Santosh Kumar, complainant (here-in-after referred to as 'complainant') has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (here-in-after referred to as 'Act') against Manager, HDFC and others (here-in-after referred to as 'opposite parties).
Briefly stated, the case of the complainant is that he has retired as Sr. Xen, PSPCL. He is maintaining a Saving Bank Account Number 01871140000861 since long.
It is alleged that in Sept., 2008 Manager HDFC Credit Card Section, Bathinda approached and persuaded him to apply for a credit card of HDFC Bank by explaining that terms for use of credit card are very attractive and soft. EMI's are offered at 12% yearly interest rate in case of any inability to deposit the whole debit amount in lump sum by due date. On this assurance, an application was got signed from him and credit card was issued to him.
It is further alleged that statements against the credit card were not supplied to him regularly. When the matter was taken up with the HDFC Bank Grievance Cell on 18-03-2015, the summary statement of Credit Card Account for the period from 10/2008 to 03/2015 was supplied by Grievance.Redressalcc@hdfcbank.com via email. On checking this summary statement, the complainant was astonished to find that HDFC Bank Credit Card Division has unilaterally manipulated the calculations in their own fraudulent manner. It has been found that amount of Rs. 1,43,979.30 has been levied as finance/interest charges which is excessive. Neither it is admissible as per terms of the agreement nor Reserve Bank of India authorizes for such heavy finance/interest charges. The complainant has also reproduced RBI Circular dated April 9, 2010, the reproduction of which is not considered necessary at this stage.
It is further case of the complainant that HDFC Credit Cards Division has never intimated him the base rate and levy of such exorbitant/usurious finance/interest charges is illegal/Unjust/invalid. The case for reversal of illegal finance charges/interest levied against his credit card was taken up with the Priority Redressal.CreditCards@hdfcbank.com vide E-mail but they have agreed and confirmed only partial reversal of an amount of Rs 33,164.50 on account of excess finance/interest charges. Partial reversal of excess charged finance/interest charges is not justifiable. They should reverse all the excess charged amount. The finance/interest charges should be levied as per RBI Circular dated April 9, 2010 or at 12% yearly interest rate on outstanding monthly balance as per commitment made at the time of issue of Credit Card.
Further averments of the complainant are that the opposite parties have levied unauthorized Service Tax on interest components credit card payments. The complainant has also quoted RBI circular dated 1-7-2013 and Section 65(105)(zzzw) of Finance Act, 1994 to support that credit card services were earlier covered under banking and other financial services but since a separate category has now been provided, all such card related services would be covered under this clause.
It is also revealed that credit card or other payment card services are services provided or to be provided to any person, by any other person, in relation to credit card, debit card, charge card or other payment card service, in any manner. The value for the taxable service will be the gross amount charged by the service provider for such services.
It is asserted that in the case interest charged on delayed payments, it is not service and no element of service is involved in Finance charges or interest charged on credit card payments. The case for retrospective monthly reversal of unauthorized Service Tax charged on the interest components of the credit card payments and some other internal transactions of the Bank which are not covered under the Service Tax Act was taken up with the Grievance.Redressalcc@hdfcbank.com vide E-mail but they have agreed and confirmed only partial reversal of an amount of Rs 19643/- on account of unauthorized Service Tax.
It is also mentioned that partial reversal of unauthorized charged Service Tax is not justifiable. The opposite parties should have reversed all the unauthorized Service Tax charged on the interest components of the credit card payments and some other internal transactions of the Bank which are not covered under the Service Tax Act.
It is also the case of the complainant that as per summary statement, a sum of Rs 11450/- has been charged as late payment fees/interest. It is alleged that payment fees has been levied @ 400 % to 500% rate of interest and amount of Rs. 6625.35 was due for payment on 22-12-2012 but was paid by him on 31-12-2012. There was delay of just 9 days. The opposite parties have charged late fees of Rs.700/- which works out to be @ 436% annual rate of interest which is not justifiable under any Banking rules. The interest on late payment should not be more than 18% per annum. The late payment be calculated @ 18% annual interest rate and extra charged amount should be reversed by them with retrospective effect.
It is also mentioned that many entries of late payment have cropped up in the summary account statement only due to levying of excessive illegal finance/interest charges and unauthorized Service Tax entries and in such cases the late fees charges should be reversed by them. An amount of Rs. 1395.65 has been levied as Service Tax on late payment fees. No element of service is involved in late payment fees on credit card payments. Therefore service tax levied on late payment fees should be reversed retrospectively as the same is not applicable.
The complainant has further mentioned that he has never opted for over limit on his Credit Card. The fictitious Over Limit have cropped up in the summary account statement only due to levying of excessive illegal finance/interest charges and Unauthorized Service Tax entries. Over limit fee of 5500/- is illegal and invalid. It should be reversed by them with retrospective effect. Moreover the Over Limit fees should be charged only for one time as by paying this penalty the Credit card Limit stands enhanced and repeatedly charging Over Limit fee is illegal. An amount of Rs. 679.80 has been charged as Service Tax on over limit fee. It should be reversed with retrospective effect.
The complainant has also pleaded that on 31-05-2005 HDFC Bank has placed Hold on Saving Bank Account number 01871140000861 which is illegal and unjustified. Instead of replying to objections conveyed to HDFC Recovery Agents from time to time and justifying the Credit Card illegal charges, hold on saving account was unilaterally placed. On 15-06-2015 an amount of Rs 3969.46 was transferred from his saving account to credit card account without his consent. By placing hold on his saving account, HDFC Bank is trying to tarnish his image, integrity, respect and reputation amongst his family, social circle, friends, colleagues and other business circle. Due to hold, it is not possible to maintain minimum monthly balance in his saving account. Due to hold on his account, HDFC Bank is debiting every month charges for non maintenance of minimum balance. Moreover due to hold on, it is not possible to make payment of his Housing Loan EMI's through Standing Instructions on his saving account but the HDFC Bank is debiting charges for bouncing of EMI standing Instructions.
It is also mentioned that the opposite parties are pressurizing and threatening by telephone calls and grave harassment is being caused to him by demanding the illegal/unjust/ fraudulent charges.
On this backdrop of facts, the complainant has prayed for directions to the opposite parties :-
(i) To calculate and levy finance/interest charges as per RBI Circular number RBI/2009-10/390 DBOD. No. Dir. BC 88 /13.03.00/2009-10 dated April 9, 2010 or @12% yearly interest rate on outstanding monthly balances as per commitment made at the time of issue of Credit Card and retrospectively reverse the excess charged amount on monthly basis.
(ii) To retrospectively reverse the levy of Unauthorized Service Tax charged on all interest components of credit card payments on monthly basis.
(iii) To levy fess/interest on Minimum Due Late Payment @ 18% per annum instead of @ 400% to 500 % per annum and retrospectively reverse the excess charged amount on monthly basis and reverse the Unauthorized Service Tax charged on Late Fees amounts.
(iv) To retrospectively reverse the Over Limit Fees and service tax on it which cropped up due to levy of excess Finance/Interest charges and Unauthorized Service Tax.
(v) To cancel the Hold/Lien on my Saving Account during the pendency of this complaint and allow me to operate the account.
(vi) To any other consequential relief that becomes valid on account of implementation of the above relief at Sr. number 1 to 5.
(vii) To pay an amount of Rs.1,00,000/- as compensation towards physical strain and mental agony suffered by me and my family members.
(viii) To pay a sum of Rs. 1,000/- towards cost of this petition.
In view of the statement of complainant, the name of opposite party No. 2 was deleted. Notice to opposite parties No. 1 & 3 was issued. They appeared through counsel and contested the complaint by filing written reply.
In written reply, the opposite parties No. 1 & 3 raised legal objections that complaint is hopelessly time barred. The complainant is trying to agitate and dispute the levy of charges agreed upon and charged from the year 2008. The complaint is barred by limitation. That the intricate questions of law and facts are involved in the complaint which requires voluminous documents and evidence for determination which is not possible in summary procedure under the 'Act'. That the complainant has concealed material facts and documents from this Forum. He has concealed the fact that he has agreed to pay the charges as agreed upon between the parties and as mentioned in most important terms and conditions and schedule of charges annexed thereof, which was supplied to the complainant at the time of supplying Credit Card vide Blue Dart Courier No. AWB 42830517925 dated 11-2-2008 delivered on 14-2-2008 and revised from time to time. The complainant gave declaration in the Credit Card application that he will be bound to pay the charges agreed upon and revised from time to time. The complainant is a educated person having remained in service and is estopped from raising any objections at this stage. That the complaint has been filed only to injure the goodwill and reputation of the opposite parties. Even otherwise the complaint is false, frivolous and vexatious to the knowledge of the complainant. The opposite parties are entitled to special cost from the complainant.
On merits, it is denied that the Manager of the opposite parties approached complainant to apply for credit card in September, 2008 or with 12% yearly interest. It is also denied that any Manager got the application signed from the complainant.
As per opposite parties complainant himself approached the opposite parties and applied for Gold Credit Card. Accordingly, Credit Card with account number 5176521007240296 was issued to him. The complainant was clearly explained the terms and conditions of use and charges against the above said Credit Card. The most important terms and conditions along with schedule of charges was also supplied to the complainant. It is denied that the statements against the credit card were not supplied to the complainant or the complainant got the statement only on 18-03-2015. Monthly statement of credit card account had been regularly sent to the complainant by post as well as through email. The complainant was aware of the rate and amount of finance charges being levied against his credit card. Even monthly statements of account were being sent by post as well as through email. The complainant had also been depositing the total amount due from time to time, keeping in mind the total amount due. In most important terms and conditions, finance charges are mentioned in detail with illustration showing calculation of the amount including finance charges. The complainant had obtained credit card in 2008. He cannot take benefit of alleged circular. The opposite parties are charging the finance charges in accordance with law and as per rules. It is denied that the opposite parties have levied any exorbitant or usurious finance/interest charges. The opposite parties have reversed the finance charges of Rs.33164.50 only as a service gesture in order to keep customer friendly relation and on account of the fact that the complainant is a Sr. Citizen. The opposite parties are within their right to receive the amount due from the complainant in accordance with law. As on 31-05-2015, a sum of Rs.1,17,931.39 was due and payable by the complainant to the opposite parties,notice dated 31-05-2015 had also been sent to the complainant. The RBI Circular and its applicability to the credit card dues is admitted. It is denied that the opposite parties are charging any unauthorized service tax on interest components of Credit Card payments as alleged.
It is also asserted that whatever amount is being charged as service tax is being deposited finally with the concerned revenue authority of Govt. The complainant cannot dispute the levy of service tax in this Forum wherein the procedure is summary in nature and even otherwise, the said challenge to service tax is not within the scope and jurisdiction of this Forum. It is denied that no element of services involved in finance charges or interest charged on credit card payments.
It is asserted that the opposite parties have legally reversed partial amount of service tax of Rs.19,643/- considering the amount of finance charge reversed and in accordance with law. It is denied that the opposite parties have charged Rs.11,450/- as late payment fee illegally or at the rate of 400% to 500% rate of interest. It is denied that interest on late payment should not be more than 18%. It is denied that amount due on account of late payment is liable to be calculated at the rate of 18% p.a. or any amount is liable to be reversed. It is denied that many entries of late payment have cropped up only due to any alleged levy of excessive finance/ interest charges or service tax. It is admitted that amount of Rs.1395.65 has been levied as service tax on late payment fee legally. It is denied that complainant did not opt for over limit on his credit card. It is denied that any fictitious over limit as cropped up in the account of the complainant due to any alleged illegal finance/interest charges or unauthorized service tax entries. It is denied that over limit fee is liable to be reversed. It is denied that hold placed on funds in saving account is illegal, invalid, arbitrary, unjustified or malicious. All other averments of the complainant have been denied. In the end, the opposite parties prayed for dismissal of complaint.
Parties were afforded opportunity to produce evidence. In support of his claim, complainant has tendered into evidence photocopy of account statement (Ex. C-1), photocopy of notice (Ex. C-2 & Ex. C-3), photocopy of application form (Ex. C-4), photocopies of RBI circular (Ex. C-5 & Ex. C-6), photocopy of e-mail (Ex. C-7 to Ex. C-10) and affidavit of complainant dated 21-12-2015 (Ex. C-11). The complainant also submitted written arguments on 15-6-2016, 8-9-2016, 15-9-2016 and then 4-12-2017.
In order to rebut this evidence, opposite parties No. 1 & 3 have tendered into evidence photocopy of application form with Annexure (Ex. OP-1/1), photocopy of terms and conditions (Ex. OP-1/2), photocopy of account statement (Ex. OP-1/3), affidavit of Dapinder Singh Kaler dated 19-4-2016 (Ex. OP-1/4) and photocopy of notice (Ex. OP-1/5), photocopy of account statement (Ex. OP-1/6) and photocopy of consolidated statement (Ex. OP-1/7).
We have heard learned counsel for the parties, gone through the record and written arguments of complainant.
The complainant has submitted that the opposite parties have raised objections regarding limitation but this objection is not sustainable. The statements of credit cards were not supplied to him regularly. When the matter was taken up with the Opposite Parties Grievance Cell, the summary statement for the period from 10/2008 to 3/2015 was supplied by the opposite parties, detailing all the transactions column wise. Hence, cause of action to file the complaint accrued to him on 18-3-2015 when on checking summary statement, he found that the opposite parties have unilaterally manipulated the calculations in their own fraudulent manner. Moreover the cause of action also accrued to the complainant on receiving the notice dated 31-5-2015 regarding suspension of his credit card and hold on his Saving Account were issued by the opposite parties and amount of Rs. 3969.46 was illegally transferred from his saving account to credit card account. The cause of action also accrued to the complainant on 8-9-2015 when opposite parties agreed and confirmed partial reversal of an amount of excess charges finance/interest charged amount.
The complainant has also relied upon decision of Hon'ble State Commission rendered in First Appeal No. 897 of 2009 decided on 16-5-2013 in case titled Pushpa Garg Vs. HDFC Bank Ltd., and submitted that case law quoted by the opposite pares is not applicable to the facts of the case.
It is further submitted by the complainant that although as per declaration, the service tax is leviable on various charges but as per Government guidelines. The opposite parties have committed fraud and violated government rules pertaining to service tax and finance/interest charges. Moreover, the complainant has already paid service tax to the merchants on all the purchases done through credit card. The opposite parties have also taken commission from merchants for all his purchases. The opposite parties cannot demand service tax on the repayments and interest charges as the same is not admissible in any law/rule.
It is also submitted by complainant that he never signed any document containing so called “Most Important Terms and Conditions” and he is bound to pay only the admissible charges as per law/rules. The illegal documents, if any, of the opposite parties cannot be enforced under any law/rules.
It is also submitted by complainant that opposite parties have raised vague objections regarding involvement of intricate questions of law and facts. The complainant has not challenged any law. Therefore, the complaint is maintainable before this Forum.
It is also submitted by complainant that opposite parties cannot charge interest more than 30% p.m. As mentioned in the application form got signed from him and approved by the opposite parties. The opposite parties have backed out from this provision of converting outstanding amount of the card in 12 Equated Monthly Installments and illegally charged excessive rate of finance charges (interest on outstanding amounts). Monthly statements against the credit card were not supplied to him regularly and these monthly statements do not depict all the complete details of charges and service tax levied. On checking this summary statement procured by him through HDFC Bank Grievance Cell, complainant came to know that HDFC Bank Credit Cards Division have unilaterally manipulated the calculation in their own fraudulent manner and usurious finance/interest charges have been levied which were excessive. The complainant has also cited 2008(2) Consumer Law Today 0602 in case AWAJ & Ors., Vs. RBI and Ors.
It is also submitted by complainant that HDFC Credit Cards Division has never intimated him the base rate. Hence the levy of such exorbitant/usurious finance/interest charges is illegal/unjust/invalid. The opposite parties have agreed and confirmed only partial reversal of an amount of Rs. 33,164.50 but partial reversal is not justifiable. The opposite parties should have reversed all the actual excess finance/interest charges amount.
Regarding Service Tax, the complainant has submitted that in Section 65 (105) (zzzw) of Finance Act, 1994, services covered for credit card are briefed and as per these services, complainant was not liable to pay any service tax because the transaction were not amounting to service. Moreover, for calculating the taxable value of the services, interest charged on the loans advanced is not included. The bank cannot charges any service tax either on the repayment amounts or the interest charged on the principal amounts. The Service tax can only be charged on the amounts collected as their charges for providing the loan. No element of service is involved in finance charges or interest charged on credit card payments. The opposite parties have also not specified under which Law/Act/Rules the Service Tax on interest components of credit card is to be charged.
The next submission of complainant is that as per summary statement, a sum of Rs. 11,450/- has been charged as late payment fee/interest. Late payment fee has been levied @400% to 500% rate of interest which is not justifiable under any banking rules. Interest on late payment should not be more than 18% per annum. Hence, the complainant is entitled to refund of excess late payment charges.
The complainant has also submitted that he has never opted for over limit on his credit card. The fictitious over limit have cropped up in the summary account statement only due to levying of excessive illegal finance/interest charges and wrong service tax entries. Over limit fee of Rs. 5500/- is illegal and invalid. It is to be reversed with retrospective effect.
At the last limb of submission, the complainant has submitted that a Hold on his Saving Bank Account is illegal and unjustified. Due to holding of his account, he is unable to maintain minimum monthly balance in his saving account and opposite party is debiting every month charges for non maintenance of minimum balance. The complainant is unable to make payment of his housing loan EMI's due to holding on his account. All these illegalities have caused unnecessary harassment to the complainant and he is entitled to compensation.
On the other hand, the learned counsel for the opposite parties has submitted that complainant has not approached this Forum with clean hands. He has intentionally concealed the material facts. The complainant has placed on record copy of Application Form (Ex. C-4). Vide this document, the complainant has confirmed receipt of MITC (Most Important Terms & Conditions). He has acknowledged that he is aware that MITC is also available for reference in the bank's website. The opposite parties have also produced on record copy of MITC (Ex. OP-1/2). All the terms and conditions are mentioned in this document. First objection of the complainant is regarding finance/interest charges on monthly outstanding amounts. As per condition No. 1.B of MITC, it is also mentioned that all cash advances also carry a finance charge equal to charges on revolving credit. The charges leviable are also mentioned in condition No. 1.C. It is categorical mentioned that charges and fee as may be applicable from time to time, are payable by card members for specific services provided by Bank to the card members or for defaults committed by the card members. It is also made clear under the finance charges head that if card holder chooses to pay amount less than total amount due reflected in the monthly billing statement, the entire outstanding amount would attract finance charges and all new transactions will also attract finance charges. Similarly late payment fee charges are also detailed in MITC. The complainant has firstly accepted the terms and condition and he used to make the payments including finance charges, interest and service tax. Now under the garb of this complaint, complainants wants to challenge terms and conditions contained in MITC which is beyond the scope of this Forum. Moreover, when the complainant has already accepted terms and conditions and started acting upon these, he cannot impugne the same after becoming defaulter.
The next submission of learned counsel for the opposite parties is that as per condition No. 4 of MITC, the bank is to send monthly statement showing the payment credited and the transactions debited since last statement. It was also mentioned that bank will mail a statement of transaction in the card account every month on a pre-determined date. Therefore, in case the complainant was not receiving statements regularly, he was expected to raise objection at that relevant time. The contention of the complainant that he received statement for the period from 10/2008 to 3/2015 is not belivable. The complainant was to settle the billing dispute every month. It is also mentioned that if the card member does not inform Bank of the discrepancies within 60 days of the statement in writing, statement will be deemed to be correct/accepted. Under this clause also, the complainant is debarred from raising this objection at such a belated stage.
It is also submitted by learned counsel for the opposite parties that even otherwise the complaint is vague in nature. The complainant has pleaded his claim on hypothetical basis. He has not pin pointed any deficiency in service. He has simply mentioned that opposite parties have charged interest ranging from 400% to 500 % in the year 2012. The charges for late payment are already described in MITC. It is not the case of the complainant that the opposite parties have claimed excess charges than briefed in MITC. The complainant has alleged that opposite parties have charged Rs. 1,43,979.30 as finance/interest charges, but there is no document to support this averment. Therefore, the complaint is without merit and it be dismissed with special cost.
We have carefully gone through the record and have considered the rival contentions.
The complainant has placed on record copy of Credit Card Application Form (Ex. C-4). Vide this document, the complainant has confirmed that he has received MITC (Most Important Terms & Conditions) and read all the details in it. He is aware that MITC is also available for reference in the bank's website www.hdfcbank.com. The complainant has not produced MITC but the opposite parties have produced on record the same as (Ex. OP-1/2). Some of the terms and conditions detailed in this document are relevant. For the sake of convenience the same are reproduced as under :-
“1 B. Cash Advance Fees
The Cardmember can use the Card to access cash in an emergency from ATMs in India or abroad. A transaction fee of 2.5% (Minimum Rs.300) would be levied on the amount withdrawn and would be billed to the Cardmember in the next statement. The transaction fee is subject to change at the discretion of HDFC Bank. All cash advances also carry a finance charge equal to charges on revolving credit (please refer schedule of charges) from the date of withdrawal until the date of full payment. The finance charge is subject to change at the discretion of HDFC Bank.”
“1.C. Charges.
i) Charges and fees, as may be applicable from time to time, are payable by Cardmembers for specific services provided by HDFC Bank to the Cardmember or for defaults committed by the Cardmember with reference to his card account.
ii) HDFC Bank retains the right to alter any charges or fees from time to time or to introduce any new charges or fees, as it may deem appropriate, with due intimation to customer.”
“3. Finance Charges • Finance charges are payable at the monthly percentage rate on all transactions from the date of transaction in the event of the Cardmember choosing not to pay his balance in full, and on all cash advances taken by the Cardmember, till they are paid back. Finance charges, if payable, are debited to the Cardmember's account till the outstanding on the card is paid in full”.
- Late Payment Charges will be applicable if Minimum Amount Due is not paid by the payment due date. Clear funds need to be credited to HDFC Bank Card account on or before the payment due date, to avoid Late Payment charges.
“4. Billing and Statement
a) HDFC Bank will send the Cardmember a monthly statement showing the payments credited and the transactions debited to the cardmember's account since the last statement. The Bank will mail a statement of transaction in the card account every month on a pre-determined date, to the mailing address on record with the bank, if the balance outstanding is less than Rs. 200/- and there is no further transaction pending billing since the last statement, no statement till be issued.
f) Billing disputes : All the contents of the statement will be deemed to be correct and accepted if the Cardmember does not inform HDFC Bank of the discrepancies within 60 days of the Statement Date in writing. On receipt of such information, HDFC Bank may reverse the charge on temporary basis pending investigation. If on completion of subsequent investigation, the liability of such charges is to the Cardmember's account, the charge will be reinstated in a subsequent statement alongwith associated retrieval requests charges. “
6. Right of Lien
The Bank, at any time and without notice, will have lien and right to set-off on all monies belonging to the Cardmember and/or add on Cardmember standing to their credit in any account/custody of the bank, if upon demand by the bank, the balance amount on the card account is not repaid within the prescribed time.”
A perusal of aforesaid terms and conditions reveal that opposite parties were to send cardmember monthly statement showing payment credited and transactions debited to the account since last statement. These conditions further clarifies that all the contents of the statement will be deemed to be correct and accepted if the card member does not inform about discrepancies within 60 days of the statement. Therefore, the complainant was expected to receive the monthly statement and he was also to point out discrepancies within further 60 days.
The statement of account (Ex. C-1) relied upon by the complainant and the copy of statement of account (Ex. OP-1/3) leads to the inference that complainant used to receive monthly statements. From the statement of account (Ex. C-1), it is noticed that in the month of December, 2008, there was balance of Rs. 38,151/- and the payment made by the complainant was also Rs. 38,151/-.
Ex. OP-1/3 statement for the month of October, 2008 contains details of the charges claimed. These details also show that opposite parties used to claim finance charges and service tax also and the complainant used to pay the same without any objection. Even otherwise as per MITC the opposite parties were also to charge finance charges and other specific charges as applicable from time to time. The opposite parties were also having right to claim late payment charges and right of lien. Therefore, from the act and conduct of the complainant, it can be safely inferred that the complainant has accepted the terms and conditions detailed in MITC and he used to pay the charges as mentioned in the terms and conditions. Now under the garb of this complaint, the complainant wants to impugne the terms and conditions incorporated in the agreement and which are already accepted by him, which is beyond the scope of this complaint.
For the reasons recorded above, this complaint is hereby dismissed being without any merit.
The complaint could not be decided within the statutory period due to heavy pendency of cases.
Copy of order be sent to the parties concerned free of cost and file be consigned to the record.
Announced :
11-12-2017
(M.P.Singh Pahwa )
President
(Jarnail Singh )
Member
