Chandigarh

DF-I

CC/103/2019

Smt. Usha - Complainant(s)

Versus

Mahindra & Mahindra Finance Services Ltd. - Opp.Party(s)

Parveen Chauhan

29 Nov 2022

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/103/2019
Date of Institution	:	18/02/2019
Date of Decision	:	29/11/2022

 

Smt. Usha wife of late Sh. Ramesh Kumar Dhiman resident of 136/2, Railway Road, Kalka, District Panchkula, through her Special Power of Attorney Ankush son of late Sh. Ramesh Kumar Dhiman resident of 136/2, Railway Road, Kalka, District Panchkula.

… Complainant

V E R S U S

Mahindra & Mahindra Finance Services Limited, SCO 2447-2448, First Floor, Sector 22-C, Above Raj Paper Mart, Chandigarh 160022 through its Branch Manager

… Opposite Party

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Gurjant Singh, Vice Counsel for Sh. Parveen Chauhan, Counsel for complainant
	:	Sh. H.P.S. Kochhar, Counsel for OP

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Smt.Usha, complainant against the opposite party (hereinafter referred to as the OP).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the husband of the complainant namely Sh. Ramesh Kumar had purchased a Hyundai i20 (IB) Sportz car bearing registration No.HR-49G-5870 (hereinafter referred to as the car in question), after getting the same financed from the OP.  The OP got insured Sh. Ramesh Kumar under Group Personal Accident Policy for the period 23.6.2017 to 22.6.2018 vide certificate (Annexure C-2). Aforesaid Sh. Ramesh Kumar died on 11.11.2018.  During his life time, he was paying the installments of loan to the OP/financier regularly.  It was incumbent duty of the OP to get the aforesaid car insured under the Group Insurance Policy which had lapsed on 22.6.2018, but, due to lapse on the part of the OP, the same could not be insured after 22.6.2018 as a result of which, after the death of her husband, complainant was deprived of the benefit of the Group Insurance Policy and the OP has been threatening either to make the payment of the installments or the car in question will be taken into possession by it since the same was hypothecated with the OP. It is averred that the OP has not given any benefit of the insurance policy to the complainant and had the husband of the complainant insured under the Group Insurance Policy, which was mandatory for all financiers to get the loan amount insured, the entire amount could have been paid to the OP by the Insurance Company. At present, complainant is in financial crisis and she is not in a position to make the payment.  When the agents of the OP started harassing the complainant, she immediately approached the branch office of the OP on 25.1.2019 and then the branch officials assured the complainant that she will not be harassed. However, later on officials of the OP threatened that they will start recovery of installments against the legal heirs of the deceased. Alleging deficiency in service on the part of OP, complainant has filed the instant consumer complaint.
2. OP resisted the consumer complaint and filed its written statement, inter alia, taking preliminary objections of maintainability, cause of action and suppression of facts.  On merits, admitted that the car in question was financed by it in favour of husband of the complainant, Sh. Ramesh Kumar, but, denied that there is any deficiency in service on its part, by stating that the loan amount was not got insured by the husband of the complainant at the relevant time.  In fact, OP is only the financier who finances vehicles and does not insure any vehicle.  It is stated that OP is not aware of the death of Sh. Ramesh Kumar since no information or any document has been provided by the complainant or by any legal heir of deceased Sh.Ramesh Kumar to the OP. After expiry of the aforesaid insurance policy, which was valid till 22.6.2018, husband of the complainant had not opted to continue by renewing the policy by paying the premium. As the aforesaid car was financed by the OP and as per record installments are due and total outstanding is of ₹5,48,611/-, complainant and other legal heirs of Sh. Ramesh Kumar are liable to repay the loan amount since the car in question is hypothecated with the OP.  Moreover, the complainant will have to surrender the vehicle as per strict terms and conditions as set forth and signed by the husband of the complainant. The cause of action set up by the complainant is denied. The consumer complaint is sought to be contested.
3. In replication, complainant re-asserted her claim put forth in the consumer complaint by denying defence of the OP and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of their respective affidavits and supporting documents.
3. We have heard the learned counsels for the parties and also gone through the file carefully, including the written arguments. For the reasons to be recorded hereinafter, following points are formulated for discussion and proper adjudication :-

1. Whether there is deficiency in service or unfair trade practice on the part of OP?
2. Whether the complainant is entitled for the claim as prayed for?
3. Relief

Point No.(i) & (ii)

4. Both these points are interconnected, hence are taken together to avoid repetition of facts and evidence.
5. Admittedly, the car in question is registered in the name of husband of the complainant namely Sh. Ramesh Kumar. It is further an admitted case of the parties that the car in question was financed by the OP in favour of Sh. Ramesh Kumar.  It is further an admitted case of the parties that earlier the car in question was insured under the Group Personal Accident Policy which was valid w.e.f. 23.6.2017 to 22.6.2018.  It is further an admitted case of the parties that the husband of the complainant, Sh. Ramesh Kumar i.e. the registered owner of the car in question had died on 11.11.2018 and at that time the aforesaid Group Personal Accident Policy was not valid as the same was not renewed by the deceased after 22.6.2018.  The case of the complainant is that as it was the bounden duty of the OP to get the loan amount insured from time to time till the entire amount is paid to the OP by the owner of the car and as the OP had not renewed the aforesaid policy after 22.6.2018, OP be directed to issue no dues certificate and also to pay the compensation as prayed for.  On the other hand, the defence of the OP is that as the OP is only a financier and does not insure vehicles and the complaint of the complainant being false and frivolous be dismissed.
6. In the backdrop of the foregoing admitted and disputed facts, it is to be determined if there is any deficiency in service on the part of the OP and the complainant is entitled for compensation, as prayed for, or if the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed.
7. Close scrutiny of the entire evidence on record of the case file, coupled with the rival contentions of the learned counsel for the parties, are discussed as under:-

1. At the very outset, it may be observed that when it is an admitted case of the parties that the car in question was got financed by the husband of the complainant, Sh. Ramesh Kumar from the OP and earlier he had got Group Personal Accident Policy which was valid w.e.f. 23.6.2017 to 22.6.2018 and later on same was not renewed after 22.6.2018 and he died on 11.11.2018 and at that time neither the loan amount was insured with any Insurance Company nor the deceased was having any Group Personal Accident Policy, the case is reduced to a narrow compass as it is to be determined if there is any deficiency in service on the part of the OP for not getting the group personal accident policy for the borrower, Sh. Ramesh Kumar in whose favour the loan was sanctioned by the OP for the purchase of the car in question.
2. The learned counsel for the complainant contended with vehemence that as it is clear on record that as per the Reserve Bank of India (RBI) guidelines and banking rules, it is the duty of the OP to keep the borrower under the shield of group insurance for the entire period till all installments fell due and further it has come on record that the OP had received the premium amount from the complainant for the said insurance w.e.f. 23.6.2017 to 22.6.2018 and also it is clear from the offer cum loan scheme acceptance letter that an amount of ₹4,401/- was also received from the husband of the complainant Sh.Ramesh Kumar on account of Mahindra Loan Suraksha premium at the time of sanctioning of loan, it was the bounden duty of the OP to continue the policy till the loan amount is due against the husband of the complainant and sudden discontinuance of the policy by the OP without informing the insured will not protect the OP from its liability to pay the due loan amount and the said act of the OP amounts to deficiency in service and unfair trade practice on its part and the complainant is entitled for the reliefs as prayed for.  On the other hand, learned counsel for the OP contended with vehemence that since the OP is only the financier who finances vehicles and does not insure any vehicle and also that the husband of the complainant, Sh. Ramesh Kumar himself had not got the earlier policy renewed, there is no deficiency in service on the part of the OP and the consumer complaint of the complainant be dismissed with costs.  There is force in the contention of the learned counsel for the OP as the offer cum loan scheme acceptance letter (Annexure “X”) duly signed by the deceased husband of the complainant Sh.Ramesh Kumar, loanee and the authorized signatory of OP clearly reveals that the OP had added an amount of ₹4,401/- on account of Mahindra Loan Suraksha (MLS) Premium payable by loanee and in addition to that had also received an amount of ₹2,421/- on account of Mahindra Aroygya Suraksha from the loanee at the time of sanctioning of loan and as the Mahindra Loan Suraksha premium is only one time payable by the loanee, OP cannot escape from its liability to repay the loan amount due to the death of the loanee on the ground that the complainant had not paid the premium after 23.6.2018 and had not got the said policy renewed, especially when it has come on record that even before sanctioning of loan, OP had admitted through offer cum loan scheme acceptance letter that the aforesaid loan sanctioned in favour of deceased Sh. Ramesh Kumar who admittedly died on 11.11.2018 was protected through Mahindra Loan Suraksha policy.  Moreover, the OP financier cannot at its discretion discontinue the policy suo motu without informing the insured who had opted for and was covered by the aforesaid insurance policy by the OP, rather the OP bank was bound to inform the husband of the complainant by personal notice or through publication that the aforesaid insurance policy has not been insured/renewed. 
3. Learned counsel for the complainant has relied upon the order of the Hon’ble National Commission in the case State Bank of India & Ors. Vs. Surisetty Lakshmi Sai Mahalakshmamma & Ors., R.P. No.2964 of 2017 decided on 23.10.2017, in which it was held as under :-

“Consumer Protection Act, 1986 Section 21(b) Deficiency in service - Free personal accident insurance policy - Facts are that Petitioner-Bank offered a Group Personal Accident Insurance (death only) to Home and Car Loan Customers of the bank as a complementary service where husband of respondent was covered under this policy - Policy is to be renewed every year, but was not renewed - Complaint filed against petitioner-bank- Petitioner-bank contends that since the policy was a complementary to Home and Car Loan customers the petitioner Bank had discretion to continue or to discontinue the policy at any time and the receiver of the complementary policy cannot compel that the offer be continued forever - Moreover, Information of the same was given at the Website of the Bank but no information was given personally to those insured as also no notice was given by publication in any newspaper - Thus, this petition - Held, Bank having offered a personal accident cover as one of the conditions of the sanction letter, should not have discontinued the policy suo motu without informing the insured who had opted for and were covered by this insurance - The bank was bound to inform the insured not only by publication in the newspaper but also mandatorily by personal notice - Thus, no interference in the exercise of powers under Section 21(b) of Act - Hence, revision petition dismissed.”

 

4. In the case in hand, when it is an admitted case of the parties that after 22.6.2018 the insurance policy (Annexure C-2) had not been renewed by the OP nor the OP had informed the husband of the complainant or his legal heirs after his demise about the discontinuance of the policy, either though publication in the newspaper or through personal notice, and also that the said policy was opted by the husband of the complainant at the instance of the OP, the OP bank cannot escape from its liability to repay the due loan amount after the demise of Sh. Ramesh Kumar, loanee and also that the said loan was covered under the Mahindra Loan Suraksha Policy by receiving one time premium from deceased by the OP for onward payment to the insurance company.  This act of the OP amounts to deficiency in service and unfair trade practice on its part and the present consumer complaint deserves to succeed alongwith suitable compensation for the harassment suffered by the complainant.

 

Relief

8. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP is directed as under :-

1. to adjust the benefit of insurance policy to the aforesaid car loan and issue the No Due Certificate to the complainant;
2. to pay an amount of ₹30,000/- to the complainant as compensation for causing mental agony and harassment to her;
3. to pay ₹10,000/- to the complainant as costs of litigation.

9. This order be complied with by the OP within thirty days from the date of receipt of its certified copy, failing which, it shall make the payment of the amount mentioned at Sr.No.(ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of remaining directions.
10. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 29/11/2022 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Suresh Kumar Sardana] Member