Law Student Wins Fight Against Extra Charge Being Levied On Debit Card Transactions

Chanakya Sharma, a student of Ram Manohar Lohiya National Law University (RMLNLU) Lucknow has emerged victorious after he had challenged the illegal levy of the Merchant Discount Rates (MDR) on debit card transactions, reports the Bar and Bench.

The entire order by the District Consumer Disputes Redressal Forum can be read here.

Sharma was unfairly made to pay a surcharge of 2% on the bill in a restaurant in Goa. He sought clarification as to why this surcharge was levied. But responses from both the establishment, as well as the bank, were not welcoming.

Later, it was found that the restaurant had charged him a similar fee on a previous transaction as well.

Sharma was then compelled to file a complaint before the District Consumer Disputes Redressal Forum in South Goa.

The Reserve Bank of India (RBI) had expressly stated in a circular published in September 2013, that the surcharge levied on debit card transactions by some merchant establishments is unjustifiable.

After fighting a long-drawn battle in the Consumer Forum, Chanakya received a favourable order last month. After going into the specifics of the bill, the Forum found the restaurant owner guilty of unfairly imposing the 2% charge for the debit card transaction.

They also said that that the restaurant was evading tax liability.

The Forum ordered the restaurant to pay Chanakya a compensation amount of Rs. 15,000 to cover his legal costs and further directed it to pay Rs. 10,000 towards the Consumer Welfare Fund.

The restaurant has been directed by the Forum to put up a sign stating: “Our customers are not liable to pay any fees for payments made through debit or credit cards of the banks.”

During the hearings before the Forum, Chanakya received assistance from the Legal Aid Clinic at GR Kare College, Margao, mainly from Principal Dr Saba D’Silva and students Kaushik Desai and Scarlett Dias.

The Logical Indian welcomes the move by the consumer court and appreciates the effort that Chanakya Sharma has put to fight this battle against the wrong. We hope that this incident makes our community readers aware and inspires much more to take up the battle for the right.