IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.A.T.Munnoli<br /> B.A., L.L.B (Spl.) - President <br /> <br /> 2. Smt.Y.V.Uma Shenoi<br /> M.Sc., B.Ed., - Member<br /> <br /> 3. Shri. Shivakumar.J.<br /> B.A., L.L.B., - Member<br /> <br /> CC 114/10 DATED 09.06.2010<br /> ORDER<br /> <br /> Complainant N. Deepak Kumar, No.613, Ashoka Road, Mysore-570001.<br /> <br /> (In person)<br /> <br /> Vs. <br /> Opposite Party 1. Branch Head, Karnataka Bank Ltd., D. Devaraja Urs Road, Mysore-570001.<br /> 2. Asst. General Manager, Karnataka Bank Ltd., New Kantharaje Urs Road, Kuvempunagar, Mysore-23. <br /> (By Sri. A.V. Jayarama Rao, Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 05.04.2010<br /> Date of appearance of O.P. : 20.04.2010<br /> Date of order : 09.06.2010<br /> Duration of Proceeding : 1 Month 20 days<br /> <br /> <br /> PRESIDENT <br /> <br /> <br /> <br /> MEMBER<br /> <br /> <br /> MEMBER<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> Sri. A.T.Munnoli,<br /> President<br /> <br /> <br /> 1. The complainant has filed the complaint Under Section 12 of the Consumer Protection Act against the opposite parties alleging that, he has S.B. Account with the first opposite party Bank and he obtained Demand Draft for Rs.100/- on 14.12.2009, paying Rs.20/- charges, in the name of the Mysore District Consumer Forum, Mysore as he wanted to lodge the complaint. Latter, the complainant found that, Demand Draft of Nationalized Bank shall have to be presented to the Consumer Forum. Hence, the complainant returned the Demand Draft to the first opposite party, for cancellation. The first opposite party charged Rs.56/-, for cancellation and remitted only Rs.44/- in the account of the complainant. On 18.01.2010, the complainant wrote to the second opposite party stating that, for issuance of Demand Draft, Rs.20/- was collected as commission, where as for cancellation, charges of Rs.56/-. It amounts to unfair trade practice as no extra service is rendered. Hence, it is prayed to direct the opposite parties to desist from adopting this unfair trade practice henceforth and award punitive damages of Rs.50,000/-, Rs.2,000/- compensation and Rs.2,000/- cost.<br /> <br /> 2. In the version, opposite parties have contended that the complaint is misconceived and is not maintainable either in law or in facts. Transactions stated in the complaint are admitted. It is contended that, based on circulars and guidelines of RBI, the Board fixes the charges applicable to all the branches of the opposite party Bank. It is displayed on the notice board and also available in the web site of the Bank. As per the circular of the head office of the opposite party Bank dated 15.09.2009, charges for cancellation of Demand Draft is fixed at Rs.50/- per instrument and that has been debited in the account of the complainant in addition to service charge of Rs.6/-. It is the normal practice. There is no unfair trade practice or deficiency in service on the part of the opposite parties. Claim of the complainant is illogical, exorbitant and not maintainable. The complainant is not entitled to any reliefs. Hence, it is prayed to dismiss the complaint.<br /> <br /> 3. In support of the claim made in the complaint, the complainant has filed his affidavit and produced certain documents. On the other hand, for the opposite parties, Senior Branch Manager has filed his affidavit and produced certain documents. We have heard the arguments of the complainant in person and of the learned advocate for the opposite parties and perused the records.<br /> <br /> 4. Now the points arises for consideration are as under:-<br /> 1. Whether the complainant has proved any deficiency in service on the part of the opposite parties and that he is entitled to the reliefs sought?<br /> 2. What order?<br /> <br /> 5. Our findings are as under:-<br /> Point no.1 : Partly in affirmative.<br /> Point no.2 : As per the order.<br /> <br /> REASONS<br /> 6. Point No.1:- Admittedly, for issuing the Demand Draft, for a sum of Rs.100/-, opposite party Bank charged only Rs.20/- where as for cancellation, Rs.56/-. This is admitted fact. Whether it amounts to unfair trade practice or deficiency in service on the part of the opposite party Bank, is the question?<br /> <br /> 7. Unfair trade practice is defined Under Section 2(1)(r) of the Consumer Protection Act. Entire lengthy two pages definition need not be quoted here. It is suffice to note that trade practice, which adopts any unfair method or deceptive practice amounts to unfair trade practice.<br /> <br /> 8. In the Chamber’s English Dictionary, meaning of “unfair” is not given but “fair” is given as clear, clean, free from blemish. Thus, “unfair” means, which is not clear, which is not clean and which is not free from blemish. Meaning of deception is stated as, an act of deceiving, means of deceiving or misleading, trick, illusion. <br /> <br /> 9. In the light of the definition of the unfair trade practice and the meaning of ‘unfair’ and ‘deceptive’ noted above, we have to analyse whether the act alleged, amounts to unfair trade practice.<br /> <br /> 10. An ordinary prudent man certainly will be of the opinion that, for the issuing Demand Draft levying charge of Rs.20/-, where as for cancellation of the same charging Rs.56/-, is unfair and unreasonable. In this regard, it is relevant to note that, for issuing Demand Draft, the Bank use it’s Demand Draft, which shall have to be got printed or prepared by the opposite party and for that, at least the Bank shall have to spend some amount towards paper cost and printing, but on the other hand, for cancellation, no such expenses needed. In addition to it, from the date of issuance of the Demand Draft, till it is encashed or cancelled, the amount of Demand Draft will be with the Bank and certainly that amount will be in circulation and consequently, that amount is used by the Bank. This is added benefit to the Bank. In spite of it, for cancellation, opposite party has charged Rs.50/-. Further, opposite party charged Rs.6/-, towards service charge. For issuance of the Demand Draft also certain service is provided. For that, no service charges is levied. Assuming that, Rs.20/- collected by the opposite party Bank at the time of issuing the Demand Draft includes service charges, then also, total Rs.56/- charged and collected by the opposite party Bank, for cancellation, in our opinion is unfair and unreasonable.<br /> <br /> <br /> 11. Learned advocate for the opposite party Bank produced copy of circulars issued by the head office of the opposite party Bank and submitted that, said circulars have been issued on the basis of the directions of the RBI and based on the same, Rs.50/-, towards cancellation and Rs.6/-, towards service charges, has been levied. It is true, in the annexure to the circular, revised charges and fees with effect from 11.02.2008 at serial No.15 is mentioned as Rs.100/-.. If, this is to be taken into consideration, for cancellation of Demand Draft of Rs.100/-, the person, who approach for cancellation, shall have to pay fees of Rs.100/- and as claimed and contended by the opposite party Bank, further service charges at least of Rs.6/- has to be paid. Consequently, to purchase the Demand Draft of Rs.100/- one has to pay Rs.20/- and then towards, cancellation, charges of Rs.100/- and service charges Rs.6/-. In all Rs.126/-. Let it be whatever charges for issuance of the Demand Draft. Because, if the charges are more then one may not purchase the Demand Draft. But once the customer purchase the Demand Draft of Rs.100/-, for its cancellation as per the circular, fees or charges is Rs.100/- in addition to service charge. Ultimately, in reality no sane and prudent customer approach the Bank to get the Demand Draft canceled, paying more than the Demand Draft amount. In such case, when the Demand Draft is of no use to the customer, who has purchased it, has to throw it in to the dustbin. In the result, the entire amount of the Demand Draft become that of the Bank. Hence, looking the case from any angle, we are of the considered opinion that, the act alleged by the complainant against the opposite party Bank, certainly amounts to unfair trade practice. <br /> <br /> 12. In the 8th paragraph of the version, the opposite party Bank has contended that, the claim of the complainant is “illogical”. Firstly, we found no illogic in the facts alleged by the complainant in the complaint and secondly, what is the logic behind collecting Rs.56/-, for cancellation of the Demand Draft, where as for issuance only Rs.20/- is charged. We are unable to find from the records any logic and that has not been explained by the opposite party and so also by the learned advocate during the course of arguments. Hence, charging Rs.56/-, towards cancellation of Demand Draft is certainly illogical.<br /> <br /> 13. On the basis of the guidelines of the RBI, master circular issued on customer service in banks dated 01.07.2009 is placed on record for the opposite party. On page 21 at para 6.2, it is stated that, <br /> “In order to ensure fair practices in banking services, Reserve Bank of India had constituted a Working Group to formulate a scheme for ensuring reasonableness of bank charges and to incorporate the same in the Fair Practices Code, the compliance of which would be monitored by the Banking Codes and Standards Board of India (BCSBI). Based on the recommendations of the Group, action required to be taken by banks is indicated under the column ‘action points for banks’ in the Annex 1 to this circular.”. (Underlining ours)<br /> <br /> 14. Thus, it is directed by the R.B.I that to ensure fair practice in banking service to formulate scheme for ensuring reasonableness of Bank charges and incorporate the same in the fair practice code. In the foregoing paragraphs, we have referred to the definition of “unfair trade practice” and the meaning of ‘fair’ and ‘unfair’. At the cost of repetition, charging only Rs.20/- for issuance of Demand Draft and for cancellation Rs.56/-, is not a “fair” practice. Also, it is not “reasonable”. Meaning of reasonable, stated in Chamber’s English Dictionary is “endure on reasons, rational, acting according to reasons, agreeable to reason, just, no excessive, not expensive, and moderate. Hence, certainly we are of the considered opinion that, charging Rs.56/- is not reasonable, but it is unreasonable and it is against the directions of the R.B.I. The circular of the head office relied upon by the learned advocate for the opposite parties referred to above, is not inconformity with the guidelines or directions of the RBI, but in fact, it is contrary.<br /> <br /> 15. Accordingly, we are of the opinion that, the act complained by the complainant against the opposite party Bank amounts to unfair trade practice. The complainant has sought a direction to the opposite party Bank to desist from adopting such unfair trade practice henceforth. As provided Under Section 14(1)(f), this Forum is empowered to direct the opposite party Bank to discontinue the unfair trade practice or not to repeat the same. Further, the complainant has sought to direct the opposite party Bank to remit a sum of Rs.50,000/- to the Consumer Welfare Fund as punitive damages. This Forum is empowered to award such damages claimed by the complainant. But considering the facts, nature and the circumstances, Rs.50,000/- claimed is excessive. We feel Rs.5,000/- is just and reasonable. Towards compensation and cost claimed by the complainant, some amount has to be awarded. Accordingly, our finding on the point is partly in affirmative.<br /> <br /> 16. Point No. 2:- From the discussion made above and conclusion arrived at, we pass the following order.<br /> <br /> ORDER <br /> 1. The complaint is partly allowed.<br /> 2. The opposite party Bank is hereby directed to discontinue the unfair trade practice forthwith and not to repeat the same in the matter of charging and claiming fees including service charges, more than the charges collected or levied for issuing Demand Drafts.<br /> 3. Further, the opposite party Bank is directed to credit a sum of Rs.5,000/- to the Consumer Welfare Fund Account maintained in this Forum as damages, for adopting unfair trade practice, within a month from the date of the order, failing which the amount will carry interest at the rate of 10% p.a.<br /> 4. The opposite party Bank shall pay a sum of Rs.500/- as compensation to the complainant towards mental agony and inconvenience caused, within a month from the date of the order, failing which the amount will carry interest at the rate of 10% p.a.<br /> 5. Likewise the opposite party Bank is directed to pay a sum of Rs.500/- towards cost of the proceedings.<br /> 6. Give a copy of this order to each party according to Rules.<br /> (Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open Forum on this the day 9th June 2010)<br /> <br /> <br /> <br /> (A.T.Munnoli) <br /> President <br /> <br /> <br /> (Y.V.Uma Shenoi)<br /> Member<br /> <br /> <br /> (Shivakumar.J.)<br /> Member<br /> <br /> <br />