Delhi

New Delhi

CC/165/2011

M.K. SACHDEVA & ANR. - Complainant(s)

Versus

M/S. CITIBANK ,N.A. - Opp.Party(s)

27 Oct 2022

ORDER

 

 

                                              DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-VI

(NEW DELHI), ‘M’ BLOCK, 1^STFLOOR, VIKAS BHAWAN,

I.P.ESTATE, NEW DELHI-110002.

Case No.CC.165/2011                               

IN THE MATTER OF:

 

1. M.K. SACHDEVA

S/O Sh. Karan Singh B-11/12,

Okhla Industrial Area, Phase-II.

New Delhi-110020

2. Gautam Sachdeva

S/O SH. M.K. SACHDEVA B-11/12,

Okhla Industrial Area, Phase-II.

New Delhi-110020                                               …..Complainants

 

VERSUS

The City Bank Credit Card Division

Through, its Managing Director/Chief Country Officer,

Citibank, N. A. Mail. Room No. 2, Club House Road,

Chennai-600002                                                  …...OPPOSITE PARTY

 

Quorum:

Ms.Poonam Chaudhry, President

Shri Bariq Ahmadi, Member

Ms. Adarsh Nain, Member

 

                                                                                                                                 Dated of Institution:-17-02-2011                                                                                                                                                                        Date of Order   : -                27.10.2022

ORDER

 

BARIQ AHMAD, MEMBER.

 

1. The present complaint has been filed under Section 12 of the Consumer Protection Act, 1986 (in brief referred as CP Act). Briefly stated the facts of the case are that the Complaint no. I is a senior citizen aged about 75 years. Complainants are having an established business and running restaurant and a Dhaba. Complainant no.1 had started his career 54 years back with a printing press at a very small scale and since then he is running his business by adding on something or the other and thus, achieved great heights in his business.

 

2.  It is stated that the complainant no. 1 had subscribed a credit card from the Opposite Party on 26.01.2005 initially having the limit of Rs.60,000/- and the complainant no.1 regularly made payments against the bills of credit card to the Opposite Party.

 

3. It is stated that due to good reputation of the complainants in their business and his timely re-payment his financial credibility has stood the test of time and therefore, the limit of credit card was increased to Rs. 2 Lacs and then to Rs.4,06,000/-.

 

4. It is further stated that the son of the complainant no. 1 Gautam Sachdeva who is complainant no. 2 in the present case, is also partner in the above said business. Due to business requirements complainant no. 2 approached Deutsche Bank for loan. During the formalities of approving the loan for the Deutsche Bank found the name of the complainant no.1 on the website of CIBII, in defaulters' list. On the website it was reflected that Rs.6,66,033/-is outstanding against the complainant no. 1 with following details:

"MEMBER: CITI BANK CREDIT CARD INDIVIDUAL

DATES: (OPEN) 11-03-1999 (CLOSE) 12-03-2000

HIGH CR/SANCT AMT CURRENT BALANCE AMOUNT OVERDUE STATUS 666,033 666.033

WO DAYS PAST DUE/ASSET CLASSIFICATION

REPTD: 31-01-2010 XXX"

5. It is stated that the reflection of name of Complainant no. I as a defaulter came as a rude shock which was unbearable for the complainant no. 1. That complainant no. 2 also suffered great difficulties as due to above said details put on the CIBIL website the complainant no. 2 could not secure loan from any other bank, which resulted in more loss in business and unbearable anxiety and distress.
6. It is stated that the default of repayment of Rs.6,66,033/- was blunder committed by the officials of Opposite Party with unpardonable recklessness Moreover, contrary to what reflected on website the Complainant no. 1 never received any credit card from the Opposite Party in the year 1999.
7. It is stated that the complainants contacted several time to Opposite Party and also filed a complaint bearing no.020420101548492340 and 02.04.2010 talked to one Ms. Manshi who assured the complainant that whatever necessary in this regard will be done immediately and same will be intimated to the complainants.
8. It is stated that OP neither any action was taken nor same was intimated to the complainants. Therefore, on 07.04.2010 again the complainants called the Opposite Party which was answered by one Ms. Anshu, who presented herself to be customer care head and assured that the name of the complainant would be withdrawn immediately and will provide No Objection Certificate. It was also assured that an apology letter from the Opposite Party will also be sent to the complainants, again the complainants were disregarded and nothing was informed to them. On 25.04.2010 the complainants again contacted customer care unit of Opposite Party which was answered one Mr. Parvesh who replied that the head Ms. Anshu is on leave and on the complaint action will be taken very soon.
9. It is stated that on 23.04.2010 the complainants had to serve Opposite Party with a legal notice through their lawyer calling upon them to withdraw the name of complainant no.1 from list of defaulters at CIBIL website and to compensate them and on 07.07.2010 the Opposite Party replied to the legal notice of the complainants. In the reply it was admitted that credit card was issued on 25.01.2005 having cash limit of Rs.4,06,000/- and the loan application of the complainant no. 2 had been rejected because of name of complainant no.1 being put on CIBIL website as defaulter. It was also stated in the reply that matter is being investigated, however, they are unable to proceed ahead in the matter for the reason being they require 'Control Number'.
10. It is stated that the complainant No.2 neither subscribed to the services of Opposite Party nor ever utilized or used their credit card therefore, the question of the committing any default by the complainant no. 2 never arose. Therefore, such conduct of the Opposite Party reflects their ignorance and carelessness about their potential customers who are made scapegoat for the fault of someone else. The present consumer complaint has been filed seeking reliefs directed to OP bank to withdraw the name of the Complainant no. 1 from the CIBIL Website and to pay a compensation of Rs.18.00 lacs to the Complainant No.1 and 2 on account of loss in business, physical suffering and further compensate the complainant no. 1 and 2 by paying damages in the amount of Rs. 2 Lacs for causing mental pain, agony and harassment; along with a cost of litigation.
11. Notice of the complaint was issued to OP pursuant to which OP contest the case on merits and filed written statement stating inter alia that loan application of complainant no.2 was rejected by Deustche Bank due to his name appearing in alleged defaulter list on CIBIL (Credit Information Bureau of India Limited).
12. It is contended that reporting of credit information of customers to any credit information company including CIBIL is governed by the Credit Information Companies Regulation Act, 2005 (hereinafter referred to as “the Act of 2005”). The Opposite Party herein is covered under the definition of ‘Credit Institution’ as defined under section 2(s) of the Act. According to Section 15 of the Act of 2005, all Credit Institution are mandatorily required to become member of Credit Information Company like CIBIL. It is stated that the Credit Information Company acts as repository of information, which contains the credit history of commercial and consumer borrowers availing financial facility from any Bank or Financial Institution. It is further that the Reserve Bank of India has issued various circulars, notifications and guidelines from time to time to all Banks and Financial Institution including the Opposite Party whereby it has made it mandatory for them to provide credit information about the customers to the credit Information Companies like CIBIL.
13. It is further stated that settlement of disputes with respect to matters relating to business of credit information companies shall be done only through Arbitration and Conciliation. This commission have no jurisdiction to entertain the present complaint.
14. It is submitted by the OP that Complainant no.1 had availed two credit cards from the Opposite Party bearing no. 4568-2293-9518-8007 and 5546-3791-5573-3007 in the year 1999 and 2005 respectively. The Complainant no. 1 intentionally concealed the fact that he has availed credit card bearing no. 4568.2293-9518-8007 from the Opposite Party.
15. It contended by the OP that the complainant was a heavy revolver and irregular in making payments toward due on the aforesaid card and due to non-payment of dues the card bearing no. 4568-2293-9518-8007 was closed in the year 2000 with dues amounting to Rs. 17,603/- (Rupees Seventeen Thousand Six Hundred and three only). As of January, 2010, the total outstanding dues on the aforesaid card bearing no. 4568-2293-9518-8007 was Rs. 6,66,032.80/-, the outstanding which was showed in the alleged CIBIL report forwarded to the complainant no. 1 by the Deustche Bank official. The total outstanding on the aforesaid card as on August, 2010 was Rs. 7,34,257.19/- (Rupees Seven Lakh Thirty Four thousand Two Hundred Fifty Seven and Nineteen Paise Only) But, the same was reversed/ written off in September, 2010 as it was considered by the Opposite Party Bank as non working stock. The aforesaid amount was written off by the Opposite Party in the month of September, 2010. It is stated that the Opposite Party was bound to share the information with CIBIL, as per the law and directions of the RBI. As per the instructions of the RBI, all member bank are required to periodically report the status of account (including settlement) to CIBIL on the basis of which a report is made containing credit history of individual. It is further stated that the Bank has only reported accurate facts of the aforesaid credit card account of the Complainant to CIBIL in compliance of its obligations under the act and guidelines issued by the RBI.
16. It is stated that in the year 2005, the complainant had again approached the Opposite Party to avail credit card facility. The complainant was issued a credit card bearing no. 5546-3791-5573-3007 with a credit limit of Rs. 60,000/- initially on 26.01.2005. This card was issued based on his DLF club relationship thereby overlooking his previous credit history. In July 2008, his card was upgraded to Citibank Master Platinum card bearing number 5520-9390 5198-3004 with an increased credit limit of Rs.4,06,000/-. The information regarding the increased credit limit was duly communicated to the complainant vide letters sent on aforesaid dates. The Banks have discretion to provide credit facilities to the borrowers after ascertaining their credit worthiness which in turn can be assessed vide different parameters including their relationship/association with other entities which may provide the Bank/Financial Institution overview of their credit worthiness/ repayment capacity.
17. It is stated that the complainant had extensively used his credit card since the month of March, 2005 for various purchases and transaction history over the credit card of the complainant is reflected in his statement of account. The complainant had availed revolving credit facility (‘RCF’), which offers the flexibility of paying either the total amount due or the minimum amount due. The statement of credit card account of the complainant shows that the complainant was regular in making payment on the credit card bearing no. 5520-9390-5198-3004 till March, 2011, but he was a heavy revolver i.e. he paid only minimum amount due i.e. 5 per cent of the total outstanding dues or slightly above the minimum amount due towards his credit card, which resulted in his outstanding increasing each and every month. Therefore, since the complainant was only paying minimum amount due, as per the terms of the card member agreement the interest charges were levied upon his credit card account. It is stated that as on July, 2012, a total amount of Rs.5,08,639.87/- (Rupees Five Lakhs Eight Thousand Six Hundred Thirty Nine and Eighty Seven Paise only) was due against the credit card bearing no. 5520-9390-5198-3004. It further stated that on 18.7.2008, the credit card of the complainant bearing no.5546-3791-5573-3007 had been converted to card bearing no.5520-9390-5198-3004 and accordingly, standing instructions/ECS maintained by the bank was automatically transferred to the new card. However, the outstanding dues on the credit card bearing no. 5546-3791-5573-3007 were written off on 20.3.2012 by the Opposite Party.
18. It is stated that the complainant no.2, Gautam Sachdeva, son of the complainant had availed an additional card on the credit card bearing no. 36559010923004. As per clause 25 of the card member agreement the holder of any Additional Credit Card on the account (Complainant No.2) and the individual Cardmember (Complainant no.1) authorizing its issuance are jointly and severally bound by the Terms and Conditions and the Cardmember (Complainant No.1) though primarily responsible, assumes joint and several liability for all charges incurred by the Additional Cardmember.
19. It is denied that the Opposite Party has placed the name of the complainant in the list of defaulters at CIBIL, whereby the name and reputation of the complainant was defamed to an irreparable extent. It is not disputed that a credit card bearing no. 5546-3791-5573 3007 was issued to the complainant on 26.1.2005 with a credit limit of Rs.60,000/-. However, it is denied that the complainant was making regular payments against the bills of credit card to the Opposite Party. It is further denied that due to timely repayment, the financial creditability was increased to Rs.4,06,000/-. It is reiterated that the complainant no.1 had availed two credit cards from the Opposite Party bearing no. 4568 2293-9518-8007 and 5546-3791-5573-3007 in the year 1999 and 2005 respectively. The Complainant No.1 has intentionally concealed the fact that he has availed credit card bearing no. 4568-2293-9518-8007 from the Opposite Party. It is stated that the complainant was not regular in making payments towards dues on the aforesaid card and due to non-payment of dues the said card was closed in the year 2000 with dues amounting to Rs.17, 603/- (Rupees Seventeen Thousand Six Hundred and Three Only.). Further, with regard to the credit card bearing no. 5546-3791-5573-3007, since the complainant was only paying minimum amount due as per the terms of the card member agreement, the interest charges were levied upon his credit card account. It is stated that as on December 2011, a sum of Rs.5,08,639.87/- (Rupees Five Lakhs Eight Thousand Six Hundred Thirty Nine and Eighty Seven Paise only) is due against the credit card bearing no.5546-3791 5573-3007, which was beyond the credit limit of the card. The last payment made by the complainant on the said card was Rs.20,000 in April 2011 against outstanding dues of Rs.3,90,110.84/-. It is prayed that the complainants are not entitled to any relief and further prayed for dismissal of the complaint.
20. The complainant filed replication and reiterated the complaint allegations. Both the parties filed their evidences by affidavit and also filed their respective written arguments.
21. We,  have heard the Ld. counsel for the parties and have also perused the entire record as well as written arguments.
22. To sum up, the matter in dispute, is in regards to the credit cards issued to the complainant No.1 by OP bank, the Complainant no.1 had availed two credit cards from the Opposite Party bearing no. 4568-2293-9518-8007 and 5546-3791-5573-3007 in the year 1999 and 2005 respectively and due to non-payment of dues the card bearing no. 4568-2293-9518-8007 was closed in the year 2000 with dues amounting to Rs.17,603/- (Rupees Seventeen Thousand Six Hundred and three only). As of January, 2010, the total outstanding dues on the aforesaid card bearing no. 4568-2293-9518-8007 was Rs.6,66,032.80/-, in the head of others charges only, the outstanding which was showed in the alleged CIBIL report forwarded to the complainant no.1 by the Deustche Bank official.
23. It is grouse of the complainants that duplicate statement of card No. 4568-2293-9518-8007 for the statement period 06/08/2010 to 13/09/2010 showing total amount due Rs.0.00 (filed by OP with W.S at page No.136) and to his utter surprise his name reflected in CIBIL (Credit Information Bureau India Limited) records which barred his further prospective to get any financial assistance from any bank.  It is claimed that due to the unjustified act of OP bank, the complainant was forced to arrange for a loan from a bank on much higher rate of interest, CIBIL records affected badly and barred his further prospective to get any financial assistance from any bank. Contrary to the grievances as raised in the above para, the OP bank claimed that the complainants had  extensively used the credit cards  issued in their favor and did not adhere to repayment schedule and committed default in repayment of the amount and as such become defaulter. Accordingly, the information was supplied to the CIBIL. The OP bank has placed on record the specific account statement starting from 06/08/2010 to 13/09/2010, to clearly show that what amount the complainant utilized/exhausted against the credit limit and what was repaid by them, However, the OP bank written off the utilized/exhausted amount against the credit card bearing No.4568-2293-9518-8007 as it had become a non-working stock. In the year 2005, the complainant had availed credit card facility and was issued credit card no.5546-3791-5573-3007 and overlooked his previous credit history, Further this credit card was upgraded to Citibank Master Platinum card  bearing No.5520-93930-5158-3004 with a credit limit Rs.4,06000/-, which is an act of deficiency in service and unfair trade practice.
24. In our considered opinion, the complainant No.2 neither subscribed to the services of Opposite Party nor ever utilized or used their credit card further, the OP bank ignored the instructions of RBI bearing No.RBI/2008-2009/100. BOD.FSD.BC.23/24.01.01.011/2008-09, JULY 23, 2008, in regards to the reporting the name of the defaulter to CIBIL/Credit Information companies, which states as under:-

It is desirable that the banks in terms of paragraph 6.2 © of the Master Circular on credit card operations of banks (Circular no.DBOD.FSD.BC.6/24.01.011/2008-2009 DATED July 1, 2008), before reporting default status of a credit card holder to CIBIL or any other credit information company VI CIBIL issues 17. Reporting to CIBIL/credit information company are made to follow a uniform method of reporting to CIBIL/master card international negative list authorized by RBI, Bank should ensured 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 a defaulter to the credit information company. The procedure should also covered the notice period for such reporting as also the period within which such report will be withdrawn in the event the customer settles his dues after having been reported as defaulter. These procedures should be transparently made known as part of the MITCs. The above instructions are reiterated. In the present case, the OP bank now here issued any notice to the complainant while sending information to the CIBIL declaring him as a defaulter and complainant was never given opportunity to clear his account before sending his name in the defaulter list which apparently is non-adherence of the RBI instructions as produced as above. Such an action of the OP bank resulting in causing harassment to the complainant.  The dispute in regards to the issuance of no-due certificate the OP bank has failed to produce any record of no-due certificate and further written off the amount outstanding as on august 2010 , card was closed in the year with dues amount Rs.,17,603/- , as it had become non working stop. So it is believe that OP bank had not issued no-dues certificate to the complainant which is in our opinion the OP bank was liable to issue.

In the light of above observations, the OP bank is held to be deficient in rendering proper services to the complainants and liable to be burdened with costs for causing harassment to the complainants as well as thrusting this litigation. Accordingly, the present complaint of the complainants is allowed.

The OP bank directed as under

1. To get the name of the complainants cleared from the records of CIBIL forthwith;
2. To pay Rs.50,000/- (Rupees Fifty Thousand Only) to the complainants as consolidated amount as compensation for causing mental agony and harassment on account of deficiency in service.
3. To pay an amount of Rs.10,000/- towards litigation expenses. The above said order shall be complied with by OP within a period of 45 days from the date of receipt of its certified copy, failing which Op shall be liable to pay the awarded compensation amount along with interest @12% p.a. from the date of filing this complaint till it is paid, apart from  complying with directions as at sub-para (a) & (b) above.

The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced 27.10.2022

 

   

(POONAM CHAUDHRY)

President

 

   (BARIQ AHMAD)                                                            (ADARSH NAIN)     

Member                                                                             Member