HSBC Bank Ordered to Pay ₹15 Lakh for Harassment in Cheque Dishonour Case
In a recent ruling, the National Consumer Disputes Redressal Commission (NCDRC) has directed HSBC Bank to compensate a man and his wife with ₹15 lakh for the mental agony and harassment they endured after their cheques were dishonoured, despite having sufficient balance in their bank account. The case of Anil Milkhiram Goyel and his wife against HSBC Limited shed light on the bank's freezing of their account due to an alleged outstanding loan amount of approximately ₹1,80,000, along with claims that their Know Your Customer (KYC) details were not updated.
Dr Inder Jit Singh, the Presiding Member of the Commission, noted that there was no evidence to support the bank's classification of the complainants as high-risk customers, which would require them to update their KYC details every two years according to Reserve Bank of India (RBI) guidelines. Furthermore, the Commission found that both loan accounts had been settled and closed back in 2009 and 2010.
According to Anil and Neelam Goyel, they encountered difficulties in November 2015 when attempting to withdraw money from an ATM. The transaction was declined, and upon contacting the bank, they were informed that their KYC details were not updated according to norms. Despite having already updated their KYC details in May 2015, they visited the bank's branch in Fort, Mumbai to do so again. There, they were informed about an outstanding amount related to the loans linked to their savings account.
Since the loan amounts had already been settled, the complainants decided to approach the NCDRC in 2016, alleging deficiency in service on the bank's part. They sought compensation of ₹3.55 crores for the ordeal they had faced. The bank admitted in its reply that the loan accounts had been settled but argued that the account was frozen due to Neelam's failure to provide updated KYC documents.
In response, the complainants stated that the bank had failed to demonstrate any unusual activity on their part. They argued that the bank's categorization of them as high-risk customers only added insult to the injury inflicted upon them, which they considered illegal.
The Commission examined the bank's communication dated November 26, 2015, where the bank initially acknowledged that the KYC details of the complainants were updated as of May 30, 2015. However, the bank later changed its stance, claiming that the update was only done for Anil and not for Neelam.
Consequently, the NCDRC concluded that the bank's decision to freeze the joint savings account was unwarranted. This action had not only affected the complainants but also exposed them to potential criminal charges due to the dishonouring of cheques, despite having sufficient funds in their account. The Commission deemed the bank negligent in this matter and found that its actions constituted a deficiency in service, warranting compensation for the complainants' unwarranted humiliation, embarrassment, and loss of reputation.
However, as the complainants did not provide documents to demonstrate the extent of their financial loss, the Commission declined to award the compensation amount they had claimed. Instead, it directed HSBC Bank to pay ₹15 lakh as compensation and ₹1 lakh for litigation expenses. The Commission also instructed the bank to unfreeze the complainants' account and refrain from demanding any further payments related to the settled loan accounts.
Advocates Pulkit Deora, Vidit Gupta, and Prachi Gupta represented the complainants, while Advocates Devmani Bansal and Shresth Sethi represented HSBC Bank in the case.
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TAGS: HSBC Bank National Consumer Disputes Redressal Commission (NCDRC) ₹15 lakh compensation cheques dishonoured sufficient balance account freezing outstanding loan amount Know Your Customer (KYC) details deficiency in service mental agony harassment Presiding Member Dr Inder Jit Singh RBI guidelines settled loan accounts ATM transaction declined Fort branch Mumbai unjustified freezing of account potential criminal action reputation impact unwarranted humiliation embarrassment loss of reputation negligent actions compensation litigation expenses account de-freezing settlement of loan accounts Pulkit Deora Vidit Gupta Prachi Gupta Devmani Bansal Shresth Sethi.
