DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi- 110016
Case No.344/17
M.J. Antony
R/o B-2, Press Enclave
Saket
New Delhi-110017. .…Complainant
VERSUS
Manager
SBI Cards & Payments Services Pvt. Ltd.
DLF Infinity Towers
Tower C, 12th Floor
Block 2, Building 3
DLF Cyber City
Gurgaon-122002, Haryana.
Manager
Bank of Maharashtra
E-11-12 Press Enclave
Saket, New Delhi-110017. ….Opposite Parties
Coram:
Ms. Monika A Srivastava, President
Ms. Kiran Kaushal, Member
Sh. U.K. Tyagi, Member
ORDER
Date of Institution: 27.09.2017
Date of Order : 20.05.2023
President: Ms. Monika A Srivastava,
The complainant has filed the present complaint seeking compensation of Rs. 5 Lakhs, direction to the OP-1 to issue a fresh credit card without imposing special conditions and legal costs.
- It is stated by the complainant that he had Maharashtra Bank – SBI credit card in the year 2015 provided to it by OP-2, bank of Maharashtra.
- It is stated by the complainant that he requested OP-1 SBI card and payment services to cancel his card much ahead of the expiry on 09.04.2016 and requested them not to renew the card.
- It is next stated by the complainant that he did not use card for any transaction after 09.04.2016 and had destroyed the card according to rules. It is stated that no payment was due at that time on the card.
- On 01.09.2016, complainant received a letter from OP-1 about the cancellation of his card which is annexed as Annexure-2. However, OP-1 continued to send bills pertaining to the card ignoring the protest e-mails of the complainant, annexed as annexure-3.
- It is stated by the complainant that the bills were to the tune of Rs.2,946/- by 18.05.2017 inclusive of late payment charges and penalty, same is annexed as annexure-4.
- It is stated that in the same letter OP-1 had warned the complainant to pay the bill other wise it will “have adverse impact on the credit history as maintained by the credit Bureau and may hamper future credit requirements”.
- It is stated by the complainant that OP-1 black listed the complainant in the CIBIL system of the wilful defaulters maintained by RBI. This black listing resulted in the rejection of complainant’s applications for credit cards from Kotak Mahindra bank where the complainant had maintained regular account for nearly two decades. Further, it is stated that on account of this blacklisting the financial institutions view the complainant as someone who is not to be trusted with loan or credit card.
- It is further stated that OP-1 on 25.07.2017 wrote to the complainant that there was no outstanding balance and there was no negative flag in the CIBIL report but it could not update past records in CIBIL annexed as Annexure-6.
- It is the case of the complainant that since other banks were rejecting complainant’s request for credit card he was forced to apply to OP-1 which had caused damage to his financial reputation. However, OP-1 rejected the request stating the reason as “business decision”. It is stated that this act of the OP is unfair, unreasonable and trampling on consumer rights.
- It is stated by the complainant that as per CIBIL practice if a person has to recover from this blacklist he must get a loan and repay it without fault for at least 10 years. Since the complainant is not able to get any credit card or loan as he is unable to show his credit worthiness.
- It is further stated by the complainant that as soon as he logs on to internet he receives advertisements offering to help him get out of CIBIL blacklisting which means that the financial world is aware of the complainant being wilful defaulter.
- It is stated by the complainant he is a journalist who has to travel and since he is unable to have credit cards he is forced to carry cash. It is also stated that his aged wife is suffering from several chronic ailments and has to be taken to hospital where again the complainant is forced to carry cash.
- It is stated by the complainant that this act of OP-1 have caused severe mental stress which has led to sleeplessness and restlessness and therefore action is sought against OP-1.
- In their reply, OP-2 in their reply has stated that it is neither a necessary nor a proper party for allegation in this case and that they have been impleaded to enable the complainant to file the complaint before this forum. It is stated that there is no deficiency of service on the part of OP-1 as OP-1 after being informed as immediately verified and updated record of the complainant to CIBIL. Therefore, there is no deficiency of service on their part. It is next stated by the OP that there is no cause of action against the OP and the complaint is an abuse of the process of law. It is also stated by the OP that as per the card holder agreement the complainant is bound by the arbitration clause. OP has also stated that the complainant has filed the present complaint with a malafide intention to wrongful gain from OP-1 and demanded compensation of Rs. 5 Lakhs without any justification.
- OP-1 has stated that on 09.04.2016 the complainant had approached OP-1 expressing his desire to close the card account and as per its business practice OP-1 has sent a retention e-mail to the complainant to reconsider his decision. Thereafter, OP-1 did not hear from the complainant confirming his decision to close the card account. However, on 20.08.2016 OP received another communication from the complainant reiterating his decision to close the card. In response to the said request, OP advised the complainant to pay the outstanding dues on the card so that the account can be closed. The e-mail communication dated 20.08.2016 is annexed as annexure R-3.
- It is stated by the OP-1 as per the products only billing cycle, annual fees was levied on the card account on 18.07.2016 which were reflected in the subsequent month’s statements. On account of non-receipt of the annual fees and outstanding dues informed earlier, incremental charges were levied on the complainant.
- It is stated by OP-1 that complainant approached OP-1 with regard to the incremental charges being levied on 01.09.2016 and it being a customer centric company duly investigated the same and reversed the charges.
- OP-1 states that it runs a banking/office system procedurally automatically monthly bill was generated and since the financial department was yet in the process of zeroing the complainant’s credit card account. The credit card bill was automatically getting generated and due to technical error same was delivered to the complainant.
- It is stated by OP that complainant vide correspondence dated 12.07.2017 brought to the knowledge of OP-1 that CIBIL reflected his account in the defaulters list. Immediate action on the part of the OP-1 and CIBIL record was updated and there was no outstanding on the card account of the complainant and the said fact was updated in CIBIL record and was informed vide email dated 25.07.2017. Copy of the complainant’s CIBIL report is annexed as annexure R-4.
- OP has denied the allegations of the complainant with Kotak Mahindra Bank declined the credit card to the complainant on account of inaction on the part of the OP-1. It is further stated by OP-1 that their decision to decline fresh credit card to the complainant was a discretionary business decision and it cannot be forced to issue credit cards to customers.
- It is denied by OP that they rejected of the complainant’s credit card by Kotak Mahindra Bank was on account of CIBIL rating as Annexure-5 of the complaint does not establish such an allegation. It is also stated that updation in CIBIL cannot be done by any bank or financial institution can only be provide updated data which is later presented by CIBIL as per their format.
- The OP has also denied that it is on account of their action that the complainant has not able to approach any financial institutions. The OP has also disputed the veracity of truth by the complainant’s statement that he does not have any credit card.
Both the parties have filed their respective evidence affidavits and their written submissions. This Commission has gone through the entire material on record and oral arguments were heard.
It is not denied by the OP that on 09.04.2016 the complainant had approached OP-1 expressing his desire to close the card account. It is also not denied that on 20.08.2016 OP received another communication from the complainant reiterating his decision to close the card. It is in fact stated that annual fees was levied on the card account on 18.07.2016 which were reflected in the subsequent months statements and on that account incremental charges were levied on the complainant and after complainant approached OP-1 with regard to the incremental charges being levied on 01.09.2016 charges were reversed.
It is stated by the OP that the credit card bill was automatically getting generated and due to technical error same was delivered to the complainant and it is only when the complainant vide correspondence dated 12.07.2017 brought to the knowledge of OP-1 that CIBIL reflected his account in the defaulters list then the OP updated CIBIL record and was informed vide email dated 25.07.2017.
It is not denied by the OP that it is on account of their inaction that the complainant received an incorrect bill and the CIBIL authorities were provided wrong information. The Hon’ble Supreme Court in M/s. Canara Bank v. S. Reghukumar on 13.02.2023 has upheld the order of Hon’ble NCDRC directing Canara Bank to pay Rs. 5 lakhs to a lawyer who was kept in the loan defaulter’s list as per CIBIL, for about 7.5 years after discharging his loan obligations.
And the Hon’ble NCDRC in Hanumesh Bandurao Kulkarni vs Standard Chartered Bank Revision Petition 2601 Of 2015 25 Feb 2016 upheld the compensation of Rs. 2 lakhs granted by the Hon’ble SCDRC in similar case of CIBIL ranking.
In M/s Magma Fincorp Ltd. vs Rajesh Kumar Tiwari Civil Appeal No. 5622 of 2019 decided on October 01, 2020, the Hon’ble Supreme Court has held that :-
a forum constituted under the Consumer Protection Act has, as observed above, the power to award punitive damages. Punitive damages should, however, be granted only in exceptional circumstances, where the action of the Financier is so reprehensible that punishment is warranted. To cite an example, where a Financier erroneously and/or wrongfully invokes the power to repossess without notice to the hirer, causing thereby extensive pecuniary loss to the hirer or loss of goodwill and repute, a forum constituted under the Consumer Protection Act may award punitive damages.
This Commission is of the view that the OP has been deficient in providing services to the complainant and though the damage/loss occasioned to the complainant in terms of credit rating cannot be measured in terms of money yet punitive damages ought to be awarded against OP therefore, OP is directed to compensate the complainant by paying a sum of Rs.2 lakhs as compensation within two months from the date of this order failing which the sum payable would be Rs. 3 lakhs.
Order be provided to the parties as per rules. File be consigned to the record room. Order be uploaded on the website.
