Compensation For Mental Pain And Agony Cannot Be Separate From Deficiency In Service: NCDRC

Brief Facts of the Case

The complainant had an American Express credit card with a limit of Rs. 3.20,000 from Standard Chartered Bank. The bank reduced this limit to Rs. 2,48,000 due to a poor CIBIL rating, which showed an outstanding amount of Rs. 1,74,644 instead of the actual Rs. 5640. The issue was not resolved despite having paid the correct amount and providing proof to the bank, affecting the complainant's CIBIL score. The complainant lodged electronic complaints and approached the Banking Ombudsman. The bank initially denied receiving the payment but later accepted it after verification. The Banking Ombudsman confirmed the complainant's claim and closed the complaint. Due to the bank's errors and lack of response, the complainant suffered mental distress and filed a complaint, which was dismissed by the District Forum. The complainant then appealed to the State Commission, which allowed the appeal and directed the bank to pay Rs. 2 lakhs for deficient service and Rs. 50,000 for mental pain and agony. Consequently, the bank approached the National Commission with a revision petition against the State Commission's order.

Contentions of the Bank

The bank argued that they did not receive the due payment of Rs. 5347.39 towards the credit card as claimed by the complainant. As a result, an outstanding amount was reflected in the complainant's credit card, and his record was updated with CIBIL accordingly. The complainant had sent a cheque for Rs. 5640.81 to the bank, which was cleared, but his CIBIL score was still affected because the bank showed an outstanding amount of Rs. 1,77,644.

Observations by the Commission

The Commission observed that the State Commission had issued a well-reasoned order, and there was no basis to interfere with its findings. It was established that the outstanding amounts were wrongly shown in the complainant's credit card account, negatively affecting his CIBIL score. The bank eventually reversed all the incorrect entries for interest and settled the credit card account. Hence, the Commission upheld the State Commission's finding of deficiency in service by the bank. However, the State Commission had awarded compensation under multiple heads: Rs. 2 lakhs for deficient service and Rs. 50,000 for mental pain and agony. Based on the observations of the Supreme Court in DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda., the Commission decided that compensation under multiple heads for the same deficiency in service is not permissible. Mental pain and agony are considered a result of the deficiency in service. Therefore, the Commission modified the order of the State Commission regarding compensation.

The commission directed the bank to pay Rs. 2 lakhs to the complainant for deficiency in service, mental pain and agony, and litigation costs of Rs. 10,000.

Case Title: Standard Chartered Bank Vs. Dr. Vinod Kumar Bhalla

Case Number: R. P. No. 2388/2019