Saturday, November 30, 2013

Is it Direct Benefit Transfer for LPG cylinder in tune to what is being projected to the Public or is to befool them?

Is it Direct Benefit Transfer for LPG cylinder in tune to what is being projected to the Public or is to befool them?
Direct Benefit Transfer for LPG

Ministry of Petroleum and Natural Gas, Govt. of India brought out a scheme of Direct Benefit Transfer for LPG cylinders which is being reproduced what is stated on their web-site

"Direct Benefit Transfer for LPG consumer (DBTL) is the scheme aimed to improve the subsidy administration of LPG across the country. As per this scheme an LPG consumer will get his/her cylinder at full market price and the differential between subsidized price and full market price i.e. the subsidy will be transferred to his/her bank account upto a capped limit(9 cylinders in a year) "

As in the past Govt. was selling the LPG cylinders under subsidised scheme which later on was withdrawn and stated that Govt. would refund the extra charge paid by consumers for 9 cylinders. Hence the subsidy which earlier was being incurred for unlimited purchase of LPG cylinders was brought to limited numbers of cylinders. 
The plain reading of the scheme as above would be that the Government would pay the extra amount paid by the consumers in buying non-subsidised cylinders for purchase of 9 cylinders in a year. It is being examplified as if:

1. Cost of subsidised cylinder                  : Rs. X
2. Cost of non-subsidised cylinder           : Rs. Y
3. Amount refundable to the consumer    : Rs. (X-Y)

In fact the practice in actual is not what is visible above. It can be substantiated by taking an example of a consumer from the state of Haryana more particularly Faridabad as:

1. Cost of LPG cylinder (as per purchase bill on 13/09/2013)        : Rs. 412.00
2. Cost of LPG cylinder (as per purchase bill on 26/11/2013)        : Rs. 944.00           
3. Differential price that should have been refunded under DBT    : Rs. 532.00
4. Actual amount refunded thru DBT scheme                                  : Rs. 435.00

As one can make out from the above that an amount of Rs. 99.00 (Difference of 3 and 4 above) is less credited to the consumer. This also implies that the consumer has paid a price of Rs. 511.00 in place of Rs. 412.00. Now the question is where this Rs. 99.00 has gone and is a subject matter of seeking information under RTI Act 2005. However, looking at the way the information are being supplied and responded by PIOs/ Appellate Authorities, it looks that RTI Act 2005 is also getting jeopardised. Another question would be is it improving the subsidy administration of LPG across the country as objectively laid down?

Monday, November 25, 2013

Surveyor’s Report on the assessment of loss is not the final and deduction on account of Excess Clause is not valid if the policy holder has not been supplied policy terms and conditions.

Surveyor’s Report on the assessment of loss is not the final and deduction on account of Excess Clause is not valid if the policy holder has not been supplied policy terms and conditions.

National Consumer Disputes Redressal Commission in the judgement passed in a case of Uni Ply Industries vs. New India Assurance Co. Ltd. on 16th July 2013 upheld the findings of State Commission.The Insurance Company had filed the revision petition No. 342 of 2013 (against the concurrent finding of both the District Consumer Forum and State Commission holding the insurance company liable for deficiency in service in terms of the impugned order passed on 10.10.2012 by the State Consumer Disputes Redressal Commission, Haryana, Panchkula in FA No.441/2008.  By its order, the State Commission dismissed the appeal of the petitioner Co. and upheld the order dated 3.1.2008 passed by the District Forum, Yamuna Nagar in consumer complaint No.1115 of 2007. The District Forum had allowed the complaint of the respondent / complainant by granting the following reliefs:-
Resultantly we allow the complaint of the complainant and direct the respondent to pay the balance amount of Rs.10,86,592/- along with interest at the rate of 12% per annum after three months of the causing of fire till realization and to pay Rs.11,000/- as litigation expense. Order be complied within one month.”
The insured complainant had insured stock of its factory for a sum of Rs.30 lakhs vide cover note valid from 10.4.2005 to 9.4.2006 issued by the insurer Co. The insurance cover was renewed for next year also by the respondents and was valid upto 9.4.2007. According to the complainant, the Insurance Co. issued one page cover note only of the said policy and never issued the terms and conditions with this policy to the complainant. During the period of insurance policy, a fire broke out in factory premises resulting into huge loss of stock. The Insurer Company appointed surveyor for assessing the loss. While the complainant lodged a claim with the petitioner Co. for Rs.19,46,800/- along with necessary documents for settling the claim, theInsurer Company informed the complainant about the settlement of the claim at Rs.8,60,208/- for which a cheque dated 1.12.2006 was issued by the Insurer to the complainant after making certain deductions from the sum of Rs.10,86,592/-  which had been assessed as loss by the surveyor. The complainant while acknowledging receipt of the cheque signed the discharge voucher indicating it to be only a partial settlement and thereafter the respondent continued to represent against the deduction made from the sum of Rs.10,86,592/-. Since the differential amount which had been deducted from the figure of loss assessed by the surveyor was not allowed by the Insurer, the complainant filed a consumer complaint alleging it a case of deficiency in service on the part of the Insurer Company. The Insurer Company stated payment of  Rs.8,60,208/- as full and final settlement and nothing remained due to the complainant by the Insurer and further submitted that the claim was settled as per the report of an IRDA approved independent surveyor and loss assessor who had arrived at a net loss figure of Rs.8,60,208/ subject to terms and conditions as well as limitations and exceptions provided in the insurance policy. Since certain amount was deducted as per excess clause and the net amount had been disbursed as per full and final settlement, the Insurer Company denied any kind of deficiency in service on its part.
The Insurer Company contended that the surveyor is the best person to assess and ascertaining the loss and its recommendations should have been accepted as provided in the Insurance Act.  Another contention raised in the Revision Petition was that the payment made by the insurance co. was by way of full and final settlement of the claim lodged by the complainant and since he accepted the amount sent by cheque and signed the discharge voucher, the complainant is not entitled for any further relief. The Insurance Company prayed for setting aside of the impugned order and acceptance of the revision petition.
National Commission perused the reports of the surveyors as well as the orders of the District Consumer Forum and State Commission. The National Commission found that the submission of the Insurer regarding settlement of claim by way of full and final settlement is not correct since the complainant had accepted the cheque of Rs.8,60,208/- as partial relief and that too under protest. Besides this, it is settled law that surveyor’s report cannot be treated as last word and a gospel truth. The District Forum after considering the report has given its cogent reasons to disagree with the final figure of loss while giving the desired relief to the complainant. The State Commission has agreed with the finding. The State Commission while dismissing the appeal of the petitioner has made the following observations in its impugned order:-
After gone through the file as well as arguments of counsel for both the parties, we are of the considered view that it is admitted fact the factory of the complainant namely Unit Ply Factor was insured with the OP for amounting to Rs.30,00,000/- and the said factory was enjoying CC limit against the stock statement with Oriental Bank of Commerce, Yamuna Nagar. It is also admitted that on intervening night of 5/6.4.2006 the fire broke out in the said factory and intimation in this regard was given to the OP and the complainant also lodged DDR with the police. It is also admitted that on intimation the OP appointed two surveyors, one for spot survey and second for conduct the final survey. It reveals from the final survey report that maximum quantity of insured stock of material was burnt and mixed up beyond recognition and it was not possible to prepare inventory of the damage stock. The surveyor after inspect the stock statement which are issued by the bank, the surveyor observed that on an average the insured is having stock worth Rs.29 lacs comprising of finishing raw material and made clear that the statement of account dated 31.3.2006 is shown the stock of Rs.29,29,067/- vide which this is clear that after deducting the said stock which was not damaged the insured suffered a loss to the tune of Rs.19,46,800/- lying in the factory premises due to fire. The surveyor after using the excess clause deduct the 20% as is clear from the surveyor report. But in our view if the ambiguity in terms and surveyor apply the excess clause of the policy which were not supplied the OP cannot claim benefit of the said clause. Moreover, the full and final settlement was not matured because the complainant accepted the amount under protest and endorsement to this effect was made on the voucher that it is part payment. Thus, deficiency in service on the part of appellant/opposite party stands proved. District Consumer Forum after considering each and every aspect of the case, rightly allowed the complaint of complainant.”
The National Commission while dismissing the revision petition of the Insurance Company stated it can interfere with the orders of the Fora below if they have exceeded their jurisdiction under law or failed to exercise their jurisdiction or have acted in exercise of its jurisdiction with illegality or material irregularity. National Commission found that both the District Consumer Forum and State Commission and further found that State Commission has based its finding on analysis of the evidence produced

Saturday, October 12, 2013

The accounts with Bank are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder.

Rs. 15 Lakhs damages imposed on Bank for Leakage of bank account information

Citi Bank has been ordered by State Commission, Delhi to pay Rs. 15,00,000/- to the customer as damages for leaking his bank account information. The complainant has complained that his statement of account has been un-authorisedly and illegally leaked by the bank officials by supplying copies of the statements to a third party which his opposite party produced in the civil court at Delhi in a private dispute pending against him.
The Bank maintained that statements in question filed by the complainant are on a plain paper while the bank usually furnishes such statement of accounts on their official stationary.
                Commission observed that in any case, the copies of account of the complainant were produced before the Civil Court; such accounts are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder. The availability of said account to the third party, which subscribed it in the Civil Court, is therefore a flagrant violation of confidential relationship between a bank and a customer and is a betrayal of trust.
                Commission after taking all factors into consideration fixed the amount of Rs. 15,00,000/- as compensation to be paid to complainant.


(Constituted under Section 9 of The Consumer Protection Act, 1986)

Date of Decision: 10.09.2012
Complaint Case No.2009/144

Sh. Amit Mittal,                       … Complainant
R/O BD-57, Vishaka,                     through Mr. Rajesh Kaushik
Enclave, Pitam Pura                       advocate.
New Delhi

1.   Mr. Hemant Kumar             ….Opposite Parties
      Branch Manager,                     through Ms. Amrita Singh,
      Citi Bank N.A.                         advocate.
      27, Central Market,
      Sector-II, Western
      Avenue Road,
      Punjabi Bagh,
      New Delhi.

2.   Mr. N. Rajashekaran,
      All Business Head-India,
      Citi Bank N.A.
      Citi Centre, 1st Floor,
      C-61, Bandra Kurla,
      Complex, Bandra (East)

        Justice Barkat Ali Zaidi       ...   President
        Ms. Salma Noor,                 …   Member

1.          Whether reporters of local newspapers be allowed to see the judgment?                                             YES
2.          To be referred to the Reporter or not?                                                      YES

Justice Barkat Ali Zaidi, President

1.                          Facts of the case as alleged by the complainant are that the complainant who is a Citigold customer holding three citi bank gold credit cards, including credit card (account) No.4385-8791-0057-4015, issued by Citi Bank, N.A. Punjabi Bagh, New Delhi, the statement of which relating to the period of November 2003 to January 2009, , has been unauthorisedly and illegally leaked by the bank officials by supplying copies of the aforesaid account to a third party, which his opposite party produced in the civil court at Delhi in a private dispute pending against him. His case is “Code of Bank’s Commitments to Customers” provides that all personal information of the clients, should be kept as private and confidential. His credit card account therefore should not have been revealed to anyone. The guidelines issued by the Reserve Bank of India prescribe that no information of a credit card customer can be supplied to any third party, barring some exceptional circumstances, which did not exist here. His case is that the complainant in this regard wrote several letters to various authorities of Punjabi Bagh branch of Citi Bank and to the Business Head of the country and other responsible officers of the OP but the response sent by them failed to satisfactorily explain the leakage of supplying the copies his statement of account of the credit card to the third party, and why and how the confidential information was leaked from the Bank, in this manner.
2.                          The OP Bank has been thus extremely negligent in protecting his confidential information with regard to his credit card statement, causing him immense prejudice, causing mental stress, trauma and distress and increasing his financial liability. He has therefore come up with a complaint before this Commission with a claim of Rs.30,00,000/- as compensation against the two OPs i.e. Sh. Hemant Kumar, Branch Manager, Citi Bank, N.A. Punjabi Bagh and Sh. N. Rajashekaran, All Business Head-India.
3.                          OPs have opposed the claim by filing their separate written statements, on similar lines alleging therein that the two individuals have not rendered any service to the complainant in their individual capacity. The complaint is therefore liable to be dismissed for misjoinder and non-joinder of necessary parties. The complaint involves complex question of facts, which require oral and documentary evidence, the dispute should therefore go to the Civil Court. Their averment is that the complainant has not disclosed any of the particulars of the third person to whim the Bank is being accused of having leaked the complainant’s statement of account and, whose presence is necessary for proper and effective adjudication of the complaint. Their further averment is that the copy of statement of account filed by the complainant in the complaint is on plain paper-sheet, while the statement of account, which the Bank provides are on the official stationary of the Bank. They have averred that the enquiry made by the Bank revealed that no copies of account/information, has been given from the Bank to anyone, and thus no cause of action therefore arises against them. They have pleaded that the complainant in connection of his three credit cards is also having Add On cards, and Add On card holder in this might have obtained this information. OPs denied any deficiency in service or negligence on their part and have prayed for dismissal of the complaint with exemplary costs.
4.                          The complainant in his rejoinder reiterated his averments made in the complaint, pleading that the OP No.1 being the Branch Manager of the Citi Bank Branch which maintains his account and other all Business Head of the country are responsible for the breach and liable to pay him compensation.
5.                          In support of his case, and in his evidence the complainant filed his own affidavit annexing copy of statement of account in question and various communications between him and the Bank. As against it in his evidence Special Power of Attorney Sh. Jagdish Salwan, of the OPs has filed his affidavit for OP No.2, while OP No.1 has given no evidence in his support.
6.                          We have heard Sh. Rajesh Kaushik, counsel for the complainant and Ms. Amrita Singh, counsel for the OPs.
7.                          An application under section 26 of The Consumer Protection Act 1986, filed by OP No.2 pending the complaint is also being disposed off alongwith this complaint, vide this order, for the reason that the question raised in the application, is involved in the main case itself, and the matter raised hereunder and could be decided at the time of final hearing and cannot and could not be decided as a preliminary issue.
8.                          It may be mentioned at the outset, that it is not disputed that the Citigold card allotment of the complainant is wrong or false. The only thing said in this connection from the side of the OPs is that the copies of statement in question filed by the complainant are on a plain paper, while the Bank usually furnishes such statement of accounts on of their official stationary. It will thus appear that in any case, the copies account of the complainant were produced before the Civil Court, such accounts are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder. There are specific guidelines of the Reserve Bank of India in this regard which fact is not disputed. The availability of said account to third party, which subscribed it in the civil court, is therefore a flagrant violation of confidential relationship between a Bank and a customer(consumer), and is a betrayal of trust which not only calls for an alarm and dismay, but also for adequate financial compensation.
9.                          It was contended from the side of the OPs that the complainant has not furnished, before the Commission, the particulars of civil court case, in which the accounts were filed, that hardly makes any difference, so long it is not disputed that no such accounts were filed. Because case of the OP is that, accounts were filed on plain paper whatever the case may have been, the leakage of the account and the presentation thereof, before the civil court, is a matter of concern and a violation of confidentiality!
10.                       One of the contentions of the OPs is that they have made enquiries and that the accounts were not furnished by the Bank as mentioned above. It is not disputed that the accounts were false or incorrect. The fact that they found their way in the civil court case, clearly indicates, that they were leaked from the Bank. It is for the Bank and the OP No.1 to find out as to how the documents got leaked. It is not sufficient for the OPs to mention that they did not furnish those documents. The relationship between the Bank and the customer implied absolute liability, and it is for the OPs and their Bank to explain any circumstances which absolves them of liability.
11.                       One of the contention from the OPs is that the question involves are complicated questions of law and facts, and require evidence, and the matter should go to the civil court. This contention cannot be justified, because the simple question here, is of, violation of confidence between the Bank and customer, in furnishing confidential accounts.
12.                       It was also argued that the Bank has not been a party to the proceedings and the OPs cannot be made individually liable for the default. It cannot be said in the circumstances of the case that the Bank was a necessary party, the non-joinder whereof was crucial and fatal, because, it is not one of the functions of the Bank to furnish confidential accounts to third parties. It is not within the framework of the official work of the Bank, for any employee, to furnish confidential account of customer to third party. This is an unlawful activity. It is not part of the routine functioning of the Bank. The person who is responsible for such leakage, is therefore primarily responsible, for the loss and damage suffered by the consumer.
13.                       It has also been pointed out by OPs that complainant has an Add On cardholder, who can also obtain information of his accounts and as such there is a possibility that the Add On Cardholder of the card in question might have obtained the information of the accounts. It has to be seen in this connection that the contention from the OPs is that they do not know, how the accounts were smuggled and laid before the Court? If the Add On cardholder had obtained the accounts his application could have been available, and there would have been a record of information being supplied to him. The case of the complainant is that how the information was leaked out? It was also contended by the counsel for the OPs that there is lack of bonafides on the part of the complainant which should disentitle for any relief from the Court, in as much, as he has been dishonest to his adversary in civil court proceedings, by trying to conceal his accounts. We do not know, what are the circumstances, and whether the complainant means are fair in trying to withhold information about his account, and merely because, the complainant does not want his accounts to be presented before courts, it cannot be inferred to his being dishonest and unfair, to his adversary, so as to disentitle him, from any relief from the Court.
14.                       As regards the fixation of liability it has to be noticed that OP No.1 Sh. Hemant Kumar, the Branch Manager is the person responsible for the functioning of the Branch, and he has to owe responsibility for all matters relating to the Branch. The OP no.1 who is the Branch Manager has therefore to be held responsible for the leakage. However, as and when any enquiry is held and any specific employee is found responsible for the leakage, the, OP No.1 Branch Manager will have the option, of recovering the amount from him.
15.                       As regards the OP No.2, Sri S. Rajashekharan it will be seen that he is the Head of Business of the Citi Bank branches for the whole of India. His relation with the incident is therefore too remote, to invite liability, for any such mischief or negligence.
16.                       OP No.1 Branch Manager has therefore to be made liable for payment of compensation.
17.                       As regard the quantum of compensation, it must be realized that in cases of this nature, the amount of compensation has to include element of fine, and while fixing the amount, it has to be borned in mind, that the amount should be such, so as to deter other financial organizations from any such performance, and to be more vigilant and watchful. All these considerations must join in determining the amount of compensation. In the end, it must however, be said, that despite all consideration the amount has, as of necessity, to be somewhat arbitrary in character. Taking all factors into consideration we will fix the amount of Rs.15,00,000/- (Rs. Fifteen Lac).
18.                       The OP No.1 Sh. Hemant Kumar, Branch Manager, Citi Bank, N.A., Punjabi Bagh, New Delhi will pay Rs.15,00,000/- (Rs. Fifteen Lac) as compensation to the complainant while OP No.2 is discharged from any liability on this score.  The amount so fixed will be paid within sixty days of the receipt of the order.
19.                        A copy of this order be provided to the parties, free of costs, and thereafter the file be consigned thereafter to Record room. 
                   Announced on 10th day of September 2012.

 (Justice Barkat Ali Zaidi)

(Salma Noor)