HDFC Bank can recover dues from savings account if a customer fails to pay. Representational Image

HDFC Bank can recover credit card dues of its customers by withdrawing from their savings account. The bank doesn’t even need to inform the customer regarding the withdrawal, according to an order of the National Consumer Disputed Redressal Commission (NCDRC), New Delhi. The terms and conditions of HDFC Bank credit card mentions: “The bank, at any time and without notice, will have lien and right to set-off on all monies belonging to the Cardmember and/or add on Cardmember standing to their credit in any account/custody of the bank, if upon demand by the bank, the balance amount on the card account is not repaid within the prescribed time.” This was also held valid in an order of the National Commission in HDFC Bank vs Anish Munjal on January 23, 2019. Here are details of the case and what the Commission said:

HDFC Bank vs Anish Munjal: The case

Anish Munjal had a savings bank account with Centurian Bank of Punjab, which was taken over by the HDFC Bank in May 2008. Munjal had obtained a credit card from HDFC Bank, which deducted Rs 53,043.68 from the balance in his savings bank account against his credit card dues. Aggrieved with the deduction, Munjal approached the District Forum, which ruled in his favour. However, the bank had claimed that “the credit card dues having not been paid, they were justified in deducting the same from the saving bank account of the respondent.” This claim was dismissed by the District Forum. The bank then appealed against the District Forum before the State Commission, which also ruled in favour of the customer. HDFC Bank finally approached the NCDRC.

What Munjal said in his complaint

Munjal specifically stated in his complaint that he had taken credit card from HDFC Bank. The card was last used in December 2005 and as per the demand of the bank, he had paid the amount and got the said card cancelled.

The bank, however, said that the total amount of dues against Munjal in his credit card statement dated 5.12.2004 was Rs.9979.85, including the finance charges levied by the bank. The dues kept on increasing on account of addition of late fee, over-limit fee and finance charges, though no fresh purchase was made by Munjal. The bank claimed that he made purchases and made several part payments over a period of this. The bank’s counsel told the National Commission,”However, he (Munjal) having not made full payment of the credit card dues, the finance charges and late fee etc. continued to be added to his credit card account and as a consequence, the said dues increased to Rs.53,043.68, till the date the said dues were deducted from his saving bank account.”

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What NCDRC said

The NCDRC noted that that Clause-6 of the terms and conditions, on which the credit card was issued, allowed the bank to set-off dues of the cardmember from his savings account with the bank without any notice. The commission, hence, set aside previous orders against the bank. It said, “In view of the aforesaid clause, the petitioner bank was entitled to set off the credit card dues at any point of time, without any notice to the complainant. Therefore, deduction of the amount of Rs.53,043.68 from the saving bank account of the complainant was in consonance with the above referred condition stipulated by the bank, while issuing the credit card to the complainant/respondent.”