Chandigarh

StateCommission

CC/365/2018

Smt. Meena Devi - Complainant(s)

Versus

Punjab National Bank - Opp.Party(s)

Pawan Kumar Sharma & Sandeep , Adv.

05 Nov 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

 

Complaint Case No.	:	365 of 2018
Date of Institution	:	26.09.2018
Date of Decision	:	05.11.2019

 

Smt. Meena Devi Wd/o Late Khazan Chand resident of H.No.36, Vikas Nagar, Baltana Zirakpur, Mohali (through Power of attorney Ms. Sonia aged 29 years D/o Late Khazan Chand resident of H.No.36, Vikas Nagar, Baltana Zirakpur, Mohali.

…..Complainant.

Versus

 

1. Punjab National Bank through Branch Manager, Sector 19-D, Chandigarh.
2. Punjab National Bank Met Life through its Manager, SCO No.2463-64, Sector 22-C, Chandigarh.

 

 ...Opposite Parties.

 

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE:   JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                MRS. PADMA PANDEY, MEMBER.

                MR. RAJESH K. ARYA, MEMBER.

 

Argued by:

 

Sh. Pawan Kumar, Advocate for the complainant.

Sh. Gaurav Tangri, Advocate for opposite party No.1.

Sh. Gaurav Bhardwaj, Advocate for opposite party No.2.

 

PER  RAJESH  K.  ARYA, MEMBER

                The case of the complainant is that her deceased husband took housing loan for consideration from the opposite parties and had been making payment of EMI @Rs.9,000/- per month regularly towards the said loan amount. He expired on 18.03.2018. However, instead of paying insurance of the borrower, the opposite parties send notice u/s 13(2) of SARFAESI Act, 2002 to take possession of the house. To support their case, the complainants placed reliance on the judgments of Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case titled ‘State Bank of India Vs. Joice Johny’, 2013(1) CPJ 11 and ‘Oriental Bank of Commerce Hinduan Branch Vs. Chandan Bala Jain, 2013 (3) CPR 384.

2.             On the other hand, opposite party No.1, in its reply, has  taken some preliminary objections that the dispute is outside the scope and ambit of Consumer Protection Act, 1986 (in short 1986 Act) and is covered under Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 (in short SARFAESI Act, 2002); that the controversy involved cannot be decided in a summary procedure provided under 1986 Act; that the complaint lacks cause of action and is based on mere surmises and conjectures. On merits, it has been stated that Late Sh. Khazan Chand had availed housing loan of Rs.9.45 Lakhs and overdraft facility of Rs.25 Lakhs, which was fully disbursed to him and the said loan was secured by way of mortgage of House No.36, Vikas Nagar, Baltana, Zirakpur, Mohali. An amount of Rs.5,838/- was charged towards insurance premium for covering the said residential building above foundation. Since there was default to repay the loan amount, the account was declared as “Non Performing Asset” on 31.03.2018 and provisions of SARFAESI Act, 2002 were invoked to recover the said loan amount. It has been stated that husband of the complainant never availed any insurance from opposite party No.1.

3.             Similar is the stand of opposite party No.2 in its reply. Additionally, it has been stated that the complainant is not the consumer under Consumer Protection Act, 1986 (in short 1986 Act); that the complaint being frivolous and vexatious is liable to be dismissed u/s 26 of 1986 Act; that the complaint is clear cut misuse of law as the complainant has approached this Commission with unclean hands.

4.             The complainant filed rejoinder, wherein she has reiterated the averments made in the complaint and repudiated those taken in the replies filed by the opposite parties.  

5.             We have heard the Counsel for the parties and have carefully gone through the material available on record.

6.             Before dwelling on to the merits of the case, we would like to deal with preliminary objections raised by the opposite parties in their replies.

7.             The first objection raised as regards the dispute not covered under the scope and ambit of 1986 Act and is covered under SARFAESI Act, 2002 cannot be accepted because as per Section 3 of 1986 Act, the provisions of the act are in addition to and not in derogation of the provisions of any other law for the time being in force. As such, the complaint filed is maintainable and the objection raised stands rejected.

8.             As regards second objection that the controversy involved cannot be decided in a summary procedure provided under 1986 Act; it may be stated here that the controversy involved in the present complaint is very simple and straight relating to the entitlement of the complainant for indemnification on account of death of her husband, which can easily be decided by this Commission based on material and evidence available on record. Thus, the objection raised also stands rejected being not tenable.

9.             The third objection raised is that the complaint lacks cause of action and is based on mere surmises and conjectures. This objection also lacks merit and stands rejected as the cause of action arose to the complainant on receipt of recall notice from the opposite parties for recovery of outstanding amount of loan and overdraft facility.

10.           The objection qua the complainant being not a consumer under 1986 Act and the complaint being frivolous and vexatious is also baseless. The complainant is very much a consumer under Section 2(1)(d) of 1986 Act being beneficiary of her husband for the loan available by him from the opposite parties and the complaint filed by her cannot be said to be frivolous and vexatious.

11.           So far as the objection as regards the complainant approaching this Commission with unclean hands is concerned, it may be stated here that it is a kind of general objection usually taken in the reply. It is not stated by the opposite parties that what was not disclosed by the complainant in her complaint which could be termed to be credible. Thus, the objection raised stands rejected being not tenable.

12.           Now coming to the merits of the case, the core question, which arises for consideration before us, is whether the complainant is to be indemnified by the opposite parties on account of death of her husband? Our answer to this question is in negative for the reasons to be recorded hereinafter. It is evident from Annexures R-1 and R-2, which are copies of Agreement for Housing Loan and Agreement of Overdraft facility for housing loan borrowers respectively, that the husband of the complainant availed housing loan of Rs.9,45,000/- and Overdraft facility of Rs.25 Lakhs from the opposite parties in the year 2016 and as on 31.03.2018, amounts of Rs.9,16,860/-  & Rs.25,58,994/-, totaling Rs.34,75,854, [plus interest & other charges w.e.f. 25.01.2018 was still outstanding. To recover the said outstanding loan amount, recall notice was served upon the complainant.

13.           It may be stated here that undisputedly, an amount of Rs.5,838/- was charged towards insurance premium for covering the residential building (Annexure R-8), which was under hypothecation, against the loan availed by the husband of the complainant. Clause 15 of Agreement for Housing Loan dated 30.04.2016 (Annexure R-1), being relevant, is extracted hereunder:-

“15.   The Borrower shall get the security fully insured against loss, damage by fire, riots and other hazards like earthquake, floods as per the requirements of the Bank in the joint name of the Borrower and the Bank with the usual Bank clause till repayment of in full of the entire loan liability of the Borrower. In case the Borrower fails to insure the said property, it will be open to the Bank to get the same insured, without being bound to do so, as aforesaid and to debit the amount of premium to the Borrower’s account which shall thereupon be treated as part and parcel of the principal amount advanced.”

                                 

14.           Perusal of aforesaid clause make it abundantly clear that it was the security i.e. hypothecated house bearing No.36, Vikas Nagar, Baltana, Zirakpur, Mohali, which was fully insured and not the life of the borrower i.e. the husband of the complainant, namely, Late Sh. Khazan Chand. Had there been any loss to the said residential house (security) on account of        any of the circumstances mentioned in the aforesaid Clause 15, in that eventuality, the complainant would have been entitled to be indemnified on account of said loss. However, in the instant case, it is not so. The said clause does not cover the risk of life of the borrower. As such, there is no room for doubt that only the mortgaged house was insured and not the life of the borrower. In our opinion, the claim raised by the complainant, in this complaint on account of death of her husband, is purely out of coverage and she is not entitled for any kind of indemnification by the opposite parties on that account.

15.           The judgments relied upon by the complainant in cases titled State Bank of India Vs. Joice Johny (supra) and Oriental Bank of Commerce Hinduan Branch Vs. Chandan Bala Jain (supra) are of no help to the complainant being distinguishable on facts. In State Bank of India Vs. Joice Johny (supra), the housing loan, which was in the joint name of the complainant and her husband, was covered by SBI Life Suraksha Group Insurance Scheme, even in case of death of one of loanees. In Oriental Bank of Commerce Hinduan Branch Vs. Chandan Bala Jain (supra), it was held that as per its own circular, the Bank should have provided free personal accidental insurance up-to Rs.5 Lakhs and they should have recovered the process fee from the borrower by debiting his account, which the opposite party failed to do.

16.           For the reasons recorded above, this complaint filed by the complainant, being devoid of any merit, is dismissed with no order as to cost.

17.           Certified copies of this order, be sent to the parties, free of charge.

18.           The file be consigned to Record Room, after completion.

Pronounced.

05.11.2019.

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

(PADMA PANDEY)

        MEMBER

 

 

(RAJESH  K. ARYA)

MEMBER

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