Wrongful CIBIL Default Tag After Full Settlement Is Deficiency In Service, SBI Cards Liable: Chandigarh Consumer Commission
Pranav B Prem
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Amrinder Singh Sidhu, President, and Brij Mohan Sharma, Member, has held SBI Cards & Payment Services Pvt. Ltd. guilty of deficiency in service and unfair trade practice for continuing to report a consumer as a CIBIL defaulter despite acknowledgment of full and final settlement of credit card dues. The Commission held that once all outstanding dues are cleared and the creditor acknowledges the settlement, the account cannot be treated as a defaulted account, nor can the consumer’s credit record be adversely affected.
The complaint was filed by Sanjay Singla, who was issued a credit card by SBI Cards. In the year 2007, after certain purchases and recovery follow-up by the company’s agent, the complainant paid a sum of ₹18,000 as a full and final settlement. The payment was made on 28 January 2007 and was acknowledged by SBI Cards through a receipt endorsing “No Dues.” According to the complainant, this settlement fully cleared his liability under the credit card account.
Despite this, the complainant stated that from October 2020 onwards, he began receiving calls demanding a further amount of ₹11,652. On checking his credit report, he found that he had been shown as a defaulter in the CIBIL records. When he approached SBI Cards and produced the settlement receipt dated 28 January 2007, the company allegedly admitted its mistake and assured him that a No Dues Certificate would be issued and that the necessary information would be sent to CIBIL for correction of his credit record. However, according to the complainant, these assurances were not acted upon, forcing him to approach the Consumer Commission alleging deficiency in service and unfair trade practice.
During the proceedings, it also emerged that SBI Cards had sold and assigned the credit card account to Kotak Mahindra Bank in the year 2016 under a securitisation process. SBI Cards relied on this assignment to contend that responsibility no longer lay with it and further submitted that no demand had been raised by it after 2016. It was argued that the No Dues Certificate subsequently obtained from Kotak Mahindra Bank was issued only as a special measure to settle the matter, without admission of any liability on the part of SBI Cards. On these grounds, the opposite party denied any deficiency in service.
The Commission, after examining the material on record, noted that even the No Dues Certificate dated 2 September 2021, produced by SBI Cards itself, showed that Kotak Mahindra Bank had confirmed receipt of the full and final payment in respect of the complainant’s account. The Commission observed that this clearly established that the complainant had already cleared all outstanding dues. It further noted that the assignment of the account to another bank in 2016 was wholly unwarranted, as the account had already been settled in full as early as 2007.
Holding SBI Cards liable, the Commission observed that despite receiving the full and final settlement amount on 28 January 2007, the opposite party not only failed to issue a proper clearance certificate but also reported the complainant as a defaulter and transferred the settled account to another bank. The Commission held that such conduct, which compelled the complainant to engage in avoidable correspondence and caused harassment, “certainly amounts to deficiency in service and unfair trade practice.”
Accordingly, the consumer complaint was partly allowed. The Commission directed SBI Cards to immediately take necessary steps to remove the complainant’s name from the CIBIL defaulters list, if not already done, and to pay ₹20,000 to the complainant towards compensation for harassment and mental agony, including litigation expenses. The order was directed to be complied with within 45 days from the receipt of its certified copy.
Cause Title: Sanjay Singla v. SBI Cards & Payment Services Pvt. Ltd.
Case No.: CC/139/2021
Coram: Amrinder Singh Sidhu, President, and Brij Mohan Sharma, Member
