Haryana

Ambala

CC/142/2020

Mohit Malhotra - Complainant(s)

Versus

SBI - Opp.Party(s)

Karampal Singh

20 Jul 2022

ORDER

 BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

 

                                                          Complaint case no.         :     142 of 2020

                                                          Date of Institution           :     05.08.2020

                                                          Date of decision    :     20.07.2022.

Mohit Malhotra S/o Sh. Prakash Chand R/o #27, Ranjeet Nagar, Behind Sewa Samti School, Ambala Cantt.

                                                                             ……. Complainant.

                                      Versus

1. State Bank of India, Cards & Payments Services Ltd. DLF Infinity Towers, Tower-C, 12^th Floor, Block-2, Building-3, DLF Cyber City, Gurgaon.
2. State Bank of India, Mahatma Gandhi Marg, Ambala Cantonment, Ambala Cantt.

                                                                    ….…. Opposite Parties.

Before:        Smt. Neena Sandhu, President.

                   Smt. Ruby Sharma, Member.

Shri Vinod Kumar Sharma, Member.

 

Present:       Shri Rupinder Singh, Advocate, counsel for the complainant.

Shri Manish Kashyap, Advocate, counsel for the OP No.1.

Ms. Upma Bhalla, Advocate, counsel for OP No.2.   

 

Order:        Smt. Neena Sandhu, President.

1.                Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

                   (i) To refund an amount of Rs.4,383/-, of fraud transaction through         the credit card of the complainant along with interest.

                   (ii) to pay Rs.25,000/- as compensation for the mental agony and                       physical harassment suffered by the complainant.

                   (iii)  to pay Rs.5,000/- as the cost of litigatioN

OR

Grant any other relief which this Hon’ble Commission may deem fit.                            

2.   Brief facts of the case are that in the month of July, 2019 the representative/official of the OPs approached the complainant and allured him to purchase the credit card with attractive schemes. They took the signatures of the complainant on some forms and thereafter card bearing No.5172527316208076 was issued by the OPs to the complainant. On 23.10.2019, complainant checked the account details of his credit card through Net Banking and was shocked to notice from the statement of the transaction history there was entry of the transaction of Rs.4,383/- dated 14.10.2019 at Flipkart which was made at Banglore, through the said SBI credit card, without his knowledge. Complainant lodged a complaint through e-mail to the credit card division/Office of the OPs and told them about the said fraud transaction of Rs.4,383/- through the said credit card. However, instead of looking into the matter carefully, the OPs declined the complaint/request of the complainant by saying that the OTP and the transaction alert was successfully sent on his mobile number, in respect of the transaction in question. When the complainant again sent an e-mail to the OPs and told them to send him the complete details as he was not getting any OTP in his mobile number with regard to the said transaction but to no avail. The complainant also lodged complaint no.201920007017496 with the Ombudsman, RBI Chandigarh. The Banking Ombudsman took the decision on 18.03.2020 and directed the OPs to pay the amount in question, under compensation policy and passed the order that the complaint has been resolved by the bank with the intervention of the Banking Ombudsman vide order dated 27.03.2020 even though, till date the OPs have not compensated/refunded the amount. By not refunding the aforesaid amount, the OPs have committed deficiency in service. Hence, the present complaint.
3. Upon notice, OP No.1, appeared and filed written version and raised preliminary objections with regard to maintainability, not come with clean hands and suppressed the material facts. As per card holder agreement there is an arbitration clause, which stipulates that in all events of dispute/difference between the card holder and the SBI Cards, the same shall be resolved by appointment of a sole arbitrator and the OPs shall have the powers to appoint the arbitrator. As such, this learned Commission is devoid of jurisdiction to entertain the complaint.  On merits, it is stated that the card has been used by the complainant only and the transaction in question has been performed in a secured manner as the same has been validated by card CVV and dynamic One Time Password (OTP) over the Internet/ IVR, which was successfully delivered at the registered mobile number of the complainant. Any transaction cannot be done without confidential details of the card i.e. card expiry date, CVV wherein, the OP No.1 always advise its cardholders not to share the said details to any third party. The Banking ombudsman advised OP No.1 to reverse the transaction amount to the complainant but after submitting the stands of OP No.1, the said Banking ombudsman closed the complaint. Rest of the averments of the complainant were denied by the OP No.1 and prayed for dismissal of the present complaint with exemplary costs.
4. Upon notice, OP No.2 appeared and filed written version and raised preliminary objections with regard to maintainability, estoppal, locus standi, cause of action, not come with clean hands and suppressed the material facts and bad for mis-joinder and non-joinder. On merits, it is stated that answering OP has no relation with the SBI Cards and Payments Services Limited i.e Op No.1. Answering OP is having a different and separate entity from SBI Cards and Payment services Limited and it has no relation with the issuance of the credit cards. Answering OP and OP no.1 are different legal entities. Grievance of the complainant, if any, was with OP No.1 who issued SBI cards and payment services and not with OP No.2 which is a Bank. Rest of the averments of the complainant were denied by the OP No.2 and prayed for dismissal of the present complaint with costs.

5.                 Learned counsel for the complainant tendered affidavit of complainant as Annexure CW1/A along with documents Annexure C-1 to C-7 and closed the evidence on behalf of complainant. On the other hand, learned counsel for the OP No.1 tendered affidavit of Shri Punit Babbar, duly constituted Attorney of OP company (SBI Cards & Payments Services Ltd.) having Registered office at Unit 401 & 402, 4^th Floor, Aggarwal Millennium Tower, E 1,2,3, Netaji Subhash Place, Wazirpur, New Delhi-110 034 as Annexure RW1/A and closed the evidence on behalf of OP No.1. Learned counsel for OP no.2 tendered affidavit of Shri Vikas Bhoria, Deputy Manager, State Bank of India, Mahatma Gandhi Marg, Ambala Cantt. as Annexure RW2/A and closed the evidence on behalf of OP No.2.

6.                We have heard the learned counsel for the parties and have also gone through the record very carefully and also gone through the written arguments filed by the learned counsel for the OP No.1.

7.                 Learned counsel for the complainant submitted that the transaction of Rs.4,383/- dated 14.10.19 at Flipkart which was made at Banglore, through the said SBI credit card, was never done by him and also no SMS was received by him for the said transaction, yet, his genuine request has been rejected by the OPs by not refunding the said amount, inspite of the fact that the Ld. Ombudsman, RBI Chandigarh, vide its order dated 27.03.2020, directed the OPs to refund the amount of Rs.4,383/-, to the complainant. 

8.                On the contrary, the learned counsel for the OP No.1 submitted that the present complaint against the Op No.1 is not maintainable before this Hon’ble Commission because as per card holder agreement, there is an arbitration clause, with stipulates that in all events of dispute between the card holder and the SBI Cards, the same shall be resolved by appointment of the sole arbitrator. He further submitted that since the complainant himself has used the card and the transaction in question has been performed in a secured manner as the same has been validated by card CVV and dynamic One Time Password (OTP) over the Internet/ IVR, which was successfully delivered at the registered mobile number of the complainant, as such, the request of the complainant claiming refund of the amount in dispute was rightly rejected by OP No.1.

9.                 Learned counsel for the OP No.2 submitted that OP No.2 is having a different and separate entity from SBI Cards and Payment services Limited and it has no relation with the issuance of the credit cards. OP No.2 and OP no.1 are different legal entities. Grievance of the complainant, if any, was with OP No.1, SBI cards and payment services Limited who issued the card and not with OP No.2 which is a Bank. There was no privity of contract with the complainant with regard to the transaction in dispute therefore, complaint filed by the complainant against OP No.2 is not maintainable and is liable to be dismissed.

10.               The first question that falls for consideration is, as to whether, the complaint filed by the complainant against the OP No.2 is maintainable. The stand of the OP No.2 is that neither it has any relation with the OP No.1, nor has any privity of contract with the complainant with regard to the transaction in dispute and thus the complaint filed against it is liable to be dismissed being not maintainable. This contention of the OP No.2 that it has no relation with the OP No.1, has not been controverted by the OP No.1. Even complainant has not placed on record any evidence to convince this Commission that the credit card has been issued by the OP No.2, to the complainant. Thus, in the absence of any cogent and convincing evidence, we are of the opinion that the complaint filed by the complainant against the OP No.2 is liable to be dismissed being not maintainable.

11.               The second question that falls for consideration is, as to whether in the face of existence of Arbitration clause in the contract/agreement in relation to the said credit card aforesaid, jurisdiction of this Commission is barred, as has been contended by the OP No1.?  It may be stated here that this issue has already been set at rest by the larger Bench of the Hon’ble National Commission in a case titled as  Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the contracts/Agreements between the parties cannot circumscribe the jurisdiction of a Consumer Foras. Civil appeal bearing No.23512-23513 of 2017 and  Review Petition (C) Nos.2629-2630 of 2018 filed by the builder, before the Hon’ble Supreme Court of India, also stood dismissed vide orders dated 13.02.2018 and 10.12.2018 respectively. As such, objection taken in this regard stands rejected.

12.               Now coming to the dispute with regard to the transaction of Rs.4,383/- on  14.10.19 at Flipkart which was made at Banglore, through the SBI credit card in question is concerned, it may be stated here that OP No.1 has failed to place on record any cogent evidence to prove that the said transaction had been carried by the complainant. No evidence has been placed on record by the OP No.1, to substantiate its stand that complainant himself had done the said transaction and that SMS alert was sent and delivered to him. More so, there is nothing on record to prove that the OP No.1 has conducted any inquiry into the incidence after reporting of the same by the complainant. 

13.               Not only as above, it is also evident from the record that when the grievance of the complainant was not redressed, he lodged complaint no. 201920007017496 with the Ombudsman, RBI Chandigarh. The Banking Ombudsman vide order dated 18.03.2020, Annexure C-5 directed OP No.1 to pay to the complainant, the amount in question under compensation policy. It is further evident from order dated 27.03.2020, Annexure C-6 passed by the Banking Ombudsman that the claim of the complainant was closed, on the ground that the dispute has been settled by the bank or the concerned subsidiary of the bank, yet, even then, the OP No.1 failed to pay the said amount of Rs.4,383/-, to the complainant.  From the facts narrated above, it is coming out that the OP No.1 failed to provide online cyber security to the credit card provided to the complainant and on account of the said security lapse, his card has been fraudulently used by someone and at the same time, it has also failed to send SMS alert to the complainant in that regard,  which result into the said transaction from the credit card account of the complainant.

14.               A similar controversy has recently been dealt with by the Hon’ble National Commission in State Bank Of India Vs Jarnail Singh & 2 Ors., Revision Petition No. 275 Of 2021, Decided On 22 Jun 2022, wherein while deciding the case in favour of the complainant, it was held as under:-

“…..16.     From the Written Statement, I find that the Petitioner Bank except for making bald allegation against the Complainant that he himself had committed a fraud and had a hand in glove with wrongdoers, did not mention whether SMS alerts were sent and delivered to the Complainant or not and that position did not change before the State Commission. Further, the Petitioner Bank has failed to prove its contention that the Complainant was himself involved in the fraud, by adducing any evidence.  Learned Counsel appearing for the Petitioner Bank argued that the SMS alerts were duly sent to the Complainant’s registered mobile number. It is significant to mention that no such averment and pleading was made in the Written Version filed before the District Forum and on the contrary the Complainant in his Evidence Affidavit has categorically stated that he has not received any SMS alert or communication for the Petitioner Bank. It is relevant to mention here that Petitioner Bank did not even care to conduct any inquiry into the incidence  after reporting of the same  by the Complainant on 05.11.2016, when it first  came to his knowledge and furthermore, when the amount from the Complainant’s Account was transferred to another Customer of the Petitioner Bank.  From the evidence and material on record, I find that the District Forum as also the State Commission have  rightly come to a conclusion that the Bank was deficient in providing service in not sending SMS alerts or information to the Complainant about the transactions….”

15.              In view of aforesaid discussion, we hereby dismiss the present complaint against OP No.2 and allow the same against OP No.1 and direct it, in the following manner:-

1. To pay the amount Rs.4,383/-, to the complainant alongwith interest @ 4% p.a. from the date of filing of complaint i.e 05.08.2020, till its realisation.
2. To pay Rs.2,000/-, as compensation for the mental agony and physical harassment suffered by the complainant.
3. To pay Rs.1,000/- as litigation expenses.

The OP No.1 is further directed to comply with the aforesaid directions within the period of 45 days from the date of receipt of the certified copy of this order. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced on: 20.07.2022.

 

 

          (Vinod Kumar Sharma)  (Ruby Sharma)               (Neena Sandhu)

              Member                         Member                       President