The National Consumer Commission upheld the decision of the State Commission asking Standard Chartered Bank to pay a compensation of Rs2 lakh for negligence and reporting the customer as a defaulter to CIBIL
The National Consumer Disputes Redressal Commission (NCDRC), while holding Standard Chartered Bank (StanChart) guilty for spoiling one of its customers’ credit record, asked the lender to pay Rs2 lakh as compensation.
"It is not disputed that the complainant made full payment of transactions carried out through credit card and opposite party (OP-StanChart) issued full and final settlement account on 25 October 2002. It is also not disputed that OP by mistake/ negligence has shown name of complainant in Credit Information Bureau (India) Ltd (CIBIL) defaults on account of which, complainant’s application for education loan of Rs4 lakh from State Bank of India was rejected," said Justice KS Chaudhari, presiding member in the order.
The case related with Vadodara-based Hanumesh Bandurao Kulkarni, who despite paying all his dues while closing a credit card with StanChart, was shown as defaulter in CIBIL report. This defaulter remark prohibited him from obtaining a loan of Rs4 lakh for his daughter's education.
On 5 September 2001, StanChart issued a credit card to Kulkarni, who used it only twice for withdrawing Rs4,000 and Rs3,100 on 15 September 2001. Kulkarni paid Rs500 on 17 February 2002 and Rs2000 on 15 April 2002 against the withdrawals. Citing defective services from the lender, Kulkarni then decided to close the credit card.
On 2 October 2002, he paid Rs7,000 to StanChart against full and final settlement for his credit card. StanChart, on 25 October 2002 issued a full and final settlement account statement and closed Kulkarni's credit card from that date.
Later in 2013 or after 11 years from closing the StanChart credit card, Kulkarni applied with SBI for an education loan of Rs4 lakh for is daughter's higher studies. However, SBI rejected his application on 31 July 2013 with a remark "CIBIL defaults, file rejected'.
On enquiry, Kulkarni found that StanChart has mentioned his name as 'defaulter' in the records of CIBIL. The amount mentioned in the credit report was Rs2.95 lakh as on 1 August 2013, which increased by around Rs20,000 to Rs3.15 lakh on 14 November 2013.
Kulkarni wrote several letters to StanChart for rectification of the error but the Bank did not take any care. He then approached the Banking Ombudsman at Ahmedabad. While admitting the facts, StanChart on 23 December 2013 assured the Ombudsman that it will remove Kulkarni's name from the CIBIL records within 10 days. However, the Bank failed to do so. It also failed to issue no dues certificate to Kulkarni, as agreed before the Ombudsman.
Kulkarni, citing service deficiency on the part of StanChart, then filed complaint before the District Consumer Forum. The Bank did not appear before the Forum. The Forum then issued an ex-parte order asking StanChart to remove Kulkarni's name as defaulter from CIBIL records, issue a no dues certificate and pay a compensation of Rs1 lakh. It also asked StanChart to pay Rs50,000 in the State Consumer Welfare Fund.
Not satisfied with the compensation, Kulkarni then approached the State Commission. While partly allowing the petition, the Gujarat State Consumer Disputes Redressal Commission, enhanced the compensation to Rs2 lakh. This led Kulkarni to approach the NCDRC.
In his petition, Kulkarni contended that since his loan proposal was rejected, he was forced to obtain a loan of Rs70,000 from other financial institutions at an in interest of 23% per annum, by pledging gold ornaments worth Rs2 lakh.
"Even if it is taken a true fact, (the) complainant (Kulkarni) was paying Rs700 per month higher to the financial institution against the interest payable to SBI at a rate of 11% to 12%p.a. Complainant has already been awarded compensation of Rs2 lakh by which he can very well pay full loan of Rs70,000 obtained from financial institution and still he would be saving Rs1.30 lakh," the NCDRC said in its order
(Ref: NCDRC Revision Petition No.2601 of 2015)