New Delhi: The practice of banks filing suits against customers at a place far away from their residence by “faking” territorial jurisdiction in order to secure favourable orders has to be discouraged, a court here has said.
“This practice of filing suits by financial institutions/banks against customers hundreds of kilometres away from their residence by faking territorial jurisdiction in order to secure favourable orders behind their backs, is a practice which has to be discouraged,” Additional District Judge Kamini Lau said in an order delivered on Monday but made available on Wednesday.
The court made this observation while dismissing an appeal filed by Corporation Bank claiming recovery of an outstanding amount from Joginder Pal Arora, a resident of Punjab, who had availed its credit card.
The order further observed that the bank before it is a mighty financial institution with a battery of expert lawyers at its command while the respondent (Arora) is an individual customer who has availed of a facility so offered by the bank.
“No doubt, this court is required to balance the interest of the lender and the borrower but at the same time the concerns of the borrowers who are unable to withstand the pressure of money power cannot be overlooked,” the court said.
“To expect a customer/borrower to travel hundreds of kilometres away from his house by spending huge amount of money only to fight a lis (case) in a territory where he cannot even otherwise be bound for action under the existing law of the land, is something which is against public policy, which no court can support or promote.”
The bank has stated before the court that the issue falls under the jurisdiction of the court here as the credit card was dispatched to Arora from its Delhi office.
The court observed there is no confirmation in the plaint that the Arora had ever approached the bank or applied for credit facility personally or through postal communication in the Delhi office.
It also noted that the application form was filed up and executed at Jalandhar on March 4, 2010. Arora, being a resident of Jalandhar, had used the credit card facility in Punjab and not in Delhi, the court added.