(Per Shri Narendra Kawde, Hon’ble Member)
(1) This appeal takes an exception to an order dated 29/03/2005 in Consumer Complaint No.142/2004, Sou.Sanyogita Chavan & anr. Vs. Divisional Manager, Life Insurance Corporation of India, passed by District Consumer Disputes Redressal Forum, Nashik (‘District Forum’ in short). Holding thereby no deficiency in service on the part of the opponent LIC for not maintaining and issuing no dues certificate in respect of loan account of the appellants/complainants whereby the excess amount of `46,435/- was charged by LIC on account of settlement of housing loan.
(2) Heard. Undisputed facts are that an amount of `1,30,000/- was sanctioned by the LIC as housing loan jointly availed by the complainants with initial EMI of `1,528/- which was subsequently raised to `1,626/-. The final repayment of `92,000/- was made and accepted as settlement of housing loan and accordingly the loan was fully repaid as on 24/03/2004. No dues certificate was accordingly issued by LIC on 24/04/2004. However, even after having received the full repayment, the mortgage documents were not released by the LIC in favour of the complainants and so also property mortgaged was not released. Two policies bearing No.967212702 and 669237708 were assigned as co-lateral security (though LIC has not clarified the exact number of the policies assigned) for the advancement of housing loan, which were noticed by the LIC as in lapsed condition after issue of no dues certificate. The premiums were required to be paid (again though not clarified by the LIC) for policies and therefore the LIC deducted a total amount of `43,554/- on 12/05/2004 from the payable surrender value under the lapse policies. It is not clarified by the LIC whether this amount of `43,554/- was deducted and adjusted against the balance loan or against the premiums of lapsed policies.
(3) There is no denial of issuing no dues certificate on 24/04/2004, but it appears that there was an error on the part of LIC as status of the assigned policies was not verified prior to issue of no dues certificate. Presumably, it was found by the LIC that the assigned policies were in lapsed condition. As per the terms & conditions of the loan, the policies assigned as co-lateral security were required to be in force. This inadvertence on the part of the LIC was considered by the District Forum and consumer complaint of the appellant/complainants was dismissed holding no deficiency in service on the part of the LIC for deducting `43,554/- from the surrender value of the policies assigned by the complainants.
(4) Original Loan Register has been produced by the LIC for our perusal. The last entry is dated 24/03/2004 having received an amount of `92,000/- against full and final settlement of housing loan. Accordingly, the endorsement ‘loan fully repaid’ was made in read ink in the register and with due attestation of the concerned officer of the LIC. The entry in the register further reveals that an amount of `43,554/- on 12/05/2004 from the surrender value accrued under the lapse policies bearing No. 967212702 and 669237708 which were assigned as co-lateral security to the loan. Out of this settlement, it was also shown that an excess amount of `2,881/- was required to be refunded to the complainant. It is something interesting to note that in the final installment of loan of `92,000/- as full and final amount settlement, yet later on on 12/05/2004 an amount of `43,554/- was deducted from the surrender value of the assigned policies (presumably towards arrears of premiums under the assigned policies as no clarification is coming forward whether it is against the arrears of loan or otherwise.) The learned advocate for the respondent LIC did not make any convincing submission as to how when the loan was received and no dues certificate was issued and yet later on an amount of `43,554/- was recovered from the surrender value of the lapsed policies and adjusted in the loan account, when loan account was closed. The submission of learned advocate of the appellant stating that the LIC never informed prior to deduction of said amount of `43,554/- from the assigned policies and arbitrarily acted upon to deduct and adjust the said amount against the loan is sustainable as there is no conclusive proof to show to the contrary.
(4) The District Forum relying on submission of the LIC, that there was an error on the part of LIC which can be corrected later on and acted upon the said submission, dismissed consumer complaint. Any mistake as contemplated could have been carried, but by extending opportunity to the complainant by issue of notice which LIC has failed to do so. Unilaterally to deduct the amount and adjusted the same either in loan account or against the outstanding premiums of the assigned policies is unwarranted. In view of this, we find that the LIC has incurred deficiency in service to the complainant. Appeal, therefore, has merit. Order under challenge deserves to be set aside. We hold accordingly and pass the following.
ORDER
(1) Appeal is allowed.
(2) The impugned order dated 29/03/2005 passed in Consumer Complaint No.142/2004 by the District Forum, Nashik is set aside.
(3) Respondent/opponent-Insurance Company is hereby directed to pay an amount of `43,554/- to the appellant/complainant with interest @ 7% p.a. with effect from 12/05/2004 till actual payment is made.
(4) Respondent/opponent-Insurance Company shall pay compensation of `5,000/- for mental harassment and `1,000/- towards cost of litigation.
Pronounced on 20th March, 2013.
