LexHONGKONG AND SHANGHAI BANKING CORP. LTD. versus AWAZ & ORS.
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[2024] 12 S.C.R. 1482 : 2024 INSC 1044 Hongkong and Shanghai Banking Corp. Ltd. v. Awaz & Ors. (Civil Appeal No. 5273 of 2008) 20 December 2024 [Bela M. Trivedi and Satish Chandra Sharma,* JJ.] Issue for Consideration (i) Whether the Respondent organization had the locus to approach the National Consumer Disputes Redressal Commission (NCDRC); (ii) Whether the NCDRC had the jurisdiction to interfere with banking operations, which is the exclusive statutory domain of the Reserve Bank of India; (iii) Whether the NCDRC had the jurisdiction to fix a maximum ceiling rate of interest to be charged by banks from their credit card holders for their failure to make full payment on the due date, at the behest of the Reserve Bank of India & unilaterally direct banks/non-banking financial institutions to charge rates of interest not beyond the 30% p.a., in absence of an instruction/ directive of the Reserve Bank of India (RBI); (iv) Whether the Impugned Judgment interferes with the contract executed between the parties; (v) Whether charging rate of interests by banks in the manner as advised by RBI vide its master circulars and notifications being independent of a standard ceiling rate prescribed by the RBI, constitute an unfair trade practice. Headnotes† Consumer Protection Act, 1986 – ss.12(1), 13(6), 2(1)(d) – “consumer” – Reserve Bank of India Act, 1934 – Respondent nos. 1 and 2-Trusts claiming themselves to be a voluntary consumer association fighting for consumer rights, if had the locus to approach the National Commission – The original complaint, if met the threshold of ss.12(1) and 13: Held: No – The original Complaint before the Commission which was filed in a representative capacity, by the Trust, representing all consumers purportedly aggrieved owing to the exorbitant rates of interest charged by the banks, was filed without complying with * Author [2024] 12 S.C.R. 1483 Hongkong and Shanghai Banking Corp. Ltd. v. Awaz & Ors. the mandate of Or. I, r.8, CPC prescribed u/s.13(6) – No order was passed by the National Commission permitting the Respondent nos.1 and 2 to represent the interest or act on behalf of any consumer – Complainants filed the application u/s.13(6) seeking permission to act “on behalf of consumers” only at the stage of conclusion of arguments, and judgment being reserved – Since, the requirement of Or. I r.8, prescribed in s.13(6) is to be read into s.12(1), the requirement of obtaining prior permission from the Commission, for any consumer to act in a representative capacity, cannot be dispensed with – Further, a trust is not a “person” as defined u/s.2(1)(m) of the 1986 Act and therefore not a consumer and thus, cannot file a consumer dispute under the 1986 Act – Also, the consumer complaint did not disclose any deficiency in service or violation and was in fact a public interest litigation in guise of a purported consumer dispute – Respondents approached the National Commission at the behest of the Respondent no.3, a credit card holder with Citibank, purportedly claiming an amount of Rs. 90,000/- against excess interest charged by the bank, which is barred by the pecuniary jurisdiction of the Commission – Furthermore, the administrative policy decisions of banks do not constitute provisions/facilities of banking, which may come under the umbrella of ‘service’, defined u/s.2(1)(o) of the 1986 Act – A policy decision pertaining to the rate of interest, and trade practices carried out by the banks across the country is a regulatory function within the specific statutory domain of the RBI and cannot come under the purview of judicial scrutiny by the National Commission – National Commission erred in holding that any complaint under the 1986 Act to curb unfair trade practice(s) adopted by the banks is maintainable – National Commission had no jurisdiction to entertain a complaint having vague, ambiguous allegations and no cause of action – Order of the National Commission set aside. [Paras 42-47, 57] Reserve Bank of India Act, 1934 – Banking Regulation Act, 1949 – s.21A – Whether the NCDRC has the jurisdiction to interfere with banking operations which is the exclusive statutory domain of the RBI – Whether the NCDRC had the jurisdiction to fix a maximum ceiling rate of interest to be charged by banks from their credit card holders for their failure to make full payment on the due date, at the behest of the RBI and unilaterally direct banks
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