BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

C.C. No. 280/2006 Filed on 26.10.2006

Dated : 30.05.2009

Complainants:

1. Consumer Vigilance Centre, Sreekovil, Kodunganoor P.O, Thiruvananthapuram represented by its General Secretary A. Ayyappan Nair.

    

2. Omana. R, W/o Rajappan Nair, Pradeesh Bhavan, V.P 11/505, Elankom Vilakam, Plavode, Kodunganoor P.O, Thiruvananthapuram.

Opposite parties:

1. The Branch Manager, Thiruvananthapuram District Co-operative Bank, Kunnukuzhi Branch, Kunnukuzhi, Thiruvananthapuram.

    

2. The General Manager, Thiruvananthapuram District Co-operative Bank, Head Office, Fort P.O, Thiruvananthapuram

(By adv. Pallichal S. Aswakumar)

This O.P having been heard on 27.04.2009, the Forum on 30.05.2009 delivered the following:

ORDER

SMT. BEENAKUMARI.A: MEMBER

The 1^st complainant in this case is C.V.C and 2^nd complainant is Omana. R who is the wife of late Rajappan Nair. The said Rajappan Nair availed a loan No. 41/04-05 for Rs. 1,20,000/- from the 1^st opposite party, on the collateral security of landed property on 29.09.2004. On the same day itself, Rs. 1,18,300/- has been withdrawn by Rajappan Nair and the opposite party charged Rs. 1,075/- from the loan amount as insurance costs and the balance amount Rs. 725/- remained in his S.B Account No. 6989. Loan period was for 5 years, the opposite parties assured Rajappan Nair that if something happened to him he need not repay the loan amount to the opposite party. Whileso Rajappan Nair died on 07.06.2006. Thereafter the 2^nd complainant requested the opposite party to close the loan from the insurance amount and return the title deed of the mortgaged property. Rajappan Nair correctly paid the monthly loan instalment till 5/06. The 2^nd complainant contacted the insurance company regarding the insurance of late Rajappan Nair. Then they informed that it was group insurance scheme. Only the opposite party bank has the right to renew the insurance and all dealings of the insurance was only with the opposite party bank. The insurance company also informed the complainant that the opposite party did not turn up to renew the insurance inspite of repeated letters from the insurance company. Hence the insurance lapsed. Thereafter the 2^nd complainant approached the 1^st complainant for their help. Accordingly the 1^st complainant sent a letter to the opposite parties to settle the matter. But the opposite parties did not settle the matter and not even turned up to send a reply. Hence this complaint.

The 1^st and 2^nd opposite parties filed version and denied the allegations against them. The opposite parties stated that in the year 2004, 2^nd opposite party had provisionally contracted with M/s A.M.P Sanmar Life Insurance Company to insure all the loanees of the Thiruvananthapuram District Co-operative Bank, under Group Insurance Scheme, and as per the proposal of the insurance company, 1^st opposite party provisionally deducted Rs. 450/- only towards insurance premium from the loan amount of Rajappan Nair on 29.09.2004. But the Reserve Bank of India did not permit the Bank to proceed with the insurance activities and directed the Bank immediately to stop all activities of insurance. So the 2^nd opposite party instructed all the branches of D.C.B, to return the premium collected from the loanees and accordingly the amount deducted from Rajappan Nair was also credited in his S.B. Account No. 6989 on 31.03.2005 and that fact was known to the loanee also. They also submitted that the balance amount in the S.B Account is Rs. 1233/-not as Rs. 725/- as alleged by the complainant. Opposite parties also stated that the 1^st opposite party sent a reply letter on 23.08.2006 to the letter issued by the 1^st complainant, stating the true facts. The opposite parties pray for the dismissal of the case on the ground that there is no negligence or deficiency of service on the part of opposite parties.

Points that would arise for consideration are:-

1. Whether there is deficiency in service or negligence on the part of opposite parties?

2. Reliefs and costs.

    

Points (i) & (ii):- In this case the complainant and opposite parties filed proof affidavits and examined the 2^nd complainant as PW1 and 1^st complainant as PW2 and 4 documents were marked as Exts. P1 to P4. From the side of opposite parties, examined the Senior Accountant of the 1^st opposite party as DW1 and marked 4 documents as Exts. D1 to D4. Both parties were cross examined. Ext. P1 is the copy of the loan pass book of Rajappan Nair. In this document it is seen that the date of issuance of loan was 29.09.2004 and the loan amount was Rs. 1,20,000/-. As per this pass book he had paid the loan instalment till 29.05.2006. Ext. P2 is the copy of Savings bank pass book of Rajappan Nair bearing A/c No. 6989. From this document it is seen that on 29.09.2004, the loan amount of Rs. 1,20,000/- has been credited to his account and on that day itself he had withdrawn Rs. 1,18,300/- and bank charged Rs. 1,075/- as service charge insurance. The balance is shown as Rs. 725/-. Ext. P3 is the copy of death certificate of Rajappan Nair, date of death is 07.06.2006. Ext. P4 is the copy of notice issued by the 1^st complainant to the opposite parties dated 16.08.2006.

The document marked as Ext. D1 is the copy of letter issued by the RBI to the 2^nd opposite party on 17.01.2005 informing the bank that the bank has no license to participate in insurance business. In furtherance of this letter the opposite party stopped all the activities of insurance and they returned the premium collected from the loanees. Ext. D2 is the attested copy of the reply issued by the opposite parties to the 1^st complainant dated 23.08.2006. Through this letter the opposite parties informed the matter that the insurance amount Rs. 450/- was credited to the S.B. A/c of Rajappan Nair on 31.03.2005. Ext. D3 is the authorization letter of opposite party to authorize Mr. Anil Kumar, Senior Accountant, Kunnukuzhi branch to contest the case for the opposite parties. Ext. D4 is the details of transaction from 22.07.2004 to 13.12.2008 of the S.B. A/c of Rajappan Nair. From this document we can see that on 31.03.2005 the 1^st opposite party credited Rs. 450/- to the account of Rajappan Nair as insurance amount.

In this case the complainant argued that they have bonafide belief that the loan was insured by the opposite parties and therefore they have not paid the balance loan instalments. But the opposite parties cancelled the insurance of loan as per the direction of the RBI and they credited the insurance amount in the accounts of all the loanees. At this juncture, the aspect to be considered is whether this act of the opposite parties in cancelling the insurance amounts to deficiency in service on their part. Ext. D1 is the circular dated 17.01.2005 issued by Reserve Bank of India to the opposite parties. As per Ext. D1, the opposite parties are not licensed to continue the insurance activities. Accordingly the opposite parties have cancelled the insurance and the amount collected from the loanees like the complainant are credited in their own accounts itself. The 2^nd complainant states that she has no information about that. The opposite parties stated that they informed the matter to Rajappan Nair. The said Rajappan Nair died on 07.06.2006. Opposite parties refunded the amount to the S.B A/c of Rajappan Nair before his death i.e; on 31.03.2005(Ext. D4). And also DW1 stated at the time of examination that “Head Office ന്‍റെ നിര്‍ദ്ദേശപ്രകാരമാണ് ആദ്യ പ്രീമിയം പിടിച്ചത്. RBI യുടെ സര്‍ക്കുലര്‍ പ്രകാരം insurance business നടത്താന്‍ നിയമപരമായി കഴിയുകയില്ലായെന്ന് അറിയിച്ചതിനെ തുടര്‍ന്ന് ഭരണസമിതി ചേര്‍ന്ന് insurance നിര്‍ത്തി വെയ്ക്കാനും വായ്പക്കാരില്‍ നിന്നും പിടിച്ച തുക തിരികെ കൊടുക്കാനും തീരുമാനിച്ചു. അതാത് അക്കൗണ്ടിലേക്ക് insurance തൂക പിടിച്ചത് തിരികെ നല്‍കുകയും ചെയ്തു. ഈ വിവരം Bank Notice Board-ലും Head Office-ലും കൃത്യമായി ഇട്ടിട്ടുണ്ടായിരുന്നു”. Hence the statement put forwarded by the complainant that they have no knowledge about the cancellation of the insurance is not sustainable. And also the opposite parties stated that they have sent reply to the 1^st complainant regarding this matter through Ext. D2 letter. But the 1^st complainant denied the issuance of the letter. The opposite parties stated that they have issued the letter by ordinary post. Therefore they have no evidence to prove that complainant has accepted the letter.

From the above mentioned discussions we are of the view that the opposite parties have acted only in accordance with the circular issued by the Reserve Bank of India and hence there was no insurance coverage to the loan. Hence the Bank has the right to realize the loan amount from the mortgaged property if the loan amount is not paid. Hence complaint is dismissed. No cost.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the day of 30^th May 2009.

BEENAKUMARI. A : MEMBER

G. SIVAPRASAD : PRESIDENT

S.K. SREELA : MEMBER

C.C. No. 280/2006

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - Omana. R

PW2 - A. Ayyappan Nair

II COMPLAINANT'S DOCUMENTS :

P1 - Copy of loan pass book of Rajappan Nair bearing loan No.

41/04-05

P2 - Copy of Savings Bank pass book of Rajappan Nair bearing

A/c No. 6989.

P3 - Copy of death certificate of Rajappan Nair

P4 - Copy of letter dated 16.08.2006 issued by the 1^st

complainant to opposite parties.

III OPPOSITE PARTY'S WITNESS :

DW1 - Anil Kumar

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Copy of letter issued by RBI to the 2^nd opposite party dated 17.01.2005.

D2 - Attested copy of reply issued by the opposite parties to the complainant.

D3 - Authorization letter of 1^st opposite party dated 15.12.2008.

D4 - Copy of the abstract of SB A/c ledger showing transaction from 22.07.2004 to 13.12.2008.

 PRESIDENT