STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(COMPLAINT CASE NO.16 OF 2009)

                                                Date of Institution: 25.05.2009

                                                Date of Decision  :  03.11.2010

Sh. Ajay Kumar son of Late Sh. M. R. Sharma resident of House No.51, Preet Vihar, Baltana, Distt. Mohali.

……Complainant.

V e r s u s

1.                  G.I.C. Housing Finance Limited, SCO No.44, Sector 31-D, Chandigarh through its Branch Manager.

2.                  Chairman, Mr. Yogesh Lohiya, GIC Housing Finance Limited, Corporate Office, Address at 3^rd Floor, Universal Insurance Building, Sir PM Road, Fort, Mumbai 400 001.

3.                  Managing Director, GIC Housing Finance Limited, Corporate Office, Address at 3^rd Floor, Universal Insurance Building, Sir PM Road, Fort, Mumbai 400 001.

4.                  The Regional Manager, Chandigarh Regional Office, National Insurance Company Limited, SCO No.332 to 334, Sector 34-A, Chandigarh.

              ....Opposite Parties.

BEFORE:            HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT.

                        MRS. NEENA SANDHU, MEMBER

                        SH. JAGROOP SINGH MAHAL, MEMBER.

Argued by:            Sh. Rohit Dheer, Advocate for the complainant.

                        Sh. Sandeep Sharma, Advocate for OPs No.1 to 3.

                        Sh. Rajneesh Malhotra, Advocate for OP No.4.

PER JAGROOP SINGH MAHAL, MEMBER.

1.                     According to the complainant, Flight Lieutenant Bharat Kumar was his son and both of them took a housing loan of Rs.14 Lacs from OP No.1 They were assured at the time of the loan agreement of Free Insurance Benefits to all the borrowers including the Accidental Death Insurance Cover. After the loan was availed, Flight Lieutenant Bharat Kumar died in a plane crash. The complainant approached the OPs to give him benefit of the insurance on the death of his young son but they did not agree with it and after a prolonged correspondence of four years, the claim was repudiated vide Annexures C-14 and C-15 dated 5.1.2008. The complainant, therefore, prayed that on account of insurance cover, the entire remaining principle amount of Rs.13,18,387/- should be treated as fully paid, all the EMIs amounting to Rs.15,025/-, which the complainant had been paying should be refunded to him along with interest @18% per annum. He also prayed for a compensation of Rs.32 Lacs for harassment and Rs.5 Lacs for mental pain and agony etc.

2.                     OPs No.1 to 3 opposed the complaint while admitting the grant of loan of Rs.14 Lacs to the complainant and his son in the year 2001. It was alleged that if one of the co-borrower had expired, the other would be liable to pay installments of housing loan. It was denied if they ever agreed to waive off the entire loan amount on the death of one of the co-borrowers.

3.                     OP No.4 – National Insurance Company Limited provided insurance cover to OP No.1 in respect of such claims. Their contention is that there is no individual policy ever taken by the complainant on his own from OP No.4, no premium was ever paid and therefore, they had no liability to provide any insurance cover to the deceased or the complainant. It was alleged that only those borrowers/co-borrowers are covered who fulfilled the criteria as prescribed under the terms and conditions of the policy issued by them to OP No.1 and that the deceased was not covered there under because of his service conditions. The EMIs were being paid by the complainant to OPs No.1 to 3 and therefore, OP No.4 could not be asked to refund the said amount. OP No.4, therefore, prayed for dismissal of the complaint.

4.                     Both the parties produced evidence in support of their contentions.

5.                     We have heard the learned counsel for the parties and have perused the record.

6.                     There is no dispute about it that the complainant and his deceased son had taken a loan of Rs.14 Lacs from OPs No.1 to 3. It is also fully proved that one of the co-borrowers has since died. Annexure R-1 is the policy issued by OP No.4 to OP No.3 showing that in case of personal accident, the liability was limited to the loan amount outstanding against the customer on the date of event. It refers to only accidental death. Annexure C-2 is the document issued by G.I.C. Housing Finance Limited in which also, it was provided that accidental death insurance cover would be provided to all borrowers. It was on this undertaking that the complainant and his son took the loan from the OPs. When once an undertaking has been given, the OPs cannot subsequently withdraw the said benefit on any such technicalities as mentioned in the Personal Accident Insurance (Individual) Endorsement produced by OPs No.1 to 3 along with their policy of insurance (Annexure R-1). It has been provided in the said endorsement that OP No.4 shall not be liable to make any payment under the policy in respect of death in Rebellion Military, Naval and Air Force or the personnel who is engaged in aviation other than as a passenger. In fact these terms and conditions were never made known to the complainant at the time of granting the loan. Otherwise also, OPs very well knew that the deceased was a member of the Air Force, he was occupying a high position and mishap could have taken place in view of the service conditions of the deceased. Even inspite of that, OPs No.1 to 3 afforded him the insurance cover limited to the loan amount and now they cannot wriggle out of the same.

7.                     It is argued by the learned counsel for the OPs that this insurance cover is available only to the sole borrower or if unfortunately all the borrowers die, then the insurance cover would come into force. A perusal of Annexures C-2 and C-3/R-1 do not make any distinction in this respect. Under both these documents, the Accidental Death Insurance Cover is provided to all the borrowers. It is nowhere provided by them in any of these documents that in case one of the co-borrower dies then there would not be any insurance cover. This contention has now been devised by the OPs to avoid the payment of insurance amount to the complainant. 

8.                     The next  question arises whether the entire amount due from the complainant on the date of death of the deceased borrower would be waived off or only the share of the deceased. The contention of  the learned counsel for the complainant is that even if one of the co-borrower dies, the entire amount was to be  waived as mentioned in Annexures C-2 and C-3. We, however, do not find any merit in this argument. In the present case, there were two borrowers. If one of them dies, only his share of the loan amount would be waived off. Since, both the borrowers had jointly taken the loan and the share of loan has not been specified, it would be deemed to have been payable in equal shares. We are, therefore, of the opinion that half of the principle amount as payable on the date of death i.e. 7.2.2004 of Flight Lieutenant Bharat Kumar would be waived off and the complainant would be liable to pay the remaining amount to OPs No.1 to 3. The complainant had been paying installments since the date of death, which amount shall be adjusted towards his share of the principle loan amount standing against him. The interest would also be calculated by the OPs on the said principle amount w.e.f. 7.2.2004. If the complainant has paid more than the amount due from him, the excess amount shall be refunded to him along with interest at the same rate at which, OPs No.1 to 3 had been charging on this loan from the complainant.

9.                     In view of the above discussion, we are of the opinion that the present complaint succeeds and the same is accordingly allowed. OPs are directed to calculate the principle amount due from the complainant and his deceased son on 7.2.2004 and remit half of the said amount. They shall calculate interest on the remaining half payable by the complainant, which he claims to have been paying through installments. The installments paid by him shall be adjusted to satisfy the said half amount of loan payable by the complainant. In case, he has already paid in excess of the amount due from him, OP would make a refund thereof along with interest at the same rate at which OPs No.1 to 3 had been charging from him for this loan at the relevant time since the date of excess payment till the amount is refunded to the complainant. OPs shall also pay to the complainant Rs.5,000/- towards costs of litigation.

10.                   Copies of this order be sent to the parties free of charge.

Pronounced.

3^rd November 2010.

[JUSTICE PRITAM PAL]

PRESIDENT

[NEENA SANDHU]

MEMBER

[JAGROOP SINGH MAHAL]

MEMBER

Ad/-

STATE COMMISSION

(COMPLAINT CASE NO. 16 OF 2009)

Argued by:            Sh. Rohit Dheer, Advocate for the complainant.

                        Sh. Sandeep Sharma, Advocate for OPs No.1 to 3.

                        Sh. Rajneesh Malhotra, Advocate for OP No.4.

Dated the 3^rd day of November, 2010.

ORDER

                Vide our detailed order of even date recorded separately, this complaint filed by the complainant has been allowed.

(JAGROOP SINGH MAHAL)          (JUSTICE PRITAM PAL)     (NEENA SAHDHU)

                MEMBER                              PRESIDENT                    MEMBER