Consumer Law: HSBC Fined for Deficiency in Service

Consumer law aims to protect consumer rights and interests. In a recent case, the message was loud and clear as the National Consumer Commission passed an order, asking the HSBC Bank to pay compensation of Rs. 1 lakh to an NRI couple. The bank had sanctioned a home loan to them but had failed to disburse the amount. The appeal was made by the HSBC bank against the decision of Chandigarh State Consumer Commission (as per consumer law) which had ruled in favour of the NRI couple.

Consumer Law: HSBC Bank Promised to Transfer Previous Loan and Defaulted in Service Delivery

A consumer law case is not easy to win and the story of this couple begins in 2004 when the NRI couple, Sridhar Gajula and Manjeet Kaur Gajula, got their flat allotment after taking a loan from ICICI Home Finance Company Limited. In 2006, the HSBC bank offered to get their previous loan transferred and sanctioned them a loan of Rs. 40 lakh. However, despite the sanction of the loan, the HSBC bank failed to disburse it. Naturally, the couple were worried and anxious and made repeated requests to the bank for its release.

When the couple realized the risk of losing their flat if there is any further delay in payment, they had to pay an amount as penalty to the builder (M/S Omaxe Limited). This was part of their agreement and they paid it from their own pocket. You can imagine the tension, anxiety and extreme mental agony this must have caused them, in addition to heavy monetary loss.

Consumer Law: HSBC Bank Defaulted despite Getting all Documents from the Couple

The commission, comprising Members, B. N. P. Singh and S. K. Naik, after hearing the case, stated this as a clear deficiency of service on the part of  the HSBC bank, and imposed another Rs. 5000 on the bank. The Commission also pointed out that the bank defaulted despite taking over the loan from the ICICI Home Finance Company Limited, and getting all the requisite documents and security.

The Commission rejects the bank’s argument that they refused the top-up loan because the complainants failed to provide certain documents. The Commission says that the requirements were already fulfilled by the couple, since the loan was only transferred to HSBC from ICICI Home Finance Company Limited.