Hongkong And Shanghai Banking Corp. Ltd. Vs AWAZ & Ors. (Supreme Court of India)
Supreme Court held that the National Commission had no jurisdiction to re-write the terms of the contract entered between the banks and the credit cardholders, which the parties have mutually agreed to be bound by. Thus, RBI cannot be directed to impose cap on charging interest from credit cardholders in case of default and delay in payment not questionable.
Facts- The captioned set of appeals arise out of the common Judgment & Order dated 07.07.2008 passed by the National Consumer Disputes Redressal Commission, Delhi in Complaint Case No. 51/2007 and Revision Petition No. 1913/2004. No appeal has been preferred from either of the parties, in the Revision Petition No. 1913/2004.
The National Commission proceeded with the prima-facie view that the charging of interest at rates ranging from 36% to 49% p.a. is exorbitant and amounts to the exploitation of the borrowers/debtors and is usurious.
Conclusion- Held that the National Commission had no jurisdiction to re-write the said terms of the contract entered between the banks and the credit cardholders, which the parties have mutually agreed to be bound by.
It is correct to say that the National Commission has been duly empowered under the statute to set aside unfair contracts, which may symbolise a single will or are unilaterally dominant or incorporate terms which are unfair and unconscionable. However, the rate of interest, charged by the banks, determined by the financial wisdom & directives issued by the Reserve Bank of India, and is duly communicated to the credit card holders from time to time, cannot be in any manner unconscionable or unilateral. The credit card holders are duly educated and made aware of their privileges and obligations, including timely payment & levying of penalty on delay.
