DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD

Dated this the 25^th day of July 2011

Present : Smt. Preetha G Nair, Member

: Smt.Bhanumathi.A.K. Member Date of filing: 10/03/2010

(C.C.No.34/2010)

Kumaradhas

S/o.Thanka Nadar,

Vadassery Colony,

Kanjikode,

Palakkad – 678 621 - Complainant

(By Adv.Venugopal.K)

V/s

1. HDFC Bank Ltd.

Chandra Nagar, Palakkad Branch,

Rep.by its Manager,

Chandra Nagar Jn. Coimbatore Road,

Palakkad – 678 007

(By Adv.K.A.Kailas)

2. HDFC Bank Ltd.

Rep.by its Manager

LAS Dept. Kamala Mills Compound,

Senapathi Bapat Marg,

Lower Parel (West),

Mumbai – 400 013. - Opposite parties

(By Adv.K.A.Kailas)

O R D E R

By Smt.PREETHA G NAIR, MEMBER

The complainant availed a loan against securities (LAS) from the opposite parties by pledging two LIC policies bearing nos. 772065794 and 771992761. The loan account was operated as an overdraft account bearing no.01172490000017. Later the complainant has availed another personal loan from the opposite party by pledging another LIC policy bearing No.772088604. The personal loan was having account number 11707620 has to be repaid by monthly EMI of Rs.1910/- for which the opposite parties has obtained a standing instructions from the complainant to pay the EMI from his overdraft account.

Later the complainant, who was a High School Head Master got retired from service on 31/3/2008 and was not in a position to repay the loan or LIC premiums. Then the complainant applied the opposite party bank to surrender the assigned LIC policies to LIC and using the surrender value obtained from LIC to close both the loan accounts and pay back the balance amount so as to enable the complainant to meet treatment expenses. Even before that one of the LIC policy bearing No.771992761 got matured and the maturity value was paid to opposite party by LIC in Feb 2008. But the opposite party has not done any proceedings to surrender the other policies and obtain the surrender value. The complainant has made several reminders and requests to the opposite party and the LIC. But the LIC has informed the complainant that they cannot act on complainant's request because the policies are already assigned. Later the opposite party has sent the policy document NO.772065794 to LIC in March 2009 and claimed survival benefits. But even at that time the documents of policy No.772088604 was not send. LIC was ready to pay and settle the surrender value. After that the complainant has send several reminders and request to the opposite party bank to its complaint redress cell. But no action was taken till January 2010. The opposite party has deliberately delayed the surrender of policies and obtain amount from LIC and close the accounts. The act of opposite party is clearly deficiency of service. Finally the opposite party send a letter dated 19/2/2010 informed the complainant that the policies were surrendered and the amount of Rs.67,183/-- under policy No.7772065794 is credited on 3/2/2010 and an amount of Rs.30174/- under policy No.772088604 is credited on 24/12/2009. The opposite party taken more than one and a half year to act on request of the complainant to surrender the policies and obtain the proceeds from LIC and close the loan account. The opposite party charging penal interest and some other charges on the complainant. Thus an amount of Rs.21260/- was collected excessively by the opposite party in LAS account. The opposite party has not given any account statement regarding the personal loan account bearing No.11707620. Hence, the complainant prays an order directing the opposite parties to

1. repay the sum of Rs.21260/- as excess amount illegally charged on the LAS loan account No.01172490000017

2. Pay compensation of Rs.10,000/- for deficiency in service and mental agony

3. pay the cost of the proceedings

The 1^st opposite party filed version stating the following contentions. Admittedly the complainant had availed a loan from the opposite party by pledging two LIC policies bearing Nos.772065794 and 771992761 and the same were assigned to the opposite party. Further the complainant has availed another personal loan from the opposite party by pledging another LIC policy bearing number 772088604. The complainant had not repaid the loan amount. The complainant having loan against security account as well as personal loan with the opposite party bank. As all the policies of the complainant were withdrawn from loan against security account the limit got reduced and subsequently all his EMI cheques got bounced. The complainant given standing instruction for his personal loan EMI amount from his loan against security account. The opposite party has given a waiver of Rs.15,063.80/- by collecting Rs.12,500/- and closed the personal loan account of the complainant. The penal charges were arising because he has not given a revised standing instruction. The opposite party stated that the complainant had defaulted in remitting the premiums before the LIC. The complainant had not applied to the opposite party bank to surrender the assigned LIC policies to LIC and to close both the loan accounts. The complainant is not entitled to get an amount of Rs.21,260/- towards excess amount collected. Hence the opposite party is not liable to pay any amount claimed by the complainant. The opposite party prays that the complaint may be dismissed with cost.

Both parties filed chief affidavit. Complainant filed documents. Ext.A1 to Ext.A12 marked. Complainant was cross examined. Heard both parties.

Issues to be considered are

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

2. If so, what is the relief and cost entitled to the complainant ?

Issue I & II

We perused relevant documents on record. The complainant filed IA 324/10 to direct the opposite party to produce the documents. IA allowed. But the opposite party produced the photocopy of loan agreement with the complainant Personal loan account No.11707620. Opposite party has not produced the loan agreement in LAS account No.01172490000017. The complainant stated that the opposite parties has not given the account statement regarding the personal loan account. No evidence was produced by the opposite parties to show that the account statement given to complainant.

The complainant stated that he had retired from service on 31/3/2008 as High School Head Master and was not in a position to repay the loan. Hence the complainant applied to the Opposite party bank to surrender the assigned LIC policies to LIC and close both the loan accounts and pay back the balance amount. But the opposite party has not done any proceedings to surrender the policies and obtain the surrender value. The opposite party stated that the complainant had not applied to the opposite party bank to surrender the LIC policies. Ext.A3 marked with objection. In Ext.A3 series documents are the copy of letters send by the complainant to the opposite parties. Complainant stated that original letters of Ext.A3 series are send to the opposite parties and the photocopies are produced. In Ext.A3 series letters dated 3/7/09, 7/9/09, 12/12/09 the complainant requested the opposite parties to surrender the LIC Policies. Admittedly the complainant had availed the LAS account bearing No.01172490000017 and the personal loan account No.11707620 from the opposite parties. In Ext.A1 and Ext.A2 the complainant has pledged the LIC policies and the LIC has accepted and registered the assignment on their books.

In Ext.A3 series the complainant has sent letters to the opposite parties to surrender the assigned policies and obtain the surrender value. The complainant stated that the opposite party has sent the policy no.772065794 to LIC in March 2009 and claimed survival benefits. But the documents of policy no.772088604 was not send. The opposite parties stated that there is no stipulation in the loan agreement to surrender the policy before the LIC on the request of the complainant and hence the bank cannot surrender the policies are against the terms of the loan agreement. No documentary evidence was produced by the opposite parties to prove the terms and conditions of LAS loan agreement. Normally the bank has received security to surrender the security amount at the time of non payment of loan amount. In the present case the opposite parties admitted that the complainant had not repaid the loan amount. Also the complainant send letters to the opposite parties to surrender the LIC policies. The complainant stated that the opposite party has surrendered the LIC policies in the month of May or June 2008, he has not suffer a loss of atleast Rs.21,260/- But in Ext.A3 series the complainant sent 1^st letter to the opposite parties on 3/7/2009. No evidence was produced by the complainant to prove that the opposite parties has collected excess amount of Rs.21,260/- on the LAS loan account. The opposite parties stated that all the policies of the complainant were withdrawn from loan against security account, the limit got reduced and subsequently all his EMI cheques bounced. No evidence was produced by the opposite parties to show that all the policies were withdrawn the limit got reduced and cheques bounced. The opposite parties has not produced the loan agreement of the complainant in LAS account No.01172490000017 before the Forum. No evidence was produced by the opposite parties to show that the loan account was closed before the due date any loss will cause to opposite parties. It is a fit case for awarding compensation for deficiency in service. The complainant is a retired High School Head Master. The complainant stated that the acts of opposite parties amounts to much mental agony and difficulties. In Ext.A5 and A6 the opposite parties send letters and telegrams directing the complainant to pay the dues. Finally the opposite parties informed the complainant that the policies were surrendered and the amount credited in the loan account.

In the above discussions we are of the view that there is deficiency in service on the part of opposite parties. In the result complaint partly allowed.

We direct the opposite parties jointly and severally to pay Rs.10,000/- (Rupees Ten thousand only) as compensation for mental agony and Rs.2,000/- (Rupees Two thousand only) as cost of the proceedings within one month from the date of receipt of order failing which the complainant is entitled for 9% interest per annum for the whole amount from the date of order till realisation.

Pronounced in the open court on this the 25^th day of July 2011. Sd/-

Smt. Preetha G Nair

Member

Sd/-

Smt. Bhanumathi.A.K.

Member

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1 – Copy of letter dated 23/2/07 from LIC Ernakualm Division to the complainant.

Ext.A2 – Copy of letter dated 19/5/2008 from LIC Ernakualm Division to the

complainant.

Ext.A3 series - Copy of letter sent by the complainant to the Sr.Divisional Manager, LIC, Ernakulam

Ext.A4 – Copy of statement of accounts issued by OP in A/c No.01172490000017

Ext.A5 - Telegram sent to the complainant by the OP dtd.7/3/09

Ext.A6 - Regd.letter sent by the OP to the complainant dtd.18/4/09

Ext.A7 series - Copy of details of Loan agreement

Ext.A8 – Copy of letter sent to complainant by the opposite party dtd.3.1.2011

Ext.A9 – Copy of letter sent to opposite party by the complainant dtd.15/1/11

Ext.A0 – Statement of Account in A/c No.01172490000017

Ext.A11 – Letter sent to complainant by the opposite party dated 14/2/2011

Ext.A12 – Copy of Account of Closure Form in A/c No.01172490000017

Cross examination of complainant

PW1 – T.Kumardhas

Exhibits marked on the side of the opposite parties

Nil

Cost Allowed

Rs.2,000/- allowed as cost of the proceedings