Chandigarh

DF-II

CC/499/2016

Aditya Sachdeva - Complainant(s)

Versus

HDFC Bank Cards - Opp.Party(s)

Adv. Sukhdev Saini

21 Jul 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

 U.T. CHANDIGARH

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Consumer Complaint  No	:	499 of 2016
Date  of  Institution	:	18.07.2016
Date   of   Decision	:	21.07.2017

 

 

 

 

Aditya Sachdeva aged 35 years son of Sh.Subhash Chander, resident of H.No.1619, Morigate Manimajra, UT, Chandigarh.   

             …..Complainant

Versus

1]  HDFC Bank Cards Division, Ceebros Building No.110, Nelson Manickam Road, AminjiKarai, Chennai 600029

2]  M/s Citi Enterprises, SCO No.90, Ist Floor, Sector 40, Chandigarh 160036

                               ….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN        PRESIDENT

MRS.PRITI MALHOTRA    MEMBER

                                SH.RAVINDER SINGH     MEMBER 

 

Argued by: Sh.Dikshant Jindal, Adv. proxy for Sh.Sukhdev Saini, Adv. for complainant.

Sh.Sandeep Suri, Adv. for OP No.1.

Opposite Party NO.2 exparte.

 

 

PER RAVINDER SINGH, MEMBER

 

 

          The complainant has stated that he took credit Card No.4346772004964929 from HDFC Bank and he made the payments till January, 2009 but he could not make payment of dues thereafter due to some financial problem, as such the Opposite Party terminated the said credit card facility. Then, after discussion, a settlement was arrived at between the complainant and Opposite Party (Annexure C-1) according to which the complainant was required to make payment of Rs.9900/- as full and final settlement. It is averred that though the matter was settled for Rs.9900/- but the Opposite Party got deposited Rs.13,000/- in installments from the complainant (Annexure C-2 to C-10).  It is also averred that though the credit card facility of the complainant was terminated in the year 2009 and the complainant has deposited the settled amount, yet Opposite Party issued legal notice dated 4.2.2014 (Ann.C-11) asking to deposit Rs.61,830.91/- as balance regarding the said credit card and it was duly reply vide reply dated 11.4.2014 (Ann.C-12). It is further averred that the Opposite Party also sent the name of the complainant to CIBIL. Alleging the said act of the OPs as gross deficiency in service and unfair trade practice, this complaint has been filed.

 

2]       The Opposite Party NO.1 has filed reply and took objection that the complaint is barred by limitation. On merits, while admitting the factual matrix of the case, stated that under the one-time settlement with the complainant on 16.2.2010 for Rs.9900/-, the complainant was required to pay the said amount in 5 monthly installments and time was the essence of the agreement.  It is stated that on account of failure of the complainant to abide by the repayment schedule mentioned in one-time settlement, the said settlement became null and void and the complainant was liable to pay the full amount payable against the said credit card and the bank was also entitled to charge overdue and late payment charges thereon.  It is submitted that the complainant is liable to pay the amount and in case the complainant wishes to get the bank to remove his name from CIBIL wherein he has been shown as a defaulter, the banks full amount are required to be cleared.  Pleading no deficiency in service and denying rest of the allegations, the OP No.1 has prayed for dismissal of the complaint.

         The Opposite Party NO.2 did not turn up despite service of notice sent through regd. post on 01.08.2016, hence it was proceeded exparte vide order dated 6.9.2016.

 

4]       Parties led evidence in support of their contentions.

 

5]        We have heard the ld.Counsel for the parties and have carefully examined the facts and pleadings along with entire evidence on record.

 

6]       The objection regarding the complaint barred by limitation as per Section 24-A of the Consumer Protection Act, 1986, is unfounded and without merits.  The Opposite Party No.1 has not settled the account of the complainant despite payment of dues agreed upon and consistently laying claim of Rs.61,880/- against the complainant which give rise to recurring cause of action.  The complaint, as such, is within limitation and not barred by limitation. 

 

7]       After careful consideration of the entire facts on record in the present complaint, it has been found that the complainant took credit Card No.4346772004964929 from HDFC Bank Card Division in December, 2007.  He used the said Credit Card till Nov., 2010 as is evident from Credit Card Statement Ann.A-1. 

 

8]       The complainant admittedly was in default in repayment of credit card dues, due to his financial constraints and as such, the Opposite Party No.1 after reconciliation, offered one time settlement of his account on 16.2.2010 for making payment of Rs.9900/- as per the following schedule:-

Date	Amount
16.2.2010	Rs.2000/-
15.3.2010	Rs.2000/-
15.4.2010	Rs.2000/-
15.5.2010	Rs.1950/-
15.6.2010	Rs.1950/-

 

9]       The Complainant, however, failed to stand to the schedule of payment as offered by the Opposite Party No.1 vide one time settlement, but paid the amount (Ann.C-2 to Ann.C-10) as per details below:-

 

Date	Amount (Rs.)
27.2.2010	1000/-
20.3.2010	500/-
17.4.2010	650/-
31.5.2010	1000/-
30.6.2010	1100/-
31.7.2010	1100/-
27.8.2010	1300/-
30.9.2010	1250/-
30.10.2010	2000/-
	9900/-

 

10]      The complainant has challenged the demand of Rs.61830.91 as claimed by the Opposite Party No.1 from the complainant and also prayed for deletion of his name from the list of defaulters with CIBIL.

 

11]      The Opposite Party No.1 in it reply admitted to have received only Rs.3150/- till 15.6.2010 against the outstanding amount of Rs.9900/- and also justified the imposition of interest @36% per annum relying upon the judgment of Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Complaint Case No.51 of 2007 titled “Awaz” Punita Society & Ors. Vs. Reserve Bank of India & Ors., decided on 07^th July, 2008.

 

12]      The Opposite Party No.1 has justified the imposition of penalty charges, interest on the ground of failure on the part of the complainant in payment of dues in time.

 

13]      The credit card issued by Opposite Party NO.1 to the complainant was used upto July, 2010 as is explicit from the Credit Card Statement (Ann.A-1 Page/7 to 42).  After cancellation of the credit card, the Available Credit Limit and Available Cash Limit on the card was also projected to be NIL as per credit card statement Page/42.  The complainant on cancellation of credit card never used any facility on that account. 

 

14]      The Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Complaint Case No.51 of 2007 titled “Awaz” Punita Society & Ors. Vs. Reserve Bank of India & Ors., decided on 07^th July, 2008 has held:-

1. Penal interest can be charged only once for one period of default and shall not be capitalized.
2. Charging of interest with monthly rests is also an unfair trade practice.

 

15]      The penal interest can be charged only once for one period of default and, therefore, the penal interest cannot be permitted to be capitalized and further interest on interest, whether simple or compound or penalty cannot be claimed on amount of penal interest.  The charging of interest or compound interest, after termination of the credit card, is unfair trade practice.  The Bank cannot recover from the user than what was due and cannot charge any interest after the usage of the card was stopped. 

 

16]      The real question, therefore, is whether the charging of interest 36% p.a. is so obnoxious which attract the provisions of Usurious Loans Act, 1918.  In any matter, where the Court/Forum has reason to believe that the transaction in question was substantially unfair, it may reopen the transaction.  If the rate of interest is penal, the Court/Forum can award at such rate as it deems reasonable.  Even if the rate is not penal, the Court may reduce it if the interest is found excessive and transaction was substantially unfair. 

 

17]      The Banking Regulations Act Section 21-A, which excludes the jurisdiction of any other act regarding working of banks, seems to have been illegally extended to the market of Credit Card Services where there is no control of Reserve Bank.  The extension of these privileges of a Bank to the relevant market of Credit Card Services, amounts to abuse of banks dominant position.

 

18]      The immunity available to banking company under Section 21-A of the Banking Regulations Act, 1949 from application of Usurious Loans Act, 1918, in respect of Credit Card transactions/market has to be overlooked in the interest of justice and fair play.

 

19]      It is pertinent to mention that the business of credit card in India is merely carried out in the credit card area through the provisions of services provided by two American Companies i.e. Visa Card and Master Card.  Once the consumer opts for credit card of a bank, then he is captured by the bank and once captured, he is made to pay heavy payment of interest, which is capitalized on daily/monthly basis making him impossible to escape from the vicious circle of misfortune.

 

20]      People especially agriculturist and even the business persons under heavy debts of the banks and financial institutions are committing suicides and it is also unfortunate that the banking sector and other financial institutions, have little sympathy/concern in extending a helping hand to the needy. 

 

21]      The complainant has already paid Rs.9900/- against the one time settlement of Rs.9900/- to the Opposite Party NO.1, though he has made payment in installments with little delay, but that also seems to be not intentional but due to his financial constraints, which seems genuine and bonafide and as such, cannot be penalized further in the interest of justice.

 

22]      Keeping into consideration the entire evidence on record and peculiar facts in the present matter, the complaint is hereby allowed partly.  Accordingly, the demand of the OPs for any further outstanding amount from the complainant in respect of the credit card in question, being untenable and illegal, stands quashed.  The Opposite Parties shall further take needful action to withdraw the name of the complainant from the list of defaulters with CIBIL. However, there is no order as to cost and compensation.

         The copy of this order be forwarded to the parties and file be consigned to record room.

Announced

21^th July, 2017           

                                            Sd/-

                                                                             (RAJAN DEWAN)

PRESIDENT

                    

                                                                                      Sd/-                                                                                      (PRITI MALHOTRA)

                                                                                      MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER