BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SIRSA.
Consumer Complaint no. 288 of 2019
Date of Institution : 04.06.2019.
Date of Decision : 13.09.2021.
- Karma Bai wife of Shri Mansa Ram son of Shri Shamir Ram
- Mansa Ram son of Shri Shamir Ram,
- Rajinder Kaur wife of Shri Mahinder Singh son of Sh. Mansa Ram
- Priyanka Barman daughter of Sh. Mahinder Singh s/o Sh. Mansa Ram,
- Ritika Barman daughter of Shri Mahinder Singh son of Sh. Mansa Ram,
- Harsh minor son of Shri Mahinder Singh son of Sh. Mansa Ram, minor through his mother Rajinder Kaur as natural guardian and next friend, all residents of village Panihari, Tehsil and Distt. Sirsa.
……Complainants.
Versus.
- HDFC Bank Limited, Sangwan Chowk, Sirsa through its Branch Manager.
- HDFC Ergo General Insurance Company Limited, Regd. & Corporate office at Ist Floor, 165-166 Backbay Reclamation, H.T. Parekh Marg, Church Gate, Mumbai- 400020.
...…Opposite parties.
Complaint under Section 12 of the Consumer Protection Act,1986.
Before: SH. JASWANT SINGH……………PRESIDENT
MRS.SUKHDEEP KAUR…………MEMBER.
Present: Sh. A.S. Kalra, Advocate for complainants.
Sh. S.L. Sachdeva, Advocate for opposite party No.1.
Sh. R.K. Mehta, Advocate for opposite party no.2.
ORDER
The complainants no.1 and 2 being parents of deceased Mahinder Singh, complainant no.3 being widow of deceased Mahinder Singh and complainants no.4 to 6 being children of deceased Mahinder Singh have filed the present complaint under Section 12 of the Consumer Protection Act, 1986 ( as after amendment under Section 35 of Consumer Protection Act, 2019) against the opposite parties (hereinafter referred to as ‘Ops’) on the averments that complainants are legal heirs of Mahinder Singh, since deceased and except the complainants, there is no other legal heir of deceased Mahinder Singh. The complainant no.6 is minor son of deceased and present complaint is being filed for and on behalf of minor through his mother Rajinder Kaur as natural guardian and next friend who has no adverse interest against minor.
2. It is further averred that Mahinder Singh during life time applied for personal loan of Rs.2,50,000/-, which was given by op no.1. According to the policy of bank/ op no.1, the said loan was got covered by op no.1 under HDFC Sarv Suraksha Pro, a comprehensive insurance plan vide policy No. 2950201180454300000 got issued by op no.2 from its allied/ subsidiary company op no.2. However, policy alongwith its term and conditions, its literature was never delivered, sent to the deceased loanee Mahinder Singh. The policy coverage was for the period 18.7.2015 to 17.7.2017. That loan amount was sanctioned for amount of Rs.2,50,000/- as coverage was for Rs.2,50,000/- but the amount credited in the account of deceased Mahinder Singh was Rs.2,43,974/- as per bank pass book entry. It is further averred that getting the loan risk covered is the practice, trend, compulsion and mandate of the bank and banks keeps all the documents regarding insurance with them, resultantly family was not aware about the Credit Shield Coverage insurance and other insurance covered under above said policy by charging the premium covering all the heads of coverage (Rs.250/- for credit shield insurance coverage of Rs.250000/-, Rs.240/- for accidental hospitalization coverage of Rs.1,00000/-, Rs.128/- for accidental death coverage of Rs.400000/-, Rs.170/- for permanent total disability/ permanent partial disability coverage of Rs.400000/- and Rs.630/- for critical illness coverage of Rs.100000/-), but intimation regarding death of Mahinder Singh was given to the bank op no.1. It is further averred that as conveyed to the family/ complainants by the deceased that he had availed the personal loan facility less than the amount sanctioned by op no.1, so on the date of death i.e. 13.11.2015, deceased was having liability of Rs.2,35,277/- only against his personal loan account, which was under coverage of insurance from op no.1. So on the date of death, deceased was having a credit of amount in account with op no.1 without any liability against the personal loan account after adjustment of insurance coverage amount of personal loan had it been adjusted by op no.1. That complainants were stunned to receive a letter in the year 2019 about settlement of personal loan account from op no.1 and thereafter complainants came to know about insurance coverage and non closure of the personal loan account (after adjustment of insurance coverage amount of Rs.2,50,000/-) showing in the name of deceased Mahinder Singh. The complainants were induced and deceived by op no.1 to make payment of Rs.1,00,000/- stating and showing that an amount of Rs.3,63,475.31 was standing due towards deceased Mahinder Singh and they after taking the amount of Rs.1,00,000/- will close the loan account of deceased, which was having liability of Rs.3,63,475.31 on 23.2.2018 and complainant should proceed against op no.2 for not paying the amount of insurance of Rs.2,50,000/- to op no.1. That complainants were told by op no.1 that they did not receive any amount/ the sum insured from op no.2 and to recover that very amount, complainants will have to proceed against op no.2. Since the complainants are villagers having no cleverness in their working and thought, resultantly failed to understand the motive of official/ officer of op no.1, who got deposited the amount of Rs.1,00,000/- from complainants, otherwise there was no liability of complainants, on the grounds mentioned herein below:-
(i) The op no.1 was under mandate of law and obligation to adjust the personal loan account, which was under Credit Shield coverage by getting the insured sum paid from op no.2, as op no.1 did the insurance of personal loan amount acting as corporate agent, subsidiary company (part and parcel of op no.2.
(ii) The entire loan amount shown outstanding in the name of Mahinder Singh on the date of his death would have been adjusted and account ought to have been closed by the ops at their own, after receipt of intimation of death of Mahinder Singh, hence this is an act of deficiency in working, rendering services to the account holder/ consumer, who had died and his legal heirs/ legal representative complainants stepped into his shoes and are entitled for the same benefits, as bank had charged the amount in the account of deceased.
(iii) That charging the amount, interest and other charges after the death of Mahinder Singh despite policy having credit shield insurance coverage of Rs.2,50,000/-, op no.1 should not have charged any more amount of Rs.1,00,000/- from complainants, hence op no.1 opted means of unfair trade practice and acted deficiently, hence complainants are entitled for the refund of Rs.1,00,000/- with interest in addition to compensation for harassment etc. and expenses incurred for the litigation in this regard as op no.1 has received an amount of Rs.1,00,000/- on the pretext of settlement of account of deceased and insisted the complainants to move before the courts for recovering the insured sum of Rs.2,50,000/- from op no.2, so the amount of Rs.2,50,000/- alongwith interest and cost is the entitlement of complainants. 3. It is further averred that complainants visited several times to op bank and asked them to pursue their matter with their own subsidiary company, but they acted in haste and even did not complete the pass book reflecting true statement of account, from where it could be gathered how much wrong expenses were charged in the account, further pass book does not have any reference of deduction of premium and other charges, which has been concealed by the ops deliberately and malafidely, hence op bank should be burdened with cost, expenses and compensation of Rs.50,000/- payable to complainants for their wrongful act. Hence this complaint.
4. On notice, opposite parties appeared. Op no.1 filed separate written version taking certain preliminary objections that complainants have no cause of action for filing the present complaint against answering op, that complaint is not maintainable in the present form and that complainants have not come with clean hands and filed the present complaint on false and incorrect facts. It is submitted that true facts are that one Mahender Singh resident of village Panihari, District Sirsa had availed facility of financial loan from answering op vide loan account no. 35040947 and he was under obligation to repay the amount of loan in monthly installments alongwith interest and other expenses. There was a default in the aforesaid loan account and the cheques issued by the deceased were declared dishonored as reflected in the loan account. However, in case of default, the Bank has a right to recall the whole loan amount which is lying outstanding against the borrower. The complainants filed the present complaint being the legal heirs of the deceased. In this regard, it is submitted that as per the terms and conditions of the loan agreement, the legal heirs/ successors of the borrower are also bound by the terms and conditions of the loan agreement and they are also legally liable to discharge the liability of the borrower. The complaints being the legal heirs and beneficiary of the deceased are legally bound to pay the aforesaid amount alongwith interest and other charges as per terms and conditions of the loan agreement. It is further submitted that it is pertinent to mention that brother of deceased borrower namely Resham Singh approached the answering op for settlement of his loan account and on the proposal of the aforesaid Resham Singh, the bank issued the settlement letter and Resham Singh in pursuance thereof paid the settlement amount of Rs.1,00,000/- and availed the benefit of waiver of the loan and now the complainants are estopped by their own act and conduct to file the present complaint. That this Forum has no territorial jurisdiction to entertain the present complaint as complicated question of facts and law are involved, so matter cannot be decided summarily before the Forum. Further, there is an arbitration clause in the loan agreement and as per the arbitration clause, if there is any dispute regarding the loan agreement in that case only Arbitrator has jurisdiction to adjudicate the same and the Arbitrator has already passed Award in favour of op bank, hence the jurisdiction of this Forum is otherwise barred by law. That there is no privity of contract between op no.1. and op no.2 and both are the different entities and there is no co-relation between the parties. The claim of the insurance is to be settled by the HDFC Ergo General Insurance Company Limited and answering op Bank has no role to pay in the settlement of the claim.
5. On merits, it is submitted that deceased borrower had obtained the insurance policy on his sweet will. It is denied that op no.1 got insured the said loan through its subsidiary company as alleged and it is also denied that policy etc. were not sent to the deceased. It is further submitted that loan was anctioned for Rs.2,50,000/- and it is quite clear from the statement of account that from the aforesaid amount, an amount of Rs.4275/- was charged on account of processing fee charges, Rs.20/- was charged on account of stamp duty and an amount of Rs.1731/- was paid to insurance company on account of insurance premium and after charging thereof, an amount of Rs.2,43,974/- was released to the borrower. It is further submitted that on the death of the insured person, the complainants were under obligation to submit claim form alongwith requisite papers to the insurance company and the insurance company was under obligation to settle the claim of complainants. But the complainants failed to do so. All other remaining contents of the complaint are also denied and prayer for dismissal of complaint qua op no.1 made.
6. Op no.2 filed written version taking certain preliminary objections that present complaint is time barred as the death of the insured happened in year 2015 and claim was lodged in year 2015 and last communication i.e. the closure letter was sent on 10.12.2015, whereas complaint has been filed in year 2019 i.e. after lapse of three and half years, therefore, present complaint is not maintainable and is liable to be dismissed. That the claim of complainant was repudiated on the ground that the ailment due to which the insured/ deceased diagnosed and died i.e. “Hepatitis, Cirrhosis & MODS” is not mentioned in the list of ailment under Sarv Suraksha Plus Policy. Further the claim was repudiated on account of 90 days exclusion clause as mentioned under the policy terms and conditions. It is further submitted that present insurance policy is not a life insurance policy where claim becomes payable only in case of death. However, it is peril based policy and claim becomes payable only on happening of any of the insured perils. The complaint pertains to claim under Sarv Suraksha Policy which is valid from 18.9.2015 to 17.9.2017.
7. It is further submitted that after the death of insured, a claim was lodged by the nominee under the coverage of Critical Illness. After the claim intimation, the documents were sought by the answering op and the claimant filed a death certificate and the transportation certificate in regard to his claim. That after scrutinizing the transportation certificate submitted by the claimant, it was found that the insured was admitted in the hospital on 12.11.2015 and was diagnosed with “Hepatitis, Cirrhosis & MODS” and was treated for the same and died on 13.11.2015 i.e. next day of admission. However, the said disease for which the insured was treated is not covered in the critical illness section of the policy. Therefore, the claim was repudiated as said disease is not covered under section 1 of the policy terms and conditions. The liability of the op is restricted and limited to the policy terms and conditions. Since, in the present case, the ailment i.e. Hepatitis, Cirrhosis & MODS was not included in the policy coverage, hence, the claim under Critical Illness was repudiated and same was communicated to the complainant vide letter dated 10.12.2015. It is further submitted that op company is not liable to pay any claim under critical illness if the critical illness is diagnosed within the first 90 days of the policy. Any critical illness which is diagnosed within first 90 days of the policy is excluded from the purview of the policy. In the present case, the policy commenced on 18.9.2015 and insured died on 13.11.2015 i.e. within 90 days. Therefore, for this reason also, the claim of applicant is not payable under the policy terms and conditions. It is further submitted that complainants are claiming the benefits under the coverage of Credit Shield. However, as per clause 5 “Credit shield” of the policy terms and conditions, it is clearly mentioned that that the company will be liable to pay the outstanding loan amount, in the event of accidental death or permanent total disability. However, in the present case, the death of the insured happened due to illness and therefore, the benefits are not attracted due to the above mentioned policy terms and conditions and op is not liable to pay any benefit under the said section. It is also submitted that it is settled principle that the terms and conditions of the policy are to be strictly complied with. Other preliminary objections regarding no locus standi, no deficiency in service and regarding no jurisdiction of this Forum have also been taken. On merits, it is denied that policy terms and conditions were not provided to the insured by answering op and this stand of complainants at this much later stage cannot be accepted. Remaining contents of complaint are also denied and prayer for dismissal of complaint made.
8. The complainants have tendered in evidence affidavit of complainant Rajinder Kaur widow of Mahinder Singh as Ex.C1, copy of policy schedule Ex.C2, copy of letter dated 18.9.2015 written to Mr. Mahinder Singh Ex.C3, copy of loan closure letter dated 7.2.2019 Ex.C4, copy of statement of account Ex.C5, copy of letter dated 21.1.2019 regarding settlement offer of HDFC Bank loan Ex.C6, copy of death certificate of Mahinder Singh Ex.C7, copy of adhar card of Mahinder Singh Ex.C8, and copy of medical certificate of cause of death Ex.C9.
9. On the other hand, op no.2 has tendered in evidence copy of policy Ex.R1, copy of claim form Ex.R2, copy of claim repudiation letter dated 10.12.2015 Ex.R3, copy of transportation certificate Ex.R4.
10. Op no.1 tendered in evidence statement of account as Ex.R5.
11. We have heard learned counsel for the parties and have perused the case file carefully.
12. Learned counsel for complainants has contended that Mahinder Singh, since deceased (who was son of complainants no.1 and 2, husband of complainant no.3 and father of complainants no. 4 to 6) had availed personal loan of Rs.2,50,000/- from op no.1 bank and the bank in order to secure the payment of the loan amount got covered the same through an insurance policy name HDFC Sarv Suraksha Pro, comprehensive insurance plan from its allied/ subsidiary company i.e. op no.2. The policy coverage was for the period 18.7.2015 to 17.7.2017. That op bank no.1 had deducted an amount of Rs.1713/- as a premium for above said insurance from the account of Mahinder Singh deceased, and paid the same to op no.2 for getting insurance. That said Mahinder Singh suddenly fell ill on 12.11.2015 and he was shifted to Life Line Institute of Medical Sciences at Hisar on 13.11.2015 but he could not be saved and died on the same day. He has further contended that as per medical certificate of cause of death issued by said hospital, said Mahinder Singh died due to Hepatitis with related cirrhosis with HRS with MODs and had cardiac arrest. After the death of Mahinder Singh deceased, intimation of his death was given to the ops and claim was also lodged with the ops but op no.2 has wrongly repudiated the claim of complainants on the ground that claim falls under the exclusion clause of insurance policy. He further argued that the policy documents and terms and conditions concerning the policy in question were never supplied to the insured. Only cover note/ policy schedule was issued and no list of critical illness was ever provided to the insured. Ops have not produced any evidence to prove that the terms and conditions or the exclusion clause of the policy in question were ever explained to the insured or that the list of critical illness was ever supplied to the insured. He has further argued that after receiving intimation of death of deceased Mahinder Singh, the bank op no.1 was under legal obligation to adjust the entire loan amount shown outstanding in the name of Mahinder Singh on the date of his death and account ought to have been closed but the op no.1 bank has failed to do so rather the op no.1 bank has illegally charged an amount of Rs.1,00,000/- from the complainants under the pretext that they will close the loan account. He has further contended that op no.1 bank should have claimed the loan amount from op no.2 insurance company and insurance company beside repayment of loan amount should have paid the claim amount of Rs.1,00,000/- under critical illness to the complainants but op no.2 has also caused deficiency in service and unfair trade practice towards the complainant and prayed for acceptance of the complaint.
13. Learned counsel for op no.1 bank while reiterating the contents of written version has contended that complainants being the legal heirs and beneficiary of the deceased were/are legally bound to pay the loan amount alongwith interest and other charges as per terms and conditions of loan agreement. The loan account of deceased Mahinder Singh has been closed by the bank after giving every type of benefit and complaint is not maintainable before this Commission as there is an arbitration clause in the loan agreement and as per the arbitration clause, if there is any dispute in that case only Arbitrator has jurisdiction to adjudicate the same and Arbitrator has already passed the Award in favour of op bank, hence the jurisdiction of this Commission is otherwise barred by law. The complainants should have approached to op no.2 alongwith claim form to take benefits of the policy they have failed to do so and even intimation of death of Mahinder Singh was not given to the bank and moreover, no insurance amount has been received to the bank, so question of any adjustment does not arise prayed for dismissal of complaint.
14. On the other hand, learned counsel for op no.2 has contended that complainants are not entitled to any benefit in case of any other eventualities other than those mentioned under the policy. The complainants would have become eligible for a sum of Rs.1,00,000/- only under critical illness in the event if the insured had been diagnosed with ailment listed under the critical illness as mentioned in the policy. In the transportation certificate Ex.R4, it is mentioned that patient Mahinder Singh, now deceased was having Hepatitis C, Cirrhosis, MODS which is not covered under the policy/ list of critical illness mentioned in the policy. He has further argued that credit shield cover is also applicable in case of death due to accident and not otherwise. The terms and conditions of the policy were duly supplied to insured. He has further contended that moreover, complaint is time barred and prayed for dismissal of the complaint.
15. We have duly considered the rival contentions of the parties.
16. There is no dispute that Mahinder Singh, since deceased son of complainants no.1 and 2, husband of complainant no.3 and father of complainants no.4 to 6 during his life time availed personal loan of Rs.2,50,000/- from op no.1 and to secure the loan amount, the op no.1 got insured the said loan amount from its allied/ subsidiary company i.e. op no.2. There is also no dispute that the policy coverage was for the period 18.7.2015 to 17.7.2017. It is also not in dispute that loan amount of Rs.2,50,000/- was sanctioned to said Mahinder Singh, since deceased by op no.1 and op no.1 bank by charging an amount of Rs.4275/- as processing fee, Rs.20/- on account of stamp duty and Rs.1713/- as premium amount for insurance of the loan amount, disbursed an amount of Rs.2,43,974/- to the borrower Mahinder Singh, since deceased. From the copy of policy schedule placed on file by complainants as Ex.C2, it is evident that an amount of Rs.350/- was paid to the insurance company on account of credit shield insurance (though complainants have wrongly mentioned the amount of Rs.250/- on account of credit shield insurance) and the sum insured in this regard was Rs.2,50,000/-, Rs.240/- was paid on account of coverage regarding accidental hospitalization and the sum insured in this regard is of Rs.1,00,000/-, Rs.128/- was paid on account of coverage regarding accidental death and the sum insured in this regard is of Rs.4,00,000/-, Rs.170/- was paid on account of coverage regarding permanent total disability/ permanent partial disability and sum insured in this regard is of Rs.4,00,000/- and Rs.630/- was paid on account of coverage regarding critical illness and sum insured in this regard is of Rs.1,00,000/-. According to op no.1 also, an amount of Rs.1731/- was paid to op no.2 as insurance premium and the said fact is also evident from copy of statement of account produced on record by op no.1 bank as Ex.R5.
17. From the copy of policy schedule placed on record by complainants Ex.C2, it is clear that loan amount of Rs.2,50,000/- was covered under the insurance coverage i.e. Credit Shield Insurance, for which an amount of Rs.350/- was paid from the account of deceased Mahinder Singh by op no.1 bank to op no.2 insurance company. According to complainants, since Mahinder Singh died on 13.11.2015, and as the loan amount was got insured by op no.1 from op no.2, therefore, loan account was to be closed by op no.1 on the death of Mahinder Singh, intimation of which was given to the ops and balance amount of loan account was to be directly paid to op no.1 by op no.2. The complainants in order to prove death of Mahinder Singh has placed on record copy of his death certificate as Ex.C7 which reveals that he died on 13.11.2015.
The op no.2 has also admitted that after the death of insured, a claim was lodged by the nominee under the coverage of critical illness and documents were sought from the claimant. However, according to op no.2, after scrutinizing the transportation certificate submitted by the claimant Ex.R4, it was found that insured was admitted in the hospital on 12.11.2015 and was diagnosed with ‘Hepatitis, Cirrhosis & MODS and was treated for the same and died on 13.11.2015 i.e. next date of admission. According to op no.2, said disease for which the insured was treated is not covered in the critical illness section of the policy and therefore, the claim was repudiated.
18. The question for adjudication before us is whether the claim of the complainants falls under critical illness and credit shield coverage or not? To determine this controversy, a perusal of the relevant Sections is necessary. Section 1 determining the critical illness of the policy in question is reproduced as under:-
Section 1- Critical Illness:-
- First Heart Attack (Myocardial Infarction)
- Coronary Artery Disease Requiring Surgery
- Stroke
- Cancer
- Kidney failure (End-stage renal disease)
- Major organ transplantation
- Multiple sclerosis
- Surgery of Arota
- Primary Pulmonary Arterial Hypertension
- Paralysis
19. We have carefully perused the above section 1: critical illness of policy in question. The op no.2 has also taken a plea that after scrutinizing the transportation certificate submitted by claimant Ex.R4, it was found that insured was admitted in the hospital on 12.11.2015 and was diagnosed with “Hepatitis, Cirrhosis & MODS” and was treated for the same and died on 13.11.2015 i.e. next day of admission. The said disease for which the insured was treated is not covered in the critical illness section of the policy. However, we have no substance in the contention of op no.2. No doubt, in the transportation certificate issued by Life Line Institute of Medical Sciences, Hisar Ex.R4 which is with regard to patient Mahender Singh son of Mansa Ram and in the said certificate it is mentioned that patient was admitted on 12.11.2015 at 10 a.m., with Hepatitis C, Cirrhosis, MODS and he died on 13.11.2015 at 4.45 a.m. But in the Medical Certificate of Cause of Death issued by Life Line Institute of Medical Sciences, Hisar, the copy of which has been placed on record by complainant as Ex.C9, the cause of death of deceased Mahender Singh has been shown as Hepatitis with related Cirrhosis with HRS with MODs and had cardiac arrest. In the clause 1 regarding Critical Illness of terms and conditions of the policy placed on record by op no.2 as Ex.R1, First Heart Attack (Myocardial Infraction) has been shown in the category of critical illness and as per certificate of cause of death of Mahinder Singh issued by above said hospital, said Mahinder Singh was suffering from Hepatitis with related Cirrhosis with HRS with MODs and had cardiac arrest and meaning thereby that deceased died to first heart attack which is covered as per clause 1 of Critical Illness of the terms and conditions of the policy. Since, in the certificate of cause of death Ex.C9 of Mahinder Singh, since deceased it is clearly mentioned that he had cardiac arrest, the op no.2 has wrongly repudiated the claim of complainants on the ground that disease from which insured suffered is not covered in the critical illness. Further more, both the ops have not produced any evidence to prove that the terms and conditions or the exclusion clause of the policy in question were ever supplied or explained to the insured or that the list of critical illness was ever supplied to the insured. The complainants have placed on record copy of policy schedule as Ex.C2 and ops have failed to prove that terms and conditions were also attached with the policy schedule. So, repudiation of the claim of complainants is also wrong and illegal and not justified due to non supply of terms and conditions of the policy in question. In this regard, reliance can be placed on the observations of Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh in case titled as The Oriental Insurance Company & another Vs. Manmohan Kaur, FA No.20 of 2019 decided on 29.7.2019, wherein it has been held as under:-
“The terms and conditions of the contract were never brought to the notice of the complainant. Rather no affidavit of that Manager has been produced in evidence by OP to prove that he had explained the contents of the terms and conditions of the insurance policy in question to the complainant or he supplied the copy of the same to her and dismissed the appeal of the appellant- Oriental Insurance Company.”
The Hon’ble National Commission in case titled as National Insurance Co. Ltd. & another Vs. D.P. Jain & others 2007 (3) CPJ 34, has held as under:-
“exclusion clauses are required to be ignored if the insurance company or its agent or intermediary does not adhere to the mandatory requirement of explaining the ‘Exclusion Clause’ before issuance of insurance cover. Procedure prescribed under Regulation 3 is required to be followed. If exclusion clauses are not explained, they are not binding on insured. In the present case, HCL has issued the insurance cover as an agent of the insurance company. Revision petition dismissed”.
20. The above said authorities are also fully applicable to the facts and circumstances of the present case. As discussed above, in the present case also, the ops have not proved on record that terms and conditions of the policy were supplied to Mahinder Singh, since deceased. So, the op no.2 is liable to pay an amount of Rs.1,00,000/- to the legal heirs of the Mahinder Singh, since deceased as per coverage of Critical Illness as mentioned in the policy schedule Ex.C2 for which op no.2 charged an amount of Rs.630/- from the deceased.
21. Now with regard to question whether the claim of complainants falls under Credit Shield Coverage, the op no.2 has placed reliance on the clause 5 of the terms of the conditions of the policy which is regarding Claim under Credit Shield, according to which company will be liable to pay the outstanding loan amount, in the event of accidental death or permanent total disability. So, according to op no.2 since death of the insured happened due to illness, therefore, the benefits are not attracted due to the above mentioned terms and conditions of the policy. However, again we have no substance in this contention of op no.2 because complainants have taken a specific plea that policy alongwith its term and conditions, its literature were never delivered, sent to the deceased loanee Mahinder Singh. As already discussed above, the op no.2 has also not proved on record by leading cogent and convincing evidence that policy alongwith its terms and conditions were ever supplied to the Mahinder Singh, since deceased. So, now op no.2 cannot take this plea that as per terms and conditions of the policy, the op no.2 was not liable to pay the outstanding loan amount.
22. The op no.2 has also taken a plea that complaint is time barred as the death of insured took place in 2015 and claim was lodged in the year 2015 and closure letter was sent on 10.12.2015. But we found no substance in this plea of op no.2 because op no.1 bank vide letter dated 21.1.2019 made demand of Rs.1,00,000/- on account of settlement of loan account and therefore, cause of action to file the present complaint arose to the complainant in year 2019 and as such complaint which has been filed on 4.6.2019 is well within limitation period and is not time barred.
23. Now, the question whether the op no.1 bank is also deficient in service for not closing the loan account of Mahinder Singh, since deceased after his death or not?
24. Admittedly, Mahinder Singh, since deceased obtained personal loan of Rs.,2,50,000/- from op no.1 bank and said loan amount of Rs.2,50,000/- was got insured by op no.1 from op no.2. The op no.1 bank has placed on file copy of statement of account as Ex.R5, from which it is evident that disbursal date of loan amount was 16.9.2015 and installment of Rs.12,181/- towards repayment of loan was to be started on 7.10.2015 and installment end date was 7.9.2017. However, as proved from record said Mahinder Singh loanee died on 13.11.2015, therefore, the op no.1 bank was under legal obligation to make communication with op no.2 insurance company to make demand of the loan amount from op no.2 or to seek clarification from op no.2 insurance company whether loan was to be repaid by op no.2 as per terms and conditions of insurance policy or not but the op no.1 has not placed on file even a single document in this regard. The op no.1 has taken a plea that complainants did not inform about the death of Mahinder Singh to op no.1 but we found no substance in this plea of op no.1 bank because op no.2 intermediary of op no.1 through whom insurance of loan amount was done by op no.2 has repudiated the claim of complainants on 10.12.2015 meaning thereby that claim was submitted by complainants to op no.2 in time and therefore, it cannot be said that op no.1 which got insured the loan amount with op no.2 was not in knowledge about the death of Mahinder Singh, since deceased. Moreover, complainants have taken a specific plea that intimation regarding death of Mahinder Singh was given to op no.1 bank after his ‘Rasam Kirya’. So, when complainants can move their claim to op no.2 insurance company in time, it cannot be said that op no.1 bank was not given intimation of death of Mahinder Singh by the complainants. So, the op no.1 bank has wrongly and illegally charged an amount of Rs.1,00,000/- from the complainants on the pretext of settlement/ closure of loan showing balance amount of Rs.3,22,363.31 on the closure date i.e. 28.1.2019, whereas loan account was to be closed by op no.1 bank and loan amount would have been claimed by op no.1 from op no.2 after the death of Mahinder Singh, which took place on 13.11.2015 or op no.1 bank should have sought clarification from op no.2 whether op no.2 was liable to pay the outstanding amount as per terms and conditions of insurance policy or not. But the op no.1 bank has failed to do anything in this regard. Therefore, op no.1 is found deficient in service and op no.1 bank is liable to refund the amount of Rs.1,00,000/- received from complainants on 28.1.2019 on the pretext of closure of loan account alongwith interest. The plea of op no.1 bank that an award has already been passed in favour of op bank, so this Commission has no jurisdiction to decide the complaint has no force because no copy of any award passed by the Arbitrator has been placed on record. When no copy of any award has been placed on record, this Commission will have jurisdiction to decide the complaint because the remedy under the provision of Consumer Protection Act is an additional remedy. Moreover, no copy of alleged loan agreement/ arbitration agreement has been placed on record by op no.1 bank. Further more, if for the sake of argument, the plea of op no.1 is admitted that there exists an arbitration agreement between the op no.1 and legal heirs of deceased Mahinder Singh i.e. complainants then also this Commission has jurisdiction to try and entertain the present complaint as it is a settled proposition of law that filing of complaint under the provisions of Consumer Protection Act, is an additional remedy despite there being an arbitration agreement and there is no bar to the proceedings before Consumer Commission. The remedy under Consumer Protection Act is a remedy provided to a consumer when there is a defect in any goods or services. In this regard, reliance can be placed in case titled as M/s Emaar MGF Land Limited Versus Aftab Singh, Review Petition (C) No.2629-2630 of 2018 (SC), in which Hon’ble Supreme Court of India held in para no.55 as under:-
“We may, however, hasten to add that in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/ special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration. It is only the case where specific/ special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration.
25. The above said authority is also applicable in this case. The op no.1 bank is also liable to make refund of the amount of Rs.1,00,000/- to the complainants which was wrongly and illegally got deposited by it from them on 28.1.2019 and op bank is also liable to refund any other amount or amount of interest, which has been received by it from the account of deceased after his death i.e. on 13.11.2015. However, the payment of loan amount to op no.1 by op no.2 is matter between op no.1 and op no.2.
26. No doubt, in the policy schedule Ex.C2, Rajender Kaur wife of Mahinder Singh, since deceased has been shown as nominee but since the complainant Rajender Kaur has filed the present complaint alongwith remaining complainants i.e. her mother-in-law, father-in-law and also with her three children seeking claim amount alongwith compensation and therefore, it is admission of complainant no.3 Smt. Rajender Kaur widow of Mahinder Singh, since deceased, that she has no objection in case the awarded amount is shared by all of them.
27. In view of our above discussion, we allow this complaint and direct the opposite party no.1 bank to make refund of the amount of Rs.1,00,000/- to the complainants (which was paid to op no.1 bank on 28.1.2019 by complainants) alongwith interest @9% per annum from the date of payment i.e. 28.1.2019 till actual realization. The op no.1 is also liable to make refund of any other amount/ interest amount which the op bank received from the account of deceased Mahinder Singh after his death i.e. 13.11.2015 and that amount will also be payable to complainants alongwith interest @9% per annum from the date when op no.1 bank received the same till actual realization. We also direct the op no.2 insurance company to make payment of Rs.1,00,000/- as claim amount for the death of Mahinder Singh, since deceased to the complainants alongwith interest @9% per annum from the date of filing of present complaint i.e. 4.6.2019 till actual payment. We also direct both the ops no.1 and 2 to pay a sum of Rs.25,000/- ( i.e. Rs.12,500/- each payable by op no.1 and 2) to the complainants for harassment and mental agony. We also direct both the ops no.1 and 2 to further pay a sum of Rs.11,000/- (Rs.5500/- each payable by op no.1 and 2) as litigation expenses to the complainants. The above said amounts will be equally shared by all the complainants. However, the amount of the share of complainant no.6 Harsh who is minor shall be deposited in some Nationalized Bank by way of FDR till he attains the date of majority. However, interest on the amount of the share of minor shall be incurred by his mother on the minor for his welfare and study etc. It is also made clear that op no.1 bank can also recover the amount of loan from op no.2 as per insurance policy in question in accordance with law. A copy of this order be supplied to the parties free of costs. File be consigned to the record room.
Announced in open Commission. President,
Dated:13.09.2021. Member District Consumer Disputes
Redressal Commission, Sirsa.
Typed by:
Jagdish Kumar (Stenographer)
