How to fight your bank in a court of law

Nayana Buch, a Mumbai-based advocate, used an HSBC credit card to pay Rs.30,559 for car repair at a fuel station in 2009. The London-based bank added Rs.858.70 as fuel surcharge in the bill. Buch questioned this as the transaction was not for purchase of fuel. She, however, paid the bill and requested the bank to refund the excess or adjust the amount in the next bill. The bank maintained that fuel surcharge was applicable to all transactions done at a fuel station regardless of whether it is to buy fuel or otherwise. Buch sent a legal notice to the bank’s nodal officer. To her dismay, HSBC said that the disputed amount had not been paid and demanded penal charges of Rs.4,848.80 for the failure to pay the surcharge of Rs.858.70. Buch filed a complaint with the district consumer forum in Mumbai. The forum, in 2012, indicted the bank for suppression of material facts and engaging in unfair trade practice and ordered it to pay a certain amount as compensation. HSBC didn’t offer any comment about the incident. In an another case, Mumbai-based Hutoxi Tata had an account with Standard Chartered Bank which provided overdraft facility on shares. In April 2000, the lender debited Rs.1,35,525 from her account, without informing her. The story started in June 1998 when she had instructed the UK-based lender to sell 100 shares, and the sale proceeds were credited to her account. When an application for share transfer is made by a bank on behalf of its customer, it has to be accompanied by two power of attorney (PoA)—one from the customer in favour of the bank and the other from the bank empowering a particular officer to sign on its behalf. In Tata’s case, the bank failed to lodge one of the PoAs and the transfer application was rejected. Meanwhile, the buyer approached the stock exchange for auction of shares. By then the share prices increased. The auction amount was recovered from the bank. The bank in turn debited the auction money from Tata’s account. She was also charged penal interest at 18.9% compounded on a daily basis. Tata filed a complaint before the district consumer forum. After a long drawn legal battle, in 2014, Standard Chartered was ordered to give a refund to Tata. The bank declined to comment. Like Buch or Tata, if you have not been able to get relief on your valid complaints from your bank or banking ombudsman, then the next option is taking the lender to court.

The basic steps while gearing up to fight it out against a bank in a court.

Approaching a court

Consumers have the right to fight it out in court if there is any dispute. “You should approach a court after you have raised the matter with your bank and with the ombudsman. In case you don’t make a grievance with the bank, your case may not be entertained as it may be considered as premature,” said Harsh Pathak, a Delhi-based lawyer who works on cases related to banking and consumer rights.

There is a hierarchy in place when you approach a consumer court depending on the financial damage in dispute. For instance, if you are fighting a case for a financial damage of up to Rs.20 lakh, you can file a complaint before the district consumer disputes redressal forum. If it is above Rs.20 lakh but below Rs.1 crore, then you will have to take it to the state consumer disputes redressal commission. If it is above Rs.1 crore, you need to approach the National Consumer Disputes Redressal Commission. “You have the right to bypass the internal redressal mechanism and complaint to consumer forum,” said Jehangir Gai, a Mumbai-based consumer activist.

Documents, jurisdiction

If you decide to approach a court, it is important to build evidence against the bank. Always save bills, receipts or any document as a proof. If you have raised the matter with the bank, keep the documents. If you have approached the ombudsman, keep a copy of the complaint. Once you decide to approach a court and have the documents in place, next is to file the case in the right jurisdiction. “Usually, you have to file the case where the home branch or the bank headquarters is depending on the agreement between you and your bank,” said Gai.

How to file a complaint

Your complaint should be brief, clear and precise. If you have hired a lawyer, she will take care of the writing. But if you don’t have a lawyer and want to fight the case on your own, keep in mind that the format is subjective. “The complaint must mention the names of the parties, details of the transactions, nature of the dispute, and the relief being sought. The pages have to be numbered, and filed along with an index. An affidavit, and supporting documents, should be attached,” said Gai. Three copies should be filed and one should be set aside for the party against whom the complaint is filed. One identical set should be kept with the complainant to argue the case. “If you don’t have a lawyer and are unable to write a complaint yourself, you can approach legal aid cell in the court premises,” said Pathak

Costs and time frame

Fighting a case in court may take time, and also money. You need to be persistent and determined. “The time taken to get a verdict on a case depends on the complexities of the case,” said Pathak. Some cases get resolved within six months while some go on for years. Besides time, court cases come with costs attached. Complaint fee for filing a case for a financial damage is limited to Rs.100-9,000 depending up on the damage you are seeking. Also, you will have to pay a lawyer if you are hiring one. But you can claim cost of your complaint.