SRI NILAKANTHA PANDA, PRESIDENT

            The Complainant has filed this complaint petition, U/s – 12 & 13 of erstwhile Consumer Protection Act, 1986 (here-in-after called as the “C.P. Act - 1986”), on dated 18/09/2017, alleging a “deficiency-in-service” by the OP, who is the Chief Manager, State Bank of India, Motiganj Branch, Balasore.

            The matrix of the case matter of the complainants, in brief, is that the complainant No.1, for the purpose of purchase of a flat from Orissa State Housing Board under auction sale, had applied for a housing loan of Rs.40, 00,000.00 to the OP which was availed by him on 12/07/2012. The complainant No.2 is the co-borrower. After disbursement of loan, the complainants started paying monthly instalments. In the process, to submit their income tax return, the complainants obtained a statement of their loan account from the OP in the month of April, 2013, wherefrom they came to know that some amount was diverted from their deposits and credited to another account opened by the OP towards premium of “SBI Life Insurance”. That covering of insurance for loan amount / asset is optional for the purpose of application and availing of housing loan from the OP. The complainants have never asked / opted the OP to open another account for “insurance coverage”. Therefore, the complainants sent an application on 08/07/2013 to the OP requesting to stop diversion of amounts towards insurance and to credit the amount so diverted into their loan account, but in vain.

            It is further stated by the complainants that on 03/03/2014, they deposited a sum of Rs.30, 000.00 in their loan account, but in the statement of account for the month of April, 2014 reveals that only Rs.11, 080.00 has been credited to their loan account and the rest Rs.18, 920.00 has been credited towards disputed insurance premium. Thus, the complainants protested the aforesaid act of the OP vide their letter dated 04/06/2014 and in reply, the OP has stated that there are “two loan accounts” for Rs.41,60,000.00 and a sum of Rs.18,920.00 has been credited to the second loan account, as per their letter vide No.PBD/14/173, dated 11/06/2014.

            The complainants have further stated that on 24/03/2014, they came to know that the OP, without taking into consideration to their aforesaid requests, had debited Rs.5, 555.00, Rs.10, 000.00 and Rs.10, 000.00 from their loan account without any pre-approval & / any pre- intimation to them and further they came to know that said amounts had been deposited towards property insurance for 18 years. The complainants were totally unaware of such asset insurance policy nor had the OP ever consulted with them about the matter. Moreover, most surprisingly, although the flat was purchased in the name of complainant No.1 (i.e. Principal Borrower), the insurance cover was made in the name of complainant No.2 (i.e. Biswashree Dash (D/o Sri Nrusingha Charan Dash)), who happens to be co-borrower. The OP has not bothered to “insure” the property neither in the name of the owner of the asset (i.e. Complainant, N. C. Dash) nor against the very asset itself and in case any loss or damage caused to the asset, no one can claim for such loss or damage. Thus, the complainant wrote a letter dated 04/06/2014 to the OP about the matter and as no action was taken by the OP, the complainant sent another letter on 17/06/2014 to the OP in the above subject matter. Thereafter, the OP vide letter No.PBD/14/182 dated 16/06/2014 intimated the complainant that the matter has been brought to the notice of “SBI Life Insurance” for appropriate consideration for refund of premium and for redressal of the grievances, but in vain. Thus, the complainant No.1 made several repeated representations on dated 15/07/2014, 07/08/2014, 02/06/2015, 31/10/2015, 05/01/2016, 21/01/2016 & 12/05/2016. Considering the above repeated representations of the complainant No.1, the OP refunded a sum of Rs.45, 170.00 on 23/03/2016 as against Rs.61, 920.00 which was illegally diverted by the OP from the loan account of the complainants towards payment of insurance premium. Thereafter, when the complainant No.1 was again requested to refund the rest differential amount of Rs.16, 750.00, the OP verbally assured to refund the same immediately, but did not pay till date.

            Being aggrieved with the aforesaid irresponsible act of the OP, the complainant served a “Legal Notice” on 17/10/2016 on the OP, but no reply has yet been received, rather, the OP, without resolving the issues, subsequently diverted a sum of Rs.25,000.00 on 11/08/2017 from their account to which the complainant objected vide letter No.16/08/2017. It is stated that the complainants are not at all responsible for opening of such alleged 2^nd loan account for the purpose of “SBI Life Insurance” at any point of time and the OP, on its own motion and for the reason best known to them, has opened the 2^nd loan account by “itself” with a view to feed their sister concern “insurance sector”. The OP, being a public functionary, expected to render adequate & proper service to the customers, but in the present case, it has acted deplorably and behaved in this said manner to an “ex-official” of the same banking concern i.e. the OP Bank.

            Though the first actual cause of action of this case arose on 09/10/2012, when the OP for the first time diverted the amount towards insurance premium but the cause of action for filling this case matter arose, when the OP without responding to the legal notice dated 17/10/2016, has again diverted Rs.25, 000.00 from the account of the complainants for the above alleged reasons on 11/08/2017.

            With the aforestated facts and circumstances, the complainants left with no other option were constrained to file the present case with the reliefs, as prayed for in their complaint petition. Hence, this case.       

            To substantiate their case, the complainants relied upon the following documents, which are placed in the record for further references-

1. Photocopy of letter dated 08/07/2013 of the complainants.
2. Photocopy of deposit slip dated 03/03/2014.
3. Photocopy of statement of account dated 05/04/2013.
4. Photocopy of letter dated 04/06/2014 of the complainant.
5. Photocopy of letter No.PBD/14/173 dated 11/06/2014 of OP.
6. Photocopy of letter dated 17/06/2014 of the complainant.
7. Photocopy of letter No.PBD/14/182 dated 26/06/2014 of OP.
8. Photocopy of letter dated 15/07/2014 of the complainant.
9. Photocopy of letter dated 07/08/2014 of the complainant.
10. Photocopy of letter dated 2/06/2015 of the complainant.
11. Photocopy of letter dated 31/10/2015 of the complainant.
12. Photocopy of letter dated 05/01/2016 of the complainant.
13. Photocopy of letter dated 21/01/2016 of the complainant.
14. Photocopy of letter dated 12/05/2016 of the complainant.
15. Photocopy of letter dated 16/08/2017 of the complainant.
16. Photocopy of Advocate’s notice dated 17/10/2016.
17. Written submission dated 11/07/2023.
18. Copy of Free Insurance Letter of the Op.
19. Copy of Master Circular Home Loan of Op.
20. Copy of Case citation of Hon’ble Supreme Court of India – Consumer Unity & trust Society, Jaipur, VS, The Chairman Managing Director, Bank of Baroda, Kolkata.

            In the present case, notice was issued against the OP on 26/09/2017, which was sufficient vide order dated 20/11/2017, but the OP neither appeared nor choose to file his written statement, for which it was set ex parte, as reflected vide order dated 02/05/2023.    

            Hence during the ex-parte hearing against the Op, the council of the complainant has submitted and presented the detail sum & substance of the case matter supported by appropriate documentary evidence, as under.

            Learned counsel for the complainants during the course of hearing argued that the complainant No.1 had applied for a housing loan of Rs.40,00,000.00 to the OP for the purpose of purchase of a flat from one, Orissa State Housing Board under auction sale, which was availed by him on 12/07/2012 and the complainant No.2 is the co-borrower. After disbursement of loan, the complainants started to pay monthly instalments regularly without any default. To submit their income tax return, the complainants obtained a statement of their Loan Account from the OP in the month of April, 2013 wherefrom they learnt that some amount was diverted from their deposits and credited to another account opened by the OP towards premium of “SBI Life Insurance”. Covering of insurance is optional for the purpose of application & availing of housing loan from the OP, as per the RBI Guideline. The complainants have never asked the OP to open such another account for insurance coverage. Therefore, the complainants sent an application on 08/07/2013 to the OP requesting to stop diversion of amounts towards such insurance and to credit the amount so diverted into their loan account, but in vain. Further, it is submitted that the complainants deposited a sum of Rs.30, 000.00 in their loan account on 03/03/2014, but in the statement of account for the month of April, 2014 reveals that only Rs.11, 080.00 has been credited to their loan account and the rest Rs.18, 920.00 has been credited towards such insurance premium. The complainants protested the aforesaid illegal act of the OP vide their letter dated 04/06/2014 and in reply, the OP stated that there are two loan accounts:- one loan account for Rs.41, 64,000.00 and another for “SBI life insurance” and Rs.18, 920.00 has been credited to the said account, vide letter No.PBD/14/173 dated 11/06/2014. It is further argued that on 24/03/2014, the complainants came to know that the OP, without taking into consideration to complainants’ earlier requests, had further debited Rs.5,555.00, Rs.10,000.00 and Rs.10,000.00 from their loan account without any prior intimation / information / consent to / from and further complainants’ came to know that said amounts had been deposited towards “property insurance” for 18 years. The complainants were totally unaware of such asset insurance policy neither had the OP ever consulted them nor took any consent them about the matter. Moreover, astonishingly, although the flat was purchased in the name of complainant No.1, the insurance cover was made in the name of complainant No.2 (Supra). The OP has not bothered to insure the property, neither in the name of the actual owner of the asset (i.e. Complainant – 1) nor in against the Property itself and in case of any loss or damage caused to the asset, no one can raise any claim and the OP & its beloved Sister Concern, would have a safe narrow passage to escape from any unforeseen Liability. Thus, the complainant wrote a letter dated 04/06/2014 to the OP about the matter and as no action was taken up by the OP, the complainant sent another letter on 17/06/2014 to the OP in the above subject matter. The OP, vide letter No.PBD/14/182 dated 16/06/2014, intimated the complainant that the matter has been brought to the notice of “SBI Life Insurance” for consideration or refund of premium and for redressal of the grievances, but in vain.

            Thus, the complainant No.1 made several representations on dated 15/07/2014, 07/08/2014, 02/06/2015, 31/010/2015, 05/01/2016, 21/01/2016 & 12/05/2016. Considering the above representations of the complainant No.1, the OP refunded a sum of Rs.45, 170.00 on 23/03/2016 as against Rs.61, 920.00 which was illegally diverted by the OP from the loan account of the complainants towards payment of insurance premium. Thereafter, when the complainant No.1 requested to refund the differential amount of Rs.16, 750.00, the OP verbally assured to refund the same immediately, but did not pay till date. For the aforesaid act of the OP, the complainant served legal notice on 17/10/2016 on the OP, but without any reply, the OP again diverted a sum of Rs.25,000.00 on 11/08/2017 from their account to which the complainant objected vide letter No.16/08/2017. It is submitted that the complainants are not at all responsible for opening of 2^nd loan account for the purpose of SBI Life Insurance at any point of time and the OP has whimsically opened the 2^nd loan account by himself with a view to feed fat the insurance sector, as mentioned earlier.

            First of all, to obtain insurance policy to secure the loan is quite optional as reflected in Master Circular Home Loans vide Master Circular No. NBG/RE,H&HD-HL/7/2017-18 dated 08/05/2017 of the Reserve Bank of India which was circulated to all Banking & NBFC Concern, whoever deals in Housing Loan Business, wherein it has clearly mentioned that it should be noted that the customers should not be compelled to opt for these, as the facility is optional to borrower. Any insistence by our operating units for taking SBI Life cover as a pre-condition for availing Home Loans may result in violation of the regulatory guidelines prescribed by the Reserve Bank of India and Insurance Regulatory and Development Authority. In the present case, the complainants have not exercised their option neither in writing nor in any other form to take insurance policy, that to, illegally insurance policy has been opened in the name of the “Co-Borrower”. Despite repeated requests of the complainants to close the insurance account, the OP always turned a deaf ear to the same and used to divert the substantial amount of money from the loan account towards payment of insurance premium to satisfy their sweet will / ill motive.

            That in view of the above averments of parties, the points for determination in this case are as follows:-

(i)         Whether the Complainants are Consumers or not?

(ii)         Whether the complainants have cause of action to file this case?

(iii)        Whether this consumer case is maintainable?

(iv)        Whether there is any deficiency in service on the part of the O.Ps?

(v)        Whether the complainants are entitled to get the relief, as sought for?

(vi)        To what other relief(s), the Complainants are entitled to? 

F   I  N  D  I  N  G  S

            First of all it is to be ascertained as to whether the complainants are “Consumers” or not. From the averments of the pleadings of the complainants and document produced on behalf of the complainants vide above mentioned Annexures, it is clearly admitted and established that the complainants have availed a Housing Loan facility , on payment of consideration (Interest Money) as rendered by the OP, the State Bank of India, Motiganj Branch, Balasore, Odisha. Therefore, the complainants are well covered under the previews of definition of “Consumer” as defined under the provisions of the Consumer Protection Act, 2019.

            That to arrive at conclusion, weather, there is a “Cause of Action” arose / lies on the part of the O.P, it is seen on the face of the complaint petition vis-à-vis the annexed letters relating to them, sent to the OP, by the complainant in connection to the first irregularities made on dated 09/10/2012, the Op did not pay any attention to it. But for fixing the liability of cause of action upon the OP, the complaint has exercised its decision to consider date on which it’s last Advocate’s Notice was issued to the Op, i.e. dated 11/08/2017. That as the Op, in this case matter did not turnout for any contest, hence allegedly there from the cause of action considered to arose.

            That it is evident from the version of the complainant that, the complain / claim of the complainant in question, could not be rectified / removed / sorted out, although after several letters, reminders & / or Advocates Notices, lastly the complainant got dejected on and after dated 11/08/2017 (Last Adv. Notice). Hence it is determined that the present case filled is within the permitted scope of the CP Act, hence it is maintainable under this Act.

            That to arrive at conclusion, weather, there is any deficiency on the part of the OP & relief as may be entitled to the complainant, the following points, as stated by both the complainants, are to be addressed collectively in pursuance to the documentary evidence as submitted. They are as under:-

            That the Section 2 (42) C.P.A.-19, deals with the definition of “Service” which means “Service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”. That in this context the Op is a Banking Concern as a service provider and the Complainant is a service recipient of it.

            Similarly, Section 2 (11) C.P.A.-19 deals with definition of “deficiency” which means “any fault, imperfection or shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to performed by a person in pursuance of a contract or otherwise in relation to any service”.

            In the present case, it is to examine, along with above parameter, as to whether any fault, imperfection, shortcoming or inadequacy in the performance of service by the OP-Bank which otherwise tantamount to deficiency of service within the meaning of Rule 2(g) of The Consumer Protection (CDRC) Rules, 2020.

            It is an established fact that the complainants have not exercised his / their option for insurance, but the OP has suo motto opened the account in connection with insurance violating the guideline of the Bank itself and of the RBI, as discussed earlier. In addition to it, the OP has not at all took any step to make the same “regular” even after several correspondences made by the complainants, as reflected under Annexure-1 to 4 & 8 to 15. Moreover, the OP taking cognizance of its illegalities diverted some amount of money from the loan account and credited the same in the insurance account. Thereafter, on written complaint, the OP although tried a bit to refund some amount of money, but did not stick to the same for total revert and again continued diverting funds from the loan account to the insurance account as before. Thus, the aforesaid illegal or irregular activities undertaken by the OP in course of rendering service to the customers, more particularly to the complainants irresistibly tantamount to an act of fault, imperfection and shortcomings in the performance of service by the OP-Bank. It is settled principle of law that any deficiency widens the ambit of service and extends to any service. Hence this commission concludes that there is a gross deficiency on the part of the OP bank.

            Therefore, basing upon the aforesaid state of affairs, payment of interest, damages and compensation as claimed by the complainants is squarely covered by the expression “service” and “deficiency of services”. Thus, taking into consideration the factual matrix and position of law via-a-vis matters of present case matter, it cannot be said that the complainants have contributed any wrong at any point of time towards the apparent fault, imperfection, shortcomings or inadequacy in the performance of service by the OP more particularly when the OP has intentionally withheld his appearance before this Commission and to resist the claim of the complainants. Thus, deficiency in service is clearly attributed to, against the OP. From the above discussions, this Commission is of the unanimous considered opinion that the complainants are rightfully entitled to the reliefs, as claimed in their complaint petition. 

            Having regards to our finding reflected above, the Complaint petition is allowed and the “ex-parte” O.P is hereby set liable.

            So, now upon careful consideration of all the materials available in the case record vis-a-vis submission made by complainants, this Commission is of the unanimous opinion that the O.P has not adjudicated its dispute properly before the Commission. There is no solution arrived by the exparte O.P for the loss sustained / suffered by the Complainants incurring out of deficiency on the part of O.P, which legally termed as deficiency-in-service by the O.P. Therefore, the complainants reserve the right to be entitled to get the relief as sought for.

            Hence, it is ordered –

O   R   D   E   R

            Having regard to the judgement reflected above, the Complaint Petition of the instant Complainants bears merit and hence allowed on exparte against O.P. That this Commission is of the unanimous opinion that there is a gross deficiency on the part of the O.P. Hence, the O.P is hereby set liable for its gross deficiency of service. Hence that the O.P. is hereby directed to:-

1. That upholding the first prayer of the complainant, the OP is hereby directed to close and / or to cause to close the second “Loan Account”.
2. That upholding the second prayer of the complainant, the OP is hereby directed to refund and / or to cause to refund the entire “diverted” money diverted, along with an interest @11.00%P.A., from the date of diversion till the date of refund.
3. That upholding the fourth prayer of the complainant, the OP is hereby directed to pay compensation of Rs 88, 460/-, as set out in the Schedule “B” annexed the prayer of the complaint petition, with an interest of @ 9.00% P.A., from the cause of action till date of payment.
4. That upholding the fifth prayer of the complainant regarding any relief as may be deem fit to be granted, as mentioned hence. That this commission while Hearing and Ordering this case matter, has meticulously observed, neither the OP has wrongly / illegally diverted the so called Loan Insurance Premium, rather has grossly played the “heard earned money” of the complainants in a very mischievous manner. That if Commission with a very “good faith” & in a “progressive” manner proceeds to believe that the alleged as action taken by the OP was to secured both its “Loan” and the “Assets under loan”, has on its own motion has opened and maintained the Insurance, but, it is clearly observed & established through documentary evidences as presented by the complainant, that  the alleged “Insurance” was neither opened in the name of principal borrower (Complt.-1) nor in the name of the Asset itself (Flat), rather opened in the name of the co-borrower (Complt.-2), there by cleverly pushing it in to a “safe danger & dark risk zone”. That in this situation, this Commission is of in strong belief that, if under any unforeseen situation, the asset under loan would be plunged to any accident / destruction, etc., then the Complainants would be in no-where position to get any relief, as neither the borrower nor the assets is under insurance coverage.  Hence, context to above discussion, as the OP dealt with both the complements and the house under loan, quite carelessly by thrusting upon all the liabilities on the complainants, despite by deduction of insurance premium but not insuring principal borrower & / or asset, hence the OP is hereby directed to pay that same amount which was initially sanctioned as loan, i.e. Rs 40, 00, 000/-, as relief as felt and deem be fit by this commission.
5. That delay in compliance of this order, on the part of the O.P, shall carry fine of Rs.01, 000/- (Rupees One Thousand) only, per day, payable by the defaulter O.P to the complainants.

            All the aforesaid ordered amounts / compliances will be paid / abided by the O.P to the complainants within 45 days from the date of receipt of this order.

            That deferment in any manner / mode / reason / step thereof, for compliance of this order, as directed above, the O.P, shall carry out with an additional fine of Rs.01, 500/- (Rupees One Thousand and Five Hundred) only, per day and an additional interest of @ 12.00% P.M., upon Order No. 1 to 4, payable by the defaulter O.P to the complainants.

            In case of failure by any of the O.P to comply any of the orders as above mentioned, within the aforesaid stipulated time frame, the Complainants are at liberty to realize the same in the shape of cash, kind and / or in any other mode / action as afore mentioned, from the O.P as per the prevailing law.

            Pronounced in the open Court of this Commission on this day i.e. the 9th day of October, 2023 given under my Signature & Seal of the Commission.