Chandigarh, January 6, 2026 : The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, has held SBI Cards & Payment Services Pvt. Ltd. guilty of deficiency in service and unfair trade practice for continuing to reflect a consumer as a defaulter in credit records despite a clear and acknowledged full and final settlement of dues. The Commission made it clear that once a creditor accepts settlement and records “no dues,” the consumer’s credit history cannot be lawfully tarnished thereafter.
The complaint was filed by Sanjay Singla, who had been issued a credit card by SBI Cards. According to the record, Singla made certain purchases in 2007 and, following recovery follow-ups by the company’s agent, paid a sum of ₹18,000 as a full and final settlement. The payment was made on 28 January 2007 and was acknowledged by SBI Cards through a receipt explicitly endorsing “No Dues,” thereby extinguishing his liability under the credit card account.
However, the matter resurfaced more than a decade later. From October 2020 onwards, Singla began receiving calls demanding an additional ₹11,652. On checking his credit report, he discovered that he had been shown as a defaulter in records maintained by Credit Information Bureau (India) Limited (CIBIL). When he approached SBI Cards and produced the 2007 settlement receipt, the company allegedly admitted its error and assured him that a No Dues Certificate would be issued and corrective information would be sent to CIBIL. These assurances, however, were not acted upon, prompting Singla to approach the Consumer Commission alleging harassment, deficiency in service, and unfair trade practice.
In its defence, SBI Cards contended that the credit card account had been sold and assigned to Kotak Mahindra Bank in 2016 under a securitisation process and that it bore no responsibility thereafter. It was further argued that no demand had been raised by SBI Cards post-assignment and that the No Dues Certificate later obtained from Kotak Mahindra Bank was issued merely as a special measure to settle the dispute, without any admission of liability on SBI Cards’ part.
The Commission rejected this defence after examining the documentary evidence. It noted that even the No Dues Certificate dated 2 September 2021, produced by SBI Cards itself, confirmed that Kotak Mahindra Bank had received the full and final payment in respect of the complainant’s account. This, the Commission held, conclusively established that no outstanding dues existed. It further observed that transferring the account in 2016 was wholly unwarranted since the account had already been settled in full as early as 2007.
Holding SBI Cards squarely liable, the Commission observed that despite receiving full settlement in January 2007, the company failed to issue a proper clearance certificate, continued to report the complainant as a defaulter, and even transferred the settled account to another bank. Such conduct, the Commission held, forced the complainant into avoidable correspondence and caused prolonged harassment, which “certainly amounts to deficiency in service and unfair trade practice.”
Accordingly, the consumer complaint was partly allowed. SBI Cards was directed to immediately take steps to remove Sanjay Singla’s name from the CIBIL defaulters list, if not already done, and to pay ₹20,000 as compensation for harassment and mental agony, inclusive of litigation expenses. The order is to be complied with within 45 days from receipt of the certified copy.
The decision reinforces an important principle for consumers and lenders alike: once dues are settled and acknowledged, credit histories must reflect that reality, and any failure to do so can attract liability under consumer protection law.
Cause Title: Sanjay Singla v. SBI Cards & Payment Services Pvt. Ltd. | Case No.: CC/139/2021 | Coram: Amrinder Singh Sidhu, President, and Brij Mohan Sharma, Member | Date of Decision: 6 January 2026
