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Raj Kumar Makkad (Adv P & H High Court Chandigarh)     08 December 2012

Icici bank to pay rs 50,000 for unfair trade practice


A consumer forum ordered the ICICI Bank to pay Rs 50,000 to one of its account holders for recovering purported credit card dues from his savings account more than three years after issuing him a no dues certificate.

The South West District Consumer Disputes Redressal Forum said the credit card account was no more in existence once the bank had settled the dues with the savings account holder in 2004 and had issued him a no dues certificate.

"After executing such certificate, the opposite party (ICICI Bank) cannot exercise bankers lien over the savings bank account of complainant (account holder). The action taken by the bank is quite illegal, malicious and against the ethics of the banking business.

"We hold the bank responsible for deficiency in service and guilty of unfair trade practice. We, therefore, direct it to reimburse amount of Rs 20,678 (debited from complainant's savings account). We also direct it to pay Rs 25,000 towards compensation along with Rs 5,000 as cost of litigation," the bench presided by Narendra Kumar said.

The forum's order came on the plea of Delhi resident Pavitro Paul, who had alleged in his complaint that ICICI Bank had in 2007 illegally recovered Rs 20,678 from his savings account with it after it had issued him a no dues certificate in 2004.

The certificate was issued after he had paid Rs 19,500 as full and final settlement of his credit card dues, Paul had said in his complaint adding that his repeated requests to the bank to return the recovered amount received no response.

In its defence, ICICI Bank had contended that Paul was irregular in his credit card payments and there was an outstanding of Rs 20,678 in his card account which it had recovered from his savings account. The forum rejected it saying the contention has no force.


 3 Replies

c.p.s. ramachary (1500)     09 December 2012

Thanks to Mr. Rajkumar Makkad for his information. It is unfair to recover money from savings account by exercising banker's lein when it had issued a certificate of having closed the account as full and final settlment.

Supreme Court in ICICI bank Vs. Shanta Devi Sharma & Ors. :2008 (2) Bank CLR 745 (S.C.) held that in addition to Guidelines on Fair Practices Code for Lenders, Master circular on outsourcing financial services and Master Circular on credit card operations and another Circular on ‘Code of Bank’s Commitment to Customers (COBCC) were promulgated by RBI with advise to banks to strictly adhere to them in loan recovery process. It seems they are not strictly adhered to and are treated as mere ritual exercise and RBI also had taken serious note of it and remarked that complaints are received regarding violation of the guidelines. In this case the borrower committed suicide on account of humiliation caused by repossessors engaged by the bank. Supreme Court declined to expunge the remarks of the High Court as well as to quash the order of the High Court in directing the police to investigate into the matter. The Supreme Court also imposed costs of Rs.25,000/- to the bank. 




Good information.


matt   21 June 2016

Great information.i have seen many cases where banks recovered 2 lacs for original amount 21k only.

this will be a great lesson for those banks.

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