Hongkong & Shanghai Banking Corporation Ltd vs Vikash Kumar Singh & 2 Ors

Subhash Chandra, Presiding Member

This appeal filed under section 15 of the Consumer Protection Act, 1986 (in short, ‘the Act’) challenges the order of the West Bengal State Consumer Disputes Redressal Commission, Kolkata in CC no.127 of 2012 dated 18th March 2016 allowing the appeal and directing payment of compensation of Rs.2,80,000/- to the respondent/ complainants along with Rs.2.00 lakh for harassment and mental agony and Rs.1,50,000/- for irreparable injury to social status apart from litigation cost of Rs.50,000/-. A total payment of Rs.6,80,000/- has been directed to be paid within 45 days failing which interest at the rate of 9% per annum has been directed.

The brief facts are that the respondent had applied for loan from the State Bank of India (in short, ‘the SBI) for purchase of a flat. However, the loan application was not processed on account of an “overdue” status on the credit card which had been terminated by the respondent the fact of which was reported by the appellant herein to respondent no.3/ CIBIL. Consequently, the loan was not processed by the SBI and respondent no.1 had to pay Rs.2,80,000/- towards interest to the builder from whom the flat was being purchased on account of delay in payment of instalment, as it was unable to pay the money to the developers in time as per the agreement. The State Commission has held that the appellant herein was deficient in service and directed the above payment.

We have heard the learned counsel for the parties and given our thoughtful consideration to the material on record.

It is the case of the appellant that although the said credit card of respondent no.1 had been cancelled/ blocked in September 2010, there was an outstanding amount of Rs.1226.70 on this card. It is contended that cancellation of the card blocks it for further transactions or use of the card but does not denote that the card account was closed and there were no payments due. It was categorically denied that respondent no.1 was enlisted in the defaulter list of respondent no.3, Credit Information Bureau (India) Limited (in short, ‘the CIBIL’). The appellant contends that the State Commission has erred in its findings and that the impugned order was liable to be set aside since there was no evidence led by any officer of the SBI to prove that the letter dated 28.02.2011 stating that the loan was not processed by it on account of the CIBIL report. It was contended that the card statement dated 10.12.2010 for the period 21.08.2010 to 20.09.2010 which showed outstanding amount against the said credit card had been denied by respondent no.1. In view of the fact that respondent no.1 had not been indicated as a ‘defaulter’ in the list maintained by CIBIL, it is contended that the SBI erred in not processing the loan facility applied for and rejection of the same was based on wrongful / negative updation of the card details in the CIBIL. It is therefore prayed that the impugned order of the State Commission be set aside.

On behalf of respondent no.1 it was contended that the appellant had issued a letter dated 14.03.2011 which stated clearly that as per records, the appellant’s card was already closed with effect from 13.09.2010 and the card had no outstanding dues as on date. This position was reiterated in another letter dated 25.07.2011 addressed to the respondent no.1 by the appellant which, inter alia, stated:

Also please note that as per Reserve Bank of India guidelines, we provide credit information relating to our credit cardholders to Credit Information Bureau (India) Limited (CIBIL) on a monthly basis.

In line with the direction, the details pertaining to your card account have been provided to the relevant reference agencies.

The respondent, therefore, contended that it was on account of this information provided to the CIBIL that the SBI did not process its loan which resulted in the liability of Rs.2,80,000/- towards interest on the payment due to be made to the developer since the loan facility was not approved. Hence, it is argued that the order of the State Commission is valid and should be upheld.

From the foregoing, it is apparent that the appellant had conveyed to CIBIL outstanding amount of Rs.1226.70 against the card which it had itself conveyed to respondent no.1 as per letters dated 14.03.2011 and 25.07.2011 that no due was outstanding against it on two occasions. It has also been admitted by the appellant that it had provided the details to CIBIL on a monthly basis. Downgrading of the credit worthiness of the respondent is the consequence of an outstanding amount being wrongly shown against respondent no.1. It has been rightly concluded by the State Commission to be a deficiency in service. The appellant’s contention that the cancellation of card and payment of outstanding dues are separate issues of no avail to it. It had stated on two occasions that there was no outstanding dues against the card. Its the contention that it had waived off the amount to be paid as ‘a good will gesture’ is also of no avail since it had already conveyed to CIBIL the fact of outstanding payment incorrectly which resulted in CIBIL downgrading the credit worthiness of respondent no.1.

For the reasons stated above, we find no reasons to interfere with the finding of the State Commission with regard to deficiency in service by the appellant and in allowing the complaint. However, as regards award of compensation it is seen that the State Commission has awarded compensation under multiple head to the respondent for a singular default. It has been held by the Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda & Ors., (2020) 16 SCC 138 that multiple compensations for a single default when interest is being awarded is not justified. We are inclined to respectfully follow the principle laid down by the Apex Court in this regard.

For the foregoing reasons, the order of the State Commission is partly allowed and modified as follows:

i. Award of Rs.2,80,000/- to respondent no.1 is upheld;

ii. Compensation @ 7.5% per annum simple interest is awarded on this sum from the date of levy of interest till realization;

iii. Appellant shall also pay litigation cost of Rs.50,000/- to respondent no.1;

iv. Compensation of Rs.2.00 lakh towards mental agony and Rs.1,50,000/- towards damages to social status are set aside, in view of the fact that they are covered under the rate of interest awarded.

All pending IAs are also stand disposed of by this order.