Costs deposited.

          Standard Chartered Bank, the appellant herein, was the opposite party before the State Commission.

          Capt. A. Ranganathan, respondent No.1 herein, was maintaining a Non Resident External Account, Non Resident Ordinary Account, Foreign Currency Non Resident Deposits and Non Resident

-2-

Non Repatriable Deposits with the appellant bank.  The respondent No. 1 had given standing instructions for payment of credit card dues standing in his wife’s name from his NRO account which was guaranteed by NRE account as well as NRNR deposits.  Further, there were standing instructions to replenish funds regularly on the utilization of card by the respondent No. 2.  As on 31.12.1996 there was no amount due and payable.  Hence, the respondent No. 2 was surprised to receive a telegram stating that the cheque for                          Rs.27,022.35 had been returned for ‘insufficient funds’.  According to the complainants, they had never issued any such cheque nor there was any need to do so in as much as amounts due under the credit card were to be adjusted from NRO Account as per the standing instructions.  Even before the complainants could verify the demand, the appellant Bank sent ‘Bill Collector’ who visited the house of the Complainants and demanded payment in a very undignified and threatening manner.  The Complainants approached the appellant bank and the bank, on enquiry, accepted that the demand made by the Bill Collector was wrong but tried to shift the blame on account of computer error.

-3-

          Aggrieved by this, respondents filed an appeal before the State Commission seeking compensation of Rs.20 Lacs.  The State Commission by the impugned order allowed the complaint and awarded Rs.20 Lacs as compensation along with costs of Rs.5,000/- to the respondents.

          Aggrieved by this, present appeal has been filed by the appellant.

          The appeal was admitted on the limited point regarding Quantum of compensation awarded by the State Commission.  The operation of the impugned order was stayed subject to deposit of Rs.2.5 Lacs by the appellant with the State Commission within four weeks.  The respondents were put at liberty to withdraw the same on furnishing security to the satisfaction of the Registrar of the State Commission.  The appellant complied with the order.

          This Commission in “Revision Petition No.737/2005 titled Citicorp Maruti Finance Ltd. Vs. S. Vijayalaxmi” has held that the practice of hiring recovery agents in a civil society is to be deprecated and the bank was directed to pay punitive damages to the victim. 

-4-

Similar is the view expressed by Supreme Court in “ICICI Bank Ltd. Vs. Prakash Kaur & Ors., (2007) 2 SCC 711” though the fact situation was different.  Dr. AR. Laxmanan, J., while supplementing the order in para 28 of his judgment observed that the civil society is governed by rule of law and the recovery of loan or seizure of vehicle could be done only through legal means; that the bank could not employ ‘Gundaas’ to take possession by force.

          We respectfully follow the view taken by this Commission in Citicorp Maruti’s case (supra) and the Supreme Court of India in ICICI Bank’s case (supra) and hold that the appellant bank is liable to pay exemplary damages to the respondents.  In the present case, the damages of Rs.20 Lacs directed to be paid by the State Commission is on the higher side.  The appellant has already deposited a sum of Rs.2.5 Lacs.  We restrict the amount of compensation to Rs.2.5 Lacs instead of Rs.20 Lacs. 

Respondents would be at liberty to withdraw the amount from the State Commission along with the accrued interest, if not already withdrawn.

-5-

            Appeal stands disposed of in above terms.