PRESIDENT DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SAMBALPUR
CONSUMER COMPLAINT NO.13/2022
Present-Dr. Ramakanta Satapathy, President,
Sri. SadanandaTripathy, Member,
Budhubari Padhan,
W/o-Late Bisikeshan Padhan,
R/O-Tiklipara
PO/Ps-Jamankira
Dist-Sambalpur,Odisha, ...………..Complainant
Versus
- Mahindra and Mahindra Financial Service Ltd.
At/Po/Ps-Ainthapali,
Dist-Sambalpur,768004.
- Kotak Mahindra Old Mutual Life Insurance Company Ltd.
At-7th Floor, Building No.21, Infinity Park,
Off Western Express Highway,
General A.K. Vaidya Marg, Malad(E)
Mumbai-400097,India .…………...Opp.Parties
Counsels:-
- For the Complainant :- Sri. B. Pradhan & Associates
- For the O.P.No.1 :- Sri. A.K. Sahoo & Associates
- For the O.P.No.2 :- Sri. S.K. Chadha , & Associates
Date of Filing:24.03.2022, Date of Hearing :17.09.2024, Date of Judgement :22.10.2024
Presented by Dr. Ramakanta Satapathy, PRESIDENT
- The case of the Complainant is that the Complainant’s husband availed a tractor loan from O.P.No.1 on 14.07.2020 making down payment of Rs. 75,000/-. The borrower Bishikeshan Padhan died on 27.07.2020 at VIMSAR Hospital, Burla amid Covid-19. Tractor bearing No. OD-15R-1303 stads in the name of Bishikeshan Padhan. The tractor is insured with O.P.No.2 under Kotak Credit Term Group plan vide certificate No. CR 000020-6945329 to secure the loan. After death of borrower the O.P.No.1 was informed who advised to claim before O.P.No.2. The Complainant came to know that at the time of availing loan the O.P. No.1 has taken signatures of borrower and one of her son in blank papers which is not within knowledge of other three sons and unmarried daughters and SOP issued the tractor was parked idle since date of purchase. On 26.12.2021 the O.P.No.1 forcibly repossessed the tractor on the ground of non-payment of instalments. The tractor had only run 20 hours.
The Complainant submitted claim before O.P.No.2 vide claim No. KC 008495 dated 15.12.2020. The claim was repudiated on 05.04.2021 that the insured has concealed the fact of his previous ailment. The O.P.No.1 was informed and thereafter the O.P.No.1 on 26.12.2021 repossessed the vehicle forcible. The O.P.No.1 served recall notice dated 06.01.2022 and demanded Rs. 7,65,215/-. Thereafter a pleader notice was issued to the O.Ps.
The O.Ps are deficient in their service and for unfair trade practice liable for compensation.
- The O.P.No.1 financier in reply submitted that this complaint has been filed after receipt of notice from Arbitrator. Accordingly, the complaint is not maintainable.
The borrower Bishikeshan Padhan availed Sonalika Tractor loan of Rs. 5,60,000/- vide contract No. 6945239.59 EMIs w.e.f 05.09.2020 to 05.07.2025 were fixed for repayment. The instalments could not be paid by the borrower. The borrower nor his heirs reconciled the loan for which the O.P. No.1 repossessed the vehicle on 26.12.2021 following due procedures. The interim order passed by the Commission is erroneous. The Bank to recover the dues repossessed the vehicle and put to auction.
There is no deficiency on the part of the O.P.No.1.
- The O.P.No.2 insurer submitted that Bishikeshan Padhan, insurer declared that he never suffered from any disease. On investigation and assessment of claim it was revealed that the member was known case of diabetes and high level serum creatinine indicating chronic kidney disease was there prior to policy inception. The claim was rejected.
In the Kotak Credit Term Group plan Bud Pradhan(Wife) is appointedas nominee. Certificate No. CR000020-69452396945239 was issued linked with loan ID 6945239, premium paid. Rs. 5824.40P, commenced from 14.07.2020, cover termination date 13.07.2021 and cover amount Rs. 5,60,000/-. Claim intimation received on 05.10.2020 from O.P.No.1 that member died on 27.07.2020. The answering O.P. conducted investigation and submitted documents. For suppression of pre-existing disease the claim was repudiated on 05.04.2021. The rejection is proper. Reply to legal notice was given on 14.02.2022. There is no deficiency on the part of the O.P.
- Perused the document filed by the parties. It is the admitted case of the parties that vehicle No. OD-15R-1303 was financed by O.P.No.1 for an amount of Rs. 5,60,000/- vide contract No. 6945239. The vehicle was insured vide certificate No. CR000020-69452396945239 under Kotak Credit Term Group plan covering Rs. 5,60,000/-. The O.P. No.2 also received premium of Rs. 5,824.40p. The O.P.No.2 issued the COI on the life of deceased member Bishikeshan Padhan. The Complainant is the nominee. The insured died on 27.07.2020. After claim No. KC008495 vide letter dated 05.04.2021 the claim was repudiated.
The financier of the vehicle also admitted that for non-payment of the outstanding loan amount on 26.12.2021 the vehicle was repossessed following due procedures and put to auction sale.
Taking into consideration the pleadings and documents submitted by the parties following issues are framed:
ISSUES
- Whether repudiation of the life insurance claim of deceased Bishikeshan Padhan, claim No. KC 008495 vide letter dated 05.04.2021 is proper?
- Whether repossession of the tractor bearing No.OD-15R-1303 and putting auction sale is proper?
- Whether the O.P.No.1 has violated the order of this Commission dated 04.04.2022?
- What relief the Complainant is entitled to get?
Issue No.1 Whether repudiation of the life insurance claim of deceased Bishikeshan Padhan, claim No. KC 008495 vide letter dated 05.04.2021 is proper?
The insurer submitted that the Complainant has clubbed two cause of actions in one case. The deceased was granted vehicle loan of Rs. 5,60,000/- from O.P. No.1 and to secure the said loan the O.P. No.2 insured the life of deceased. It is admitted by the O.Ps that the financier and the insurer are tied up. The O.P. No.2 basing on the finance of O.P. No.1 insured the life of member Bishikeshan Padhan without examining the health condition. After wards when received the information of death of Bishikeshan Padhan onvestigated the cause of death. To promote business taking the plea of “utmost good faith” policy is not acceptable. It was the duty of insurer before granting the COI health condition was to be examined. The cause of actions are not different. From the finance itself cause of action arose. Accordingly plea of the O.P.No.2 is not acceptable.
The O.P.No.2 received the claim information through O.P.NO.1 on 05.10.2020. It is admitted by O.P.No.2 that by that time Rs. 5824.40P premium has already been received and LOI was issued. After receiving information of death on 27.07.2020 and claim intimation dated 05.10.2020 investigation was started. The O.P.No.2 submitted DOCH form dated 14.07.2020, COI, claim information form dated 05.10.2020, pathological report issued from New City Diagnostics dated 04.07.2020, prescription dated 04.07.2020 issued by Dr. Ritesh Kumar Agrawala, Urine report New City Diagnostics dated 04.07.2020, Medical prescriptions issued by Jyoti Lab. Dated 06.07.2020, CT scan, VSSIMSAR, Burla dated 27.07.2020, Medical record from 27.07.2020 to 30.07.2020, copy of investigation report etc. The O.P.No.1 not examined the authority of New City Diagnostics, Dr. Ritesh Kumar Agrawala nor any authority of VSSIMSAR, Burla. It was the duty of insurer at the time of acceptance of the proposal policy physically the insured was to be examined. Before acceptance the O.P.No.2 not ascertained the history of assured. In Bhumikaben Patel & others Vs LIC of India, 2024 Live Law 365 the hon’ble Apex Court held that once the First premium is accepted by the insurer than it is bound pay the claim.
The second allegation of the insurer is that the LA not disclosed the existing diseases. During lock down period the policy came into existence. It was the duty of O.Ps to physically examine the L.A. The LA is just a literate person who only marks the signature. It is difficult for an illiterate person to say about his body condition except by medical expert. The insurer generally takes the plea of utmost good faith to avoid the liability. When a contract is made bi-lateral the insured is to disclose all the material facts and it is also duty of insurer to examine whether the statement furnished are true or not. After examination of material facts the acceptance should be made. Non-examination of statements in proposal form amounts to deficiency in service. The O.P.No.2 failed to perform their part of obligation/duty.
Accordingly, the contention of O.P.No.2 is not acceptable. The issue is answered in favour of Complainant. The repudiation letter dated 05.04.2021 against claim No. KC 008495 is not proper.
Issue No.2:- Whether repossession of the tractor bearing No.OD-15R-1303 and putting auction sale is proper?
The O.P.No.1 submitted that the vehicle was repossessed on 26.12.2021 after following due procedure of law. The O.P.No.1 informed the I.I.C., Dhanupali Police station on 26.12.2021. The O.P.No.1 not filed the demand notice served to the borrower or guarantor prior to seizure of the vehicle. Secondly, the seizure list has not been prepared and before whom it was seized. Thirdly, on which date auction sale made the procedure not explained. To whom it was sold, who were the bidders not explained. The O.P.No.1 has not followed the procedures of auction sale and after auction notice has not been served to the borrower to show the account position. It proves that seizure procedure and auction procedures are not followed by the O.P.No.1.
The O.P.No.1 appointed arbitrator to Mrs T.Pushpavati. The Complainant filed her objection on 15.03.2022. Further notice was issued to O.P.No.1 on the ground that against a dead person proceeding has been initiated. The O.P.No.1 has not filed any arbitration award passed by Arbitrator. Mere issuance of a notice under the Arbitration and conciliation Act, 1996 does not bar a consumer to knock the door of the Consumer Commission. Accordingly, this Commission has jurisdiction to entertain the Complaint.
The issue is answered against the O.P.No.1
Issue No. 3:- Whether the O.P.No.1 has violated the order of this Commission dated 04.04.2022?
On 04.04.2022 this Commission passed order not to dispose off the vehicle till the disposal of the complaint case and keep the vehicle in safe condition. Again the O.Ps were directed on 01.12.2022 to submit a status report of the vehicle No. OR 15R-1303. On 14.01.2022 a pre-sale notice has been issued and the O.Ps have not filed the date of sale and auction participants. As prior to passing of the order by this Commission illegally vehicle was sold, the O.Ps failed to file the status report.
The issue is answered accordingly.
Issue No.4: What relief the Complainant is entitled to get?
As discussed Supra the Complainant is entitled for the relief.
Taking into consideration the circumstances of the case following order is passed:
ORDER
The complaint is allowed partly against the O.Ps. The O.P.No.2 is directed to pay Rs. 5,60,000/- to the Complainant within one month of this order. In case of no payment the amount shall carry 7 % interest P.A. w.e.f. 27.07.2020 till realisation. For unfair trade practice and illegal seizure of vehicle No. OD-15R-1303 the remaining loan amount of the borrower is wiped out. The O.Ps are jointly liable for compensation of Rs. 50,000/- and litigation expenses of Rs. 20,000/- to the Complainant.
Order pronounced in the open court on 22nd day of Oct. 2024.
Supply frees copies to the parties.
