- Aggrieved by the concurrent findings and Orders passed by the District Consumer Disputes Redressal Forum, Faridkot (for short, the District Forum) and the State Consumer Disputes Redressal Commission, Punjab, Chandigarh (for short, the State Commission), the Petitioner / Bank filed the present Revision Petition No. 3742 of 2014 under Section 21(b) of the Consumer Protection Act, 1986 (for short, the Act). The Complaint filed by the Respondent No. 1 / Complainant through LRs (Respondents No. 1(i) to (iv) herein) in the District Forum was partly accepted and the Opposite Party No. 3 / Insurance Company / LIC (Respondent No. 2 herein) was directed to get the loan amount of Rs. 3,50,000/- insured and to give the benefit of the scheme to the legal heirs of the deceased Complainant. Further, the Opposite Parties Nos. 1 and 2 (Bank) & Opposite Party no. 3 were directed to pay Rs. 5,000/- each as compensation on account of mental tension, harassment and litigation expenses.
- Aggrieved by this Order dated 11.05.2011 of the District Forum, the Opposite Party No. 3 / Insurance Company filed an Appeal before the State Commission, which, vide its Order dated 24.02.2014, partly accepted the Appeal by modifying the Order of the District Forum to the extent that out of the total outstanding amount of the Complainant on 31.01.2010 i.e. Rs. 3,38,750/-, the Opposite Party No. 3 / Insurance Company shall be liable to pay Rs. 1,12,917/- to the Bank and the remaining amount of Rs. 2,25,833/- to be adjusted by the Bank in the outstanding loan of the Complainant.
- As the District Forum and the State Commission have comprehensively addressed the facts of the case, which led to filing of the Complaint and passing of the Orders, I do not find it relevant to reiterate the same, when the findings of both the fora are concurrent on facts.
- I have heard the learned Counsel for the parties and considered their submissions.
- The learned Counsel for the Petitioner / Bank submitted that pursuant to a housing loan of Rs. 3,50,000/- sanctioned to the Respondent No. 1, the loanee applied for the Group Mortgage Redemption Assurance Scheme of the LIC, which mandated for a person above the age of 45 years to undergo a medical examination. The Complainant refused to submit the medical report. Further, the Petitioner / Bank paid a premium amount of Rs. 16,822/- to the Insurance Company and this amount should have been returned to the Bank. He further argued that the Order of the District Forum needs to be upheld.
- The learned Counsel for the Respondent No. 1 / Complainant submitted that he had applied for a housing loan, which was granted in March, 2009 and also opted for insuring the amount in case of the death of the loanee / Complainant. The premium due to be paid to the Insurance Company was debited from his loan amount and paid on 15.05.2009 to the Insurance Company. However, no insurance was done and eventually, when the Complainant expired on 01.08.2010, no claim was allowed. He further submitted that the information regarding non-issuance of the insurance policy was not communicated by the Bank to the Complainant.
- The learned Counsel for the Insurance Company / Respondent No. 2 submitted that it is the Bank which is the intermediary and that the Insurance Company had written to the Petitioner / Bank that the medical report is required to be submitted for the issue of the insurance policy. He submitted that the LIC was not responsible for providing any insurance cover in the absence of medical report and therefore, any liability should lie squarely with the Bank and not with LIC. He cited the Order of the Hon’ble Supreme Court in Life Insurance Corporation of India vs. Raja Vasireddy Komalavalli Kamba & Ors., (1984) 2 SCC 719, wherein it was held that “it does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance.”
- The main issue in this case is whether for the loan amount sanctioned, the Insurance Company is liable to make payment of the outstanding loan in view of the death of the loanee when no insurance policy was technically issued by the Insurance Company. It is a fact that a loan was taken. It is a fact that premium amount for insurance policy was deducted by the Bank and remitted to the Insurance Company in May 2009. The death of the loanee took place in August 2010. Definitely, the matter was between the Bank and the Insurance Company. The argument of the Bank is that the Complainant delayed furnishing the full medical report. In such a situation, it is not understood why the Bank did not get back the premium already paid to the Insurance Company and inform the Complainant that his insurance policy proposal is rejected on the ground of non-furnishing of further medical report. Clearly, there is a deficiency of service on the part of the Bank in not having done the same. The State Commission has rightly observed that keeping the proposal pending for a long time for more than 13 months is a proof of gross deficiency of service on the part of the Bank. I would like to add that even the Insurance Company is partly responsible for the deficiency of service as it should have returned the premium amount received from the Bank and closed processing of the proposal in view of the delay in submission of the medical report of the Complainant. On the whole, the Complainant has a case to seek relief and for any further payment towards the loan amount availed.
- I do not see any illegality or material irregularity in the Order of the State Commission and accordingly, see no reason for interference with the same.
- In view of the aforesaid discussion, the Revision Petition is dismissed and the Order of the State Commission upheld.
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