PER MADHU MUTNEJA, MEMBER

                The instant complaint has been filed by Dr. Ram Saran Bhatia against HSBC Bank & Anr., under Section 12/13 of the Consumer Protection Act. 

1]             The Complainant is a serving doctor in Civil Dispensary Morinda, Punjab. The Complainant’s grievance is that he had been issued an unsolicited HSBC Gold Credit Card by the OPs.  There was a clear cut understanding that there would be no issue/ renewal charges on the card. The Complainant was not interested in the credit card from the beginning and has alleged that he never used his card at any time. He also requested the OPs to cancel the card. He later returned the Card to the OP No.2.

                The Complainant has alleged that the OPs had been issuing falsified bills and compounding the same against the credit card. Despite his various requests, the OPs never withdrew or cancelled the bills issued. Also charges for interest, service tax, finance charges etc. kept mounting. The agents of the OPs also started making threatening calls to the Complainant for making payment of the amount with the threat that he would otherwise be arrested.

                The Complainant, thus, deposited Rs.11,900/- with the OPs on 25.09.2009 under protest, against a bill of Rs.10,308.55/-.  Unfortunately, the OPs are still showing an outstanding amount of Rs.1591.45/- due from the Complainant.

                The Complainant has alleged that he does not owe any money to the Bank and has, thus, filed the instant complaint alleging unfair trade practice. He has prayed for refund of Rs.11,900/- deposited in cash, along with compensation for tarnishing his image and making threatening calls to him.

2]             After admission of the complaint, notices were sent to the OPs.

                In the reply filed by OPs, the proposal and acceptance by the Complainant of a life insurance policy have been annexed in a CD attached with the reply.  They have taken the preliminary objection that the requirement of clause 4(1) & (4) of IRDA Regulation were duly complied by them. The CD is a recording by TATA AIG and the Bank has raised the deduction of the amount from the account of the Complainant, when the demand was raised by the TATA AIG.

                The OPs have contended that from the details of the calls, it is evident that the voice belongs to the Complainant. He had asked for the insurance policy. The insurance premium was paid and collected by the Bank through the customers credit card. This was not only allowed, but also confirmed by the Complainant.  The relevant portion of the IRDA guidelines are as under:-

“[4] Where a proposal form is not used, the insurer shall record the information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover.”

                The OPs have submitted that the Complainant has used the credit card for the purchase of the policy mentioned above and payment was made by the OPs from the credit card account. Hence, the Bank was entitled to recover the amount from the Complainant.

                On merits, the Bank has submitted that the credit card issued to the Complainant was applied for and availed by the Complainant.  There is no documentation qua the return. Even  otherwise the alleged usage of card was prior to the alleged return of card and bills were issued only as per usage and charges payable.

                The Complainant was well aware of his dues and has made the payment without any pressure.  Denying all other allegations, the OPs have prayed for dismissal of the complaint.

                The Complainant filed his rejoinder by way of affidavit in response to the reply filed. Denying the preliminary objections, the Complainant has said that there is no insurance contract. Also no money could be withdrawn without his written consent. He has alleged that there was a gross violation of business conventions and mandatory provisions of byelaws by the Bank. The alleged CD is fictitious and a falsified procured evidence, which is not admissible in law. There was no due payment from the Complainant. So, the demand of the OP was unjustified.  He has also alleged that the OPs have referred the name of the Complainant in CIBIL which is a highly illegal action.

3]             We have heard the learned counsel for the parties and have also perused the evidence & documents led by the parties in support of their contentions.

4]             The Complainant has alleged against the OPs that they had fostered an unwanted credit card on him and after he protested the card was cancelled. He was further surprised to see certain transactions alleged to have been made by him with the said card, for which money was demanded from him by the OPs. The Complainant has alleged that all these transactions have not been made by him and hence, no amount was actually due from him to the OPs. However, since the interest due on the credit card was being regularly compounded by the OPs on the alleged life insurance policy issued in his name, the Complainant deposited an amount of Rs.11,900/- under protest with the OPs and, then filed the instant complaint, claiming the amount back, along with compensation from them.

                In support of his contentions, the learned counsel for the Complainant has placed on record a copy of the Master Circular on Credit Card Operation of Banks. He has relied on certain clauses of this Circular in support of his case, which reads as under:-

“6.1 Right to privacy

a. Unsolicited cards should not be issued. In case, an unsolicited card is issued and activated without the written consent of the recipient and the latter is billed for the same, the card issuing bank shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed.”

“6.2 Customer confidentiality

c. Before reporting default status of a credit card holder to the Credit Information Bureau of India Ltd. (CIBIL) or any other credit information Company authorized by RBI, banks/NBFCs should ensure that they adhere to a procedure, duly approved by their Board, including issuing of sufficient notice to such card holder about the intention to report him/ her as defaulter to the Credit Information Company……...”

“6.3 Fair Practices in debt collection

(b) In particular, in regard to appointment of third party agencies for debt collection, it is essential that such agents refrain from action that could damage the integrity and reputation of the bank/NBFC and that they observe strict customer confidentiality. All letters issued by recovery agents must contain the name and address of a responsible senior officer of the card issuing bank whom the customer can contact at his location.

(c) Banks /NBFCs / their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the credit card holders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.

(d) The banks should also ensure to comply with the guidelines in respect of engagement of recovery agents (circular No. DBOD.No.Leg.BC.75 /09.07.005/2007-08 dated April 24, 2008) issued by RBI. These guidelines inter-alia cover aspects relating to i) engagement of Recovery Agents including verification of antecedents of their employees by agents, (ii) incentives to recovery agents – banks to ensure that contracts with the recovery agents do not induce adoption of uncivilized, unlawful and questionable behaviour or recovery process, (iii) methods followed by recovery agents, (iv) training to recovery agents , (v) taking possession of property mortgaged /hypothecated to banks, (vi) use of forum of Lok Adalats, (vii) complaints against the bank/recovery agents and (viii) periodical review of the recovery agents’ mechanism.”

5]             The OPs have submitted right from the very beginning that the contentions of the Complainant are totally false and they had no cause to make payment for the policy issued in his name to the insurance company without his consent. They have also placed on record copy of the policy alleged to have been issued in the name of the Complainant. However, there is no written document available on record to show the consent whether prior or afterwards given by the Complainant for the policy, or any directions by the Complainant to the OP for making payment of the said policy.

6]             The OPs have placed their sole reliance on a CD, wherein the voice of the Complainant is identified and he has made a request for issuance of the policy. The Complainant has denied that he has made any such request or given any such directions.

7]             The Complainant is a busy government doctor and we do not think that he would indulge in such litigation, unless he was definitely aggrieved by the OPs. The amount involved is too small. What has upset him is not only the demand from the OPs, but also the threatening calls being made by the Agents of the OPs that he would be arrested for non-payment of the amount. To add fuel to the fire, the OPs have also given his name as a defaulter to CIBIL. It is, thus, a clear case of harassment of an individual, who has said from the beginning that he was not even interested in the credit card.

8]             In view of above, we feel that there is clear unfair trade practice and deficiency in service on the part of OPs and they need to compensate the Complainant for the loss suffered by him. 

9]             Keeping in consideration these facts and findings, we deem it appropriate to allow the complaint in favour of the Complainant. The OPs shall, make the following payments to the Complainant:-

(i)     Refund Rs.11,900/- deposited with them.

(ii)    Pay Rs.10,000/- by way of compensation for mental harassment and costs of litigation.

10]            The OPs will also ensure that the name of the Complainant is removed from the defaulters list of CIBIL at the earliest under intimation to him.

11]            The above said order be complied with by the OPs, within a period of 30 days from the date of receipt of certified copy of this order, failing which the they shall pay the decretal amount of Rs.21,900/- along with interest @12% per annum from the date of the order, till the date of actual payment to the complainant.

12]            Certified copies of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.