In the Court of the Consumer Disputes Redressal Forum, Unit -I, Kolkata, 8B, Nelie Sengupta Sarani, Kolkata-700087. CDF/Unit-I/Case No. 208 / 2007 1) The Director, Consumer Affairs & Fair Business Practices, 8B, Nelie Sengupta Sarani, 6th Floor, Kolkata-700087. ---------- Complainant ---Verses--- 1) M/s. SBI Cards & Payment Services Pvt. Ltd. F.M.C. Fortuna Buildings, 234/3A, A.J.C. Bose Road, Kolkata-700020, P.S. Bhawanipur. 2) M/s. SBI Cards & Payment Services Pvt. Ltd., 90-A, Udyog Vihar, Sector-18, Gurgaon, Haryana-122015. 3) M/s. State Bank of India, 1, Strand Road, Kolkata-700001. ---------- Opposite Party Present : Sri S. K. Majumdar, President. Sri T.K. Bhattachatya, Member Order No. 2 6 Dated 1 5 / 0 1 / 2 0 1 0 . On the basis of authorization issued by joint Secretary to the Govt. of West Bengal dt.14.6.07 the Director of Consumer Affairs and Fair Business Practices, Govt. of West Bengal has filed the instant petition of complaint u/s 12(i)(d) of the C.P. Act, 1986 against the SBI Card and Payment Services o.p. no.1, SBI Card and Payment Services Pvt. Ltd. o.p. no.2 and M/s State Bank of India o.p. no.3 praying for issuing order/direction upon the o.ps., (a) to produce or cause to be produced all records pertaining to credit card issued during the last three years to ascertain the actual amount of earning made by unfair trade practice u/s 13(4)(ii)(vi) of the C.P. Act read with Rule 10 of the C.P. Rules, 1987, (b) to pass an interim order u/s 13(3)(B) of the Act directing the o.p. nos.1 and 2 to stop issue of new credit cards and raising bills in respect of old credit cards in dispute till the disposal of this application or strict enforcement of the clause 6(b) of Reserve Bank of India guidelines dt.20.11.05 whichever is earlier and o.p. no.1 M/s SBI Cards and Payment Services Pvt. Ltd. may be directed to arrange issuing instantaneous acknowledgement in respect of surrender of credit cards and/or in sorts of correspondence immediately and (c) o.ps. may directed to pay Rs.20 lakhs as compensation u/s 14(i)(d) of the Act for the loss suffered both mental and monetarily by numerous consumer in general and the complainant will deposit the amount of compensation to the State Consumer Welfare Fund and utilize the same for the purpose of protection and welfare of the consumers as per relevant rule and (d) for litigation cost. On the basis of 18 numbers of petitions of complaint addressed to the Director, CA & FBP, 8B, Lindsey Street, 6th floor, Kolkata-87, the complainant has filed the instant case with the aforesaid prayer. It is specific prayer of the complainant viz. the Director of CA & FBP, Govt. of West Bengal that 18 credit card holders filed their individual complaint praying for redress against the deficiency in service of the o.ps. and accordingly, they requested the intervention of the complainant, so that the disputes can be amicably settled through mediatory process which is undertaken by the Director of CA & FBP. According to the complainant the allegations are serious in nature and disregardful to the guidelines for implementing credit card operation as circulated by Reserve Bank of India. Astonishing to note that a team of officers of the complainants’ office for the august purpose of amicable settlement wanted to visit the office of the o.p. no.1 for preliminary inquiry, but they were denied entry into the office. It was brought to the notice of the Regional Director, Division of Banking and Development, Reserve Bank of India, Kolkata, but the o.ps. did not pay any heed to Secretary’s query on the disputes under reference. Further, office of the banking ombudsmen also received various complaints, but even then the o.ps. did not pay any heed to mitigate the grievances of the consumers. The allegations involved are not only fictitious, imposition of unjust billing and charges, issuance of unsolicited cards and insurance policy, irregular sending of bill resulting expiry of due date and other complications, but also sending application of humiliating nature comprising of intimidation, harassment to the card holders and their family members. Although the 18 card holders who made complaint to the complainant is microscopic in number compared to the vast unidentifiable consumers, but for the interest of large number of consumers who are suffering a lot with regard to deficiency of service of the o.ps. should be redressed properly by this forum and for the purpose the case is filed practically in a representative manner by the complainant. Moreover, the system of cancellation of SBI Credit Card does not confirm to the spirit of terms and conditions prescribed as per rules causing tremendous mental and monitory loss to the card holders. It is very much important and striking to note that o.p. nos. 1 and 2 use the common logo of India’s larges commercial bank, viz. State Bank of India and definitely State Bank of India is to shoulder the responsibility of adoption of unfair trade practice and deficiency of service as committed by the o.p. nos.1 and 2 and by allowing to use such logo of SBI oo.p. nos.1 and 2 unscrupulously enjoy the status of beneficiary with respect to business activities of the SBI. In view of this background of this allegation they have filed this case with the aforesaid prayer. It appears on perusal of the record vide order no.4 dt.12.9.07 that o.p. no.3 appeared and an order was passed by this forum on an application of interim order restraining the o.ps. to initiate any action of recovery of disputed bills, issuance of unsolicited cards, grant of unsolicited loans, adoption of coercive measures of recovery debts etc. and on hearing the complainant and o.p. no.3 an interim order was passed restraining the o.p. no.3 as prayed for by the complainant. It further appears from order no.7 dt.12.10.07 that the o.p. no.1 filed a petition challenging the maintainability of the case in its present form and law and the forum held on the basis of prima facie case the present petition of complaint is maintainable in its present form and law. The o.p. nos.1 and 2 prayed for filing their w/vs, but as they took so many times to file w/v, their prayer was rejected vide order no.9 dt.20.12.07 and 5.2.07. The o.p. no.3 not only filed w/v, but they also filed their written notes of argument. But ultimately o.p. nos.1 and 2 were allowed to file w/v on payment of cost of Rs.2000/- vide order no.12 ft.24.4.08. O.p. nos.1 and 2 on 25.3.08 had filed their w/v. They have denied all the material allegations against them including unfair trade practice and deficiency of service. They have categorically stated that they are engaged in the business of extending credit card and facilities and in this regard they have earned good will and reputation and they strictly follow the terms of the guidelines framed by Reserve Bank of India with regard to code of conduct. The customers also consciously decide if they wish to avail the insurance of “SBI Card Protection Plus” with regard to billing payment, interest on late payment, credit and cash limit, mode of payment, sending of statement and information regarding fees and charges they follow the guidelines of Reserve Bank of India. Each and every bill provides and schedule of charge which is explanatory. Even bill disputes resolution mechanism are also provided and stated in each and every bill provided to the customers. They also provide SBI helpline with an interactive voice response (IVR) to the customers. They have also given the separate reply with regard to the allegations complaint by 18 customers before the complainant. The complainant is really and abuse of the process of the court and appears to be and to harass unnecessarily the o.p. nos.1 and 2. The petition of complaint is defamatory and accordingly, the petition of complaint should be dismissed with compensatory cost. The o.p. nos.3 on 20.12.07 filed their written statement. They have denied all the material allegations against them. Their case is that SBI Cards and payment Services Pvt. Ltd. is a company incorporated under the Companies Act, 1953 and the SBI is a banking corporation incorporated under the State Bank India Act, 1955. State Bank of India has 60% stake of SBI Cards and remaining 40% is owned by General Electric Corporation. SBI Card is governed by its Memorandum and Articles of Association and has been permitted to use the name and logo of State Bank of India for business purpose and the day to day affairs of the card business is handled exclusively by SBI Cards. With regard to deficiency of service they have clearly and in unequivocal terms have categorically stated that with regard to credit card they are not at all concerned because they do not issue such credit cards, so they are not supposed to provide any service for the credit card, so the onus of rendering service with regard to credit card and charging of excess interest etc. cannot lie upon them. The credit cards are not the cheques/drafts and so the credit card holders are not also the customers of the State Bank of India. Accordingly, they have claimed that impleading the name of State Bank of India is a matter of classic example of misjoinder of parties and so their name may kindly be expunged from the record. Decision with reasons :- We have perused annex-A containing the petitions filed to the complainant by 18 consumers alleging the deficiency of service and unfair trade practice committed by the o.ps. Annex-E speaks of the nature of complaint submitted by 18 consumers. It involves the question of undue charging of interest, charging of premium on unsolicited insurance, unsolicited loan, threatening for payment against loan, irregular debit to account, charging of interest, even after surrender of card fraudulent transaction, even after destruction of card, non settlement of disputes, even after payment of demand amount charging of annual fees, even after expiry of card, non updating after payment using of force for accepting card, sending unsolicited draft, irregular sending of bills for resulting interest on delayed payment, sending of bill showing outstanding even after full payment, illegal blocking of credit card, harassment and threatening to the card holders and family members, sending of ambiguous balance statement, inflicting mental torture, sending of inflated bills, non fulfillment of promise for giving gift vouchers, demand of false dues, obstruction in initiating criminal procedure in the matter of acknowledgement of draft, refusal of receiving cheque even after production of documents etc. We have perused all the 18 petitions filed by different consumers to the Director of CA & FBP and the main allegations of all of them involve the question of deficiency of service and unfair trade practice by the o.p. nos.1 and 2 using the name of o.p. no.3 State Bank of India. We have also perused the annexures filed from the side of the o.ps. including he terms and conditions of credit cards and payments. We have also perused the letter given from the side of o.p. nos.1 and 2 to the customers who made their complaint before the complainant. We have also perused the application form and declaration form of different customers and the balance transfer statement. On perusal of all those documents it appears to us that those customers had transaction with the o.p. nos.1 and 2 with regard to SBI Cards and Payments Services. The allegations of those 18 customers with regard to SBI Cards and Payment Services is numerous in nature, but only having one uniformity that there is deficiency of service and unfair trade practice committed by o.p. nos.1 and 2 using the logo of State Bank of India o.p. no.3. and this is the main point of our discussion which we like to deal with in details. In view of this position, the involvement of o.p. no.3 State Bank of India definitely takes an important position in our discussion. State Bank of India which was originally Imperial Bank is perhaps oldest commercial bank in our country. State Bank of India as it appears from various reports has not only achieved commendable success, but also definitely renders banking service not only in metropolitan towns, but also even to remote corner of the villages of India. So in a word their service is very much extensive. So, it is not at all expected that under the umbrella of State Bank of India other commercial banks or financial institutions will enjoy unlawful gain from the consumers. It not only hampers the goodwill of State Bank of India, but at the same time it reaps the seed of suspicion raising the question of sincerity and integrity of State Bank of India which is not at all desirable. It is not understood that commanding colossal success in respect of rendering true banking service to the customers how they allow the SBI Cards and Payment Services to use their logo. The explanation given in the written statement submitted by the SBI o.p. no.3 that “SBI Cards and Payment Services Pvt. Ltd. is a company incorporated under the Companies Act, 1953. SBI is a banking corporation incorporated under the State Bank of India Act,1955. State Bank of India has 60% stake of SBI Cards and the remaining 40% is owned by General Electric Corporation through its investment arm GE Consumer (Mauritius) Investment I Ltd. SBI is governed by its memorandum and articles of association and has been permitted to use the name of logo of SBI for business purpose. The day to day affairs of card business is further handled exclusively by SBI Cards”. It is also reflected in their written argument filed on 20.4.09. It is true that it is the domestic arrangement between the State Bank of India and SBI Card and Payments. It has also been stated in paragraph 4 of the written argument which runs as As regards use of logo and part of the name of the SBI was permitted by SBI as a shareholder pursuant to the terms and conditions captured in the share holder’s agreement entered on 22.1.1998 in between the SBI and General Electric Capital Corporation. In paragraph 8 they have stated that the use of logo and name by other corporate entities is either permissive and/or passed on contract. In this case, SBI has permitted to use its logo and name under the arrangement made in the contract. In paragraph they have stated that “SBI Card is governed by its Memorandum and Articles of Association and has been permitted to use and name to the logo of SBI for business purposes”. In view of this background of contract and the Memorandum and Articles of Association between State Bank of India in one side and SBI Card and Payments Services and some other organization on the other it is very much important to note that whatsoever may be the terms and contract between them; is not SBI aware of huge number of cases against the SBI Cards and Payment have been filed, pending and disposed of by different forums of India on the allegation of deficiency of service and unfair trade practices alleged by the consumers ? Does it not cause disparagement of the good will and status of SBI before the public eyes at large? Is not the banking service based on trust and believe between the banking authorities and its concerned customers? Our common prudence speaks that SBI is aware of it. Further by a deep probe of the matter we are inclined to believe that as beneficiary of the State Bank of India, the SBI Card and Payment have been taking the advantage of Memorandum and Articles of Association and for their unlawful business purpose and commercial gain they have been using the logo and we are accordingly further of the opinion that in view of the huge number cases which we are having regularly against the SBI Card and Payment Services time has come that SBI is to give a second thought that whether they would allow the SBI Card and Payment to use their logo at the cost of disparagement of their status and good will. We are further of the opinion that if such practice is allowed to be continued for long period of time we are afraid that at all the SBI will be able to continue their goodwill and status in future. So, our question is that everything should be amenable to reasons - Can the Memorandum and Articles of Association as referred to above between SBI and other financial institution including the SBI Credit Cards and Payment be an exception ? We have perused the affidavit of examination on evidence of the complainant wherein they have stated that the statements made out in their petition of complaint and the annexures are true and correct. But the o.p. nos.1,2 and 3 have not filed any such affidavit on evidence. Now let us again reiterate the point of obligation of the SBI with regard to allegation and unfair trade practice by the o.p. nos.1 and 2. In this respect the statement of the complainant as reply to the w/o dt.20.12.07 of SBI o.p. no.3 is noteworthy. In paragraph 9 it is stated “the role of SBI in the instant point venture of credit card business may not be regulatory, but obviously participatory”. So, it appears to be obligatory on the part of the SBI to have a say against any kind of UTP being adopted by its associated companies in the matter of giving formal acknowledgement against the surrender of credit card on termination of membership. In absence of any specific rules of business in this regard the standard of acknowledging any monitory institution as prescribed by Reserve Bank of India for commercial banks may be adopted for consumer complaint and also to ensure fair trade in credit card business. Since they have financed any such business o.p. no.3 cannot sit idle. In view of an unfair trade being practiced by its associated companies viz. o.p. nos.1 and 2 in the interest of permission of their business at the cost of right of consumers in civil society. As such, o.p. no.3 cannot be expunged from the present proceedings. In view of this position it is needless to say all the commercial banks of India are statutorily governed and guided by the rules and regulations framed by Reserve Bank of India and in a democratic country like ours no civil society can tolerate such unfair trade practice committed buy SBI Credit Card and Payment Services under the coverage of Memorandum and Articles of Association and to use the logo of SBI for business purposes alone.. We are unable to give individual relief to the 18 consumers who submitted their applications before the Director, CA & FBP because they have not filed applications u/s 12 of the C.P. Act before this forum. Therefore, considering the facts, circumstances, evidence on record filed on evidence and documentary, we are of the opinion that o.p. nos.1 and 2 are held liable for unfair trade practice. No substantial order relating to financial liability can be passed against SBI o.p. no.3, but at the same time we are constraint in view of our above observation to pass certain directions of caution to SBI for the protection and welfare of the consumers who are being victimized by o.p. nos.1 and 2 for their commercial purpose under the umbrella of SBI. Hence, Ordered, That the petition of complaint filed by the Director, CA & FBP, Govt. of West Bengal having its office at 8B, Nelie Sengupta Sarani, Kolkata-87 is allowed on contest against o.p. nos.1 and 2 with costs and without costs against o.p. no.3. Complainant is awarded a compensation of Rs.18,00,000/- (Rupees eighteen lakhs) only and litigation cost of Rs.5000/- (Rupees five thousand) only which must be deposited by o.p. nos.1 and 2 jointly or severally to the State Consumer Welfare Fund and to use the same for the purpose of protection and welfare of the indigent consumer as per rules. O.p. nos.1 and 2 are directed to pay the said cost of Rs.18,05,000/- (Rupees eighteen lakhs five thousand) only positively within forty five days from the date of communication of this order, failing which it will carry interest @ 10% p.a. till full realization. O.p. nos.3 State Bank of India, 1, Strand Road, Kolkata-1 is strongly directed to publish in the daily news paper in English, Bengali and Hindi and through electronic media with regard to their clear position, views and obligation with regard to using of logo by o.p. nos.1 and 2 with the customers. Interim order passed on 12.9.07 is hereby made absolute. Fees paid are correct. Supply certified copy of this order to the parties on payment of prescribed fees. ______Sd-_____ _______Sd-_______ MEMBER PRESIDENT | 
