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awadheshjha   25 July 2015

Invoking arbitration clause without any dispute by bank

Respected Members,

I have received a notice from  a sole arbitrator appointed by bank. The grounds for invoking the arbitration has been mentioned the dispute over some X amount due over my credit card balance. The arbitrator has called for initial meeting and has asked to attend such meeting mandatorily.

Before receipt of this notice of arbitration, i received a legal notice from bank for the payment of X amount due against my credit card and asked me to pay such amount within 15 days alongwith the notice fee of Rs. Y.

Now the real Facts

The amount claimed by bank in legal notice was made 20 days prior to receipt of notice and well before the due date of the credit card. Hence there was no amount due in my credit card account which even the credit card statement clearly shows.hence i ignored the legal notice and did not replied to that legal notice.

 

Suddenly that bank (afetr 2.5 months of receipt of all pending amount) has sent this notice from their arbitrator appointed by them. Hence the legal notice and then this invoking of arbitration clause is not at all valid as the grounds mentioned in the arbitration letter does not arise. There is no amount due and there is no dispute over any of such amount.

My question:

1. I will reply the letter of this arbitrator to quash this aribtration proceeding as no grounds for arbitration arise. 

What else should I do apart from asking him to qaush the arbitration proceeding?

Can bank be criminally prosecuted for harrassing me for dues which has already been paid

can bank be prosecuted for extortion for demanding money which has already been paid.

 

Would highly appreciate advice and comments.

 

Thank you & best regards,

Awadhesh



Learning

 9 Replies

Kumar Doab (FIN)     26 July 2015

You have posted that:

 

----“The amount claimed by bank in legal notice was made 20 days prior to receipt of notice and well before the due date of the credit card. Hence there was no amount due in my credit card account which even the credit card statement clearly shows.”

 

The legal notice was unwarranted and harassment in such case.

 

You can very well claim that Bank/CC company should beg apology, withdraw the legal notice and even demand compensation/damages/defamation etc…………….

 

---“Suddenly that bank (afetr 2.5 months of receipt of all pending amount) has sent this notice from their arbitrator appointed by them. Hence the legal notice and then this invoking of arbitration clause is not at all valid as the grounds mentioned in the arbitration letter does not arise. There is no amount due and there is no dispute over any of such amount.”

 

It is believed that you have paid the amount within due date.

If you have indeed paid within due date then both legal notice and arbitrator’s notice are without application of mind and further harassment and you can very well claim that Bank/CC company/arbitrator should withdraw the  notice and should beg apology, withdraw the legal notice and even demand compensation/damages/defamation etc…………….

 

If you have not paid the due amount within due date and/or the penal charges within due date then even then the legal notice sent by bank was unwarranted and you can agitate.

 

---“ i received a legal notice from bank for the payment of X amount due against my credit card and asked me to pay such amount within 15 days alongwith the notice fee of Rs. Y.”

 

No legal notice and notice fee was warranted since amount was due to be paid only by due date.

 

---“ The grounds for invoking the arbitration has been mentioned the dispute over some X amount due over my credit card balance. The arbitrator has called for initial meeting and has asked to attend such meeting mandatorily.”

 

What is the detail of this due amount mentioned as due amount by arbitrator; the actual amount that was disputed and payable within due date or late payment charges/finance charges/penal charges etc?

 

Even if these are late payment charges/finance charges/penal charges etc then if you have paid these already then you can put it on record in writing under proper acknowledgment with seal, signature, date or by Redg. Post or thru redg. Email id with a copy to you.

 

Has the bank explained the disputed charges to your satisfaction or not? Has it substantiated with copy of charge slips duly signed by you?

 

 

If the actual amount that was disputed and payable within due date or late payment charges/finance charges/penal charges etc and has been paid by you within due date (amount +penal charges) then arbitrator’s  notice seems to be again without application of mind.

In such case you may be qualified to place on record the loss of faith in arbitrator and your able lawyer/counsel may opine that you can press for arbitrator of your choice and it may be your own lawyer.

 

Your lawyer/counsel that is well versed with banking/consumer/arbitration/such matters and that has examined the CC application submitted by you, Card member’s agreement, charge slips, Bills of CC Company, MITC, legal notice, arbitrator’s notice etc and your inputs can advise you the best................................and can notice the local BM, Manager-CC, MD of the bank and make them a party.

 

Which bank it is?

 

Why are you banking with such bank/CC company?

 

Why have you signed arbitration clause?

You may tame and shame the Bank/CC compnay if facts are on your side and get it penalized.

You can report to the Officer In Charge of CC in RBI and to Governor and demand to penalize the Bank.......................you can download the contact details from another thread at:

 

 https://www.lawyersclubindia.com/forum/Harrasment-by-icici-banks-recovery-agents-76271.asp#.VbDKCrV-jMo

 

 

 

 

1 Like

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     31 July 2015

I suggest you go to the Bank concerned and discuss the matter with them to get the matter cleared.

T. Kalaiselvan, Advocate (Advocate)     01 August 2015

I agree with the suggestions made by expert Mr. Kumar Doab.  You should issue a legal notice to the bankerimmeditely on the suggested lines including a mention abut your action for defamation against the bank/CC company. 

The customers cannot be take for granted due to their lethargy, they are supposed to be careful before taking any action since it affects the banking/CC business if their face is revealed before public.

Take the help of a good local lawyer, issue a bombarding legal notice and can also demand apology for their act bring disrepute to your name and fame. 

1 Like

awadheshjha   01 August 2015

Dear Kumar Doab Sir,

Thanks for your elaborated advise. I have already sent a letter to the arbitrator asking him to quash the arbitration proceedings. Further more I have aso aked him to withdraw this arbitration notice.

I have provided hi with all the updated statement and communication received from the banks that all the payment has been made and there is no dues.

I am now in process of sending a legal notice to the bank for their harrassment. Also I am in proces of filing complant with RBI ombudsman and RBI Governor requsting them to penalise bank for their extorting behaviour.

After sending legal notice and reply from RBI ombudsman, I am also preparing to file a case in consumer court against this bank.

Thank you very much for your assistance. I am waiting for the communication from the Arbitrator. As soon as I get the response, I will update this forum.

 

Thank you & best regards,

Awadhesh

 

T. Kalaiselvan, Advocate (Advocate)     01 August 2015

You are welcome for your appreciations.  Yes we to await your update in this regard. 

P.Bashista (Advocate)     03 August 2015

Dear Mr. Awadhesh,

What you are doing is like making the cart run ahead of the horse. You need to first understand the arbitration Act. This is not the stage where you should have given the explanation to the arbitrator. In fact you are not even realising that an arbitrator cannot be appointed without a mutual consent of the parties over his appointment. Though you must not be aware that you had given the consent at the time of signing of the application form for applying the credit card.

The bank is not a fool that they have invoked an arbitration clause and you have received a letter from the arbitrator. Your merely writing a reply letter to the arbitrator will not close this chapter. If you will not proceed properly (as per the provisions under the arbitration act) then one fine day you will be in a receipt of an arbitration award passed against you. And then you will be running from pillar to post just for the simple reason that you did not take the arbitration proceedings seriously.  

awadheshjha   03 August 2015

Dear Shri P. Bashista,

I am thankful for your suggestions and inputs. However with all due respct, I disagree with your reply.

I am aware of the arbitration clause being signed during the credit card application. However invoking of arbitration clause is based on certain event, if it happens. In credit cards typically the event is defaultor dispute in the payment.

Now please understand the fact:

Monthly statement raised on 10th of month P for Rs. X with due date of 25th of month P. The entire payment for amount of Rs. X were made on 15th of month P i.e. well within the prescribed due date.

An email with the payment details were sent through email on 16th of month P, requsting the bank to close the credit card account with immediate efect.

A new monthly Statement is generated in month Q, confirming the payment of Rs. X made on 15th P. the total outstanding mentioned in the credit card is Rs. Y in CREDIT hence the minimum payment and total payment due mentioned in the statement is NIL.

Now an e-mail from the bank in the month of Q confirms " Thank you for making all the outstanding payments. We have already honoured your request to close your credit card account." 

No further statements were generated as the card account is already closed.

Now in the month of R the bank sends legal notice for the payment of Rs. X and then sends an Arbitration notice again on the grounds of Rs. X. So as mentioned above the payment of Rs. X is already made well in advance and 2.5 months prior to the date of this arbitration notice.

So when there is no amount payble to credit card company, no dispute over any payments, no default of even a penny, such arbitration notice has no grounds.

Whether bank is fool or not is not something what I want to prove. I want to prove that there is no grounds for invoking arbitration clause and that the arbitrattion notice should be withdrawn. To justify my stand on withdrawal of this arbitration notice, I have submitted all the evidences and documents. This may not be stage for reply to arbitrator, however I dont wish to attend such baseless and groundless arbitration proceedings. And hence as my duty I have provided the arbitrator with sufficient grounds to quash this arbitration proceeding.

 

Now after all such clarity, if the arbitrator would like to continue with arbitration proceedings, I will welcome the decision of Arbitrator even if the award passed is agianst me.

And yes I am ready to run to file a criminal extortion case against the bank and offcourse Arbitrator. If Arbitrator being a neutral person (Which he is not based on all the findings and evidences I have collected) doesnot apply his mind and favours bank because of his commercial interest, he should be ready for his appearance as well in the criminal proceedings.

This is not arrogance or any direspect either for bank or for arbitrator, however I can fight till my death for such harrassment and has sufficient resources for that.

will update this forum on the happenings.

Thank you & best regards,

Awadhesh

 

Saurendra Rautray (advocate)     11 December 2015

Hi,

I agree with the Ld Advocate P.Bash*ta. Right or wrongly the arbitral has been formed and that too as per the agreement and i am sure they being Bank they must be the appointing authority and has appointed an arbitrator accordingly. The Tribunal hall follow a procedure of filing of claim petition with a reply and there on. The letter so filed by you is ok but the timing is wrong. You need to file the same at the appropriate time and i opine that you should participate and put forth a counter claim for harrasment,defamationa and the cost incurred.Other wise as P Bash*ta said you might and possibilties are high you would if you dont participate in the proceeding.

Regards

Saurendra Rautray

Rautray&Co

www.rautray.com

09437008255

Kumar Doab (FIN)     11 December 2015

If your naration in your last post is based on facts and is precisely correct then the bank should have withdrawn the notice and begged apology.

 

You may go thru RBI 'Master Circular on Credit Card Operations' carefully.

You may send the final communication/notice to MD/CEO, local BM of the bank and demand to withdraw  notice begging apology and offering to compensate you to your satisfaction within say next 3 days..

YOu may at once lodge complaint with Governor RBI:

CGM-Customer Services

Vigilance

Police station/Commissioner of Police : Anti Fraud cell

DCDRF

 

and expose the bank and is deeds to the institution of print and electronic media, NGO's,Social-public-legal portals,courts of law etc

 

Tame and shame them.

 

 


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