Karnataka State Consumer Commission order and analysis
Bank did unfair trade practice which damaged the customer’s CIBIL score
Rs 1 lakh compensation amount is not sufficient in light of this unfair trade practice
The appeal is disposed off with modification.
The impugned order dated 17.02.2024 passed by the Bangalore I Additional District Consumer Disputes Redressal Commission, Bangalore in consumer complaint No.7412023 is hereby modified;
The Respondents/Opposite Parties are directed to pay Rs 5,00,000 towards compensation for unfair trade practice and Rs 1,00,000 as Advocate fee and Rs 50,000 towards cost of litigation to the complainant.
The Respondents/Opposite Parties shall comply with the above said order within 30 days from the date of this order, failing which the above said amounts shall carry interest at the rate of 9% till realization.
On August 27, 2010, Mr Venkatesh from Mysore, Karnataka, submitted a request to close his credit card and made a payment of Rs 15,500. The bank also confirmed that the credit card was closed. However, a decade later, the bank sent him a legal notice on December 25, 2020, demanding Rs 33.83 lakh for outstanding dues. The bank continuously intimated him through calls, messages, and other means, asking him to make the payment.Even though the credit card was closed and there were no transactions, the bank still demanded Rs 33.83 lakh payment. The bank sent another legal notice on June 15, 2022 for payment. In response to these legal notices, Venkatesh replied on June 18, 2022, stating that the credit card had been closed for the last 10 years and there were no transactions, meaning there were no dues to settle.Despite this, the bank continued to harass him, prompting Venkatesh to file a consumer complaint. Initially, he approached the district consumer commission, which in 2024 awarded him Rs 1 lakh as compensation, plus 10% interest per annum from the date of order till payment and Rs 3,000 as litigation costs. Unhappy with the amount, Venkatesh appealed for a higher compensation in the Karnataka State Consumer Commission.On February 12, 2026, he won the case in the Karnataka State Consumer Commission. He was represented by Advocate Anudeep L Jain.The Karnataka State Consumer Commission ordered the bank to pay him Rs 5 lakh in compensation, Rs 1 lakh in advocate fees and Rs 50,000 as litigation expenses within 30 days beyond which 9% interest will be charged on the amount till the date of realisation.Judicial Member Ravi Shankar and Member Sunita Channabasappa Bagewadi of the Karnataka State Consumer Disputes Redressal Commission, Bengaluru gave this judgement (SC/29/A/716/2024)The Karnataka State Consumer Disputes Redressal Commission said that this was a clear case of unfair trade practice on the part of the bank which demanded an exorbitant amount of Rs 33.83 lakh without any transactions.The consumer commission noted that Venkatesh had already informed the bank on August 27, 2010 after making a payment of Rs 15,500 for closure of the credit card and the bank had also confirmed that the credit card was closed. Even after that, the bank demanded payment of the Rs 33.83 lakh.No proper explanation was provided either before the District Commission or before the Karnataka State Consumer Commission why the closure was not made when they had made a representation on August 27, 2010 itself.A demand notice was made in 2018 and that too after a lapse of 7 years when the bank demanded the said amount without any basis.The Karnataka State Consumer Commission said: “It is a clear case of unfair trade practice. Definitely the complainant suffered an adverse effect due to CIBIL count for 10 years and further the learned counsel for Appellant (Venkatesh) says that due to CIBIL count, his loans were rejected. The complainant (Venkatesh) also suffered some mental agony due to harassment made by the bank for demanding the said amount.”The Karnataka State Consumer Commission said that they have noticed that the bank issued a number of emails seeking payment of Rs 33.83 lakh.The Karnataka State Consumer Commission said that after considering the said unfair trade practice, the District Commission awarded a meagre Rs 1 lakh and thus upon considering the citations furnished by the the counsel for Appellant (Venkatesh), they are of the opinion that the award passed by the District Commission is not sufficient.The complainant definitely suffered mental agony and adverse effect due to the demand made by the respondent bank. Hence, the Karnataka State Consumer Commission said they are inclined to enhance the compensation to Rs lakh for unfair trade practice. Plus the complainant engaged an advocate to resolve his dispute before District Commission and also filed an appeal before the Commission. Hence, they found it appropriate to award Rs 1 lakh as advocate fee and Rs 50,000 for litigation expenses to the complainant.As such the order passed by the District Commission is hereby modified. Accordingly, pass the following:-