FA.No.515/2008 against CC.No.288/2006 District Consumer Forum-I, Hyderabad.

Between:

The Standard Chartered Bank,

Rep. by its Manager,

2^nd Floor, Amsri Plaza,

S.D.Road, Secunderabad.

…Appellant/Opp.Party.

And

Madhusudan Kakani, S/o.Satyanarayan Kakani,

Age : 58 years, Occ: Director of Govind Industries,

H.No.6-48/1, Gagan Pahad, Shamshabad,

Hyderabad.

…Respondent/Complainant.

Counsel for the Appellant         : M/s.M.V.Kini & Co.

Counsel for the Respondent     : Mr.Damodar Mundra

QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT,

AND

SMT.M.SHREESHA, HON’BLE MEMBER.

FRIDAY, THE SIXTEENTH DAY OF JULY,

TWO THOUSAND TEN.

Oral Order (Per Hon’ble Sri Justice D.Appa Rao, President)

*******

1.         This is an appeal preferred by the opposite party, Standard Chartered Bank against the order of the District Forum directing it to pay a compensation of Rs.50,000/- together with costs of Rs,2000/-.

 2.        The case of the complainant in brief is that he had a Credit Card with the appellant bank, vide Gold Card No.5543 7586 9603 and 0764 along with an adon Cards  with a cash limit of Rs.68,000/-.  On 14.09.2004 he paid the entire due amount of Rs.19  However, again he received a bill for Rs.7  He paid an amount of Rs.4  Yet again he received a notice

“YOUR NAME HAS BEEN INCLUDED IN THE DEFAULTER LIST.  THIS IS A SERIOUS MATTER, WHICH AFFECTS YOUR CREDIT WORTHINESS.  PLEASE CONTACT MANAGER, CUSTOMER ASSISTANCE”

On that he issued a legal notice dt.16.01.2006, which was received by the bank under acknowledgement, Ex.A.8.  However, no reply was given.  On that he filed the complaint for a direction to delete his name from the  list together with compensation of Rs.1,00,000/- and costs.

3.         The opposite party resisted the case.  It alleged that there was some outstanding amount payable on his accounts and on the request of the complainant, it agreed to close his accounts by taking Rs.4,000/-.  Accordingly, the complainant paid Rs.4    He did not pay the entire dues.  At no time, harassment was made.  The complainant might have received the statements showing the balance amount.  In fact the bank had to send the settlement letter to the Head Office situated at Chennai for zerovisation of his accounts by informing about the settlement.  Since it has to be routed through several departments, it took some time for issuance of zero balance statement.  The statement that was received by the complainant was a computer generated one which was sent to the complainant due to over sight.  It admitted that it has received the amounts towards full and final settlement.  It prayed for dismissal of the complaint with costs.

4.         The complainant in proof of his case filed his affidavit evidence and got the documents marked as Exs.A.1 to A.8, while the opposite party filed affidavit evidence of its Asst. Manager (Legal) and filed Ex.B.1 statement of account.

5.         The District Forum after considering the evidence placed on record opined that the opposite party Bank has undoubtedly sent an incorrect statement, Ex.A.6 demanding an amount of Rs.4

6.         Aggrieved by the said order, the opposite party Bank preferred this appeal contending that the District Forum did not appreciate the facts in its correct perspective.  It ought to have seen that it had filed statement of account showing zero balance.  It ought to have seen that the statements showing the outstanding amounts were issued due to over sight.  It had not initiated any recovery proceedings and therefore, prayed that the appeal be allowed.

7.         The point that arises for consideration is whether the order of the District Forum awarding compensation of Rs

8.         It is an undisputed fact that the complainant, who had credit cards with the appellant Bank, intended to close the credit cards in view of repeated demands being made by the Bank.  On 16.04.2005 he paid Rs.4  It is not in dispute that on 27.12.2005 the bank had again issued a notice asking the complainant to pay Rs.4  Despite the fact that the complainant issued a legal notice inviting the attention of the bank authorities to get it corrected, still it did not chose to correct or give any reply.  Having waited for some time, the complainant filed the complaint on 15.04.2006 for which the bank did not file counter. 

9.         However, the bank filed affidavit evidence  one G.Praveen Kumar, Asst. Manager (Legal) admitting that it was a mistake.  He intends to get over by stating that it had sent the settlement letter to the Head Office situated at Chennai for zerovisation of accounts and for that it had to pass through several departments.  The statement that was issued to the   The demand notice was sent to the complainant due to over sight. 

10.       We may state that this could not have been an innocent act on the part of the appellant bank.  Admittedly,   bank has issued a letter, Ex.A.4 stating that they have received Rs.4,000/- towards full and final settlement.  As we have pointed out that the complainant had already issued legal notice.  Even then, the bank did not choose to give any reply asking the complainant to ignore the said notice.  On the other hand, it had threatened the complainant that it would declare him as a defaulter and necessary action would follow. Undoubtedly, the complainant must have suffered mental agony, since there was threat from the bank that it would take action.  This kind of negligence amounts to deficiency in service. 

11.       Only at the time of arguments in the appeal, the learned counsel for the appellant vehemently contended that these mistakes do occur in view of the fact that there were problems in the computer for which no compensation need be awarded.  He relied on decision of the Supreme Court in State Bank of India Vs. A.G.I.Switches reported in 1999 CPR 238 wherein it was held that compensation should not be awarded when there is no evidence in regard to loss of business, reputation, mental agony and harassment.  Granting compensation without any basis would not hold good.  A perusal of the judgment shows that it was a case where the bank for the loss sustained instituted a suit for recovery of the amount, even though the complainant had paid the amount.  The Supreme Court observed that it was filed only a counter blast to the suit filed by the bank.  In that context the Supreme Court opined that award of compensation “in the facts of the present case ‘cannot be sustained’ for want of any evidence of loss alleged to have been sustained by the respondent/complainant.  Even in the case of deficiency in service, compensation could not have been awarded for loss of business, reputation and mental harassment in the absence of any evidence on record proving the quantum of such loss.” 

12.       Coming to the facts of the present case, we may state that the complainant had paid the amount which the bank had acknowledged by their own letter Ex.A.4.  Ignoring the said letter, the bank had issued demand notice, Ex.A.6.  When it was brought to its notice by way of legal notice, it did not choose to give any reply.  On that the complainant filed complaint.  Having received the amount and having issued Ex.A.4.  Issuance of demand notices repeatedly would obviously create mental agony to any customer.  The complainant is an industrialist, whose credibility and reputation would be lost for such acts of the bank.  Had the complainant kept quiet, probably it would have initiated proceedings also.  As we could see that no reply was given to the legal notice issued by the complainant.  It cannot get over by pleading that it was a mistake.  Awarding of Rs.50  In the circumstances mentioned above, no leniency could be shown in this regard.  However, awarding interest on compensation is not justified.  Therefore, awarding of interest would not sustain and therefore it is set aside.

13.       In the result, the appeal is partly allowed and the order of the District Forum is modified by deleting the award of interest.  However, the compensation as well as costs   In the appeal, the appellant is directed to pay costs of Rs.2    

PRESIDENT                

MEMBER

DtVvr