bank issued a credit card bearing No. 4346771008577133 in her favour.  It has been alleged in the consumer complaint that during November 2005, the complainant received the credit card statement, from which it was revealed that cash withdrawals of ₹5,000/- on 23.10.2005 and ₹10,000/- on 09.11.05 had been made by her.  The complainant brought the matter to the notice of the Bank authorities saying that the said transactions had not been made by her.  The Bank reversed the transactions from the credit card statement. However, in the month of March 2006, the earlier reversed transactions were still there in the credit card statement.  It is stated that on 23.05.2006, there were talks of settlement between the complainant and the Bank and it was decided that the complainant shall pay a total amount of ₹29,000/- as against the total alleged outstanding amount of ₹51,098.94ps.  The complainant paid a sum of ₹4,000/- by cash to the Bank on 25.05.2006 and the balance amount of ₹25,000/- was to be paid in three monthly instalments.  According to the complainant, the payment of ₹4,000/- was not credited to her credit card account, but it was credited to a different credit card account, showing outstanding balance of ₹50,802.41 instead of ₹25,000/- as per the agreement between the parties.  The bank kept on adding the late fees and finance charges upon the complainant.  The complainant alleged that in August 2006, the OP had put on hold the funds lying in the salary account of the complainant and returned the cheques unpaid.  The complainant received a notice, dated 28.10.2009, mentioning some different credit card number and showing an outstanding amount of ₹1,38,631.20ps. against her name.  The OP Bank had also taken away a sum of ₹80,488.62ps. from the salary account of the complainant without her permission.  The complainant also stated that in the meantime, she had opened another account at HDFC Hyderabad as she joined a new job at that place.  Through the consumer complaint, the complainant sought directions to the OPs to pay her back the amount of ₹78,640.97ps. with interest which was allegedly siphoned away from her account by the Bank.  She also demanded ₹1 lakh as compensation and ₹35,000/- as cost of litigation. 

3.       In reply to the consumer complaint, the Bank stated that they received intimation from the complainant about the loss of her credit card 4346771008577133 and hence, the said card was blocked on 25.04.2006 and replaced with another card No. 4346771009984338 with effect from 25.04.2006.  However, a physical card was not issued to the complainant, as she had not followed the procedure mentioned in the card-member agreement in the clause “WRT card lost”.  The complainant was required to file an FIR and complete other formalities before the new card could be issued.  The outstanding balance of ₹51,098.94 from the earlier card was carried forward to the new replaced card, as the amount was not cleared by the complainant.  The OP HDFC Bank has, however, admitted that a settlement was arrived at between them and the complainant as per which, a sum of ₹29,000/- was to be paid in four instalments during July 2006 against an outstanding balance of ₹53,076/-.  However, since the complainant failed to honour the terms of the settlement, the same became null and void and stood revoked and hence, the complainant was liable to pay the entire outstanding amount with agreed interest and other applicable charges.  The Bank further stated that after issuing notice dated 28.10.2009 to the complainant, they rightfully invoked the bankers’ right of lien and set off due to non-receipt of any payment from her.  Accordingly, a sum of ₹80,468.02 was set off on 12.11.2009.  The said action taken by them was in accordance with the terms and conditions of the card-member agreement duly accepted by the complainant. The complainant was fully aware of the charges applicable to her when she was issued the credit card.  The OP Bank maintained that there was no deficiency in service on their part, as they had acted strictly in accordance with the arrangements listed in the card-member agreement.

4.       The District Forum after taking into account the averments of the parties, concluded that the complainant had not fulfilled the terms and conditions of the settlement arrived at between the parties and hence, the Bank had not made any mistake by showing outstanding balance of ₹51,098/- in the credit card statement.  The District Forum also held that the Bank had the right to hold the amount in any account of the customer against their outstanding dues under section 171 of the Indian Contract Act.  The District Forum dismissed the consumer complaint in question.  Being aggrieved against the order of the State Commission, the complainant challenged the same by way of an appeal before the State Commission, which was allowed as per the impugned order.  The State Commission concluded that section 171 of the Indian Contract Act, 1872 empowered the banker to have general lien on the account of a customer, but action under this section could not be taken without giving proper notice to the complainant.  The State Commission stated that the action of the bank was against the principles of natural justice and hence, they allowed the appeal and directed the Bank to pay a sum of ₹78,640.97ps to the complainant with interest @9% p.a. from 09.04.2010 till realisation.  Being aggrieved against the said order of the State Commission, the OP Bank is before us by way of the present revision petition.

5.       Due notice of the petition was sent to the complainant/respondent but the same could not be served upon her.  The notice was then published in two newspapers, but none appeared for the complainant despite the said publication to defend the case.

6.       During arguments before us, the learned counsel for the petitioner Bank stated that according to the settlement arrived at between the Bank and the complainant, a sum of ₹29,000/- was to be paid by the complainant to the Bank, but she paid only a sum of ₹4,000/-.  The settlement was, therefore, no longer valid and the Bank was within their rights to recover the entire outstanding balance from the complainant.  The learned counsel has drawn attention to a letter dated 23.05.2006 sent by one Ashim Ohri from the Bank to the complainant, saying that settlement had been made for payment of ₹29,000/- in three instalments and a sum of ₹4,000/- should be paid before 25.05.2006.  The learned counsel has drawn attention to the memo of appeal filed by the complainant before the State Commission, in which she has clearly admitted that notice dated 28.10.2009 was received by her on 04.11.2009.  The learned counsel stated that as per the information received on 25.04.2006 from the complainant, she had lost her credit card on 24.04.2006.  The said card was, therefore, blocked by the Bank on 25.04.2006 itself and replaced with a new card; however, the new card was not handed over to the complainant, as she could not complete the necessary formalities like registration of FIR etc.  However, the outstanding balance on the previous card was transferred to the new card.  The learned counsel has drawn attention to an order passed by this Commission in “State Bank of India vs. Jawahar Lal” [1 (1996) CPJ 293 (NC)], saying that the Bank was within their rights to have a general lien on the accounts of the customer as per section 171 of the Indian Contract Act.

7.       We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

8.         A perusal of the contents of the consumer complaint filed by the complainant/respondent and the memo of appeal filed by her before the State Commission reveals clearly that there was dispute between the complainant and the Bank regarding certain transactions shown in the credit card statement issued by the Bank to the complainant.  It is admitted by the complainant that on 23.05.2006, there was settlement between the Bank and the complainant, according to which, it was agreed that a sum of ₹29,000/- shall be paid by the complainant against the outstanding amount of ₹51,098.94 as full and final settlement.  The complainant has also admitted that she paid a sum of ₹4,000/- by cash on 25.05.2006 and the balance amount of ₹25,000/- was to be paid in three monthly instalments.  It is evident from the entire material on record and even the evidence affidavit filed by the complainant that she never made any further payment to the Bank in terms of the settlement arrived at between the parties.  The complainant has not given any reasons for not taking steps to implement the settlement between the parties, rather she has simply stated that the Bank was showing the old outstanding balance in the credit card statement of the new card, which was never issued to her.  It is held, therefore, that the contention of the Bank that the settlement no longer remained valid due to the failure of the complainant to pay the outstanding amount in terms of the said settlement, is not without force.  It cannot be denied that the Bank has every right to recover the outstanding balance from its customer.  Had the contention of the complainant that she never made any transaction on the credit card been true, she would have never agreed to make payment of ₹29,000/- to the Bank in terms of the settlement.  It is evident, therefore, that the complainant has miserably failed to prove that she did not owe any money to the OP Bank.  Vide impugned order, the State Commission held that the Bank had wrongfully debited the savings bank account of the complainant with ₹80,488.62ps. as they could not have exercised general lien over the savings bank account as per section 171 of the Indian Contract Act, 1872 without giving a notice to the complainant on the principle of natural justice.  This contention is, however, not tenable, because notice dated 28.10.2009 had been issued by the Bank to the complainant.  It is held, therefore, that the direction given by the State Commission in the impugned order, directing the Bank to pay a sum of ₹78,640.97ps to the complainant with interest @9% p.a. with effect from 09.04.2010 is not based on any logical reasoning.  Once the settlement had been reached between the complainant and the Bank, the complainant was duty bound to make payment to the Bank in terms of the said settlement.  We agree with the petitioner Bank that on the failure of the complainant to follow the terms of the settlement, the Bank has every right to recover the outstanding amount from the complainant as per the terms and conditions settled between the parties.  It is held, therefore, that the order passed by the State Commission is without any legal basis and the same is ordered to be set aside.  However, the order passed by the District Forum reflects a correct analysis of the facts and circumstances on record and is upheld.  Consequently, the present revision petition is allowed, the impugned order of the State Commission is set aside and the consumer complaint in question stands dismissed.