In the case of Anil Milkhiram Goyel v. Hongkong and Shanghai Banking Corporation Limited a complaint was made against the opposing party, HSBC, with the main goal of getting HSBC found to be inadequate in delivering banking and related services, guilty of gross negligence, and obligated to pay the complainants Rs 3.55 crores in damages.
According to the current lawsuit, the complainants kept a joint savings account with HSBC for more than 15 years before it was forcibly closed. The complainants used HSBC lending options connected to their savings accounts. They were purportedly closed as settled in 2009 after making the outstanding payments indicated in the loan accounts, as certified by HSBC, and all completed documentation and checks for the same were annulled. The complainants were advised that there was an overdue balance of Rs 92,210 and Rs 90,301 in the two loan accounts connected to the savings account after they failed to withdraw money from the specified account using an ATM. With a scanned copy of the closure notice and other pertinent papers attached, the complainants were urged to remedy the problem of limiting the functioning of the mentioned savings account through email. Later, both checks dated 30 October 2015 were returned as dishonoured by HSBC even though there was adequate money in the aforementioned savings account, putting the complainants inadvertently at risk of legal trouble, criminal accusations, and public humiliation.
The HSBC executives said that the complainants’ KYC papers had not been updated by them in accordance with RBI requirements, which had last been revised in 2012. They also claimed that they had not been provided despite the bank’s six-month follow-up. Consequently, the bank temporarily prohibited debit transactions on the aforementioned account.
Analysis of Commission order
Dr. Inder Jit Singh, the NCDRC’s presiding member, ordered HSBC to unfreeze the complainants’ savings account and pay a compensation of Rs. 15 lakhs plus Rs. 1 lakh in court costs.
The Commission emphasised that nothing in the records indicated that the complainants were “high-risk customers” who needed to have their KYC updated every two years in accordance with RBI rules. Further, it was noted that HSBC representatives originally stated that KYC was updated as of May 30, 2015, but afterwards claimed that it was done for one of the complainants. The records, meanwhile, plainly demonstrate that both loan accounts were resolved and closed in 2009 and 2010. The Commission determined that HSBC’s conduct of blocking the complainants’ joint account due to a KYC update was inappropriate and had a negative impact on the complainants’ image, putting them at risk of facing criminal charges for check dishonour.
According to the Commission, justice cannot be served when certain factual issues need to be addressed or resolved since summary trials are permitted. The Commission declare to pay the compensation requested and deemed it improper for HSBC to maintain the frozen account in light of the fact that both loan accounts had been resolved and KYC papers had been submitted. The Commission ordered HSBC to produce a No Dues Certificate, de-freeze the complainants’ savings account, stop demanding any additional money when closing any of the two loan accounts, and reflect the complainants’ CIBIL in accordance with regulations. Additionally, HSBC was ordered to pay the complainants Rs 15 lakhs in damages and Rs 1 lakh in legal fees.