Monday, March 31, 2008

HC puts stay order on the verdict of the lower court in credit card dispute case

The Delhi High Court in its judgment has perhaps set a new example for cases related to credit card disputes and harassment in the country. The bench of Justice Mukul Mudgal and SL Bhayana has provided temporary relief to Citibank credit card holder Desh Deepak by putting a stay order on the verdict of the lower court. Citibank the global banking major had filed a suit for recovery of Rs 3,61, 431.72 against Desh Deepak on the grounds that he had failed to make payments, despite being offered a structured payment plan.

Though the matter is still sub-judice, it has possibly created a situation that will cause trouble, which can result in more stringent regulations being implemented in the credit card industry in the country. Kanchan Singh, representing Desh Deepak acclaimed the High Court’s stay order and told Sunday ET that the court made an oral observation that this looks like a clear case of extortion by a foreign bank.

“There are so many people like Desh. They don’t have the means to fight against these global giants. I took the case on a pro bono basis, had I charged him any fees, he wouldn’t have been able to put up a fight. I am sure the honorable court will come out with a just decision,” he said.

Desh Deepak who had filed a case against Citibank had claimed that interest charged was excessive, random and unjust. In his complaint he also claimed that Citibank had assured him of a settlement of the account after a payment of Rs 2 lakh. But in court, Citibank denied both these claims. When Sunday ET contacted Citibank, the Citibank officials refused to comment on the matter refer to the subject as sub-judice.

In fact, the bank official said, that in situations where the customer is unable to pay the amount owed, their highly trained customer assistance professionals assess the case and find a solution, in consultation with the customer, and work out an alternative repayment plan. “We’ve enlisted the services of eminent citizen Julio Ribeiro as external grievance redressal officer - debt collections, which shows our concerns towards such matters,” said the official.

On the other hand leading consumer activist, Pushpa Girimaji, said that such incidents will keep on happening until the credit card companies make a point of putting out the most important information in a separate package. “The customer is lost in the maze of rules and regulations, which can be as long as a thesis. Also, the companies need to improve their in-house redressal systems,” she said.

CV Giddappa, national secretary, Credit Card Holders Association of In-dia, said that the RBI needs to strictly enforce the guidelines. “The code of bank’s commitment to customers, should be turned into a penal code, this will make a major impact on such cases,” he said.

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