STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(APPEAL NO.218 OF 2010)

                                                Date of Institution: 04.06.2010

                                                Date of Decision   : 26.10.2010

1.                Citi Bank, through its Regional Credit Manager, Jeewan Bharti Building, 124, Connaught Place, New Delhi.

2.                Citi Bank, through its Branch Manager, SCO No.132-134, Sector 9, Chandigarh.

……Appellants

V e r s u s

Madan Mohan Malhotra, s/o Sh. Ram Sharan Dass, r/o H.No.3398, Sector 46-C, Chandigarh. 

              ....Respondent

BEFORE:          HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT

                    MRS. NEENA SANDHU, MEMBER

                    SH. JAGROOP SINGH MAHAL, MEMBER

Argued by:        Ms. Gargi, Advocate for the Appellants.

                Sh. Ajit Singh, Advocate for Respondent.

PER JAGROOP SINGH MAHAL, MEMBER.

1.                This is OPs appeal under section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) against the order dated 4.5.2010, passed by Learned District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter referred to as the District Forum), directing the OPs as follows :-

“i)     to withdraw the letters dated 17.04.2009 and 08.06.2009 and to reverse the entries of outstanding dues from all the three credit cards accounts of the complainant.

ii)                To pay a sum of Rs.1,00,000/- as compensation for mental agony and harassment.

iii)             To pay a sum of Rs.5000/- as costs of litigation.”

The order was to be complied with by the OPs/appellants within 45 days from the date of receipt of the copy failing which they were liable to pay the compensation amount of Rs.1,00,000/- alongwith penal interest @ 18% per annum from the date of filing of the complaint i.e. 15.9.2009 till its realization besides costs of litigation. 

2.                Madan Mohan Malhotra, complainant/respondent availed the facility of 3 credit cards from the appellants/OPs.  Some amount was due from him regarding which the OPs offered a full and final settlement on payment of Rs.2,05,200/- in 36 installments as per their letter Annexure C-1. The complainant accepted the said offer and issued 36 cheques to the OPs out of which one cheque was got encashed and the receipt for the remaining amount of Rs.1,99,500/- was given to the complainant.  After about one year, OPs again offered one time settlement for full & final payment of the entire remaining outstanding dues against the 3 credit cards on payment of  Rs.96,000/-. The complainant issued a cheque dated 21.4.2004 for the said amount towards full and final settlement and the OPs returned to the complainant the 24 cheques which they had received at the time of the earlier settlement.  After 2 years, the OPs/appellants issued a letter dated 17.4.2009 (Annexure C-14) demanding a sum of Rs.1,49,944.93. The complainant sent a reply (Annexure C-15) dated 22.4.2009 intimating that he has paid the amount in full and final settlement and a copy of the letter and other documents were enclosed.  However, the OPs/appellants thereafter sent a demand notice dated 8.6.2009 (Annexure C-16) demanding Rs.6,54,283.92 against the said credit card accounts.  The contention of the complainant is that this demand amounts to deficiency in service and unfair trade practice.  He, therefore, prayed for the withdrawal of the said letters and a compensation of Rs.1,50,000/- for mental harassment and torture and Rs.5,000/- as miscellaneous expenses. 

3.                The complaint was opposed by the OPs/appellants though admitting that three credit cards were issued to the complainant and one time settlement for all the three credit cards was negotiated through letter as mentioned by the complainant.  It was also admitted that subsequently another letter for full and final settlement on payment of Rs.96,000/- was issued to him but according to the OPs/appellants the said settlement pertained only to two credit cards whereas the amount remained due relating to the third credit card regarding which the demand of Rs.1,49,944.93 was made.  They also admitted that they subsequently demanded Rs.6,54,283.92.  It was denied if they ever harassed or tortured the complainant or there is any deficiency in service on their part.

4.                Both the parties were given opportunity to produce evidence in support of their contentions.

5.                After hearing the arguments of the learned counsel for the parties and perusing the record, the Ld. District Forum allowed the complaint directing the OPs/appellants to withdraw  the notices and to pay a compensation of Rs.1,00,000/- and litigation costs of Rs.5,000/- as mentioned earlier vide the impugned order dated 4.5.2010. The OPs have challenged the same through this appeal.

6.                We have heard the learned counsel for the parties and have perused the evidence on record.

7.                The contention of the ld. Counsel for the appellants is that though the first settlement was with respect to the arrears relating to all the three credit cards, but the 2^nd settlement was only with respect to the 2 credit cards and not 3 as alleged by the complainant.  It is admitted that in the letter dated 18.5.2006 (Annexure C-1), the full and final settlement offer pertained to all the 3 credit cards as mentioned therein.   Annexure C-3 is the receipt in which also all the 3 credit cards were mentioned regarding the full and final settlement.  It was, however, alleged that in the subsequent settlement for Rs.96,000/- the number of the third credit card was wrongly mentioned in the receipt, though the said settlement did not pertain to that account. This contention was not accepted by the ld. District Forum and we also are not inclined to accept the same.  Annexure C-1 is the letter showing that all the 3 accounts of the credit cards were being clubbed together by the OPs and consolidated amount of Rs.2,05,200/- was being demanded from him towards full and final settlement.  He had delivered the cheques to the OPs as demanded through this settlement. The receipt (Annexure C-3) also pertains to all the three accounts.  There is no such letter on record nor it appears to have ever been issued to the complainant after the consolidated amount earlier demanded from the complainant was ever bifurcated into two parts or the arrears due against one of the credit cards were separated.   Interestingly, the receipt (Annexure C-4) was issued with respect to all the 3 credit cards which fact is clearly admitted by the OPs in their reply.  Not only this, the cheques which had been obtained from the complainant were returned to him on his payment of Rs.96,000/- in cash.  Needless to mention that in view of the earlier settlement (Annexure C-1) these cheques related to the payment of the third credit card also.  If anything remained due with respect to the third credit card, the OPs would not have returned the cheques back to the complainant which fact also shows that no amount remained due from the complainant after the final settlement on receipt of Rs.96,000/-.  The OPs have, therefore, concocted this false story to cover up their deficiency in demanding the amount again.

8.                The notice (Annexure C-4) does not mention anything about the full and final settlement having taken place on 18.5.2006 vide Annexure C-1.  It also does not mention if any cheques were issued by the complainant or a receipt was issued by the OPs/appellants with respect to the said cheques. The OPs/appellants have also not mentioned if there was any second settlement in response to which they received a sum of Rs.96,000/- in cash from the complainant  on 21.4.2007.  It shows that the notice (Annexure C-14) was issued without consulting the record and obviously when a person who does not owe anything is asked by the bank to pay a huge amount of Rs.1.5 lacs would get scared.  The complainant was prompt in sending a reply (Annexure C-15) intimating to the OPs that a final settlement had already taken place and he had already paid the entire amount as demanded by the OPs/appellants.  He also enclosed  with the letter a photocopy of the settlement letter sent by the OPs dated 18.5.2006 and the receipts issued by them.  No reply was sent to this letter. The OPs did not update their account even when they were reminded by the complainant through letter (Annexure C-15).  However, now they chose another firm Kohli and Sobti, Advocates and Solicitors to issue a fresh notice (Annexure C-16) this time demanding a sum of Rs.6,54,283.92.  It is not understood as to how a sum of Rs.1,49,944.93 swelled into Rs.6,54,283.92 within a short span of 1 ½ months. There is, therefore, clear deficiency in service on the part of the OPs.  It appears the full and final settlement being done by one wing of the OPs/appellants is not taken note of by their other wing which is blindly issuing notices to the card holders thus terrorizing them to pay huge amounts as arrears.

9.                The contention of the ld. Counsel for the appellants is that they never harassed or terrorized the complainant and, therefore, the amount of Rs.1,00,000/- should not have been imposed as compensation on them.  This argument does not hold water.  In fact their own documents prove the allegation leveled by the complainant. In Annexure C-14 which is notice dated 17.4.2009, it is specifically mentioned in para 4 of the letter that despite repeated reminders sent to the complainant by the OPs/appellants through letters and personal visits by their representatives, he was yet to repay the outstanding amount of Rs.1,49,944.93.  It was then mentioned in para 8 of this letter that this communication should not be construed in a manner as to prejudice their rights to initiate legal proceedings or avail any other remedy available to them under the law. When the second notice (Annexure C-16) was issued by the OPs/appellants it was again admitted by them that they have repeatedly called upon the complainant to clear and liquidate the dues in respect of the said card but the said demands have proved futile. They threatened that if the amount of Rs.6,54,283.92 was not paid within a period of 7 days of the receipt of the notice, the OPs would be constrained to initiate appropriate legal proceedings against him including arbitration proceedings seeking the recovery of its dues alongwith interest, costs and other charges at his risk, cost and consequences.  Issuing such type of notices and demanding the amounts which are not due from the complainant definitely amounts to mental harassment and torture for which the OPs have been rightly held liable to compensate the complainant.

10.           No other point was argued before us.

11.            In view of the above discussion, we are of the opinion that there is no merit in this appeal and the same is accordingly dismissed with litigation costs of Rs.5,000/- to be paid by the Appellant to the Complainant/Respondent.

        Copies of this order be sent to the parties free of charge.

Pronounced.

26^th October, 2010.

Sd/-

 [JUSTICE PRITAM PAL]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

hg

STATE COMMISSION

(F.A. NO. 218 OF 2010)

Argued by:   Ms. Gargi, Advocate for the Appellants.

                        Sh. Ajit Singh, Advocate for Respondent.

Dated the 26^th day of October, 2010.

ORDER

                Vide our detailed order of even date recorded separately, this appeal filed by the OPs has been dismissed with costs of Rs.5,000/-.

(JAGROOP SINGH MAHAL)  (JUSTICE PRITAM PAL)   (NEENA SAHDHU)

                MEMBER                       PRESIDENT                MEMBER