Chandigarh

DF-I

CC/341/2023

AMANDEEP - Complainant(s)

Versus

AXIS BANK LIMITED - Opp.Party(s)

DEVINDER KUMAR

01 Apr 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/341/2023
Date of Institution	:	20/07/2023
Date of Decision	:	01/04/2024

1. Amandeep son of Sh. Kamlesh Chander, aged about 40 years, H.No.300, Phase-3B1, S.A.S Nagar Mohali, Punjab-160059.

2. Ridhima wife of Sh. Amandeep, aged about 33 years, H.No.300, Phase 3B1, S.A.S. Nagar Mohali, Punjab-160059

… Complainants

V E R S U S

1. Axis Bank Limited, SCO No.350-352, Sector 34-A, Chandigarh through its Branch Manager.

2. Max Life Insurance Company Insurance Limited, Plot No. 90-A, Sector 18, Gurugram-122015 through its Managing Director.

… Opposite Parties

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                                               

ARGUED BY	:	Sh. Devinder Kumar, Advocate for complainants
	:	Sh. Gaurav Gupta, Advocate for OP-1
	:	Sh. Abhinandan Jindal, Advocate, Proxy for Gurpreet Singh, Advocate for OP-2 (through VC)

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Amandeep and another, complainants against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that complainants had availed home loan facility from OP-1 by submitting all the documents required for sanctioning of the loan and accordingly OP-1 had sanctioned loan to the tune of ₹2.00 crores vide sanction letter dated 13.1.2022 (Annexure C-1) for the period of 240 months.  In order to secure loan amount, OP-1 directed complainants to purchase insurance policy and accordingly, under compelling circumstances, complainants paid premium of ₹6,90,780/- to OP-2 and purchased a policy.  However, after receiving the premium amount, policy document was not supplied to the complainants. Vide letter dated 23.11.2022 (Annexure C-2), OP-1 intimated the complainants that since the details received are incomplete, premium amount already deducted to the tune of ₹6,90,780/- on 30.6.2022 towards credit shield was refunded back to loan account by OP-2 and the said amount has been adjusted against principal outstanding and the loan account has been rescheduled.  In order to obtain loan from OP-1, complainants had mortgaged their property with it and after disbursement of loan amount, complainants paid monthly installment to OP-1 without any default.  Thereafter complainant No.1 contacted the official of OP-1 with the request to reduce the rate of interest as the other banks had been providing loan facility at lower rate of interest, but, nothing has been done by OP-2.  On finding no other option except to close loan account with the OP bank, complainants approached the RBL Bank, Mohali for sanction of loan, who sanctioned the same at lower rate of interest. Thereafter, complainants approached OP-1 with the request to close the loan account and in response, OP-1 issued foreclosure letter dated 28.12.2022 (Annexure C-3) intimating that a sum of ₹1,99,54,838/- is due towards the loan account.  On this, complainant paid entire amount to OP-1 on 4.1.2023 and nothing remained outstanding towards complainants and accordingly OP-1 issued letter dated 17.1.2023 (Annexure C-4).  As per the letter dated 23.11.2022, OP-1 was bound to adjust the premium amount of ₹6,90,780/- in the loan account, but, it failed to adjust the same.  After paying the entire loan amount, complainants requested OP-1 to refund the premium amount of ₹6,90,780/-. However, instead of adjusting/refunding the insurance premium of ₹6,90,780/-, OP-1 sent message dated 19.1.2023 (Annexure C-5) intimating that OP-2 has refunded the insurance premium of ₹3,90,132.36 on 19.1.2023 for loan linked insurance and the said amount has been credited to the master policy holder’s account and the complainants are not covered under the policy terms and conditions.  It is further alleged that OP-1 transferred/credited a sum of ₹3,90,132.36 on 24.1.2023 in the account of the complainant instead of ₹6,90,780/-, which was received as premium amount, without explaining any reason, as is also evident from the copy of statement of account (Annexure C-6).  In this manner, as OP-1 has withheld the balance amount of ₹3,00,647/-, complainants are entitled to the refund of the same and the said act of the OPs amounts to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions.
3. In its written version, OP-1, inter alia, took preliminary objections of maintainability, cause of action and jurisdiction.  However, it is admitted that the loan of ₹2.00 crores was sanctioned in favour of the complainants and the same was got insured by the complainants on payment of premium of ₹6,90,780/- to OP-2 for purchasing the subject policy (Annexure OP-1/1).  The complainants, despite of knowing the fact that the subject policy has been issued and the premium for the policy is paid to OP-2, have filed a false complaint against the answering OP.  The subject policy was issued for a period w.e.f 30.6.2022 to 29.6.2039 and the complainants closed the loan account on 4.1.2023.  The subject policy had provided protection to the complainants from 30.6.2022 to 4.1.2023 and after closure of the loan account, complainants requested OP-2/insurer for surrender of the policy and as per terms and conditions of the policy, the insurer has refunded the surrender value to the complainants.  The answering OP has neither charged the premium nor refunded the premium amount towards the insurance, rather it is OP-2 who has charged the premium amount and refunded the partial amount of premium.   In this manner, complainant has no cause of action against the answering OP. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
4. In its written version, OP-2, inter alia, took preliminary objections of maintainability, concealment of material facts and cause of action.  However, it is admitted that the subject policy was issued to the complainants by the answering OP, but, alleged that as the answering OP has already refunded the admissible surrender value against the certification of insurance in response to the health declaration form signed and submitted by the complainants with the answering OP, as per the terms and conditions of the certificate of insurance, the consumer complaint is liable to be dismissed against the answering OP.  It is further alleged that member has a period of 15/30 days i.e. the free look period within which the policy can be got terminated and as the complainants have not approached the answering OP within the said period and have only approached the answering OP after closure of the loan account after several months, the answering OP refunded the premium amount of ₹3,90,132/- only, after deducting proportionate risk premium for the period covered, charges of stamp duty and the expenses incurred on medical examination of the member as per the terms and conditions of the subject policy.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
5. Despite grant of sufficient opportunity, rejoinder was not filed by the complainant to rebut the stand of the OP.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainants had obtained home loan to the tune of ₹2.00 crores from OP-1, as is also evident from the copy of sanction letter (Annexure C-1), and got the same secured covering the risk w.e.f. 30.6.2022 to 29.6.2039 by obtaining the subject policy (Annexure OP-1/1 on paying premium of ₹6,90,780/-, and the complainants had closed the loan account  on 4.1.2023 by paying entire loan amount to OP-1 and OP-2 has already refunded an amount of ₹3,90,132/- out of total premium amount of ₹6,90,780/-, the case is reduced to a narrow compass as it is to be determined if OPs are unjustified in withholding an amount of ₹3,00,647.64 out of the total premium amount and the complainants are entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainants, or if OP-2 has rightly deducted the aforesaid amount as per the terms and conditions of the subject policy i.e. for the protection provided to the complainant w.e.f. 30.6.2022 to 4.1.2023 (i.e. the day on which the complainants had closed their loan account) and the consumer complaint, being false and frivolous, is liable to be dismissed, as is the defence of OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the documentary evidence adduced on record by the parties, especially the terms and conditions of the subject policy, and the same is required to be scanned carefully to determine the real controversy between the parties.
   3. Annexure C-1 is copy of loan sanction letter which clearly indicates that loan amount of ₹2.00 crores was sanctioned in favour of complainant No.1 by OP-1. Annexure OP-1/1 is the copy of subject policy which indicates that loan amount to the tune of ₹1,96,90,780/- was insured through single premium to the tune of ₹6,90,780.11 and the subject policy was issued in the name of complainant No.1 with complainant No.2 as nominee for the period w.e.f. 30.6.2022 to 29.6.2039.  The subject policy contains the surrender benefit clause and same is reproduced below for ready reference :-

“3.   Surrender Benefit: During the period of Coverage, a Member may request for the surrender by making a written request, upon which We shall pay the surrender value to the Member based on the below formula:

Surrender Value = 70% of Premium paid * (Unexpired risk period in months at the date of Surrender^ / Total Period of Cover in months) * (Sum Assured applicable at time of Surrender^^/Sum Assured at inception)

^Ignoring fraction of a month ^^As per Annexure-1.

Upon receipt of a valid surrender request, the cover shall cease and upon payment of the surrender value, all benefits and rights under this Certificate of Insurance shall automatically cease and shall discharge Us from all of our liabilities in respect of the Member.”

4. As it is an admitted case of the parties that the subject policy was valid w.e.f. 30.6.2022 to 29.6.2039 and the complainants had closed the loan account on 4.1.2023, one thing is clear that the refund of the premium amount is to be assessed in the light of formula in the afore-extracted surrender benefit clause as under :-

Surrender Value

70% of premium paid

x

Unexpired risk period in months at the date of surrender ___________________ Total Period of Cover in months

x

Sum Assured applicable at time of Surrender ________________ Sum Assured at inception

 

 

Surrender Value

483546

x

194 ______ 204

x

19220834 _________ 19690780

=

₹4,48,868/-

 

5. In the case in hand, as it is an admitted case of the parties that OP-2 has refunded an amount of ₹3,90,132/- only whereas the complainants, in terms of the above calculation, were entitled to an amount of ₹4,48,868/-, it is safe to hold that OP-2/insurer has wrongly withheld an amount of ₹4,48,868 – ₹3,90,132/- = ₹58,736/- and it is liable to pay the said amount to the complainants alongwith interest and compensation etc.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP-2 is directed as under :-

1. to pay ₹58,736/- to the complainants alongwith interest @ 9% per annum w.e.f. 24.1.2023 (i.e. when part payment was transferred in the account of complainant) onwards.
2. to pay ₹20,000/- to the complainants as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainants as costs of litigation.

5. This order be complied with by OP-2 within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OP-1, the consumer complaint against it stands dismissed with no order as to costs.
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

01/04/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member
	Sd/- [Suresh Kumar Sardana] Member