HON'BLE Mrs. YASHODA BHASKAR PATIL,

                                                      B.Com, L.L.B(Spl.,) M.Ed.,

                                                             WOMAN MEMBER                  

Complainant:               1. Sanjeev S/o Shivaraddi Chavaraddi

                                      Age:47 Yrs, Occ:Business.

                                              R/o Hulkoti Tq & Dist:Gadag.

                                            (Rep. by Sri.P.S.Dharmayat, Advocate)

V/s

JUDGEMENT

JUDGEMENT DELIVERED BY SRI.D.Y.BASAPUR, PRESIDENT.

            The complainant has filed the complaint U/Sec.35 of the C.P. Act, 2019, seeking direction against the Op to refund the amount of  Rs.15,257/- along with interest and Rs.4,50,000/- towards mental agony and cost of litigation.

2.    The brief facts of the complaint are as under:

            The complainant is a regular customer having S.B and loan account with Op Bank, the Syndicate Bank now after merger is Canara Bank.  The complainant had obtained vehicle loan from Op bank bearing loan account No.12197790000781 for Rs.8,00,000/- with interest 9.55% p.a. The loan amount of Rs.8,00,000/- is sanctioned on 21.09.2014 and  the said complainant had purchased the RENULT DUSTER RXL Diesel Sallon with register No:KA-26 M-7230. The complainant had regularly paid the loan installment amount.  The complainant personally had got insured his vehicle with Liberty general insurance company, and from the date of purchase of the said vehicle till date a copy of the insurance certificate is supplied to the OP bank, but all of sudden on 18.01.2020 Op bank charged for insurance premium a Rs.15,257/- for UIIC Co., from the  loan account of complainant without his  knowledge. The complainant had never purchased the insurance policy from OP bank or from the said insurance company as the complainant had already got insured his vehicle from other company and the copies of insurance policy is also submitted to OP Bank. Even then, the Op bank charged for insurance premium amount from the complainant’s loan account. The complainant obtained the statement of his loan account on 27^th April 2021 and visited the Op bank and requested to correct the same, but Op bank did not heed to the request of complainant. On 11.07.2021 complainant issued a legal notice through his Advocate, the notice is duly served to the Op, but have not replied till today. Ops have committed the deficiency of service. Hence, filed this complaint.  

Subsequently Op No.2 is impleaded and amended the complaint stating that,  the Op No.2 had issued the alleged policy to the vehicle bearing No. KA-26 M-7230 under its policy NO.0505823119p113688994 covering period from 23.01.2020 to 22.01.2021, after lapse of one month from the previous policy, without the inspection of the said vehicle and without the knowledge of the complainant, hence the Op No.2 is liable for the deficiency of service.

          3.   In pursuance of service of notice, OP appeared through their counsel and filed their written version. Subsequently, Op No.2 was impleaded and appeared through his counsel and filed written version.

4. The brief facts of  written version filed by OP No.1 is as under:

          OP No.1 admitted loan being borrowed by complainant and denied that, complainant personally had got insured his vehicle with the liberty General insurance Company and supplied to the OP bank. The complainant had not insured the vehicle in time and the OP bank insured the vehicle with UIIC Company and also denied that all of a sudden on 18.01.2020 Op bank charged the insurance premium from the loan amount of the complainant without his knowledge. The insurance of the vehicle policy expired on 15.12.2019.  The OP waited for one month for insurance certificate.  The complainant did not supply the insurance policy of the vehicle till 17.01.2020. The OP bank had no other way but to go  for the insurance of the vehicle.  The vehicle is hypothecated with Syndicate Bank, Hubballi and not with Canara bank, Hulkoti branch which is not connected to the loan account of complainant. The complainant has not at all purchased the insurance policy for Op bank loan and nor obtained statement of loan account  on 27.04.2021 and saying that  it came to the knowledge of complainant about the charge for Insurance premium is all false. The complainant knew very well the insurance premium is charged into his loan account and then only he closed his loan account.  The complainant has executed composite Hypothecation agreement in favour of Op Canara Bank, Hulkoti in respect of the vehicle loan agreeing the terms and the conditions mentioned in the composite Hypothecation Agreement on 22.09.2014. The condition mentioned  in the Para No.8 of Composite Hypothecation agreement in respect of Insurance read as under 8 (a) “that on the aid goods which is the subject matter of the agreement shall be insured and kept insured by the borrower against loss or any other risk as the borrower may think necessary or as may be required by the Bank in its discretion in the joint name of the borrower and the Bank with an insurance company approved by the Bank to the extent of actual value of the said goods and the borrower shall punctually pay the premium due for such insurance and that cover note and the insurance policy shall be delivered to the Bank. The complainant has not at all submitted cover note and the insurance policy in respect of the vehicle to the Op bank.”  He has violated the terms and conditions of the composite Hypothecation agreement.  The Op bank has produced composite Hypothecation Agreement executed by complainant.  In the same agreement 8 (b) reads as under “ if the borrower fails to effect such insurance in time the bank may without being bound to do so insure the said goods against any one. Any premium and other charges paid by the Bank shall be paid by the borrower”. The Op bank has insured the vehicle to protect and safeguard the interest of complainant. The question of suffering financial loss by complainant does not arise at all.  There is absolutely no deficiency of service committed by the Op. Hence, prays for dismissal of the complaint.

5. The brief facts of  written version filed by OP No. 2 is as under:

The Op No.2 denied the various allegations and contended that, this OP is no way concerned with the agreement entered between the banker and complainant. The Op No.2 had accepted the proposal and issued the policy as per request of the bank.  The contract of insurance is based on the principle of good faith more so as there was tie-up between the bank and insurance Company. If at all there was double insurance then it was the duty of the bank to request for the cancellation of the subsequent policy immediately, that too within the mentioned period. At no point of time such request is made by bank, there was no fault on the part of the OP No.2 and cannot be made liable and there is no deficiency of service on the part of Op  No.2. There is no direct relationship between insured and insurer i.e. complainant and Op No.2, since the premium is paid on account of complainant. Op No.2 has not undertaken any service contract for and on behalf of the complainant, in absence of any privity of contract between the parties. The claim of the complainant that, he is the consumer within the meaning of C.P.Act, Hence, prays for dismissal of the complaint.

        6. To prove the case, the complainant has filed his affidavit and was examined as PW-1 and got marked the documents as Ex.C-1 to Ex.C-4 Sri. Pradeep Kumar T.S. has filed affidavit for OP No.1 and got examined as RW-1 and got marked the documents as Ex.Op-1 & Ex.Op-2.   Op No.2 has not chosen to file affidavit evidence, inspite of sufficient time was given.

       7. The learned counsel for complaint filed written argument. Heard, the arguments on both sides.       

       8.   The points for consideration to us are as under:              

1. Whether the complainant proves the deficiency of service committed by the Ops?

2. Whether the complainant is entitled for

3. What Order?

   9.        Our findings on the above points are as under:

               Point No. 1:  In the  affirmative.

               Point No. 2:  In the partly affirmative.

               Point No. 3:  As per the final Order

R E A S O N S

           10.     Point No.1 & 2 :- The learned counsel for complainant submitted in written argument, as per evidence of PW-1 and documents Ex.C-1 to Ex.C-4, complainant has proved the deficiency of service committed by the Op.  The learned counsel for OP No.1 argued that, complainant has failed to prove that, the deficiency of service is committed by this OP.

11. At the very outset, undisputed facts are that Op No.1 has admitted that, the complainant borrowed a loan of Rs.8,00,000/- and purchased the vehicle bearing No.KA-26 M-7230, and also Op No.1 insured the vehicle with Op No.2 for the period  23.01.2020 to 22.01.2021. As per the complainant, he had got insured the vehicle personally with Liberty General Insurance Company, from the date of purchase of vehicle in the year 2014.  The main contention of Op No.1 is that, complainant had not insured the vehicle in time, therefore the bank insured the vehicle with Op No.2. The complainant did not supply the insurance policy of the vehicle till 17.01.2020 even though the policy had expired on 15.12.2019.

12. Ex.C-1 Postal acknowledgment, Ex.C-2 Postal receipt, Ex.C-3 Legal notice issued by complainant to OP No.1 are not in dispute. Ex.C-4 Copy of the Private Car Package policies issued by Liberty General Insurance Co. Ltd., for the period from 03.10.2015 to 2016, 2017, 2018, 15.12.2019 to 14.12.2020 and  15.12.2020 to 14.12.2021 all the policies  reveal that, the complainant got insured the vehicle from the date of purchase of vehicle till he closed the entire loan. Ex.Op-1 composite Hypothecation  agreement executed by complainant is also not disputed by the parties. Ex.Op-2 Private car policy issued by Op No.2 UIICL Company from 23.01.2020 till 22.01.2021.  According to OP No.1, complainant did not supply the insurance of the vehicle till 17.01.2020. So, the bank insured the vehicle.  Ex.Op-2 policy with Op No.2 company.  Complainant has produced Ex.C-4 policy which was inforce till 14.12.2021. If, the complainant did not supply the policy to OP No.1, the bank ought to have insured the policy with Op No.2 on 16.12.2019 immediately after expiry of previous policy on 15.12.2019.  However, Op No.1 got insured the policy on 23.01.2020 after more than one month 8 days. Op No.1 has not produced any document to show that, they issued notice or sent any reminder to the complainant for supply of policy immediately after expiry of policy on 15.12.2019. Op No.1 further contended that, as per hypothecation agreement  para No.8 vehicle shall be insured and kept insured by the borrower against loss as may be required by the bank in its discretion in the joint name of borrower and bank with an insurance Company. if the borrower fails to effect such insurance in time the bank may without being bound to do so insure the said goods against any one. Any premium and other charges paid by the bank shall be paid by the borrower. However, Op No.1 for the first time has got insured the vehicle on behalf of complainant and debited the amount to the loan account of complainant. as per Ex.Op-2 with Op No.2 company.  PW-1 has stated that, he supplied the insurance policy to OP No.1 bank till 14.12.2021. So, the act of the Op No.1 that, without making enquiry with the complainant or issuing notice/reminder for supply of policy, they got insured the vehicle with Op No.2 after lapse of one month 8 days is not correct and proper.  Even though complainant got insured the vehicle for the year 2019-20, 2020-21, Op No.1 again insured the same vehicle with Op No.2 for the year 2020-21. Thereby double insurance to the same vehicle is made with two different insurance Companies. Op No.2 contended that, as per the request of the Op No.1 bank issued the policy Ex.Op-2. Further contended that, if at all there was a double insurance then it was the duty of the bank to request for cancellation of the subsequent policy immediately, that too within the mentioned period. At no point of time such request is made by the bank.

13. So for as, deficiency of service Op No.2 is concerned, they issued the policy Ex.Op-2 without enquiring, whether the policy is in existence or has expired.  It is mandatory on the part of insurance Company at the time of issuance of policy to the vehicle, either for fresh insurance or for policy that has expired it is necessary to produce the vehicle physically for inspection. Usual procedure is that once policy is issued and if it has to be renewed prior to expiry of the policy period, then production of vehicle physically is exempted.  Suppose previous policy has expired, then it is mandatory on the part of insurance Company to insist for production of vehicle for physical inspection.  Admittedly, no insurance policy is issued by Op No.2, from date of vehicle purchase for the year 2014 till 2020. Such being the case, Op No.2 issued Ex.Op-2, without insisting the bank or the complainant to produce the vehicle for physical inspection prior to issuance of Ex.OP-2. Even, bank has also not insisted the complainant to produce the vehicle before Op No.2 as previous policy had expired.  Morever, bank got insured the vehicle as per Ex.Op-2 from OP No.2 company which is situated at Medak of Telaganna State. Op Bank has not stated any reasons why they have insured  the vehicle with Op No.2, though many other insurance companies are situated at Gadag. As per the contention of Op No.2, if there is an agreement entered between the OP No.1 and 2 what precluded the Op No.2 to produce the agreement and prove its contention and as far as the contention that there is no privity of contract between Op No.2 and the complainant, then why at all  the Op No.2 has insured the vehicle policy which is in the name of individual complainant itself and not in the name of bank. Therefore, this stand also is not having any force. Therefore, , the act of Op No.1 bank creates a suspicion in the mind of the Commission, Ops have colluded with each other and got issued Ex.Op-2. Therefore, both the Ops have committed the deficiency of service.

 14. Point No.2:-The reasons stated in the above point No.1, the complainant has proved that, OPs have committed the deficiency of service and he is entitled for the relief. The insured amount of Rs.15,257/- received by Op No.2 from Op No.1 bank who has been debited the said amount to the loan account of complainant therefore, the  Op No.2 is liable to pay the amount of Rs.15,257/- to the complainant with interest @9% from the date its debited to the account of the complainant i.e. from  18.01.2020 till realization.  Complainant has suffered mental agony due to deficiency of service committed by the Op No.1. Therefore, the complainant is entitled for a sum of Rs.15,000/- towards mental agony and Rs.10,000/- towards cost of litigation from Op No.1 bank. Accordingly, we answer point No.1 in the affirmative and point No.2 in the partly affirmative.   

          15. Point No.3:-In the result, we pass the following: 

  //O R D E R//

The complaint filed U/Sec.35 of the Consumer Protection Act, 2019 is partly allowed against OP No.1 & Op No.2.

           The Op No.2 is directed to pay a sum of Rs.15,257/- with interest @9% p.a. from 18.01.2020 till realization.

Further, Op No.1 is directed to pay a sum of Rs.15,000/- towards mental agony and  Rs.10,000/- towards cost of litigation.  

Op No.1 & Op No.2  are directed to pay the above claim amount within two months from the date of this order.

Office is directed to send the copies of this     order to the parties free of cost.

           (Dictated to the Stenographer, directly on computer corrected and then pronounced by us in the Open Commission on this 14^th  day of March-2023)

 (Shri Raju N. Metri)     Shri. D.Y. Basapur)  (Smt.Yashoda Baskar.Patil)

       MEMBER                        PRESIDENT                   WOMAN MEMBER

-: ANNEXURE :-

EVIDENCE ON BEHALF OF COMPLAINANT/S:

PW-1: Shri. Sanjeev S/o Shivaraddi Chavaraddi

DOCUMENTS ON BEHALF OF COMPLAINANT/S

Ex.C-1 : Postal acknowledgement.

Ex.C-2: Postal receipt.

Ex.C-3: Legal notice.

Ex.C-4: Copy of policy.

EVIDENCE ON BEHALF OF OPs:

RW-1 : Sri. Pradeep Kumar T.S.

DOCUMENTS ON BEHALF OF OPs:

Ex.Op-1 :  Composite Hypothecation Agreement executed by

                complainant in favour of Op Bank, Dtd:22.09.2014.

Ex.Op-2 :   Copy of Private Car package policy.

(Shri Raju N. Metri)    (Shri. D.Y. Basapur)      (Smt.Yashoda Bhaskar. Patil)

      MEMBER                      PRESIDENT                  WOMAN MEMBER