A Delhi court has slammed banks for filing suits against customers at a place miles away from their residence by "faking" territorial jurisdiction to allegedly secure favourable orders.
The court said it is against "public policy" to expect a customer or borrower to travel hundreds of kilometres away from his house by spending huge money only to fight a case at a place where he cannot be bound for any action.
Additional District Judge Kamini Lau's observations came while dismissing an appeal filed by PSU, Corporation Bank claiming recovery of outstanding amount from Joginder Pal Arora, a resident of Punjab, who had availed its credit card facility.
"This practice of filling 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," the court said.
It said, "To expect a customer/ borrower to travel hundreds of kilometers 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."
On the issue of jurisdiction, the court said in the entire plaint filed by the bank, there was nothing on record to suggest that Arora had ever approached the bank or applied for credit facility personally or through postal communication in its Delhi office.
"Rather, it is apparent from the documents present on the trial court record that the application form was filled up and executed at Jalandhar on March 4, 2010...," the court said.
It also said that Arora, being a resident of Jalandhar, had used the credit card facility in Punjab and not in Delhi.
The counsel appearing for the bank told the court that the issue falls under the jurisdiction of court here as after sanctioning of maximum limit, the credit card was dispatched to Arora from its Delhi office.
The bank had filed the appeal against a trial court order returning the plaint along with original documents on the ground of territorial jurisdiction to entertain the suit.
The order of the trial court was challenged after a delay of 16 months on various grounds.
