The Manager, OBC, Uttarpara Branch No. 2- Op 1.
The Dy. General Manager, OBC, Asset Recovery Branch. DD – II, Sector – I, 3rd Floor, Saltlake
City – op 2.
The Senior Manager LICI of India, Uttarpara Branch, Op – 3.
The facts of the case of complainant in short is as follows.
The complainant stood guarantor in granting credit facility to M/S. Bose Oil Mill by way of cash credit from Uttarpara Branch of OBC, - Op 1.
At the time of granting the said credit facility a Life Policy No. 437953726, on the life of complainant was assigned in favour of Op 1, as Collateral Security .
The said cash credit A/C , was declared NPA on 29.9.2012 and the Bank proceeded with the actions under SARFAESI Act. By challenging the said action by Op 1, the complainant filed an application in Debt. Recovery Tribunal No 2, Kolkata, which was registered as No 33 of 2014. The Advocate of the complainant vide his letter dated 2.6.14 informed the Op 1 that the date of hearing in the ‘SA No. 333 of 14, was fixed on 30.6.14.
During pendency of the said proceeding in DRT – 2 Kolkata op 1 Bank vide its letter dated 26.5.14 informed the complainant that they were taking up the matter to LICI, Op 3 towards surrender of policy in question, as the proceeds of the same would be adjusted against the NPA loan A/C. The Advocate of the complainant vide his letter dated 2.6.14 informed the Divisional Manager LICI, Howrah Division, with a copy to the op 1 Bank that the date of hearing of SA No 333 of 14 was fixed on 30.6.14 and the Bank cannot take any steps regarding premature encashment of LICI policy.
The complainant vide letter dated 10.7.14 submitted a compromise proposal , where he offered to pay 13.10 lacs for full and final settlement of the NPA cash credit a/c.
The Bank i.e. op 1 accepted the proposal. The complainant deposited qntire settled amount for liquidating the c/c a/c on 10.7.14.
The op 2 , the Dy. General Manager, asset Recovery Branch, vide its letter dated 11.8.14 informed op 1 i.e. Branch Manager of Uttarpara Br. That the c/c a/c of M/S. Bose Oil Mill , has been closed on 9.8.14. Op 2 Also requested the op 1 to hand over the Original Deed, No dues certificate and the LICI Policy after reassignment to the complainant.
At this stage the complainant requested the op 1 to hand over the title deed , no dues certificate and the original LICI policy. But the complainant learnt from op 3 LICI, Uttarpara Br. That the subject policy was prematurely encashed on 26.5.14. this fact was kept suppressed by op 1.The op 1, even suppressed the matter to op 2 i.e. its higher authority . The op 1 did not adjust the amount of premature encashment in the NPA cash credit a/c.
The complainant had sent a Lawyer’s notice on 4.11.14 to the Op 2 , Dy. General Manager of Asset Recovery Branch of Oriental Bank of Commerce, stating therein with details of premature encashment of the LICI policy most illegally , unethically and with malafide intention. As such the complainant on several occasions asked for the return of securities of the cash credit loan a/c, including the LICI policy in question, but the op 1 bank did not do the needful.
Hence the complainant came before this forum for redressal of his grievances.
The complainant prays for direction on the op Bank for : -
a). Rs. 5,00,000/- being the value of LIC in question
b. Rs.20,000/- for mental agony and harassment.
c). Rs.20. 000/- for the cost of litigation.
The Op Bank in their written version denied each & every allegations leveled against them, save & except what are specifically admitted. But op bank could not justify its action in the matter of premature encashment of the LIP…… policy in question, as the cash credit a/c as was settled by compromise on 09.08.14.
From the documents submitted by the parties and other records it reveals that the complainant had offered to close the NPA cash credit a/c on compromise. The bank at this stage accepted the said proposal. Eventually the cash credit a/c was closed on 09.08.14 . Op 2 instructed the op 1 bank to hand over the original title deed and no dues certificate to the complainant and to reassign the LICI policy in favour of the complainant (life assured) and return back the same to the complainant. However it is gathered from records that op 1 had sent the LIC policy to LICI office op – 3 for premature encashment and the same was got done on 29.05.14. But the same amount was not utilized by op 1 adjusting in the NPA a/c.
Upon the complaint, written version of the op and the records placed before us we frame the following points for proper adjudication of the instant case.
- Whether the complainant / petitioner is a consumer ?
- Whether the op has deficiency in service ?
- Whether the complainant / petitioner is entitled to get any relief as prayed for ?
Decision with reasons.
Point – 1: Regarding point 1, it appears that the complainant was the guarantor in a cash credit loan a/c in op 1 bank . For collateral security of the said a/c complainant offered a LICI policy by way of assignment. As such he is consumer of op 1 bank branch and there was no denial of the fact by op 1 . As such the complainant is a consumer of the op 1 bank. The point 1 is thus answered in favour of the complainant.
Points 2 & 3 : Both the points no 2 & 3 are taken up together for the sake of convenience of discussion as they are closely interlinked with each other.
Regarding point 2, it appears from the records that the cash credit a/c was declared NPA by op 1 and the bank wanted to liquidate the security. The LIC policy was sent to LIC office /op 3 for premature encashment. But the amount was not adjusted in the cash credit a/c in question.
On the other hand the LIC policy lost its value on premature encashment. Again the NPA loan (c/c) a/c was closed on compromise by deposit from other sources and in al fairness the Bank’s higher authority i.e. op 2 directed the op 1 bank to return the LICI policy to the complainant , after reassignment . But op 1 branch failed to return the same as the policy was prematurely encashed by them and in the process the complainant was unfairly put to loss, due to deficiency of the op 1.
That apart, the complainant is found to have , uncalled for, been deprived of the complete remitant brenefit, had his LICI Policy remains in full vigor. This loss should, according to our considered opinion, be compensated by the Bank (OP 1) on account of gross deficiency of service already committed by him under wrong implication of the loan adjustment.
So points 2 & 3 goes against the op 1 & 2.
Hence ordered
That the case of the complainant be and the same is allowed in part on contest with cost.
The Op 1 the Manager, Oriental Bqank of commerce, Uttaqrpara Branch No. 2 is directed to pay the complainant Rs.5,00,000/- (Rupees five lac) only being the SA of the subject LIP. The Op 1 is further directed to pay Rs. 10,000/- (Rupees ten thousand) only to the complainant towards cost of litigation. The op 1 is further directed to pay Rs. 5,10,000/- (5,00,000+10,000)in total to the complainant within one month from the date of this order i.d. 9% interest will carry.
The case is disposed of accordingly.
Let a copy of this order be made over to the parties free of cost.
