legal action agaisnt credit card defaulters

CHENNAI3rd Floor, ‘Creative Enclave’,

148-150, Luz Church Road,Mylapore,

Chennai - 600 004.Tel: +91 - 44 - 2498 4821

BANGALORE Suite 920, Level 9,

Raheja Towers,26-27, M G Road,

Bangalore - 560 001.Tel: +91 - 80 - 6546 2400

COIMBATOREBB1, Park Avenue,

# 48, Race Course Road,Coimbatore - 641018.

Tel: +91 - 422 – 6552921

[email protected]

WEBSITEwww.altacit.com

LEGAL ACTION PERMISSIBLE AGAINST CREDIT CARD PAYMENT DEFAULTERS

Lakshminarayanan AlagurajaAdvocateAltacit Global



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CREDIT CARD

A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


BENEFITS TO CUSTOMERS

The main benefit to each customer is convenience. Compared to debit cards and cheques, a credit card allows small short-term loans to be quickly made to a customer who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


INTEREST CHARGES

• Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

• The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments.

• Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CRIMINAL THREAT

Section 156 (3) of CrPC - Police officer’s power to investigate cognizable cases.Section 200 of CrPC - Examination of complainant.Section 406 of IPC - Punishment for criminal breach of trust.Section 420 of IPC - Cheating and dishonestly inducing delivery of property.Section 138 of NIA - Dishonour of cheque for insufficiency, etc., of funds in the accounts.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


REMEDY

• non payment of dues is a civil liability and not criminal.

• bank can file a civil suit for recovery of the outstanding amount and not criminal case.

• file a recover suit under RDDBFI Act. • Banking Ombudsman at RBI.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


RESERVE BANK OF INDIA

Important Terms and Conditions:• Fees and Charges• Drawal limits• Billing• Default and circumstances• Termination / revocation of card

membership• Loss/theft/misuse of card• Disclosure



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


DEFAULT AND CIRCUMSTANCES

• Procedure including notice period for reporting a card holder as defaulter

• Procedure for withdrawal of default report and the period within which the default report would be withdrawn after settlement of dues

• Recovery procedure in case of default• Recovery of dues in case of death/ permanent in

capacitance of cardholder• Available insurance cover for card holder and date of

activation of policy



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


RECOVERY AGENTS• engagement of Recovery Agents including verification of

antecedents of their employees by agents, • incentives to recovery agents – banks to ensure that

contracts with the recovery agents do not induce adoption of uncivilized, unlawful and questionable behavior or recovery process,

• methods followed by recovery agents, • training to recovery agents , • taking possession of property mortgaged /hypothecated to

banks, • use of forum of Lok Adalats, • complaints against the bank/recovery agents and • periodical review of the recovery agents’ mechanism.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


Case Study



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


MADRAS HIGH COURT JUDGEMENT

Justice R Regupathi - • Magistrates asked not to entertain private

complaints. • Police not to register criminal cases in such

complaints.• Erring magistrates warned of stringent action.• HC registrar asked to compile statistics on number

of private complaints.• Also asked to report on the orders passed by the

magistrates concerned.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


In the present matters, it is ex facie apparent that, in spite of having weighed the nature of allegations in judicial scales and thereby knowing fully well that legally they are not supposed to refer the civil disputes for police investigation or take cognizance by themselves, the said Judicial Officers concerned, with ulterior motives and to oblige the demand of the Bankers, illegally imputed criminal flavour to civil disputes, which action is not only inappropriate, and as such legally untenable, but elicits their unwanted intention in aiding one party to intimidate the other party.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


G. SAGAR SURI & ANOTHER V. STATE OF UP & OTHERS (2000) 2 SCC 636

in view of mixing the civil disputes with criminal offences, the aggrieved parties are increasingly invoking the inherent powers of the High Court under Section 482 of the Code of Criminal Procedure to prevent abuse of the process of Court or otherwise to secure the ends of justice. The illegal practice has made the Magistrate Courts breeding points of pendency of unnecessary criminal cases reflecting its adverse effect at all levels upto the Supreme Court.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CENTRAL BANK OF INDIA VS. RAVINDRA AND OTHERS (2001 (7) SCALE 351)

Supreme Court has directed that even when a civil suit is filed, the Banks must furnish in their plaint that interest/compound interest is charged at such rates and capitalised at periodical rests as permitted by directives of the Reserve Bank of India.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


Thank You

legal action agaisnt credit card defaulters

Economy & Finance