BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SIRSA.
Consumer Complaint no. 190 of 2021.
Date of Institution : 23.08.2021.
Date of Decision : 20.03.2024.
1. Sheela Devi ( aged about 67 years) widow, 2. Sunil Kumar (aged about 33 years) son, 3. Bhajan Lal (aged about 29 years) son of late Sh. Aad Ram son of Sh. Duni Chand, residents of village Keharwala, Tehsil Rania, District Sirsa.
……Complainants.
Versus.
1. Axis Bank Ltd., Branch Kalanwali, Tehsil Kalanwali, District Sirsa through its The Branch Manager/ Authozied Signatory.
2. Max Life Insurance Co. Ltd., Shop No. 175, New MC Market, Circular Road, Sirsa, District Sirsa through its Branch Manager/ Authorized Signatory.
3. Max Life Insurance Co. Ltd., 3rd, 11th and 12th Floor, DLF Square Building, Jacaranda Marg, DLF City Phase-II, Gurugram- 122002 through its Chief General Manager/ Authorized Signatory.
...…Opposite parties.
Complaint under Section 35 of the Consumer Protection Act, 2019.
BEFORE: SH. PADAM SINGH THAKUR ………………PRESIDENT
SMT. SUKHDEEP KAUR …………………MEMBER
Present: Sh. Mukesh Poonia, Advocate for complainants.
Sh. Madan Jangra, Advocate for opposite party No.1.
Sh. Sudhir Kumar, Advocate for opposite parties no.2 and 3.
ORDER
The complainants have filed the present complaint under Section 35 of the Consumer Protection Act, 2019 against the opposite parties (hereinafter referred as OPs).
2. In brief, the case of complainants is that they are agriculturists and Sh. Aad Ram husband of complainant no.1 and father of complainants no.2 and 3 was owner in possession of agricultural land situated in villages Keharwala, Gindra, Sadewala and Mattuwala, Tehsil Rania, District Sirsa and he obtained KCC limit of Rs.13,20,650/- from op no.1 on 25.08.2020. The complainant no.2 has joint accounts with his father with op no.1 vide accounts numbers 920030058064102 and 920030058064115. That at the time of taking the facility of KCC limit by Sh. Aad Ram now deceased, the op no.1 told to the complainant no.2 and his father that for the security of loan amount and also to indemnify the loan, a life insurance policy of the loanee i.e. Sh. Aad Ram will be mandatory to be purchased and it was told by op no.1 that op no.2 has tie up with ops. It was further told that life of the loanee i.e. Sh. Aad Ram will be got insured by op no.1 from ops no.2 and 3 and it was assured by op no.1 on behalf of ops no.2 and 3 that in case of his death during pendency of loan amount, the risk of loan amount of Rs.13,20,650/- will be secured/ insured with ops no.2 and 3 and the entire outstanding amount of loan as well as its interest and other penalties/ dues will be paid by ops no.2 and 3 itself to the bank and bank will recover its entire outstanding from ops no.2 and 3 itself and will not be burdened upon any of the legal heirs of the loanee/ insurer. It was also assured by op no.1 that the period of said policy will be till the loan period and for the aforesaid policy, one time installment of Rs.80,658/- will be charged for the same. Accordingly an amount of Rs.80,568/- was deducted by op no.1 on behalf of ops no.2 and 3 on 10.09.2020 from the joint account No. 920030058064102 of complainant no.2 and his father Sh. Aad Ram now deceased and it was assured that policy documents will be delivered very soon by bank itself just after receiving from ops no.2 and 3.
3. It is further averred that unfortunately Sh. Aad Ram had expired on 29.11.2020 leaving behind the complainants as his only legal heirs and immediately complainant no.2 informed op no.1 regarding death of his father on 23.12.2020 vide written application along with his death certificate and other required documents and also furnished claim documents and all entire formalities have been completed by them. At that time, it was assured by op no.1 that claim amount regarding entire outstanding loan amount, interest, penalties, dues of the bank will be recovered by op no.1 itself from ops no.2 and 3 and no penny of outstanding loan and its dues will be burdened upon complainants and mortgaged property of loanee in view of said insurance policy. It is further averred that about a week back when the complainants went to the premises of op no.1 for asking about the claim, then it was replied by op no.1 that claim has been declined by ops no.2 and 3 and on 02.06.2021 they have refunded the premium of policy in aforesaid bank account of complainant no.2 from bank account of ops no.2 and 3. The complainant no.2 obtained the bank statement and was surprised to see the entry of refund of premium of the policy which was wrongly and illegally refunded by ops no.2 and 3 in collusion with op no.1 and they in collusion with each other have intentionally denied/ declined the claim of complainants in order to usurp the claim amount and to illegally recover the outstanding loan amount and its dues from the properties of insurer and mortgaged properties for which the op no.1 is intending to recover the same illegally and forcibly and threatening the complainants continuously. It is further averred that complainants number of times approached the ops and requested to indemnify claim of complainants but the ops have refused to admit the genuine and legal claim of complainants and even the ops did not pay even a single penny rather threatened them to deposit the loan amount and such act and conduct on the part of ops clearly amounts to deficiency in service, unfair trade practice on account of which complainants have suffered unnecessary harassment. That complainant got served a legal notice upon the ops on 14.06.2021 but to no effect. Hence, this complaint seeking direction to the ops to indemnify the claim of complainant and to recover the entire outstanding loan amount of Rs.13,20,650/- along with all dues including interest, penalties etc. from ops no.2 and 3 and to make payment of Rs.1,00,000/- as compensation for unnecessary harassment, to pay Rs.20,000/- as penalty on account of deficiency in service, unfair trade practice and also to pay a sum of Rs.25,000/- as litigation expenses.
4. On notice, ops appeared. Op no.1 filed written statement raising certain preliminary objections. It is submitted that Shri Aaad Ram may have got insurance policy from ops no.2 and 3, hence any compensation is liable to be paid by ops no.2 and 3. Ops no.2 and 3 are independent company and op no.1 has never persuaded or convinced Aad Ram to get the insurance policy. The officials of op no.1 have no concern with the terms of insurance and policy cover. It is further submitted that as per instructions of Sunil Kumar, an amount of Rs.80,658/- has been debited in the account of Sunil Kumar on 10.09.2020 and transferred the same to op no.2, but the same has been refunded by op no.2 on 02.06.2021 which has been debited in the account of Sunil Kumar on the same day. It is further submitted that officials of answering op never got any signature of Aad Ram regarding his insurance and officials of op no.2 and 3 may have obtained his signatures on their required documents. The officials of answering op have forwarded the claim to ops no.2 and 3 and it was their duty to pay according to terms of policy. Remaining contents of complaint are also denied to be wrong and prayer for dismissal of complaint qua op no.1 made.
5. Ops no.2 and 3 also filed written statement raising certain preliminary objections. It is submitted that in fact true and material facts of the present case are that present complainant no.2 Sunil Kumar submitted the proposal form along with all requisite documents for purchase of life insurance policy against the loan amount of Rs.6,50,000/- with the sum assured of Rs.6,50,000/- and on submission of all documents and payment of premium of Rs.3229/- through op no.1, the answering ops issued the policy of insurance No. 35003244 in the name of complainant no.2. But on the other hand, the op no.1 taken proposal form only and premium of Rs.80,658/- from the complainant on account of issuance of insurance policy however they failed to submit the health declaration form as a result of which payment made by op no.1 to the answering ops which were received by op no.1 from complainant were refunded back. So, due to non submission of health declaration form which is necessary for issuance of policy of insurance, the policy of insurance could not be issued. Hence, there is no privity of contract between the deceased Aad Ram and answering ops. It is further submitted that when there is no policy of insurance/ contract, then no liability can be fastened upon answering ops. That there is no relationship of consumer and service provider between Aad Ram and answering ops, so present complaint is legally not maintainable and liable to be dismissed with costs. Neither any death claim has been lodged under any of the policy of insurance, nor answering ops issued any letter of repudiation, so question of filing alleged complaint against ops does not arise at all. Remaining contents of complaint are also denied to be wrong and prayer for dismissal of complaint made.
6. The complainants in evidence have tendered affidavit of Sunil Kumar complainant as Ex. CW1/A and documents Ex.C1 to Ex.C17.
7. On the other hand, op no.1 has tendered affidavit of Sh. Tarun Bansal, Manager & Principal Officer as Ex.R1/1 and statements of account Ex.R1/2 and Ex. R1/3. The ops no.2 and 3 did not lead any evidence despite availing various opportunities and as such their evidence was closed by order.
8. We have heard learned counsel for the parties. The written arguments filed on behalf of ops no.2 and 3 which is almost repetition of the written version have also been gone through with the case file. During the course of arguments, learned counsel for ops no.2 and 3 has also placed on file affidavit of Sh. Sudhir Kumar, Deputy Manager Legal and certificate of insurance issued to Sunil Kumar as Annecure R4 and health declaration form of Sunil Kumar as Annexure R5.
9. The perusal of the jamabandi Ex.C16 reveals that on 25.08.2020 Aad Ram obtained agricultural loan to the tune of Rs.13,20,650/- from op no.1 bank against his agricultural land situated in above said four villages and the op no.1 bank in order to secure the loan amount the premium amount of Rs.80,658/- was deducted by op no.1 bank from the joint account of Sunil Kumar complainant and Aad Ram on 10.09.2020 as is evident from copy of statement of account bearing No. 920030058064102. The said premium amount of Rs.80,568/- was admittedly paid to ops no.2 and 3 by op no.1 bank for securing the loan amount under the policy in question. Similarly, complainant no.2 Sunil Kumar also availed agricultural loan of Rs.6,50,000/- from op no.1 bank and said loan amount was also got secured by op no.1 from ops no.2 and 3 by paying insurance premium amount of Rs.3229/- to ops no.2 and 3 and this fact is not disputed by ops no.2 and 3 whereas ops no.2 and 3 have denied about issuance of policy in question to Aad Ram on the ground of non submission of health declaration form. There is no dispute of the fact that ops no.2 and 3 also received huge premium amount of Rs.80,658/- for insuring loan amount of Rs.13,20,650/- taken by Aad Ram now deceased from op no.1 bank. The clauses 2 and sub clauses 2.1, 2.1.1 and 2.1.2 regarding benefit of the policy namely i.e. Max Life Group Credit Life Secure Plan placed on file by ops no.2 and 3 themselves under which premium amount was also deducted by op no.1 for paying the same to ops no.2 and 3 for insuring the loan amount advanced to Aad Ram are relevant and are reproduced as under:-
2. Benefit
2.1 Death Benefit
Subject to Sections 2, 3 and 8 below, if the insurance is in force, then upon death of the Member during the Period of Coverage, We shall pay one of the Death Benefit specified below, depending upon the Death Benefit Option chosen by the Master Policyholder to the Beneficiary:
2.1.1. Option A- Decreasing Cover: If the Master Policyholder has chosen option- A as the Death Benefit Option under the Policy, the Sum Assured payable by Us shall the Sum Assured outstanding as per the schedule of Sum Assured indicated in this Certificate of Insurance, irrespective of the actual loan outstanding on the date of death of such Member;
2.1.2 Option B- Level Cover: If the Master Policyholder has chosen option – B as the Death Benefit Option under the Policy, We shall pay the Sum Assured as chosen by the Master Policyholder and as specified in this Certificate of Insurance.
10. However, ops no.2 and 3 only admits about issuing of insurance policy in question to the complainant no.2 Sunil Kumar against the loan amount of Rsa.6,50,000/- whereas with regard to insurance of loan amount taken by Aad Ram from op no.1 bank, the ops no.2 and 3 have pleaded that op no.1 taken proposal form only and premium of Rs.80,658/- on account of issuance of insurance policy, however, they failed to submit health declaration form as a result of which the payment made by op no.1 to the ops no.2 and 3 was refunded back. They have further pleaded that due to non submissions of health declaration form which is necessary for issuance of policy of insurance, the policy of insurance could not be issued. However, we find no substance in the plea of ops no.2 and 3 firstly because there is nothing on file to prove that ops no.2 and 3 have ever asked the op no.1 bank to submit any health declaration form of said Aad Ram deceased or also asked the insured at any time during his life time to submit his health declaration form. The premium amount of Rs.80,658/- was paid by op no.1 bank to ops no.2 and 3 on 10.09.2020 whereas death of Aad Ram took place on 29.11.2020 as is evident from his death certificate but ops no.2 and 3 refunded back the premium amount on 02.06.2021 i.e. even after more than six months of death of the deceased Aad Ram which is not justifiable at all. If the ops no.2 and 3 did not receive health declaration form either from op no.1 or from insured, then either ops no.2 and 3 should have demanded the same in time or should have refunded the premium amount in time but ops no.2 and 3 have refunded back the premium amount even after six months of death of deceased Aad Ram and as such ops no.2 and 3 are now estopped from taking the aforesaid plea of non submission of health declaration form. It is proved on record that ops no.2 and 3 are receiving differential premium amounts for issuing the policies in question to the different aged persons because for issuing policy in question to Sunil Kumar complainant no.2 for securing his loan amount of Rs.6,50,000/- they only charged premium amount of Rs.3229/- whereas keeping in view the old age of his father Aad Ram for securing his loan amount of Rs.13,20,650/- they charge huge premium amount of Rs.80,658/- and as such they are now debarred from taking above said pleas and are liable to indemnify the claim amount against the loan amount of Aad Ram now deceased. So, it is proved on record that ops no.2 and 3 have caused deficiency in service and have adopted unfair trade practice because it duly received huge insurance premium amount for insurance of loan amount of Aad Ram deceased keeping in view his old age and when they came to know about his death, then instead of indemnifying the claim amount have only refunded back the premium amount i.e. too after longe delay. The ops no.2 and 3 are therefore liable to reimburse the outstanding loan amount of deceased Aad Ram to op no.1 bank and bank is entitled to the outstanding loan amount of deceased Aad Ram from ops no.2 and 3 only and not from complainants or from the mortgaged property of deceased Aad Ram.
11. In view of our above discussion, we allow the present complaint and direct the opposite parties no.2 and 3 to indemnify the claim of complainants under policy in question i.e. to clear/ pay the outstanding loan amount of deceased Aad Ram i.e. Rs.13,20,650/- alongwith interest, penalties etc. because ops no.2 and 3 have not indemnified the claim within time. We also direct the op no.1 bank not to recover the outstanding loan amount of Aad Ram from complainants and to seek reimbursement only from ops no.2 and 3 as per their collaboration scheme under the policy. We also direct ops no.2 and 3 to pay a sum of Rs.20,000/- as composite compensation for harassment and litigation expenses to the complainant. The ops are liable to comply with this order within a period of 45 days from the date of receipt of copy of this order. A copy of this order be supplied to the parties as per rules. File be consigned to the record room.
Announced: Member President,
Dated: 20.03.2024. District Consumer Disputes
Redressal Commission, Sirsa.
