Banks cannot enter into unfair trade practices: DSCDRC

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New Delhi, Jan 17 (UNI) The Delhi State Consumer Disputes Redressal Commission (DSCDRC) has categorically stated that the banks or any other financial institutions cannot enter into unfair trade practices of sending goons or making threatening calls to the consumer to recover their dues.

The State Commission has shown its concern over the manner in which lawyers are distorting facts to get the stay from the Delhi High Court on the orders passed by it which affects millions of consumers.

The Delhi High Court has recently stayed the State Consumer Court's order which had directed ICICI bank to pay punitive damages of Rs 50 lakhs to the consumer who were harassed by goons hired by the bank to extort some pending car instalments from the consumer and the bank failed to comply with the directions of the State Consumer Commission, paying Rs five lakhs to the consumer as damages.

DSCDRC president J D Kapoor said the Supreme Court and the National Consumer Redressal Commission have held that the financial institutions lending loans for cars etc cannot take law in their hands by taking possession of vehicles forcibly through goons and should enforce their legal right only through proper process of law.

Mr Kapoor said a multinational bank, ICICI had indulged in unfair trade practice of using musclemen and goons in seizing the vehicles forcibly for recovery of few instalments and the banks were forcing people to commit suicide.

The State Commission in its order dated November 2, 2007 had awarded compensation of Rs five lakhs to the complainant for mental agony, harassment and having suffered immensely for infliction of grievous injuries including those on the skull of son of a friend, who at the time of seizure of car was sitting inside the vehicle and remained admitted for 20 days or so in the hospital and as many as 17 stitches were administered on his skull and huge expenses were incurred in his treatment.

The State Commission further imposed Rs 50 lakhs as punitive damages on the bank for violating the orders of the commission.

Justice Kapoor said an impression was being given by the lawyers that State Commission is passing orders without any power or jurisdiction conferred upon it, under the Consumer Protection Act 1986, but it is not so, he added.

Mr Rajive Nayyar, lawyer for the ICICI bank had approached the Delhi High Court to stay the State Commissions order stating that under Section 27 of the Consumer Protection Act 1986, the State Commission does not have powers to grant 'Punitive Damges' beyond Rs 10,000.

However, the State commission says that under section 14(1)(d) and (f) of the act, it empowers the commission to impose punitive damages upto Rs one crore and has powers to give directions to all those who indulge in unfair trade practices to discontinue the same.

Justice Kapoor said the Punitive damages were not the same as penalties. Punitive damages do not involve element of sentence or imprisonment, fine or both. These damages were awarded when the circumstances of the case call for it, i.e the malafide, opressive or arbitrary, illegal conduct or act. Penalties were by way of punishment for non compliance or breach of the order passed by any court or judicial, quasi-judicial bodies.

He observed that in the past the commission has passed similar orders imposing punitive damages running into lakhs of rupees in number of cases against many banks, traders, service providers, public authorities like DDA, MCD, DJB and statutory authorities.

''This order will expose the lawyers who are misleading the High Court as to jurisdiction and powers of the State Commission in giving general directions to discontinue with the unfair trade practices or restrictive trade practices and also to remove defects and deficiency in services in question effecting lakhs of consumers,'' he added.

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